China Hooked On Smokes

One in three cigarettes smoked in the world today is lit by the Chinese, who smoke 1.7 trillion cigarettes every year. China's army of smokers runs to more than 300 million people, more than the entire population of the United States.

China's smoking epidemic is such that according to data from recent surveys released at the 10th World Conference on Tobacco and Health held in Beijing last week, a third of deaths in China are already related to smoking.

China will also be the leading country for tobacco deaths in the next three decades. There are now 3.5 million tobacco deaths annually, but this is projected to rise to 10 million by 2025, documents from the conference said.

Hooked on the tobacco habit, China is the world's largest producer and consumer of tobacco. It consumes four times as much as the next larger consumer, the United States.

Because of the size of its population, no discussion of the tobacco industry in the year 2000 is complete without addressing the China market, which may be the most important feature on this landscape.

In every respect China confounds the imagination, Rene Scull, vice president of Philip Morris Asia, said in evaluating China's importance for cigarette producers.

"Thinking about Chinese smoking statistics is like trying to think about the limits of space" is how Robert Fletcher, Rothman's regional public affairs manager, defined China's attraction for tobacco industry.

So as tobacco manufacturers find fewer opportunities to expand their markets in developed countries, the cigarette industry giants are cultivating eager, lucrative markets in Eastern Europe and other parts of the developing world.

Judith Mackay, executive director of Asian Consultancy on Tobacco Control and one of the very few specialists on tobacco prevention in the Asia-Pacific region, sees the world being divided into two large groups by 2025.

First, there are the "post-transition nations," featuring most western countries that would by then be plagued by serious crises of death and disability caused by their history of tobacco consumption.

Second, there are the "pre-transition nations" that will be still struggling with the tobacco habit. They will be trying to cope with the increasing numbers of young and female smokers, unable to prevent the tide of tobacco-related deaths.

Mackay predicts that most of developing world and Eastern European countries will make up the group of "pre-transition" nations. "The global tobacco epidemic is shifting to the developing world," she said.

Yet delegates to the tobacco conference here say little is being done to reverse what one called a "tidal wave of death and disability" aided by the reach of transnational tobacco companies into the markets of the developing world.

Recently, the tobacco industry suffered a major setback in the United States, with leading firms being forced to pay out large settlements because of tobacco's damaging effects on health.

But "nothing in the $4.367 billion settlement in the United States between 39 states against U.S. tobacco companies proposing severe restrictions on marketing practices in the States will limit the actions of tobacco companies abroad," Dr Gregory Connoly of the Massachusetts Department of Health in the United States, said.

Transnational tobacco companies have been penetrating the Chinese market gradually, since the 1980s.

In 1986, the vice president of the China National Tobacco Corporation (CNTC), the government monopoly and main exporter of cigarettes, welcomed foreign tobacco companies by saying "the door of China is open to you all."

For decades, the tobacco industry has been the largest single source of state revenue. In 1996, the money collected from tobacco taxes topped $10 billion.

So while China worries about the harmful health effects of tobacco, it is also unlikely to snuff out the industry, which reported pre-tax profits of $1 billion in 1996 or an increase of 16.9 percent from 1995.

Like many other countries, the government is caught between the need to discourage smoking and its traditional reliance on tobacco as a revenue source.

Noted Mackay: "There is a real bloc in the governments around the world taking measures to fight tobacco companies which is caused by economic reasons."

China also gets substantial export earnings from selling its local cigarettes overseas, with CNTC exporting some $650 million of cigarettes a year. "In 2025, China might be the biggest world exporter of tobacco, Mackay said.

In 1993, Philip Morris signed a cooperation agreement with CNTC under which the two would "work together to produce and sell Marlboro cigarettes for the Chinese market as well as develop and produce other brands for both domestic and export sales."

Marlboro cigarettes are also being marketed through three shops that sell clothing of the same name across the country.

There are other joint ventures involving tobacco, such as one with R.J. Reynolds in Xiamen, Fujian province in southern China, and another with Rothman's in Jinan, Shangdong province.

Experts say tobacco's inroads into Eastern Europe, where state monopolies on tobacco have been bought up by transnational giants, are a harbinger of what may befall developing countries in the Asia-Pacific.

Currently, half of the world's 1.1 billion smokers live in the Asia-Pacific region, but very few from Asia work full-time to snuff out the tobacco epidemic. "We need a super-human effort to prevent this disastrous epidemic from getting worse," Mackay said.