China’s tobacco industry adopts a system of unified leadership, vertical management and monopolized operation. The State Tobacco Monopoly Administration and China National Tobacco Corporation are responsible for centralized management of staff, finance, properties, products, supply, distribution, and domestic and foreign trade of the country’s tobacco industry.

The China National Tobacco Corporation was founded in January 1982. The State Council issued the Rules on Tobacco Monopoly in September 1983, officially proposing the national tobacco monopoly system. The State Tobacco Monopoly Administration was established in January 1984. The Standing Committee of the National People’s Congress approved the Law of the People’s Republic of China on Tobacco Monopoly in June 1991, and the State Council issued the Rules for Implementation of the Law of the People’s Republic of China on Tobacco Monopoly in July 1997. The issuance and implementation of the laws and regulations has improved the national tobacco monopoly system. Currently, the industry covers 33 provincial tobacco monopoly administrations and companies, including in Shenzhen and Dalian, 16 companies, 57 industrial enterprises, over 1,000 commercial enterprises, and companies specialized in leaf tobacco, cigarette-making machinery, selling cigarettes, imports and exports - as well as other institutions, with a total of 510,000 employees.

Since the adoption of the monopolized system, China’s tobacco industry, under the leadership of the Central Committee of the CPC and the State Council, and with the support of local Party committees, governments and related departments at all levels, has put into full play the advantages of its management system, adopted a scientific approach for development, deepened reforms, enhanced enforcement of the monopoly law and rules, promoted scientific and technological progress, strengthened management at grassroots level and ensured a continuous increase of economic returns. From 1982 to 2004, the industrial and commercial taxes and profits reached 1577.8 billion yuan, contributing greatly to the country’s financial accumulation and meeting the demands of market consumption.