Trans-Pacific View | Economy | East Asia

Fentanyl in America: A Barometer of the China-US Relationship

China has numerous potential avenues for cracking down on illegal drug production and export. What it lacks is the political will to do so.

Fentanyl in America: A Barometer of the China-US Relationship
Credit: Depositphotos

One of the telltale signs of the state of the relationship between the United States and China is the degree to which illicit drugs from China enter the U.S. market.

Indeed, a newly released report from the U.S.-China Economic and Security Review Commission (USCC) found that “China remains the primary country of origin for illicit fentanyl and fentanyl-related substances trafficked into the United States.”

Most China observers are now clear-eyed and in agreement about one theme of the China-U.S. relationship: Beijing and Washington are staring at each other over an ever-widening chasm of differences of both policy and principle. Within that chasm, there are factions within the CCP that would not go out of their way to stop the flow of a drug that has a debilitating influence on the United States.

The drug trade is a key indicator of the overall integrity of the China-U.S. relationship because this trade could not happen without the actual or tacit knowledge, approval, and support of the Chinese government, which is led by the Chinese Communist Party (CCP). As with the flow of people, surveillance over the movement of goods that go in and out of China is and has historically been rigorous.

Even prior to China becoming the world’s second largest economy, flush with cash from foreign direct investment and then its own home-grown industries, both Chinese Customs and the Chinese Postal Bureau were dedicated to screening every letter and package sent to China from abroad, and sent from China to points overseas. A Chinese woman who had been a screener for the state at that time described the process she used throughout her day. She would first remove an international letter from its envelope, then assess its contents, and finally reinsert it without breaking the flap open, using a special tool. Assessment meant being able to read the language of the letter, so people with language skills were used in this effort. Packages were similarly treated, although with less care to hide the fact that they had been opened and rifled through.

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Given this history of physically prying into private correspondence and packaging contents in order to ensure that nothing was entering or leaving China that could “harm” the country, it is not a large leap to suggest that China today still has the willingness to inspect what crosses its borders. Indeed, China uses the tools of modern surveillance on Chinese citizens both in China and abroad. Why wouldn’t it be as diligent with the export of illegal drugs?

The USCC report says that the National Drug Threat Assessment put out by the Drug Enforcement Agency (DEA) in 2020 finds that “China is the primary source of fentanyl and fentanyl-related substances trafficked through international mail and express consignment operations.”

“Fentanyl,” the assessment goes on to say, “is trafficked into the United States by two primary methods.” It is either “sent from Chinese suppliers via international mail or express consignment services, such as UPS, FedEx, or DHL,” or it is “smuggled across the U.S.-Mexican border.”

For anyone familiar with the operations of UPS, FedEx, and DHL into and out of China, this, if true, is telling, as well as deeply disturbing. If the supply chains of these three major international express services operating in China, which have always depended on the ability of local partners to operate domestically, have been compromised with illicit drug trafficking, then that calls into question not just the security of their supply chains from China to the U.S, but of their supply chains globally. One might wonder how each courier company has reacted to the assertion made in the report.

Each of these companies is known for the efficiency and speed of their door-to-door services. Although there are variations of service levels among the three, in general each is excellent at getting even large packages halfway around the world to the door of the recipient without incident, often in 48-72 hours. Neither shipper nor recipient has to deal with customs procedures on either side; the couriers do it for them. If any issues arise, the courier is the interface.

Therein lies the rub.

Are these companies too efficient? Have they, their Chinese partners, and Chinese Customs sacrificed inspection integrity for speed of service for the bulk of their cargo, the vast majority of which will be completely aboveboard? Or are there deliberate compromises being made?

Beyond its border inspection capabilities, China also has other means at its disposal to identify and stop the flow of fentanyl and its precursors (much of which is now shipped to Mexico for further processing, and then smuggled across the southwest border of the United States, as the report details).

However, keeping tabs on the export of Chinese fentanyl and its precursors begins not at customs screening in airports in Beijing or Shanghai, but at the point of production of the drug and its components themselves. The Chinese government has early visibility on exactly this type of data. China, more than almost any other country, collects detailed and highly specific information as part of the procedure to establish a company, in order to fix and identify exactly what a firm’s scope of business will be.

Business licenses, it should be noted, are issued under the authority of the State Administration for Market Regulation (SAMR), a super-ministry created in 2018 by amalgamating three previous ministries and abolishing related agencies. Thus, a business license is not just a local affair. Given that the SAMR reports directly to the State Council, the chief administrative authority of China, the information on a business license is known at a national level. China has every capacity to identify potential abusers at the source.

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It goes without saying that no company is going to define its business scope as the production of illegal fentanyl or illicit precursors. But companies with the capability to do so, including those that are producing and exporting the legal version of fentanyl, are identifiable by the business scope on their business licenses, and that information is known to provincial and municipal government officials, as well as their national counterparts.

At those lower government levels, any bureau or section chief worth their salt is deeply familiar with the companies located in their area of responsibility. Although more careful these days than in the early 2000s, local party leaders and their business counterparts will often meet in informal circumstances. The CCP is plugged into the commercial and industrial environment of its locality.  It would be difficult for a company to be making and exporting an illicit product without local officials getting wind of it.

As a result of an agreement between then-U.S. President Donald Trump and China’s Xi Jinping, China placed all forms of fentanyl on a regulatory schedule, making it a controlled substance the distribution of which is illegal. As a result, Chinese producers have managed to create new supply and financial chains through Mexico, creating even greater challenges at the U.S. southern border.

But the question for policymakers goes beyond how to chase the illegal import of dangerous, deadly fentanyl into the United States and other countries afflicted with its addictive presence. To get to the bottom of the China-fueled fentanyl epidemic, the entire international supply chain, from manufacturer to international courier, from customs and inspection on one side to their counterparts on the other side, needs to be scrubbed and scrutinized, from the bottom up.

In the meantime, there are some factions of the CCP that are not unhappy with this state of affairs, and the difficulty it causes the United States.