American tobacco giant R.J. Reynolds began production Friday of its best-selling cigarettes in the first joint-venture cigarette factory in China, the company announced.

The China-American Cigarette Co., a joint-venture between R.J. Reynolds Tobacco International Inc. and the Xiamen Cigarette Factory and Xiamen United Development Company Ltd., is to produce 2.5 billion cigarettes annually when fully operational.The factory, located in the Xiamen Special Economic Zone in eastern Fujian Province, is capitalized at $21 million with R.J. Reynolds contributing 50 percent, according to a statement.