China may raise tobacco price to curb consumption
Updated: 2012-03-12 11:20
China is studying the possibility of increasing prices and tax hikes to curb tobacco consumption, a senior official with the country's tobacco use regulator said.
The effects of raising tobacco prices in order to curb tobacco use need to be tested by practice, given that tobacco prices and the tax on tobacco are already at a high level in China. Public comments are welcome, said Miao Wei, Minister of Industry and Information Technology (MIIT) and a deputy to the National People's Congress (NPC), according to chinanews.com.
Miao earlier admitted that more efforts are needed to control tobacco use. He repeated his stance Sunday by saying that it is important to reduce the number of smokers and the amount of tobacco they use, considering China now has 350 million people smoking.
International studies have found that when tobacco prices are increased by one percent, the number of smokers dwindles by about 0.4 percent.
However, tax doesn't necessarily curb cigarette use. The retail price of cigarettes didn't go up accordingly following a six percent tax hike in May 2009 as the State Tobacco Monopoly Bureau, the major pricing department of tobacco products and an affiliate of MIIT, absorbed the tax hike and maintained stable prices.