July 18, 2016

Disclaimer: This paper is the product of professional research performed by staff of the U.S.-China Economic and Security Review 

Commission, and was prepared at the request of the Commission to support its deliberations. Posting of the report to the Commission’s 

website is intended to promote greater public understanding of the issues addressed by the Commission in its ongoing assessment of U.S.-

China economic relations and their implications for U.S. security, as mandated by Public Law 106-398 and Public Law 113-291. However, 

the public release of this document does not necessarily imply an endorsement by the Commission, any individual Commissioner, or the 

Commission’s other professional staff, of the views or conclusions expressed in this staff research report.

Sean O’Connor, Policy Analyst, Economics and Trade

Acknowledgments: The author thanks James Bosworth, members of the team at the Joint Interagency 

Task Force-West, officials at the U.S. Food and Drug Administration, and officials at the U.S. Drug 

Enforcement Administration for their helpful insights. Their assistance does not imply any endorsement 

of this report’s contents, and any errors should be attributed solely to the author.

Meth Precursor Chemicals from China: 

Implications for the United States
U.S.-China Economic and Security Review Commission 

Table of Contents

Executive Summary....................................................................................................................................................3

History of Meth Use in the United States...................................................................................................................4

Precursor Chemical Flows from China ......................................................................................................................5

China’s Meth Problem............................................................................................................................................6

Scope of China’s Pharmaceutical and Chemical Production .................................................................................8

Regulations Governing Chemical Production in China .........................................................................................9

U.S. Efforts to Address Precursor Chemical Flows from China ..............................................................................11

Limitations of Counternarcotic Regulations.............................................................................................................12

Considerations for Congress.....................................................................................................................................13

Appendix I: Controlled Chemicals in the United States...........................................................................................15

Appendix II: Controlled Precursor Chemicals in China...........................................................................................17

Appendix III: Controlled Chemicals under 1988 UN Convention against Illicit Traffic in Narcotic Drugs and 

Psychotropic Substances ..........................................................................................................................................18

Endnotes...................................................................................................................................................................19
U.S.-China Economic and Security Review Commission 3 

Executive Summary

During the last 15 years, methamphetamine (meth) abuse in the United States has skyrocketed, necessitating new 

policies to reduce meth production. To limit the drug’s use, regulations were introduced in the mid-2000s limiting 

access to cold and cough medicines containing chemicals like ephedrine and pseudoephedrine—also known as 

“precursor” methamphetamine chemicals—used to produce meth. Nevertheless, meth seizures and abuse have 

continued to increase, with Mexican drug organizations replacing domestic producers as the main manufacturers 

and distributors of meth in the United States.

While Mexican cartels produce the majority (around 90 percent) of meth used in the United States, around 80 

percent of precursor chemicals used in Mexican meth come from China. Precursor chemicals are increasingly being 

shipped from China to Mexico, where they are manufactured into meth, transported across the southern border of 

the United States, and brought into southwestern states—Texas, Arizona, and California—before being shipped 

across the country. A period of increased cooperation between the U.S. and Mexican governments in the late 2000s 

and early 2010s has done little to reduce the precursor flows, with Chinese drug traffickers circumventing 

counternarcotic authorities by shipping chemicals to poorly regulated Central American ports before transporting 

them to Mexico.

As China has become a global source of precursor chemicals, reports of meth abuse and meth lab incidents in China 

have also become more frequent. To combat rising meth use among Chinese citizens, large-scale drug busts have 

become more common during the last few years, particularly in coastal cities and towns. In addition, Beijing has 

introduced new drug regulations and enhanced cooperation with international counternarcotic organizations. 

Despite these efforts, China remains one of the largest global producers of meth precursor chemicals.

China is home to the world’s second-largest pharmaceutical industry by revenue, producing and exporting vast 

quantities of generic drugs and active pharmaceutical ingredients (APIs) used to manufacture legal and illegal drug 

products. Coupled with the country’s large domestic consumer market, the scale of Chinese API production has led 

to lower costs for chemical production, which in turn has made China the world’s leading exporter of APIs. In 

addition, Chinese nonpharmaceutical chemical companies ship more than one-third of the world’s chemicals, 

making it the world’s largest chemical producer and exporter. The U.S. Department of State estimates that 

nationwide, China has more than 160,000 chemical companies operating legally and illegally, with facilities 

manufacturing tons of precursor chemicals every week.

Ultimately, Chinese manufacturers of meth precursors have thrived because the country’s vast chemical and 

pharmaceutical industries are weakly regulated and poorly monitored. China’s drug and chemical regulators are 

unable to adequately inspect the country’s chemical producers, and online chemical sales have made it easy for drug 

producers to avoid detection. Furthermore, nonpharmaceutical chemical facilities have been poorly monitored, 

allowing producers to easily circumvent inspection requirements. The lack of regulations has led to an increasing

number of unlicensed chemical companies—and, through them, effectively unlicensed pharmaceutical 

companies—producing illegal chemicals, making it easy for drug traffickers to gain access to precursors. Corrupt 

government officials also undermine China’s chemical regulations, with local regulators bribed to overlook illegal 

chemical production.

To reduce precursor chemical flows, the United States and the international community at large are working with 

China through an array of international and bilateral mechanisms, forming government working groups, establishing 

international drug tracking systems, and strengthening international precursor regulations. Yet, international laws 

governing chemical trade remain insufficient and are easily circumvented. There are numerous ways precursor 

exports can be hidden from regulators, including mislabeling chemical shipments, modifying illegal chemicals, and 

shipping legal pre-precursor chemicals, or the chemicals used to create precursors.
U.S.-China Economic and Security Review Commission 4 

History of Meth Use in the United States

Despite crackdowns on ingredients necessary for meth production, meth abuse in the United States continues to 

grow.

1 Meth is a powerful, highly addictive Schedule II stimulant—meaning it is legally available only through a 

nonrefillable prescription—that drug users ingest, snort, smoke, or inject for recreational use.

2 Meth use increased

steadily throughout the 1990s and early 2000s, with approximately 5 percent of the U.S. population ages 12 and 

older having used meth in their lifetime in 2004, up from 2 percent in 1994.

3

In 2004, nearly 24,000 meth laboratory 

incidents—instances where meth lab equipment or dumpsites were confiscated by authorities—were reported in the 

United States, an all-time high.4 The drug’s growing prominence necessitated new policies limiting access to meth 

precursor chemicals—like ephedrine and pseudoephedrine—found in cold and cough medicines that can be used to

produce meth (for a full list of U.S. controlled precursor chemicals, see Appendix I, “Controlled Chemicals in the 

United States”).

5

To reduce the availability of precursor chemicals, Congress enacted the U.S. Combat Methamphetamine Epidemic 

Act of 2005, setting sales limits for products containing precursor chemicals and requiring these products be sold 

behind the counter and entered into a national log.

6

In 2007, a full year after the Combat Methamphetamine 

Epidemic Act was implemented, the number of meth lab incidents decreased by 71 percent, and meth seizures 

declined by 33 percent (see Figure 1).7In the following years, however, meth seizures increased, rising 78 percent 

between 2004 and 2014, even as the number of meth labs in the United States has declined by 61 percent over the 

same period.

8 Although meth seizures declined 30 percent year-on-year in 2014, the U.S. Department of State’s

2016 International Narcotics Control Strategy Report (INCSR) indicates meth trafficking to the United States 

spiked again in 2015 (although official 2015 trafficking data are not available), which typically leads to a surge in 

domestic meth seizures.

9

Figure 1: Meth Activity in the United States, 2004–2014

Note: Data for 2014 are preliminary and subject to updating.

Source: U.S. Drug Enforcement Administration, Statistics and Facts. http://www.dea.gov/resource-center/statistics.shtml.

The 2015 National Drug Threat Assessment Summary by the U.S. Drug Enforcement Administration (DEA) 

concludes that while regulations on meth precursor chemicals have led to reduced U.S. meth production, increased 

availability of Mexico-produced meth has made Mexican drug organizations the primary manufacturers and 

distributors of meth in the United States.10 Domestic meth labs continue to produce and distribute meth in the United 

States, but they operate on a much smaller scale compared to meth makers in Mexico, where the product is far 

cheaper and purer.

11 Lawrence Payne, a spokesman for the DEA, said “the days of the large-scale U.S. meth labs 

are pretty much gone,” with Mexico “tak[ing] over production south of the border and distribution into the United 

States.”

12 Increased meth seizures at the U.S.-Mexico border over the last few years appear to support Mr. Payne’s 

0

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Meth Seizures (left axis) Meth Lab Incidents (right axis)
U.S.-China Economic and Security Review Commission 5 

assessment: the U.S. Border Patrol reported meth seizures along the southern border increased from less than 0.5 

kilograms (kg) in 2005 to nearly 773 kg in 2011; authorities in San Diego also saw a 43 percent increase in meth 

seizures between 2013 and 2014.13 According to the DEA, meth shipments of 20 kg or more are regularly seized at 

the southwestern U.S. border.

14

Precursor Chemical Flows from China

While Mexican cartels produce the majority of meth used in the United States, China is the main source of meth 

precursor chemicals: according to the DEA, Mexico produces around 90 percent of the meth found in the United 

States, and 80 percent of precursor chemicals used in Mexican meth come from China.

15 In the 2014 INCSR, the 

U.S. Department of State indicated criminal syndicates in China were redirecting legal chemical shipments for 

illegal use, with “most precursor chemicals seized in Mexico and Central America destined for illegal production 

of meth ... legally exported from China and diverted en route.”16 These claims were restated in the 2016 INCSR, 

which indicated China remains one of the world’s top producers and exporters of precursor chemicals.17 Undetected 

illegal precursor chemicals shipped from China are made into meth and transported to the U.S.-Mexico border, 

crossing over the southern border of the United States into southwestern states—Texas, Arizona, and California—

before being shipped across the country.18

Despite introducing more stringent regulations on precursor chemicals, Mexico remains a chief transit point for 

illicit Chinese chemicals.

19 During an interview with the Hong Kong-based newspaper South China Morning Post 

in 2014, Jorge Guajardo, Mexico’s ambassador to China from 2007 to 2013, described Chinese meth precursor 

exports to Mexico as “the number one issue [he] had to address” in his time as ambassador. 20 In 2008, new 

regulations went into effect limiting sales of cold medicines and other legal products containing ephedrine and 

pseudoephedrine in Mexico. 21 Despite these precautions, precursor flows into Mexico continue to increase.

22

Between 2009 and 2011, the volume of meth and precursor chemical seizures in Mexico increased 1,000 percent.

23

Most of the precursor chemicals are suspected to have originated in China.24 Mexican authorities seized a record 

900 tons of precursor chemicals from China in just six weeks in 2012.25

With Mexican and U.S. officials cracking down on precursor imports, Chinese chemical exporters are taking 

additional steps to ensure precursor shipments arrive undetected. Chinese triads—organized crime syndicates

operating throughout Asia and beyond—have increased their cooperation with Mexican criminal organizations and 

are now the main suppliers of precursor chemicals to Mexico.

26 The triads work in conjunction with Mexican drug 

cartels, including the Sinaloa and Knights Templar cartels, to produce and transport chemicals and bypass laws and 

import regulations.27 Chinese drug traffickers also undermine Mexico’s anti-precursor regulations by transporting

chemicals into Central American countries, which are vulnerable to narcotics trafficking due to their remoteness, 

limited infrastructure, lack of government presence, and weak law enforcement institutions (see Figure 2).

28 James 

Bosworth, CEO of the strategic advisory firm Southern Pulse, explained in an interview with Commission staff, 

“On top of direct covert trafficking into Mexico’s Pacific ports, precursor materials from China enter ports in 

countries like Guatemala, Honduras, El Salvador, and Venezuela before being transported into Mexico by land and 

sea routes, making them difficult to detect.”29
U.S.-China Economic and Security Review Commission 6 

Figure 2: How Chinese Meth Precursors Flow to the Western Hemisphere

Source: United States Department of State, 2016 International Narcotics Control Strategy Report (INCSR), March 2016.

http://www.state.gov/documents/organization/253655.pdf. Created by the U.S.-China Economic and Security Review Commission.

China’s Meth Problem

While precursor exports drive a significant portion of China’s meth-making market, domestic meth consumption in 

China has also increased dramatically over the past decade, despite efforts to crack down on producers and users.

30

Ten years ago, China’s population of known drug abusers totaled around one million people, with 86 percent of 

them taking opiates like heroin and opium, while only 14 percent abused meth.

31 A report from China’s National 

Narcotics Control Commission in March 2015 revealed the number of known drug users has tripled since 2005, 

reaching 2.95 million.

32 Liu Yuejin, the director of the Narcotics Control Bureau at the Ministry of Public Security, 

has indicated the actual number of drug addicts in China is “estimated at 13 million ... and about half are suspected 

of taking methamphetamine.”33 While the data on drug users in China remain difficult to verify, drug seizure

statistics show meth use becoming more prevalent in the last 15 years. In 2001, opiate seizures outpaced all other

drug seizures in China, with authorities seizing 16,000 kg of opiate drugs compared to 4,820 kg of meth.34 By 2014, 

however, meth seizures had increased by 437 percent, with nearly 26,000 kg seized, while heroin seizures had 

declined by 42 percent to 9,300 kg (see Figure 3).35
U.S.-China Economic and Security Review Commission 7 

Figure 3: Annual Drug Seizures in China, 2001–2014

Source: Sheldon X. Zhang and Ko-lin Chin, “A People’s War: China’s Struggle to Contain Its Illicit Drug Problem,” Brookings Institution, 

May 2015, 5; United States Department of State, 2016 International Narcotics Control Strategy Report (INCSR), March 2016, 131. 

http://www.state.gov/documents/organization/253655.pdf.

Numerous drug busts have occurred in China in the last few years, particularly in coastal provinces. In February 

2015, for instance, 2.2 kg of meth were seized and 28 people were arrested for meth production in Guangdong 

Province.

36 In January 2016, 150 kg of meth and one ton of precursor materials were seized in the city of Panyu, 

Guangdong.

37 China’s largest meth seizure occurred in December 2013 when 3,000 heavily armed police raided 

Boshe, a small village located on China’s southeast coast in Guangdong Province.

38 The town had become one of 

China’s major producers of precursor chemicals and an international drug trafficking channel due to its location 

and developed sea and land transport infrastructure.39 During the bust, police reported closing 77 separate meth 

labs, seizing more than three tons of meth along with 23 tons of precursor chemicals and arresting 182 people.40 In 

all, nearly 20 percent of the villagers living in Boshe had been involved in the drug trade in some way, earning as 

much as ten times more through meth production than they could have as standard fishing or orchard workers.

41

China has attempted to stem domestic meth production by introducing new drug regulations, more stringently 

enforcing existing drug laws, and cooperating with international drug combatting efforts. Amendments to China’s

Criminal Law in 2015, for instance, set explicit punishments for illegally producing and distributing precursor

chemicals, including providing new criminal penalties for illegal drug activity.* 42 China also rolled out a new

electronic precursor control information system aimed at facilitating applications for chemical licenses and 

enhancing verification procedures for precursor operators and transactions involving precursor chemicals.43 Most 

recently, in October 2015 China added 116 synthetic chemicals to the list of controlled chemical substances, 

including components necessary for the manufacture of synthetic ephedrine and pseudoephedrine.

44 While it is 

difficult to measure the impact these laws have on drug use and production in the short term, they signal Beijing’s 

awareness of the country’s growing drug problem and a willingness to address it.

45

Police in China have also begun cracking down on the sale and use of meth, with the number of drug-related trials

increasing by roughly 80 percent from 2007 to 2011.

46 In 2014, law enforcement officials investigated 145,900 drug 

trafficking cases resulting in 168,900 drug-related arrests—a 27 percent increase since 2012—and seized 25.9 tons

of meth, up 60 percent from 2012.47 In addition, police seized nearly 4,000 tons of precursor chemicals in 2014, a 

record 350 percent increase from 2010 levels.

48 In 2015, over one million drug users were arrested in China—a 20 

 

*

 Under the new law, illegal drug producers and distributors will face at least seven years in prison. Zhang Hui, “China’s No.1 Drug Village 

Closely Watched by Police One Year after Crackdown,” Global Times, January 7, 2016. http://www.globaltimes.cn/content/962374.shtml.

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U.S.-China Economic and Security Review Commission 8 

percent increase year-on-year—including 776,000 meth users.49 These efforts have deterred recreational drug 

activity in the country, yet large-scale meth production continues to increase.50

Along with efforts to combat domestic drug use, China has enhanced its cooperation with international 

counternarcotic organizations. China is an original signatory to the 1988 UN Convention against Illicit Traffic in 

Narcotic Drugs and Psychotropic Substances, which provides measures against drug trafficking and the diversion 

of precursor chemicals.

51 China also maintains bilateral counternarcotic agreements with the UN Office on Drugs 

and Crime (UNODC), as well as memoranda of understanding with Burma (Myanmar), Cambodia, Laos, Thailand, 

and Vietnam on narcotic drug control.

52 Through these agreements, China has sought to combat drug crimes more 

actively, attending various high-level dialogues on drug control and signing on to joint projects cracking down on 

transnational narcotics-related crimes.53 In addition, China participates in a variety of international drug conferences 

and bilateral meetings, including the annual International Drug Enforcement Conference hosted by the DEA.

54

China has also increased its work with multilateral partners through organizations such as the UNODC and the UN 

Commission on Narcotic Drugs (UNCND)—the UN’s primary narcotic drug policy-making body—to control for

new chemicals like the 116 illegal synthetic compounds banned in October 2015.

55 However, controlling these 116 

synthetic chemicals is unlikely to significantly reduce China’s precursor production, with new synthetic chemicals 

quickly replacing banned ones in circulation.56

Scope of China’s Pharmaceutical and Chemical Production

Despite efforts to crack down on chemical production and distribution, China’s drug problem continues unabated

in part because the country’s robust chemical and pharmaceutical industries are producing vast legal quantities of 

meth precursor chemicals.57 Throughout the last decade, the Chinese government has prioritized pharmaceutical 

production as a “high value-added industry,” providing export tax rebates to producers of pharmaceutical 

ingredients to boost exports.

58 Today, China’s pharmaceutical market—which consists of more than 5,000 

pharmaceutical companies producing legal synthetic chemicals and drugs—is the second largest in the world with 

a revenue of $105 billion in 2014, although it trails far behind the United States’ $380 billion pharmaceutical

industry.

59 China’s market is still growing rapidly, with revenues increasing 15 percent on an annualized basis since 

2010 and expected revenues of $200 billion by 2020.60

Unlike the United States, which produces costly, high-value pharmaceuticals, China’s pharmaceutical industry 

relies on mass production and export of inexpensive generic drugs and APIs.

61 This explains why China became 

the largest manufacturer of pharmaceutical ingredients in 2012 (producing around 800,000 tons of APIs) yet still 

took in revenues equal only to 28 percent of U.S. pharmaceutical industry revenue.62 Together with the country’s 

large domestic consumer market, the scale of API production in China has facilitated economies of scale that lower 

costs for chemical production.63 As a result, China has become the leading global exporter of APIs, with other 

countries importing pharmaceutical ingredients from China to lower production costs for drugs and medicines.64 A 

2010 study of pharmaceutical executives by the consulting firm Axendia, for example, found 70 percent of 

respondents cited China as their top country source for pharmaceutical ingredients.

65 Although these shipments are 

legal, APIs and other noncontrolled pharmaceutical products can still be used for drug and precursor drug 

production, particularly in cases where the APIs are counterfeit or adulterated during production to make cheaper

and more potent products.

* 66

In addition, China’s numerous nonpharmaceutical chemical companies legally produce massive quantities of meth 

precursor chemicals every day.

67 China surpassed the United States as the world’s largest chemical market in 2009, 

and by 2014 global chemical shipments from China reached $1.8 billion, or 34 percent of global shipments, 

compared to a 15 percent share for U.S. chemical shipments.68 The U.S. Department of State estimates that 

nationwide, China has more than 160,000 chemical companies operating legally and illegally, with facilities 

manufacturing tons of precursor chemicals every week.

69 As a result, China has become a leading producer and 

 

*

 For more on drug safety in Chinese pharmaceutical exports, see U.S.-China Economic and Security Review Commission, Chapter 1, 

Section 3, “China’s Health Care Industry, Drug Safety, and Market Access for U.S. Medical Goods and Services,” in 2014 Annual Report 

to Congress, November 2014, 127–137.
U.S.-China Economic and Security Review Commission 9 

exporter of precursor chemicals:

70 in 2014 (the last year chemical export data are available) China was the world’s 

sixth-largest exporter of ephedrine (2,100 kg) and fifth-largest exporter of pseudoephedrine (65,678 kg).

* 71

Regulations Governing Chemical Production in China

In many cases, the precursor chemicals used to produce meth are diverted from legitimate pharmaceutical uses.72

Preventing the theft and diversion of precursor chemicals necessitates coordination and cooperation among law 

enforcement, chemical producers, and pharmaceutical retailers. 73 However, China’s vast chemical and 

pharmaceutical industries are weakly regulated and poorly monitored, making it easy for drug traffickers to divert 

chemicals with legitimate uses in medicine, fertilizer, and pesticides to meth and other synthetic drug production.

74

China controls more than 25 known precursor chemicals—including ephedrine and pseudoephedrine—which 

should subject these chemicals to strict production, sale, and export licensing requirements (for a full list of Chinese 

controlled precursor chemicals, see Appendix II, “Controlled Precursor Chemicals in China”).

75 In an interview 

with Commission staff, however, officials at the U.S. Food and Drug Administration described the complexity of 

the oversight of chemicals in China at the national, provincial, municipal, and local levels, and expressed concern

over the difficulty of enforcing regulations of chemicals when responsibility falls under numerous jurisdictions.76

In addition, regulatory loopholes and insufficient enforcement protocols allow criminals to produce unregulated 

precursors and divert APIs and other chemicals with legitimate uses into the production of meth and other new and 

dangerous synthetic drugs.77

China’s fragmented governing structure has contributed to administrative problems controlling chemical 

production, with conflicts of interest between regulatory agencies frequently contributing to regulatory failure.78

Numerous agencies are involved in regulating chemical companies, with bureaucratic infighting preventing the 

government from carrying out precise and effective counternarcotic operations.

79 China’s Food and Drug 

Administration (CFDA), for example, is responsible for drafting laws, enforcing regulations, and conducting 

investigations for all food safety and drug issues.80 Additionally, a State Council Leading Group on Product Quality 

and Food Safety coordinates government agencies in addressing major issues related to product quality and drug 

safety, and the National Narcotics Control Commission coordinates with relevant Chinese departments and 

international agencies to meet China’s obligations under international drug control conventions.

81 An AntiSmuggling Bureau within the General Administration of Customs is responsible for the enforcement of China’s 

drug control laws at seaports, airports, and land border checkpoints; the Ministry of Chemical Industry, Ministry of 

Agriculture, and Ministry of Commerce—along with the General Administration of Quality Supervision, 

Inspection, and Quarantine—play roles in the inspection, licensing, and export of pharmaceutical products, 

including precursor chemicals and APIs.

82

Deficient local drug inspection and enforcement capabilities are another limitation of China’s chemical 

regulations.

83 China is home to approximately 400,000 retail pharmacy shops legally selling products containing 

ephedrine and pseudoephedrine and other precursor chemicals, in addition to the 160,000 precursor production 

plants and 5,000 pharmaceutical companies.

84 Because regulators are not able to adequately inspect all chemical 

production and distribution facilities, precursor chemical producers easily avoid detection by migrating to 

jurisdictions with less vigilant drug enforcement.

85 Chinese law enforcement personnel are mainly concentrated in 

urban centers, leading to increased drug activity in rural areas and poorer communities.86 Meanwhile, online API 

and precursor sales remain extremely covert in China and are difficult for law enforcement authorities to identify, 

allowing drug producers to collect payments and deliver chemicals without detection.

87 In a 2015 New York Times

investigation into China’s unbridled online drug market, a UN official explained that China has “an enormous 

chemical industry and ... doesn’t have the capacity to monitor and control it.”88

China’s regulations governing nonpharmaceutical chemical production are also limited and easy to bypass.89 In 

2011, the CFDA published new drug manufacturing practices, which were viewed as a significant step toward 

improving inspection and oversight procedures.

90 However, due to a regulatory loophole that left Chinese chemical 

companies out of the CFDA’s jurisdiction, Chinese chemical production facilities—even those making 

pharmaceutical components and APIs—were registered as nonpharmaceutical companies with the state, leaving 

 

*

 Export figures do not include illicit trafficking and production of ephedrine and pseudoephedrine. United States Department of State, 2014

International Narcotics Control Strategy Report (INCSR), March 2014. http://www.state.gov/j/inl/rls/nrcrpt/2014/vol1/223176.htm.
U.S.-China Economic and Security Review Commission 10 

them in a gray area of regulation free from inspection requirements and other certification systems.

91 In an interview 

in 2007, Yan Jiangying, the former deputy director of policy and regulation at the CFDA, revealed the CFDA had 

“never investigated a chemical company,” because “we don’t have jurisdiction [to do so].”92 The loophole was not 

closed until 2014, when China’s State Administration of Work Safety implemented new regulations on the 

management of precursor chemicals to strengthen oversight on nonpharmaceutical businesses, including enforcing 

stricter licensing requirements.93 It is unclear, however, if the new regulations have sufficiently addressed the issue.

In addition, inadequate regulations on chemical companies have led to a large number of unlicensed chemical 

companies operating in China.

94 Many of China’s chemical production facilities are described as “semi-legitimate”

producers, which are allowed to make chemicals but unlicensed to sell them to pharmaceutical companies.

95 Instead, 

semi-legitimate chemical companies churn out massive quantities of product to sell in bulk to licensed chemicals 

manufacturers as compounds for pharmaceuticals.

96 The operations of semi-legitimate chemical companies are 

difficult to investigate because they sell to other businesses—many of which operate with little-to-no government 

oversight and regulation—and not to the general public.97 Through these unlicensed chemical companies, drug 

traffickers can easily gain access to precursor chemicals.

98

Pharmaceutical companies also take advantage of the lack of oversight on chemical companies, creating “show and 

shadow factories” whereby the company registered with the Chinese government and inspected by the CFDA is not 

where the chemicals are produced.99 To get around CFDA regulations, pharmaceutical firms will buy a token 

amount of chemicals from certified suppliers to pass inspection, while using unlicensed facilities to produce a 

majority of their products, including precursor chemicals.

100 Thus, not only are pharmaceutical ingredients 

manufactured by China’s chemical companies not really inspected or certified for pharmaceutical use, but also their 

production of precursor chemicals far exceeds limits imposed by regulators.

101 In 2007, Wang Siqing, the managing 

director of a pharmaceutical company in China, estimated uncertified chemical companies make half the active 

pharmaceutical ingredients sold in China, with most exports from unregulated companies going to Africa or South 

America.

102 Although China has begun more stringently enforcing regulations governing pharmaceutical production

in recent years, FDA officials still “routinely come across shadow facilities” when conducting inspections of 

Chinese pharmaceutical companies.

103

Beyond Meth: China’s Fentanyl Production 

In addition to producing meth precursor chemicals, China exports other synthetic drug precursors, including 

compounds necessary for the manufacture of fentanyl and fentanyl-like substances. Fentanyl, a Schedule II drug, is 

a powerful synthetic opiate painkiller similar to morphine but 100 times more potent.

104 U.S. health and law 

enforcement officials have seen a recent spike in fentanyl-related deaths, with a recent report from the Centers for 

Disease Control and Prevention indicating deaths from overdoses of illicitly manufactured fentanyl and synthetic 

opioid pain relievers increased 80 percent year-on-year in 2014. 105 According to drug investigators, Chinese 

suppliers are providing both raw fentanyl and the machinery necessary for fentanyl production.

106 Like meth, 

fentanyl and fentanyl-like products are made in Mexico from Chinese chemicals before being transported to the 

United States.107

Fentanyl and many of its analogs are now controlled in China as part of the 116 new banned chemicals announced 

in October 2015.

108 Recently, Chinese manufacturers started producing and openly selling a new form of the drug

in China, called furanyl fentanyl.

109 Because of its modified chemical structure, the substance is not currently 

controlled in the United States or China.110 The DEA is working to add furanyl fentanyl to the U.S. list of controlled 

substances and pressuring China to include the drug in its list of banned synthetic chemicals.111 Counternarcotic 

experts warn banning the chemical is not enough, however, and will lead to the creation of a new synthetic 

substance, much as banning fentanyl resulted in the spread of furanyl fentanyl.112

Legislation has already been passed at the state level to strengthen U.S. anti-trafficking laws as they relate to 

fentanyl. In February 2016, Massachusetts enacted a law making the trafficking of fentanyl a crime and increasing

the penalty for fentanyl possession and distribution from ten to 20 years.113 Although the trafficking of other drugs, 

including heroin, marijuana, and cocaine, was already criminalized, the state did not have similar laws for 

fentanyl.114
U.S.-China Economic and Security Review Commission 11 

Along with shortfalls in Chinese regulations governing precursor production, anecdotal evidence suggests corrupt 

government officials actively undermine chemical production regulations.

115 A 2002 report by the Washington Post

revealed that Chinese military leaders were participating in counterfeit and illegal chemical trade, with military 

trucks being used to transport pharmaceuticals for unlicensed chemical production.

116 This behavior was tolerated 

by officials, with corrupt politicians paid off to not inspect manufacturing facilities or conduct drug quality 

assessments.117 As recently as 2008, local government officials in Guangdong Province, a meth-making hub in 

China, were caught encouraging farmers to illegally grow plants that produce a natural source of ephedrine for meth 

production.

118 In the last few years, however, Beijing has begun cracking down on local government corruption, 

expelling 41 officials from Yunnan Province for drug use in 2014.

119 Still, officials are susceptible to bribery from 

drug producers, particularly in localities where regulators are underpaid and overloaded with applications.

120

U.S. Efforts to Address Precursor Chemical Flows from China

Although the majority of meth sold in the United States is made with precursor chemicals originating in China, 

these precursors do not enter the United States directly. Rather, they are transported via a network of land and sea 

routes to Central America.121 This considerably complicates U.S. counternarcotic efforts. In many cases, precursor 

chemicals are shipped openly and legally because they are not controlled in China or in the destination country.122

Therefore, precursor chemical flows cannot be reduced through U.S.-China bilateral efforts alone, but also require 

cooperation with Central American countries.123

To reduce precursor chemical flows, the United States and the international community at large have intensified 

counternarcotic cooperation efforts with China. The U.S.-China Joint Liaison Group, for instance, which convened 

its 14th annual meeting in October 2015, seeks to address global law enforcement concerns shared by the United 

States and China, including controlling precursor chemical flows and cooperating on trends in drug abuse and 

trafficking.

124 The DEA and the Narcotics Control Bureau of China are also parties to the Bilateral Drug Intelligence 

Working Group, which brings legal and law enforcement experts together to share drug trafficking information and 

discuss new avenues for antidrug cooperation. 125 In addition, the U.S. Pacific Command’s (PACOM) Joint 

Interagency Task Force-West (JIATFW) works with Department of Defense counternarcotic authorities to open 

new avenues of cooperation with Chinese officials, providing training and other support to combat drug 

trafficking. 126 Admiral Harry Harris, the commander of PACOM, said JIATFW’s efforts “show promise in 

improving communication, cooperation, and information sharing on significant criminal enterprises operating in 

the U.S. and China.”

127

International tracking systems like the Pre-Export Notification (PEN) system and Precursors Incident 

Communication System (PICS) can also be used to identify suspicious transactions in international trade.

128 The 

PEN system was created under the 1988 UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic 

Substances, and is used by 150 UN member states and territories—including China—to provide clearance for 

chemical shipments and acknowledge receipt of precursor chemical exports.

129 PICS is an online tool developed in 

2012 by the U.S. Bureau of International Narcotics and Law Enforcement Affairs (INL) to enhance real-time 

communication and information sharing between national authorities on precursor incidents. 130 These 

communication tools have fostered coordination among competent national authorities, with PICS, for example,

used to share intelligence on more than 800 instances of chemical trafficking since 2012 (for a full list of UN 

controlled chemicals, see Appendix III, “Controlled Chemicals under 1988 UN Convention against Illicit Traffic in 

Narcotic Drugs and Psychotropic Substances”).

* 131

Enhanced chemical regulations and streamlined emergency scheduling† protocols enable U.S. law enforcement 

officials to limit shipments of new or modified chemicals. In May 2016, the president signed the Transnational 

Drug Trafficking Act into law, lowering the threshold for prosecuting extraterritorial drug traffickers to include 

individuals with “reasonable cause to believe” that their illegal drugs will be trafficked into the United States.132

 

*

 As of November 1, 2014, China had accessed the PICS database over 50 times. UN International Narcotics Control Board, “Precursors and 

Chemicals Frequently Used in the Illicit Manufacture of Narcotic Drugs and Psychotropic Substances,” March 2015, 15.

†

 Emergency scheduling introduces temporary restrictions on a chemical while a final decision is made on whether to permanently control 

the substance. Jonathan P. Caulkins and Carolyn Coulson, “To Schedule or Not to Schedule: How Well Do We Decide?” Journal of Global 

Drug Policy and Practice 205:20 (December 2010): 11.
U.S.-China Economic and Security Review Commission 12 

Additionally, the Synthetic Drug Abuse Prevention Act (signed into law in 2012) banned more than 20 chemical 

compounds used in synthetic drugs, doubled the review period for emergency scheduled substances from 18 to 36 

months, and expanded the DEA’s emergency scheduling authority to allow the DEA to more quickly ban new 

chemicals.

133 Between May 2012 and February 2014, the DEA emergency scheduled more than 20 chemicals 

deemed to present an imminent hazard to public safety and significantly reduced the number of harmful chemicals 

in the United States.134 In its 2012 annual report, the UN International Narcotics Control Board praised international 

efforts to streamline emergency scheduling procedures, stating that they have been “highly effective in ensuring 

that the public is not unnecessarily put at risk before a comprehensive evaluation of [a] substance can be undertaken 

by national authorities.”135

The United States also supports efforts to develop and strengthen international precursor laws and regulations in 

compliance with international drug control treaties. The INL, for instance, manages and funds international 

counternarcotic training programs, which focus on increasing cooperation and improving the technical skills of

foreign drug law enforcement personnel.136 U.S. counternarcotic efforts consist of both general law enforcement 

training and specialized training for mid-level managers in police and other law enforcement agencies around the 

globe.

137 However, the INL does not have a representative in Beijing and does not provide funding for 

counternarcotic efforts in China.138 Instead, the Department of State and DEA combat Chinese drug trafficking 

organizations by providing investigative assistance to foreign governments—particularly in Central America—and 

helping to develop more effective international drug control laws and regulations.

139

While the INL has no direct funding projects in China or East Asia to reduce drug-related activity, the United States 

has funded programs to cut off chemical flows into Central America, including dedicating $1.15 billion between 

2008 and 2015 to the Central America Regional Security Initiative (CARSI).140 Nearly 66 percent of CARSI’s 

funding was given to the International Narcotics Control and Law Enforcement foreign aid account, helping Central 

American governments build law enforcement institutions to counter transnational crime—including narcotics—

and create transparent and accountable public institutions. 141 The DEA’s Sensitive Investigative Unit (SIU), 

authorized by Congress in fiscal year (FY) 1997, also conducts field operations in Central American countries

designated by Congress, identifying and training DEA foreign counterparts in counternarcotic investigations.

142

According to the United States Department of Justice, the SIU program has “unquestionably enhanced DEA’s 

ability to fight drug trafficking on a global scale.”143 Despite increasing levels of trafficking activity in China, 

Congress has not designated China as a specific SIU location, and thus there are no units currently operating in the 

country.

144

Limitations of Counternarcotic Regulations

U.S. efforts to reduce international narcotic and drug trafficking remain insufficiently equipped to reduce shipments 

of precursor chemicals from China. The numerous ways precursor exports can be hidden include:

 Mislabeling: Mislabeling shipments of precursor chemicals is one way Chinese drug traffickers avoid 

detection by U.S. and foreign authorities.

145 According to members of the team at JIATFW, “As 

international authorities have intensified efforts to identify and seize illegal precursor shipments, drug 

traffickers have begun mislabeling chemical shipments with greater frequency. As mislabeling increases, 

so do the challenges for law enforcement and customs officers in identifying these shipments.”

146

 Modifying Chemicals: Precursors can also be chemically modified, making them technically legal and 

permissible to export.

147 These modified chemicals contain compounds similar to banned precursors and 

are designed to mimic their use, but are not included on the UN or U.S. lists of banned chemicals.148 Because 

PICS and the PEN system can only identify chemicals controlled by the UN and United States, new or

modified chemicals are not flagged.

149 In addition, DEA officials told Commission staff that hundreds of 

different chemical combinations can be used to produce drug precursor chemicals, making it difficult for 

regulatory authorities to keep up.150

 Shipping Pre-Precursor Chemicals: As precursor chemicals have become more difficult to ship 

undetected, Chinese drug traffickers have begun transporting pre-precursors, or the chemicals used to create 

precursors. 151 By shipping noncontrolled pre-precursor chemicals—including APAAN (alpha-
U.S.-China Economic and Security Review Commission 13 

phenylacetoacetonitrile), benzaldehyde, and nitroethane, among others—traffickers are able to avoid 

detection.

152 Like modified chemicals, many pre-precursors are legal, and so are not flagged by PICS or the 

PEN system.153

 Insufficient Partner Country Counternarcotic Capabilities: Many Central American countries still lack 

the institutional and regulatory capabilities to identify and seize illegal precursor chemical shipments.154

Chinese drug traffickers take advantage of these weaknesses in global counternarcotic operations, sending 

precursor chemicals to countries where the chances of detection and seizure are lower.

155 When precursors 

are detected, Central American governments often lack proper means for storage and disposal, instead 

holding the chemicals in ports and warehouses that can result in environmental degradation.

156

 Illegal Activity: Because they are illicit, drug shipments facilitated by criminal organizations limit the 

effectiveness of the PICS and the PEN system, customs and port authority inspections, and other regulations 

governing precursor flows. Transnational criminal organization operatives typically use large, illegally 

operated boats to smuggle precursor chemicals from China to ports in Central America and Mexico, where 

organized crime groups pick up the chemicals and transport them in SUVs and trucks to meth labs.157 These 

operations—commonly carried out by Chinese triads and Central American drug cartels—circumvent the 

counternarcotic regime currently in place.158

Considerations for Congress

Although chemical production is difficult to measure in China’s opaque pharmaceutical and chemical industries, 

China is clearly one of the world’slargest manufacturers of precursor chemicals.159 China has made efforts to reduce

its domestic meth production and curb the export of precursor chemicals, yet the country’s vast pharmaceutical and 

chemical industries remain largely unregulated. As a result, meth precursor chemical flows—along with other 

dangerous synthetic drugs—from China into the Western Hemisphere continue to increase, contributing to a 

growing drug problem in the United States.

The onus to reduce China’s meth precursor chemical production lies largely on Beijing. The increasing frequency 

of drug raids in meth-producing towns like Boshe, along with the implementation of new antinarcotic regulations, 

indicate the Chinese government is aware of this growing drug problem and willing to address the issue. To reduce 

the prevalence of meth—both in China and around the world—Chinese leaders should continue to address shortfalls 

in existing chemical regulations and implement new requirements for chemical production. 

The United States and other foreign nations also bear responsibility for enhancing international regulations 

governing chemical shipments and drug trafficking. Countries have attempted to reduce precursor imports through 

stricter chemical regulations, with the U.S. and Mexican governments both restricting sales of products containing 

precursor chemicals. Drug producers have several methods for avoiding detection by local and international 

authorities and circumventing Chinese and international antidrug regulations, including mislabeling chemical 

shipments, modifying illegal chemicals, and shipping legal pre-precursor chemicals.

To reduce precursor chemical flows from China into the Western Hemisphere, Congress should consider the 

following questions:

 How can Congress encourage China to improve its chemical production regulations?

Congress should encourage future administrations to work with Beijing to centralize its drug authorities 

and coordinate more closely with the DEA and U.S. FDA. Giving one agency like the CFDA sole authority 

over pharmaceutical and chemical production in China would formalize inspection practices, allow for 

better distribution of counternarcotic resources, and simplify coordination and communication efforts 

between Chinese regulators and their counterparts in the United States. Along with encouraging an 

increased role for the CFDA, establishing more frequent communication between U.S. and Chinese drug 

regulators could increase awareness of suspected drug shipments, leading to more seizures and reduced 

precursor flows.

 How should Congress recommend China reform laws governing precursor chemical production?
U.S.-China Economic and Security Review Commission 14 

Congress should encourage future administrations to pressure Beijing to revise its laws governing chemical 

exports. Currently, Chinese law enforcement lacks the authority to crack down on meth precursor 

production because many of the chemicals are not controlled in China. To enhance Chinese law 

enforcement’s ability to enforce precursor restrictions, Beijing should adopt new regulations making it 

illegal to knowingly ship a substance that is illegal in the destination country. Additionally, Beijing should 

add additional meth precursor chemicals to its list of controlled substances.

 How can global communication networks be enhanced? 

Congress should recommend that the U.S. Department of State’s Bureau of International Narcotics and 

Law Enforcement Affairs send a team to Beijing to cooperate directly with Chinese law enforcement on 

counternarcotic issues. Increased communication with antidrug counterparts in Central America and Asia—

with the United States acting as a facilitator for these discussions—could significantly reduce drug 

traffickers’ ability to circumvent regulations and facilitate illegal precursor flows.

 How can capabilities for tracking and destroying Chinese chemicals be improved?

The United States should designate China as a SIU location. By adding a SIU unit in China, the DEA could 

better establish an effective and trustworthy counternarcotic system in China. To accommodate this 

expansion, Congress should consider increasing funding for the program.
U.S.-China Economic and Security Review Commission 15 

Appendix I: Controlled Chemicals in the United States

List I

1. Anthranilic acid, its esters, and its salts

2. Benzyl cyanide

3. Ephedrine, its salts, optical isomers, and salts of optical isomers

4. Ergonovine and its salts

5. Ergotamine and its salts

6. N-Acetylanthranilic acid, its esters, and its salts

7. Norpseudoephedrine, its salts, optical isomers, and salts of optical isomers

8. Phenylacetic acid, its esters, and its salts

9. Phenylpropanolamine, its salts, optical isomers, and salts of optical isomers

10. Piperidine and its salts

11. Pseudoephedrine, its salts, optical isomers, and salts of optical isomers

12. 3,4-Methylenedioxyphenyl-2-propanone

13. Methylamine and its salts

14. Ethylamine and its salts

15. Propionic anhydride

16. Isosafrole

17. Safrole

18. Piperonal

19. N-Methylephedrine, its salts, optical isomers, and salts of optical isomers 

20. N-Methylpseudoephedrine, its salts, optical isomers, and salts of optical isomers

21. Hydriodic Acid

22. Benzaldehyde

23. Nitroethane

24.

Gamma-Butyrolactone (Other names include: GBL; Dihydro-2 (3H)-furanone; 1,2-

Butanolide; 1,4-Butanolide; 4-Hydroxybutanoic acid lactone; gamma-hydroxybutyric acid 

lactone)

25. Red Phosphorus

26. White phosphorus (Other names: Yellow Phosphorus)

27.

Hypophosphorous acid and its salts (including ammonium hypophosphite, calcium 

hypophosphite, iron hypophosphite, potassium hypophosphite manganese 

hypophosphite magnesium hypophosphite, and sodium hypophosphite

28. N-phenethyl-4-piperidone (NPP)

29. Iodine

30. Ergocristine and its salts

List II

1. Acetic anydride

2. Acetone

3. Benzyl chloride

4. Ethyl ether

5. Potassium permanganate

6. 2-Butanone (or Methyl Ethyl Keton or MEK)

7. Toluene
U.S.-China Economic and Security Review Commission 16 

8. Hydrochloric acid (including anhydrous hydrogen chloride)

9. Sulfuric Acid

10. Methyl Isobutyl Ketone (MIBK)

11. Sodium Permanganate

Note: List I chemicals are more important to the manufacture of a controlled substance than List II chemicals.

Source: United States Department of Justice Office of Diversion Control, Records and Reports of Listed Chemicals and Certain Machines.

http://www.deadiversion.usdoj.gov/21cfr/cfr/1310/1310_02.htm. 
U.S.-China Economic and Security Review Commission 17 

Appendix II: Controlled Precursor Chemicals in China

Category 1 -

High Risk 

Substances

1. 1-phenyl-2-propane, CAS 103-79-7

2. 3,4-Methylenedioxyphenyl-2-propanone, CAS4676-39-5

3. Piperonal, CAS 120-57-0

4. Safrole, CAS 94-59-7

5. Sassafras oil

6. Iso-safrole, CAS 120-58-1

7. N-Acetylanthranilic acid, CAS 89-52-1

8. O-amino benzoic acid, CAS 118-92-3

9. Ergotic acid, CAS 82-58-6

10. Ergotamine, CAS 113-15-5

11. Ergobasine, CAS 60-79-712

12.

Ephedrine, pseudoephedrine, mesoephedrine, phenylpropanolamine, 

methylephedrine, ephedrine extractum, ephedrine extractum power, and other 

ephedrine substances

13. Hydroxylimine, CAS 90717-16-1 and its salts (added in 2008)

14. 2-Chlorophenyl cyclopentyl ketone, CAS 6740-85-8 (added in 2012)

15. 1-Phenyl-2-Bromo-1-Propanol, CAS 2114-00-3 (added in 2014)

16. 3-oxo-2-phenylbutyronitrile, CAS 4468-48-8 (added in 2014)

Category 2 -

Precursors

1. Phenylacetic acid, CAS 103-82-2

2. Acetic anhydride, CAS 108-24-7

3. Chloroform, CAS 67-66-3

4. Aether, CAS 60-29-7

5. Piperidine, CAS 110-89-4

Category 3 -

Other Raw 

Materials

1. Toluene, CAS 108-88-3

2. Acetone, CAS 67-64-1

3. Methyl ether ketone, CAS 78-93-3

4. Potassium permanganate, CAS 7722-64-7

5. Sulphuric acid, CAS 7664-93-9

6. Hydrochloric acid, CAS 7647-01-0

Source: ChemSafetyPRO, “Management of Drug Precursor Chemicals in China.” 

http://www.chemsafetypro.com/Topics/China/Drug_Precursor_Chemicals.html. 
U.S.-China Economic and Security Review Commission 18 

Appendix III: Controlled Chemicals under 1988 UN Convention 

against Illicit Traffic in Narcotic Drugs and Psychotropic 

Substances

Table I

1. Acetic anhydride

2. N-Acetylanthranilic acid

3. Ephedrine

4. Ergometrine

5. Ergotamine

6. Isosafrole

7. Lysergic acid

8. 3,4-Methylenedioxyphenyl-2-propanone

9. Norephedrine

10. Phenylacetic acid

11. alpha-Phenylacetoacetonitrile

12. 1-Phenyl-2-propanone

13. Piperonal

14. Potassium permanganate

15. Psudoephedrine

16. Safrole

Table II

1. Acetone

2. Anthranilic acid

3. Ethyl ether

4. Hydrochloric acid*

5. Methyl ethyl ketone

6. Piperidine

7. Sulphuric acid*

8. Toluene

Note: Table I chemicals are more critical to the production of controlled substances than chemicals in the Table II, with more rigorous

provisions concerning Table I substances. Asterisks indicate that the salts of these chemicals are not controlled.

Source: UN International Narcotics Control Board, “Precursors and Chemicals Frequently Used in the Illicit Manufacture of Narcotic 

Drugs and Psychotropic Substances,” March 2015, 49.
U.S.-China Economic and Security Review Commission 19 

Endnotes

1

 U.S. Substance Abuse and Mental Health Services Administration, Behavioral Health Trends in the United States: Results from the 2014 

National Survey on Drug Use and Health, September 2015. http://www.samhsa.gov/data/sites/default/files/NSDUH-FRR1-

2014/NSDUH-FRR1-2014.pdf. 

2

 United States National Institute on Drug Abuse, “What Is Methamphetamine?” https://www.drugabuse.gov/publications/researchreports/methamphetamine/what-methamphetamine. 

3

 Dana Hunt, Sarah Kuck, and Linda Truitt, Methamphetamine Use: Lessons Learned, U.S. Department of Justice, February 2006, iii. 

https://www.ncjrs.gov/pdffiles1/nij/grants/209730.pdf.

4

 U.S. Drug Enforcement Administration, Statistics and Facts. http://www.dea.gov/resource-center/statistics.shtml.

5

 January W. Payne, “Want to Buy Some Cold Medicine? Your ID, Please,” Washington Post, November 8, 2005. 

http://www.washingtonpost.com/wp-dyn/content/article/2005/11/04/AR2005110402200.html. 

6

 United States Department of State, 2013 International Narcotics Control Strategy Report (INCSR), March 5, 2013.

http://www.state.gov/j/inl/rls/nrcrpt/2013/vol1/204046.htm; U.S.A. Patriot Improvement and Reauthorization Act of 2005 § 701, Pub. L. 

No. 109–177, 2005, codified at 2261 U.S.C. § 28 (2005).

7

 United States Drug Enforcement Administration, Statistics and Facts. http://www.dea.gov/resource-center/statistics.shtml.

8

 United States Drug Enforcement Administration, Statistics and Facts. http://www.dea.gov/resource-center/statistics.shtml.

9

 United Nations Office on Drugs and Crime, “World Drug Report 2015,” May 2015, 9. 

https://www.unodc.org/documents/wdr2015/World_Drug_Report_2015.pdf; United States Department of State, 2016 International 

Narcotics Control Strategy Report (INCSR), March 2016. http://www.state.gov/documents/organization/253655.pdf.

10 United States Drug Enforcement Administration, 2015 National Drug Threat Assessment Summary, October 2015, 45, 50. 

http://www.dea.gov/docs/2015%20NDTA%20Report.pdf.

11 United States Drug Enforcement Administration, 2015 National Drug Threat Assessment Summary, October 2015, 46. 

http://www.dea.gov/docs/2015%20NDTA%20Report.pdf.

12 Nick Miroff, “Losing Marijuana Business, Mexican Cartels Push Heroin and Meth,” Washington Post, January 11, 2015. 

https://www.washingtonpost.com/world/the_americas/losing-marijuana-business-mexican-cartels-push-heroin-andmeth/2015/01/11/91fe44ce-8532-11e4-abcf-5a3d7b3b20b8_story.html.

13 United States Border Patrol, Marijuana Seizures along the U.S.-Mexico Border. http://static.apps.cironline.org/border-seizures/; Joe 

Johns, “U.S. Aims to Slow Meth Imports from Mexico,” CNN, January 7, 2015. http://www.cnn.com/2015/01/06/politics/meth-whitehouse-mexico/.

14 United States Drug Enforcement Administration, 2014 National Drug Threat Assessment Summary, November 2014, 19. 

http://www.dea.gov/resource-center/dir-ndta-unclass.pdf.

15 Joshua Philipp, “China Is Fueling a Drug War against the US,” Epoch Times, December 18, 2015. 

http://www.theepochtimes.com/n3/1915904-china-is-supplying-a-drug-war-against-the-united-states/. 

16 United States Department of State, 2014 International Narcotics Control Strategy Report (INCSR), March 2014.

http://www.state.gov/j/inl/rls/nrcrpt/2014/vol1/222864.htm. 

17 United States Department of State, 2016 International Narcotics Control Strategy Report (INCSR), March 2016.

http://www.state.gov/documents/organization/253655.pdf.

18 Kylene Kiang, “Texas Sees Spike in Demand for Stronger Meth from Mexico,” Banderas News (Mexico), September 2006. 

http://banderasnews.com/0609/hb-methfrommexico.htm; Sami Horwitz, “U.S. Cities Become Hubs of Mexican Drug Cartels,” 

Washington Post, November 3, 2012. https://www.washingtonpost.com/world/national-security/us-cities-become-hubs-of-mexican-drugcartels/2012/11/03/989e21e8-1e2b-11e2-9cd5-b55c38388962_story.html.

19 United States Department of State, 2014 International Narcotics Control Strategy Report (INCSR), March 2014.

http://www.state.gov/j/inl/rls/nrcrpt/2014/vol1/222925.htm. 

20 Joshua Philipp, “China Uncooperative in Stopping Meth Flow,” Epoch Times, March 3, 2014. 

http://www.theepochtimes.com/n3/540878-china-uncooperative-in-stopping-meth-flow/. 

21 Noel Randewich, “Mexico Limits Some Cold Remedies in Narcotics War,” Reuters, July 19, 2007. http://www.reuters.com/article/usmexico-crime-pseudoephedrine-idUSN1927125520070719.

22 Joshua Philipp, “China Uncooperative in Stopping Meth Flow,” Epoch Times, March 3, 2014. 

http://www.theepochtimes.com/n3/540878-china-uncooperative-in-stopping-meth-flow/.

23 Rebecca Winters, “The Majority of the World’s Meth Begins in China,” Natural News, January 18, 2014. 

http://www.naturalnews.com/043566_China_methamphetamine_illegal_drugs.html#; Travis J. Tritten, “Task Force Targets Chinese 

Shipments of Meth Chemicals,” Stars and Stripes, September 15, 2012. http://www.stripes.com/news/task-force-targets-chineseshipments-of-meth-chemicals-1.189502.

24 Rebecca Winters, “The Majority of the World’s Meth Begins in China,” Natural News, January 18, 2014. 

http://www.naturalnews.com/043566_China_methamphetamine_illegal_drugs.html#; Travis J. Tritten, “Task Force Targets Chinese 

Shipments of Meth Chemicals,” Stars and Stripes, September 15, 2012. http://www.stripes.com/news/task-force-targets-chineseshipments-of-meth-chemicals-1.189502.

25 Rebecca Winters, “The Majority of the World’s Meth Begins in China,” Natural News, January 18, 2014. 

http://www.naturalnews.com/043566_China_methamphetamine_illegal_drugs.html#; Travis J. Tritten, “Task Force Targets Chinese 

Shipments of Meth Chemicals,” Stars and Stripes, September 15, 2012. http://www.stripes.com/news/task-force-targets-chineseshipments-of-meth-chemicals-1.189502.

 
U.S.-China Economic and Security Review Commission 20 

 

26 Roger C. Chin, “Assessing New Frontiers: Methamphetamines and the Emerging China-Mexico Connection,” Small Wars Journal, 

January 15, 2016, 4.

27 Bryan Harris, “Hong Kong Triads Supply Meth Ingredients to Mexican Drug Cartels,” South China Morning Post, January 12, 2014. 

http://www.scmp.com/news/hong-kong/article/1403433/hong-kong-triads-supply-meth-ingredients-mexican-drug-cartels; Joshua 

Philipp, “China Uncooperative in Stopping Meth Flow,” Epoch Times, March 3, 2014. http://www.theepochtimes.com/n3/540878-chinauncooperative-in-stopping-meth-flow/; R. Evan Ellis, “Chinese Organized Crime in Latin America,” PRISM 4:1 (January 2013): 66. 

28 United States Department of State, 2015 International Narcotics Control Strategy Report (INCSR), March 2015. 

http://www.state.gov/j/inl/rls/nrcrpt/2015/vol1/238978.htm. 

29 James Bosworth, Chief Executive Officer, Southern Pulse, interview with Commission staff, March 3, 2016.

30 Sheldon X. Zhang and Ko-lin Chin, “A People’s War: China’s Struggle to Contain its Illicit Drug Problem,” Brookings Institution, May 

2015, 1.

31 Peter Ford, “China Faces a Growing Meth Problem,” Christian Science Monitor, May 4, 2015. http://www.businessinsider.com/chinafaces-a-growing-meth-problem-2015-5.

32 Peter Ford, “China Faces a Growing Meth Problem,” Christian Science Monitor, May 4, 2015. http://www.businessinsider.com/chinafaces-a-growing-meth-problem-2015-5. 

33 Peter Ford, “China Faces a Growing Meth Problem,” Christian Science Monitor, May 4, 2015. http://www.businessinsider.com/chinafaces-a-growing-meth-problem-2015-5. 

34 Sheldon X. Zhang and Ko-lin Chin, “A People’s War: China’s Struggle to Contain its Illicit Drug Problem,” Brookings Institution, May 

2015, 5. 

35 Sheldon X. Zhang and Ko-lin Chin, “A People’s War: China’s Struggle to Contain its Illicit Drug Problem,” Brookings Institution, May 

2015, 5. 

36 Wang Zhao, “Drug Bust in Shanghai, China, Nets 2.4 Tons of Meth,” CBS News, February 5, 2015. 

http://www.cbsnews.com/news/drug-bust-in-shanghai-china-nets-2-4-tons-of-meth/.

37 Julie Makinen, “Drug Seizures Soar in China; Most Suspects are ‘Farmers and Unemployed,’” Los Angeles Times, February 18, 2016. 

http://www.latimes.com/world/asia/la-fg-drugs-china-meth-ice-20160218-story.html.

38 Zhang Hui, “China’s No.1 Drug Village Closely Watched by Police One Year after Crackdown,” Global Times, January 7, 2016. 

http://www.globaltimes.cn/content/962374.shtml. 

39 Zhang Hui, “China’s No.1 Drug Village Closely Watched by Police One Year after Crackdown,” Global Times, January 7, 2016. 

http://www.globaltimes.cn/content/962374.shtml. 

40 He Huifeng, “Police Hunt Drug Makers after Huge Crystal Meth Raid in Boshe Village,” South China Morning Post, January 5, 2014. 

http://www.scmp.com/news/china/article/1397789/police-hunt-drug-makers-after-huge-crystal-meth-raid-boshe-village. 

41 Zhang Hui, “China’s No.1 Drug Village Closely Watched by Police One Year after Crackdown,” Global Times, January 7, 2016. 

http://www.globaltimes.cn/content/962374.shtml. 

42 Zhang Hui, “China’s No.1 Drug Village Closely Watched by Police One Year after Crackdown,” Global Times, January 7, 2016. 

http://www.globaltimes.cn/content/962374.shtml. 

43 UN International Narcotics Control Board, “Precursors and Chemicals Frequently Used in the Illicit Manufacture of Narcotic Drugs and 

Psychotropic Substances,” March 2015, 9. https://www.incb.org/documents/PRECURSORS/TECHNICAL_REPORTS/2014/2014-

PreAR_E.pdf. 

44 China Food and Drug Administration, Notification of the Issuance of Managing Non-Medicinal Narcotics and Psychoactive Drugs, 

September 29, 2015. Staff Translation. http://www.sfda.gov.cn/WS01/CL0056/130753.html. 

45 United States Department of State, 2014 International Narcotics Control Strategy Report (INCSR), March 2014. 

http://www.state.gov/j/inl/rls/nrcrpt/2014/vol1/223180.htm.

46 David Volodzko, “China’s Fourth Evil: Drug Trafficking in the PRC,” China Brief (Jamestown Foundation), 16:6 (March 2016). 

http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews%5Btt_news%5D=45234#.Vw_WpEwrIdU.

47 China National Narcotics Control Commission, Annual Report on Drug Control in China, 2015, 2016. Staff translation; United States 

Department of State, 2016 International Narcotics Control Strategy Report (INCSR), March 2016, 131.

http://www.state.gov/documents/organization/253655.pdf. 

48 T.S.S. Dikshith, Hazardous Chemicals: Safety Management and Global Regulations, CRC Press, May 6, 2013, 450; David Volodzko, 

“China’s Fourth Evil: Drug Trafficking in the PRC,” China Brief (Jamestown Foundation), 16:6 (March 2016). 

http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews%5Btt_news%5D=45234#.Vw_WpEwrIdU.

49 David Volodzko, “China’s Fourth Evil: Drug Trafficking in the PRC,” China Brief (Jamestown Foundation), 16:6 (March 2016). 

http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews%5Btt_news%5D=45234#.Vw_WpEwrIdU.

50 Adam Minter, “China’s Growing Meth Addiction,” Bloomberg, May 25, 2015. http://www.bloombergview.com/articles/2015-05-

25/china-s-growing-meth-addiction.

51 UN Office on Drugs and Crime, “UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances,” 1988, 

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52 Xinhua (English edition), “Country Report on China’s Participation in Greater Mekong Subregion Cooperation,” China Daily, December 

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53 Hong Lu, Terance D. Miethe, and Bin Liang, China’s Drug Practices and Policies: Regulating Controlled Substances in a Global 

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54 United States Department of State, 2014 International Narcotics Control Strategy Report (INCSR), March 2014.

http://www.state.gov/j/inl/rls/nrcrpt/2014/vol1/222864.htm. 
U.S.-China Economic and Security Review Commission 21 

 

55 United States Department of State, 2014 International Narcotics Control Strategy Report (INCSR), March 2014. 

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58 U.S.-China Economic and Security Review Commission, Chapter 1, Section 3, “China’s Health Care Industry, Drug Safety, and Market 

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61 U.S.-China Economic and Security Review Commission, Chapter 1, Section 3, “China’s Health Care Industry, Drug Safety, and Market 

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62 Yanzhong Huang, “Chinese Pharma: A Global Health Game Changer?” Council on Foreign Relations Blog, March 31, 2015. 

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63 U.S.-China Economic and Security Review Commission, Chapter 1, Section 3, “China’s Health Care Industry, Drug Safety, and Market 

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65 U.S.-China Economic and Security Review Commission, Chapter 1, Section 3, “China’s Health Care Industry, Drug Safety, and Market 

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66 U.S.-China Economic and Security Review Commission, Hearing on Importation of Drugs into the United States, written testimony of 

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69 United States Department of State, 2014 International Narcotics Control Strategy Report (INCSR), March 2014. 

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71 United States Department of State, 2016 International Narcotics Control Strategy Report (INCSR), March 2016, 81–82.

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72 White House Office of National Drug Control Policy, “Controlling Precursor Chemicals.” https://www.whitehouse.gov/ondcp/precursorchemicals.

73 White House Office of National Drug Control Policy, “Controlling Precursor Chemicals.” https://www.whitehouse.gov/ondcp/precursorchemicals.

74 Dan Levin, “In China, Illegal Drugs Are Sold Online in an Unbridled Market,” New York Times, June 21, 2015. 

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75 ChemSafetyPRO, “Management of Drug Precursor Chemicals in China.” 

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76 Official, United States Food and Drug Administration, interview with Commission staff, May 12, 2016.

77 Dan Levin, “In China, Illegal Drugs Are Sold Online in an Unbridled Market,” New York Times, June 21, 2015. 

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78 U.S.-China Economic and Security Review Commission, Chapter 1, Section 3, “China’s Health Care Industry, Drug Safety, and Market 

Access for U.S. Medical Goods and Services,” in 2014 Annual Report to Congress, November 2014, 140.

79 U.S.-China Economic and Security Review Commission, Chapter 1, Section 3, “China’s Health Care Industry, Drug Safety, and Market 

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80 China Food and Drug Administration. http://eng.cfda.gov.cn/WS03/CL0756/.
U.S.-China Economic and Security Review Commission 22 

 

81 Yanzhong Huang, Governing Health in Contemporary China, Routledge, 2013, 125; David Volodzko, “China’s Fourth Evil: Drug 

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82 U.S.-China Economic and Security Review Commission, Chapter 1, Section 3, “China’s Health Care Industry, Drug Safety, and Market 

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83 U.S.-China Economic and Security Review Commission, Chapter 1, Section 3, “China’s Health Care Industry, Drug Safety, and Market 

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84 U.S.-China Economic and Security Review Commission, Chapter 1, Section 3, “China’s Health Care Industry, Drug Safety, and Market 

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85 Ed Giniat et al., “China’s Pharmaceutical Industry–Poised for the Giant Leap,” KPMG, 2011, 7; U.S.-China Economic and Security 

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Services,” in 2014 Annual Report to Congress, November 2014, 134, 140.

86 David Volodzko, “China’s Fourth Evil: Drug Trafficking in the PRC,” China Brief (Jamestown Foundation), 16:6 (March 2016). 

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87 Wang Hairong, “War on Drugs,” Beijing Review, July 9, 2015. http://www.bjreview.com.cn/nation/txt/2015-07/06/content_694744.htm. 

88 Dan Levin, “In China, Illegal Drugs Are Sold Online in an Unbridled Market,” New York Times, June 21, 2015. 

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89 Roger Bate, Phake: The Deadly World of Falsified and Substandard Medicines, American Enterprise Institute for Public Policy 

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90 U.S.-China Economic and Security Review Commission, Hearing on China's Healthcare Sector, Drug Safety, and the U.S.-China Trade 

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91 Rebecca Winters, “The Majority of the World’s Meth Begins in China,” Natural News, January 18, 2014. 

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92 Walt Bogdanich, “Chinese Chemicals Flow Unchecked onto World Drug Market,” New York Times, October 31, 2007. 

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93 China State Administration of Work Safety, Notification of Non-Pharmaceutical Precursor Chemicals Enterprises Standardized 

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94 Roger Bate, Phake: The Deadly World of Falsified and Substandard Medicines, American Enterprise Institute for Public Policy 

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95 Roger Bate, Phake: The Deadly World of Falsified and Substandard Medicines, American Enterprise Institute for Public Policy 

Research, 2012, 179.

96 Roger Bate, Phake: The Deadly World of Falsified and Substandard Medicines, American Enterprise Institute for Public Policy 

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97 Roger Bate, Phake: The Deadly World of Falsified and Substandard Medicines, American Enterprise Institute for Public Policy 

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98 Bryan Harris, “Corrupt Mainland Drug Firms ‘Fueling Crystal Meth Scourge’, says UN Official,” South China Morning Post, February 

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99 U.S.-China Economic and Security Review Commission, Chapter 1, Section 3, “China’s Health Care Industry, Drug Safety, and Market 

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100 Walt Bogdanich, “Chinese Chemicals Flow Unchecked onto World Drug Market,” New York Times, October 31, 2007. 

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101 Rebecca Winters, “The Majority of the World’s Meth Begins in China,” Natural News, January 18, 2014. 

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102 Walt Bogdanich, “Chinese Chemicals Flow Unchecked onto World Drug Market,” New York Times, October 31, 2007. 

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103 Official, United States Food and Drug Administration, interview with Commission staff, May 12, 2016.

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106 David Armstrong, “‘Truly Terrifying’: Chinese Suppliers Flood U.S. and Canada with Deadly Fentanyl,” STAT News, April 5, 2016. 

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107 Ed Markey, “Markey Discusses Fentanyl Scourge & Opioid Epidemic” (United States Senate, Washington, DC, May 12, 2016).
U.S.-China Economic and Security Review Commission 23 

 

108 Max Plenke, “This Is How Chinese Labs Are Sneaking the Dangerous Drug Fentanyl into the US,” Science Mic, April 26, 2016. 

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109 David Armstrong, “Chinese Labs Modify Deadly Fentanyl to Circumvent Ban on Sales to US,” STAT News, April 26, 2016. 

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110 David Armstrong, “Chinese Labs Modify Deadly Fentanyl to Circumvent Ban on Sales to US,” STAT News, April 26, 2016. 

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111 David Armstrong, “Chinese Labs Modify Deadly Fentanyl to Circumvent Ban on Sales to US,” STAT News, April 26, 2016. 

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112 Max Plenke, “This Is How Chinese Labs Are Sneaking the Dangerous Drug Fentanyl into the US,” Science Mic, April 26, 2016. 

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114 J.D. Capelouto, “Law Increasing Sentence for Fentanyl Trafficking Goes into Effect Tuesday,” Boston Globe, February 22, 2016. 

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115 David Volodzko, “China’s Fourth Evil: Drug Trafficking in the PRC,” China Brief (Jamestown Foundation), 16:6 (March 2016). 

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116 Roger Bate, Phake: The Deadly World of Falsified and Substandard Medicines, American Enterprise Institute for Public Policy 

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117 Roger Bate, Phake: The Deadly World of Falsified and Substandard Medicines, American Enterprise Institute for Public Policy 

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118 Joshua Philipp, “China Uncooperative in Stopping Meth Flow,” Epoch Times, March 3, 2014. 

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119 Xinhua (English edition), “China’s Yunnan Expels Drug Addicts from Party,” December 10, 2014. 

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120 U.S.-China Economic and Security Review Commission, Chapter 1, Section 3, “China’s Health Care Industry, Drug Safety, and Market 

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121 United States Department of State, 2014 International Narcotics Control Strategy Report (INCSR), March 2014.

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122 Official, U.S. Drug Enforcement Administration, interview with Commission staff, May 16, 2016.

123 Official, U.S. Drug Enforcement Administration, interview with Commission staff, May 16, 2016.

124 David Volodzko, “China’s Fourth Evil: Drug Trafficking in the PRC,” China Brief (Jamestown Foundation), 16:6 (March 2016). 

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125 United States Department of State, 2016 International Narcotics Control Strategy Report (INCSR), March 2016, 52.

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126 U.S. House Armed Services Committee, Hearing on U.S. Pacific Command Posture, written testimony of Harry B. Harris Jr., February 

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128 UN International Narcotics Control Board, “Precursors and Chemicals Frequently Used in the Illicit Manufacture of Narcotic Drugs and 

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129 United States Department of State, 2014 International Narcotics Control Strategy Report (INCSR), March 2014. 

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130 International Narcotics Control Board, “The Precursors Incident Communication System Recognized among the Top UN Innovations in 

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131 United States Department of State, 2016 International Narcotics Control Strategy Report (INCSR), March 2016, 52.

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132 Erin Bagalman, Lisa N. Saco, and Liana W. Rosen, “Active Opioid Legislation in the House: In Brief,” Congressional Research 

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133 Charles Schumer, “Synthetic Drugs Continue To Put Batavia Kids in Danger and New Chemical Combinations Must Be Made Illegal,” 

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U.S.-China Economic and Security Review Commission 24 

 

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134 Charles Schumer, “Synthetic Drugs Continue To Put Batavia Kids in Danger and New Chemical Combinations Must Be Made Illegal,” 

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136 United States Department of State, 2016 International Narcotics Control Strategy Report (INCSR), March 2016, 40.

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137 United States Department of State, 2016 International Narcotics Control Strategy Report (INCSR), March 2016, 40.

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138 United States Department of State Bureau of International Narcotics and Law Enforcement Affairs (INL). http://www.state.gov/j/inl/. 

139 United States Drug Enforcement Administration, North & Central America Region. http://www.dea.gov/divisions/international/northcentral-america.shtml.

140 United States Department of State, Bureau of International Narcotics and Law Enforcement Affairs (INL). http://www.state.gov/j/inl/; 

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141 United States Department of State, Bureau of International Narcotics and Law Enforcement Affairs (INL). http://www.state.gov/j/inl/; 

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144 United States Office of the Inspector General, “The Drug Enforcement Administration's International Operations,” February 2007. 

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145 United States Department of State, 2016 International Narcotics Control Strategy Report (INCSR), March 2016, 55.

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146 Member, Joint Interagency Task Force-West, interview with Commission staff, February 9, 2016.

147 Australian Crime Commission, Clandestine Laboratories and Precursors, 2012, 148.

148 Economist, “Chemical Highs,” July 26, 2014. http://www.economist.com/news/china/21608802-synthetic-drugs-are-now-commonchinese-cities-they-are-being-exported-too-chemical-highs.

149 UN International Narcotics Control Board, “Precursors and Chemicals Frequently Used in the Illicit Manufacture of Narcotic Drugs and 

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150 Official, U.S. Drug Enforcement Administration, interview with Commission staff, March 9, 2016.

151 United States Department of State, 2016 International Narcotics Control Strategy Report (INCSR), March 2016, 55.

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152 United States Department of State, 2014 International Narcotics Control Strategy Report (INCSR), March 2014. 

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153 United States Department of State, 2016 International Narcotics Control Strategy Report (INCSR), March 2016, 55.

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154 Official, U.S. Drug Enforcement Administration, interview with Commission staff, March 9, 2016.

155 United States Department of State, 2016 International Narcotics Control Strategy Report (INCSR), March 2016, 55.

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156 Official, U.S. Drug Enforcement Administration, interview with Commission staff, March 9, 2016; UN Office on Drugs and Crime, 

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157 Julieta Pelcastre, “Guatemalan, Salvadoran Security Forces Seize Precursor Chemicals,” Dialogo, October 25, 2013. http://dialogoamericas.com/en_GB/articles/rmisa/features/regional_news/2013/10/25/drogas-centroamerica. 

158 Joshua Philipp, “China Is Fueling a Drug War against the US,” Epoch Times, December 18, 2015. 

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159 Roger Bate, Phake: The Deadly World of Falsified and Substandard Medicines, American Enterprise Institute for Public Policy 

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