Drug Intelligence Brief

CHINA COUNTRY BRIEF
MARCH 2002

STATUS IN INTERNATIONAL DRUG TRAFFICKING

There are several factors influencing China’s current status in the international drug trafficking arena. These factors include history, location, size, population, and current economic conditions. Opium has played an important role in Chinese history since before the Boxer Rebellion as early as the mid-1800s. China’s large landmass, close proximity to the Golden Triangle, and numerous coastal cities with large and modern port facilities make it an attractive transit center for drug traffickers. China’s status in drug trafficking has changed significantly since the 1980s, when the country, for the first time, opened its borders to trade and tourism after 40 years of relative isolation.

As trade with Southeast Asian countries and the West increased, so did the flow of precursor chemicals and illicit drugs into and through China. China has one-quarter of the world’s population and a large and expanding economy. China is a transit area for Southeast Asian heroin bound for international drug markets, and is a key source of crystal methamphetamine (aka ice, shabu, bingdu) used by many Southeast Asian and Pacific Rim nations. China is also a major source of precursor chemicals necessary for the production of cocaine, heroin, and crystal methamphetamine. The country has developed a complex counterdrug strategy that includes prevention, education, eradication, interdiction, and rehabilitation.

CULTIVATION AND PROCESSING

Cannabis

Cannabis grows naturally throughout southwestern China. Cannabis is licitly cultivated in some areas of China for use in commercial rope manufacturing. Most of the illicit cultivation of cannabis in China occurs in Xinjiang and Yunnan Provinces, and is primarily for domestic use.

Ephedra

The Chinese Government owns and operates ephedra farms, where ephedra grass (ephedra sinica) is cultivated under strict government control. The active alkaloids, pseudoephedrine and ephedrine, are chemically extracted from the plant material and processed for pharmaceutical purposes. These chemicals are then sold domestically and internationally. China and India are the major producers of these chemicals when extracted from the ephedra plant. Notwithstanding government controls, ephedra also grows wild in many parts of northern China.

Methamphetamine

The unrestricted availability of precursor chemicals, such as pseudoephedrine and ephedrine, facilitates the production of large quantities of crystal methamphetamine in China. Seizure information indicates that methamphetamine laboratories are located in provinces along the eastern and southeastern coastal areas. China is a major manufacturer of ephedrine and pseudoephedrine and is one of the world’s primary exporters of both chemicals.

Opium

Illicit cultivation of the opium poppy is negligible. The illicitly cultivated opium is grown in several provinces, including Yunnan, Ningxia, Inner Mongolia, and the remote regions of the northwest frontier. Opium, produced in these areas, is not converted into heroin but is consumed locally by ethnic minority groups. Chinese officials report that in the last several years no heroin laboratories have been seized in China.

Licit cultivation of the opium poppy occurs on farms controlled by the Ministry of Agriculture and the National Drug Administration Bureau of the State Council. According to United Nations (UN) International Narcotics Control Board data, China produces approximately 14 metric tons of licit opium per year for use in the domestic pharmaceutical industry. According to Chinese authorities, none of this opium is exported.

TRAFFICKING

Trafficking Groups

Many of the individuals involved in the international trafficking of Southeast Asian heroin are ethnic Kokang, Yunnanese, Fujianese, or members of other ethnic Chinese minority groups that reside outside of China. Members of these groups reside in locations such as Burma, Cambodia, Canada, Hong Kong, Taiwan, Thailand, and the United States, where they are actively involved in drug trafficking.

Drug intelligence reporting on the activities of drug trafficking organizations in China is sparse. What reporting exists indicates that drug traffickers in China are increasingly using women, children, and poor, uneducated farmers to body-carry drugs from Burma and elsewhere to Guandong Province and several other Chinese provinces.

Methamphetamine

Chinese authorities seized over 20 tons of crystal methamphetamine (ice) in 2000. Due to the easy availability of precursor chemicals, drug traffickers have been producing large amounts of crystal methamphetamine. Although some crystal methamphetamine is consumed locally, much of the crystal methamphetamine produced in China is exported to drug markets throughout Southeast Asia. Several ports in southern China serve as transit points for crystal methamphetamine transported by containerized cargo to international drug markets.

In December 2000, Chinese customs officers at the Baiyun International Airport in Guangzhou seized 20 bottles (40 kilograms) of a liquid form of crystal methamphetamine (64.9 percent purity) from the luggage of a foreign visitor departing China.

Heroin

China shares a 2000-kilometer border with Burma, as well as smaller but significant borders with Laos and Vietnam. Chinese officials state that the majority of heroin entering China comes over the border from Burma. This heroin then transits southern China through either Yunnan or Guangxi Provinces to either Guangdong or Fujian Provinces to Chinese southeastern coastal areas, and then on to international markets. Heroin is transported by various overland methods to ports in China’s southeastern Provinces of Guangdong and Fujian. Increasing quantities of heroin are transported to Guangdong Province and to the cities of Xiamen and Fuzhou in Fujian Province for shipment to international drug markets. Traffickers are taking advantage of expanding port facilities in such northeast cities as Qingdao, Shanghai, and Tianjin to ship heroin along maritime routes.

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Precursor Chemicals

China is of paramount importance in global cooperative efforts to prevent the diversion of precursor chemicals. In fact, with its large chemical industry, China remains a source country for legitimately produced chemicals that are diverted for illicit drug production of heroin, cocaine, as well as all amphetamine-type stimulants. To combat this diversion, the Government of China implemented several regulations on controlled precursor chemicals from 1992-1998, including the adoption of the 1988 UN Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances in 1993. Additionally, the Government of China further improved regulations to strengthen control of ephedrine, during 1999 and 2000, due to the country’s status as a leading exporter of bulk ephedrine. China fully participates in Operation Topaz and Operation Purple, which are international monitoring initiatives targeting acetic anhydride and potassium permanganate, respectively. Acetic anhydride is used to synthesize morphine base into heroin and potassium permanganate is used as an oxidizer in cocaine production, and both chemicals have been targeted because they are most often preferred and most widely used by drug manufacturers. Additionally, Chinese authorities further control the export ephedrine/pseudoephedrine through the voluntary use of the Letter of Non-Objection (LONO) system. China will not allow exports of ephedrine or pseudoephedrine without a positive affirmation by the authorities in the importing country as to the bona fides of the consignee. For those countries, which do not issue import permits, a letter of non-objection must be issued to the Chinese authorities.

China has been a source country for much of the ephedrine/pseudoephedrine imported into Mexico that is subsequently used to manufacture methamphetamine destined for the United States. Also, reports indicate that acetic anhydride is diverted from China to morphine/heroin refineries found in the Golden Triangle. Domestically, Chinese officials have expressed concern over the increasing number of synthetic drug production operations in the country. Seizures of precursor chemicals in China increased from 72 metric tons in 1992 to 344 metric tons in 1998, but decreased to 215 metric tons in 2000.

DRUG-RELATED MONEY LAUNDERING

Under Chinese law, laundering the proceeds from drug trafficking is a crime, but legal and financial systems have not kept pace with China’s rapid internationalization. There are laws that allow the convertibility of currencies; however, the enforcement of these laws has been hard to track because of the explosion in money movement between China and the rest of the world. This type of weakness makes China vulnerable to exploitation by money launderers.

DRUG ABUSE AND TREATMENT

Drugs of Choice

The major drugs of choice in China are injectable heroin, smokeable opium, and 3, 4-methylenedioxymethamphetamine (MDMA) or Ecstasy. Preferences between opium and heroin and methods of administration differ from region to region within China. The use of heroin and opium has increased among the young as income has grown and leisure time has expanded. The use of MDMA has only recently become popular in China’s growing urban areas.

Addict Population

There are 860,000 registered drug addicts in China, but the government realizes that the actual number of users is far higher. Some unofficial estimates range as high as 12 million drug addicts. Of the registered drug addicts, 83.7 percent are male and 73.9 percent are under the age of 35. Intravenous heroin users in China account for 70.9 percent of the confirmed HIV/AIDS cases. Chinese officials are increasingly concerned about the abuse of methamphetamine and other amphetamine-type stimulants.

Treatment and Demand Reduction Programs

Both voluntary and compulsory drug treatment programs are provided in China, although the compulsory treatment is more common. Most addicts who attend these centers do so involuntarily upon orders from the government. Voluntary treatment is provided at centers operated by the Public Health Bureaus, but these programs are more expensive and many people cannot afford to attend. Addicts, who return to drug use after having received treatment and who cannot be cured by other means, may be sentenced to rehabilitation at any one of the special centers for reeducation through labor.

Demand reduction efforts are targeted on individuals between the ages of 17 and 35, since this is the largest segment of drug users. These demand reduction efforts include, but are not limited to, media campaigns and establishment of drug-free communities.

DRUG LAW ENFORCEMENT AGENCIES AND LEGISLATION

At the national level, the agencies specifically responsible for the control of licit and illicit drugs are the Ministry of Public Health, the Ministry of Public Security, and the Customs General Administration. The Criminal Investigation Department of the Ministry of Public Security handles all criminal investigations involving opium, heroin, and methamphetamine. The State Drug Administration Bureau of the Ministry of Public Health oversees implementation of the laws that regulate the pharmaceutical industry. In the Customs General Administration, the Smuggling Prevention Department plays the major role in intercepting illegal drug shipments.

TREATIES AND CONVENTIONS

China is a party to the 1988 UN Drug Convention, the 1961 UN Single Convention as amended by the 1972 Protocol, and the 1971 UN Convention on Psychotropic Substances. China is a member of INTERPOL, and has been a member of the UN International Control Board for Narcotic Drugs (INCB) since 1984.

In 1996, China signed mutual legal assistance treaties that gave specific attention to drug trafficking with Russia, Mexico, and Pakistan. China has over 30 mutual legal assistance treaties with 24 nations covering both civil and criminal matters. In addition, China signed a drug control cooperation agreement with India. In June 2000, China and the United States signed a Mutual Legal Assistance Agreement.

China and Burma are continuing to confer on counterdrug issues, such as drug trafficking by the United Wa State Army along the China-Burma border. China is assisting Burmese authorities in implementing alternative crop programs. China is also building on Memoranda of Understanding that are currently in place with Burma, Cambodia, Laos, Thailand, Vietnam, and the UN Drug Control Program.

DRUG SEIZURES (IN METRIC TONS)

KEY JUDGMENTS

• China will continue to be a major source country for precursor chemicals, such as ephedrine, pseudoephedrine, and acetic anhydride.
  
  
• The southern areas of China (from Yunnan Province to the port cities on China’s eastern shore) will continue as major transit routes for Southeast Asian heroin. Traffickers will continue using expanded port facilities as well as land routes.
  
  
• China will continue to be a major producer of crystal methamphetamine and a supplier to international drug markets.

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