Economy

Fake cigarettes stubbed out better jobs

By Peng Yining (China Daily)
Updated: 2011-05-11 15:42

Tradition to industry

Yunxiao epitomizes the Chinese hinterlands, which are eager to shake off poverty at all costs. Before the cigarette business boomed, Yunxiao people struggled for a livelihood by planting loquat trees and harvesting the yellow fruit or by quarrying stones from the surrounding mountains.

"I remember that people occasionally rolled cigarettes with tobacco they purchased from outside to sell or exchange for rice when I was 8 years old," Luo said. "It came from the local smokers' tradition of homemade cigarettes."

In 1992, some villagers bought two cigarette-making machines and turned the tradition into a counterfeiting industry. Luo said 80 percent of village residents participated, and one-fifth of households opened their own cigarette workshops.

"People hid their machines in trucks, fishing boats and barns, but the sweet aroma of tobacco was so strong that you could smell it on any street in the county," he said.

It was the smell of fresh renminbi. The cost of cigarette machines and materials, usually less than 200,000 yuan, could be recouped after one month of production. Many residents made a killing from counterfeiting. If they were caught, the usual punishment was a few weeks in jail and possibly a fine.

Some local officials turned a blind eye to the illegal production and trade. Fang Zhenshan, director of the county's anti-counterfeit office, was arrested in 2001 for taking bribes and connivance and was sentenced to 14 years in prison.

Jobs up in smoke

Luo said Yunxiao was like a giant cigarette factory people divided the work into specialties: Some provided tobacco, some produced wrapping paper and some took charge of counterfeiting the trademarks. He said there was a group of "researchers" to analyze the ingredients of original cigarettes.

Luo, who has been smoking for more than 10 years, said he can't tell the fake and original cigarettes apart. "The packages look exactly the same, and I can tell the slight difference in flavor only if someone tells me which one is fake. Usually the real one smells lighter," he said. "Yunxiao can counterfeit any brand and quality."

Although the packages and taste are close, the fake cigarettes are made and transported in unsanitary conditions and emit higher levels of dangerous chemicals than brand-name cigarettes, according to a report released by the State Tobacco Monopoly Administration.

Yunxiao's counterfeiting also threatened China's cigarette industry by taking market share. The legitimate industry sells to 350 million smokers who consume 1.7 trillion cigarettes every year.

The administration began its crackdown in Yunxiao in 1998, and its operations continue.

Luo's father closed his factory in 1999 because of increasingly harsh punishments - years in jail, even life sentences. Luo's family picked up the long-neglected work of planting fruit trees, because there were no other jobs in town.

Yunxiao's old pillar industries - sugar, food canning and refrigerator factories - had closed during a decade of counterfeiting that drew profit-seeking participants from farming and other jobs.