Director Cheng Jiahua: China’s tobacco regulations are ahead of the curve

Introduction: Cheng Jiahua, Director of the State Tobacco Monopoly Administration, pointed out that China is leading the world in combating illegal tobacco trade. Illegal tobacco trade refers to any act or behavior related to the production, shipment, acceptance, possession, distribution, sale, or purchase of tobacco products that is prohibited by law, including any acts and behaviors intended to facilitate such activities. The World Health Organization states that the illegal trade of tobacco products poses a serious threat to human health and is one of the main threats to global tobacco control efforts.     According to news from China's e-cigarette information: illegal tobacco trade refers to any act or behavior related to the production, shipment, acceptance, possession, distribution, sale, or purchase of tobacco products that is prohibited by law, including any acts and behaviors intended to facilitate such activities. The World Health Organization states that the illegal trade of tobacco products poses a serious threat to human health and is one of the main threats to global tobacco control efforts.   What harms does illegal tobacco trade bring? What is its impact on the country, individual citizens, and tobacco control efforts? How will the newly released "China Tobacco Control Plan (2012-2015)" (hereinafter referred to as the "Plan") effectively combat illegal tobacco trade? Recently, a reporter specifically interviewed Cheng Jiahua, Director of the State Tobacco Monopoly Administration.   Global illegal tobacco trade is serious   The harm of illegal tobacco trade is enormous and has attracted the attention of governments around the world.   On January 10, 2013, at the World Health Organization headquarters in Geneva, Switzerland, the Chinese government signed the "Protocol to Eliminate Illicit Trade in Tobacco Products" (hereinafter referred to as the "Protocol"). The core of the Protocol is to combat illegal activities such as tobacco smuggling, illegal production, and counterfeiting to eliminate illicit trade in tobacco products, protect public health, and maintain the normal market order of tobacco products. China was among the first 11 countries to sign the Protocol.   "Cigarettes have become one of the most smuggled consumer goods in the world," Cheng Jiahua told reporters. According to information provided by the United Nations, criminal groups smuggle an estimated 600 billion cigarettes each year, which means that one out of every ten cigarettes smoked globally is smuggled, resulting in a loss of $50 billion in tax revenue annually. The Plan cites data from the International Union Against Tuberculosis and Lung Disease, stating that in 2009, illegal cigarettes accounted for 11.6% of the global cigarette market, with 16.8% in low-income countries, 11.8% in middle-income countries, and 9.8% in high-income countries.   "The harm of illegal tobacco trade is enormous, primarily threatening public health and hindering tobacco control efforts in various countries," Cheng Jiahua said. Illegal tobacco trade makes tobacco products cheaper and more accessible due to tax evasion, leading to more people smoking, which has severely impacted tobacco control efforts. Additionally, illegally produced tobacco products pose greater health risks; criminal activities related to smuggling cause significant financial losses for governments; and criminals may use profits from illegal tobacco trade to fund other forms of crime. "The victims of illegal tobacco trade are consumers, governments, and law-abiding tobacco companies, while the only beneficiaries are criminals," Cheng Jiahua stated.   China's level of combating illegal tobacco trade is globally leading   Currently, illegal cigarette products account for about 4% of China's cigarette market, which is not only lower than that of middle and low-income countries but also lower than that of developed countries, placing China at a leading level globally.   "China was once a victim of illegal tobacco trade," Cheng Jiahua explained. In the 1990s, China's cigarette market was severely impacted by smuggled and counterfeit cigarettes. In recent years, the tobacco department has continuously strengthened its crackdown in collaboration with public security, customs, and industry and commerce departments, effectively rectifying and standardizing the tobacco market order, achieving significant results. In 2012 alone, China investigated 4,886 cases of counterfeit cigarettes valued at over 50,000 yuan, dismantled 928 major counterfeit cigarette networks, seized 256,000 counterfeit cigarettes, 14,900 tons of tobacco leaves, confiscated 530 counterfeit cigarette machines, shut down 347 illegal tobacco-related websites, detained 8,486 criminal suspects, and pursued criminal responsibility for 5,660 individuals.   "From being a victim of illegal trade to becoming a global leader in combating illegal trade, the reasons are multifaceted," Cheng Jiahua said. Firstly, China implements a tobacco monopoly management system, and the "Tobacco Monopoly Law of the People's Republic of China" provides legal guarantees for combating illegal tobacco trade. Secondly, China is one of the few countries in the world that has established specialized management departments to effectively combat illegal tobacco trade. In recent years, China has cultivated a high-quality, capable, and high-level inspection team, whose main responsibility is to combat illegal trade. At the same time, the tobacco department has gradually explored a "government-led, inter-departmental collaboration, multi-party participation, and close cooperation" system for combating counterfeiting, focusing on "cracking down on production sites, cutting off sources, dismantling networks, and capturing main offenders," forming a complete set of effective measures to combat illegal trade. While severely cracking down on various illegal activities in society, the tobacco industry also emphasizes rectifying various irregularities within the system, conducting special rectifications and serious investigations into serious issues such as overproduction, concealment of production, and regional blockades, further standardizing the production and operation order of "two tobaccos".   "China's experience and practices in combating and eliminating illegal tobacco trade have been recognized and emulated worldwide," Cheng Jiahua said. China participated in the negotiation and formulation of the Protocol throughout, and its successful experiences have been referenced and absorbed by the Protocol. For example, the content regarding strengthening license management in the Protocol draws on relevant provisions of the "Tobacco Monopoly Law of the People's Republic of China." The Secretary-General of the Framework Convention on Tobacco Control, Dr. Vera Luiza da Costa e Silva, has highly praised: "The Chinese government has actively fulfilled its obligations under the Convention and established a strong coordinating leadership mechanism, accumulating a wealth of experience in tobacco control laws and technologies, which is worth promoting to other countries." This Plan also fully draws on China's experience in combating illegal tobacco trade. For example, in Section 4, Article 7, "Effectively Combat Illegal Trade in Tobacco Products," it emphasizes the need to "consolidate and improve the joint anti-counterfeiting mechanism" and "maintain a high-pressure stance against counterfeiting at all times."   Implementing tobacco monopoly is the most effective means to combat illegal tobacco trade   Illegal tobacco trade has severely impacted global tobacco control efforts, and how to effectively combat illegal tobacco trade has become key to advancing tobacco control work.   Cheng Jiahua believes that the rampant global illegal tobacco trade is mainly due to three reasons: first, tobacco is a legal and high-value commodity that can be openly transported and sold, making it easy to establish supply and distribution channels; second, cigarettes are high-tax products, and illegal trade is highly profitable due to tax evasion; third, in most countries, penalties for cigarette crimes are relatively light, making it easy to induce counterfeiting, smuggling, and illegal production behaviors.   Combating illegal trade is a fundamental responsibility, but its persistent and rising trend year after year is worth pondering. Although tobacco is harmful to health, its demand still exists and cannot be eradicated in the short term. Cheng Jiahua believes that the essence of tobacco control lies in reducing tobacco consumption demand; merely reducing supply may backfire. "This is evident from the implementation and impact of the Prohibition in the United States in the early 20th century," Cheng Jiahua said.   As early as the early 19th century, residents in some parts of the United States began seeking legal means to punish drunkards, arguing that "alcohol is the root of all crimes." In 1919, the U.S. Congress passed a constitutional amendment that made all production, sale, and consumption of alcoholic beverages illegal starting the following year. However, Prohibition did not control people's drinking; instead, it led to rampant illegal alcohol production. In December 1933, the United States had no choice but to lift the 14-year Prohibition.   "Tobacco control must fully consider the uniqueness of tobacco products and advance steadily with plans and priorities," Cheng Jiahua believes. China's tobacco monopoly system not only concentrates resources and forms a joint force but also organically unifies the interests of monopoly management with production and operation, fully mobilizing all parties' enthusiasm to combat illegal trade, which is very beneficial for curbing the spread and proliferation of counterfeit and smuggled tobacco. The Plan also fully recognizes this point, emphasizing the need to fully leverage the role of the inter-ministerial coordination leadership group, strengthen communication with relevant departments, and strictly implement the tobacco monopoly and licensing system, providing strong institutional guarantees for tobacco control in China.   "From the perspective of future development directions, the liberalization of tobacco trade is no longer the direction encouraged and supported by countries around the world, and governments will increasingly tighten regulations on the tobacco industry," Cheng Jiahua stated. Practice has also proven that continuously strengthening government regulation of the tobacco industry is a reasonable and effective tobacco control measure. In recent years, there have been increasing calls in Russia, Ukraine, Poland, Hungary, and other countries for governments to implement a tobacco monopoly system.   "Adhering to and improving the strict management of the production, sale, import, and export of tobacco monopoly products by the state, and operating according to the law, is conducive to strengthening tobacco control and steadily advancing tobacco control work," Cheng Jiahua said.