The Rise Of China’s “Puff Daddies”, The World’s Biggest Smokers by Jeffrey Towson
Question: What do you get when you combine the world’s biggest smokers with the world’s most polluted cities?
Answer: You get 20M super-smoking and soon-to-be-sick men. A group I call China’s “puff daddies”.
If you take the top 20% of Chinese smokers (by consumption), you get about 60-70M people. If you take the 20% of those that live in the most polluted areas (assuming an even distribution), that gets you about 15-20M people.
This Tiger Cub Giant Is Betting On Banks And Tech Stocks In The Recovery
The first two months of the third quarter were the best months for D1 Capital Partners' public portfolio since inception, that's according to a copy of the firm's August update, which ValueWalk has been able to review. Q2 2020 hedge fund letters, conferences and more According to the update, D1's public portfolio returned 20.1% gross Read More
And as only 4% of Chinese smokers are women, these 20M super-smoking and super pollution-inhaling Chinese are almost all guys.
The puff daddies are an interesting demographic to consider. It is as if the entire population of Australia was replaced by super-smoking men. These 20M men will inhale more pollutants in their lifetimes than probably any other group alive.
The rise of China’s puff daddies is really about five factors playing out in combination:
Factor #1: China has very high prevalence of smoking and a very large population.
The China smoking numbers are well-known: 300-350M smokers consuming 130 billion packs of cigarettes per year. This is about a third of the world’s cigarettes. It results in 1.3M deaths per year (about 10% of all deaths in China).
It is very unusual to have such a big population with such a high smoking prevalence. Greece is actually #1 for smoking per capita. But China is far and away #1 in the aggregate.
Factor #2: China’s air quality is a major health threat – and this is likely synergistic with smoking.
Air pollution is more of a Northern China phenomenon, as that’s where a lot of the polluting factories are. In Beijing, where I live, the air quality index (AQI) typically goes between 50 and 250. At 100, I usually start to wear a mask. At 200 (described as “very unhealthy” on my phone app), school kids are kept indoors. And on the “airmageddon” days (300-400 and above), things start to shut down.
Most studies argue that pollution is now the 4th biggest health threat in China, behind heart disease, dietary risk and, yes, smoking. And smoking, unfortunately, can have a synergistic effect when combined with other inhaled carcinogens (i.e., the cancer rates go up more in combination with some pollutants).
A side note: Last weekend in Shenyang (in northern Liaoning province) the pollution hit 1400. This was the highest level ever recorded in China. Visibility was reported to be down to 100 meters.
Factor #3: Second-hand smoke is a big problem in a populous country with a smoking culture.
Second-hand smoke is a big deal in China. Lots of people smoking impacts lots of other people. Volume, density and social acceptability matter. According to PRC researchers, over 700 million Chinese are affected by secondhand smoking.
And unfortunately, this has a particularly cumulative effect when it happens indoors – such as in restaurants, offices, bars and homes. According to the WHO, the air in a restaurant with three smokers reaches a 600 AQI level. And it increases to 1,200 with five smokers.
The irony here is that when the pollution is really bad outside, everyone tends to stay inside, where they then smoke in close quarters.
Factor #4: Lung cancer survival rates are low.
The 5 year lung cancer survival rate is very low. This depends on the type and the stage, but even Stage 1 non-small cell (arguably the best kind) has only a 50% five-year survival rate. According to the American Lung Association, the five year survival rate for lung cancer overall is about 17%.
This is not a disease that most people survive. China’s puff daddies are a very high mortality demographic.
Factor #5: The lag effect means there is likely a bow wave of lung cancer coming in China.
Smoking typically takes 20 years before it can kill you. And that means today we are still mostly seeing sickness from those who started smoking before 1990-95. So the true magnitude of China’s smoking-related illness is coming but has not yet arrived.
Additionally, the amount of smoking in China is still increasing. The percentage of the Chinese population that smokes has been holding steady at 24%, but the population itself is still growing. So the number of Chinese smokers is still increasing overall.
Additionally, the average number of cigarettes consumed daily per smoker has actually increased (according to JAMA). The average Chinese smoker consumed about 15 cigarettes a day in 1980. In 2012, it had risen to 22. So this is increasing as well.
Overall, China’s puff daddies are the result of a unique combination of factors. And unfortunately, in the next decade, we can expect to see a bow wave of lung cancer from this. China’s puff daddies, arguably the world’s biggest smokers, will be riding the top of this wave.
Please leave any comments below. And a thanks to Vijay Vaitheeswaran for suggesting the name puff daddies.
I regularly write about the fight for rising Chinese consumers. If you would like to read my regular posts, please click ‘Follow‘ or send a connection request.
Previous posts include:
- Stop Calling Me an Introvert. I Prefer “Power Thinker”
- The One Number That Matters for Uber China
- How I Went From NYC to Working for Prince Alwaleed
- My Favorite Map for Understanding China
- Get Ready for the Uber – DidKuaidi Price War
About: I am a Professor of Investment at Peking University Guanghua School of Management. I am also an investor and former executive / slave to Prince Alwaleed. My newest books are “The 1 Hour China Book” and “The 1 Hour China Consumer Book”. Read a sample chapter here.