China is often heralded as the new champion of free markets. And there is no doubt that it has some of the most liberal trade rules in the world. But sometimes adoration of the People’s Republic can lead commentators to forget that, even in the economic sphere, China is incredibly interventionist.
It also remains a textbook case of what happens when bureaucrats rule. But the latest proposal appears to truly beggar belief. In fact, if it did not appear in several independent sources, I would believe that it was a satire.
Chinese government officials have been ordered by the government to smoke more cigarettes to boost the economy. Departments whose staff smoke too few cigarettes will lose revenue that they would have received from state tobacco taxes; individual civil servants will be fined unless they smoke local brands.
The policy was originally introduced in Hubei Province, where local government agencies and institutions were given a target of 230,000 packs of locally-produced cigarettes a year, according to Hubei-based Chutian Metropolis Daily reported. This follows a policy earliest this year in Hefei province where civil servants were pressured to buy flats to keep the property market afloat.
So staggeringly stupid is this, that it seems almost nit-picking to point out two particular economic features of this. The first is the belief that increasing tax revenues will increase the economy. The second is the fact that protectionism appears to be emerging between Chinese provinces.
On the other hand, if bureaucrats are so stupid that they are ordering bureaucrats to smoke more, perhaps a Darwin Award is in order.