Contents:

INTRODUCTION Report Coverage Units of Measure Used by the Chinese Tobacco Industry Executive Summary     1 MARKET BACKGROUND       1.1 Fast Facts       1.2 Exchange Rates         1.2.1 Exchange Rates: China         Table 1.1 AVERAGE ANNUAL EXCHANGE RATES BETWEEN RMB AND US$ 1994-1999         1.2.2 Exchange Rates: Hong Kong         Table 1.2 AVERAGE ANNUAL EXCHANGE RATES BETWEEN HK$, RMB & US$ 1994-1999       1.3 Regions of China       Map 1.1 CHINA: PROVINCES AND MUNICIPALITIES       1.4 Demographics         1.4.1 Demographics: Total Population         Table 1.3 TOTAL POPULATION 1994-1999         1.4.2 Demographics: Population by Location         Table 1.4 POPULATION BY URBAN-RURAL DIVIDE 1994-1999         1.4.3 Demographics: Population Breakdown by Location         Table 1.5 POPULATION BREAKDOWN BY URBAN-RURAL DIVIDE 1994-1999         1.4.4 Demographics: Population by Province         Table 1.6 POPULATION BY PROVINCE 1999         1.4.5 Demographics: Population Density by Province         Table 1.7 POPULATION DENSITY BY PROVINCE 1999         1.4.6 Demographics: Population Concentration         Map 1.2 CONCENTRATION OF POPULATION BY PROVINCE 1999         1.4.7 Demographics: Population by Sex         Table 1.8 TOTAL POPULATION BREAKDOWN BY SEX 1994-1999         1.4.8 Demographics: Population by Age         Table 1.9 POPULATION BY AGE GROUP 1994-1998         1.4.9 Demographics: Population by Age         Table 1.10 POPULATION BY AGE GROUP 1994-1998       1.5 Consumer Wealth         1.5.1 Consumer Wealth: GDP and Cost of Living         Table 1.11 GDP AND COST OF LIVING INDEX 1994-1999         1.5.2 Consumer Wealth: Provincial Differences in GDP         Table 1.12 GDP BY PROVINCE 1996-1999         1.5.3 Consumer Wealth: GDP Per Capita by Province         Table 1.13 PER CAPITA GDP BY PROVINCE 1999         1.5.4 Consumer Wealth: Concentration of Wealth by Province         Map 1.3 VALUE OF GDP PER CAPITA BY PROVINCE 1999       1.6 Households         1.6.1 Households: Total Households by Size         Table 1.14 NUMBER OF HOUSEHOLDS BY SIZE 1994-1999         1.6.2 Households: Total households by Urban/Rural Divide         Table 1.15 NUMBER AND SIZE OF HOUSEHOLDS BY LOCATION 1994-1998         1.6.3 Households: Income Earners Per Household         Table 1.16 AVERAGE NUMBER OF INCOME EARNERS PER HOUSEHOLD 1994-1999       1.7 Consumer Trends       1.8 Consumer Market         1.8.1 Consumer Market: Consumer Spending Trends         Table 1.17 CONSUMER EXPENDITURE BY BROAD SECTOR AT CURRENT PRICES 1995-1999*         1.8.2 Consumer Market: Retail Sales and Consumer Spending         Table 1.18 RETAIL SALES AS A PROPORTION OF CONSUMER EXPENDITURE 1994-1999*         1.8.3 Consumer Market: Urban Income and Spending Compared         Table 1.19 URBAN AVERAGE ANNUAL INCOME AND EXPENDITURE 1995-1999     2 THE TOBACCO MARKET       2.1 Overview       2.2 Food Market         2.2.1 Food Market: Food and Non-food Sales         Table 2.1 TOTAL RETAIL SALES BY FOOD AND NON-FOOD 1994-1999*         2.2.2 Food Market: Food/Non-food Sales Split         Table 2.2 TOTAL RETAIL SALES BY FOOD AND NON-FOOD SPLIT: PERCENTAGE ANALYSIS 1994-1999*         2.2.3 Food Market: Urban and Rural Split         Table 2.3 TOTAL CURRENT VALUE RETAIL SALES BY FOOD AND NON-FOOD 1994-1999*         2.2.4 Food Market: Total Value Trends         Table 2.4 CURRENT VALUE OF FOOD SALES BY MAJOR PRODUCT CATEGORY 1994-1999*         2.2.5 Food Market: Urban Value Trends         Table 2.5 URBAN FOOD SALES VALUE BY MAJOR PRODUCT CATEGORY 1994-1999*         2.2.6 Food Market: Rural Value Trends         Table 2.6 VALUE OF RURAL FOOD SALES BY MAJOR PRODUCT CATEGORY 1994-1999*       2.3 The Tobacco Market         2.3.1 The Tobacco Market: Total Market Size in Value Terms         Table 2.7 TOTAL VALUE MARKET FOR TOBACCO 1994-1999         2.3.2 The Tobacco Market: Total Market Size in Volume Terms         Table 2.8 TOTAL VOLUME MARKET FOR CIGARETTES 1994-1999         2.3.3 The Tobacco Market: Food Market Significance         Table 2.9 THE TOBACCO MARKET AS A PROPORTION OF TOTAL FOOD SALES 1994-1999         2.3.4 The Tobacco Market: Global Value Significance         Table 2.10 THE MARKET FOR TOBACCO IN CHINA AS A PROPORTION OF TOTAL GLOBAL TOBACCO SALES 1994-1999         2.3.5 The Tobacco Market: Global Volume Significance         Table 2.11 THE MARKET FOR TOBACCO IN CHINA AS A PROPORTION OF TOTAL GLOBAL TOBACCO VOLUME 1994-1999         2.3.6 The Tobacco Market: Number of Smokers         Table 2.12 TOTAL MARKET FOR TOBACCO IN CHINA BY NUMBER OF SMOKERS 1994-1999         2.3.7 The Tobacco Market: Regional Cigarette Sales In Context With National Sales         Table 2.13 CHINA: TOTAL CIGARETTE SALES BY REGION AND AS A PERCENTAGE OF TOTAL CIGARETTE SALES 1994-1999       2.4 Sector Breakdown         2.4.1 Sector Breakdown: Sector Values         Table 2.14 VALUE MARKET FOR TOBACCO BY SECTOR 1994-1999         2.4.2 Sector Breakdown: Sector Shares         Table 2.15 % BREAKDOWN OF TOBACCO BY SECTOR 1994-1999         2.4.3 Sector Breakdown: Growth Indices         Table 2.16 % ANNUAL GROWTH FOR TOBACCO BY SECTOR 1994-1999       2.5 Subsectors         2.5.1 Subsectors: Cigarette Sales Values         Table 2.17 CIGARETTE SECTOR VALUE BY SUBSECTOR 1994-1999         Table 2.18 PERCENTAGE BREAKDOWN OF THE CIGARETTE SECTOR VALUE BY SUBSECTOR 1994-1999         Table 2.19 CIGARETTE SECTOR VOLUME BY SUBSECTOR 1994-1999         Table 2.20 PERCENTAGE BREAKDOWN OF THE CIGARETTE SECTOR VOLUME BY SUBSECTOR 1994-1999       2.6 Market Shares         2.6.1 Market Shares: Leading Companies by Turnover         Table 2.20 TOP 20 CIGARETTE MANUFACTURERS BY TURNOVER 1994-1998         2.6.2 Market Shares: Leading Companies by Pre-tax Profit         Table 2.21 TOP 20 CIGARETTE MANUFACTURERS BY PRE-TAX PROFIT 1994-1998         2.6.3 Tobacco Market: National Shares         Table 2.22 20 LEADING COMPANY SHARES OF RETAIL SALES 1998         2.6.4 Tobacco Market: Global Shares         Table 2.23 LEADING GLOBAL SHARES IN VOLUME TERMS 1998*         2.6.5 Tobacco Market: Domestic and Foreign Companies Compared         Table 2.24 CHINESE VS. FOREIGN TOBACCO COMPANIES 1998       2.7 Prices         2.7.1 Prices: Retail Price Indices         Table 2.24 RETAIL PRICE INDICES BY BROAD SECTOR 1994-1999         2.7.2 Prices: Retail Pricing Factors         2.7.3 Prices: Regional Prices         Table 2.25 TOBACCO RETAIL PRICE INIDICES BY MAJOR CITY 1994-1999         2.7.4 Prices: Selected Retail Prices         Table 2.26 AVERAGE* PRICE DEVELOPMENTS FOR CIGARETTES BY LEADING BRANDS ACROSS MAJOR CITIES 1994-1999         2.7.5 Prices: Supermarket Chain Store Prices         Table 2.27 AVERAGE* SUPERMARKET CHAINSTORE CIGARETTE PRICES 1999         2.7.6 Prices: Convenience Store Prices         Table 2.28 AVERAGE* CONVENIENCE STORE CIGARETTE PRICES 1999         2.7.7 Prices: Small Local Shop Prices         Table 2.29 AVERAGE* SMALL LOCAL SHOP CIGARETTE PRICES 1999         2.7.8 Prices: Local Bar Prices         Table 2.30 AVERAGE* LOCAL BAR CIGARETTE PRICES 1999         2.7.9 Prices: Different quality products          2.7.10 Prices: Relevant price determining factors Price Fixing Other Factors       2.8 Outlook         2.8.1 Outlook: Forecast Trends         2.8.2 Outlook: Key Factors         2.8.2 Outlook: Total Market Size         Table 2.31 FORECAST TOTAL MARKET FOR TOBACCO 1999-2004         2.8.3 Outlook: Sector Values         Table 2.32 FORECAST SALES OF TOBACCO BY SECTOR 1999-2004         2.8.4 Outlook: Sector Breakdown         Table 2.33 FORECAST PERCENTAGE BREAKDOWN OF TOBACCO BY SECTOR 1999-2004         2.8.5 Outlook: Sector Growth         Table 2.34 FORECAST ANNUAL GROWTH OF TOBACCO BY SECTOR 1999-2004       2.9 Current Issues         2.9.1 Current Issues: Legislation         2.9.2 Current Issues: Anti-Smoking Laws         2.9.3 Current Issues: Government Attitudes to Smoking         2.9.4 Current Issues: Health Concerns & Anti-Smoking Campaigns         2.9.5 Current Issues: Counterfeiting         2.9.6 Current Issues: The Importance of Yunnan Province         2.9.7 Current Issues: Investment into Yunnan Province         2.9.8 Current Issues: Related Products - Matches         2.9.9 Current Issues: Related Products – Smoking Cessation Products          2.9.10 Current Issues: WTO Entry Significance          2.9.11 Current Issues: Tariffs on Leaf Tobacco          2.9.12 Current Issues: Tariffs on Cigarettes          2.9.13 Current Issues: Tariffs on Cigarette Machines and Associated Materials          2.9.14 Current Issues: Losses From Relaxation of Non-Tariff Barriers     3 MARKETING AND DISTRIBUTION       3.1 Marketing         3.1.1 Marketing: Trends         3.1.2 Marketing: Advertising         3.1.3 Marketing: Sponsorship       3.2 Marketing: Consumer Profile         3.2.1 Marketing: General Consumer Profile         3.2.2 Marketing: Profile of Women Smokers         3.2.3 Marketing: Profile of Male Smokers         3.2.4 Marketing: Profile of Rural Residing Smokers         3.2.5 Marketing: Profile of Youth Smokers         3.2.6 Marketing: Profile of Cigar Smokers         3.2.7 Marketing: Consumer Health Awareness         3.2.8 Marketing: Trend to Lighter cigarettes         3.2.9 Marketing: Changing Shopping habits          3.2.10 Marketing: Demographic Profile of China’s Smoking Population          Table 3.1 TOTAL SMOKING POPULATION BY GENDER AND LOCATION 1994-1999          3.2.11 Marketing: Attitudes to Smoking in Chinese Society          3.2.12 Marketing: Below-the-line Methods          3.2.13 Marketing: Illegal advertising          3.2.14 Marketing: Current Coupon Marketing Used          3.2.15 Marketing: Types of Coupons in Use       3.3 Wholesale Distribution         3.3.1 Wholesale Distribution: Recent Developments         Table 3.2 NUMBER OF STATE OWNED TOBACCO DISTRIBUTION COMPANIES 1998         3.3.2 Wholesale Distribution: Control of Wholesale Licensing         Table 3.3 THE COST OF TOBACCO PRODUCTION AND SALES LICENSE         3.3.3 Wholesale Distribution: Locally Produced Goods Chart 3.1 WHOLESALE DISTRIBUTION OF LOCALLY PRODUCED TOBACCO PRODUCTS         3.3.4 Wholesale Distribution: Other Province Produced Goods Chart 3.2 WHOLESALE DISTRIBUTION OF OTHER PROVINCE PRODUCED TOBACCO PRODUCTS         3.3.5 Wholesale Distribution: Foreign Produced Goods Chart 3.3 WHOLESALE DISTRIBUTION OF FOREIGN PRODUCED TOBACCO PRODUCTS         3.3.6 Wholesale Distribution: Counterfeit and Smuggled Cigarettes Chart 3.4 DISTRIBUTION OF SMUGGLED AND COUNTERFEIT TOBACCO PRODUCTS         3.3.7 Wholesale Distribution: Wholesale Distribution Current Value Trends         Table 3.4 CURRENT VALUE OF THE WHOLESALE TRADE BY BROAD PRODUCT SECTOR 1994-1999         3.3.8 Wholesale Distribution: Wholesale Distribution Current Value Growth         Table 3.5 WHOLESALE NETWORK TRADE CURRENT VALUE GROWTH BY BROAD SECTOR 1994-1999         3.3.9 Wholesale Distribution: Wholesale Distribution Current Value Annual Growth         Table 3.6 WHOLESALE NETWORK TRADE CURRENT VALUE ANNUAL PERCENTAGE GROWTH 1995-1999          3.3.10 Wholesale Distribution: Wholesale Distribution Current Value Percentage Breakdown          Table 3.7 WHOLESALE NETWORK TRADE CURRENT VALUE PERCENTAGE BREAKDOWN 1994-1999          3.3.11 Wholesale Distribution: Wholesale Distribution Volume Trends          Table 3.8 VOLUME OF THE WHOLESALE TRADE BY BROAD PRODUCT SECTOR 1994-1999          3.3.12 Wholesale Distribution: Wholesale Distribution Overall Volume Growth          Table 3.9 WHOLESALE NETWORK TRADE VOLUME GROWTH BY BROAD SECTOR 1994-1999          3.3.13 Wholesale Distribution: Wholesale Distribution Annual Volume Growth          Table 3.10 WHOLESALE NETWORK TRADE VOLUME ANNUAL PERCENTAGE GROWTH 1995-1999          3.3.14 Wholesale Distribution: Wholesale Distribution Average Wholesale Unit Prices          Table 3.11 AVERAGE ANNUAL WHOLESALE TRADE UNIT PRICES BY BROAD SECTOR 1994-1999          3.3.15 Wholesale Distribution: Wholesale Distribution Average Wholesale Unit Profits          Table 3.12 AVERAGE ANNUAL WHOLESALE TRADE UNIT PROFITS BY BROAD SECTOR 1994-1999          3.3.16 Wholesale Distribution: Wholesale Distribution Average Wholesale Unit Profit Margins          Table 3.13 AVERAGE ANNUAL WHOLESALE TRADE % PROFIT MARGINS BY BROAD SECTOR 1994-1999          3.3.17 Wholesale Distribution: Price Fixing          3.3.18 Wholesale Distribution: Licensing Agreements          3.3.19 Wholesale Distribution: Trading Restrictions       3.4 Retail Distribution         3.4.1 Retail Distribution: Foreign investment         3.4.2 Retail Distribution: Investment in Retail Technology         3.4.3 Retail Distribution: The Evolution of Retail Formats         Table 3.14 RETAIL OUTLETS BY TYPE 1994-1999         3.4.4 Retail Distribution: Growth of Outlets by Type         Table 3.15 GROWTH OF RETAIL OUTLETS BY TYPE 1994-1999         3.4.5 Retail Distribution: Total Sales by Outlet Type         Table 3.16 RETAIL SALES BY OUTLET TYPE 1994-1999         3.4.6 Retail Distribution: Vending machines         3.4.7 Retail Distribution: Duty Free Sales         3.4.8 Retail Distribution: The Structure of Cigarette Distribution Chart 3.5 STRUCTURE OF THE TOBACCO WHOLESALE/RETAIL SYSTEM         3.4.9 Retail Distribution: Structural Changes          3.4.10 Retail Distribution: Volume Sales by Outlet Type          Table 3.17 VOLUME SALES OF CIGARETTES BY TYPE OF RETAIL OUTLETS 1994-1999          3.4.11 Retail Distribution: Percentage Sales Volume by Outlet Type          Table 3.18 PERCENTAGE OF VOLUME SALES OF CIGARETTES BY TYPE OF OUTLET 1994-1999          3.4.12 Retail Distribution: Value Sales by Outlet Type          Table 3.19 VALUE SALES OF CIGARETTES BY TYPE OF RETAIL OUTLETS 1994-1999          3.4.13 Retail Distribution: Val Percentage Sales Value by Outlet Type          Table 3.20 PERCENTAGE OF VALUE SALES OF CIGARETTES BY TYPE OF OUTLET 1994-1999     4 SOURCES OF SUPPLY       4.1 Manufacturing         4.1.1 Manufacturing: The Development of China’s Cigarette Manufacturing Industry – 1950s         4.1.2 Manufacturing: The Development of China’s Cigarette Manufacturing Industry – 1960s & 1970s         4.1.3 Manufacturing: The Development of China’s Cigarette Manufacturing Industry – 1980s         4.1.4 Manufacturing: The Development of China’s Cigarette Manufacturing Industry – 1990s         4.1.5 Manufacturing: The Development of China’s Cigarette Manufacturing Industry – The Current Situation         4.1.6 Manufacturing: The China National Tobacco Corporation (CNTC)         Table 4.1 CNTC CONTROLLED TOBACCO TRADING COMPANIES AND FACTORIES         4.1.7 Manufacturing: Licensing         Table 4.2 THE COST OF TOBACCO PRODUCTION AND SALES LICENSE         4.1.8 Manufacturing: Reorganisation of Wholesale Companies into Groups         4.1.9 Manufacturing: Pricing          4.1.10 Manufacturing: Tobacco Advertising Restrictions          4.1.11 Manufacturing: Leaf Production          4.1.12 Manufacturing: Cigarette Production          4.1.13 Manufacturing: Packaging          4.1.14 Manufacturing: Investment conditions (new plant and machinery)          4.1.15 Manufacturing: Local Tax          4.1.16 Manufacturing: Import Tax          4.1.17 Manufacturing: Brand development          4.1.18 Manufacturing: Foreign Joint Ventures          4.1.19 Manufacturing: Rothmans          4.1.20 Manufacturing: R J Reynolds          4.1.21 Manufacturing: Nanyang Brothers          4.1.22 Manufacturing: Dimon International          4.1.23 Manufacturing: Philip Morris Group          4.1.24 Manufacturing: Awazi Group          4.1.25 Manufacturing: Malaysian Tobacco Company          4.1.26 Manufacturing: Imported Cigarettes       4.2 Manufacturing: Value Output         4.2.1 Manufacturing: Current Value Trends         Table 4.3 DOMESTIC TOBACCO PRODUCTION CURRENT VALUE BY SECTOR 1994-1999         4.2.2 Manufacturing: Current Value Growth         Table 4.4 DOMESTIC TOBACCO PRODUCTION CURRENT VALUE GROWTH BY SECTOR 1994-1999         4.2.3 Manufacturing: Percentage Value Breakdown         Table 4.5 DOMESTIC TOBACCO PRODUCTION VALUE PERCENTAGE BREAKDOWN BY SECTOR 1994-1999         4.2.4 Manufacturing: Volume Output Trends         Table 4.6 DOMESTIC TOBACCO OUTPUT VOLUME BY SECTOR 1994-1999         4.2.5 Manufacturing: Overall Volume Growth         Table 4.7 OVERALL GROWTH OF DOMESTIC TOBACCO OUTPUT VOLUME BY SECTOR 1994-1999       4.3 Regional Value Output         4.3.1 Regional Value Output: Value By Province         Table 4.8 TOTAL CIGARETTE OUTPUT VALUE BY PROVINCE 1994-1998         4.3.2 Regional Value Output: Output Value Growth By Province         Table 4.9 TOTAL CIGARETTE VALUE GROWTH BY PROVINCE 1994-1998         4.3.3 Regional Value Output: Regional Volume Output By Province         Table 4.10 TOTAL CIGARETTE OUTPUT VOLUME BY PROVINCE 1994-1998         4.3.4 Regional Value Output: Output Volume Growth By Province         Table 4.11 TOTAL CIGARETTE OUTPUT VOLUME GROWTH BY PROVINCE 1994-1998       4.4 Factory Gate Prices         4.4.1 Factory Gate Prices: Price Trends         Table 4.12 AVERAGE ANNUAL UNIT FACTORY GATE PRICES 1994-1999         4.4.2 Factory Gate Prices: Growth of Prices         Table 4.13 GROWTH IN AVERAGE UNIT FACTORY GATE PRICES 1994-1999       4.5 Agricultural Production         4.5.1 Agricultural Production: Total Tobacco Crop         Table 4.14 TOTAL SOWN AREA OF TOBACCO 1995-1999         4.5.2 Agricultural Production: Total Tobacco Crop By Province         Table 4.15 TOTAL SOWN AREA OF TOBACCO BY PROVINCE 1998         4.5.3 Agricultural Production: Tobacco Crop Yields         Table 4.16 TOBACCO CROP YIELD 1995-1999         4.5.4 Agricultural Production: Fluecured Tobacco Crop Yields         Table 4.17 FLUE-CURED TOBACCO: YIELD PER HECTARE 1995-1999       4.6 Imports         4.6.1 Imports: Value         Table 4.18 IMPORT VALUE BY BROAD SECTOR 1995-1998         4.6.2 Imports: Volume         Table 4.19 IMPORT VOLUME BY BROAD SECTOR 1995-1998         4.6.3 Imports: Significance         Table 4.20 IMPORT VALUE AS A % OF RETAIL SALES VALUE BY BROAD SECTOR 1995-1998       4.7 Exports         4.7.1 Exports: Value         Table 4.21 EXPORT VALUE BY BROAD SECTOR 1995-1998         4.7.2 Exports: Volume         Table 4.22 EXPORT VOLUME BY BROAD SECTOR 1995-1998         4.7.3 Exports: Significance         Table 4.23 EXPORT VALUE AS A % OF DOMESTIC OUTPUT VALUE BY BROAD SECTOR 1995-1998     5 SWOT ANALYSIS       5.1 Strengths       5.2 Weaknesses       5.3 Opportunities       5.4 Threats     6 COMPANY PROFILES       6.1 China National Tobacco Company (CNTC)         6.1.1 CNTC: Company Details         6.1.2 CNTC: Company Background         6.1.3 CNTC - Structure         Table 6.1 CNTC CONTROL STRUCTURE         6.1.4 CNTC - Enterprises         Table 6.2 CNTC CONTROLLED TOBACCO TRADING COMPANIES AND FACTORIES 1995         6.1.5 CNTC - Importers China National Tobacco Import-Export Corporation (CNTIEC)         6.1.6 CNTC - Responsibilities         6.1.7 CNTC - Counter Black Market Legislation         6.1.8 CNTC: Financial Results         6.1.9 CNTC: Future Strategy       6.2 BAT/Rothmans         6.2.1 BAT/Rothmans: Company Details         6.2.2 BAT/Rothmans: Company Background         Table 6.3 BAT ROTHMANS MAJOR BRANDS 2000         6.2.3 BAT/Rothmans: China-Related Activities         6.2.4 BAT/Rothmans: Financial Results         Table 6.4 BAT: CIGARETTE SALES VOLUME BY REGION 1998/1999         Table 6.5 BAT: FINANCIAL RESULTS 1997/1999         6.2.5 BAT/Rothmans: Future Strategy       6.3 RJ Reynolds         6.3.1 RJ Reynolds: Company Details         6.3.2 RJ Reynolds: Company Background         6.3.3 RJ Reynolds: Company History          6.3.3. RJ Reynolds: Financial Results          Table 6.6 RJ REYNOLDS: FINANCIAL RESULTS 1998-1999         6.3.4 RJ Reynolds: Future Strategy       6.4 Philip Morris Inc.         6.4.1 Philip Morris Inc.: Company Details         6.4.2 Philip Morris Inc.: Company Background         6.4.3 Philip Morris Inc.: Financial Results         Table 6.7 PHILIP MORRIS INC.: FINANCIAL RESULTS 1997/1998         6.4.4 Philip Morris Inc.: Future Strategy       6.5 Yuxi Hongta Group         6.5.1 Yuxi Hongta Group: Company Details         6.5.2 Yuxi Hongta Group: Company Background         6.5.3 Yuxi Hongta Group: Company Structure         6.5.4 Yuxi Hongta Group: Financial Results         Table 6.8 YUXI HONGTA GROUP: FINANCIAL RESULTS 1997/1998         6.5.5 Yuxi Hongta Group: Future Strategy       6.6 Kunming Cigarette Factory         6.6.1 Kunming Cigarette Factory: Overview         6.6.2 Kunming Cigarette Factory: Development         6.6.3 Kunming Cigarette Factory: Leading Brands         6.6.4 Kunming Cigarette Factory: Financial Results         Table 6.9 KUNMING CIGARETTE FACTORY: FINANCIAL RESULTS 1997/1998       6.7 Shanghai Tobacco (Group) Company         6.7.1 Shanghai Tobacco Group: Overview         6.7.2 Shanghai Tobacco Group: Development         6.7.3 Shanghai Tobacco Group: Leading Brands         6.7.4 Shanghai Tobacco Group: Financial Results         Table 6.10 SHANGHAI TOBACCO GROUP: FINANCIAL RESULTS 1997/1998       6.8 Hunan Changsha Cigarette Factory         6.8.1 Hunan Changsha Cigarette Factory: Overview         6.8.2 Hunan Changsha Cigarette Factory: Leading Brands         6.8.3 Hunan Changsha Cigarette Factory: Financial Results         Table 6.11 HUNAN CHANGSHA CIGARETTE FACTORY: FINANCIAL RESULTS 1997/1998       6.9 Domestic Companies: Changde Cigarette Factory         6.9.1 Changde Cigarette Factory: Overview         6.9.2 Changde Cigarette Factory: Financial Results         Table 6.12 CHANGDE CIGARETTE FACTORY: FINANCIAL RESULTS 1997/1998        6.10 Qujing Cigarette Factory          6.10.1 Qujing Cigarette Factory: Overview          6.10.2 Qujing Cigarette Factory: Development          6.10.3 Qujing Cigarette Factory: Leading Brands          6.10.4 Qujing Cigarette Factory: Financial Results          Table 6.13 QUJING CIGARETTE FACTORY: FINANCIAL RESULTS 1997/1998        6.11 Zhaotong Cigarette Factory          6.11.1 Zhaotong Cigarette Factory: Overview          6.11.2 Zhaotong Cigarette Factory: Financial Results          Table 6.14 ZHAOTONG CIGARETTE FACTORY: FINANCIAL RESULTS 1997/1998        6.12 Chuxiong Cigarette Factory          6.12.1 Chuxiong Cigarette Factory: Overview          6.12.2 Chuxiong Cigarette Factory: Financial Results          Table 6.15 CHUXIONG CIGARETTE FACTORY: FINANCIAL RESULTS 1997/1998        6.13 Jinan Cigarette Factory          6.13.1 Jinan Cigarette Factory: Overview          6.13.2 Jinan Cigarette Factory: Leading Brands          6.13.3 Jinan Cigarette Factory: Financial Results          Table 6.16 JINAN CIGARETTE FACTORY: FINANCIAL RESULTS 1997/1998        6.14 Guiyang Cigarette Factory          6.14.1 Guiyang Cigarette Factory: Overview          6.14.2 Guiyang Cigarette Factory: Development          6.14.3 Guiyang Cigarette Factory: Leading Brands          6.14.4 Guiyang Cigarette Factory: Financial Results          Table 6.17 GUIYANG CIGARETTE FACTORY: FINANCIAL RESULTS 1997/1998        6.15 Other Domestic Companies          6.15.1 Other Domestic Companies: Shanghai Gaoyang International Tobacco          6.15.2 Other Domestic Companies: Yangji Cigarette Factory          6.15.3 Other Domestic Companies: Yunnan Honghe Cigarette Factory          6.15.4 Other Domestic Companies: Yunnan Tobacco          6.15.5 Other Domestic Companies: Hangzhou Cigarette Factory        6.17 Other Foreign Companies          6.17.1 Other Foreign Companies: Imperial Tobacco          6.17.2 Other Foreign Companies: Gallaher          6.17.3 Other Foreign Companies: Goldlion Tobacco International          6.17.4 Other Foreign Companies: Japan Tobacco          Table 6.18 JAPAN TOBACCO: FINANCIAL RESULTS 1997/1998          6.17.5 Other Foreign Companies: Seita          Table 6.19 SEITA: COMPANY INFORMATION 1998          6.17.6 Other Foreign Companies: Tabacalera          Table 6.20 TABACALERA: COMPANY INFORMATION 1998          6.17.7 Other Foreign Companies: Nanyang Brothers Tobacco Company          6.17.8 Other Foreign Companies: Dimon International          6.17.9 Other Foreign Companies: Habanos        6.18 Tobacco Machinery Suppliers          6.18.1 Tobacco Machinery Suppliers: Körber          6.18.2 Tobacco Machinery Suppliers: Molins-Sasib          6.18.3 Tobacco Machinery Suppliers: G.D Machinery Asia Pacific Company          6.18.4 Tobacco Machinery Suppliers: Focke          6.18.5 Tobacco Machinery Suppliers: Liggett Group          6.18.6 Tobacco Machinery Suppliers: International Flavours And Fragrances (IFF)          6.18.7 Tobacco Machinery Suppliers: Schmermund        6.19 Ancillary Product Joint Ventures          6.19.1 Ancillary Product Joint Ventures: Hoechst Celanese          6.19.2 Ancillary Product Joint Ventures: Daicel          6.19.3 Ancillary Product Joint Ventures: Reichhold     7 CONTACTS       7.1 Trade Organisations         7.1.1 Trade Organisations: China National Cereals, Oils & Foodstuffs Import & Export Corporation         7.1.2 Trade Organisations: All-China Federation of Industry & Commerce         7.1.3 Trade Organisations: China National Tobacco Corporation Zhengzhou Tobacco Research Institute       7.2 Government Departments         7.2.1 Government Departments: State Economic and Trade Commission – State Light Industry Bureau       7.3 Anti-Smoking Groups         7.3.1 Anti-Smoking Groups: Asian Consultancy on Tobacco Control         7.3.2 Anti-Smoking Groups: China Association on Smoking & Health (CASH)

Summary:

China is seen as the ultimate prize for the international tobacco industry. A country with a largely restricted market and laws against tobacco advertising but one with three hundred million smokers - four time the consumption rate of the number two world market, the USA, and just about the only major international market that is growing. The Chinese government likes tobacco too, despite some very real attempts to stem its use amongst young people. Tobacco contributes a tenth of tax revenues in China, a tidy sum. The Chinese market is certainly one with mind-boggling statistics. Among Chinese males aged between 15-25 smoking increased by 6% between 1984-1996 with 46% of all college students admitting that they are smokers. The World Health Organisation (WHO) estimates that 40% of all Chinese aged 15 and over do smoke a total of 1.7 trillion cigarettes annually. This is 85 billion packs annually, a third of total global consumption and represents approximately 320 million smokers in all. However, there is also a health price to be paid with an estimated 750,000 Chinese dying annually from smoking related diseases This death toll is now likely to slow down with an estimated three million Chinese starting to smoke annually.