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Wednesday, April 17, 2024

China Continues to Subsidize Fentanyl Precursor Chemicals According to US Congress

"Socalj" for Borderland Beat

"The PRC (People's Republic of China) scheduled all fentanyl analogs as controlled substances in 2019, meaning that it currently subsidizes the export of drugs that are illegal under both U.S. and PRC law," the report said, adding that some of the substances "have no known legal use worldwide."

The report cited data from the Chinese government's State Taxation Administration website, which listed certain chemicals for rebates up to 13%. It additionally currently subsidizes 2 fentanyl precursors used by drug cartels - NPP and ANPP, it said.

Following a months-long investigation, Chairman Mike Gallagher (R-WI) and Ranking Member Raja Krishnamoorthi (D-IL) of the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party revealed their findings of the Chinese Communist Party’s role in the deadly fentanyl epidemic that has killed hundreds of thousands of Americans.

The fentanyl crisis is one of the most horrific disasters that America has ever faced. On average, fentanyl kills over 200 Americans daily, the equivalent of a packed Boeing 737 crashing every single day. Fentanyl is the leading cause of death for Americans aged 18-45 and a leading cause of the historic drop in American life expectancy. It has led to millions more suffering from addiction and the destruction of countless families and communities. Beyond the United States, fentanyl and other mass-produced synthetic narcotics from the People’s Republic of China (PRC) are devastating nations around the world. It is truly a global crisis.

The PRC, under the leadership of the Chinese Communist Party (CCP), is the ultimate geographic source of the fentanyl crisis. Companies in China produce nearly all of the illicit fentanyl precursors, the key ingredients that drive the global illicit fentanyl trade. The House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party (Select Committee) launched an investigation to better understand the role of the CCP in the fentanyl crisis.

This investigation involved delving deep into public PRC websites, analyzing PRC government documents, acquiring over 37,000 unique data points of PRC companies selling narcotics online through web scraping and data analytics, undercover communications with PRC drug trafficking companies, and consultations with experts in the public and private sectors, among other steps.

The Select Committee's investigation has established that the PRC government, under the control of the CCP:
  • Directly subsidizes the manufacturing and export of illicit fentanyl materials and other synthetic narcotics through tax rebates. Many of these substances are illegal under the PRC’s own laws and have no known legal use worldwide. Like its export tax rebates for legitimate goods, the CCP’s subsidies of illegal drugs incentivize international synthetic drug sales from the PRC. The CCP never disclosed this program.
  • Gave monetary grants and awards to companies openly trafficking illicit fentanyl materials and other synthetic narcotics. There are even examples of some of these companies enjoying site visits from provincial PRC government officials who complimented them for their impact on the provincial economy.
  • Holds ownership interest in several PRC companies tied to drug trafficking. This includes a PRC government prison connected to human rights abuses owning a drug trafficking chemical company and a publicly traded PRC company hosting thousands of instances of open drug trafficking on its sites.
  • Fails to prosecute fentanyl and precursor manufacturers. Rather than investigating drug traffickers, PRC security services have not cooperated with U.S. law enforcement, and have even notified targets of U.S. investigations when they received requests for assistance.
  • Allows the open sale of fentanyl precursors and other illicit materials on the extensively monitored and controlled PRC internet. A review of just seven e-commerce sites found over 31,000 instances of PRC companies selling illicit chemicals with obvious ties to drug trafficking. Undercover communications with PRC drug trafficking companies (whose identities were provided to U.S. law enforcement) revealed an eagerness to engage in clearly illicit drug sales with no fear of reprisal.
  • Censors content about domestic drug sales, but leaves export-focused narcotics content untouched. The PRC has censorship triggers for domestic drug sales (e.g., “fentanyl + cash on delivery”), but no such triggers exist to monitor or prevent the export of illicit narcotics out of the PRC.

  • Strategically and economically benefits from the fentanyl crisis. The fentanyl crisis has helped CCP-tied Chinese organized criminal groups become the world’s premier money launderers, enriched the PRC’s chemical industry, and has had a devastating impact on Americans.

Committee Proposed Actions

While the PRC government publicly acknowledged in November 2023 that the trafficking of fentanyl precursors and other illicit narcotics materials in the manner described above is illegal under Chinese law, the Select Committee found thousands of PRC companies openly selling these illicit materials on the Chinese internet—the most heavily surveilled country-wide network in the world. The CCP runs the most advanced techno-totalitarian state in human history that “leave[s] criminals with nowhere to hide” and has the means to stop illicit fentanyl materials manufacturers, yet it has failed to pursue flagrant violations of its own laws.

Armed with the knowledge gained in the course of this investigation, the report finds that the United States should:
  • Establish a Joint Task Force – Counter Opioids (JTF-CO) that concentrates all non-military elements of state power and executes a coordinated strategy to target the weak points in the global illicit fentanyl supply chain.
  • Provide law enforcement and intelligence officials with the statutory authorities, tools, and resources they need to execute their responsibilities, including through enhancing international law enforcement cooperation, appropriately prioritizing fentanyl and anti-money laundering in intelligence and enforcement efforts; and recruiting and retaining top talent to combat the fentanyl threat.
  • Strengthen U.S. sanctions authorities and use those authorities in an aggressive and coordinated manner against entities involved in the fentanyl trade.
  • Enact and use trade and customs enforcement measures to restrict fentanyl trafficking
  • Close regulatory and enforcement gaps exploited by PRC money launderers and fentanyl traffickers.

Former DEA Operations Chief Testimony

Former DEA Chief of Operations Ray Donavon submitted his testimony on the fentanyl crisis and China's source for synthetic drugs. DEA has historically focused investigations on source regions and countries for traditional narcotics, primarily Mexico, Central and South America, and the Caribbean for transshipment.

We have representatives in 90 offices globally to help partner nations fight the proliferation of the drug trade and associated money laundering. Mexican transnational criminal organizations have been DEA’s primary focus in the narcotics trafficking space in recent years, specifically the Sinaloa Cartel formerly headed by the notorious Chapo Guzman, and the Cartel de Jalisco Nueva Generacion currently led by Nemesio Oseguera Cervantes aka El Mencho. These criminal organizations act as the wholesalers and logistical orchestrators of the movement of illicit narcotics over the southern border of the United States.  

Over the last 10-plus years, we saw a significant increase in the number of “super labs,” or high-volume narcotics manufacturing labs, used to mass produce synthetic narcotics in Mexico, and the correlated increase in the adulteration of what we at DEA consider to be “traditional” narcotics, heroin, cocaine, and methamphetamine with fentanyl.  

When these labs were interdicted, extensive evidence of Chinese-produced chemicals (blue barrels with Chinese labeling, bills of lading, etc.) was found.  

We also noted the labs were not only mixing fentanyl into the narcotics supply, but also pressing fentanyl into pills intentionally designed with colors and markings mimicking those of pharmaceutical synthetic opioids such as Oxycontin, Percocet, and other widely known and highly addictive opioids used to treat pain. Now, they are increasingly pressed into non-opioid pills, such as counterfeit Xanax, dramatically increasing the risk of accidental overdose.  

DEA noted a sharp uptick in the use of Chinese precursor chemicals gathered from the super labs as well as a significant increase in Chinese money laundering organizations operating globally in the narcotics trafficking space.

Based on these factors and other intelligence gathered regarding the fentanyl precursor chemical trade DEA responded with the creation of Operation Sleeping Giant. This operation utilized a collaborative Whole of Government approach, utilizing assets from Law Enforcement, the Intelligence Community, and the Departments of Defense, Treasury, and State, as well as the Five Eyes consortium.

Operation Sleeping Giant 

Targeted the two primary areas where Chinese criminal organizations were gaining prominence:  manufacture and trafficking in fentanyl precursor chemicals and money laundering. I have had the opportunity to review the investigation conducted by the bipartisan select committee.  

Based on my knowledge and experience I have determined the findings and information with respect to the involvement in this activity by Chinese chemical manufacturers and brokers supported and sanctioned by the CCP and the government of the PRC to be valid and correct.   

The dominant role China plays as the primary fentanyl precursor supplier was demonstrated in early 2020 when the CCP locked down Wuhan Province, where chemical manufacturing, specifically fentanyl precursor production, is concentrated. This lockdown caused the U.S. fentanyl supply to dwindle and prices to skyrocket. 

Roles the PRC and CCP play in the fentanyl crisis:  
  1. The PRC directly subsidizes the exports of 97% of fentanyl precursors and deadly fentanyl analogs and other synthetic narcotics that are illegal under its own laws. 

  2. The PRC rewards companies that openly and notoriously export these illegal drugs with government grants and monetary awards.

  3. The PRC and ranking members of the CCP hold ownership interest in some of these companies.

  4. The PRC actively protects synthetic narcotic manufacturers and other PRC companies from investigation and prosecution either within China or by the international community.

  5. The PRC allows this activity to continue via its controlled and actively monitored communication platforms despite regularly censoring speech that violates PRC law or speaks ill of the CCP in other contexts.

  6. The production of synthetic narcotics and fentanyl precursors are illegal under PRC law, but those laws are not enforced effectively.

  7. The PRC fails to mobilize the massive government surveillance and security apparatus to stop the manufacture and distribution of these substances.   
The PRC has actively evaded all United States-led efforts aimed at stopping the outflow of fentanyl and fentanyl precursors from China and instead has supported synthetic drug manufacturers' production and distribution, resulting in the problem continuing to grow in both size and scope.  

In addition, the PRC’s support of fentanyl production has paved a path for more dangerous synthetic drugs to gain a foothold in the United States.

The illicit synthetic narcotics industrial complex in China doesn’t solely produce fentanyl; it also produces methamphetamine, ketamine, and other dangerous drugs like nitazene and xylazine.   

Nitazene is a chemical opioid more potent than fentanyl and 25 times stronger than street heroin.  

Xylazine is resistant to naloxone treatments (also called Narcan, an opioid reversal drug used to treat overdose victims) and when mixed with fentanyl, dramatically increases the risk of death and causes the user’s flesh to rot.   

Sources ReutersHouse Select Committee on CCP


  1. Nothing not known aleady. Reverse Opium Wars.

  2. This comment has been removed by a blog administrator.

    1. Mencho always said CDN is nothing more than a glorified crew. Plain and simple

    2. 752 jaja, chapo never had tje makings of a varsity athlete.

    3. an askew crew..

    4. The 6:35 deleted comment was a Sopranos reference, NOT a racist comment about either Japanese or Chinese people..

    5. @ 7:52 ''The sacred and the propane.''

    6. 8:57 Lizard you only need one period at the end of the sentence, 😭 you need to go back to night school.


    7. ZH Dead resident. China produces 40-45% of all chemicals globally. Next up will be USA and then Germany. Whereby you are never going to supply from them no matter what you do. India produces a quite small percentage and would be 4th on the list.

      Fentanyl is not that complex a chemical. It comes from easy enough chemicals to obtain. Whoever is making it in Mexico is going to get the chemicals from China as it'll be cheapest from there. It would be ridiculous to try and get them from the USA and Germany is not a possibility given it's geographic location. If India ramps up Chemical production, it'll come from there. The main problem is the hopelessness of a lot of people in the USA that they want to take this drug.

      This whole narrative feels like just another tool for the forever war to keep the money going to the MIC. I doubt the powers that be care less about the numerous people dying from overdoses. They are probably happy to watch these people die and stop using up the precious resources of the anointed ones. Also, it gives the powers that be a great tool to keep the money rolling in and keep blaming the bogeyman.

  3. Seems easy to export from china to Mexico and vice versa all by ocean or air submarines.

    1. Wow 🤯 narcos got air submarines now

  4. I’m an American and I have come to realize it’s crazy how every issue in the US is blamed on another country. How many other countries blame the US? Without the US most organizations would fall apart. US guns,money,banks,lawyers,financial advisers who clean the money so people can over power and over pay their country’s leaders.

    1. this is a rare instance where they are right to blame another country - why is china exporting fentanyl precursors? well, for money obviously.. but they know where it's going. there's things usa could do to mitigate it, better border security or, provide access to safe forms of opiates to cut into the demand for illegal ones.. but yeah i would blame china if i were them too.

  5. “ fentanyl and other mass-produced synthetic narcotics from the People’s Republic of China (PRC) are devastating nations around the world.” what a bullshit. It just affects the USA, there is no other country in the world with such numbers. And to be honest 90% of the people give a rats ass about any addict and i would even go so far and say that they are lucky when they OD and die. One weird crazy motherfucker less on the streets.

    1. Hear hear finally some sense from someone

    2. let's not forget dude, a bunch of these od deaths, maybe more than half, are people who don't know they are getting fentanyl and are trying to buy something else like m30s or heroin. it's not all street junkies dying.

  6. I don’t understand what the big problem. If they really wanted to stop they would just enforce the laws already on the books, arrest drug dealers, force users to get medically supervised detox and rehab therapy, and inspect postal packages and 99% of all traffic coming in the USA.

  7. I am in 100% in support of Taiwan and Hong Kong. China can reverse opium wars all they want. At the moment the US has China bent over. Interests are down in China and its not really stimulating any thing. If you want to do your part Short any Chinese Stock.

  8. I doubt US governent has anything against junkies dying.

  9. I remember reading articles about President Biden, asking AMLO to curb the flow of precursor chemicals, coming into Mexico from China, at first AMLO had to be a smart ass, and say "no precursor chemicals come into Mexico, it comes from US and India '.
    We all know it exists in Mexico.
    Sure enough, he had a letter written to the Chinese leader, which at first Denied that no chemicals come from China, then months later China President said he will do something about it, apparently that brings in big money to China, you think he wants to stop it?

  10. Build a wall around China!!!

    1. Great Wall of China already built, almost 2,000 years ago, didn't you get the memo?

    2. 11:16 so now you know that walls don't work correct?

  11. duh the problem is those corrupt at Mexican ports were all chemicals come and yet no one does nada

    1. Would you believe Obrador, has requested the military watch over the ports, which was done. And guess what....the precursor chemicals still make it to, it's intended destination.

    2. The precursors are not illegal, it's the end product that is illegal. So as long as you have a shell company with legitimate paperwork to justify the purchase of those chemicals than there's not much the government on any side can do.

  12. Disgusting Chinese people are the world's cancer cells. There is only eradication!


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