Study On The Competitiveness Of China's Tobacco Industry

With its entry into WTO in December 2001, China, the world biggest tobacco producing as well as consuming country, will become part of the global market. Since then, academic study on China's tobacco industry, particularly the Industry's competitiveness has been the focus of learners in and outside the Industry. The Paper aims to conduct a quantitative study of China's tobacco industry competitiveness, to explore the possibility of enhancing its competitiveness, and eventually to change China from a big tobacco country into a tobacco power.First, the Paper presents a brief introduction to the development, organization structure, management system of China's tobacco industry and the situation with which it is now facing up. By using regression method, it studies the relationship between national income and profit, taxation generated by the Industry. The Paper conducts a research on the global tobacco industry's production, consumption, import & export, industry policy, management system, and social environment. Based on the above, the Paper defines the world competitors of China's tobacco industry and makes a study of the competitors' manufacturing, products, marketing and corporate strategy.Secondly, based on the existing research, the Paper studies the sourcing factors and influencing factors of the tobacco industry competitiveness, and sets up the Competitiveness Model of tobacco industry. In addition, the Paper establishes a complete set of appraisal index system and carries out a quantitative analysis of the Industry's and its competitors' competitiveness by using principal component analysis method. In addition, the Paper builds up the value-chain of the Industry and makes step-by-step analysis, finding out its advantages and disadvantages, and puts forward relevant product, marketing strategies.Thirdly, China has too many cigarette manufacturers scattered throughout the country. The Paper, from the point of relationship between industry structure and competitiveness, by establishing the regression model between them, analyzes the relevant data of China's tobacco industry. Meanwhile, China's cigarette manufacturers are scattered around in 29 provinces and cities. Due to regional protectionism from local governments, the long co-existing of weak and strong cigarette manufacturing regions affects directly the Industry's overall competitiveness. The Paper conducts a DEA research on the input and output of 19 provinces' cigarette manufacturing industry with annual production over 400 thousand cases. The result suggests that six areas in China have strong comparative advantages. Therefore, to optimize the Industry structure, it is recommended to shut down the small inefficient manufactures and to re-allocate the resources such as leaf tobacco, production quota to the above six areas.Finally, the Paper, from the point of industry policy, conducts a research on the Industry's present policy and management. The research reveals that present fiscal and taxation system has been the root cause of China's long-existing local protectionism, and its present organization structure and management system has unconsciously facilitating the existence of local protectionism. The Paper, based on the experience from Japanese tobacco industry, brings forward relevant recommendations as how to reform the Industry's fiscal and taxation policy, organization structure and management system as well.