Why there is a rise in demand of fentanyl? In terms of business, it is because of the low cost and flexibility. It can be made in laboratory and no need to plant in the golden triangle of Cambodia and Myanmar, no need to wait for harvest time, no need to use ships to sent overseas, just mail it out as small parcels, and give a label of whatsoever medicine, thus can easily pass the custom. Thus no need to ignite another Opium War as in 1842, no need to cede Hong Kong to UK and generate another Pearl of the Orient.
So those famers producing drugs in Golden Triangle area all changed their job to internet fraud such as the KK Complex, and the amount of fraudulence always breaks world record high as in stock market.
It is not easy to ban them practically. US gives pressure to China to clear up all the lobotomies. Inside China, the society control is much stricter than western countries, but still hard to prevent them at 100% level. China also uses this as a chip for tariff talk. When US raises such a question, China can accept but US must take a step backward like the sanction of semiconductor. After the promise, whether China is launching out in full force or half done level, it needs time to prove it. So, after several months of grace period, it will be another story. China will also observe what the attitude of US is, and US also will be in such observation.
In the coming APEC of Korea, the Trump/Xi side meeting will have 2 major topics which are rare earth and fentanyl. In the negotiation of rare earth, China is in the position of sure win, please refer to the analysis of AI on previous days. In fentanyl talk, it surely will have good news to come out. China will make their promise on the request of US, so the stock market will go up. How about the actual effect, it takes time to observe.
One thing is more important, in the Donald Trump 1.0 trade talk of 2019, they agreed to establish a special unit that is US squadron can enter China to work with Chinese police to carry out the agreement. But just 2 weeks after the agreement signed, Covid-19 burst out and such a case never carried out. The agreement took 2 years to talk about and China has nearly 200 points to do while US only 30 points. This time they do not have such talks, and thus not likely to come out again.
Fentanyl is originally for medical usage, but the peculiar is easily addicted. In Canada, the case is more serious, the death is even more than US in per capita ratio. Addictors on the street are known as zombie, but they are not real zombie as in Hollywood movie. It is a new kind of fentanyl mixed with tranq. So, the problem does not lie totally in China, but Mexico and Canada also plays their part.
After Trump won the general election in November, at first he aimed at the 25% tariff of Canada and Mexico, mainly due to fentanyl , so it is a serious problem, but later say 60% tariff on China. And later full turbo on Liberation Day.
So even now people are waiting for the Trump/Xi side-meeting in APEC, even there is a big black candlestick when Trump announced 100% tariff on China, 3 major indexes still running upward with the 50-SMA as support, that is the uptrend is still integral, no symptom of changing. Anyway, the preparation is still as before, when looking good upon the Trump/Xi meeting, just buy now, when looking bad sell now. Do it before too late.