Meth Precursor Chemicals From China: Implications For The United States

July 18, 2016
Meth Precursor Chemicals from China:

Implications for the United States
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.
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.
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

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 3

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).7 In 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
6 30
5 25
Thousand kilograms
4 20
Thousands
3 15
2 10
1 5
0 0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Meth Seizures (left axis) Meth Lab Incidents (right axis)
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

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

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

Figure 3: Annual Drug Seizures in China, 2001–2014
30
25
Kilogram thousands
20
15
10
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Opiates Meth
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.

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.

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 Anti-
Smuggling 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.

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

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.

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-

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’s largest 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?

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.

Appendix I: Controlled Chemicals in the United States
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
List I
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
Gamma-Butyrolactone (Other names include: GBL; Dihydro-2 (3H)-furanone; 1,2-
Butanolide; 1,4-Butanolide; 4-Hydroxybutanoic acid lactone; gamma-hydroxybutyric acid
24. lactone)
25. Red Phosphorus
26. White phosphorus (Other names: Yellow Phosphorus)
Hypophosphorous acid and its salts (including ammonium hypophosphite, calcium
hypophosphite, iron hypophosphite, potassium hypophosphite manganese
27. hypophosphite magnesium hypophosphite, and sodium hypophosphite
28. N-phenethyl-4-piperidone (NPP)
29. Iodine
30. Ergocristine and its salts
1. Acetic anydride
2. Acetone
3. Benzyl chloride
List II 4. Ethyl ether
5. Potassium permanganate
6. 2-Butanone (or Methyl Ethyl Keton or MEK)
7. Toluene

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.

Appendix II: Controlled Precursor Chemicals in China
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
Category 1 -
9. Ergotic acid, CAS 82-58-6
High Risk
Substances 10. Ergotamine, CAS 113-15-5
11. Ergobasine, CAS 60-79-712
Ephedrine, pseudoephedrine, mesoephedrine, phenylpropanolamine,
methylephedrine, ephedrine extractum, ephedrine extractum power, and other
12. 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)
1. Phenylacetic acid, CAS 103-82-2
2. Acetic anhydride, CAS 108-24-7
Category 2 -
3. Chloroform, CAS 67-66-3
Precursors
4. Aether, CAS 60-29-7
5. Piperidine, CAS 110-89-4
1. Toluene, CAS 108-88-3
2. Acetone, CAS 67-64-1
Category 3 -
3. Methyl ether ketone, CAS 78-93-3
Other Raw
Materials 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.

Appendix III: Controlled Chemicals under 1988 UN Convention
against Illicit Traffic in Narcotic Drugs and Psychotropic
Substances
1. Acetic anhydride
2. N-Acetylanthranilic acid
3. Ephedrine
4. Ergometrine
5. Ergotamine
6. Isosafrole
7. Lysergic acid
8. 3,4-Methylenedioxyphenyl-2-propanone
Table I
9. Norephedrine
10. Phenylacetic acid
11. alpha-Phenylacetoacetonitrile
12. 1-Phenyl-2-propanone
13. Piperonal
14. Potassium permanganate
15. Psudoephedrine
16. Safrole
1. Acetone
2. Anthranilic acid
3. Ethyl ether
4. Hydrochloric acid*
Table II
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.

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/research-
reports/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.
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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.
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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.
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11 United States Drug Enforcement Administration, 2015 National Drug Threat Assessment Summary, October 2015, 46.
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12 Nick Miroff, “Losing Marijuana Business, Mexican Cartels Push Heroin and Meth,” Washington Post, January 11, 2015.
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meth/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-white-
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14 United States Drug Enforcement Administration, 2014 National Drug Threat Assessment Summary, November 2014, 19.
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16
United States Department of State, 2014 International Narcotics Control Strategy Report (INCSR), March 2014.
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17 United States Department of State, 2016 International Narcotics Control Strategy Report (INCSR), March 2016.
18 Kylene Kiang, “Texas Sees Spike in Demand for Stronger Meth from Mexico,” Banderas News (Mexico), September 2006.
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20 Joshua Philipp, “China Uncooperative in Stopping Meth Flow,” Epoch Times, March 3, 2014.
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21 Noel Randewich, “Mexico Limits Some Cold Remedies in Narcotics War,” Reuters, July 19, 2007. http://www.reuters.com/article/us-
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26 Roger C. Chin, “Assessing New Frontiers: Methamphetamines and the Emerging China-Mexico Connection,” Small Wars Journal,
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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
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46 David Volodzko, “China’s Fourth Evil: Drug Trafficking in the PRC,” China Brief (Jamestown Foundation), 16:6 (March 2016).
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61
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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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107 Ed Markey, “Markey Discusses Fentanyl Scourge & Opioid Epidemic” (United States Senate, Washington, DC, May 12, 2016).

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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112 Max Plenke, “This Is How Chinese Labs Are Sneaking the Dangerous Drug Fentanyl into the US,” Science Mic, April 26, 2016.
https://mic.com/articles/141850/chinese-labs-are-sneaking-drug-fentanyl-into-the-us#.UPFvkVix0.
113 J.D. Capelouto, “Law Increasing Sentence for Fentanyl Trafficking Goes into Effect Tuesday,” Boston Globe, February 22, 2016.
https://www.bostonglobe.com/metro/2016/02/22/law-increasing-sentence-for-fentanyl-trafficking-goes-into-effect-
tuesday/Zbe59bwh0545I5DEj6KcaI/story.html; Shira Schoenberg, “Massachusetts Gov. Charlie Baker Signs Law Making Fentanyl
Trafficking a Crime,” MassLive, November 24, 2015.
http://www.masslive.com/politics/index.ssf/2015/11/gov_charlie_baker_signs_law_ma.html.
114 J.D. Capelouto, “Law Increasing Sentence for Fentanyl Trafficking Goes into Effect Tuesday,” Boston Globe, February 22, 2016.
https://www.bostonglobe.com/metro/2016/02/22/law-increasing-sentence-for-fentanyl-trafficking-goes-into-effect-
tuesday/Zbe59bwh0545I5DEj6KcaI/story.html.
115
David Volodzko, “China’s Fourth Evil: Drug Trafficking in the PRC,” China Brief (Jamestown Foundation), 16:6 (March 2016).
116
Roger Bate, Phake: The Deadly World of Falsified and Substandard Medicines, American Enterprise Institute for Public Policy
Research, 2012, 179; David Volodzko, “China’s Fourth Evil: Drug Trafficking in the PRC,” China Brief (Jamestown Foundation), 16:6
(March 2016); Joshua Philipp, “China Uncooperative in Stopping Meth Flow,” Epoch Times, March 3, 2014.
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Trafficking in the PRC,” China Brief (Jamestown Foundation), 16:6 (March 2016).
119 Xinhua (English edition), “China’s Yunnan Expels Drug Addicts from Party,” December 10, 2014.
http://www.chinadaily.com.cn/china/2014-12/10/content_19060457.htm; David Volodzko, “China’s Fourth Evil: Drug Trafficking in the

PRC,” China Brief (Jamestown Foundation), 16:6 (March 2016).
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.
http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews%5Btt_news%5D=45234#.Vw_WpEwrIdU; United States Department

of State, 2014 International Narcotics Control Strategy Report (INCSR), March 2014.
126 U.S. House Armed Services Committee, Hearing on U.S. Pacific Command Posture, written testimony of Harry B. Harris Jr., February
24, 2016, 18. http://docs.house.gov/meetings/AS/AS00/20160224/104587/HHRG-114-AS00-Wstate-HarrisH-20160224.pdf.

127 U.S. House Armed Services Committee, Hearing on U.S. Pacific Command Posture, written testimony of Harry B. Harris Jr., February
24, 2016, 18. http://docs.house.gov/meetings/AS/AS00/20160224/104587/HHRG-114-AS00-Wstate-HarrisH-20160224.pdf.

Psychotropic Substances,” March 2015, 5.

130 International Narcotics Control Board, “The Precursors Incident Communication System Recognized among the Top UN Innovations in
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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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sale-of-new-dangerous-synthetic-drugs-such-as-cloud-9-that-have-cropped-up-in-batavia-schools-and-recently-sent-4-local-students-to-
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July 18, 2016

Meth Precursor Chemicals from China:

Sean O’Connor, Policy Analyst, Economics and Trade

U.S.-China Economic and Security Review Commission

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

Meth Seizures (left axis) Meth Lab Incidents (right axis)

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

U.S.-China Economic and Security Review Commission 4

Precursor Chemical Flows from China

U.S.-China Economic and Security Review Commission 5

China’s Meth Problem

U.S.-China Economic and Security Review Commission 6

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

Scope of China’s Pharmaceutical and Chemical Production

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

Regulations Governing Chemical Production in China

U.S.-China Economic and Security Review Commission 9

Beyond Meth: China’s Fentanyl Production

U.S.-China Economic and Security Review Commission 10

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

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

Limitations of Counternarcotic Regulations

U.S.-China Economic and Security Review Commission 12

Considerations for Congress

U.S.-China Economic and Security Review Commission 13

U.S.-China Economic and Security Review Commission 14

U.S.-China Economic and Security Review Commission 15

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

U.S.-China Economic and Security Review Commission 17

U.S.-China Economic and Security Review Commission 18

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

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

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

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

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

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

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

December 20, 1988. https://www.unodc.org/unodc/en/treaties/illicit-trafficking.html.

16, 2011. http://usa.chinadaily.com.cn/china/2011-12/16/content_14279772.htm; United States Department of State, 2014 International

Context, Routledge, September 28, 2009, Table 6.3.

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

http://www.ibisworld.com/industry/china/pharmaceutical-manufacturing.html; U.S.-China Economic and Security Review Commission,

release/2015/07/21/753676/0/en/Pharmaceutical-Industry-in-China-2015-2020.html; IBIS World, “Pharmaceutical Manufacturing in

http://www.bloomberg.com/news/articles/2014-04-03/drug-quality-in-china-still-poses-risks-for-u-s-market; U.S.-China Economic and

William K. Hubbard, June 7, 2001.

U.S.-China Economic and Security Review Commission 21

Research, 2012, 179.

in Medical Products, written testimony of Christopher Hickey, April 3, 2014.

Research, 2012, 187.

Research, 2012, 179.

Research, 2012, 180.

Research, 2012, 180.

23, 2015. http://www.scmp.com/news/china/article/1720801/corrupt-mainland-drug-firms-fuelling-crystal-meth-scourge-says-

http://www.naturalnews.com/043566_China_methamphetamine_illegal_drugs.html#; Walt Bogdanich, “Chinese Chemicals Flow

Weekly,” Morbidity and Mortality Weekly Report 64:50 (January 1, 2016).

U.S.-China Economic and Security Review Commission 22

http://www.chinadaily.com.cn/china/2014-12/10/content_19060457.htm; David Volodzko, “China’s Fourth Evil: Drug Trafficking in the