China’s tobacco output rises for seventh consecutive year

Mark O'Neill January 23, 2025 22:35

“We have brands here for every taste and requirement,” said Wang Limei at a grocery store in a popular tourist town. “The cheapest cost 13 yuan a packet, the workers buy those. The most expensive is a carton of ten Zhonghua (中華) for 1,000 yuan. People buy these not to smoke but as gifts for officials or company managers. They will be smoked at the restaurants in the town.”

The culture of giving expensive cigarettes is deeply embedded in the mainland. It is one reason why cigarette production in 2024 was on course to grow for the seventh year in succession.

In the first 10 months, output was 2.21 trillion cigarettes, an increase of 1.5 per cent over the same 2023 period, according to official figures. That is more than 35 per cent compared with 2003. In 2023, the China National Tobacco Corporation generated 1.5 trillion yuan in tax revenue, up from 1.44 trillion in 2022, and the figure is forecast to rise again in 2024. It accounts for about seven per cent of central government revenue.

The health consequences of this are catastrophic. According to the National Health Commission, China currently has 380 million smokers and each year 1.3 million people die from tobacco-related diseases, more than the total from traffic accidents. Without changes in the current situation, the number of deaths will reach four million by 2060, it said.

The gift of cigarettes, to officials and company managers, helps drive demand at the top end of the market. “The giving of cigarettes is no simple matter. There is a technique to it,” said Wang Ming, a salesman in an electronics firm. “You must choose the right brand and the right price, and discover the taste preference of the recipient. With the restrictions on smoking, this custom has become more discreet but is still widespread. You must give cartons in two or multiples of two, not one or three.”

The most expensive brands of Zhonghua on public sale cost 100 yuan a packet and more. Other brands are not on public sale but are only available to those with the right Party and business connections. These gifts have the most value.

Figures from Euromonitor show that China’s share of global sales rose to about 47 per cent last year from less than 38 per cent in 2009.

The state-owned CNTC is by far the world’s biggest company in its field. Founded in 1982, it employs more than 514,000 people. It is a powerful nationwide institution, with 92 cigarette factories and 2,393 offices and sales units across the country. Overseas, it has established 38 companies in 16 countries and regions. It is one of the few legacies of the Soviet-era economy in China – a single government institution controlling the entire process, from production to distribution, marketing and sales. The share of foreign brands in China’s market is negligible. CNTC’s enormous revenue and workforce and nationwide reach give it great power and influence within the government.

One result is the weak health warnings on packets. They are made much less obvious by being on the same colour background as the rest of the pack, and text rather than visual, as in Hong Kong and the majority of other countries. Two on a packet of Diamond, a cheap brand, says: “smoking harms health. Please do not smoke in places where smoking is banned.” And: “giving up smoking early is good for health. Ending smoking reduces the risk to health.” There is no mention of any specific disease, such as lung cancer or pulmonary infections, the economic effects upon the smoker and their families, or links to advice on quitting.

In 2015, China implemented its strictest series of measures, banning smoking in public transport, hotels and restaurants, offices and many indoor areas. The implementation of these measures is left to local governments.

Mao Zedong and Deng Xiaoping were chain smokers and proud of it. They were happy to be photographed smoking in public. Deng used to joke that smoking was one reason for his long life – he died at 93. Since 2015, that has changed. China’s leaders do not smoke in public.
But the energy of tobacco control from that period seems to have subsidised. One reason is the power of CNTC. Another is the slowing economy. Official figures put GDP growth last year at five percent. But many economists, Chinese and foreign, doubt this figure and estimate it as between two and three per cent. In such a context, the billions of yuan in tobacco tax becomes more important.

Dr Judith Mackay, Director of the Asian Consultancy on Tobacco Control based in Hong Kong, however pointed out that smoking entailed a massive economic debit to the smoker and their families, to employers and to the government. This is due to sickness and health care costs, lost productivity, costs of life and damage to buildings by fires caused by careless smoking, deforestation, the use of arable land to grow tobacco that could grow food, and the cost of cleaning up billions of cigarettes, cigarette packs, matches and lighters discarded every day.

Mark O'Neill

A Hong Kong-based writer, teacher and speaker.