China raises tobacco tax

Hong Liu, Olin finance professor, was interviewed on China Central Television, CCTV-America, about China’s recent hike in taxes on tobacco. The new 11% tax on wholesale cigarettes, up from 5%, has led to a 10% jump in retail prices. But according to Prof.Liu the price increase won’t deter China’s millions of smokers. Liu says China needs to boost the tax rate to 70% to reduce tobacco consumption. Liu also tells CCTV that China is far behind other countries on curbing smoking. Bans on indoor and public area smoking are not enforced and there is little education on the the health hazards of tobacco.

Watch video by clicking on image above.

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