China Power

China’s Tobacco Addiction

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China Power

China’s Tobacco Addiction

Forget pollution, China’s astronomical smoking rates are really fouling up the air – and it’s going to be a tough fix.

China is fighting entrenched industrial interests to begin cleaning up its environment. While progress may be slow, there is buy-in at all government levels, as evidenced by the recurring use of words like “environment,” “ecology,” and “green development” in recent government reports. When it comes to cleaning up the air, though, there is one area that might be even more difficult than shutting down polluting businesses — getting China to cut down on its tobacco addiction.

According to Xinhua, China’s State Council just issued an edict urging government officials not to smoke in public places where smoking is already (theoretically) banned. The circular also prohibits officials from using public funds to buy cigarettes and calls for “prominent notices of smoking bans” in government offices.  In China, anti-smoking policies have historically been little more than window-dressing due to lax enforcement. Still, if this ban stick, it could represent an important step in fighting China’s smoking problem.

China is home to about 350 million smokers, representing over a quarter of China’s total population. That high number also means that one-third of the world’s smokers can be found in China. These numbers were brought up numerous times during the November 2013 North-South Lunch Cancer Summit held in Beijing, which noted that lung cancer has become the leading form of cancer in China.

According to CCTV’s report on the conference, China produces 1.7 trillion cigarettes each year. This makes China the world’s leading producer of cigarettes, which is fitting because China is also the world’s leading consumer of cigarettes. As a result, 1 million people each year die in China from tobacco-related illnesses, and this number is expected to double by 2025. Lung cancer alone could kill 1 million Chinese per year by 2025. In the past 30 years, lung cancer rates have risen by 465 percent.

Dr. Sun Yan, a cancer specialist at Xiehe Hospital in Beijing, told CCTV that lung cancer deaths could start to decrease in the next 10 years, thanks to increases in early detection and more effective treatments. Still, to realize this goal, Sun added, China needs to address the risk factors of pollution and smoking. Surprisingly, reducing smoking rates might be even more difficult than fighting pollution.

There is one huge obstacle to fighting smoking in China — the State Tobacco Monopoly Administration. The STMA is responsible for managing China’s tobacco industry and thus for enforcing regulations that might reduce smoking, such as printing graphic warnings on cigarette packs. Unfortunately for anti-smoking advocates, the STMA is also known as the China National Tobacco Corporation, which has a virtual monopoly on China’s tobacco industry. Obviously, there’s very little incentive for the STMA to enforce regulations that will injure its revenue stream.

And make no mistake: the tobacco industry is enormously profitable. According to a 2012 report by Dr. Cheng Li of the Brookings Institution, in 2011“the Chinese tobacco industry generated over 753 billion yuan (US$119.5 billion) in commercial and consumption tax and profits, and turned over 600 billion yuan (US$95.2 billion) to the state as revenue.” That gives China’s government plenty of reasons to keep its population smoking. Li estimates that China’s tobacco industry generates about 7-10 percent of China’s total tax revenue — making it about equal with China’s two other high-profit sectors, real estate and petroleum. Plus, the huge tobacco industry provides many jobs. According to the STMA’s official webpage, the industry directly employs over half a million people. Li’s report cites a Chinese Academy of Social Sciences estimate that nearly 60 million people make their living through farming, manufacturing, and sales jobs related to the tobacco industry.

Fearful of killing the golden goose, China’s government has been reluctant to make drastic moves to cut smoking. According to the World Heath Organization’s tobacco fact sheet on China, the country is lagging in several important measures. For one, China’s cigarettes are much more affordable than in other countries. In 2010, the retail price of the most popular pack of cigarettes was 5 RMB ($0.74). To make cigarettes more expensive, thus deterring smoking, WHO recommends much high tax rate. Right now tax makes up about 40 percent of the retail price; the WHO recommends raising that level to at least 70 percent. Interestingly, implementing this measure would help make up for tax revenue lost by dwindling numbers of smokers, yet the STMA has managed to stonewall this step so far.

WHO also reports that Chinese have little awareness of the health risks of smoking. Only 25 percent of Chinese adults “have a comprehensive understanding of the specific health hazards of smoking.” As part of the problem, WHO notes that the warnings on Chinese cigarettes brands are not effective enough. It will be difficult to ensure larger, more graphic warnings, however, as long at the STMA is in charge of  enforcing such rules.

Still, there has been some progress. Li noted in his report that China’s 12th Five Year Plan (adopted in 2011) included a resolution seeking “full implementation of a smoking ban in public places.” The idea of a public ban on smoking has gained more traction and is expected to be enacted next year. It’s worth remembering, however that a more limited ban (prohibiting smoking in hotels, restaurants, and other specific areas) was adopted in 2011, and continues to be widely ignored. In fact, the recent ban on smoking by Party officials merely reiterated that they are not to smoke in places where lighting up a cigarette is already prohibited. With such widespread disregard for the existing law, it’s hard to see how a new smoking ban will make much difference.

As mentioned in Li’s report, according to the director of STMA, from 2006-2010 the Chinese tobacco industry grew more quickly than any industry in the history of the PRC. This accurately captures both sides of the problem: how profitable the STMA has become, and how dire the smoking epidemic is within China. The conflicting pulls between profit and health are also reflected in the upper echelons of China’s government. Xi Jinping’s wife Peng Liyuan is an “Anti-Smoking Ambassador” for the Chinese Association on Tobacco Control, but Li Keqiang’s brother Li Keming is currently a Deputy Administrator of STMA. With steep political opposition but an increasingly obvious need for change, China’s treatment of the tobacco industry is a bellwether for the leadership’s ability to handle tough reforms.