Source: 2002
Released by the Bureau for International Narcotics and Law Enforcement Affairs
The People's Republic of China (PRC) remains a major drug-transit country, but it continued to take strong measures to stem the production, abuse, and trafficking of narcotics in 2002. PRC authorities clearly understand the threat posed by drug trafficking in the PRC and in the region, and they continued to take steps to integrate the PRC into regional and global counternarcotics efforts in 2002. The amount of illicit narcotics seized by PRC authorities rose in 2002. Preliminary figures suggested that heroin seizures would not be as large as they were in 2001, although they would still be significant, while seizures of amphetamine-type stimulants (ATS) appeared to have risen over those registered in 2001.
Throughout 2002, PRC authorities continued to provide U.S. counternarcotics officials with samples of drugs seized, including drugs en route to the United States. The United States and the PRC made requests for assistance in criminal matters under the U.S.-PRC Mutual Legal Assistance Agreement (MLAA), which entered into force March 8, 2001. The PRC is a party to the 1988 UN Drug Convention.
The PRC is situated adjacent to both the "Golden Triangle" and the "Golden Crescent." The PRC seizes more Southeast Asian heroin than any other single country in the world. Drug abuse in general continues to rise in the PRC. As it has reported in previous years, the PRC government reported that there were over 900,000 registered drug addicts in 2002, an increase of over 200,000 in three years. Officials privately admit that the actual number of users is likely far higher.
The PRC is a major producer of precursor chemicals, including acetic anhydride, potassium permanganate, piperonylmethylketone (PMK), and ephedra. The PRC monitors all 22 of the precursor chemicals listed in Table I and Table II of the 1988 UN Drug Convention (the "watch list"), but there is clear evidence that diversions continue to occur. The PRC continues to be a strong partner with the United States and other concerned countries in implementing a system of pre-export notification of dual-use precursor chemicals.
Policy Initiatives. In June 2000, the government issued a "White Paper" on drugs, which laid out a comprehensive strategy for fighting narcotics use and trafficking. This strategy, which covered all of the major goals and objectives of the 1988 UN Drug Convention, puts emphasis on education, rehabilitation, eradication, precursor chemical control, and interdiction. In 2002, PRC counternarcotics authorities continued to follow this strategy.
Accomplishments. The PRC cooperates actively with countries in the region in the fight against drug trafficking. In partnership with the UN Office of Drugs and Crime (UNODC) (formerly the UN Drug Control Program, UNDCP) and five Southeast Asian nations (Cambodia, Laos, Burma, Thailand, and Vietnam), the PRC is a participant in a Memorandum of Understanding (MOU) committing the six member-countries to cooperate regionally to combat illicit narcotics production, trafficking, and use. The PRC continues to support crop-substitution initiatives for farmers in Burma and Laos, as well as demand reduction efforts in areas bordering Yunnan province. The PRC participates in the UNODC-sponsored action plan "ASEAN and China Cooperative Operations in Response to Dangerous Drugs (ACCORD)." The ACCORD program targets all aspects of the drug problem, including demand reduction, alternative development/supply reduction, and law enforcement/control measures-oriented projects, with the goal of making the region drug-free by 2015. Separately, the PRC participates in the "Six plus Two" Drug Control Mechanism program, with Iran, Pakistan, Tajikistan, Turkmenistan, Uzbekistan, Russia, and the U.S. The PRC continues to cooperate with the Drug Enforcement Administration's (DEA) chemical control initiatives, "Operation Purple" and "Operation Topaz" and strictly regulates the import and export of precursor chemicals.
Law Enforcement Efforts. Preliminary figures suggest that seizures of heroin by PRC law enforcement personnel in 2002 were up in virtually all areas of the country compared to the previous year, but overall seizures still declined in comparison to record seizures registered in 2001. The PRC accounts for more heroin seizures than all other East Asian countries combined. While heroin seizures were not as high as the 13,200 kilograms in 2001, the 6,400 kilograms seized during the first nine months of 2002 are still significant for the PRC. ATS seized in 2002 will likely also exceed the quantity seized in 2001.
In 2002, PRC authorities increased their level of cooperation with the U.S. in sharing drug-related strategic intelligence in several key investigations. Ministry of Public Security (MPS) officials routinely facilitated trips for U.S. law enforcement personnel based at the U.S. Embassy in Beijing. On several occasions, MPS provided vital intelligence information on suspected drug traffickers that resulted in the identification of several major suppliers to the U.S. drug market.
For details on the PRC's anti-money laundering initiatives in 2002, please see the Money Laundering section of this report.
Precursor Chemical Control. The PRC is a major producer of precursor chemicals. The PRC monitors all 22 of the chemicals on the 1988 UN Convention watch list. Several provinces, including Yunnan (which shares a border with Burma), have even more stringent controls than the Convention requires. In June 1999 and May 2000, the government issued regulations further tightening controls on transportation licenses for ephedrine. One result of this was to drive up the price and create a black market in the PRC for ephedrine. The PRC cooperates closely with the United States on chemical control issues. The two sides have in place a strong pre-export notification program for ephedrine, pseudoephedrine, and PMK 3,4. The PRC is a participant in "Operation Purple," a worldwide initiative to stem the diversion of potassium permanganate to cocaine syndicates, and in "Operation Icebreaker," a cooperative effort to combat the diversion of precursor chemicals for the production of crystal methamphetamine.
Corruption. PRC officials admit that corruption is one of the most serious problems the country faces. Continuing anticorruption campaigns have led to the arrest of hundreds of mostly low-level officials. Most official graft in the PRC involves misappropriation of funds, abuse of power, and embezzlement. Cases of narcotics-related corruption in the PRC are seldom reported in the press, and there is no indication that this problem is pervasive. The fact that large quantities of narcotics regularly transit the PRC suggests, however, that corruption in the PRC plays an important role in narcotics trafficking. As a matter of government policy or practice, the PRC does not encourage or facilitate the laundering of proceeds from official drug transactions, nor do any senior officials of the PRC engage in laundering the proceeds from illegal drug transactions.
Demand Reduction. Education and rehabilitation are important components of the PRC's counternarcotics strategy. According to official statistics, there were over 900,000 "registered" addicts in 2002, a figure PRC officials have cited for several years. The actual number of drug addicts is likely significantly higher. Individuals identified as addicts are subject to compulsory rehabilitation. The PRC continues to provide counternarcotics education to all school children, and has also taken steps to warn citizens about the link between intravenous drug use and HIV/AIDS. The PRC has continued to implement "drug free community" programs, in order to mobilize entire communities to work together to combat narcotics trafficking and encourage addicts not to relapse.
Agreements and Treaties. The PRC has signed more than 30 mutual legal assistance treaties with 24 countries. On March 8, 2001, a mutual legal assistance agreement between the PRC and the United States entered into force. It constitutes a powerful tool for obtaining evidence important to the U.S. investigation and prosecution of transnational criminals, including narcotics traffickers. In 1999, the PRC and the United States signed a bilateral customs mutual assistance agreement, but the PRC has not taken the steps needed to bring it into force. This agreement, if brought into force, would facilitate cooperation by customs officials and enhance the flow of narcotics intelligence. A May 1997 U.S.-PRC MOU on Law Enforcement Cooperation allowed the two sides to provide assistance on narcotics investigations and prosecutions on a case-by-case basis.
Illicit Cultivation/Production. The PRC's effective eradication program has largely eliminated commercial cultivation of drug-related crops. (Such cultivation was never significant.). The government continues to target small-scale cultivation in remote areas of the country's northwest. Ephedra, a plant from which the precursor for methamphetamine is made, grows wild in northern parts of the PRC. The government tightly controls exports of this key precursor.
Faced with a growing threat from methamphetamine and synthetic drugs such as ecstasy, the government continues to make closing down illicit drug laboratories a top priority. These efforts halted many illicit operations, but new ones continue to spring up, especially in the PRC's more remote locations.
Drug Flow/Transit. The PRC shares a 2000-kilometer border with Burma. The majority of heroin produced in Burma travels through the PRC en route to the international market. Reflecting the PRC's importance as a transshipment route, most seizures of Burmese heroin now take place inside the PRC's borders. Smaller quantities of heroin enter the PRC from Laos, Vietnam, and Southwest Asia, including an increasing flow from the neighboring "Golden Crescent" countries.
Bilateral counternarcotics cooperation at both the working and policy levels improved further in 2002. The June 2000 visit to the PRC by then ONDCP Director McCaffrey was followed up by an August 2001 visit by ONDCP's former Director of Intelligence, who reinforced the USG's commitment to work with the PRC to combat illicit narcotics trafficking. These visits culminated in the first Sino-U.S. intelligence sharing meeting held in October 2002 in Beijing. The two sides have agreed to hold future intelligence-sharing meetings on a regular basis. At the working level, PRC and U.S. officials continued to cooperate closely in conducting trans-national investigations, exchanging information on existing and emerging threats, and developing Chinese law enforcement capabilities.
DEA Beijing and MPS counternarcotics officers worked cooperatively to share strategic information in 2002. They shared a greater number and variety of drug samples than in 2001. In 2002, PRC police attended counternarcotics and general law enforcement training courses at the joint U.S.-Thai International Law Enforcement Academy (ILEA) in Bangkok. This important regional forum brought together police and other law-enforcement officials from throughout the region to improve technical capabilities and establish ties among regional counternarcotics and law-enforcement bodies. MPS counternarcotics officers regularly attended ILEA training courses, such as the Narcotics Unit Commanders Course and the Transport Interdiction Course, and they attended a training course organized by DEA for forensics officials.
The Road Ahead. Despite many significant advances, there is still room for improvement in U.S.-PRC cooperation on narcotics control. For example, the PRC authorities have thus far been unwilling to sign a Letter of Agreement (LOA) that the State Department's Bureau for International Narcotics and Law Enforcement Affairs (INL) requires as a matter of policy in order to provide in country counternarcotics and law-enforcement training and technical assistance programs in the PRC. Arriving at an early agreement on an LOA remains a key goal. Also, while considerable progress has been made in the sharing of drug samples, the United States continues to encourage the PRC to increase the number of seized narcotics samples that it is willing to share.
The United States will continue to monitor both the transshipment of Burmese heroin through the PRC and the threat posed by the explosive growth of methamphetamine trafficking in and from the PRC. PRC counternarcotics officials have consistently expressed the desire to expand and deepen cooperation with DEA, especially in the PRC's drug-plagued Yunnan, Guangzhou, and Fujian Provinces. DEA is presently preparing to meet this challenge by seeking PRC approval to bring additional personnel to the PRC to handle its increased workload.
China has a large chemical industry. It is a major producer of acetic anhydride, potassium permanganate, ephedrine, and pseudoephedrine, all chemicals on list 1 of the 1988 UN Drug Convention. The country is a party to the 1988 UN Drug Convention and has regulations for record keeping and import/export controls on the 23 chemicals included in the Convention. Several provinces, including Yunnan (which shares a border with Burma), have more stringent controls than called for in the Convention.
The Chinese Public Security Bureau maintains a small chemical control unit in Beijing to investigate chemical diversion and to verify the legitimacy of chemical handlers and transactions. In the provinces, provincial police only address controlled chemicals when they are discovered at a clandestine laboratory. China also requests letters of no objection
from importing countries prior to authorizing exports of methamphetamine precursor chemicals. China participates in Operations Purple and Topaz and Project Prism.
Despite adequate legislation, China is a significant source country for chemicals diverted worldwide for the illicit production of cocaine, heroin, methamphetamine, and ecstasy. The country lacks the infrastructure to monitor adequately its large chemical production capacity and its international trade in chemicals.
U.S. and Chinese cooperation in chemical control is good, within the limits of Chinese capabilities. Information is exchanged through mechanisms such as Operations Purple and Topaz and in the course of normal counternarcotics cooperation.