On Monday, more than 1,000 pupils at Beijing Wenhui Middle School practiced three anti-smoking gestures, which were recognized city-wide to convey that smoking is not okay in a given area. The pupils are covering their nose with their hand to signal "I am bothered by your smoke." The capital city will roll out strict anti-smoking regulations on June 1, 2015. [Photo/CFP]

In a few weeks, Beijing will implement a city-wide ban on smoking in all indoor public spaces, such as restaurants and offices, as well as on tobacco advertising outdoors, including those on public transport vehicles and in most forms of media. If the initiative, agreed late last year by the Beijing municipal people's congress, is successful, China may impose a similar ban nationwide.

A significant decline in smoking would undoubtedly bring enormous public health benefits to China. But is it feasible?

With an estimated 300 million smokers, China represents one-third of the world's total smokers and accounts for an average of roughly 2,700 tobacco-related deaths a day. The costs of treating smoking-related diseases, not to mention the associated productivity losses, are considerable.

But China has so far struggled to reduce smoking or enforce bans effectively. Indeed, despite ratifying the World Health Organization's Framework Convention on Tobacco Control in 2005, China failed to fulfill its commitment to ban indoor smoking by 2011. Moreover, tobacco output increased 32 percent.

The obvious question is: Why the Chinese government, which is not known to be shy about imposing paternalistic policies in other areas, does not simply ban cigarette production and use altogether? After all, other countries and localities, from Scandinavia to New York City, have made smoking prohibitively expensive and illegal in most public places.

The reason why China has not taken this path lies in the jobs and revenue that the industry provides. The State-owned China National Tobacco Corporation sells almost all of the cigarettes consumed in the country. Indeed, it is the world's largest cigarette manufacturer, supplying 2.5 trillion annually, which in turn generates 816 billion yuan ($131.5 billion or 7-10 percent of GDP) in revenue. Tobacco receipts finance as much as half of some provincial governments' budgets. Even in a country like China, the loss of so much income, not to mention the ire of 300 million addicts, would make prohibition a huge challenge.

But there is an alternative that could help appease angry citizens and mitigate the revenue loss from an outright ban on smoking: electronic cigarettes. Given that e-cigarettes merely heat a nicotine solution to produce an inhalable vapor, they release none of the carcinogenic tar of cigarette smoke, making them the ideal nicotine-delivery system for smokers seeking - or being forced - to reduce or halt their tobacco intake.

Aside from being far less damaging than cigarettes, e-cigarettes are a homegrown product, invented in China in 2003. But despite considerable progress in China's e-cigarette industry - in 2013, Shenzhen in Guandong province housed 900 manufacturers of the devices, up 200 percent from 2012, and accounted for more than 95 percent of global e-cigarette production - traditional cigarettes still dominate the Chinese market.

As Yanzhong Huang of the Council on Foreign Relations recently said: "If only 1 percent of China's smoking population turned to e-cigarettes, it would mean a market of about 3.5 million e-cigarette users." And the CNTC could become the world's largest e-cigarette maker.

One reason China has not managed to tap the e-cigarette industry's enormous potential is a lack of adequate regulation. Low entry barriers enable intense competition that diminishes producers' profit margins, and shoddy products are rife, owing to low manufacturing standards. If e-cigarettes are to replace traditional cigarettes and offset lost tobacco revenues, the government must regulate the industry more carefully to ensure safety and quality.

Already, it seems CNTC directors have complied with a government-mandated ban on cigarette smoking. Whether they have become e-cigarette "vapors" is not known.

A smoke-free China - one that benefits from rising productivity and massive healthcare savings - may seem like a pipedream. But a nationwide ban on smoking, with a reliable e-cigarette industry providing an alternative (both to smokers and to budgets), offers an intriguing way to turn the dream into reality.

Sally L. Satel, a medical doctor, is a resident scholar at the American Enterprise Institute in Washington, DC, and Sarahann Yeh is a student at the University of Maryland.

Project Syndicate