Notes

Will High cigarette Prices Led to a Recession in the Chinese Tobacco Market?

The Chinese market has greatly expanded the reach of many popular brand names, including cigarettes manufactured by Big Tobacco, the world's largest manufacturer of tobacco products. Recently the Chinese government has begun to enforce a quota on foreign tobacco manufacturers that wish to sell tobacco to China. In addition to their efforts to control the purchase of tobacco in China, the Chinese government is also considering banning the use of the common Chinese term" cigarettes," which is commonly referred to as "paper cigarette." As if that were not enough to curtail the Chinese tobacco industry, recent reports indicate that the Chinese government is considering capitalizing on the "harming Chinese tradition" to bolster its smoking ban: The Health Ministry is reportedly looking into limiting the amount of cigarette boxes that can be opened and inspected before they are sold. The Health Ministry is also looking into reinforcing the smoking ban by making it illegal to sell tobacco to children under the age of 18.


The Chinese market for cigarettes has grown rapidly over the past decade, as the government has cracked down hard on pollution and high unemployment levels in the country. The result has been an increased number of smokers who have chosen to quit smoking and a marked increase in cigarette sales. In response, Chinese cigarette manufacturers have been forced to increase prices, which have currently doubled in value since the beginning of the current recession. https://www.edb.eu/tschechische-firme-902039-tabacnictvi-prachatice/kontakte in price has helped to keep the Chinese tobacco market healthy, but some tobacco companies fear that they will eventually be unable to retain their current market share. While many in the tobacco industry view the recent price hike as a positive for their bottom line, others are concerned that higher prices will force current tobacco users to abandon smoking altogether.


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One recent study indicated that a majority of Chinese individuals would be forced by their increased cost to switch from traditional tobacco to electronic cigarettes, which may also cause them to abandon traditional cigarettes. Since the Chinese government tightly controls the tobacco market, the result may be that many users simply decide to quit smoking altogether, reducing the Chinese tobacco industry's market share. If this trend continues, the Chinese government may soon face a serious crisis on its hand. The only way to protect China's delicate economic balance is to ensure that price increases do not lead to a rapid decline in the overall value of the renminbi.


Homepage: https://www.edb.eu/tschechische-firme-902039-tabacnictvi-prachatice/kontakte