The Study On The Development Of Tobacco Industry Under The Background Of Chinese Tobacco Monopoly System

This study is about the development of tobacco industry which is under the background of Chinese tobacco monopoly system. Smoking as a personal consumption behavior has 500 years’history, and it has become a kind of fashion consumption, which also created a huge industry. Due to the rigid demand generated by the addictiveness of tobacco consumption and the high profits generated by the serious departure of the price from the value, the hazards on health and negative externality generated by smoking behavior, more than 70 countries implement the tobacco monopoly management in the world. But with the development of society and the progress of human civilization, smoking behavior is rejected, tobacco industry is also criticized, global anti-smoking tide is blustery.China is the first country in the world’s tobacco ranked list, and the amount of annual planting area of tobacco and cigarette production and sales is more than 1/3 of the world’s total amount, the tobacco industry is an important part of the national economy in china. Because of the particularity of tobacco and tobacco products, China has implemented the state tobacco monopoly system since the 80s of the last century, and implemented "unified leadership, vertical management, monopoly franchise" on the tobacco industry, the state has completely monopolized the production and sale of tobacco products because of the executive power. More than 30 years, the implementation of the tobacco monopoly system has achieved remarkable results in the fight against fake and shoddy products, in standardizing the order of the tobacco market, in improving the quality of tobacco products, in protecting consumers’health, in helping mark, in improving the competitiveness of the industry, in guaranteeing at all levels of government tax revenue, and in maintaining national interests.However, more than 30 years, China’s reform and development further moved, profound changes have taken place in the economic system, and the socialist market economy with Chinese characteristics has gradually established.Especially the party’s Third Plenary Session of the thirteenth made it clear:"economic system reform is the key of the comprehensive reform, its core problem is to deal with the relationship between government and market, making the market play a decisive role in the allocation of resources..." At the same time, from the view of the world, majority of countries that implemented tobacco monopoly system has followed the market rules, canceling the tobacco monopoly system. Therefore, under the new environment, how tobacco monopoly system combined with the market economy is the tobacco industry is major problem that the factory faced with, correctly handling the relationship between the market and the government in order to improve the efficiency of resource allocation will be the first issue of the next step reform of the tobacco industry, which will have a far-reaching impact on the development of tobacco industry in our country.In this context, this thesis is titled as " the study of development Chinese tobacco industry from the perspective of monopoly", it comprehensively uses industrial economics, regulation economics, institutional economics, econometrics and other disciplines, follows the ISCP (System-Structure-Behavior-Performance) framework, it started with combing the monopoly system and the tobacco monopoly system, analyses background and basic framework of the tobacco monopoly system in China, interpret situation of Chinese tobacco control and reasons under the monopoly system and analyses market structure under the control of Chinese tobacco industry, at the same time,it examines empirically the relationship between market structure and market power, and then operates efficiency, production efficiency and Chinese tobacco industry allocation efficiency. Then, through the comparison of market situation and economic benefits between Chinese tobacco industry and the salt industry which has the similar monopoly system and between Chinese tobacco industry and the white wine which has the similar product attributes but completely different control measures,it inspects the pros and cons of the tobacco monopoly system. In addition, by elucidating world tobacco and major national tobacco control policy and the world’s major multinational tobacco enterprise’s development path and operating performance, it provides valuable experience for Chinese tobacco control policy and industrial reforms. According to the research conclusion, it puts forward the reform and development road of the Chinese tobacco industryThis thesis is divided into 9 chapters, followed by introduction, literature review and theoretical analysis, the basic framework and the system background of Chinese tobacco monopoly system, tobacco monopoly system of China tobacco control, analysis of Chinese tobacco industry market structure, the efficiency of Chinese tobacco industry analysis and measurement, Chinese tobacco industry with the salt, white wine transverse comparative analysis, the tobacco industry’s international vision and inspiration and in Chinese tobacco industry reform and development direction.The introduction is mainly about research questions, methods, framework and main innovation etc.The literature review and theoretical analysis combs the literature from the monopoly system and tobacco monopoly system respectively, and analyses the causes of the tobacco monopoly system theoretically.In the section of Institutional background and basic framework of Chinese tobacco monopoly system, firstly, it introduces the background of the progress of Chinese tobacco industry development and tobacco monopoly system; secondly, it sorts out the formation of Chinese tobacco monopoly system; finally, the paper introduces the basic framework of Chinese tobacco monopoly system of the current system, including the aim, management system, management system and security system of implementation of the tobacco monopoly system.In the part of monopoly system of China tobacco control, on the basis of world tobacco control, it inspects tobacco control in China under the monopoly system, and finds that China’s regulation of the tobacco industry is failed, and specific performance is in supply of tobacco products continue increasing, cigarette production and sales increasing year by year; tobacco laws and regulations lacking of control, and law enforcement is not strict; tobacco tax regulation is failed, sales are not affected; tobacco technology standard is lagging behind, causing harm. And then analyzes the reasons of the failure of Chinese tobacco industry regulation theory and realistic explanation, and try to put forward Chinese tobacco control strategy.In the part of the market structure of Chinese tobacco industry, combined with the implementation of Chinese tobacco industry development course, it measures the changes in the market structure of tobacco industry after the implementation of the monopoly management system, through the measurement of market concentrated degree and Herfindahl index of Chinese tobacco industry from 1996 to 2012,we can find out the after the implement of tobacco monopoly system, concentration degree in Chinese tobacco market increases, economic benefits continue to improve.And through the comparison of with other industry with higher concentration, we found that the trend of concentration in other industries is decreasing, while the concentration index in tobacco industry increases, thought the degree in is not large. However, at the present stage, market concentration level of Chinese tobacco industry is not high, there is room for further improvement. In order to explore the relationship between the market structure and economic performance, we use the New Empirical Industrial Organization (NEIO) to evaluate systemic market power and the scale elasticity of Chinese tobacco industry to obtain the overflow price level information of market power relatived to other tobacco industry so as to reveal the deep-seated causes of the market structure affecting economic-premium market forces and economies of scale.In the part of Chinese tobacco industry efficiency analysis and measurement, thesis measures Chinese tobacco industry efficiency under the tobacco monopoly system by constructing the relevant index system which is divided into 3 level indicators,9 secondary level indexes and 12 third level indexes. Specifically, they include operation efficiency (yield growth, profitability and profit growth), production efficiency (including total factor productivity, technical progress, scale efficiency), and allocation efficiency (including the cost of rent-seeking, X-ray low efficiency, net loss of welfare). Results show that the efficiency index of Chinese tobacco industry is higher. The main sales revenue of Chinese tobacco enterprises shows a trend of increasing year by year, and taxes and profits of the tobacco industry also maintained a high growth rate. But production efficiency index of Chinese tobacco industry is low, many enterprises in the stage of increasing returns to scale, which means the scale of enterprise is smaller, and it dose not reach the best scale, which also reflects the present situation of Chinese tobacco enterprises:the overall size of the efficiency is not high. The efficiency of allocation of Chinese tobacco industry is low, the efficiency loss is large, although the internal reform of the tobacco industry has reduced the efficiency loss of resource allocation in a certain extent, there is still large space to step forward.In the part of horizontal comparison analysis with Chinese tobacco industry, salt, and white wine industry, through the comparison of development and evolution, comparing market situation and economic performance in the franchise system with that after breaking the franchise system, it found that the tobacco industry has a great difference in market situation and economic performance despite the similar monopoly management system with the salt industry, the tobacco industry’s is far better. Compared with white liquor industry, the product has the same properties, but since the 80s of the last century, they have implemented two different kinds of management system, so they have the different results:cigarette products’production organization and standardize level of the market order are higher than the liquor products’, domestic cigarette brands also firmly are in control of the domestic market. Obviously, although tobacco industry and alcohol products have the similar market size, and the same implement of the heavy tax policy, from the actual effect, the tobacco tax and liquor tax has huge gap. This suggests that tobacco monopoly system is effective on the control of blind production expansion, on purifying the market’s competition environment, on cracking down illegal manufacturing and selling activities, and on supporting the development of national brand.In the part of International vision and Inspiration of the tobacco industry, through the comparison of the tobacco industry regulation policy in the United States, Japan, Russia, the European Union and other world’s major developed countries and regions, we found that it is efficient to realize the goal of public health, ensure the national revenue, safeguard the interests of consumers and enhance the competitiveness of the national tobacco enterprises by implementing monopoly system on this special products -tobacco.However, the introduction of market mechanism is a reference road for the reform of the tobacco industry. It needs active,safe, step by step to reform the tobacco monopoly system, especially needs government and market which called two hands fully and effectively play a great role in the allocation of resources, not only to control the development of tobacco in order to safeguard the public interest but also to support and protect the national tobacco industry.The last part is the direction of reform and development of Chinese tobacco industry.According to the research results, the paper puts forward the direction of reform and development of Chinese tobacco industry:under the premise of adhering to the strict state regulation and macro-control, reform the allocation of resources, construct operation mode between government and the market, to improve the efficiency of resource allocation, cultivate the great enterprise, the great brand, enhance the overall strength of the industry and international competitiveness. The specific measures are to adjust the tobacco industry’s tax system, management system and administrative management system, perfect the structure of property rights,improve the efficiency of the market.