The Tobacco Industry Investment Strategy And Regulatory Policy Options

China's tobacco industry has experienced a rapid development in recent years. The government's revenue from the industry increased from 105 billons RMB in the year of 2000 to about 300 billons RMB in 2006. It is not exaggerated that the tobacco industry is the'cash cow'of the government's revenue and an important support to national tax.At the same time, after the entrance of china into the WTO(World Trade Organization),the industry is coming through inevitable challenge. There are lessons drawn from others' mistakes: some small European countries'market share of domestic tobacco industry reduced about 70% in several years after the opening of their tobacco market. If china's tobacco industry follows the same old disastrous road, the tax of government will reduce at least 200 billons RMB, according to its amount in the year of 2006. To avoid this converted into reality, several reform and innovation have been carried through in the industry to built up its competitive power.At first, this essay briefly introduces the main development course of the industry, such as the split of its industrial and commercial branches, offering product according to order from clients, the merger and combination of corporations, etc. then, evaluates the industry's success or failure in course of enhancing its corporations and brands, based on the analysis of its present situation. This essay finds out the problem of the industry in macroscopical aspect and microcosmic aspect, and proposes some solutions to its reform and innovation in the next stage as the following two aspects:In microcosmic aspect, proposes three fields that are worth the tobacco corporations researching and investing: Chinese style cigarettes, Cigar and cigarettes for females.In macroscopical aspect, this essay deems that the core problem restricting the healthy development of the china's tobacco industry is that tobacco is a heavy taxes product in china and it is fatal to regional government revenue. So, regional government drove by their own benefits, intervened too much to cigarettes produce and sale, thus the problem of regional blank off, repeating construction, market division are very stand out in this industry. Aim to solve these problem, this essay propose two ways to out: one is to intercross their stock in its industrial and commercial branches corporation in the period of intergrades, another is to reforming china's current excise system thoroughly, the revenue should wholly belongs to central government.The result of this essay's research is something helpful to domestic tobacco corporations to change their minds and enhance the R&D of new product according to their own realities, thus to increase competitive power of their product in market. It is also a reference to the constitution of macropolicy of government.