China is funding the U.S. fentanyl crisis, House panel says in new report

The Chinese Communist Party uses tax rebates to subsidize the manufacturing and export of fentanyl materials, a House panel said in a report released Tuesday.

The House Select Committee on China pointed to findings indicating that China plays a key role in the flow of fentanyl into the U.S., and lawmakers made several recommendations to curb the crisis.

“Through subsidies, grants, and other incentives, the PRC harms Americans while enriching PRC companies,” the report says, referring to the People’s Republic of China.

The report was released just ahead of a scheduled hearing Tuesday at which Chairman Mike Gallagher, R-Wis., and ranking member Raja Krishnamoorthi, D-Ill., are expected to detail what they argue is China's complicity in fueling the fentanyl crisis in the U.S.

The committee said in its report it has "found no evidence of new criminal enforcement actions" to curb the flow of fentanyl chemicals into the U.S.

"This failure — when combined with new evidence establishing the PRC incentivizing the export of illegal drugs abroad and ownership stake in companies doing the same — casts doubt on the veracity of the PRC’s claims that it will act to stem the massive export of illicit fentanyl materials and other dangerous synthetic narcotics, and reinforces the need for global cooperation and communication between law enforcement agencies," the report says.

The panel had launched an investigation into China’s role in the fentanyl crisis, which included, according to its report, examining public Chinese websites, analyzing government documents and identifying narcotics sales online.

Tuesday's report makes recommendations to curb the flow of fentanyl components made in China into the U.S.

One suggestion in the report is to establish a joint task force to counter opioids that would focus on targeting the weaknesses in the global illicit fentanyl supply chain.

The report also advises bolstering sanctions authorities and mobilizing trade and customs enforcement measures to restrict fentanyl trafficking, as well as closing regulatory and enforcement gaps.

U.S. officials have identified China as the main source of the key ingredients drug cartels in Mexico use to synthesize fentanyl, while China has suggested the U.S. has fallen short in its efforts to suppress domestic demand for opioids.

The U.S. and China held high-level talks this year about the fentanyl crisis in an effort to resume counternarcotics cooperation after President Joe Biden and Chinese President Xi Jinping met in California in November. China had suspended counternarcotics cooperation following a 2022 trip by then-House Speaker Nancy Pelosi to Taiwan, which China claims as its territory despite the current Taiwanese government’s rejecting the sovereignty claim.