Reporter’s Notebook: China’s Conflict of Interest on Tobacco

BY Ray Suarez  May 31, 2010 at 3:28 PM EST

It was interesting, kind of retro, to be in a country where so many people still light up, where so many stores were selling cigarettes, and the telltale odor of smoke, or a just-stubbed out butt, seemed ever present.

If you’re trying to quit, don’t come here. In shops and restaurants across China, guests can use cigarette bongs kept for public use, and within moments smoke and steam billow forth from their nostrils. Sitting in public parks, taking breaks in farm fields or outside factory gates, men across the country are stopping for a smoke.

China is grappling with how to confront its smoking problem because it faces a simple paradox. The Chinese government wants its citizens to stop smoking, but the Chinese government is also the world’s No. 1 buyer of tobacco and producer of tobacco products.

Provincial governments depend heavily on the tax revenues from tobacco sales, while at the same time the Beijing government is signing on to international compacts meant to restrict and discourage smoking.

Even doctors here smoke. Fully a third of medical personnel in China still use tobacco. What makes this particularly threatening is the threadbare Chinese health system. Looking down the road, Chinese health officials see deaths from smoking doubling, from the current 1 million a year, to 2 million a decade from now.

We visited with a 52-year old machinist and former smoker, suffering from chronic obstructive pulmonary disease, COPD. He sat in his sparsely furnished apartment and talked about how the disease limits his life. He talked slowly, and had to pause to catch his breath.

He used to work for a state enterprise. The old “iron rice bowl” system guaranteed continued employment and continued income, even if the state-owned factories were money-losers for the government.

Over time, the Chinese government has bailed out of operating most of these state monopolies. By the time our machinist lost his job, his disease had progressed to the point where no other business would hire him. There is no state disability insurance. There is only the most limited private insurance. At 52, he relies on cash from his daughter to stay afloat.

One monopoly the state hasn’t divested is the production of cigarettes and it is tremendously profitable. The top government official trying to discourage smoking in China expressed frustration in an interview with the fact that the head of the state tobacco monopoly still speaks with a loud voice in government circles while she has an uphill battle.

Around the world, a pretty reliable pattern has set in: when populations move out of the worst poverty, one of the things that added disposable income is spent on is cigarettes. Smoking is a small luxury for the world’s poor. When that same society gets a critical mass of its population into the middle class, instead of trending even higher, smoking starts to tail off. Maybe these richer people now see the possibility of living longer, healthier lives, and figure out how to quit.

China’s getting a lot richer, really fast. And six out of 10 men smoke. It will be interesting to watch smoking levels over the next decade or two. When millions more Chinese men are sure they’re going to be living a lot longer, will they pass when offered a cigarette and say, “No thanks, I’m trying to quit?”

In Yunnan province, families vie for choice farm plots for growing tobacco. Though they can only sell their crop to one buyer, the Chinese government monopoly, they know there’s no crop they can grow that can yield a bigger cash payout. One family we spoke to had just finished watering a tobacco field, young tobacco plants framed by plastic sheeting as a hot sun beat down on them. Was last year a good year? Yes it was. How much were they paid for the crop? Twelve hundred dollars. To support how many people? Six.

Now we should be clear: With minimal housing costs, and most of the family’s food grown on a private plot, that twelve hundred bucks can go pretty far. But China’s annual per capita income is around $3,600… a figure that reflects the yawning gap between the country’s increasingly affluent urbanites and the rural majority.

Shopping for tobacco is a reminder of that gap. The most expensive gift cartons can run as high as $120, or about a tenth of the annual income of that tobacco family laboring near the border with Vietnam.

This week, the NewsHour will air several of Ray Suarez’s health reports from China. On Monday, which is World No Tobacco Day, he reports on why the Chinese government has done little to curb the nation’s smoking epidemic. Tuesday’s NewsHour will feature a report on China’s growing obesity problem.