The Chinese government sponsored a nationwide education campaign aimed primarily at reducing drug use by youth. Narcotics enforcement cooperation between the United States and China continued to expand in 1998, with increased levels of training, professional exchanges, and tactical-level enforcement cooperation. The DEA anticipates the assignment of permanent staff for its new office in Beijing sometime in 1999. China is a major producer of precursor chemicals. The ephedra plant, from which the precursor chemical ephedrine is extracted, grows wild in northern China.
China produces and legally exports potassium permanganate, which can be used in cocaine production.
The Chinese government vigilantly monitors precursor chemical exports and has in place a system of pre-export notification. Yunnan, the province most directly affected by China's growing drug problem, goes further than the 22 chemicals on the 1988 Convention Watch List by monitoring exports of 28 chemicals. According to press reports, in the first ten months of 1998, Yunnan provincial law enforcement authorities seized more than 300 metric tons of precursor chemicals destined for illegal use, more than the amount confiscated nationwide in all of 1997. Although Chinese law prohibits laundering the proceeds from illegal narcotics trafficking, China's legal system and banking regulations generally have not kept pace with the country's rapid economic internationalization. Consequently, China is vulnerable to possible exploitation by drug traffickers, particularly from Burma, seeking to launder money.