Background Cigarette smoking imposes substantial health and economic burdens on China, yet its full impact remains significantly underestimated and based on outdated data. This study aims to comprehensively assess the direct and indirect economic costs of cigarette smoking from 2014 to 2020.

Methods From a societal perspective, the study uses the subtractive method in conjunction with propensity score matching to estimate direct costs, particularly excess healthcare expenditures incurred by people who smoke compared with those who have never smoked. Additionally, indirect costs, including productivity losses due to premature mortality and morbidity, are quantified using disability-adjusted life-years and the human capital approach.

Results The total economic cost of cigarette smoking in China increased significantly from 1.40 trillion RMB in 2014 to 2.43 trillion RMB in 2020, representing an average of 2.29% of Gross Domestic Product (GDP) annually. In contrast, the fiscal benefits derived from the tobacco industry, including tax revenue and profits, were substantially lower, amounting to 1.52 trillion RMB in 2020. This disparity reveals that the economic cost of cigarette smoking was approximately 1.6 times greater than the fiscal gains, undermining the narrative that the tobacco industry is economically advantageous.

Conclusions This study underscores the unsustainability of relying on revenues from the tobacco industry and emphasises the urgent need for comprehensive tobacco control policies in China. Policy-makers should prioritise raising tobacco taxes and adopting effective strategies to reduce smoking prevalence, thereby safeguarding long-term public health and promoting economic sustainability.