ECONOMIC EMERGENCE POWERS CHINA'S RISE AS DRUG EXPORTER

MANILA, Philippines -- Zeng Jiaxuan sold fish balls in the shadow of
Spanish mission churches when he first arrived here from his native
China. Yet within a year he was hawking something far more lucrative
- -- methamphetamines -- and was on his way to becoming one of the
biggest drug barons in his adoptive country.

His rise, and eventual disappearance, provides a window onto what is
being described as the Opium Wars in reverse. Instead of 19th-century
British trading houses pushing opium on the Chinese, China's massive
production might is shoveling an addictive stimulant known as "ice"
into markets from Seoul to Sydney, throwing police forces and
governments off balance.

China was first exposed to the trade only a decade ago when synthetic
concoctions such as ecstasy and methamphetamines -- renowned for
their fast-paced, euphoric high -- began seeping in from Southeast
Asia. Today, Chinese criminal syndicates control a sprawling web of
laboratories, trained scientists and offshore bases that pump out
vast amounts of high-quality methamphetamines, or "meth," according
to Western and Asian antinarcotics officials. Just as China's
economic emergence is turning it into a major competitor in sectors
such as toys, televisions and memory chips, the country's rise in the
synthetic-drugs business is powered by a ready supply of capital and
low-cost manufacturing muscle, according to drug-enforcement
officials. China, says one antinarcotics agent in Beijing, "is a
formidable producer."

The change marks a pronounced power shift in the world's narcotics
industry, disrupting the once-predictable patterns of Asia's drug
trade. Since the early 1980s, when truck drivers and factory workers
in Southeast Asia began popping pills to stay awake, Myanmar has had
a stranglehold on meth production in Asia. Drug lords hiding out in
hills around the Golden Triangle have created millions of Asian
addicts.

But, according to intelligence officials, China is fast catching up
with Myanmar. China, for example, now accounts for 95% of all
methamphetamines in the Philippines, according to Philippine National
Security Adviser Roilo Golez.

China still consumes much of the meth it makes domestically. Yet the
sheer scale of production and smuggling networks through offshore
hubs such as the Philippines give it brute strength overseas. That
has allowed Chinese traffickers to begin squeezing out their rivals
in foreign markets, these intelligence officials say.

China's police forces are scrambling to get a handle on the problem.
Officials check mail for drug ingredients such as ephedrine and look
for telltale signs of clandestine laboratories, such as efforts to
bury or conceal chemical waste nearby. They are also sharing
intelligence with China-based foreign authorities to disrupt the
supply from the labs to the streets. "Most are getting busted in the
production stages," says Chen Cunyi, deputy head of China's Narcotics
Control Commission. Authorities seized about 20 metric tons of
methamphetamine in 2000, up from just 1.6 tons two years before.

But the amounts of meth seized, as well as the chronicle of arrests,
highlight how some parts of the country's industrial infrastructure
have mobilized in pursuit of drug profits. Some companies licensed to
trade chemicals are illegally selling them to meth labs. Even without
that conduit, though, chemicals are widely available. Unlike in some
countries, ephedrine, a cold-medicine ingredient, is legal in China.
What's more, the root plant ephedra grows wild in southwestern China,
within arm's reach of aspiring chemists. "You can go to these areas,
pick it up and do it yourself," says the drug agent based in Beijing.

At the same time, meth labs have become increasingly sophisticated.
In October 2000, Chinese authorities arrested two
government-award-winning scientists, former employees of a
pharmaceutical factory, for acting as "technology advisers' to ice
production in three different provinces.

"Unfortunately, lured by money, the scientists and technicians, with
glorious pasts and otherwise brilliant futures, have fallen into an
abyss of crime," the government's 2000 annual report Drug Control in
China said.

The Chinese triads have made the most of this fertile environment,
both at home and overseas. Nowhere is this more evident than in the
Philippines, where weak law enforcement, immigration loopholes and a
porous coastline have eased the way.

Indeed, triad organizations such as the 14K Gang have been among the
most successful foreign investors in the Philippines in recent years.
Chinese nationals control every stage of the drug trade here, from
smuggling to distribution to sales on Manila's crowded streets, where
meth is known as shabu or "poor man's cocaine." Hulking gray
freighters and fishing boats set out from China's Fujian coastline
for remote corners of the Philippines, where they drop off
plastic-wrapped bundles of the drugs to outrigger canoes waiting in
the darkness below. Police say that every year at least $6 billion of
methamphetamines is consumed in the Philippines or passes through the
country; some five million Filipinos -- 6.5% of the population -- are
habitual users of the drug, according to the Philippine government.

Military intelligence chief Col. Victor Corpus worries that the money
from the trade is corrupting the Philippines's police and judiciary.
"Narcotics are now the biggest threat to our national security," he
says.

The story of Zeng Jiaxuan shows why. In 1998, at the age of 26, Mr.
Zeng left his hometown of Zhang Guo in Fujian province for Ongpin
Street, the winding, bustling road at the heart of Manila's
Chinatown. It is often the first stop for new arrivals from China.
The Fujian dialect is more readily spoken here than the local Tagalog
language; noodle shops and dim-sum vendors jostle for space with old
men selling the fertilized duck embryos prized by Philippine men for
their supposed aphrodisiac powers. Here, Mr. Zeng sold fish balls.

But the way he entered the country suggests that Mr. Zeng, who was a
television repairman in Fujian, didn't come to Manila to be a street
hawker. Mr. Zeng was granted a special visa for people who invest at
least $80,000. The Special Investors Residency Visa program was
introduced in 1996 to stimulate foreign investment. However,
Philippine police officials say it is often used by Chinese criminal
syndicates to spirit in foot soldiers.