China has been directly causing the deadly fentanyl crisis ravaging communities across America by giving tax rebates to producers and exporters of key precursor chemicals and doling out grants to companies involved in drug trafficking, according to a shocking congressional report released Tuesday.
The House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party noted in the 64-page document that many of the substances involved in production of the deadly opiate are illegal under Chinese law “and have no known legal use worldwide.”
However, the report says, Beijing continues to provide subsidies “solely for exporting these deadly synthetic narcotics out of China.”
“This policy was in place at least as early as 2018,” the committee said, “and continued during the height of diplomatic furor between the United States and [China] over the massive amounts of illicit fentanyl materials it was sending to America.”
The report cited data from China’s State Taxation Administration, which listed certain exported chemicals as eligible for rebates of up to 13%.
The committee added that the subsidization system “incentivized the export of at least 17 illegal narcotics that are Schedule I controlled substances and have no legitimate purpose.”
The subsidies, the report added, were still in place as of this month.
Meanwhile, the panel noted, despite having “advanced techno-totalitarian surveillance state in human history,” China has repeatedly looked the other way from the manufacture and export of fentanyl — even giving companies a heads-up when US law enforcement asks for Beijing’s assistance.
The early warnings led to drug-making companies “changing their operational techniques, making it harder to detect and deter their criminal activities,” the committee said, later adding that on the rare occasions the US was able to arrest Chinese drug traffickers, Beijing “not only refused to assist the investigation but also published warnings to the … drug trafficking community to avoid ‘falling into US snares and arrest-entrapment.'”
During one 2018 meeting between federal investigators and their Chinese counterparts about a particular trafficking ring, the report recounted, the Beijing authorities freely admitted their laws had been violated, only to stonewall by claiming that “‘different staff’ handles these types of violations and that they would not be in until the following week.
“Despite the US investigative team offering to change their flights to meet the ‘different staff’ to discuss further cooperation, the [Chinese] senior-most official refused and ended the meeting, stating that they would be in touch for further cooperation.”
“Aside from limited collaboration in 2017,” the report added. “‘Beijing has not followed up on other major US indictments of Chinese nationals on drug trafficking charges.'”
“The global illicit fentanyl trade has enriched [China] itself, empowered its organized crime assets through lucrative money laundering, and offer [Chinese] elites a means to move a certain amount of their capital abroad,” it went on.
Since President Biden took office in January 2021, more than 200,000 Americans have died from fentanyl, which is increasingly cut into non-opioid drugs including cocaine and into counterfeit prescriptions, killing unwitting users.
“Through its actions, as our report has revealed, the Chinese Communist Party is telling us that it wants more fentanyl entering our country,” said select committee Chairman Rep. Mike Gallagher (R-Wis.) at the top of a Tuesday hearing. “It wants the chaos and devastation that has resulted from the epidemic.”
“Imagine you woke up one morning and heard that a passenger plane carrying over 200 people crashed, killing everyone on board. Imagine that this happened again the next day, and the next. Day after day and year after year. This scale of death seems incomprehensible. And yet, it is the reality that we live in,” Gallagher added.
“While we knew where fentanyl comes from, until now, we did not know why,” the Republican went on, pointing the finger squarely at Chinese President Xi Jinping’s pursuit of “asymmetric warfare” with the US.
“Xi Jinping has stated that it is the role of the CCP to overthrow the liberal democratic system,” the retiring congressman warned. “One of their generals and leading strategists has even discussed ‘drug warfare that causes disasters in other countries while making huge profits’ as an effective tactic.”
In November, fentanyl emerged as a top priority during Biden’s meeting with Xi on the sidelines of the APEC summit in San Francisco. At the time, China publicly vowed to clamp down on the chemicals used to produce the synthetic opioid.
Biden and Xi also spoke via phone earlier this month for the first time since their November meeting, and discussed their joint efforts to combat fentanyl production, according to the White House.
However, Ray Donovan, a former senior Drug Enforcement Administration official, told the hearing that the November agreement had not changed China’s support for shipping fentanyl to the West, and implored the government to “apply more pressure.”
“Without China’s production and export of fentanyl and fentanyl precursors, there would be no fentanyl crisis in the United States,” agreed former Attorney General Bill Barr, who said Beijing is “knee-deep in actively sponsoring, encouraging, and facilitating the production and export of fentanyl and fentanyl precursors for distribution in the United States.”
The committee recommended that the government convene a task force on opioids, ratchet up sanctions and penalties on fentanyl-related commerce, bolster customs enforcement, and close regulatory gaps.
The US has previously said that China is the primary source of the precursor chemicals synthesized into fentanyl by drug cartels in Mexico. Mexico’s government also has asked China to do more to control shipments of fentanyl to that country.
China, for its part, has said the responsibility lies with the US government to curb domestic demand for opioids.
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