In 2008, a 7.9-magnitude earthquake devastated China's western Sichuan province, killing about 90,000 people, including children trapped in shoddily built schools. Amid the despair, China's tobacco monopoly saw an opening for charity – and brand-building.

China National Tobacco Corp. offered funding for new schools in distressed areas, naming them after cigarette brands like China Pride. The slogan "Talent Comes from Hard Work -- Tobacco Nurtures Talent" was painted on the wall at the Sichuan Tobacco Hope Elementary School.

After that particular school became a flash point, the slogan was removed and the school's name changed. But more than 100 schools across China are still sponsored by the tobacco industry, said Wu Yiqun, deputy director of the Think Tank Research Center for Health Development, who has campaigned against such sponsorships.

China, the world's biggest tobacco producer, has a dire smoking problem. One out of every three cigarettes consumed worldwide is smoked in China, according to the World Health Organization, or WHO. Nearly a third of the population smokes. And tobacco kills 1 million people in China every year.

China is attacking the problem with an anti-smoking draft law submitted to the State Council that would fine people up to $80 for smoking in public places. The proposal would also ban all tobacco ads, promotions and sponsorships, including in schools.

However, there are questions about how fiercely the tobacco industry will fight to water down the proposal. A separate draft law governing the advertising industry would allow school sponsorships to continue, but it's not clear yet which law will prevail.

Smokier Than Marlboro Country

China's track record on tobacco control hasn't been great -- after all, it's tricky to crack down on an industry that's basically part of the state. The country's tobacco monopoly is state-owned, and it's run by the government tobacco regulator. Tobacco taxes make up around 7% of the government's annual revenue, according to Bloomberg News.

A ban on smoking in many indoor public places has been in place since 2011, but it's widely ignored. As the Global Times newspaper noted, "Ashtrays sometimes sit near some 'No Smoking' signs."

Tobacco ads are banned on TV and in magazines, but cigarette ads show up anyway. And China's tobacco industry has found ways around restrictions. On its website, China's national tobacco corporation showcases its volunteer outreach to disadvantaged children of migrant workers. (The company's spokesman did not respond to calls seeking comment.)

The tobacco industry has signaled its displeasure with the proposed new restrictions. Ling Chengxing, the director of the regulator, the State Tobacco Monopoly Administration, said smoking is a tradition and that there's still a market for it. He told Communist Party publication Study Times that any new restrictions should not be "absolutist."

To Ban or Not to Ban?

China, in fact, already signed on to an absolutist pledge long ago. In 2005, China ratified WHO's global tobacco control treaty, which requires a complete ban on all tobacco marketing.

China hasn't complied so far, but if the country presses forward with the proposed anti-smoking draft law and enforces it, it would. WHO still has concerns about China's plans on tobacco marketing, though: In a separate legislative process in the National People's Congress, there's a bid to overhaul the law regulating the ad industry, and it proposes merely tightening restrictions on tobacco promotion, not banning it outright.

If both proposals pass, that second law – which is far less restrictive in its current wording – would take precedence to govern cigarette advertising, said Angela Pratt, who leads WHO's tobacco control efforts in China.

In that case, billboards would be banned, but school sponsorships could continue. WHO wants to see the tobacco industry's school sponsorships, in particular, come to an end: "That's a particularly invidious form of tobacco advertising," Ms. Pratt said. "It's about building brand loyalty, introducing tobacco to people when they're young, and that's the most vulnerable time."