A large national salt group has been launched, scooping half the nation's table salt production.
The move is aimed at helping the government maintain a monopoly on salt sales in an attempt to popularize the use of iodized salt in preventing ailments linked to iodine deficiency.
The new China Salt Group includes 57 provincial companies involved in exploration, production and sales, as well as design and research institutions.
China National Salt Corp, the nation's only national-level salt monopoly, is the parent company of the group.
The group is now able to produce 18.7 million tons of salt a year with annual sales revenue reaching 14 billion yuan (US$1.7 billion).
"The purpose of the group is to implement monopolized salt sales that will ensure the supply of iodized salt," the organization said in a statement.
China has long grappled with iodine deficiency diseases that can impede children's mental development. A significant portion of Chinese children suffered from hypothyroid diseases in 1995.
To tackle the problem China began adding iodine to salt in the late 1990s and the disease has almost been eradicated.
Sales of iodized salt increased to 7 million tons last year from 3 million tons in 1995.
The government maintains a monopoly on salt sales for fear that non-iodized salt might edge out the iodized product in an open market.
A research report from Macroeconomy Research Institute under the National Development and Reform Commission said it is not the right time to liberalize salt sales.
Scattered production, fragile market supervision and lack of knowledge among consumers could make non-iodized and inferior salt prevail in the market, thus hurting the health of consumers, the report said.
At the same time, the government sells salt in economically developed regions at higher prices in order to subsidize residents in remote, impoverished areas. In an open market few residents in poor areas could afford the iodized salt, the report said.
Still, China's salt industry is plagued by over-production. Capacity reached 42 million tons last year, while sales totalled 33 million tons.In the first half of this year China produced 3.9 million tons of table salt, up 16 per cent year-on-year.
(China Daily August 14, 2003)
