Country Study: China China’s Tobacco Industry and Agriculture Liberalization

This paper aims to present an overview of China’s tobacco industry by examining trends in production, consumption, and international trade, and by discussing the role played by the government, particularly through the State Tobacco Monopoly Administration (STMA). It also attempts to analyze the potential export opportunities for China’s tobacco industry in view of the probable increase in market access and reduction of domestic support in developed countries, and its ability to implement the necessary structural adjustments to take advantage of these developments. China is simultaneously the biggest producer of tobacco leaf and the largest consumer of cigarettes in the world. However, China’s exports and imports are still modest relative to its production and consumption. As a result of trade liberalization, China could become more integrated in the world tobacco economy. It seems that the production structure and the regulatory environment exist for China to take advantage of opportunities to export more tobacco in the future.