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China Reform Monitor - No. 944

Beijing profits from booming tobacco industry;
Cities resist social security tax on foreigners

Edited by Joshua Eisenman
January 31, 2012

January 4:

 The Chinese Academy of Engineering (CAE) has awarded a lifetime appointment to Xie Jianping, the deputy director of Zhengzhou Tobacco Research Center funded by the State-owned China National Tobacco Corporation (CNTC). CAE is a national organization composed of elected members who have made outstanding achievements in engineering and science. Xie’s research regards adding Chinese herbal medicine into cigarettes,
the semi-official Global Times reports. “It is impossible to reduce harm by adding Chinese herbs, which may also cause greater side effects,” said Fang Zhouzi, a critic of Chinese pseudo-science and traditional Chinese medicine. Former deputy health minister and CAE member Wang Longde said “Xie’s election reflects a system that needs improving. In many cases we have professionals from one field voting for professionals in another.” One CAE member said he voted for Xie because “the tobacco industry’s tax revenue is too great to do without.” In 2010, CNTC, one of the largest sources of government revenue, paid 498.85 billion yuan ($75 billion) in taxes.
 [Editor’s Note: More than 300 million Chinese smoke and more than half of all men. In 2009 China produced 2.3 trillion cigarettes, more than any other country. World Health Organization statistics show that nearly 1.2 million people in China die from smoking-related diseases each year, 20 percent of the world’s total. In 2005 China signed the WHO’s Framework Convention on Tobacco Control, which requires a ban deceptive marketing. Beijing has declined to force cigarette companies to print warning pictures on packs.]
 January 9:

 Three months after China was supposed to begin levying a new social security tax on the country’s more than 600,000 foreign employees, many cities including Guangzhou and Shanghai continue to drag their feet on implementation. The tax, which would add 3 billion yuan to China’s pension system, will cost foreigners 11 percent of their salaries and employers 37 percent of their employees’ salaries. The law was supposed to take effect nationwide on October 15, but only Beijing began registering foreigners on that date. Over the past two weeks Tianjin and Suzhou have also begun preparation to start charging the tax. The contributions from cities must date back to October 15 or a face a steep late penalty. About 65,000 foreigners work in Shanghai, most only for a few years and will not collect pensions.
The South China Morning Post reports that Shanghai party boss Yu Zhengsheng and city mayor Han Zheng have concerns about the policy, which could hurt foreign investors’ interest in Shanghai.
 January 11:

 China’s tobacco industry paid 752.96 billion yuan ($119 billion) in taxes in 2011, up 22.5 percent over 2010 levels, and provided 600.12 billion yuan ($95 billion) in profits to the government last year, a 22.8 percent rise over 2010 levels,
the official People’s Daily reports.
The semi-official Global Times has published an editorial blaming the Dalai Lama and his supporters for the self-immolation of dozens of Tibetan monks over the last several months. The “group should stop sacrificing these young monks,” as well as stop calling them heroes and holding ceremonies to mourn them for political gain, the editorial said. It accuses the Dalai Lama and his supporters of “selling themselves to the West to help against China [and] helping the West interfere in China’s domestic affairs,” and concludes that “the selfishness and ruthlessness of the Dalai group are carefully packaged by the West” which provides “considerable sums of financial support.”
 January 12:

 A senior writer
at the official China Daily
has published a scathing editorial calling for the government to respect “migrant workers and treat them like equal human beings.” Huang Xiangyang called for “reform of the household registration system, or hukou, so that migrant workers can settle with their families in the cities where they work.” He wrote: “It is still hard for migrant workers to settle in cities - where they have often toiled for years - given the government restrictions on education, housing and healthcare. I have heard too many stories about their sufferings, ranging from unpaid wages, workplace accidents, random evictions from temporary homes, and the closure of their children’s schools. It is time to put an end to this.”

Related Categories: China; China and East Asia Program

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