Chinese "No Smoking" leaflet
Chinese "No Smoking" leaflet - 
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Scott Jagow: It's unlikely China can host a pollution-free Olympics. It will be somewhat smoke-free. Today, a ban on smoking took effect in Beijing. Schools, hospitals, government offices, Olympic venues. But it doesn't cover everything. Our correspondent in China Scott Tong has more.

Scott Tong: A last-minute exemption allows lighting up in bars and restaurants in designated smoking zones. The head of the state cigarette monopoly argues a total ban is unrealistic and would harm social stability. Indeed, the cigarette is the business equivalent of the pat on the back in China, says Beijing restaurateur Paul Astephen.

Paul Astephen: It is used as a gesture of good faith. Every time I've ever came across doing business with people, whether it's in purchasing product, going out buying equipment or dishes, the first thing they do is offer me a cigarette.

China has a third of the world's smokers -- 350 million is more than the entire U.S. population. Last year, Chinese cigarette makers made $50 billion. As for the Beijing ban, smokers who break it will be fined $1.50 -- that's about the cost of four packs of the cheapest cigarettes.

In Shanghai, I'm Scott Tong for Marketplace.