2002年-世界发展银行全球_Economic_Analysis_of_Tobacco_and_Options_for_Tobacco_Control___China_Case_Study_32页_458kb

Summary of "Economic Analysis of Tobacco and Options for Tobacco Control: China Case Study"

Core Content

This paper, published by the World Bank's Human Development Network and the Tobacco Free Initiative of the World Health Organization, presents an economic analysis of tobacco in China, focusing on the health and economic consequences of smoking, the role of tobacco leaf production in the agricultural sector, the cigarette manufacturing industry, and the potential impact of tobacco control policies.

Main Points

• Smoking Prevalence in China: Over 320 million people smoke in China, accounting for nearly one-third of the world's smokers. Men account for 63% of adult smokers, while women account for 3.8%. There are also an estimated 460 million second-hand smokers.

• Health and Economic Costs of Smoking: Smoking causes significant health problems, including lung cancer, cardiovascular disease, and respiratory illnesses, leading to premature deaths and substantial healthcare costs. In 1989, smoking-related illnesses cost 27.07 billion Yuan annually, which was higher than the government's cigarette tax revenue of 24 billion Yuan. In 1998, smoking accounted for about 6% of total medical costs in China.

• Tobacco Leaf Production: Between 1980 and 1997, tobacco growing areas in China increased from 0.397 million hectares to 2.161 million hectares, a 444% increase. Despite this, the productivity of tobacco land remained relatively stable. Tobacco leaf production rose from 7.17 million metric tons to 39.08 million metric tons, representing a 445% increase. China produced 56% of the world’s tobacco leaf volume in 1997.

• Factors Driving Tobacco Production: Tobacco is seen as a profitable and relatively easy-to-grow cash crop. Farmers can cross-plant and use residuals as fertilizer. Some provinces, like Yunnan and Guizhou, rely heavily on tobacco for income due to their geographical and climatic conditions. Local governments also encourage tobacco production to generate tax revenue.

• Economic Impact of Tobacco Production: Tobacco contributes only about 1.8% of the total value of agricultural production. However, it plays a significant role in some regional economies, particularly in Yunnan, Guizhou, Sichuan, and Henan, which account for 51% of China's tobacco production.

• Cigarette Manufacturing Industry: The tobacco industry is a state monopoly, with the China National Tobacco Company overseeing 180 factories. The industry produces over 2,000 cigarette brands and is highly competitive within major tobacco-producing provinces. Some provinces, like Heilongjiang and Hainan, experienced losses in 1999, suggesting the need for consolidation.

• Taxation and Economic Implications: An increase in cigarette tax by 40 cents (from 1.60 yuan to 2.00 yuan per pack) would lead to a reduction in consumption by 4.57 billion packs, increase central government revenue by 24.74 billion Yuan, and save 1.44 to 2.16 million lives. The increase in tax revenue would outweigh the losses in the tobacco industry and local tax revenue.

• Policy Conflict: There is a conflict between public health goals and economic interests. While the government aims to reduce tobacco consumption for health reasons, tobacco production is a significant source of income for farmers and local governments. This makes implementing tobacco control policies difficult.

• Control Options: The paper suggests several control options, including increasing cigarette taxes, consolidating the cigarette manufacturing industry, and encouraging farmers to grow alternative crops. It emphasizes the need for collaboration between the government and local stakeholders to reduce the negative impacts of tobacco control on farmers and local economies.

Key Information

• Tax Impact: A 40 cent tax increase would result in significant health and economic benefits, including a substantial reduction in smoking-related deaths and a net gain in government revenue.

• Economic Role of Tobacco: Although tobacco contributes minimally to the overall agricultural value, it has a major impact on regional economies and is a key source of income for farmers and local governments.

• Policy Recommendations: The paper recommends that the Chinese government consider increasing cigarette taxes as a public health and economic policy instrument. It also calls for the consolidation of the cigarette manufacturing industry and the promotion of alternative crops for farmers.

Structure and Appendices

• The paper includes a Table of Contents with sections on health costs, tobacco production, cigarette manufacturing, taxation, and control options.

• List of Figures includes data on cigarette consumption, tax revenue, and the economic impact of a hypothetical tobacco tax.

• List of Tables provides detailed data on tobacco growing areas, production, and economic values from 1980 to 1997.

Conclusion

The paper concludes that, despite the economic importance of the tobacco industry, the health and economic costs of smoking are substantial. Therefore, the Chinese government should consider increasing cigarette taxes and promoting alternative economic activities to reduce smoking prevalence and its associated costs.