Chinese tobacco giant’s rapid global expansion plans, operations raise alarm bells

China National Tobacco Corporation (CNTC), one of the largest global tobacco companies with a 44% global market share, is rapidly expanding globally in a way that is alarming. Across continents, the Chinese tobacco industry has been reported as utilizing both legal and illegal methods of operation. China has been dedicatedly encouraging its state-owned companies to invest abroad and expand. As a result, the various Chinese state-owned companies now cover investments in about 132 countries and regions. According to the U.N, China is a significant source of global FDI outflows that rose from 2.7 billion dollars to 84 billion dollars.
The CNTC with other state-owned companies in China participated in the ‘go all out’ strategy and has now expanded to 20 countries, operating through 34 offshore facilities which include sales offices, and manufacturing plants to export significant amounts of cigarettes globally.
CNTC is regulated by the State Tobacco Monopoly Administration (STMA), which is controlled by China’s Ministry of Industry and Information Technology. They have the same website and follow an effective single leadership structure, there is no difference since they are both governed by one body. However, CNTC displays two separate arms of operation. To be precisely clear — under CNTC’s large complexity, they have about 30 smaller Chinese tobacco companies, or rather subsidiaries under its belt, according to domain experts.

In other countries, CNTC often operates viz., its subsidies. The existence of so many subsidiaries to carry CNTC’s agenda across the globe is not without reasons.

These subsidiaries were curated purposely as countermeasures against the WHO Framework Convention on Tobacco Control (FCTC). CNTC studied and examined the impact FCTC would have and most likely came up with this solution to circumvent the regulations. The intentions of CNTC are quite well-indicated, where it does not seem to have any hesitations about flaunting global health regulations for the sake of its vested interests.

Chinese tobacco industry has been benefitting from free advertisements in schools cause of their generous charity in rural schools of China under the name ‘Project Hope’. It is an initiative introduced by the government to invite Tobacco companies to invest in the poorest schools. The schools sponsored by CNTC and its subsidiaries, had a slogan such as, ‘genius is from hard work, tobacco helps you excel.’It goes to the extent of schools being named as ‘Sichuan Tobacco Primary School,’ Qinghai Tobacco Primary School,’ and ‘Liaoning Tobacco Company Primary School,’ and many more. These schools are also being named after cigarette brands such as Zhongnanhai and Liqun.

The charity propaganda has looped the locals into thinking that these ‘tobacco’ companies are kind. Some teachers and students as young as 5th grade wishes to study hard to repay their gratitude to the tobacco company for their kindness, according to experts who have studied this sector.