US committee finds China is subsidizing American fentanyl crisis

China is directly subsidizing production of illicit fentanyl precursors for sale abroad and fueling the U.S. opioid crisis, a U.S. congressional committee said on Tuesday, releasing findings from an investigation it said unveiled Beijing's incentives for the deadly chemicals.

China continues to provide subsidies in the form of value-added tax rebates to its companies that manufacture fentanyl analogues, precursors and other synthetic narcotics, so long as they sell them outside of China, the House of Representatives' select committee on China said in a report.

"The PRC (People's Republic of China) scheduled all fentanyl analogues as controlled substances in 2019, meaning that it currently subsidizes the export of drugs that are illegal under both U.S. and PRC law," the report said, adding that some of the substances "have no known legal use worldwide."

The report cited data from the Chinese government's State Taxation Administration website, which listed certain chemicals for rebates up to 13%. It additionally currently subsidizes two fentanyl precursors used by drug cartels - NPP and ANPP, it said.