Smokeless China

BEIJING – In a few weeks, Beijing will implement a city-wide ban on smoking in all indoor public spaces, such as restaurants and offices, as well as on tobacco advertising outdoors, on public transportation, and in most forms of media. If the initiative, agreed late last year by the municipal people’s congress, is successful, China may impose a similar ban nationwide.

A significant decline in smoking would undoubtedly bring enormous public-health benefits to China. But is it feasible?

With an estimated 300 million smokers, China represents one-third of the world’s total and accounts for an average of roughly 2,700 tobacco-related deaths per day. The costs of treating smoking-related diseases, not to mention the associated productivity losses, are considerable.

But China has so far struggled to reduce smoking or enforce bans effectively. Indeed, despite ratifying the World Health Organization’s Framework Convention to Tobacco Control in 2005, China failed to fulfill its commitment to ban indoor smoking by 2011. Moreover, tobacco output increased 32%.

Bans have since been implemented in 14 Chinese cities, including Shanghai, Hangzhou, and Guangzhou. But they have done little to reduce smoking, owing not only to weak enforcement, but also to the prevailing view, held by 75% of Chinese adults, that smoking does not cause serious harm. (Only about 16% of Chinese smokers report an intention to quit.) Against this background, the Beijing municipal authorities’ plan to fine smokers up to CN¥200 ($32) for lighting up in public places appears unpromising at best.

The obvious question is why China’s government, which is not known to be shy about imposing paternalistic policies in other areas, does not simply ban cigarette production and use altogether. After all, other countries and localities, from Scandinavia to New York City, have made smoking prohibitively expensive and illegal in most public places.

The reason why China has not taken this path lies in the jobs and revenue that the industry provides. The state-owned China National Tobacco Corporation sells almost all of the cigarettes consumed in the country; indeed, it is the world’s largest cigarette manufacturer, supplying 2.5 trillion annually, which in turn generates CN¥816 billion (7-10% of GDP) in revenue. Indeed, tobacco receipts finance as much as half of some provincial governments’ budgets. Even in an authoritarian country like China, the loss of so much income, not to mention the ire of 300 million addicts, would make prohibition a huge challenge.

But there is an alternative that could help appease angry citizens and mitigate the revenue loss from an outright ban on smoking: electronic cigarettes. Given that e-cigarettes merely heat a nicotine solution to produce an inhalable vapor, they release none of the carcinogenic tar of cigarette smoke, making them the ideal nicotine-delivery system for smokers seeking – or being forced – to reduce or halt their tobacco intake.

Aside from being far less damaging than cigarettes, e-cigarettes are a homegrown product, invented in China in 2003. But, despite considerable progress in China’s e-cigarette industry – in 2013, Shenzhen province housed 900 manufacturers of the devices, up 200% from 2012, and accounted for over 95% of global e-cigarette production – traditional cigarettes still dominate the Chinese market.

As Yanzhong Huang of the Council on Foreign Relations recently pointed out, “If only 1% of China’s smoking population turned to e-cigarettes, it would mean a market of about 3.5 million e-cigarette users.” The China National Tobacco Corporation could become the world’s largest e-cigarette maker.

One reason China has not managed to tap the e-cigarette industry’s enormous potential is a lack of adequate regulation. Low entry barriers enable intense competition that diminishes producers’ profit margins, and shoddy products are rife, owing to low manufacturing standards. If e-cigarettes are to replace traditional cigarettes and offset lost tobacco revenues, the government must regulate the industry more carefully to ensure safety and quality.

But such efforts will mean little without a shift in people’s attitudes. Here, the ban on smoking in public places or during official activities imposed in 2013 on Chinese Communist Party and government officials could be helpful. As Huang explains, if more officials turn to e-cigarettes, ordinary people might be inspired to follow suit.

Already, it seems that the directors of the China National Tobacco Corporation have complied with a government-mandated ban on cigarette smoking. Whether they have become e-cigarette “vapers” is not known.

A smoke-free China – one that benefits from rising productivity and massive health-care savings – may seem like a pipe dream. But a country-wide ban on smoking, with a reliable e-cigarette industry providing an alternative (both to smokers and to budgets), offers an intriguing way to turn the dream into reality.

Sally L. Satel, a medical doctor, is a resident scholar at the American Enterprise Institute in Washington, DC. Sarahann Yeh is a student at the University of Maryland.