China bans new tobacco factories

The biggest smoking nation on the planet has said it will not allow any more cigarette factories to be built, including joint ventures. Regulators also said they would not allow foreign companies to distribute cigarettes, state media reported. The announcement will come as a blow to global tobacco giants such as BAT that have been trying to gain access to the world's biggest market. "The country's cigarette manufacturing capacity exceeds market demands, and the establishment of new cigarette factories will not be approved," the China Daily newspaper quoted State Tobacco Monopoly Administration (STMA) spokesman Xing Wanli as saying. He added that tobacco production and sales would remain under a government controlled monopoly. China consumes an estimated 1.7 trillion cigarettes a year, generating US$24.5bn in pre-tax profits in 2004, the China Daily said.