China’s tobacco industry hit by big clean-up but major changes unlikely, say analysts

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The graft investigations have revealed how business and power are intertwined in a controversial part of China’s economy. Read more at straitstimes.com.

has netted its biggest fish yet, in the form of Mr Ling Chengxing, a former party chief and director at the state tobacco regulator.

Mr Zhu, who retired nearly eight years ago, had been questioned about matters relating to Mr He Zehua, a former deputy chief of STMA, local media reported citing sources. Mr He was being investigated by the CCDI. China Tobacco is the commercial arm of the STMA, and both were formed in the 1980s to consolidate tobacco production and sales in China. China Tobacco controls 97 per cent of supplies in the world’s largest tobacco market.

The cosy relationship between state and market has been clear in the way China Tobacco has been able to repeatedly lobby for the watering down of anti-smoking legislation, he added. Much of the investigation is also focused on China Tobacco’s subsidiary in Yunnan province, the country’s biggest tobacco grower and top producer of cigarettes.

Others caught up in the graft investigation include brothers Li Xiaoming and Li Xiaohua, who control a Yunnan-based supplier of film and paper packing products to cigarette makers.

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