When Chinese President Xi Jinping arrived in San Francisco last week, his top aides delivered welcome news for U.S. officials: Beijing had already taken action against 25 Chinese companies involved in supplying chemicals used in the illicit fentanyl trade, said a White House official familiar with the matter.
The move was viewed as evidence that Beijing is serious about stepping up counternarcotics cooperation after more than a year of diplomatic efforts that met resistance from Chinese officials – who had shifted blame to the United States for its insatiable demand for drugs. After President Biden and Xi met, the White House on Wednesday announced that China had agreed to resume cooperation against counternarcotics with the United States, while cracking down on chemicals flowing to clandestine fentanyl labs overseas.
While the agreement notches a political win for Biden as he runs for reelection and is eager to show progress curbing the nation’s enduring drug crisis, policy experts remain skeptical that China’s pledge will make a lasting dent in the global supply chain for illicit drugs. They question whether Beijing will follow through, or that it is even capable of rooting out shady players within China’s vast chemical industry who use encrypted communications and cryptocurrency while peddling precursor chemicals to Mexican drug traffickers.
Some experts worry that other cheap, synthetic drugs may begin replacing fentanyl. Others say sales of the precursor chemicals – which can have many legitimate uses but are instrumental to manufacturing fentanyl – will simply migrate to other countries, such as India.
“I have a hard time believing this is a permanent game-changing scenario because somebody else can step in and provide the chemicals,” said Jonathan P. Caulkins, a Carnegie Mellon University professor who researches the criminal drug trade. “The Chinese are not the only ones who know how to manufacture these chemicals.”
The Biden administration has made combating the nation’s drug crisis a priority, pumping hundreds of millions of dollars into helping communities and states obtain overdose reversal drugs, beef up addiction treatment and start education campaigns. Still, the toll exacted by illicit drugs keeps climbing, with more than 110,000 deaths in the United States in 2022, two-thirds from synthetic opioids such as illicitly made fentanyl, according to federal estimates.
Fentanyl made in secret labs in Mexico long ago replaced prescription painkillers and heroin as the catalyst for the nation’s drug deaths. And while the fight against the drug problem is a bipartisan issue, the GOP and its presidential candidates have pilloried Biden’s record, linking the proliferation of fentanyl to a porous southern border – even though the drug mostly enters the United States through vehicles traversing legal ports of entry, not carried by migrants seeking asylum.
Amid tensions over Taiwan, trade and technology, China’s role in the fentanyl trade has become a political rallying point for both Democrats and Republicans. Before Biden met with Xi, senators from both parties exhorted the U.S. president in a letter to urge Beijing to cut off the precursor supply and spur “a drastic drop in illicit fentanyl being trafficked across our southern border and killing vulnerable Americans.”
Republicans have criticized last week’s agreement, predicting China’s pledge will prove hollow.
“No amount of weak appeasement from Joe Biden is going to change Communist China’s desire to weaken the United States and kill Americans,” Sen. Rick Scott (R-Fla.) said in a statement. “We’ve seen this failed playbook before when then-Vice President Joe Biden tried to get Communist China to crack down on fentanyl during the Obama administration. They didn’t keep their word then and won’t now.”
During the Trump administration, China moved to constrain domestic production of fentanyl but with grim, unintended consequences.
The country’s chemical and pharmaceutical companies, using mail and courier services, used to be the primary suppliers of fentanyl and other synthetic drugs to North America. In 2019, Chinese authorities tipped off by the U.S. Drug Enforcement Administration convicted a ring of fentanyl suppliers. U.S. and Chinese officials held a joint news conference after nine men were sentenced. That year, China agreed to sweeping internal restrictions on fentanyl-related substances.
But Chinese companies then began supplying precursor chemicals to Mexican drug trafficking groups, which now produce finished fentanyl in labs in Mexico and traffic the small, easy-to-hide packages across the border into the United States. A study last year estimated that the amount of fentanyl consumed in the United States in 2021 was only in the single-digit metric tons, compared with an estimated 145 tons of cocaine, underscoring the potency of the drug and the ease of smuggling it into the United States.
This year, U.S. law enforcement has increasingly targeted Chinese companies and brokers suspected of supplying precursors sent by ship and through parcels to Mexico. The Treasury Department has issued sanctions against companies in China. Federal prosecutors have linked Chinese companies to the ruthless Sinaloa cartel, whose leaders have been arrested and extradited to the United States.
In June, the Justice Department unveiled indictments against companies that prosecutors say advertised the chemicals online, shipping them overseas using fake labeling and deceptive delivery procedures. They also announced the arrests of two Chinese nationals in Fiji – a rare instance in which Chinese suspects found themselves in U.S. custody. At the time, a Chinese Embassy spokesman called the indictments “entrapment” and shifted blame to the United States’ “own drug problems.” In October, the Justice Department unsealed additional indictments against different Chinese companies and their executives.
Wednesday’s agreement between the nation’s presidents represented an about-face from China, which stopped cooperating with U.S. law enforcement more than a year ago amid deteriorating relations and a visit to Taiwan by Rep. Nancy Pelosi (D-Calif.), then the House speaker.
The White House says Beijing has issued a notice to industry alerting it to laws and regulations on selling precursors and pill presses. China also began taking enforcement action and as a result, certain companies “have ceased operations and have had some international payment accounts blocked,” according to a White House summary. For the first time in three years, China began sharing intelligence with an international board that monitors drug threats under United Nations treaties, the White House said.
In return, the Biden administration lifted sanctions on China’s Institute of Forensic Science, a network of crime labs, which had been targeted in 2020 because of human rights violations and abuses.
Analysts say that for Xi, reining in the chemical trade is not a priority, but that the agreement helps stabilize China’s relationship with the United States and bolsters the image of a country confronting economic and political challenges. They caution that China could stop cooperating if it feels it is not benefiting on a bigger political stage – and the United States would have no easy way to gauge its efforts.
“I would be very surprised if we had robust, lasting cooperation from China,” said Vanda Felbab-Brown, who studies the international opioid trade for the Brookings Institution, a D.C. think tank. “The cooperation will wither over time.”
China’s mammoth chemical and drug industries are fragmented, with many small companies operating on thin margins, said Zongyuan Zoe Liu, a research fellow studying China for the Council on Foreign Relations. She said some chemicals are diverted from legitimate companies, making it harder for regulators to detect. And those products are often sold through small-time brokers who employ English-speaking sales representatives to engage with customers through WhatsApp and other messaging services, according to an investigation by Elliptic, a crypto compliance analytics firm.
“I really think Chinese law enforcement investigators may not necessarily have the adequate capacity” to regulate the sales of precursors, Liu said.
The White House’s top official on drug control policy, Rahul Gupta, said in an interview that China’s pledge is only a first step, and that Beijing needs to enforce regulations to ensure that shipments from China are going to legitimate customers. He pointed to the 2019 crackdown as proof that “when China wants to act, it can act and it can be decisive in its action to yield results.”
Gupta, director of the White House Office of National Drug Control Policy, acknowledged that the moves by China may change where suppliers emerge. While China is the chief supplier of precursor chemicals, other countries such as India “are not too far behind,” he said.
“We also know that the criminal elements could quickly shift to countries like India,” Gupta said. “And that is a reason why we’ve been working with India since 2020. And it’s time for us to double- and triple-down our efforts with India to clamp down.”
Gupta on Friday traveled to India for meetings on U.S.-India drug policy and efforts to combat illicit synthetic drugs trafficking.
In the United States, where demand for illegal drugs rages on, some experts worry that an ebb in precursor chemicals from China may lead to a rise in other synthetic narcotics whose blueprints can be found online.
The illicit drug supply has become increasingly tainted with substances such as xylazine, an animal tranquilizer that can be bought from Chinese websites and is mixed with fentanyl for an extended high. Last month, the Treasury Department sanctioned companies it said were selling xylazine online – along with precursors used to make fentanyl, methamphetamine and MDMA, also known as ecstasy or Molly.
Jon E. Zibbell, a senior scientist at the nonprofit research institute RTI International, said that clamping down on precursors created unintended problems in the past. He pointed to crackdowns on pseudoephedrine in the mid-2000s to curb domestic production of methamphetamine. Today, Mexican cartels control a growing methamphetamine market using a different synthesis process, without pseudoephedrine, to make a more potent product.
“The illicit manufacturing of synthetic drugs,” Zibbell said, “is constantly shifting in response to national drug control strategies that have most often led to more toxic and dangerous versions of street drugs making their way onto America’s streets.”