Legal importation of opium into China was ended in 1906, largely for economic reasons, but widespread addiction remained. As the power of the central government declined, feudal overlords in the provinces assumed control of a growing illicit traffic in the drug which provided the principal source of revenue for the militarist provincial armies. This situation persisted during the nationalist period under Chiang Kai-Shek, when ineffectual attempts to suppress poppy growing were defeated by the corruption of officials. The Japanese invasion of China in 1937 provides an example of the exploitation of narcotics for subversive purposes. During their occupation of the country, the Japanese made determined attempts to spread opium addiction in China. A significant development in this technique was the setting up of laboratories in Manchuria for the conversion of opium into morphine and heroin. When the Communists came to power in 1949 after the end of the Civil War, their first drive was against the drug addicts. A series of decrees were promulgated forbidding imports of narcotics, and curtailing the domestic drug traffic. Significantly, no mention was made of actual opium growing in China, or of any prohibition regarding its export from the country. These moves were clearly dictated by political and economic considerations. Political control was firmly secured by measures against private entrepreneurs, and the drain on the economy imposed by payments for imported narcotics was halted. The drug traffic was in effect nationalised under the Central Finance and Economic Committee in Peking which became the central authority for all commercial dealings in opium narcotics expressly for distribution and sale outside China.
Red China's narcotic drive is directed broadly at the major industrial societies of the free world. In purely commercial terms these offer obvious targets, since they provide both large, affluent markets, and potential sources of hard currency. The looser structure of the free societies renders them more vulnerable to exploitation than the tightly controlled Communist economies. Commercial enterprise, absence of travel restrictions, and uninhibited self-expression are factors which weaken the resistance of the West in this respect. Those industrial societies which have, in addition endemic addiction on a large scale, are particularly susceptible. From a purely commercial point of view the most attractive markets for Chinese narcotics are Japan and the United States.
The domestic narcotic problem in Japan did not attain serious dimensions till 1949. In external affairs, however, Japan had been deeply involved in the narcotic traffic for many years. We have noted that Japan first employed drugs as weapons of subversion on a national scale, ironically against China. With the outbreak of the Sino-Japanese War, Japanese forces set about the conquest of Manchuria in the 1930's. During this period opíum narcotics were widely disseminated by resident Japanese nationals including Koreans and Formosans, as a means of weakening the resistance of the Chinese people. Traffickers protected by Japanese consuls set up opium dens, and sold morphine and heroin in Shanghai, Tientsin, Dairen, Shenyang, Peking, Tsingtao, Tsinan, Hankow, Foochow and Amoy. Manchuria itself became a processing ground for crude opium, and chemical plants for the production of heroin were set up in many parts of the country. The bulk of the opium for these activities was cultivated in China under Japanese supervision. After the collapse of Japan in 1945 and the Communist-Chinese occupation of Manchuria, the
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