A senior U.S. government official said, “Just like multinational criminal organizations, adapting their business models to law enforcement methods, they will seek new ways to circumvent law enforcement scrutiny.”
When U.S. President Biden and Chinese President Xi Jinping met in November 2023, Xi promised to resume cracking down on illegal drug trafficking in China, causing a brief disruption to the massive fentanyl supply network in China. However, six months later, investigations by U.S. media revealed that Chinese sellers had resumed their drug trafficking businesses with Mexico, the U.S., and Canada as usual.
Following the Xi-Biden meeting in November, Beijing issued a warning to the Chinese pharmaceutical industry and closed 25 Chinese companies selling fentanyl precursor chemicals. Chinese officials conducted on-site inspections, and pharmaceutical suppliers temporarily suspended international orders.
U.S. officials welcomed the breakthrough agreement on combating fentanyl resulting from the Xi-Biden meeting, marking the first drug enforcement cooperation between the two countries since the geopolitical tensions cooled the U.S.-China relations in the past three years.
Every year, over 70,000 deaths in the U.S. are caused by overdoses of synthetic opioids like fentanyl, and the majority of the chemicals used to produce these opioids are manufactured in China.
Despite China’s actions against fentanyl, Chinese fentanyl sellers are still in business. Seven months after the Xi-Biden meeting, The Washington Post investigated advertisements from over ten fentanyl sellers on online platforms and interviewed three Chinese industry insiders involved in illegal exports of fentanyl precursor chemicals. The investigation revealed that the online market for shipping potent fentanyl precursor chemicals in small packages from China to Mexico is thriving and essentially unimpeded.
These three individuals—two salespersons from Chinese chemical companies and a Chinese distributor in Mexico—spoke anonymously to The Washington Post, describing the industry’s minor adjustments to evade bans this year and resume sales. These adjustments include altering customs labels on packaging and turning to fentanyl precursor alternative compounds with almost the same effect.
A salesperson from a Hubei chemical company that produces fentanyl precursors 1-Boc-4-AP and tranquilizer methaqualone stated that the company only paused business for six weeks after the Xi-Biden meeting and resumed selling these compounds to Mexico in January. He said, “There may be some impact in the future, but it’s not a problem now.”
He added, “The ban is like water flowing over rocks… If there is demand, there will be a way.”
The reporter mentioned that The Washington Post could not verify specific sales of fentanyl precursor chemicals since November, but the Hubei company’s online advertising for these chemicals remains active, promoting “safe, fast” shipping to the U.S., Canada, and Mexico.
U.S. officials are trying to leverage the warming U.S.-China relations to target the fentanyl supply chain extensively—a rare consensus between the U.S. and China in the absence of almost any other agreement. However, the Chinese government appears unwilling to invest resources to address the issue, making the drug enforcement consensus extremely fragile, indicating that the U.S. still faces significant challenges.
A senior U.S. government official, speaking on condition of anonymity, told The Washington Post that targeted enforcement significantly reduced the volume of fentanyl precursors crossing into the U.S. by the end of 2023. Still, seizures of finished fentanyl hit a historic high, indicating that these chemical companies are finding alternative routes.
“Their business models adapt to law enforcement methods,” the official said, “just like you often see with multinational criminal organizations. They will seek new ways to evade law enforcement scrutiny.”
China is the world’s largest producer of chemicals used to create synthetic opioids like fentanyl, and most of the fentanyl supply to the U.S. is controlled by criminal groups in third-party countries, primarily Mexico. Mexican cartel “Cartel” purchases precursor chemicals and pharmaceutical equipment, including pill presses, from China.
Since November 2023, U.S. officials have held multiple face-to-face or virtual meetings with their Chinese counterparts. They have engaged in deep exchanges between U.S. and Chinese drug enforcement agencies, scientists, and bankers, urging Beijing to regulate new fentanyl precursors and enhance customs and anti-money laundering actions.
Negotiations and cooperation between the U.S. and China on combating fentanyl reached their peak from 2017 to 2022, leading to a significant decrease in the amount of fentanyl seized at the U.S. border.
However, the current situation seems different and more complex as there are dozens of precursor chemicals used to make fentanyl, and China has numerous unregulated small chemical labs capable of synthesizing these chemicals.
Another senior U.S. government official, also speaking on condition of anonymity, said, “The fentanyl on the list banned in 2017 was very different because… it was a drug that, once on the list, could truly disrupt its trade. Precursor chemicals are a more challenging problem.”
Aaron, a Chinese national who left southern China during the COVID-19 pandemic and traveled to Mexico via Thailand, founded an online business with a friend, initially trading raw materials for cosmetics. They soon switched to more lucrative pharmaceutical chemical trading, including fentanyl precursor chemical 4-AP.
Aaron, a 34-year-old who previously worked in a factory in southern China, had never heard of fentanyl before arriving in Mexico. Still, he discovered a ready market for fentanyl precursor chemicals in Mexico, which could be discreetly shipped from China in postal packages. He said, “Making money was easy.”
Regarding his new business, Aaron declined to mention his Mexican clients, stating, “We don’t focus on retail but on storage… setting up chemical shops in Mexico to easily resell when there is demand.”
After the Xi-Biden agreement in November, Aaron’s two main 4-AP suppliers, shell companies procuring from mainland Chinese labs, informed him that shipments were suspended. Aaron started to worry that his inventory in Mexico might run out within a few months, threatening his business.
He said, “It felt chaotic… No one knew what would happen next.”
However, a few weeks later, shipments resumed with a new twist. Aaron said, “This time, the label said laundry powder. There were no labels before.”
Aaron mentioned his suppliers only told him that the situation in China was now “much looser.”
Aaron’s story highlights some key challenges U.S. drug enforcement officials face when trying to combat cross-border fentanyl trade—China’s lax enforcement against fentanyl precursor chemical manufacturers and Mexico’s distributors and traffickers operating with impunity.
Vanda Felbab-Brown, a senior researcher at the Brookings Institution specializing in international crime networks, stated, “Issuing a warning is not enough. Prosecutions are needed for law enforcement. They [enforcement agencies] found that the heat had dissipated, and operators felt they could escape punishment.”
In April, during U.S. Secretary of State Antony Blinken’s visit to Beijing, he once again urged Chinese officials to use judicial prosecutions to take illegal drug production and trafficking more seriously.
Following the Beijing talks, Blinken stated at a press conference, “I emphasized the importance of additional action by China, particularly in prosecuting individuals who sell chemicals and equipment for manufacturing fentanyl. [China] must fulfill its international commitments to strictly control all precursor chemicals restricted by the United Nations International Narcotics Control Board and dismantle illegal financing networks.”
Chinese Embassy spokesperson Liu Pengyu indicated that China is speeding up the process of listing three fentanyl precursor chemicals, including 4-AP, on the banned list and preparing to regulate more chemicals.
Currently, U.S. and Chinese law enforcement departments are enhancing cooperation on six cross-border drug trafficking cases, conducting joint investigations and operations.
On Wednesday, June 19, the U.S. Department of Justice announced a case involving 24 individuals charged with money laundering for the Sinaloa cartel in Mexico. Beijing informed U.S. authorities that one individual had been detained and charged. This marked China’s first public arrest within the country related to international drug trafficking following the Xi-Biden meeting last November.
Liu Pengyu stated that the U.S. provided further “clues” on individuals and companies involved in drug-related money laundering activities to China. However, local Chinese law enforcement didn’t find evidence of these companies being involved in drug crimes within China. He mentioned that both sides plan to hold further discussions later this month.
China rarely sues Chinese chemical manufacturers involved in illegal fentanyl trade. Beijing mainly opts to warn these manufacturers about the threat of U.S. law enforcement rather than the risks of violating domestic Chinese laws. In a notice issued in November last year, Beijing even urged Chinese manufacturers to “beware” of the U.S. “long-arm jurisdiction and the ‘risk’ of ‘fishing law enforcement.'”
In reality, Chinese chemical manufacturers claim there’s minimal new regulation at the local level. Chongqing Chemdad, a chemical company in China, is still promoting the sale of fentanyl precursor 1-N-BOC-4 online. An employee of the company stated that the recent change was local authorities adding company staff to a WeChat group to receive “reminders” about regulations.
Strider Technologies, a strategic intelligence company that analyzes open-source data on China’s supply chain, estimates around 1,500 physical entities in China related to the fentanyl industry, mostly comprising precursor chemical manufacturers, distributors, and pharmaceutical machinery companies.
The U.S. has initiated its enforcement actions, including indictments against Chinese individuals and entities by the Department of Justice and sanctions by the Treasury Department. However, these U.S. prosecution actions have limited impact within China without support from Chinese law enforcement agencies.
U.S. officials and researchers feel that, in some cases, small Chinese labs and reselling companies swiftly change names and resume business after becoming targets of U.S. indictments. For instance, Hubei Amarvel Biotech Ltd was sued in New York in June 2023 for online fentanyl sales. Shortly after the company’s website was shut down, their online information, including employee profiles, quickly reappeared on a rebranded website with a slightly altered name, continuing to advertise the same fentanyl products.
A senior U.S. official said, “Many of these (Chinese) companies are small-scale and can resume business quickly under different names. We encourage the People’s Republic of China to take more deterrent law enforcement actions, such as public arrests.”
Fentanyl and some chemicals used to synthesize fentanyl are highly potent, with just one pound containing over 200,000 doses. Traffickers easily hide small amounts of chemicals in laundry detergent, vitamin supplements, cosmetics, or even electric toothbrushes for transportation, making substantial profits.
U.S. officials appear optimistic about China’s ability to combat fentanyl. In 2019, Beijing issued a similar notice to Chinese firms like in November 2023, resulting in a sharp decline in fentanyl exports.
However, the success of the fentanyl ban also depends on the fluctuations in U.S.-China relations.
For instance, in 2022, after former U.S. House Speaker Nancy Pelosi’s visit to Taiwan, U.S.-China relations hit a low point, and drug enforcement cooperation became a casualty of the tense relations between the two countries; Beijing completely canceled any communication regarding the topic. It was only after the Biden administration lifted sanctions against the Chinese Ministry of Public Security Forensic Medicine Research Institute for allegations of mistreating Uighurs that cooperation resumed. Previously, the Chinese Ministry of Public Security Forensic Medicine Research Institute was sanctioned by the U.S. for allegedly mistreating Uighurs.
China strictly controls drugs domestically, and fentanyl abuse is not prevalent within the country. Thus, the Chinese Communist Party (CCP) repeatedly denies being the source of the fentanyl epidemic in the U.S. The Chinese Ministry of Foreign Affairs spokesman stated in an April 2023 press briefing that the overdose problem of fentanyl in the U.S. was entirely “Made in the USA” and claimed there were no illegal fentanyl trafficking between China and Mexico.
A report released in April by the bipartisan House China Commission in the U.S. found over 2,000 Chinese companies advertising the sale of illicit substances, including fentanyl precursor chemicals and other narcotics, on the internet.
Chinese Embassy spokesperson Liu Pengyu stated that the Chinese government recently deployed a “network cleaning operation” to combat the proliferation of online ads, resulting in the “closure of 14 online platforms, forcing the cancellation of 332 corporate accounts, shutting down 1,016 online stores, and cleaning up over 146,000 pieces of information.”
However, some Chinese sellers’ online ads are becoming increasingly “creative.” The Washington Post found that over a dozen platforms are still offering advertisements for exporting fentanyl precursor chemicals. For example, a 1-Boc 4-AP seller disguised the sales ad as a song on the audio streaming platform SoundCloud. Another similar ad was published as a blog post on Medium.com. These companies seek contact through messaging platforms like WhatsApp, Telegram, and Signal (which are banned in China) and demand payment in cryptocurrencies.
After requesting comment, SoundCloud in Berlin deleted the ad and stated they would double down on content moderation and partner with the United Nations International Narcotics Control Board to track online sales of hazardous substances. However, Medium in San Francisco did not respond to The Washington Post’s request for comment.
Many ads promise to evade customs and target Mexican buyers. Hebei Huanhao Biotechnology is currently advertising the sale of a controlled chemical, and the company’s prices and purity levels are publicly promoted, targeting Mexico market specifically.
When contacted, these Chinese companies denied selling illegal drugs. An employee of Changzhou Huayang Technology stated that they were only investigating market demand, citing it as not illegal to conduct market research.
When asked why Wuhan Boyuan Import and Export Company continued to advertise exports of fentanyl precursor chemicals, a company representative replied it was “inconvenient” to explain and promptly hung up the phone.