Fentanyl Precursors from China and the American Opioid Epidemic

Introduction

The fentanyl epidemic was born in America, rose from the supply of precursor chemicals made in China and is now even more destructive as Mexican drug cartels profit from huge demand. The involvement of suppliers of fentanyl precursors from China is a controversial issue that negatively impacts U.S.-China relations. The U.S. government has claimed that not enough is being done to curtail the production and trafficking of fentanyl precursors from China. The People’s Republic of China (PRC) government has claimed that it has taken strong action while also emphasizing China’s antipathy to illegal drugs by falling back on the historical legacy of the harm wrought by Western merchants’ trading of opium with China in the 19th century.

According to the U.S. Drug Enforcement Agency (DEA), fentanyl precursors from China were a major source of the supply until 2019, when the PRC government listed most of these as controlled substances, commenced investigations of fentanyl manufacturing, imposed regulations on fentanyl advertising and created special teams to investigate the problem (DEA, January 2020). The measures taken by the PRC authorities resulted in the diversification of fentanyl precursor supply from China to India as well as Mexico. The DEA reported the discovery of links to the Sinaloa Cartel in Mexico from Chinese as well as Indian nationals known to be involved in the supply of fentanyl. There now seem to be complicated supply chains for fentanyl itself as well as the used precursors to manufacture the drug. A major concern is that  if suppliers in China are providing these materials to drug cartels in Mexico, this would effectively be an expansion of transnational organized crime that will be more difficult for the authorities in both the U.S. and China to combat.

The lethality of fentanyl was apparent as long ago as 2002, when in response to an attack by Chechen militants who took 850 hostages in the Dubrovka Theater in Moscow, the Russian authorities covertly pumped fentanyl into the building, resulting in the death of at least 170 people, which was well reported by Chinese news media (China Daily, October 31, 2002). That a manufactured drug used by the Russian military to kill terrorists could become one of the most trafficked drugs on the planet for human consumption, contributing to hundreds of thousands of deaths in the U.S., requires all governments to collaborate in the fight against the criminal business driving this epidemic.

Born in the USA

The U.S. has been in the grip of an opioid epidemic since the late 1990s, when overdose deaths from prescription drugs such as methadone, oxycodone and hydrocodone began to increase. From 1999 to 2020, over 564,000 people died from overdoses involving an opioid, but from 2019 to 2020 synthetic opioid related deaths increased by 56 percent. In 2020, more than 56,000 Americans died from overdoses involving synthetic opioids (other than methadone) and fentanyl analogs (Center for Disease Control [CDC], June 1, 2022).

Fentanyl is a synthetic pain release drug approved by the U.S. Food and Drug Administration for controlled medical use. However, over the past several years, recreational use of Fentanyl has become a major cause of overdose deaths in the U.S. Fentanyl is around 100 times more potent than morphine and 50 times stronger than heroin as an analgesic (DEA, October 2022). Fentanyl use as an intravenous anesthetic started in  hospitals American hospitals in the 1960s, but legal pharmaceutical products containing fentanyl have been diverted to illegal channels to create a massive black market fueled by transnational organized crime groups. The DEA has stated that illegal fentanyl is often sold on social media sites as fake prescription pills that look identical to real medicines such as OxyContin, Percocet and Xanax. These counterfeit medications are often deadly, with DEA testing finding that 60 percent of these tablets contain a potentially deadly dose of fentanyl.

The fentanyl abuse problem in America is worsening. In December, the DEA announced the seizure of over 50.6 million fentanyl-laced fake prescription pills and more than 10,000 pounds of fentanyl powder during the year, which they estimated comprises over 379 million potentially deadly doses (DEA, December 20, 2022). The DEA went on to state that most of the fentanyl is trafficked into the U.S. by the Sinaloa Cartel and the ‘Jalisco New Generation Cartel’ (CJNG), and is mass-produced at secret factories in Mexico using precursor chemicals sourced largely from China.

Made in China

Government officials in China have been rather defensive in their statements regarding fentanyl and precursors originating from the PRC and have rejected the notion that China is the root cause of the problem. Official Chinese accounts have focused on the U.S.’s domestic situation as the primary driver of the epidemic. For example, an article in People’s Daily last year asserted that “the U.S. has itself to blame for the root cause of fentanyl abuse in the country” and “the responsibility to prevent the entry of non-scheduled chemicals and their use in illicit drug-making falls on the import country.” (People’s Daily, June 20, 2022)

PRC officials also assign blame for problems that China historically faced to western nations, including in relation to drugs. Qin Gang, then Chinese Ambassador to the U.S., made comments last year that refer to the CCP’s historical narrative regarding the sale of opium to China, the related wars with Britain and the resultant “unequal treaties.” He said in a September 2022 interview that:

“China was a painful victim of opium in history. In the 19th century, Britain profited immensely from smuggling opium into China. When China decided to ban the material to save its population and economy, the British launched the Opium War, which started a century of humiliation for China, marked by a slate of unequal treaties and waves of Western aggressions. The repercussions of history are felt even today. With such searing pains in our national memory, China holds an understandably stronger antipathy for narcotics than any other country, as displayed in its zero-tolerance attitude towards all narcotic drugs, as well as stringent control and tough punishment measures. Thanks to these efforts, narcotics are not endemic in China” (Embassy of the PRC in the United States of America, September 30, 2022).

According to these PRC narratives, the U.S. governing system is weaker than the CCP led system. Hence, the U.S. illegal drug problem is the result of the demand side, which stems from internal issues in U.S. society and not the supply side of fentanyl from China.

Nevertheless, PRC authorities have acted to crackdown on fentanyl production over an extended period. By 2017, the National Narcotics Control Bureau reported that 138 kinds of synthetic psychoactive substances, including 23 types of fentanyl, had been listed as controlled substances in China and acknowledged that abuse has become widespread around the world since 2009 (China Daily, June 19, 2017). Fentanyl-related substances were added to the list of controlled narcotic drugs by the PRC in May 2019. Liu Yuejin, Deputy Director of the China National Narcotic Control Commission and Assistant Minister for Public Security, was reported as saying that including all fentanyl-like substances on the control list would provide a solid legal basis for the crackdown on fentanyl-related crimes, efficiently prevent large-scale fentanyl abuse and stamp out illicit fentanyl production, trafficking and smuggling. The action was coordinated by the Ministry of Public Security (MPS), the National Health Commission and the National Medical Products Administration. The enforcement effort included commitments to investigate fentanyl manufacturing and smuggling and to cooperate with other countries, including the U.S., against drug trafficking networks. Liu’s comments indicate the seriousness of the coordinated action, but also perhaps that the MPS officials also recognized the potential for fentanyl to become more widely abused in China, hence the need to take preventive action (Xinhua, April 1, 2019).

The continued development of enforcement action by the PRC authorities has been facilitated by the promulgation of international agreements as the basis for multinational action against illicit fentanyl production and trafficking. In 2022, the International Narcotics Control Board (INCB) agreed to the proposal from the U.S. Government to add three precursors that can be used for the manufacture of fentanyl, 4-AP, boc-4-AP and norfentanyl, to the international schedule of the Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (UNODC, April 2022). This step provided governments with a legal basis to prevent these substances from being diverted from legitimate uses for illicit fentanyl production.

However, the PRC government’s statements and approach to international cooperation on illegal drug enforcement can be contradictory and often involve other political imperatives, which in recent years have been driven by the increasingly confrontational U.S.-China relationship. A key shift came in May 2020, when the U.S. Department of Commerce added the Ministry of Public Security’s Institute of Forensic Science and also the Aksu Huafu Textiles Company to the “Entity List,” which places restrictions on access to U.S. technology, for entities engaging in human rights abuses in Xinjiang (U.S. Department of Commerce, May 22, 2020).

Changes in the PRC’s approach to counter-narcotics cooperation with the U.S. are well illustrated by the case of Chinese national Zhang Jian. In August 2021, the U.S. Department of State offered a reward of $5 million for information regarding the location or leading to the arrest and/or conviction of Zhang, who was alleged to be “a key leader of the transnational criminal Zhang Drug Trafficking Organization.” Under Zhang’s leadership, the organization allegedly imported and distributed controlled substances and their analogues to North America. The case also involves criminal charges against other Chinese, Canadian and U.S. nationals pertaining to drug trafficking and international money laundering (U.S. Department of State, August 30, 2021).

In September 2017, when the MPS announced the addition of two new fentanyl precursors as controlled substances, they referred to the investigation of Zhang and the accusation that he had been producing fentanyl and other drugs in China, using the internet to find buyers, and smuggling drugs to the U.S. via international parcel or express services (China Daily, November 4, 2017). By September 2021, the MFA was demanding that U.S. authorities cancel their offer of a reward for Zhang Jian as they claimed the charges related to chemicals that were not scheduled as drugs in China and hence not illegal (China Daily, September 1, 2021).

This is in stark contrast to the indictment against Zhang Jian and his co-conspirators in the U.S., which states clearly that he “was the organizer and leader of this criminal conspiracy in China and did so by establishing and using the business name “Zaron Bio-tech,” based in China,” a company that “facilitated the unlawful importation of fentanyl, acetyl fentanyl, ANPP, beta-hydroxy-thiofentanyl, U-47700, ethylone and furanyl fentanyl from China to the United States and Canada.” (U.S. District Court for the District of North Dakota, September 21, 2017).

By mid-2022, the Ministry of Public Security claimed that China has the strictest drug control measures in the world and the largest number of listed controlled substances, resulting in all fentanyl and synthetic cannabinoid substances being put under control (China Daily, June 23, 2022). The MPS was highly self-congratulatory, releasing data indicating the control of illegal drugs in China, but did not provide any information on the impact of controls on the export of controlled substances.

PRC authorities have made statements that seek to establish that law enforcement actions countering fentanyl are not in fact related to any potential problem in China, but rather, stem from altruistic moral reasons. In August 2022, the Office of China National Narcotics Control Commission, a part of the MPS, stated that:

“In recent years, as the world drug situation evolves, fentanyl-related substances and other new drugs are widely abused in the United States and other countries, ramping up the death toll year by year and causing serious social problems. To safeguard the health, safety and well-being of all mankind, China has given full, comprehensive and selfless support to relevant countries to help address these problems, even though fentanyl does not impose serious threat in China with neither large-scale abuse nor death toll reported” (MPS, August 25, 2022).

By August 2022, the political influence on U.S.-China drug enforcement cooperation was apparent, with the MFA blaming the U.S. for the suspension of counter-narcotics efforts. In August 2022, an MFA spokesman stated that in response to the visit by House Speaker Nancy Pelosi to Taiwan the PRC government had halted eight “countermeasures,” including China-US counter narcotics cooperation, and firmly placed the blame on the US government:

“The responsibility for undermining China-U.S. counternarcotics cooperation is entirely on the U.S. It has been over two years since the U.S. put the Institution of Forensic Science of the Ministry of Public Security and the National Narcotics Laboratory of China, which are responsible for testing and controlling fentanyl-related substances, on the U.S.’s “entity list” in the name of so-called human rights issues in Xinjiang. They still have not been removed from the list. The U.S. has been publicly making irresponsible remarks and repeatedly rehashing old cases. The U.S. has sanctioned Chinese companies in the name of controlling fentanyl-related substances and offered high reward for the arrest of certain Chinese citizens. The U.S. has done this to mislead the public, deflect the blame, and shift away the responsibility for the botched response to narcotics abuse in the U.S. China has made démarches with the U.S. side over this multiple times, but has received no response. All the consequences arising therefrom, including the damage caused to bilateral relations and China-US counternarcotics cooperation must be borne by the U.S. side” (MFA, August 12, 2022).

The PRC government clearly bases its willingness to engage in international counter-narcotics cooperation with the U.S. (and indeed other national governments) on political factors, in particular any deviation from the PRC narratives regarding the status of Taiwan as well as criticism of the human rights situations in Xinjiang, Tibet, and Hong Kong. In this regard, there is no consistent moral approach to combating illegal drugs, contrary to the remarks made by former Ambassador Qin Gang.

Death from Mexico

Drug cartels have become such a challenge to the Mexican state that the military leads the fight against them. An indication of the strength of the Mexican cartels was shown in early January, when Mexican security forces captured Ovidio Guzman, the son of the imprisoned Sinaloa cartel leader Joaquin “El Chapo” Guzman, leading to heavy fighting between cartel members and security forces, resulting in the deaths of 10 soldiers and 19 alleged criminals (Mexico Daily News, January 6). Similarly, in August 2022, members of the Jalisco New Generation Cartel rampaged through Guadalajara, burning vehicles, setting up roadblocks and engaging in firefights with the Mexican army (El Pais, August 11, 2022).

Fentanyl is increasingly manufactured in Mexico and smuggled north, as illustrated by U.S. Customs and Border Protection in San Diego, who seized over 5,000 pounds of the drug (out of 8,425 pounds seized in all of the U.S.) in the nine months leading up to June 2022 (U.S. Customs, August 11, 2022). According to U.S. Customs, seizures of fentanyl in San Diego are up 323 percent from 2019 to 2022, an increase which is attributed to the growing involvement of Mexican drug cartels in the fentanyl trade.

Mexico is clearly the main source of the supply of fentanyl entering the U.S., but its involvement in the supply chain of precursor chemicals sourced from China to produce fentanyl in Mexico is contested. Chinese government sources have denied that fentanyl or precursors are being shipped from China to Mexico, with Ambassador Qin Gang stating in October 2022 that “China has never received any report or data from Mexico on the use of Chinese precursor chemicals for drug production there, nor has the U.S. provided any evidence about the flow of Chinese chemicals into Mexico for fentanyl production” (China Daily, October 1, 2022). This assertion contradicts the DEA, which stated this January that “most of the fentanyl trafficked by the Sinaloa and CJNG cartels is being mass-produced at secret factories in Mexico with chemicals sourced largely from China” (DEA, January 5).

There are indications of relationships between Mexican drug cartels and Chinese organized crime groups to collaborate in drug trafficking. In the 2000s, the Sinaloa cartel reportedly started developing import and export connections in the Asia Pacific region, which involved cooperation with Hong Kong based Triad societies that had easy access to precursors in southern China produced by the huge chemical industry. By 2022, Hong Kong was suspected to be an increasingly important transshipment hub for methamphetamine based on major seizures by Customs, and part of Mexican drug cartels’ extensive links to organized crime groups in the Asia-Pacific region. [1]

Conclusion

At present, no interruption of the fentanyl supply that is fueling the opioid crisis in America appears likely. The crisis clearly results from an endemic illegal drug use problem in U.S. society, which traces back several decades. The opioid crisis was worsened by the supply of fentanyl and its precursors before 2019, based on the unlimited availability of the chemicals from the vast number of factories able to produce them in China.

The PRC authorities cooperated with the US government to restrict production of fentanyl and precursors by listing more precursors as controlled substances and jointly investigating trafficking. However, this cooperation has recently ground to a halt because of the political conflict between the U.S. and China, with the PRC government increasingly linking the cessation of counter-narcotics cooperation with issues such as criticism of human rights in China or U.S. engagement with Taiwan.

The current deadly problem of powerful Mexican drug cartels, particularly the Sinaloa and New Generation Cartel, is proving to be insoluble for both the Mexican and U.S. authorities and is leading to increasing levels of violence as the cartels expand their trafficking of fentanyl. Also of concern, analysts are increasingly drawing links between Mexican cartels and organized crime groups in Asia, particularly in China, which if correct indicates that fentanyl trafficking may not only be a continued deadly problem for the U.S. but could also start to impact other countries where those criminal groups tranship drugs as well as launder the proceeds of crime. As a result, the opioid crisis in the U.S. and the impact of fentanyl are increasingly likely to be experienced in Asia as well.

Martin Purbrick is a writer, analyst, and consultant. He spent over 32 years in Asia working in the Royal Hong Kong Police serving in Special Branch and the Criminal Intelligence Bureau, followed by senior leadership roles managing financial crime risk with several major companies. Martin is an Honorary Fellow at the Keele Policing Academic Collaboration (KPAC) of the Keele University focused on public order and criminology in Asia.

Notes

[1] see Vanda Felbab-Brown, “The foreign policies of the Sinaloa Cartel and CJNG – Part II: The Asia-Pacific,” The Brookings Institution, August 5, 2022.