China Dependent On Tobacco In More Ways Than One

As if on a pilgrimage trail, visitors to the city of Yuxi in southwest China pose for photographs beside eight cigarette-like pillars and tobacco-factory-in-Chinathen in front of a hilltop red pagoda, instantly recognizable to most Chinese from the cigarette packets of the Hongta — or Red Pagoda — group.

With 80 percent of Yuxi’s revenue from tobacco taxes, this is the town that tobacco built. In particular, one cigarette brand, Hongta, now owned by the Hongyun group, is responsible for this town’s wealth. Yuxi has a Hongta avenue, a Hongta hotel, a Hongta sports stadium — and even a tobacco culture museum devoted to extolling the pleasures of smoking.

Tobacco Dependence

On a national level, too, tobacco plays an important role, providing Beijing’s biggest single source of tax revenue: Last year topped $75 billion. The Chinese government actually runs the world’s biggest tobacco company and is intimately involved at every level of this deadly, murky industry — from marketing, sales and distribution down to production with widespread reports of village officials forcing farmers to grow tobacco against their will.

Given China’s burgeoning ranks of smokers, the tobacco business has been hugely lucrative for Beijing, with annual profits up almost 20 percent every year for the past five years.

“The industry in China is run by the Tobacco Monopoly Administration, a central government administrative body created in the 1980s, also known as China Tobacco Corp.,” says Stanford University’s Matthew Kohrman, who has researched smoking in China for the past eight years. “This is one of the last bastions of the command economy system. Quotas are set; factories are required to meet them. Once they meet those quotas they are required to shut down.”

The Hongta factory in Yuxi is one of the world’s largest, with an annual production of 93 billion cigarettes. According to epidemiological studies, that’s enough to kill 77,000 people every year.

‘How Could This Be A Bad Influence?’

But despite the fatal nature of its products, most people in Yuxi support the factory, largely because the city is so dependent upon it.

“Of course the Hongta group’s good. It’s made Yuxi rich,” says Mr. Zheng, an elderly visitor to the museum, who has brought his 5-year old grandson to examine the museum dedicated to smoking.

“How could this be a bad influence? It’s just about tobacco production: planting, curing tobacco, all the way to cigarettes,” he says.

The walls of the museum are decorated with photographs of China’s leaders smoking, including Chairman Mao surrounded by a bevy of smiling beauties, vying to light his cigarette. Deng Xiaoping is shown puffing away and quoted as telling Japanese visitors: “I only smoke because I’m so healthy. I hear there are a lot of advantages to smoking.”

There’s a wall of fame for celebrity smokers like Winston Churchill, Fidel Castro and Vincent van Gogh. There are bronze statues of tobacco growing; there are star-shaped arrangements of cigarette filters; but there are no notices pointing out that smoking is bad for your health.

China is failing to curb smoking, despite attempts by anti-smoking campaigners. China has a third of the world’s smokers, with almost 60 percent of adult Chinese men smoking regularly. In January, Beijing marked its fifth anniversary since ratifying the international anti-smoking treaty, the Framework Convention for Tobacco Control, with an admission that it had managed to fulfill only 37 percent of its commitments.

The government just announced new moves limiting scenes showing smoking on television and in films, but campaigners say the real problem is structural. In what is itself a violation of the FCTC, the same government body that develops and manages the tobacco industry in China also oversees anti-tobacco efforts.

“The leadership of tobacco control should change,” says Wang Ke’an, who works for the Think-Tank Research Center for Health Development. “The tobacco monopoly should not be involved. … It’s not so good because they give some interference when it comes to tobacco control.”

Tobacco Farmers’ Fate

On the ground, farmers also report interference, this time by village officials. Few willingly grow tobacco, since they say they can make three to five times more growing vegetables. Surveys bear this out, showing tobacco has the lowest revenue-to-cost ratio of all crops surveyed.

A 2005 investigation by a Chinese paper, the Economic Times, estimated the average income among tobacco farmers in Hongta district to be just a quarter of the average annual agricultural income, well below the poverty line. The most recent official government statistics claim that tobacco farmers earn on average $3,500 a year, but on the ground, farmers say their income is as little as a tenth that figure.

Some farmers do choose to grow tobacco, since there’s a guaranteed buyer — the state — and other enticements, including subsidies in the form of free or cheap fertilizer. Tobacco farmer Huang Mei describes how it works in her village.

“The village committee holds a meeting. If you want to grow tobacco, then you tell village officials how much land you will use, and you get cheap fertilizer. They also teach you how to grow tobacco,” she says. “Last year there was a drought, and the government gave us water. If we were growing vegetables, we wouldn’t have had such treatment.”

But there are widespread reports farmers are being forced to grow tobacco, miring them in poverty. According to a 2004 survey carried out by Berkeley professor Hu Teh-Wei and some Chinese professors, 93 percent of tobacco farmers indicated that they would not have grown tobacco if they had not been subject to government pressure. Many say the situation has improved since then. But one farmer who gives his name as Yang insists that in his village, most tobacco growers are forced into it.

“Local officials say they’ve received a notice from above, and every family has to grow some tobacco. Nobody does it willingly, since it does not make economic sense. We only receive half the subsidies; the rest is siphoned off by officials,” he says.

Tax Addiction

Nobody knows how widespread this is, but several tobacco control campaigners have heard similar stories, and farmers interviewed by the Economic Times said their nontobacco crops had been uprooted by village officials. The State Tobacco Monopoly Administration turned down a request for an interview, as did the Hongta group itself.

One thing, however, is clear: Such coercion could be explained by China’s addiction to tobacco tax revenues, at all levels of the government.

“A few years back, most of China’s rural agricultural taxes were ended. One of the few exemptions, though, is the tobacco tax,” says Stanford’s Kohrman. “County officials are keen to see tobacco grown, because it’s the only way that they — in terms of agricultural production — can finance themselves.”

That system seems unlikely to change. Here’s one other reason why: the deputy director of the State Tobacco Monopoly is Li Keming; he’s the brother of the man tipped to be China’s next premier, Li Keqiang.

Smoking may be costing 1 million Chinese lives a year, but the anti-smoking lobby fears the tobacco industry’s high-level political patronage means reform is unlikely to happen anytime soon.

By Louisa Lim

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