1. Public-health and tax-policy specialists at a WHO Collaborating Centre conference noted that China has a widening window to raise health taxes on tobacco, alcohol, and sugary drinks, driven by mounting chronic-disease costs, accelerating population aging, and intensifying pressure on public finances [para. 1]. These levies, broadly known as health taxes, are designed to curb consumption of products linked to noncommunicable diseases by raising prices, while also generating revenue for health care, education, and social protection [para. 2].
2. Health taxes have gained traction globally but remain underused. According to Mark Goodchild, an economist at the WHO, at least 178 countries tax tobacco, 167 tax alcohol, and 114 impose some form of tax on sugary drinks [para. 3]. However, as of 2024, only 40 countries, mostly high-income economies, had tobacco-tax rates equal to 75% of retail prices—the WHO's highest implementation benchmark [para. 4]. Alcohol taxes are generally low and often lack supporting measures such as annual adjustments, while sugary-drink levies in many countries are not structured to maximize health benefits [para. 4]. China, a major consumer of tobacco, alcohol, and sugary beverages, has made limited progress: its tobacco and alcohol tax rates remain below international levels, and it has yet to levy an excise tax on sugary drinks [para. 5].
3. In July 2025, the WHO launched its "3 by 35" initiative, urging countries to use taxation to raise the real prices of tobacco, alcohol, and sugary drinks by at least 50% by 2035, estimating the effort could reduce consumption and generate $1 trillion in additional public revenue globally over the coming decade [para. 6]. The initiative comes as health systems contend with rising rates of noncommunicable diseases, shrinking development aid, and growing public debt [para. 7]. For China, health taxes have added relevance because of falling birthrates and faster population aging; reducing illness associated with harmful products could help preserve human capital, supplement labor supply, and lift productivity [para. 8][para. 9].
4. Fiscal pressures also bolster the case. China's general public-budget revenue rose 5.7% in the first eight months of the year from a year earlier, while spending increased 1.2%, according to Finance Ministry data [para. 10]. Tax revenue has been growing slowly, but excise-tax revenue has declined, making it the sole major tax category to shrink, while value-added tax, corporate income tax, and personal income tax have all increased, according to Zhu Kun and Zheng Rong [para. 11][para. 12]. Raising tobacco taxes, further increasing alcohol levies, and imposing a sugary-drink tax could help fill that revenue gap [para. 12].
5. China's tobacco-tax system is particularly complex, taxing products at agricultural, manufacturing, distribution, and retail stages through levies including tobacco-leaf tax, value-added tax, excise tax, urban-maintenance and construction tax, and education surcharges [para. 13]. The WHO generally favors simpler systems and recommends placing greater weight on specific (per-unit) taxes rather than value-based taxes, because lower-income consumers and young people are more responsive to price changes, which effectively raises the price of cheap cigarettes and narrows the gap with premium products [para. 14]. China relies primarily on value-based tobacco taxes; its specific tax amounts to only 0.06 yuan ($0.01) per pack of 20 cigarettes at production and 0.1 yuan at wholesale [para. 15].
6. The case for a sugary-drink tax is increasingly urgent due to China's diabetes burden—148 million adults with diabetes, projected to rise to 168 million by 2025—and sharply rising consumption among adults, children, and adolescents over the past three decades [para. 16]. Policy groundwork is emerging: the National Nutrition Plan for 2017-30 set targets for reducing sugar consumption, and Shenzhen became the first Chinese city to require warning labels on sugary drinks, with Shanghai adopting similar measures [para. 17]. Zheng Rong emphasized that a sugary-drink tax should not aim solely at cutting consumption; if tied to a beverage's sugar content, it could also prompt companies to reformulate products and reduce harmful ingredients [para. 18]. She concluded that the real question is not simply how much to raise tax rates, but how to build prices, prevention, financing, and accountability into a credible, equitable, and sustainable public institution [para. 19].
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