China's tobacco monopoly fuels profits, and a smoking crisis

China’s anti-smoking push runs into a basic contradiction: the state is both the public-health regulator and the financial beneficiary of the cigarette business. That tension has left China Tobacco, the government monopoly, deeply embedded in the system it is supposed to restrain.

The scale is enormous. The World Health Organization says China has more than 300 million smokers, nearly one-third of the world’s total, and more than half of adult men still smoke. The agency says about one in every three cigarettes smoked globally is smoked in China. China also has one of the world’s heaviest second-hand smoke burdens, with more than 700 million non-smokers, including about 180 million children, exposed at least once a day in a typical week. WHO says that exposure kills 100,000 people a year.

China signed the WHO Framework Convention on Tobacco Control in 2005 and enforced it in 2006, but the monopoly never lost its power. The Examination reported that China Tobacco controlled 96% of the cigarette market in 2022 and sold 2.46 trillion cigarettes that year, while sending about $213 billion to the central government through profits and tax payments. CNBC later reported that China’s tobacco industry generated about 1.5 trillion yuan, or $210 billion, in revenue in fiscal 2023, with China Tobacco accounting for about 97% of tobacco production and sales.

That revenue stream helps explain why enforcement has moved unevenly. In 2023, 44 cities introduced or revised smoking regulations, bringing the total with relevant rules to 254 nationwide, and 24 provinces or provincial-level regions had smoking rules in place. The National Health Commission’s Healthy China plan calls for tougher controls through pricing, taxation and legislation, with a target of reducing smoking among people age 15 and older to 20% by 2030. Even so, the nationwide smoking rate was still 24.1% in 2022, down just 1.7 percentage points from 2020.

The health outlook is deteriorating. The China Kadoorie Biobank projected that smoking will kill one in three young men in China and warned annual tobacco deaths could rise from about 1 million in the 2010s to 2 million in the 2030s and 3 million in the 2050s if quitting does not accelerate. The same research said China now consumes about 40% of the world’s cigarettes, almost entirely among men, and that more than 183.5 million smokers may already be tobacco-dependent. Even Xi Jinping’s personal aversion to smoking has not overcome a system built to profit from it.