Is China Going Up in Smoke?

For all the major achievements of China’s economic reforms over the past few decades, one appallingly unreformed behavior stands out. With 301 million smokers (28% of adults in the country), China accounts for close to 30% of all smokers globally, according to the World Health Organization. That army of puffers is nearly equal to the size of the entire U.S. population of about 310 million in 2010.

The detrimental effects of smoking are well known. As anybody can attest who has seen the garish images of facial distortions displayed on cigarette packages on sale, for example, in Singapore, some countries in Asia are determined to push back against the inclination of smokers. Not so the Chinese.

In their case, one cannot even blame the usual culprit, the global (read: largely Western) tobacco industry. In Africa and elsewhere, these firms are shamelessly seeking to push their products onto new consumers for one simple reason: to make up for losses in market penetration in the “first world.”

China’s tobacco industry, while outwardly very diversified with around 900 different brands, is all in the hands of one company, the government-owned China Tobacco Company, for which the deadly nicotine stuff is big business. While the company has a monopoly, there are ways around it. Cigarettes from other countries such as Vietnam are smuggled in and offered “under the counter.” These wares often are about $1 cheaper than the “over-the-counter,” made-in-China pack.

In China’s favor, social and economic historians could point out that an increase in smoking levels is not necessarily an advertising-induced lifestyle issue. Rather, its prevalence is closely correlated to periods of massive industrialization, as if to help individuals cope with the tremendous pressures of the far more tightly integrated, clockwork-like big city lifestyle.

And yet, the current circumstance in China is not a direct replay of past periods of Western puffing mania. Today, much more is known about the often disastrous health consequences of smoking, particularly premature death. In the United States, for example, smokers die, on average, 14 years earlier than non-smokers.

At the same time, the Chinese government is not known for being hesitant when it comes to interfering in the lives and attitudes of its citizens. And yet, there are no signs that it is using its bully pulpit to bring about changes in smokers’ attitudes.

This gives rise to dark thoughts as to whether a partial motivation for the Chinese government’s callous non-interference on this front is the need to manage another coming calamity.

By 2040, 317 million Chinese — a group larger than the current U.S. population — will be over 65 years old, up from just 110 million today. Because of the enormous transition away from the iron rice bowl toward a market economy, only a small percentage of these people have sufficient old-age insurance.

The old “insurance” scheme, which consisted of moving in with one’s kids in old age, is increasingly no longer realistic in modern, urbanized China, with people moving long distances from their native villages. Moreover, because of the significant age-structure effects of the one-child policy, one child can hardly be expected, even assuming the most angelic of wills, to take care of his or her parents, as well as those of one’s spouse.

The Chinese government is seeking to set up pension finance schemes rapidly, in order to avoid a social catastrophe. However, one sometimes wonders whether at least the subconscious part of this strategy is not to protest the penchant for heavy tobacco consumption. If this truly cynical strategy were indeed to play out, it could at least reduce the statistical “head count” of those needing old-age financing.

That, of course, presumes that a strategy of relying on premature deaths in order to reduce social security obligations would not involve significantly higher healthcare costs. And this assumes that old-age insurance will actually be provided by the Chinese authorities to those aged 65 and over.

Certainly for the current older generation, which doesn’t have enough time left to accumulate any significant savings from wages, there is little other choice. One surely hopes that the Chinese government is humane enough not to have started calculating the expected costs for social security payments versus the costs for lung cancer treatment.

Tongue-in-cheek considerations aside, the real issue about the pervasiveness of smoking in China is that there hasn’t been much of a bottom-up, grassroots effort to ban smoking in more places — or to increase taxes, which usually leads casual smokers to quit. In Hong Kong, for example, things are much more restrictive.

There have been “regulations” passed in some cities in China to curb smoking in certain areas (such as elevators), but overall it is still like 1950s America. The majority of middle-aged and young men smoke (though quite a few in their 20s don’t and hate smoking, so the broader trend may be shifting).

As was the case in the United States and elsewhere, these things take time to develop.