China -- Guangzhou Update (fwd)

[Robert Weissman <rob@essential.org>]

Financial Review (Australia)
26 August 1998
                Elvis a substitute 
                for nicotine

                     By Rowan Callick, Hong Kong 

                Chinese communist leaders of the past such as Deng
                Xiaoping demonstrated how they were in touch with
                peasants and workers by being pictured with a cigarette
                constantly to hand. 

                Today's leaders are rarely portrayed smoking. They
                illustrate their common touch, instead, by their prowess at
                karaoke – President Jiang Zemin favouring the Elvis
                Presley ballad Love Me Tender. 

                This is not accidental. For China is developing into a
                battleground between unbridled economic opportunism and
                newly emerging environmental and health anxieties. 

                High on the list of those anxieties is the fact that China is
                by far the world's largest tobacco market, the leading
                British medical journal The Lancet recently estimating that
                1.7 trillion cigarettes are smoked there each year, almost
                five a day for every man, woman and child. 

                About 320 million people, more than a quarter of the entire
                population, smoke. 

                It is estimated that annual smoking-related deaths will reach
                2 million by the year 2025, compared with a present
                750,000. 

                The central government has become increasingly anxious
                about the impact on national health – and costs – and four
                years ago promulgated legislation banning tobacco
                advertising from certain public places, including waiting
                rooms, theatres, cinemas, conference rooms and sports
                arenas, and from the mass media. 

                The municipal government of Guangzhou – the country's
                richest city, excepting Hong Kong – is, like other provincial
                centres, being pulled into line by the new administration of
                Mr Zhu Rongji, who became Premier five months ago. And
                it has consequently issued a ban on all tobacco advertising,
                starting yesterday. 

                The Guangzhou Administration of Industry and Commerce,
                the body responsible for enforcing the ban, however said
                this would mean arbitrarily breaking lucrative contracts with
                advertisers. 

                The official newspaper China Daily quoted Mr Yi
                Zhenhua, an official from the organisation, as saying: "We
                can't tolerate" being put in this position. He claimed that
                main streets, bus stations, squares, cafe umbrellas and
                buses were not included in the regulation. 

                As a compromise, the ban would be telescoped, Mr Yi said,
                to two months – September and October. 

                Local governments, said China Daily, were tempted to
                earn big incomes from cigarette companies by selling more
                space than legally allowed, and already depended heavily
                on tax revenues from cigarette makers. 

                There are only three cigarette manufacturing joint ventures
                in China, other projects being put on hold until 2001. Until
                then, foreign companies can only increase their profits by
                entering into licensing and technical advice agreements with
                the 180 Chinese producers, who employ 500,000 people.
                Tobacco, highly taxed, is also the subject of massive
                smuggling. 

                Pricing, production quotas and distribution for the industry
                are set by the state tobacco Monopoly Administration,
                which two months ago announced it would soon order
                domestic manufacturers to reduce the average tar content
                to less than 15 milligrams per cigarette by the year 2000,
                compared with 18 milligrams at present. 

                Many industrialised countries have a 12 milligrams limit.