China and US to agree crackdown on fentanyl trade

China has agreed to crack down on companies exporting chemicals used to make fentanyl, a deadly synthetic opioid, in a deal that will be sealed when Joe Biden and Xi Jinping meet this week, according to people familiar with the negotiations.

The deal is expected to be among several to emerge from the summit in San Francisco on Wednesday, Biden and Xi’s second meeting as leaders, as the two sides try to stabilise US-China relations that have sunk to their worst state in four decades.

It would mark a significant achievement for the Biden administration, which has sought to tackle the proliferation of fentanyl, a drug that is 50 times more potent than heroin and has been linked to hundreds of thousands of deaths in the US.

Biden and Xi are set to meet for four hours ahead of the Asia-Pacific Economic Cooperation forum. They are expected to discuss a range of issues including tensions over Taiwan, China’s coercive behaviour in the South China Sea and Beijing’s concerns about US export controls that are designed to slow its military modernisation.

The leaders are also expected to agree to reopen military communication channels that Beijing shut after then-US House Speaker Nancy Pelosi visited Taiwan in August 2022.

The Pentagon has pushed to reopen those channels amid mounting US concerns about risky behaviour by Chinese fighter jets coming close to surveillance aircraft flown by the US and its allies over the South China Sea.

The summit marks Xi’s first visit to the US since April 2017, when he met then-president Donald Trump in Florida.

US and Chinese officials are putting the final touches on the fentanyl agreement, which the US hopes will stem the flow of precursor chemicals to Mexico, where drug cartels manufacture the opioid.

Beijing previously cracked down on the manufacture and export of fentanyl, but Chinese companies responded by selling the precursor chemicals to Mexico.

The US Treasury last month imposed sanctions on 25 Chinese individuals and entities in an effort to disrupt what it alleged was a network involved in making and distributing fentanyl, methamphetamine and ingredients to make ecstasy.

The justice department also unsealed eight indictments against Chinese companies and executives allegedly linked to the drug trade.

Beijing had refused to limit the trade of precursor chemicals, which also have legitimate uses, because the US has refused to lift sanctions imposed under Trump on a Chinese police institute connected to a counter-narcotics laboratory.

The fentanyl agreement would be a victory for Biden, who has made tackling the opioid crisis a priority as he gears up for a presidential election next year in which he is likely to face Trump again.

News of the agreement on fentanyl precursor exports was first reported by Bloomberg. The White House and the Chinese embassy in Washington did not respond to requests for comment.