Given the Chinese tobacco market is saturated with surplus cigarette production capacity, China has decided not to build any more cigarette, flue-cured tobacco and filter joint venture plants or launch any new tobacco joint venture with foreign investors. But cooperation in other fields are allowed.

China has decided not to build any more cigarette, flue-cured tobacco and filter joint venture plants or launch any new tobacco joint venture with foreign investors.

The decision is made on the ground that the Chinese tobacco market is saturated and it has surplus cigarette production capacity.

However, cooperation may be launched in other fields.

For instance, the import of high quality tobacco leaf, advanced equipment, high-grade cigarette paper and other necessary materials is allowed.

Foreign partners are also welcomed to cooperate in research on how to raise the quality of tobacco.

In recent years, based on the tobacco monopolization system, China’s tobacco industry has made great efforts to carry through strategic adjustment to the structure of tobacco enterprises. The number of cigarette production enterprises has been reduced to over 80 from 185.

Recently, the State Tobacco Monopoly Bureau has not given license to establish more cigarette factories, including joint ventures.

(CRI.com, China.org.cn November 19, 2004)