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OCCRP Exposé: China Tobacco Goes Global

24 June 2021

Organized Crime and Corruption Reporting Project (OCCRP) has just released an exposé on China National Tobacco Corporation (CNTC), a state-owned enterprise, its operations and expansion across the globe including how it is linked to illicit trade activities. CNTC is the world’s biggest tobacco company, supplying 43.6% of the global market for cigarettes which amounted to 2.33 trillion cigarettes in 2019. China now exports tobacco products to 125 countries on five continents.

The OCCRP exposé provides information and insight into how CNTC, being a government entity, has an influence on countries through China’s “Belt and Road” initiative.

OCCRP reports that in 2019, CNTC launched China Tobacco International (HK) Company Limited, listed on the Hong Kong Stock Exchange, to oversee its tobacco leaf sales around the world as well as cigarette sales in Southeast Asian markets. It will also lead China’s sales of its own heated tobacco products.

While promoting and selling its cigarettes, the CNTC has ignored the WHO Framework Convention on Tobacco Control (FCTC). It has conducted charitable activities in the countries it operates in. In Cambodia, Viniton, which is majority owned by CNTC’s China Tobacco Guangdong Industrial Co., Ltd. and produces the Angkor cigarettes, had sponsored primary schools which it advertised on its website. Its general manager had said that Viniton had “consistently provided financial assistance in several varying forms to fund infrastructure and equipment provision for schools and education facilities, helping promote the development of the country’s education sector,” reports OCCRP.

In the ASEAN region, according to OCCRP, CNCT has manufacturing factories in Indonesia and Myanmar. SEATCA’s own research shows Lao PDR has also seen an increase in Chinese tobacco companies in recent years. In 2019, there were more than 20 new tobacco businesses registered with the Enterprise Registration and Management Department with most companies coming from China.

In 2018, Deputy Director of China State Tobacco Monopoly Administration (STMA) visited Lao-China Hongta Good Luck Tobacco Co., Ltd. (Laos Hongta) to implement China Tobacco’s strategy and implement the Chinese Central Government’s spirit of the Belt and Road Initiative and implement the development strategy of China Tobacco through joint efforts and build Laos Hongta into a Southeast Asian spice center for China Tobacco (Yunnan) and contribute to the prosperity of the Laos people. 

In 2018, among the most widely sold cigarette brands, Lao-China Hongta Good Luck Company Ltd.’s Dok Mai Deng, had been violating the law by not printing PHWs on their cigarette packs even after being granted three extensions of the implementation deadline.

In August 2019, Deputy Director of STMA visited Laos Hongta and described it as the “best overseas entity in the industry” and that although Laos Hongta was not very large in scale, it had achieved a high local market share, that it possessed a whole tobacco industry chain and supporting facilities; and its level of profitability had gradually increased.

State owned enterprise can exert undue influence on national tobacco control measures. The WHO FCTC Article 5.3 guidelines calls on Parties to treat state-owned enterprise like any other tobacco industry. In the ASEAN region, state-owned tobacco enterprise are found in three countries – Lao PDR, Thailand and Vietnam. SEATCA report on state owned enterprise implementation of Article 5.3.

See here for OCCRP’s exposé: https://www.occrp.org/en/loosetobacco/china-tobacco-goes-global/ 

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