Saturday, July 28, 2007

Tobacco in China


Tobacco played an important role in the early days of the Amerikkkan colonies, and Mao Zedong noted the presence of Amerikkkan and Briti$h merchants making cigarettes in China in 1923. He calls the Chinese government "the counting house of our foreign masters" and points out that when the foreign merchants ask the Chinese ministers to cut taxes, the ministers reply, "How low?"

With lower taxes, the price of cigarettes falls, and if more Chinese people can afford cigarettes, they will buy them. Addiction ensures loyalty. That means more money for the foreign companies operating in China.

Tobacco has remained a major industry in China. The nation accounts for roughly 30% of the world's tobacco consumption. According to a World Bank report on Chinese tobacco:

73% of tobacco revenues accrue to the state (49% in taxes, 24% in profits), 20% is absorbed in marketing and production, 7% goes to private business as profits and only about 0.1% of total revenues goes to the farmers.
A 7% net profit is a good profit margin for sustaining corporate growth. The World Bank also reports on the corrupt measures the government uses to keep tobacco production up:

farmers who refuse to grow tobacco have their other crops ripped out. Farmers who resist may be detained for awhile, have their livestock taken, or are fined, a widespread practice in the country.


RJR Nabisco, Altria Group, Rothman's and Universal Leaf Tobacco company have all entered into joint ventures with Chinese companies. The disparity between the corporate compensation and peasant compensation reveals the true nature of the Chinese Communist Party: the counting house of its foreign masters. Don't worry, Google has agreed to participate in the pig work of censoring anti-revisionist websites.

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