Organizers, sponsors and fans were ecstatic when he Federation Internationale de l's Automobile (FIA) announced Formula One, the world's most prestigious motor-racing event, would be staged in Shanghai from 2004 until 2010.

But some insiders have expressed concern about the FIA's frank approval of Grand Prix racing's entry into China.

That concern stems from the fact some world tobacco giants - long the main financial backers of F1 at more than US$350 million annually -will use the race to promote their products in the world's largest tobacco-consuming market.

Adding to that concern is the fact China will soon abolish special retailing licences for foreign tobacco products.

The World Health Organization is seeking to phase out tobacco sponsorship of F1 globally starting October 1 2006, a timetable that has been bumped ahead to July 31, 2005 by the European Union (EU) health committee.

Big names like Ferrari, BAR, McLaren and Renault will lose their tobacco sponsorships by then (in fact by the end of 2004, because the deadline is in the middle of the Grand Prix season and they won't be able to change title sponsor), and will be forced to find new ways to pay for their teams before contracts with sponsors expire at the end of 2006.

"The only way they (the teams) can observe those contracts in 2006 is to reduce the number of Grands Prix in the EU to a point where the tobacco companies do not object," FIA president Max Mosley said.

The Belgian Grand Prix has been dropped this year and Austria will follow next year.

China and Bahrain are scheduled to come in for 2004 with future races possible in Turkey and Russia, India, Egypt, Mexico. Another race in the United States is also being discussed as possible venues.

But it seems things will not go as smoothly as expected in China, even if the event not only introduces an exciting sport to the country for the first time, but also brings the city enormous revenues from ticket sales, services, tourism and related areas.

According to the World Health Organization's Convention on Tobacco Control, which China has agreed to adopt, tobacco advertisement, promotion or sponsorship will be widely banned and restricted in China and the government has promised to take a series of stricter measures to conform to the WHO's anti-tobacco mandate.

When Yu Zhifei, deputy general manager of the Shanghai International Circuit Company (SIC), endorsed the deal with Formula One chief Bernie Ecclestone last October, he found himself having to deal with a subtle and sensitive problem.

It's been reported that Yu is seeking a government "franchise" to permit the legal appearance of F1's tobacco ads, as similar situations have been seen in China's first division football and volleyball leagues, in which the Yunnan Hongta team and Zhejiang Liqun team are primarily sponsored by China's two tobacco giants.

"Chinese people are wise enough to deal with such matters. We are working very hard to negotiate with various departments and will achieve our goal (hosting the F1 with its tobacco sponsors) while also following international practice," Yu confidently predicted.

Formula One is one of the world's most prestigious and expensive entertainment events, with each car costing about US$7 million and drivers enjoying some of the highest salaries in professional sports. The elimination of tobacco sponsorships could cause severe financial hardships.

Shi Tianshu, president of the China Motor Racing Federation, also sees the tobacco companies' entry as a first important step for further marketing development.

"F1 will bring enormous ads and commercial value and improve a lot of related industry and local employment." Shi said.

"China is a developing country, so development should be a priority. I do not think tobacco ads from F1 will directly lead to an increase in the number of smokers," he added.

However, criticisms are inevitably heard from tobacco control experts and ordinary people. Li Xiang, a researcher at the Tobacco Control Department of the local Disease Control and Prevention Centre was very worried about the potential passive influence on public health, especially among children and juveniles.

"Exciting motor racing is very attractive to young people. A combination of fashion sports and tobacco advertisements can strongly lure the young into bad habits," said Li.

In addition, the race will be broadcast internationally, so health experts are worried the tobacco advertisements will also influence China's image overseas, compared to some countries' immediate and complete efforts on tobacco ads ban.

Although tobacco companies contribute a great sum of tax revenue to the economy, more and more people are of the opinion it's simply not worth the risk.

"In the long term it is in the country's health and economic interest to control tobacco use, since the revenue raised from the tobacco industry does not cover the economic and health related costs of smoking," said Li.

The WHO estimates in 1993 China gained US$4.9 billion in tobacco taxes but lost US$7.8 billion in productivity and additional health care costs.

"It is illegal if there are tobacco ads in next year's F1 event. I will not allow the 'franchise' to organizers," said Yang Gonghuan, vice-president of China Smoke and Health Association.

When asked if he had considered the possibility of F1 being granted permission to use tobacco advertising in China, Yang answered in the affirmative.

"But I have to say it would be a big step backward in our tobacco control," he said.

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