U.S. to Extradite Chinese Fentanyl Kingpin Who Smuggled Precursors

Welcome to China In Focus. I'm Tiffany Meyer. Our top story. The Chinese Communist Party announces its biggest priority for the next five years, plus the CCP is replacing its number two general. More on the power struggles inside the regime's top echelon. The one that I think stood out to most people is this idea of self-reliance on tech, but really no recipe that I can see on how to do that. A Chinese man operating a massive drug trafficking and money laundering network is arrested in Cuba and could soon be extradited to the U.S. U.S. authorities have been pursuing his case for years for fueling the fentanyl crisis. Maintaining energy supply while evading sanctions, China and India are trying to steer along a narrow path as both the United States and the European Union impose new sanctions on Russian oil. Before we dive into today's news, don't forget to subscribe to our newsletter using the link down below. It drops Friday morning straight to your inbox. Don't miss it. The Chinese Communist Party has announced its top goal for the next five years to become more self-reliant in technology. The regime also aims to boost advanced manufacturing and increase domestic consumption. This comes amid escalating trade tensions with the U.S., a slowing economy, and growing public frustration. Worth noting, the party is also getting a new number two general. The man overseeing China's armed forces and is directly under Chinese regime leader Xi Jinping. We'll expand on the details later. All these decisions came out of the top leader's closed door meeting called the fourth plenum. It came ahead of a trade talk between President Trump and CCP leader Xi Jinping later this month. Washington is weighing a big move restricting exports of products using American software such as laptops and jet engines to China. Treasury Secretary Scott Besson yesterday said it's in response to China's rare earth export controls. The Chinese announced on October 8th this wide ranging export controls on rare earth magnets, or excuse me, just on rare earths all over the world. This is China versus the globe. It's not just on the U.S. We are contemplating if we are not able to negotiate a pause or relief on this regime, how the U.S. and the allies would respond. The Trump administration has been restricting China's access to advanced U.S. technology. In March, U.S. officials barred dozens of Chinese firms from buying American technology. Switching gears to power struggles at Beijing's top echelon, the regime tapped Zhang Shenmin as China's number two general. His predecessor, He Weidong, and eight other high-ranking generals were ousted before the key meeting. He Weidong is Xi Jinping's close ally, and the purge sparked speculations that Xi's loyalists have been stripped of power by opposing factions. The new general Zhang isn't seen as part of Xi's faction. Zhang used to head China's military anti-corruption campaign. In addition, 14 members of the Central Committee were ousted during the meeting. The committee is the third decision-making tier in the CCP's power structure. Back to the five-year plan. Beijing also emphasized increasing domestic consumption. The turmoil in China's real estate market in recent years has wiped out significant portions of people's savings among Chinese households. Many people have limited their spending as a result. China's youth unemployment rate is also high, hovering at around 19 percent. And now that the fourth plenum has concluded, what's next for China? What key messages on policy and personnel came out of the meeting? We sat down with retired Brigadier General David Stilwell, former defense attache at the U.S. Embassy in Beijing, and former Assistant Secretary of State for the Bureau of East Asian and Pacific Affairs for insight. General Stilwell, thank you so much for joining us. Always great to have you back on the show. Back so soon. Well, there's a lot of eyes on the fourth plenum, which has now concluded. So far, all the reports are saying, the main message coming out is that the Chinese regime will focus on speeding up self-reliance in science and technology. Of course, that comes after President Trump's threats to cut off any and all critical components in that sector. What do you make of this? How will the Chinese regime do that? Well, reading the 5,000-word summary from the PRC side, it basically says we're going to fix everything. As you said, the one that I think stood out to most people is this idea of self-reliance on tech, but really no recipe that I could see on how to do that. How do you empower people in markets and all those innovative forces that made Western technology development so quick? Up to now, when you say innovate in China, in my opinion, it generally means go find the best source in the world and go steal it. I want to get to the personnel aspect, but on the economic front, because as you predicted, this one seemed to be focused a lot on the economic situation inside China. Of course, it's not been going well at all, but normally that's something focused on in the third plenum. So what was different about this year's plenum? You talk about raging storms and headwinds, of course, they're referring to not just the U.S., but the world resistance to a system that overproduces, the command economy, which by definition overproduces because it doesn't respond to market forces, supply and demand. It responds to a top-down direction to build more and create more, even though there's no market for it. So what do they do? They dump it on Europe and the U.S. and the rest. And Europe, to its great credit, is fine no more. We're not going to let you undermine our automotive market and other things. Now they're casting about. I mean, I only see two options here. One is you increase consumption at home, which isn't happening because people are worried about what the future looks like. The economy, as it follows the real estate market down the toilet, people are less willing to part with their hard-earned savings rather than more. So consumption can happen, which means more exports required. And that's not happening either because the world is putting back. Nexperia, that Dutch company that the Dutch nationalized, that was a strong signal to the PRC that it's not just the U.S., it's everybody. And they're going to have to deal with this problem instead of just blaming it on one or perhaps punishing one side by cutting off rare earths and all that. Looking ahead, if you will, we heard President Trump saying just yesterday that he is expecting a long meeting with China Xi on the sidelines of the APEC summit. He's expecting China to start resuming buying of U.S. soya beans because they did stop, which is hurting our farmers. What do you make of that? Because right now we also have Treasury Secretary Scott and Trade Representative Jameson Greer meeting their counterparts in Malaysia to try and hammer out potentially a trade deal. What do you make of all these moving parts happening in Asia? Just for one, I would be surprised if Xi Jinping shows up on the sidelines of APEC. I mean, he's missed almost all of the large meetings that you'd think he would have gone to. If President Trump's at the United Nations General Assembly, you'd think the Chinese leader would want to be there to offer his counterpoint. And there's been back and forth on whether or not he's going to leave the country or not. The ASEAN Regional Forum and the ASEAN Summit is another opportunity for senior leaders to gather. But what I saw was that they're sending Li Qian, the Prime Minister of the Premier, versus Xi Jinping. I guess the bigger point is it's unclear as to what the future holds and who's going where and doing what. I want to dig into that a little bit because it seems markets are watching for this trade deal. Everyone's calling for a trade deal. But if we look at the past, communist China has a history of not keeping its promises, especially with trade deals. So if there is a trade deal this time, how would or how should the U.S. ensure and enforce it that actually China follows through this time? Or is there a way to get Beijing accountable? In April 2019, we finally hammered out after steadily increasing tariffs, finally got the PRC's attention and our interlocutor, Liu He, signed off on a very meaningful trade agreement that had a verification regime. If you do not follow through, we will then take the following actions. And we thought we had a deal. I remember everybody was celebrating that. He took it back to Beijing and Xi Jinping said, not a chance. I am not going to put myself in a position where I agree to penalties for not following through because, here's the quiet part, I don't intend to follow through. I'm only going to do this for the appearance of being a reliable, trusting partner while doing the opposite. I can't see how it happens other than a major change in their policy. And the 15th Five-Year Plan doesn't show anything like that. It just says we're going to keep doing what we're doing. Well, definitely a lot to look out for here. General Stola, as always, thank you so much for joining us. Thanks, Tiffany. See you. Washington's most wanted Chinese drug lord was finally arrested in Cuba and is now waiting to be extradited to the United States through Mexico. The U.S. government is accusing him of supplying fentanyl to the two biggest Mexican cartels and building a multi-continental criminal network whose operations spread across America. The Chinese narco broker's name is Zhang Dongji, also known as Brother Wang. He was born in Beijing. U.S. authorities say Zhang had built a massive narco traffic network which directly supplies to two Mexican cartels for nearly a decade. The Trump administration designated the two cartels as terrorist groups earlier this year. The U.S. government says Zhang's operatives are scattered across states like California, Georgia, as well as Latin America, Europe and Asia. This way, Zhang's organization smuggled nearly 4,000 pounds of fentanyl and over 2,000 pounds of cocaine from Mexico into the U.S. Such a massive amount of fentanyl can kill approximately 900 million people, almost triple the U.S. population. The Trump administration has doubled down its pressure on Beijing to stop fueling the opioid crisis, especially fentanyl, and even slapped 20 percent tariffs on Chinese goods as punishment. But despite the tariff in place, U.S. federal agencies last month intercepted 1,300 barrels of precursor chemicals shipped from China before they could poison Americans. These 1,300 barrels were shipped from Shanghai, China to Mexico. We intercepted these precursors on the high seas, and now the Sinaloa cartel will not be able to use them to make methamphetamines. And the bottom line is this. Whenever there is an effort on the part of foreign terrorist organizations to create drugs that are killing Americans, we will seize them, whether it's on the high seas or whether it's in the country or a foreign country. Back to Zhang's story, the drug trafficking business is only half of his business model. As an operator of Zhang's who was arrested in the U.S. disclosed, after Zhang's Mexican operatives collected money from drug dealers, they used Zhang's shell companies based in China and the U.S. for money laundering. U.S. officials say Zhang has 150 shell companies and almost 200 bank accounts. An indictment against Zhang says he laundered 20 million dollars in the U.S. within one year. Court documents show Zhang tends to start bank accounts with reputable banks like Bank of America, JP Morgan or Wells Fargo. But what's really raising eyebrows is Zhang's connection to the Chinese Communist Party. The bureau reported that Zhang Wang flew into Canada's Vancouver back in 2017, and he saved contacts from the Chinese embassy and consulate in Ottawa and Vancouver in his phone. Now, the U.S. has never been this close to bringing the Chinese drug kingpin to justice after he managed to escape the last arrest. Media reports say Zhang will be extradited to the U.S. as soon as he touches Mexican soil after the Cuban authorities finish their current interrogation. China and India are weighing their options after the United States and the European Union imposed new sanctions on Russian oil. They must navigate a narrow path between maintaining their oil supply and avoiding penalties. Oil prices rose 5% on Thursday as traders worry about a squeeze on global supply. Here's more. Oil prices surged almost 5% early Thursday. Markets reacted after the U.S. put sanctions on leading Russian suppliers Rosneft and Look Oil over the Ukraine war. One analyst said the sanctions mean refineries in China and India will need to find other suppliers for oil, or they risk exclusion from the Western banking system. Both countries are major buyers of Russian oil. The U.S. said it was prepared to take further action as it called on Moscow to agree to a ceasefire in Ukraine. Britain sanctioned Rosneft and Look Oil last week. EU countries have approved a 19th package of sanctions against Russia, which includes a ban on imports of the country's LNG. Brent and West Texas intermediate futures rose by more than $2 a barrel after the sanctions were announced. Analysts argue the impact of sanctions on oil markets will depend on how India reacts and if Russia finds alternative buyers. India became the largest buyer of discounted seaborne Russian crude after Moscow began its war in Ukraine. For months, China's been quietly building up its oil reserves. Chinese customs data shows between January and September about one-sixth of its crude imports came from Russia. Analysts believe a big chunk of that has gone straight into storage tanks. Top trade officials from the United States and China are paving the way for the upcoming Trump-Xi summit. On Friday, Treasury Secretary Scott Besson and U.S. Trade Representative Jameson Greer are set to meet with Chinese Vice Premier Hu Lifeng in Malaysia, a Southeast Asian country. Coming up, mercy for a crypto mogul. President Trump pardoned one of the most influential figures in the cryptocurrency sector, and this person vows to help America become the global capital of crypto. And questions remain over why TikTok hasn't been banned. A cybersecurity advisor breaks down the role of the U.S.-China tech lobby and big donors backing TikTok. More on that after the break here on China In Focus. Welcome back to China In Focus. I'm Tiffany Meyer. President Trump pardoned the crypto exchange giant Binance founder Changpeng Zhao on Thursday. The White House says the previous administration prosecuted Zhao in a war on cryptocurrency. Zhao thanked President Trump on X, saying he will, quote, Zhao is one of the most influential figures in the crypto sector. In 2023, he stepped down as the head of Binance after the company pleaded guilty to failing to maintain an effective anti-money laundering program. It agreed to a settlement with the U.S. government worth more than $4 billion. Prosecutors agreed to end a years-long probe into misconduct at the world's largest crypto exchange. Zhao has already served his time in prison after a judge sentenced him to four months. He's a Canadian citizen and was born in China. With increasing focus on national security, there's been growing concern over apps like TikTok still having free reign in the U.S. What's the role of the U.S.-China tech lobby on K Street and big donors behind TikTok's staying power in the U.S.? We spoke with Rex Li, cybersecurity advisor at MySmartPrivacy, to discuss. This law, the Protecting Americans from Foreign Adversarial Controlled Applications Act, isn't being enforced in the case of TikTok. How would you see solutions going forward? Do you see more states doing their own thing, then? Or why isn't it being enforced from the federal level? The fact is, this is the federal law, and it's simply not being enforced. The Senate Committee on Commerce, Science and Transportation, they're the senate committee that has oversight over this law. Aside from TikTok, there's not a single other Chinese or American app that's been identified. They're all being proliferated, not only here in the United States by Google, Apple, Microsoft, through Google Play, Apple App Store, Microsoft Windows App Store, but they're also being proliferated globally by these companies. If you were to enforce this act, it could have a detrimental impact on their revenues. They would lose hundreds of millions, billions. We're talking billions, aggregately, probably trillions of dollars that it would impact these companies. So it's not just the Chinese app developers that are making profits off of these apps from China. It's Google, Apple, and Microsoft. Whether DeepSeek is number one in the App Store, or OpenAI, or TikTok, or Facebook, they don't care. They're neutral in this. They're just distributing and helping to develop these apps in partnership with these Chinese app developers. As you mentioned, there's billions or even trillions of dollars on the line. You mentioned K Street or the U.S.-China tech lobby specifically, and the role they've played. But there's also the question of campaign donors. So how do you see those two fitting into why maybe we haven't seen this TikTok ban, even though the law isn't called the TikTok ban? Yeah. Well, actually, it's those investors that are getting paid back, namely Jeffrey Yass and SIG, or SIG, his investment company. If you take his personal ownership in ByteDance and SIG, his investment company, and you combine them, he's the largest shareholder of ByteDance, even larger than any of the Chinese investors in ByteDance, because he helped start it up with a Chinese investor many years ago, even before TikTok was even on the radar screen. He had invested money in them to the tune of over 25%. So he owns over 25%. Well, he was donating money to both Democrats and Republicans, but mostly Republicans, and had met with Donald Trump in Mar-a-Lago in late November, December last year, aside from the meeting that Donald Trump had with Shou Chu, CEO of ByteDance. So how they tie into this is also through the K Street lobbyist, namely David Urban, who was Trump's former presidential advisor, became the chief lobbyist through his K Street law firm, American Continental Group, ACG. He became their chief lobbyist, but not only that, ByteDance actually at one time hired him as a senior vice president of North American operations. So you have a former presidential advisor, a huge investor to the Republican Party, all involved in this, all who own shares in this company. So they stand to make money when the Oracle deal, if that gets approved, then they stand to make billions in profits from that. But also on the flip side of that, they're going to make a lot of money. Jeffrey Ass is going to make a lot of money from the revenues that are going to be kicked back to ByteDance through the 20% ownership that he'll still retain in the new company, plus all the ad revenues flowing back to China, the 20% of all profits that will flow back to China. So he makes money both ways, through the acquisition of the company, and then at the post acquisition of the company, he'll make money both ways. In your view, what is the solution here? How can Americans protect themselves? Well, I think what needs to happen is the Senate Committee on Commerce, Science and Transportation has to start enforcing this law. Somebody's asleep at the wheel with this law. So whether it's developed in America or developed in China or Russia, the app itself and the operating system itself is a cybersecurity threat to the end user, period. It's a threat to your privacy, security, civil liberties, safety, data and financial sovereignty. I mean, very concerning, for sure. It's a whole new world, if you will, that we live in now from just a couple of years ago. But Rexley, as always, thank you so much for joining us. Thank you. And that's all for today's China In Focus. I'm Tiffany Meyer. If you have any feedback on the show or have something you'd like to see us cover, send us an email at ChinaInFocusNTD.com. We'd love to hear from you. For on-the-clock original news coverage, visit us at NTD.com or download our NTD app. Thanks for watching. See you tomorrow.