Economy

Fake cigarettes stubbed out better jobs

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

Thousands of fake cigarettes made in this bunker-like factory were confiscated Feb 25 in a raid by anti-counterfeit authorities in the hills of Yunxiao county. The local government is hoping new, legitimate industries will supplant the counterfeiting. This unidentified man works for the department that is trying to wipe out the illegal operations. [Photo / Xinhua]

Locals mired in poverty as economy yet to rise from the ashes, reports Peng Yining in Fujian province.

Wang misses the days in the 1990s when cigarette counterfeiting boosted the economy of his home, Yunxiao county, a mountainous backwater in Fujian province.

The 58-year-old former porter, who would not give his full name, said he could earn more than 5,000 yuan ($770) each month in 1995, when the average Chinese income was 350 yuan, by loading and unloading fake cigarettes.

The traders "tipped me like millionaires", he said. "No. They were millionaires."

But the central government cracked down on illicit cigarettes, and Wang now earns less than 1,000 yuan a month as a rickshaw driver. He can't find a better job, he said, because long-term counterfeiting operations devastated legal industries in Yunxiao.

"Factories closed down because the workers all quit to produce fake cigarettes," said Luo Yuequan, 31, an official in the county's publicity department. "Children dropped out of school to work in house mills rolling cigarettes.

"The counterfeiting seemed to rescue people from poverty, but it didn't bring Yunxiao real fortune," he said. "On the contrary, it ruined the county's economy and future."

As the heartland of China's illicit cigarette trade, Yunxiao county in the 1990s annually produced more than 25 million packs of fake cigarettes, including bogus Chunghwa, considered a top-grade Chinese brand, and fake Marlboros and Newports for overseas markets.

While 10 packs of fake Chunghwa cost 30 to 80 yuan, they could fetch up to 10 times that amount in the open market. Ten packs (a carton) of legitimate Chunghwa cigarettes cost about 450 yuan. Local officials said in a report that by using low-quality tobacco and tax avoidance, counterfeiters made their profits easily rival those of the narcotics trade.

Traders in fake cigarettes swarmed to Yunxiao in the '90s from all over China, even the world. More than 100 hotels, including a four-star hotel, were built in the remote county with 400,000 residents to welcome them.

Luo said his father used to run a small fake cigarettes mill employing five to eight hired hands working in a tree-shaded tent in the hills.

"My father monthly sold a dozen boxes of cigarettes in Jiangxi province. His business was quite small, just for feeding his family and to send me and my two sisters to school," Luo said. "This is how the counterfeiting began, getting rid of poverty."