[Intl-tobacco] Very impt: China's Tobacco Industry Undergoes Changes After WTO Entry

[Robert Weissman]

This is a hugely important story that the tobacco control movement has
unfortunately let fall off the radar screen (at Essential Action, we
feel significant responsibility for this). The immediate story is
China's entry into the WTO and the impact for tobacco control in China
-- not included in this piece is the U.S.-negotiated sharp reduction in
tariff rates for cigarettes imported into China.

What this piece deals with is the structural changes now going in the
industry in China. At least three key trends are mentioned:

1. The Chinese tobacco companies are modernizing and trying to become
more competitive in the face of foreign competition in the Chinese market.

2. The Chinese companies are quickly increasing their cooperative
arrangements with the tobacco multinationals.

3. The Chinese industry is interested in becoming multinational itself,
and selling in foreign markets. (See point 5 below)

These are developments of the utmost importance, forcing major
challenges on the tobacco control movement, and almost sure to lead to
very significant increases in the toll of preventable tobacco-related
death and disease, especially among girls and women.  



China's Tobacco Industry Undergoes Changes After WTO Entry
Source: Tobacco China, 2002-08-07, via tobacco.org
URL: http://www.tobaccochina.com/english/new.asp?id=3390


The tobacco industry of China has undergone a series of changes
since China's entry into the World Trade Organization (WTO) in
November last year, which can be summed up as the following
points:

1. Chinese tobacco manufacturers have striven to reform their
structure by association, acquisition, merger or reorganization, to
turn themselves into enterprise groups and to continuously enlarge
their capacity and strengthen their capability.

Today, Chinese tobacco manufacturers are increasingly of
characteristics of economy of scale. In an effort to increase
profit-making, many large-size tobacco manufacturers have managed
to enlarge their capacity and strengthen their capability, along
with the continued process of structural reform.

2. Chinese tobacco manufacturers have changed their concepts of
business operation. In the past, Chinese tobacco manufacturers used
to attach greater importance to extensive development than
operation, and simply seek the maximization of profits. Today, they
are attaching greater importance to the development of technology
than economic operation, and are endeavoring to create more social
values and improve their corporate performances.

3. The tobacco industry of China has been reforming its management
mechanism, in an effort to establish a modern enterprise system and
raise its operating efficiency. All the Chinese tobacco
manufacturers are promoting technicians or marketing personnel as
corporate managers.

4. Chinese tobacco manufacturers have strengthened the study of
advanced technology developed by their foreign counterparts, and
are introducing advanced cigarette-making machines, to raise the
general level of technology of the tobacco industry of China. So
far, almost all the large tobacco manufacturers of the world have
established relations or started cooperation with Chinese tobacco
manufacturers.

5. Chinese tobacco manufacturers are continuously developing
overseas operations, in an effort to develop new points of economic
growth, participate in international competition, sharpen their
competitive edge on international markets and increase their market
shares.

6. By offering high income and good working conditions, and with
advanced concepts of operation, the tobacco industry of China is
striving to attract highly qualified technical personnel from both
China and abroad, particularly personnel specializing in directions
for producing cigarettes.

SOURCE FROM: Oriental Tobacco newspaper

TobaccoChina Online-08/07/2002