China tobacco facts of the day

A conglomerate on the order of the old Gulf + Western, China National runs more than 160 cigarette brands, manufactured in about 100 factories across the country, and uses its earnings to invest in banks, luxury hotels, a hydroelectric plant, a golf course, and even drugmakers. Most of its money goes to its owner, the Chinese government; the tobacco industry accounts for about 7 percent of the state’s revenue each year [emphasis added], and China National controls as much as 98 percent of the market. All told, the industry in China employs more than 500,000 Chinese. They are among roughly 20 million people who get some income from tobacco, including members of 1.3 million farming households and workers at 5 million retailers, according to government figures. The extent to which the government is interlocked with the fortunes of China National might best be described by the company’s presence in schools. Slogans over the entrances to sponsored elementary schools read, “Genius comes from hard work. Tobacco helps you become talented.”

From Andrew Martin, there is more here.  Of course this helps explain why the Chinese government has such mixed feelings about conducting a successful anti-tobacco campaign.  By the way, do any of you know of a source on the 7 percent figure?

Comments

Chinese people have told me: the individual human life is not the most important element of Chinese society, but the least important (in everybody's opinion there). They have too many. If you want to kill yourself, they don't mind.

Oh yes, "Chinese people" have told you this. I guess it's better than "I have many Chinese friends and they told me..."

Nothing could be further from the truth. There is an entire generation of urban Chinese one-child families where each life is considered totally precious.

By their own families yes. Hardly means society as a whole cares about individual life. Indeed the more you care about your own child the less you are likely to care about another persons children in an overcrowded environment.

Even if that were true, they would support social policies that place a high value on life, even if only to protect their own children.

I recall the Sichuan earthquake when my wife and millions of other Chinese were totally focused on helping the victims. Tens of billions of dollars were raised in China from small contributions. Not exactly the behavior of people who don't value life.

Judah Benjamin Hur April 17, 2015 at 3:00 pm

Even if that were true, they would support social policies that place a high value on life, even if only to protect their own children.

I agree. Here's a social policy they could support. Better building regulations. So many children died in Sichuan because the building quality was so poor. So. How have Chinese building practices changed? How many people were charged for building poor quality schools? Or perhaps we could ask how much has pollution declined? Or whether the milk is still safe to drink?

I am not so sure about the Wenchuan Earthquake either. In theory a lot of money was donated. But where did it go? What has been spent? Zhang Ziyi has refused to answer questions about the money she collected. Which seems to have vanished. The Red Cross did not spend much - which is not a surprise as they have been mired in corruption scandals. Tens of billions seems a high figure. Do you have a source?

Judah Benjamin Hur April 17, 2015 at 5:25 am

Nothing could be further from the truth. There is an entire generation of urban Chinese one-child families where each life is considered totally precious.

I don't want to buy into this debate in any way at all, but aren't you actually arguing the opposite of what you think? Chinese families did not care all that much until the One Child policy came along. Then they did. You might read that as saying they did not and do not care about the lives of children at all. They are just very concerned about their pensions.

I think it is impossible to tell simply because Chinese culture does not allow much comment on the death of children. They are unfilial.

I don’t want to buy into this debate in any way at all, but aren’t you actually arguing the opposite of what you think? Chinese families did not care all that much until the One Child policy came along.

Not at all, just that life is even more precious now that there often is only one child.

I think it is impossible to tell simply because Chinese culture does not allow much comment on the death of children. They are unfilial.

I try not to make generalizations, but I'd say that Chinese families are, ON AVERAGE, much closer than White families, they have much deeper attachments and are vastly more loyal. Having lived a decent amount of time in both cultures and seen and experienced a significant sample size, that would be my conclusion. Of course, I haven't consulted with The Occidental Quarterly which probably knows far more about Chinese people (and Jews, of course).

Judah Benjamin Hur April 17, 2015 at 10:55 pm

Not at all, just that life is even more precious now that there often is only one child.

But you see my point? Having been restricted to putting all their retirement eggs in one basket, their future comfort depends on that child surviving. That could be seen as a healthy appreciation of the comforts of retirement. Not the slightest interest in the child itself.

I try not to make generalizations, but I’d say that Chinese families are, ON AVERAGE, much closer than White families, they have much deeper attachments and are vastly more loyal.

I would certainly agree they appear so. But then what are their choices? They have to pretend to be loyal in public because of both public pressure and the fact that an isolated individual has serious problems. They need the support of relatives given the lack of any other sort of comfort or protection.

Chinese parents often say what they are doing is in the interests of their children. But I can't help but notice it often tends to coincide with what is in the interests of the parents. Have you seen much evidence of parents sacrificing their own long term interests to those of their children?

Of course, I haven’t consulted with The Occidental Quarterly which probably knows far more about Chinese people (and Jews, of course).

Nice.

But you see my point? Having been restricted to putting all their retirement eggs in one basket, their future comfort depends on that child surviving. That could be seen as a healthy appreciation of the comforts of retirement. Not the slightest interest in the child itself.

Chinese, particularly urbanites, have a much higher savings rate and usually can afford to retire. Many retirees also have pensions (my in laws do). Property taxes are low to nonexistent and medical care is much cheaper.

No, I really don't see your point. In fact, I can't fathom how anyone could think this way. To lose a child, not to mention the entire future of your family line, is infinitely more disastrous than any economic considerations. I would think this true for any human being.

Have you seen much evidence of parents sacrificing their own long term interests to those of their children?

My wife has a Shanghainese friend who has an 8 year old child with a brain tumor. I can't describe the emotional anguish she's going through. But in terms of pecuniary matters, she sold her apartment in Shanghai just to pay for better care in a mostly hopeless chance for survival. Needless to say, this is a bad retirement planning choice.

That's an extreme example, but Chinese parents typically put much more energy and investment in their kids than would make any sense for economic reasons.

Chinese parents often even give their kids apartments, which are worth a fortune and could often pay for retirement and nursing home costs, if one lives that long. In fact, in many major cities, it's kind of expected to buy an apartment for a son who gets married.

Judah Benjamin Hur April 18, 2015 at 12:44 am

Chinese, particularly urbanites, have a much higher savings rate and usually can afford to retire.

Yes but who will look after them? A sick person in a hospital without someone to fight their corner is screwed in modern China. They cannot rely on strangers to look after them. They need the child and the grandchildren no matter how much money they have. Although I agree as parents get richer, they are likely to care less about what their children do. I don't think they are there yet.

No, I really don’t see your point. In fact, I can’t fathom how anyone could think this way.

Someone who loves their children loves the first as much as the eighth. You claimed that because they only have one, they love the only one more. That is, they are not in the first category of people.

That’s an extreme example, but Chinese parents typically put much more energy and investment in their kids than would make any sense for economic reasons.

But they will not invest in their children's future for what the children want. They will not fund a child who loves the oboe to play the oboe unless there is a career in it. They will not encourage a child to spend their free time learning Hittite. They will invest a lot, I agree. Quite why they are investing so much is not clear. But it is obvious that there has to be a pay off, but for the parents.

Chinese parents often even give their kids apartments, which are worth a fortune and could often pay for retirement and nursing home costs, if one lives that long. In fact, in many major cities, it’s kind of expected to buy an apartment for a son who gets married.

So you are claiming that if they want their son to marry, and give them grandchildren, especially if they want him to marry a girl they like, not one he likes, they have to buy him a house? You keep saying things but don't seem to hear what they mean.

Brides are a great example of what I mean. Conflicts between mothers and daughters-in-law are famous in China as in most of Asia. Any mother that wanted her son to be happy would allow him to marry someone he liked and then would step back. This is not actually what happens is it? Mothers pick girls they like (subservient ones mostly) and then come as close as humanly possible to destroying the family by fighting with the daughter-in-law over the son's affection. Causing misery for everyone.

Then the government should emphasize smoking as being a very masculine art and as very un-feminine.

Tobacco is a win/win from the government's point of view. Working age people are more satisfied, and fewer pensioners to support.
Even a pure utilitarian framework could favor this, as the contribution of older years to well-being can be highly variable, as Ezekiel Rahm pointed out. Especially true if we accept time discounting.
As against this there is some research showing that smokers are less productive, but this is measured in terms of work missed. Could be that smokers are more productive in their actual working hours.

You have to weigh in with the fewer pensioners, the extra costs of treating lung cancer and other related diseases...

Plus it is not a fast painless death , but a slow very painful one...

Yes and no.

On the one hand, you get the diagnosis of lung cancer, and you're oftentimes gone in a month. It is a very aggressive cancer. By the standards of some diseases, you're gone quickly. For the Chinese state, this is not a bad way for large numbers of "excess people" to go. You're not doing chemo for long, you're not taking up hospice space for long.

On the other hand, the actual death itself, I agree. It's a terrible way to go, not quick. For the individual, it's nasty.

Varies a great deal. The last case in my circle of acquaintances died about a year after his diagnosis. He was well enough to work until four days before his death. The case prior to that I can remember, the man had some disagreeable symptoms (back pain) for about eight months before he was diagnosed, but was ambulatory. He lasted less than three weeks. There was an administrator at my old elementary school who went home from work early and called in the following day. He died the day after.

I know of another case where the patient had symptoms for about six weeks, was diagnosed, and lasted another four months, bedridden. I've seen worse deaths. All of these people avoided nursing homes and avoided senility. I've seen people who were non-compos-mentis for six or seven years before their death, locked in memory care units. I've seen people afflicted with strange palsies and auto-immune disorders and colitis for years on end. There are worse things than lung cancer.

Google smoker net costs. From the governments perspective its a definite win.

Right - this came up in the U.S. a few years ago in the states' legal case against the tobacco companies. The states essentially were suing for the healthcare costs caused by the tobacco companies. The tobacco companies moved to claim an offset for the retirement monies they saved the states because people were dying younger. As you can imagine, there was an uproar as the media reported 'tobacco companies want credit for killing people' and similar headlines. The judge ultimately disallowed the offset theory, which was a key piece in fueling the large settlements the states ultimately won.

You mean Ezekiel Emanuel, Rahm's brother, right?

In China, the state sells tobacco and makes a decent profit. In America, the government makes obscene profits on tobacco sales, but pretends to be against it. Hilarious!!!

Yet another example where China is in practice more free than America, our pretend democracy.

I dont want to claim that America is really a democracy, but China is definitely less free than America.

In China, you can't challenge the ruling Party. In America, you can't challenge the ruling elites. We're just more sophisticated (and somewhat dishonest) about how we enforce the rules. There really isn't that much more free speech in America. There's a reason why people don't generally use their names on politically oriented message boards.

In China, there is greater economic freedom, with much less regulation and taxation. Our advantage is that we appear to have a more stable political system (and, of course, are more developed).

In China if you form a political party, you get 25 years doing hard labor. In America, Noam Chomsky sits in his tenured job in MIT and keeps himself busy setting up off-shore trust funds so that his fortune can go to his children without paying tax. Lew Rockwell is not under arrest. Pat Buchanan even runs his own mini-media empire.

America still, sort of, has a rule of law. The ruling party, and even the ruling elites, lose some times. In China, the law is whatever the ruling party says it is. The courts have no real existence at all.

Lhasa is covered by small cells covering some 200 households with cameras everywhere, and ready response teams of police - and social workers - so that no one can hold up a sign saying anything about the Dalai Lama. The Chinese government employs six figures worth of people to police the internet. That is what a lack of freedom of speech looks like. As I said, Chomksy is alive and well despite a lifetime of what the Chinese would call treason.

In China there is no economic freedom. If you do not pay off the right people the right amounts at the right time, you will go to jail. See any number of Chinese businessmen now doing time.

+100
I see this type of comment (Chinese freedom higher than American) at least once a week. Do you people know nothing about China. Also I wasn't aware of Chomsky trust funds. Even if you think your cynical your not cynical enough.

Even if you restricted the analysis to White people in America, you are far more likely to be incarcerated in America than China.

I would agree that corruption is worse in China (though hardly the caricature you describe and things are getting much better), but it's much easier to start a business in China than the USA and taxes are much lower. One is more likely to succeed in China than America, all other things being equal.

China may be policing the internet (of course, we don't, ha ha ha, paging Mr. Snowden), but the USA is quite draconian about looking into citizens' financial records. For example, I have to disclose our Chinese bank account numbers to the US Federal government (the bureau is called the "Financial Crimes Enforcement Network") even though we never have enough money overseas to buy even a car (by the way, the penalty for not disclosing the information is 5 years of imprisonment). America knows more about our Chinese finances than China does!!!

In China, you can't form a political party because the rule is clear. In America, you can't really form a political party, but you can pretend to form one and pretend to participate in elections. The only thing you can't pretend to do is win. As I stated above, our political system is more sophisticated and is more stable (a major plus).

Don't misunderstand, I think the United States is, on balance, a great country. I just don't think we're have nearly as much freedom as many Americans assume.

Judah Benjamin Hur April 18, 2015 at 12:20 am

Even if you restricted the analysis to White people in America, you are far more likely to be incarcerated in America than China.

So what? You are much more likely to go to jail after a real trial in the US. You know, one with an impartial judge, a jury and an actual real defense lawyer. You are much less likely to be locked up in an illegal but tolerated prison run by local officials in the US.

Also law enforcement is a component of freedom. The Chinese government is only interested in enforcing the law when it is in the interests of the government. So in China you are free to work for your construction company all year and then not get paid. You are free to sign a contract with someone else and then have it ignored. You are free to have your material goods stolen and the police do nothing about it. You are free to have your local water supply poisoned by a solar cell factory. You are free to be drugged and raped by your own colleagues. Or your middle school teacher for that matter.

I would agree that corruption is worse in China (though hardly the caricature you describe and things are getting much better)

How do you know?

China may be policing the internet (of course, we don’t, ha ha ha, paging Mr. Snowden), but the USA is quite draconian about looking into citizens’ financial records.

How do you know? The US government does not pay people to wander across bulletin boards and post pro-government material. They do not delete posts en masse. They do not threaten companies like Sina with closure unless they properly censor materials for the government. They do not shut down newspapers and prevent any new media outlets opening.

Comparing the US government's absurd interest in money laundering with the Chinese government's massive and intrusive censorship efforts are bizarre.

America knows more about our Chinese finances than China does!!!

Your money in China is in a Chinese government-run bank. They know everything about your finances. At least anything they want to know, they will know, immediately and without judicial oversight.

In China, you can’t form a political party because the rule is clear.

No it isn't. Actually. Cite the law. But even if it was, that means that Chinese people are vastly less free than Americans.

In America, you can’t really form a political party, but you can pretend to form one and pretend to participate in elections. The only thing you can’t pretend to do is win. As I stated above, our political system is more sophisticated and is more stable (a major plus).

The Tea Party is being fought all the way by the Republican establishment and the Democrats with the mild force of the state, but to pretend that they do not exist and they have not won elections is absurd. Insurgents win in America. They win over the objections of the entire social elite. The ERA went down because of a one-woman campaign, basically. The Chinese government arrested three girls for handing out leaflets last week.

I just don’t think we’re have nearly as much freedom as many Americans assume.

That is not what you said.

As for the source, it should be (it's 6,7% in the paper):

Yang GH, Hu AG. eds. Tobacco Control and the Future of China. Beijing, China: The Economic Daily Press, 2011:109–16

As a comparison, the UK raises some £10bn a year through tobacco taxes alone, which is around 1.5% of revenue. That's much lower than China's 7%, but then UK has less than half the rate of smoking that China has. So 7% is not implausible.

How much do the make from booze, or any other addictions?

Studies on smoking have shown that the savings from the costs of taking care of the extended lives for non smokers exceed the incremental health care costs associated with smoking. The logic is quite simply really. We all die of something that usually requires some significant costs at the end of our lives usually at the point where a government program such as Medicare is paying for it and if we die sooner society avoids the costs associated with an extended life such as Social Security. From a personal point of view the trade offs are clearly not worth it to most people,

I suspect that the source of the statistics is the tobacco control board. They produce financial reports that can be requested as part of their open data initiative. There are also many informational articles on their site on the state of the business in China. The link is
http://www.tobacco.gov.cn
I looked around the site and noticed an article for 2011 that quotes the percentage of government revenue contributed by tobacco taxes as 7.28%. Doing a baidu search, I saw a few news and stock market articles with the same general figures -- the percentage from 2005 through 2014 seems to have held steady in the 7-8% range.

Also relevant, I noticed on http://www.tobacco.gov.cn that the industry has a policy to contribute some tobacco profits back into the local communities where it operates. That may be the origin of the, above, 'supported schools' phrase. In the less prosperous, agricultural provinces, it can get stunningly poor and disadvantaged very fast. So you readers should read 'tobacco helps you become talented'' with that context in mind, and not with the perception that the government is pushing tobacco.

"tobacco helps you become talented" Must be some term to describe the conversion of bad into good--"whitewashing" doesn't quite do it.. I'm reminded that tobacco companies used to donate to civil rights causes, trying to improve their public image. Or take the way that lotteries tout their contribution to education. I wonder what the legal marijuana types are doing along these lines.

With the (sort of) one child policy, China faced the problem of too many old people and not enough young people to support them. Looks like they are actually doing something to solve it.

Interestingly, China's cigarette per capita consumption is below Japan and South Korea and it's fertility rate is vastly higher.

1.55 kid/woman to 1.4. wouldn't say it's so vastly higher.

China Tobacco is an arm of the military and revenue has traditionally been approx equal to military spending.

Comments for this post are closed