Healthcare expenditure, productivity losses raise costs of smoking: WHO

Source:Global Times Published: 2017/4/14 20:33:39

The economic dividends from China's tobacco industry are a false economy, which is at odds with government's vision for China's future, the World Health Organization (WHO) claimed on Friday.

"The total economic cost of tobacco use in China in 2014 amounted to a staggering 350 billion yuan ($57 billion), a tenfold increase since 2000," Bernhard Schwartlander, the WHO representative in China, told a press conference in Beijing.

The increase is a result of more people diagnosed with tobacco-related illness and increasing healthcare expenditure, according to a report jointly released by the WHO and the United Nations Development Program (UNDP) at the conference.

"The direct cost of treating tobacco-related diseases in China was about 53 billion yuan and the indirect cost was expected to be 297 billion yuan," in which the productivity loss from premature deaths was a major concern, according to the report.

Meanwhile, the report said that tobacco represents an economy of the past as China's tobacco companies do not fit the vision of an innovative, value-added future economy.

"Projected increases in these costs will lead to negative spillovers effects across many sectors, placing increasing challenges to Chinese economy and businesses, in addition to the social welfare and health system," it said.

Wu Yiqun, deputy director of the Beijing-based Research Center for Health Development, a think tank, told the Global Times earlier that China has huge public support for a nationwide smoking ban, but the timetable to adopt a law has been on the back burner.

"The proposed law has been mainly stymied by tobacco industry officials due to the huge economic interests involved," Wu said.

The sector handed over 1.1 trillion yuan ($170 billion) to the State in 2015, up 20.2 percent from the previous year, the State Tobacco Monopoly Administration said in 2016.

The revenue from the tobacco industry derives from corporations whose business model is to create dependence on a lethal substance.

China in 2016 adopted the "Healthy China 2030" blueprint, which says China aims to reduce smoking rates among adults from 28 percent to 20 percent by 2030.

More than 1 million people die of tobacco-related diseases every year in China, and the number is expected to reach 3 million by 2050 if no action to reduce smoking rates is taken. About 44 percent of the world's cigarettes were consumed in China in 2014, nearly 26 percent higher than that in India, the report said.

China's Ministry of Finance announced in May 2015 to raise cigarette taxation from the previous 5 percent to 11 percent, which "led to a reduction in cigarette sales for the first time in 20 years," according to the report.

However, "cigarettes are increasingly affordable as the increase in cigarette prices has been much lower than the average increase in salaries."

Global Times


Newspaper headline: Tobacco’s economic dividend claims ‘false’


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