China Salt is a state owned company that has a monopoly over the management and production of edible salt in China. It is one example of an SOE that the public is beginning to question the need for- is salt a matter of national security in 2014?
Employees: 60,000
Subsidiaries: 46 over 22 provinces
Total assets: 34.5 billion in value
Output: 12 million tons salt annually,
7.7 million tons salt chemical products annually
China has a long history of many dynasties using salt as a major source of government revenue, with it still representing over 5% of the total national tax by the founding of the PRC. Nowadays, salt brings in only a very small percentage of national tax, but the monopoly still costs consumers an average of an extra 10 yuan per year in excessive profits.
One reason for the state affiliation decades ago was for health reasons as iodine deficiency is a common problem among under-nourished populations. As salt can be iodized or non-iodized, the government wanted to ensure that all citizens were consuming salt with iodine to resolve this problem. However, this is no longer the case for the Chinese population and in fact China is joining the developed world now in having the opposite problem, with people consuming too much iodine, also leading to health complications. Now, Chinese consumers have no option to purchase salt with iodine as there is no private market.
CNSIC has a monopoly in China on table salt, with sub-enterprises encompassing production, packaging, and distribution. The company was founded in 1950 and falls under the administration of the State Council. Regulations in China prohibit salt from being sold across regional lines or from private citizens selling their own manufactured salt. This particular law led to the removal of all salt listings from Taobao’s marketplace in March 2013.
One negative outcome of the monopoly is in the food industry, in which there have been reports of food product manufacturers, such as soy sauce and other seasonings, illegally using industrial salt rather than table salt in their products to cut down on costs.