VSHina National Tobacco Corporation, a Chinese state-owned tobacco company, also known as “China Tobacco”, attracted attention last year after a senior disciplinary inspector was sacked by the powerful Commission the Communist Party’s discipline control center for using “shadow societies” and “revolving doors”. ‘ to seek illegal profits. A few weeks later, in 2022, Sichuanese vaping baron Chu Lam Yiu was arrested by China for alleged “disciplinary violations” and placed under “residential surveillance”.

While both of these cases may be linked to Xi Jinping’s national anti-corruption campaign since he came to power in 2013, an underreported facet of the China National Tobacco Corporation (CNTC) is its association with

China’s Belt & Road Initiative (BRI) and “Go Out” policy was first launched in 1999.

China Tobacco’s expansion could have national and global health implications in the form of increased tobacco smuggling, undermining the country’s commitment to international laws under the United Nations Framework Convention. World Health Organization for Tobacco Control (CCSA). At the same time, it could also open up the possibility of Beijing gaining influence in low-income countries in Africa and the Middle East that are potential markets for CNTC and increasing the risk of influence from Chinese soft power and of debt traps in a pattern similar to that of other BRIs. projects around the world.

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From local to global

44 percent – this figure indicates the global market share of CNTC, which trumps Western Big Tobacco with a $235 billion industry. As Beijing plans to reduce the smoking rate by 20% by 2030 as part of the Healthy China Policy, the number of smokers in China is expected to drop. Given that China Tobacco is responsible for 13% of all of China’s tax revenue, Beijing certainly wouldn’t want CNTC’s profits to drop.

With the aim of “Go Global”, China Tobacco in 2017 reportedly emphasized using the BRI and Silk Roads to expand its overseas tobacco production and increase tobacco exports. The ultimate goal, he added, would be to “strive to build an international and substantial enterprise that controls the operations and control of the entire overseas tobacco industry” (translated from Mandarin to English using Google Translate).

Therefore, it came as no surprise when CNTC expanded its production overseas to countries like Brazil and Zimbabwe. However, what is worrying about China Tobacco’s global growth trends is the fact that it has been accused of engaging in large-scale international smuggling to expand its global market, especially in Europe. According to a report, China Tobacco’s global subsidiaries and joint ventures have been involved in the illegal smuggling of tobacco and cigarettes into countries including Italy, Libya, Ukraine, Syria, Iraq, South America South and Latin America.

At the same time, China Tobacco was further accused of defying compliance with the FCTC (without going into details), the WHO also reportedly refused to comment on China’s compliance with the international framework. To illustrate this point through a legal prism, consider first article 15 of the FCTC. It states that “the parties recognize that the elimination of all forms of illicit trade in tobacco products, including smuggling, illicit manufacturing and counterfeiting, as well as the development and implementation of national legislation related, in addition to sub-regional, regional and global agreements, are essential elements of tobacco control”. China, being part of the framework, therefore totally defies Article 15. Moreover, as Article 15 stipulates on the need to develop national legislation to achieve this goal, state support for global activities of China Tobacco appears to be in violation of its framework commitments.

In this regard, it should also be noted here that due to its large tobacco imports from its subsidiaries in Brazil and Zimbabwe, the same tobacco is sure to end up in the domestic markets of Beijing. Therefore, it is logical to conclude that this will end up undermining China’s national targets set under the Healthy China Policy 2030 to reduce the smoking rate.

Second, due consideration should be given to Article 18 of the FCTC, which states that “In carrying out their obligations under this Convention, the Parties agree to have due regard to the protection of the environment and human health in relation to the environment with regard to the cultivation and manufacture of tobacco in their respective territories”.

According to a report, there are serious questions about the compliance of China Tobacco subsidiaries with international labor standards in their production facilities in Brazil. The report further alleges that China Tobacco subsidiaries also pay local politicians to ensure they escape government and regulatory scrutiny. If these allegations are true, then China is also openly defying Section 18 of the FCTC. Tobacco production as an agricultural activity is itself considered unsafe, and such non-compliance by China Tobacco in these countries raises another question: does CNTC maintain a healthy working environment in its production units? tobacco production abroad? Unfortunately, the proof of the same is not yet reported. Even then, it would be safe to assume that the conditions under which tobacco workers work will not be exactly conducive.

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China Tobacco and BRI diplomacy

This raises another question – why did the WHO not take notice of the matter? A possible answer could be that China’s influence on the functioning of the WHO has helped the CNTC escape its liability under the FCTC. Similar accusations have already been leveled against China and the WHO regarding the origins of Covid-19 and the effective dissemination of information when the pandemic first broke out in Wuhan.

However, China Tobacco’s global ambitions also require scrutiny beyond Beijing’s influence within the WHO. A key element of China Tobacco’s “Go Global” strategy is to increase people-to-people and cultural exchanges while setting up new overseas production facilities. But it raises concerns about China’s imposition of its culture and language on host countries. This has been seen in countries like Sri Lanka and Algeria, where Mandarin-language billboards are commonplace. In fact, Tian Ze, CNTC’s Zimbabwe branch, has huge adornments in the form of images of Mao Zedong and Xi Jinping.

Simultaneously, most of China’s state-backed enterprises, while going global, are seeing the Chinese population moving to host countries in large numbers. In Pakistan, several reports indicated that Chinese workers working on BRI projects had engaged in physical altercations with their Pakistani counterparts in a show of dominance. Such reports once again raise similar suspicions about China Tobacco’s expansion into other countries.

Similarly, China Tobacco’s subsidiary in Zimbabwe has been reported to have pushed local tobacco growers into a debt trap. While China’s debt traps against countries are well known, individuals facing debt traps due to Beijing’s overseas activities portend an ominous sign for countries that will host the CNTC and its affiliates.

Therefore, China Tobacco’s planned global operations also appear to be driven by Beijing’s soft power diplomacy and influence strategies to buy leverage in host countries. Of course, each country that will host China Tobacco’s expansion will also host a range of other projects under the BRI. and this becomes important to study given that China Tobacco’s biggest potential market will be small, low-income African and Middle Eastern countries that are more susceptible to China’s pressure tactics against their need for Chinese investment. .

Even as China formally incorporated a “global health perspective” into the BRI framework in 2015, announcing plans for a Health Silk Road, the expansion of China Tobacco and its disregard for local laws and international organizations present a worrying paradox. While observations of its expansion may be considered circumstantial and based on predictions, the similarity of patterns paints a picture worth dwelling on.

Bhavdeep Modi is currently a research analyst at Global Policy Insights, a centrist policy institute with offices in New Delhi, London and Washington. He is also a consultant at the Organization for Research on China and Asia (ORCA India). He tweets @BhavdeepModi

(Editing by Zoya Bhatti)