China's communist government is complicit in the U.S. fentanyl epidemic, subsidizing the manufacturing of fentanyl materials, according to a new House report.

Why it matters: The bipartisan investigation uncovers fresh details about the Chinese Communist Party's pivotal role in the illicit fentanyl trade as overdoses in the U.S. continue to surge.

• Fentanyl is the "leading cause of death for Americans aged 18-45," per the report released Tuesday by the House Select Committee on the CCP.
• The findings come even after President Biden and Chinese President Xi Jinping pledged to curb the flow chemical precursors to fentanyl in November.

Zoom in: "Through subsidies, grants, and other incentives, the PRC harms Americans while enriching PRC companies," the report states, referring to the People's Republic of China.

• China's government "directly subsidizes the manufacturing and export of illicit fentanyl materials and other synthetic narcotics through tax rebates," the report says. "The CCP has never disclosed this program."
• The CCP-run government even has ownership interest in multiple Chinese companies tied to illegal drug trafficking, the report says.
• And despite China's intense internet surveillance, it allows sites to openly sell fentanyl precursors, the chemicals needed to produce the deadly drug.

Driving the news: The committee released the report Tuesday morning ahead of a public hearing on the issue.

• Former U.S. attorney general Bill Barr called the findings "groundbreaking" as he testified before lawmakers.
• "The Committee's work has uncovered persuasive evidence that the PRC and CCP are not just bystanders; they are the prime movers," he said in prepared remarks.
• "They are knee deep in actively sponsoring, encouraging, and facilitating the production and export of fentanyl and fentanyl precursors for distribution in the United States," he added.

What they did: The committee said it examined Chinese websites, government documents and "undercover communications" with Chinese drug trafficking companies to reach its conclusions.

• The panel also consulted with experts in the public and private sectors.

Zoom out: Biden and Xi spoke by phone earlier this month and discussed their joint effort to counter the illegal narcotics trade.

• Despite these overtures, the report found there was "no evidence of new criminal enforcement actions" to crack down on the flow of illegal fentanyl materials.
• Instead of investigating drug traffickers, Chinese authorities "have not cooperated with U.S. law enforcement, and have even notified targets of U.S. investigations when they received requests for assistance," the report found.
• "This failure — when combined with new evidence establishing that the PRC incentivizes the export of illegal drugs abroad and holds ownership stake in companies doing the same — casts doubt on the veracity of the PRC's claims that it will act to stem the massive export of illicit fentanyl materials and other dangerous synthetic narcotics," the report said.

What to watch: The report makes a series of recommendations to curb the flow of fentanyl materials from China, including establishing a joint task force.

• It also suggests boosting U.S. sanctions authorities, and using them in "an aggressive and coordinated manner against entities involved in the fentanyl trade."

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Editor's note: This story has been updated with details of how the committee reached its findings.