Peking counts profits from over a trillion cigarettes

The Chinese government owns and runs the biggest cigarette producer in the world, a situation which creates some interesting moments with Peking this week hosting the 10th World Conference on Tobacco or Health, and government ministers addressing delegates from around the world about China's belated efforts to halt a rising epidemic of tobacco- related deaths.

Why does the Chinese government tobacco monopoly not just simply stop producing cigarettes, was the blunt question put yesterday to the Health Minister, Chen Minzhang, who had just warned that 100 million of Chinese males under the age of 30 were destined to die from tobacco-related diseases? "The tobacco industry in China is still a strong economic sector," Mr Chen admitted. Smokers "cannot quit smoking in a day" and there would still be a big demand for cigarettes if China stopped production, he added.

While the Chinese government likes to point the finger at Western cigarette manufacturers and their advertising efforts on the mainland, in reality it is the government-produced cigarettes which account for almost all the tobacco smoked in China.

The statistics for the state-owned China National Tobacco Corporation (CNTC) are mind-boggling. Last year it produced and sold 1,700,000,000,000 cigarettes, about one-third of the world market or about the same number as the three largest multinational tobacco companies combined. CNTC employs 10 million Chinese farmers growing tobacco leaf, more than 500,000 workers in the industry, and 3 million retailers.

CNTC is also itself becoming a leading exporter of tobacco. According to the World Health Organisation, Chinese export revenue from tobacco was US$600 million in 1995. Further immediate economic benefit comes from domestic tax revenues from tobacco, the largest single source of revenue for the government. Tobacco taxes raised 83 billion yuan (pounds 6.4 billion) in 1996, compared with 14.5 billion yuan a decade earlier.

How seriously should one therefore take Mr Chen and the Chinese government's protestations that they are doing their best to limit smoking? Yin Dakui, the vice-minster of health, yesterday pointed out that many cities in China ban advertisements for cigarettes "especially foreign cigarettes". The government is also opposed to advertisements "in disguise" such as sports sponsorship.

Why then is Marlboro the sponsor of the China National Soccer League, the most widely followed sports event in China? Sport, like cigarette production, is completely state-run on the mainland and the decision to choose Marlboro was thus made by a government department.

Similarly, China's state- controlled propaganda machine is highly effective, and at the moment is making sure that even a peasant in a remote rural village knows that the 15th Communist Party Congress is soon upon us. But it seems to have forgotten to tell much of China about new rules implemented on 1 May this year banning smoking on all forms of public transport. During several weeks this summer travelling in western China, this correspondent failed to travel on one train or bus which was not thick with smoke, and even government officials in the region said they had never heard of the new regulation.