Kicking China’s smoking habit

Man smoking in China

Local man smoking at a traditional Chinese market in Beijing.Photo: Csondy, iStock

Waging an international policy war on tobacco

by Austin Price | October 8, 2018

“Policy change takes time,” says Professor Teh-wei Hu, philosophically understating a truth that he has experienced throughout his career.

For over 25 years, Hu has advocated for the Chinese government to levy a tax on cigarettes in a country where 350 million people smoke. He argues that this tax is critical to saving millions of lives, cutting medical care costs, increasing government revenue for health programs and creating a healthier environment.

Back in 1989, Hu began researching the economic and health benefits of such a tax. He conducted surveys and simulations, published his results and wrote and edited—and helped translate into Chinese—a book on tobacco taxation. He led workshops near Beijing and spoke frequently with Chinese policymakers and the press.

But nothing changed.

Then, in 2014, China’s President Xi Jinping requested a policy briefing on tobacco taxation from Hu and his research team. This was a first. After more than two decades of research, Hu’s persistence started to pay off. China introduced its first tax on cigarettes in May 2015.

We want to make a difference in the world and save lives.

The tax alone isn’t enough, says Hu. But it’s a start and shows that dedicated research and advocacy—along with patience and perseverance—spurs progress.

Hu, professor emeritus at Berkeley Public Health, has devoted his professional career to the intersection of economics and public health. In the 1960s, he left Taiwan to work at the World Bank in Washington, D.C. After a year of crunching numbers for basic statistical analysis, Hu went to the University of Wisconsin to earn his PhD in econometrics.

Hu’s doctoral research focused on the Wisconsin dairy industry, where he was able to apply and refine econometrics—Hu describes econometrics as a research model to decipher how the world operates: “You have a lot of data and you find out how to make sense of it, to come to conclusions, findings. It’s a tool.”

Then Hu became a professor of economics at Pennsylvania State University. While he was there, the governor of Pennsylvania commissioned Hu to assess the state welfare system’s cost-effectiveness in regards to child health. “I looked at hospital costs and the health of children,” says Hu. “And I became interested in the healthcare sector.”

Throughout the decades that followed, Hu continued to apply econometrics to public health. He evaluated the economic system of mental health as a National Institute of Mental Health advisor. He published reports on the financial impacts of senile dementia, and he studied the health and economic repercussions of the Three Mile Island accident, a 1979 nuclear power plant partial meltdown and radiation leak disaster.

In the mid-1970s, Hu met and befriended Richard Scheffler, now professor emeritus at Berkeley Public Health, who Hu credits for his decision to join the Berkeley faculty in 1986. “Scheffler convinced me to come here,” Hu says with a laugh. “This is a great place. Great weather, good Chinese food. And closer to China.”

From Berkeley, Hu’s war on tobacco began. He advised California policymakers on Proposition 99 (the Tobacco Tax and Health Protection Act), which was passed in 1989 to increase the California tax on a pack of cigarettes to 25 cents.

Professor Teh-wei Hu

To an economist like Hu, tobacco taxation was a matter of figuring out the price elasticity of demand, or how much a tax needed to be increased in order to reduce consumption. Prop. 99 demonstrated that cigarettes are a particularly inelastic good: the tax increase resulted in reduced consumption. Less consumption leads to fewer health issues (including cancer) from smoking and second-hand smoke, reduced medical costs, and increased revenue for smoking-related education and prevention programs. Fifteen years after implementation, Prop. 99 had cut medical care costs in California by an estimated $86 million.

With support from the National Institute of Health, Hu brought this research to China. “We can learn something from California,” Hu told the Chinese Ministry of Health. “This is a win-win-win situation. A triple win.”

But Hu discovered barriers to tobacco taxation in China that didn’t exist in California. Namely, China was the largest producer and consumer of cigarettes worldwide. One study concluded that nearly half of the male physicians at a teaching hospital in Shandong province regularly smoked.

When Hu first approached Chinese policymakers about introducing a tobacco tax, he faced hesitation, even downright rejection. Many officials were reticent to pass a tax against the 350 million smokers—nearly a fourth of the country’s population.

But the main reason for their hesitation stemmed from the fact that the Chinese National Tobacco Corporation enjoyed a monopoly in China, and was owned by the Chinese government itself. By taxing tobacco, the government would be taxing its own product. “For them, to reduce cigarette consumption was a conflict of interest,” says Hu. “The government focused more on money than on health.”

In 2015, when China finally introduced its tobacco tax, Hu felt that his 25 years of work in China had made an impact. The tax was a step in the right direction, he says, but it’s not enough. There are still issues to consider: how to raise the tax further to match increases in average income, what to do with the resulting tax revenue, how the tax has affected health and industry, and more. “After they raised the tax,” says Hu, “I thought, ‘I need to write and edit another book.’” Within a year, he published his second book on tobacco policy in China geared towards answering these questions.

Although Hu retired from teaching in 2004, he continues to work with former students—even those from his days at Penn State—who have brought his econometrics model to other countries where populations are at risk due to the cigarette industry. In this way, Hu has extended his influence to Indonesia, ranked third in the world for total number of smokers by the World Health Organization, and to Tanzania, where research is focused on the poor working conditions of tobacco farmers.

“We want to make a difference in the world,” Hu says, “and save lives.”

For many of his former students, Hu serves as a mentor as well as a member of their research team. He continues to offer the same advice he gave in his classes: In order to achieve long-term policy change, he says, “you have to identify a very important topic, where you can make a difference. You have to do research, collect data. You have to show that your findings are credible with quantitative information. And you have to be persistent.”