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Foreign cigarette companies have been battering on China's doors for years. That's no surprise. It accounts for about one-third of the world's 1 billion or so smokers. China now has 320 million smokers -- more than the entire U.S. population.
And plenty of room for growth remains. Dr. Judith Mackay, a Hong Kong-based physician and author of the forthcoming book The Tobacco Atlas (to be published by the World Health Organization in mid-October) says by conservative estimates, China's smoking population is expected to rise 20%, to 400 million, by 2050.
A glance at the demographics of a growing Chinese population tells the story. If China follows development patterns in other countries, more women will start smoking. Only about 1 of every 20 women smoke now, vs. nearly 2 of every 3 men.
KILLER AD CAMPAIGNS. And that's where I have some problems with inviting foreign tobacco makers to operate. They're marketing wizards, and their presence cannot do anything but encourage more people to take up this addictive and deadly habit. China should tread carefully and develop sound antismoking policies before it lets in these masters of salesmanship.
The country has been resisting the seductions of foreign cigarette companies mainly out of concern that its domestic tobacco companies will be wiped out (see BW, 9/30/01, "Where There's Smoke, There's Profit -- for Beijing"). But more than simple protectionism is at work here. Some very powerful people in China have doubts about smoking, doubts that are slowing tobacco-trade liberalization -- a good thing.
The first restrictions on tobacco advertising in China came into force in 1994. At the same time, China started putting health warnings on cigarette packs and sanctioned antismoking education efforts. Today, tobacco-related print and electronic ads are banned completely. Indoor advertising at sports events is also prohibited. Eighty cities have formulating polices on banning smoking in public places.
KICKING THE HABIT. Still, tobacco companies have taken advantage of remaining loopholes. For a time even a Marlboro soccer league was in operation. Some wiggle room still exists at the local level for tobacco sponsorships of outdoor sports. But with the Olympics coming to Beijing in 2008, industry insiders expect them to be banned nationwide.
All this is a bit of a turnaround in official Chinese attitudes toward smoking. For years, the country was a smoker's paradise. Mao Zedong, the founder of Communist China, was a chain-smoker. Deng Xiaoping, the economic reformer who followed Mao, was rarely seen without his trademark cigarette.
As late as the 1980s, the concept of controls on smoking was virtually nonexistent. A mainland friend tells of once boarding a plane and requesting a nonsmoking seat. After the flight took off, people in front of him, behind him, and on his side lit up. When he asked the attendant about this, she told him, "Yes, your seat is no-smoking."
SNEAKING SMOKES. Things started changing a decade or so ago. In his later years, Deng, who died in 1997 at the age of 93, refused to be photographed with a cigarette. Rumors have it that he quit smoking.
Li Peng, the hardline premier who was a key proponent of the bloody June 4, 1989, crackdown on antigovernment protestors in Beijing, is a vitriolic antismoker. He helped ban smoking in the Great Hall of the People. Later, he forbid the sale of cigarettes at the concessions inside the Hall. And he is said to have once chastised some National People's Congress delegates who had tried to steal a smoke in the men's room. Today, none of the top leadership smokes, at least in public.
I'm usually in favor of freer trade. And I have a pretty libertarian attitude toward personal behavior. I certainly don't think tobacco should be outlawed. But cigarettes aren't a normal product. If used as the manufacturers recommend, they have nasty health consequences for users and passive smokers alike.
ABBREVIATED LIVES. In China, Mackay figures that direct tobacco-related health costs alone already are running at $3.5 billion. And she notes that smoking today accounts for 750,000 deaths annually in China. Mackay estimates that tobacco will kill between 2 million and 3 million people a year. Think about what that will mean in human terms -- all those abbreviated lives -- over the next 20 years.
Allowing foreign tobacco companies to enter the market is one case where free trade and a level, competitive playing field would tilt the odds dramatically against the health and well-being of the Chinese people.
Clifford is BusinessWeek's Hong Kong bureau chief Edited by Thane Peterson
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Copyright 2002, by The McGraw-Hill Companies Inc. All rights reserved.
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