China has been subsidizing the manufacturing and exporting of illicit fentanyl precursor chemicals and other synthetic narcotics through tax rebates and other means, according to newly revealed details released Tuesday by the House Select Committee on the Chinese Communist Party.
“Many of these substances are illegal under the PRC’s own laws and have no known legal use worldwide,” the 64-page report states. “Like its export tax rebates for legitimate goods, the CCP’s subsidizing of illegal drugs incentivizes international synthetic drug sales from the PRC. The CCP has never disclosed this program.”
The committee’s bipartisan investigation, led by Chairman Mike Gallagher (R., Wis.) and Ranking Member Raja Krishnamoorthi (D., Ill.), uncovered numerous other details on the extent of China’s role in the U.S. fentanyl epidemic, including that the CCP-run government gives monetary grants and awards to companies that illegally traffic fentanyl and other drugs.
The report also found that the CCP holds ownership interest in several Chinese companies tied to drug trafficking, impedes U.S.-led investigations into manufacturers producing fentanyl and precursors, allows the open sale of drugs on the Chinese internet, and fails to censor online content on narcotics set to be exported. Notably, the Chinese government censors content about domestic drug sales but not exported ones.
“These actions and omissions are abhorrent, violate the laws of nations, and have led to profound human suffering in the United States and around the world,” the report reads. “They also, as a factual matter, further the PRC’s strategic and economic interests.”
The committee reached its conclusions by examining Chinese websites, analyzing government documents, acquiring “undercover communications with PRC drug trafficking companies,” and consulting with experts in the public and private sectors.
The findings undercut the CCP’s public acknowledgement that the trafficking of fentanyl precursors and other narcotics materials are illegal in China. They also undermine President Joe Biden’s and Chinese president Xi Jinping’s November agreement to coordinate on curbing the flow of fentanyl from China to the U.S. Both world leaders also discussed the joint effort earlier this month.
Deaths in the U.S. continue to soar due to fentanyl overdose or poisoning. The synthetic opioid, which kills an average of 200 Americans per day, is the leading cause of death among Americans ages 18-45.
The committee revealed the report ahead of its public hearing on the matter. In his prepared opening remarks Tuesday morning, former U.S. attorney general Bill Barr called the months-long investigation and subsequent report “groundbreaking” as he testified before the congressional panel.
“The Committee’s work has uncovered persuasive evidence that the PRC and CCP are not just bystanders; they are the prime movers,” Barr said. “They are knee deep in actively sponsoring, encouraging, and facilitating the production and export of fentanyl and fentanyl precursors for distribution in the United States.”
Former DEA chief of operations Ray Donovan and RAND Corporation senior international and defense researcher David Luckey also testified before lawmakers.
To counter the fentanyl epidemic, the House committee recommended that the U.S. establish a joint task force and impose stronger sanctions on Chinese entities involved in the fentanyl trade, among other measures.