Experts rehash advice from the pits to curb smoking

Monday 21 March 2011, 3.26pm HKT


In China, one state agency is trying to get people to quit smoking while another tries to get them to smoke.

Another David vs. Goliath storyline.

The China Center for Disease Control and Prevention (China CDC) is calling on the Chinese government to cut tobacco consumption by raising cigarette prices. The state tobacco monopoly wants the reverse and to have more smokers (or, if you like, fewer smokers to kick the habit).

A China CDC report out on 6th January 2011 recommends raising cigarette prices to serve double duty of driving down nationwide tobacco consumption whilst keeping tobacco revenue and taxes up.

Sound familiar? It should. It’s what happened in Hong Kong, first with Sir Piers Jacobs (1936-99) when he was financial secretary here (1986-91) and now with John “Tom Selleck” Tsang this year. Yes, raising the price of one commodity (or should it be contraband?) so that it creates the domino effect of driving up prices for all other commodities.

Let’s take an at-a-glance look at the report, with my take on things embedded, as it were, like journos embedded in combat units making piss-bored running commentary.

* * *

Friendly advice for those of you who smoke

The Naked Listener makes no representations, but would suggest the smokers among some of you should:

(a) learn a little bit of the reasons and arguments usually advanced by the anti-smoking lobby so that you don’t appear like an irrelevant airhead (i.e. an irrelephant) with your one and only excuse “I’ll do damn well whatever I please with my lungs, thank you”;

(b) quit the filthy habit and/or go for some other bad habit that doesn’t produce secondhand smoke (e.g. cocaine snorting, pill popping, LSD trippin’, becoming a nudist / lawyer / sociologist / linguist / law-enforcement officer / religious nutcase, etc);

(c) learn to identify and distinguish feasible or realistically possible advice from the ivory-tower ones: it may save your life.

* * *

The report at a glance

Credentials

The China CDC report was prepared by the country’s anti-smoking lobby and posted on the China CDC website on 6th January 2011 (but unlocatable since then).

The report titled “Tobacco Control and China’s Future” was authored by Yang Gonghuan (vice director of the CCDC and head of the National Office of Tobacco Control) and Hu Angang (head of the Center for China Studies at Tsinghua University) with help from a panel of 28 experts (19 Chinese and nine foreign).

The panel includes two experts from Hong Kong: Professor Lam Tai-hing (professor of the school of public health of the University of Hong Kong) and Dr Judith Mackay (senior adviser to the World Lung Foundation).

Situation

  • slow progress in tobacco control nationwide
  • basically no change in number of smokers nationwide
  • tobacco consumption and production growing nationwide
  • tobacco-attributable deaths on rapid rise nationwide since 2000 and will rise even more by 2030
  • tobacco use in China is resulting in higher medical costs than the taxes and profits it generates
  • the Chinese tobacco industry is the major culprit for interfering and stalling government efforts to meet official tobacco control pledges (usually by sanctions-busting advertising and sponsorship bans)
  • Chinese citizens still don’t fully understand the personal health implications of tobacco use, which means public education is badly needed
  • nationwide tobacco control is handled by a non-health-related ministry (see ‘Legal & administrative’ section below)
  • China’s (and the world’s) largest cigarette maker is a component of the country’s tobacco regulatory authority (see ‘Legal & administrative” section below)

The Naked Listener writes: Of course there’s been slow progress. For what it’s worth, the Chinese have a highly noticeable penchant for interlocking definitions for words, so it’s unsurprising that China has an interlocking regulatory/industry mechanism like the cigarette company being part of the regulatory authority being part of the ministry. What the hell did you expect? The whole point of the administrative structure is graft: skimming off the top, just like the disaster-in-the-offing with China’s airports (as said in the Week 9 Roundup). The same structure is nearly always duplicated in practically all economic sectors of China.

As to public education, this is kind of bizarre. China has been a nation of smokers since way back when ever since Sir Walter Raleigh brought the stuff over from the New World. Smoking had been phenomenal, to say the least, during the Cultural Revolution 1966-76. To say the Chinese citizenry as a whole is in serious need of education about tobacco hazards is, quite honestly, testing everyone’s patience as well as a bit insulting to our intelligence. They know full well of the medical problems, thank you very much — it’s just that the average Chinaman will always say “don’t know” in any survey (as any sociologist or experimental psychologist will tell you).

Ask, and any Fag Ash Lil’ (煙剷 yeen chaan*) lit. smoke shovel: a chainsmoker) can tell you that, six weeks into regular smoking, he/she knows nearly everything there is to know about the health-destroying effects of smoking. Just knows. It’s the non-smokers who find the smoking health stuff a mystery.

* Cantonese slang: a chainsmoker.

Recommendations

  • 20-year phased plan to bring about graduated change in national smoking habits
  • raise cigarette prices by RMB¥1 (15 U.S. cents or 9 pence in British money) for lower-end cigarette brands (serves double duty in driving nationwide smoking down whilst keeping tobacco revenue up)
  • define more clearly the government’s role in comprehensive tobacco control
  • reassign responsibility for tobacco control (i.e. at policy level) to the Ministry of Health or a new ministry-level authority from the current arrangement
  • establish a national tobacco control bureau for nationwide enforcement
  • remove responsibility for tobacco control from regulatory authorities overseeing the tobacco sector
  • restructure the administrative mechanism of the Chinese tobacco industry so that it is excluded from authorities that handle tobacco control
  • encourage tobacco growers to switch to alternative crops or even other fields of work through subsidies or policies
  • central government to subsidise provinces with tobacco-dependent industries during the transition period
  • ban the use of public funds for purchasing tobacco by public agencies (the biggest buyers of premium cigarettes)
  • public education and anti-corruption campaigns to counter ingrained cultural customs (e.g. gift-gifting) that perpetuate tobacco use to demonstrate how such behaviour harms people
  • disallow accepting tobacco-related gifts by state and party personnel as part of anti-corruption measures

Bet these two can supplement their smoking expenses with something...

The Naked Listener writes: Yes, it is true that a one-yuan (15¢ or 9p) increase will bring about “a tangible reduction” in the number of smokers in China, given that the fairly low state of average income and standard of living there.

When Michael Bloomberg became mayor of New York City, he hiked up cigarettes there to US$11 a packet. So even a 15¢ (1.4%) increase is pretty steep even in the American context. In the British context, a 9p (1.5%) increase for a £5.99 packet is also pretty steep. We in Hong Kong took a 41% hit — forty-one percent! — if that doesn’t drive up inflation for other goods, you really have to be a blithering idiot not to see it.

Here’s a maxim from Economics 101 (look up any university-level economics textbook): If you want to keep inflation under control, keep your price increases INSIDE the rate of inflation. Forty-one percent most certainly isn’t inside the in-bloody-flation rate.

Economics

  • price of a packet of cigarettes (20s) around RMB¥5 (76¢ or 47p)
  • 50% of smokers (150 million people) generates only 2% of the country’s per-capita GDP in 2009
  • tobacco consumption growing in China (589.9 billion cigarettes in 1978 vs. 2.3 trillion in 2009)* in tandem with production
  • production value of the Chinese tobacco industry has been rising year after year (RMB¥100 billion in 1978 vs. RMB¥513.1 billion in 2009)
  • tobacco no longer makes a net contribution to the Chinese economy but, rather, a deficit (minus RMB¥61.8 billion or US$9.41 billion in 2010)
  • economic consequences arising from tobacco use have long been underestimated
  • Chinese tobacco industry’s favourite argument against price increases and legislation to discourage smoking: declining consumption leads to economic loss
  • another favourite argument: 6% of the national tax revenue comes from the tobacco industry, which employs 20 million tobacco planters and 250,000 workers
  • both arguments fall flat because tobacco-related medical expenditure and loss of productivity (both increasing at explosive rates) wholly offset such economic benefits of the industry

* That is, 589,900 million cigarettes in 1978 vs. 2,300,000 million in 2009

The Naked Listener writes: Considering the 2010 nominal income of the average Chinese person is US$4,282 p.a. (IMF estimate) or US$4,300 (CIA estimate), a five-yuan packet of ciggies is pretty expensive. So the first obvious indication is there’s a lot of wastage and the proverbial money-down-the-rabbithole activities extra legal functions must be going on if half your smokers are only making a 2% impact on the economy. The other half of the smokers can’t be making a more significant contribution because you just can smoke that much, even with premium ciggies. It can’t be cheap smokes because they aren’t cheap local-wise. The ‘production value’ is high enough, therefore the consumption value must be even higher (since profits have to be made). You cannot possibly come to any other conclusion — other than the conclusion that the authors are shoehorning their own conclusions into the figures.

(I didn’t get a Distinction in Business Calculations in university for nothing, you know. Figures are just figures — they have a tendency to give a veneer of empiricism and expertise unless you take the trouble of giving sense to them.)

Demographics

  • negligible decrease in number of smokers in China (0.08% p.a. in 2002-2010 vs. 0.87% p.a. in 1996-2002)
  • est. 301 million smokers in 2010 (about the same as in 2002), or 28% of the national population of 1,300 million
  • est. 740 million non-smokers, including 182 million children, exposed to secondhand smoke in public places and the workplace in 2010
  • of male smokers, 68% are workers, 60% farmers, 52% civil servants, 40% medical professionals and 38% teachers (note: these figures don’t add up: report gives no figures for female smokers)
  • a 2010 survey found 75% of Chinese adults didn’t know the health hazards of smoking
  • the same survey found 35% of same surveyees didn’t know the hazards of secondhand smoke

The Naked Listener writes: Of course you have negligible decrease in smoker numbers. Old smokers die horrible deaths. New smokers idiotically coming on stream. Even a constant 10% new smoker rate will mean a fast-growing number of smokers, given the explosive birth rates of the Chinese population.

Let’s put this in a simple way so all of us can get the basic idea:

Assumptions for calculation:
– total population is 100 persons
– birth rate of 20 persons p.a.
– crude death rate in the population of 2 persons p.a.
– 20 persons out of 100 are smokers
– smoking uptake rate of 5 new smokers a year
– smoking death rate of 2 old smokers p.a.

So in Year 1, we have 20% smokers vs. 80% non-smokers.

By Year 2:
Population is 100 + 20 – 2 = 118 persons.
There are 20 + 5 – 2 = 23 smokers in the population.
That’s 19% smokers vs. 81% non-smokers (almost same as before).
But of the smokers group itself, it’s already been a 15% increase.

By Year 3:
Population is 118 + 20 – 2 = 136 persons.
There are 23 + 5 – 2 = 26 smokers.
That’s 19% smokers vs. 81% non-smokers (no change)
But of the smokers group itself, it’s already been an 11% increase.

Conclusion: Things cancel each other out if you’re careless.

Mortality

  • smoking killed 1.2 million people in China in 2005, making tobacco “the top killer of the Chinese population”
  • smoking-related deaths expected to reach 3.5 million annually by 2030 if no countermeasures are taken to reverse the momentum
  • tobacco-attributable deaths will peak and coincide with the end of China’s “population bonus” period in the next 20 years
  • one-third of tobacco-attributable deaths are in the 40-69 age bracket
  • 25% of that one-third tobacco-attributable deaths are aged 40 and over
  • 3 out of 4 tobacco-related stroke survivors have lost ability to work
  • 40% of those 3-out-of-4 stroke survivors suffer from severe disabilities
  • recent WHO statistics say 600,000 people die every year worldwide due to exposure to secondhand smoke

So's making things fit...

The Naked Listener writes: You really have to home in on the meaning of “tobacco-attributable deaths.” It covers a really wide range of causes, as much as it could also mean whatever you want it to mean. Considering the heavy air and water pollution in many parts of China, many non-tobacco-related respiratory causes could be drawn into the tobacco-attributable death heading. In statistics, it’s called colloquially ‘making things fit.’

Healthcare costs

  • healthcare costs for tobacco-attributable illness have been outstripping tobacco taxes and profits every year since 1999
  • healthcare costs for those illness totalled US$10.65 billion in 2010
  • in 2005, tobacco was responsible for RMB 242.6 billion in direct medical costs and indirect economic costs vs. RMB 240 billion in tobacco tax and industry profits

The Naked Listener writes: I make no representations, but be reminded that healthcare costs are also the fastest- and highest-rising of any costs anyway. In that sense, medical costs will will outstrip tobacco revenue whether tobacco use causes harm or not.

Legal & administrative

  • Ministry of Industry and Information Technology (MIIT) is responsible for tobacco control nationwide (an essentially health-related matter)
  • China National Tobacco Corporation (CNTC) (the world’s largest cigarette maker and produces 95% of China’s tobacco products) is part of the State Tobacco Monopoly Administration (STMA)
  • China in 2003 ratified the WHO’s Framework Convention on Tobacco Control (FTCC), which came into force in China on 9th January 2006
  • FTCC pledges: measure to curb tobacco use, smoke-free legislation, large and clear health warnings on tobacco packaging, smoking ban in all indoor public areas, total bans on tobacco advertising, promotion and sponsorship, among others
  • China only scored 37.3 out of 100 points on fulfilling FCTC commitments
  • China’s failing its anti-smoking pledges is due to Chinese tobacco industry’s circumvention of tobacco-control policies (e.g. distortion of FCTC contents, denying scientific conclusions of health hazards, disguised advertising and marketing, smoking as smoker’s rights)

* * *

Why the advice is worthless

Let’s not denigrate the report’s recommendations, which are by themselves useful enough. Trouble is there just aren’t more of the useful advice.

Ladies and gentlemen, as if you couldn’t see already (and clearly you couldn’t), it’s a simple matter of arithmetic and economics.

It boils down to a singularly simple truth: vested interests.

That China CDC report is a direct attack on the country’s State Tobacco Monopoly Administration, whose subsidiary is the China National Tobacco Corporation (CNTC).

The state-owned CNTC had record profits: RMB¥604.5 billion (US$92 billion or £57 billion) in 2010 vs. RMB¥253 billion for 2006. This is serious bread by anyone’s standard.

Tax is a practical way to rein in tobacco production and consumption. The tax proportion in cigarette prices varies among different countries, for instance, 80% in the UK, 76% in Germany, 58% in Brazil, 54% in India and 37% in China. In other words, slapping on higher tobacco duties don’t operate with the same effect in China as do in other countries. Also, taxes paid by the CNTC for the 2010 tax year was RMB¥498.8 billion (US$76 billion or £47 billion) vs. RMB¥194.4 billion for tax year 2006. This is lovely bread for the state.

Any change in overall smoking demand and supply takes a long time, which provides a golden opportunity for the Chinese tobacco industry to transform its structure and redefine its role. And that offers ‘golden opportunities’ for various people and organisations to ride the gravy train too.

So which recommendations in the report haven’t got a chance in hell?

Recommendations such as those calling for reforming the structure of the tobacco industry isn’t going to work. It’s too big if it employs 20 million or more people and it’s going to take more than 20 years to change. The country’s general economic reforms are still nowhere near half-finished fully 30 years after their launch in 1980.

Resetting tobacco control responsibilities to another (possibly new) ministry isn’t going to work. It ignores the fact that every tier of government operates along political or personal faction lines (i.e. guanxi, social networking). You’re just asking for factional tugs of war as party cadres go into influence peddling and various other secret activities as they scramble for position in any new government body.

Taking anti-smoking efforts out of the hands of regulatory bodies that also oversee the tobacco sector isn’t going to work. It completely goes against the grain of Chinese administrative philosophy since time immemorial.

Taking the tobacco industry out of the loop in tobacco control is easier said than done. Look at the tobacco industries in other countries to see why this isn’t going to work. If the results are less than favourable in advanced countries with a sophisticated administrative structure, what can we expect in a country like China?

Subsidising tobacco growers to switch to other crops isn’t going to work. It just goes against the stated policy of China to realign itself into a more market-oriented economy. And you are asking it to re-realign itself to something before? Pffft!

Public education to denature ingrained cultural practices isn’t going to work (at least not in the short or medium term), given the highly conservative nature of the Chinese population and the risk-averse nature of the government. Do it, of course, but expect little from it.

So what are we left with that’s doable?

Raising prices! Which is the whole point of the exercise. That’s the rationale of the report, albeit not in so few words. You just cannot recommend raising prices by itself — you have to pad it up with serious-sounding, feel-good, horizon-looking recommendations. When you cross off the bits that have little or no chance of succeeding or being carried out, we’re left with … raising prices.

* * *

“What needs to be done, what is effective in reducing tobacco use – especially price policy and legislation – is very well known, and if China wishes to protect the health of its people, now is the time to implement these measures.” — Dr Judith Mackay

As The Naked Listener already mentioned in the Week 8 Roundup, those who promote the raising of tobacco prices to keep tobacco consumption down are also those who seem unable (or unwilling) to realise that it drives overall inflation for other goods. And that’s all-round bad for everyone. You don’t really need to be an expert to come up with that kind of recommendation — but you do need a modicum of genuine expertise and common-sense foresight to figure out the long-range consequences on other sectors of the economy.

No, Dr Mackay, that’s not what you should advise. Please don’t do things like this again.

* * *

Sources (for those who are brainwashed into believing that anything without citations or references must automatically be worthless)

Asia Sentinel. “China’s Smoking Problem” by Mark O’Neill, 08 March 2011,  http://www.asiasentinel.com/index.php?option=com_content&task=view&id=3042&Itemid=206

Central Intelligence Agency. Field Listing—GDP – Per-Capita (PPP), The World Factobook, accessed 15 March 2011, https://www.cia.gov/library/publications/the-world-factbook/fields/2004.html?countryName=China&countryCode=ch&regionCode=eas&#ch

Hong Kong Trade Development Council. “China’s tobacco control efforts stalled as smoking cost outweighs benefits,” 12 Jan 2011,  http://www.hktdc.com/info/vp/a/profs/en/1/5/1/1X07ACDN/China-039-S-Tobacco-Control-Efforts-Stalled-As-Smoking-Cost-Outweighs-Benefits.htm

International Monetary Fund. World Economic Outlook Database: October 2010, accessed 15 March 2011,  http://www.imf.org/external/pubs/ft/weo/2010/02/weodata/weorept.aspx?sy=2010&ey=2010&scsm=1&ssd=1&sort=country&ds=.&br=1&c=512%2C941%2C914%2C446%2C612%2C666%2C614%2C668%2C311%2C672%2C213%2C946%2C911%2C137%2C193%2C962%2C122%2C674%2C912%2C676%2C313%2C548%2C419%2C556%2C513%2C678%2C316%2C181%2C913%2C682%2C124%2C684%2C339%2C273%2C638%2C921%2C514%2C948%2C218%2C943%2C963%2C686%2C616%2C688%2C223%2C518%2C516%2C728%2C918%2C558%2C748%2C138%2C618%2C196%2C522%2C278%2C622%2C692%2C156%2C694%2C624%2C142%2C626%2C449%2C628%2C564%2C228%2C283%2C924%2C853%2C233%2C288%2C632%2C293%2C636%2C566%2C634%2C964%2C238%2C182%2C662%2C453%2C960%2C968%2C423%2C922%2C935%2C714%2C128%2C862%2C611%2C716%2C321%2C456%2C243%2C722%2C248%2C942%2C469%2C718%2C253%2C724%2C642%2C576%2C643%2C936%2C939%2C961%2C644%2C813%2C819%2C199%2C172%2C184%2C132%2C524%2C646%2C361%2C648%2C362%2C915%2C364%2C134%2C732%2C652%2C366%2C174%2C734%2C328%2C144%2C258%2C146%2C656%2C463%2C654%2C528%2C336%2C923%2C263%2C738%2C268%2C578%2C532%2C537%2C944%2C742%2C176%2C866%2C534%2C369%2C536%2C744%2C429%2C186%2C433%2C925%2C178%2C746%2C436%2C926%2C136%2C466%2C343%2C112%2C158%2C111%2C439%2C298%2C916%2C927%2C664%2C846%2C826%2C299%2C542%2C582%2C967%2C474%2C443%2C754%2C917%2C698%2C544&s=NGDPDPC&grp=0&a=&pr.x=8&pr.y=6

US Winston Online Club. “Tobacco control necessary,” 10 Jan 2011, http://www.us-winston.com/tobacco-control-necessary/

Xinhua. “WHO warns ‘death wave’ from tobacco to hit China,” 06 Jan 2011, Xinhua English News, http://news.xinhuanet.com/english2010/health/2011-01/06/c_13679227.htm

Images:

© The Naked Listener’s Weblog, 2011.

2 Responses to “Experts rehash advice from the pits to curb smoking”

  1. Woman said

    Firstly; let say this. I am indeed a smoker.

    Now that is out of the way… let me get to my second thingie I wanted to say.

    Do those labels on the packages really do any good to anyone, “Smoking is bad for your health” and such? No. I laugh and chuckle at it. It is the same thing on the sides of pill bottles you get in Western hospitals with possible side effects. Does that stop people from taking them if they cannot operate heavy machinery? Noppers.

    BUT… I do enjoy one of the points you made here. People in China lack the education/knowledge when it comes to the effects of second hand smoke. THAT is where the Educational System should focus.

    I get mocked often enough when I put out my cigarette when I am around children or a pregnant woman because they claim that the smoke cannot hurt those around them.

    Excellent post by the way!!!

    Like

    • Considering the behaviour of most governments around the world, whatever the hell they’re smoking must be more dangerous than ‘normal’ smoking. True about lack of knowledge or insight about secondhand smoke – but then most people even in advanced countries are pretty much in the dark about it too. Thanks for liking this post.

      Like

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