An STMB spokesman said production and demand for cigarettes achieved a balance that kept prices stable for the first six months of 2001.

The STMB showed that about 17 million cartons were sold from January to June, up 3.8 percent over the same period last year.

The country produced 17.2 million cartons of cigarettes, 5.2 percent more than from January to June last year.

The industry contributed 64 billion yuan (US$7.7 billion) in taxes, up 17 percent.

The government has worked to reduce tobacco planting, so the supply dropped.

By June this year, about 3 billion kilograms of tobacco leaves were in warehouses, 78.8 million kilograms less than in storage in June 1998.

The State aims to reduce the planting area of tobacco by 28,000 hectares to 948,600 hectares this year.

"After the government strengthened the fight against counterfeit cigarettes and began efforts to stamp out illegal activities, the tobacco market has been quite well-ordered," the spokesman said.

Meanwhile, the bureau continued to set up a comprehensive sales network to ensure sales of proper cigarettes.

In the January-June period, cigarettes sold through illegal channels reached 740,000 cartons, 504,000 cartons fewer than the same period last year.

A total of 1,080 underground factories were discovered and 581 sets of equipment to produce counterfeit cigarettes were confiscated during the first half of 2001.

(China Daily 07/25/2001)