Brother of China's Premier Li Keqiang steps down as deputy head of tobacco monopoly

BEIJING (Reuters) - Chinese Premier Li Keqiang's brother has stepped down as deputy head of China's powerful tobacco monopoly, state media said on Wednesday, removing a potential conflict of interest as the world's largest tobacco user battles a major health crisis.

Mr Li Keming, a vice-director at the State Tobacco Monopoly Administration, has "been removed" from his position, Xinhua news agency said in a brief report, listing several other officials who were also stepping down.

The tobacco monopoly wields extraordinary power because it provides an estimated 7 per cent to 10 per cent of government revenues in China - as much as 816 billion yuan (S$177 billion) in 2013.

Mr Li is the younger brother of Mr Li Keqiang, and had been in his post at the monopoly since 2003. His position had become a target for accusations from anti-smoking activists that the Chinese government was too cosy with the State Tobacco Monopoly Administration, which controls 98 per cent of China's vast cigarette market.

There is, however, no indication that the government is prepared to weaken the tobacco monopoly.Mr Li has been appointed to a new post as chairman of a supervisory committee focused on large state-owned enterprises, the ministry said, without elaborating.

The family lives of top leaders are generally a forbidden subject for public discussion in China.

The tobacco monopoly drew fire from anti-smoking activists last year when its intense lobbying resulted in the weakening of controversial legislation that aimed for a total ban on tobacco advertising, sources told Reuters.

Smoking is a major health crisis for China, where more than 300 million smokers have made cigarettes part of the social fabric, and millions more are exposed to second-hand smoke.

Last year, a health official said China was considering raising cigarette prices and taxes. The State Council, China's Cabinet, has issued a draft regulation to ban indoor smoking, limit outdoor smoking and end tobacco advertising.

The director of the State Tobacco Monopoly Administration has taken aim at anti-smoking efforts, saying they should not take an "absolutist" or "expansionist" direction because the habit had hundreds of years of history behind it.