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Report: China continues to subsidize deadly fentanyl exports

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Report: China continues to subsidize deadly fentanyl exports

President Biden greets China’s President President Xi Jinping Nov. 15, 2023, in California. China has agreed to curtail shipments of the chemicals used to make fentanyl, the drug at the heart of the U.S. overdose epidemic.

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President Biden greets China’s President President Xi Jinping Nov. 15, 2023, in California. China has agreed to curtail shipments of the chemicals used to make fentanyl, the drug at the heart of the U.S. overdose epidemic.

Doug Mills/AP

Investigators for a U.S. House committee released a report on Tuesday detailing what they describe as new evidence the Chinese government is continuing to “directly” subsidize “the manufacturing and export of illicit fentanyl.”

According to the report, Chinese officials encourage production of precursor chemicals by giving “monetary grants and awards to companies openly trafficking illicit fentanyl materials.”

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Specifically, researchers found companies making fentanyl precursors and analogues could apply for state tax rebates and other financial benefits after exporting the product.

Street fentanyl has driven a devastating surge in fatal overdoses, killing tens of thousands of people in the U.S every year.

The Biden administration and drug policy experts say China is the primary source of precursor chemicals used by Mexican drug gangs to manufacture the powerful street opioid.

Last November, U.S. officials said their counterparts in China promised to crack down on the illicit fentanyl industry.

“We’re taking action to significantly reduce the flow of precursor chemicals and pill presses from China to the Western hemisphere,” President Joe Biden said, following a summit with Chinese President Xi Jinping in California.

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“It’s going to save lives and I appreciate President Xi’s commitment on this issue.”

But five months after that announcement, a report produced by a bipartisan team with the U.S. House Select Committee on the Chinese Communist Party, found the tax rebates and other incentives appear to still be in place.

China’s role in fentanyl production previously documented

Many of the findings were known previously among drug policy experts. They appear to confirm reports that the Chinese government bureaucracy is aiding the production and export of fentanyl-related substances.

In a 2019 book, Fentanyl, Inc., journalist Ben Westhoff wrote about “a series of tax breaks, subsidies and other grants” that benefit Chinese companies who produce fentanyl analogues.

An NPR investigation in 2020 found a web of Chinese companies whose employees were openly marketing fentanyl precursors and selling them to clients in Mexico and the United States.

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However, despite U.S. diplomatic efforts to stem the production of precursors, China has done very little to enforce international and domestic laws banning fentanyl production.

According to the House report released Tuesday, Chinese officials appear to have taken steps to conceal financial incentives linked to fentanyl, but failed to end them.

One of the investigators told reporters it was clear companies were contributing directly to the overdose crisis by leveraging benefits available through China’s complex bureaucracy.

“The fact that these [precursor chemicals] are subsidized solely for export is what allows them to go through so cheaply,” said the staffer, who spoke on background in order to outline details of the report ahead of a committee hearing today.

Investigators say they found evidence that many of the subsidized companies are marketing their products directly to illicit buyers in Mexico, using crypto-currencies to help conceal transactions.

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“Rather than investigating drug traffickers, [Chinese] security services have not cooperated with U.S. law enforcement, and have even notified targets of U.S. investigations when they received requests for assistance,” said the report.

NPR requested comment from the White House late Monday, but received no reply before press time.

The House report points to a number of possible motives for the Chinese government allegedly aiding the production of illicit fentanyl.

“The fentanyl crisis has helped [Chinese Communist Party-linked] organized criminal groups become the world’s premier money launderers, enriched the [Chinese] chemical industry, and has had a devastating impact on Americans,” investigators concluded.

Tuesday’s committee hearing will include testimony about China’s role in illicit fentanyl trafficking from former U.S. Attorney General William Barr, Ray Donovan, a former Drug Enforcement Administration Official, and David Luckey, a drug policy expert with the RAND Corporation.

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With more than 110,000 drug overdose deaths every year in the U.S., fentanyl has become a major flashpoint in the 2024 presidential campaign. Staff-members involved in producing this latest report described the investigation as a bi-partisan effort.

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Sticky German inflation curbs investors’ ECB rate cut expectations

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Sticky German inflation curbs investors’ ECB rate cut expectations

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German inflation rose slightly more than forecast in April on the back of strong food and energy prices in Europe’s largest economy, curbing investors’ hopes of a string of interest rate cuts this year.

Consumer prices in Germany increased 2.4 per cent in the year to April, rising from 2.3 per cent a month earlier, according to EU harmonised data released by the federal statistical agency Destatis on Monday. Economists polled by Reuters had expected a flat reading.

However, excluding underlying energy and food prices, Destatis reported core inflation had fallen from 3.3 per cent to 3 per cent.

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With Spain reporting a similar uptick in headline inflation coupled with a cooling of core price growth, the German figures chipped away at investors’ confidence about the extent of European Central Bank rate cuts this year.

The uptick in German inflation was “a good reminder of how difficult the last mile of bringing inflation sustainably back to 2 per cent will be for the ECB”, said Carsten Brzeski, an economist at ING.

Government bond yields, which move inversely to their prices, rose slightly on the news as investors trimmed their bets that the ECB will start cutting rates in just over a month. Despite the rise, Germany’s benchmark 10-year bond yield was still down almost 5 basis points at 2.53 per cent.

Senior ECB policymakers have said they are likely to cut rates for the first time in five years at their next policy meeting on June 6 as long as wages and price pressures keep cooling in line with their forecasts for inflation to drop to the bank’s 2 per cent target by next year.

A June rate cut by the ECB “still looks like a done deal”, Brzeski said.

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Eurozone inflation is expected to remain flat at 2.4 per cent, while core inflation in the bloc is expected to fall from 2.9 per cent to 2.7 per cent when that data is released on Tuesday.

Any overshoot could cause traders to doubt whether the ECB will start cutting rates in June, especially after hotter than forecast US inflation prompted them to reduce bets on the scale of Federal Reserve easing this year.

Recent business and consumer surveys show the eurozone economy is tentatively emerging from its recent stagnation and data on Tuesday is expected to show gross domestic product in the region expanded at a quarterly rate of 0.2 per cent in the three months to March.

But despite economic activity improving, most economists expect the fact that Easter was in March rather than April this year to lower airfare and package holiday prices in the past month, bringing down eurozone services inflation for the first time in six months.

The earlier Easter seemed to contribute to lower German services inflation, which fell back to 3.4 per cent, having accelerated to 3.7 per cent in March.

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Ralph Solveen, an economist at Commerzbank, predicted that German inflation would rise later this year “as companies in the service sectors in particular will pass on the massive rise in wage costs to their customers”.

Destatis said energy prices fell 1.2 per cent in April — a much smaller annual decline than the drop of 2.7 per cent recorded in March — while food prices rose 0.5 per cent after falling the previous month.

Spain’s statistics office said rising gas and food prices — after the removal of government subsidies — helped to push up its inflation rate to 3.4 per cent in April, compared with 3.3 per cent a month earlier. But core inflation, excluding energy and fresh food, slowed from 3.3 per cent to 2.9 per cent.

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As student protesters get arrested, they risk being banned from campus too

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As student protesters get arrested, they risk being banned from campus too

A man holds up a Palestinian flag as activists and students surround piled barricades at an encampment at at George Washington University early Monday.

Kent Nishimura/Getty Images


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A man holds up a Palestinian flag as activists and students surround piled barricades at an encampment at at George Washington University early Monday.

Kent Nishimura/Getty Images

Pro-Palestinian demonstrators continue to turn out at schools across the country despite the risk of detention and suspension, with nearly 300 more protesters were arrested over the weekend.

On Sunday, pro-Palestinian protesters and pro-Israeli protesters clashed at the University of California, Los Angeles, leading to what university leaders described as “physical altercations” and prompting them to increase security measures on campus.

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Twelve protesters — including nine students — were arrested at the University of Mary Washington after refusing to vacate an encampment on its Fredericksburg, Va., campus. University President Troy Paino said in a statement that health and safety concerns had emerged on Saturday after protestors invited the off-campus public to join the encampment.

Elsewhere in the state, an unknown number of protesters were arrested at Virginia Tech University in the early hours of Monday morning, according to the Washington Post. NPR has reached out to the university for more information.

The school warned of “heavy police activity around the Graduate Life Center” in a series of posts on X (formerly Twitter) starting just after 10 p.m. ET, and announced around 3:30 a.m. that the incident “had stabilized.” Social media footage shows protesters chanting at police as they lead people into multiple white vans.

Protests at George Washington University in D.C. are stretching into their fifth day on Monday — the last day of class for the semester — after a tense weekend, culminating in a clash between protesters and police.

Students first set up an encampment on University Yard on Thursday and later launched a second one on nearby H Street after the school put up barricades to restrict access.

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Shortly before midnight on Sunday, protesters knocked down the barricades — piling them in a stack in the middle of the lawn — and flooded the lawn, with people remaining there overnight in some 85 tents, the GW Hatchet reports.

GW officials said in a statement early Monday that a group of “approximately 200 protesters from across [D.C., Maryland and Virginia], including professional organizers, activists, and university students, have joined the unauthorized encampment on our campus.”

“This is an egregious violation of community trust and goes far beyond the boundaries of free expression and the right to protest,” they added. “The university will use every avenue available to ensure those involved are held accountable for their actions.”

Schools are alternately threatening and disavowing disciplinary action

Students arrested at Emerson College last week won’t face disciplinary action from the school, its president announced.

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Students arrested at Emerson College last week won’t face disciplinary action from the school, its president announced.

Joseph Prezioso /AFP via Getty Images

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One question on the minds of many is what, if any, disciplinary action student protesters might face from their schools, especially with finals and graduation fast approaching.

Some universities have suspended — or threatened to suspend — students who have been arrested for protesting, while others have said they will not.

Students have been suspended for protesting at George Washington University, Princeton University, Washington University in St. Louis, Pomona College and Vanderbilt University, according to reports.

Barnard College officials announced Friday that it will allow most of the 53 students who were arrested and suspended after protesting at Columbia University to return to campus. The New York Times reports that suspended students who reached agreements with the college have their access to residence halls, dining facilities and classrooms restored, while others are still working to reach agreements.

On Sunday, Jay Bernhardt, the president of Emerson College in Boston — where more than 100 protesters were arrested at an encampment early Thursday morning — said the college will not bring disciplinary charges against protesters, and will “encourage the district attorney not to pursue charges related to encampment violations.”

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He said it is also taking steps to support students who were arrested, including posting bail for them and providing housing support to those who are required to stay local for court appearances after the closing of their dorms.

“The College has done its best to keep all community members safe every day during these challenging times, but we recognize that we must do more,” he added.

In Texas, the Travis County district attorney has dropped misdemeanor trespassing charges against all 57 people arrested during a protest at UT-Austin last week, after a judge found insufficient evidence to proceed.

Elsewhere, some schools are threatening disciplinary action for students who don’t comply with directives to leave encampments that they say violate their policies.

Officials at the University of Florida, where students began protesting on Wednesday, said Friday that demonstrators could face suspension and a three-year ban from campus if they violate specific protest rules, reports member station WUFT.

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They are prohibited from using bullhorns or speakers to amplify their voices, possessing weapons and protesting inside campus buildings — but also face more vague prohibitions like “no disruption,” according to a list circulated late Thursday.

“They also included ‘no sleeping’ on a campus where students often doze in the sun between classes,” per WUFT.

At Cal Poly Humboldt, officials closed campus to the public on Saturday, several days after student protesters first occupied two academic and administrative buildings. They had previously given protesters until 5 p.m. on Friday to leave with a guarantee of no immediate arrest — but said they would still face consequences.

“This does not, however, eliminate University conduct-related sanctions or legal implications,” officials said in a release. “In addition, voluntarily departing in this way will be considered as a mitigating factor in University conduct processes and may reduce the severity of sanctions imposed.”

The campus will remain closed until May 10, with work and classes remote through the end of the semester. Officials say they are planning for “various scenarios” for commencement.

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At Massachusetts Institute of Technology, president Sally Kornbluth said in a Sunday message to students that their growing encampment violates policies around registering for campus demonstrations and creates a “potential magnet for disruptive outside protestors.”

She said rules have been broken, and those who break them — “including rules around the time, place and manner of protest” — will face disciplinary action.

“We are open to further discussion about the means of ending the encampment,” she added. “But this particular form of expression needs to end soon.”

Some faculty are calling for amnesty

Students and faculty at some universities are calling on their administrations not to discipline protesters. Arrested protesters face uncertainty about not only their legal records but the status of campus housing, financial aid and graduation eligibility.

At the University of Pennsylvania, officials say a campus statue was vandalized with antisemitic graffiti and are calling on demonstrators — from Penn and other area schools — to disband.

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A group of Penn faculty and Philadelphia-area elected officials signed a letter last week urging university leaders to “respect students’ rights to engage in nonviolent protest” by refraining from calling in law enforcement to make arrests and from filing disciplinary and criminal charges against peaceful protesters at the encampment.

“Protesters nationwide face police violence and severe discipline, and the safety and wellbeing of Philadelphia students exercising their rights are among our foremost concerns,” they wrote.

Nearly 300 faculty members at Yale University, where 48 protesters were arrested last week, signed a letter condemning what they called “the criminalization of Yale students engaged in recent acts of peaceful protest.” They demanded that the university take no further disciplinary action and called on authorities to drop all charges against them.

They said the protesters arrested face Class A misdemeanors under Connecticut law, which carry possible penalties of up to 364 days in jail.

“Threatening students with sanctions of this kind is unconscionable and should not be the means by which Yale responds to peaceful protest,” they added.

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In a further sign of discontent, faculty members at universities in California, Georgia and Texas have either initiated or passed largely symbolic votes of no confidence in their leadership, according to the Associated Press.

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Humza Yousaf considers quitting as Scotland’s first minister ahead of no-confidence votes

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Humza Yousaf considers quitting as Scotland’s first minister ahead of no-confidence votes

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Scotland’s beleaguered first minister Humza Yousaf is considering quitting ahead of crunch votes of no confidence expected this week.

Yousaf, who faces two attempts to bring down his premiership and government, is set to decide whether to resign on Monday, according to one person briefed on the matter.

Over the weekend, the Scottish National party leader’s team has been considering options to win enough support to be able to carry on as a minority government.

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Senior SNP figures have been holding talks with the Scottish Greens, Yousaf’s erstwhile coalition partners whom he booted out of government last week, triggering the current political crisis.

On Monday morning Greens co-leader Patrick Harvie told the BBC Radio 4 Today programme: “I don’t think there is anything that Humza Yousaf will be able to say that can restore the trust that he has broken.”

The SNP has 63 Holyrood seats, versus 65 for opposition parties. Yousaf would need to persuade one opposition MSP to vote for him and his government in no confidence motions to secure his position.

Yousaf has also been considering seeking support from Ash Regan, the sole MSP from rival nationalist party Alba, led by former first minister Alex Salmond. But the SNP has ruled out the notion of a formal pact with Alba.

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