A document prepared by the Central Party School in Beijing has proposed the most far-reaching changes to China’s tobacco industry since 1949. The most important recommendation is to split the producer – the China National Tobacco Corporation – from the regulator. Currently, they are part of the same ministry.
The document points to a historic shift in the official attitude to the industry. The proposals are not government policy but are likely to become so. Work on the 200-page document began two years ago, when Xi Jinping was its director, a post he retained until January this year.
It proposes that the State Council set up a National Tobacco Control Office or designate a specific health department to “take charge and supervise the control of tobacco in all processes from production to sales”. This would become the regulator.
Until now, the State Tobacco Monopoly Administration (STMA) has been the regulator. It is under the Ministry of Industry and Information Technology, which also oversees the China National Tobacco Corp. (CNTC), the largest and most profitable cigarette maker in the world.
The document also proposes that China should pass laws to include on packets graphic photographs of the health risk, similar to those in Hong Kong and other countries, and ban the tobacco industry from promotional activities such as sports and culture.
“This is unprecedented,” said Judith Mackay, a senior adviser to the World Lung Foundation (WLF), which has been working on tobacco control in Asia, and in particular China. “The most important thing is to take tobacco control away from the tobacco industry. That is a really important structural change that will have to happen before anything happens in China.”
She is the leader of an international advisory group of 15 who contributed global examples and experience to the nine members of the team at the school which drew up the document. She recalled a conversation last year with one of the members, Zhang Zhongjun.
“He said that there are a million jobs lost per year because a million people die from tobacco. That was the first time in China that I have heard this economic understanding, that the economic balance is definitely in favor of health,” she said.
On December 11, the WLF and the American Cancer Society presented the fourth edition of the Chinese-language Tobacco Atlas at a news conference in Beijing. They were joined by representatives of other organizations, including the China Centre for Disease Control, the World Health Organization and the China Association on Tobacco Control. This atlas graphically lays out the extent of the global tobacco epidemic and why the Party School has drawn up the report on the need for action.
It says that 38 percent of all cigarettes consumed in the world are in China, more than the other top four countries combined, and that 50.4 percent of all men smoke. This means that about 340 million people are at significant risk of death from tobacco-related diseases.
China produces 41 percent of the world’s cigarettes and 43 percent of the world’s tobacco, more tobacco leaf than the other top nine producing countries combined.
It also says that 600,000 people die in China each year from second-hand smoke exposure, mainly women and children. Of young people from 13 to 15, forty-seven percent are exposed to second-hand smoke at home, increasing the risks for them of tobacco-related diseases.
Change and implementation of policy will not come easily, because of the economic importance of the industry. In 2012, it produced 2.58 trillion cigarettes, up from 1.75 trillion in 2003. State-owned, it accounts for 7-10 percent of annual revenue of the government — about 600 billion yuan in 2011. Li Keming, the younger brother of Prime Minister Li Keqiang, is deputy director of STMA.
CNTC said that in the first half of 2013, sales and profits rose 10.2 percent to a record 530.35 billion yuan over the same period last year. Sales rose 1.3 percent to 266.6 million crates. Sales of premium and second premium brands rose 14.9 percent and 14.1 percent respectively. A rise in sales of these premium brands more than offset slow overall sales growth of 1.3 percent.
In 2003, China signed the World Health Organization framework convention on tobacco control. The health ministry has banned smoking in many public places, but enforcement of the ban has been erratic.
There is little understanding among the public on the magnitude and full range of the risks of cigarette smoking; it remains a key part of Chinese culture and is offered by men as a token of friendship. It is also an important gift for birthdays, anniversaries and as a bribe, although it is slowly becoming less so. Coverage in the media of the industry and of its risks to health is very limited.
“The Party School report will be a critically influential element in tackling the tobacco epidemic in China,” said Mackay.