The Covert Nature of the CCP's Reverse Opium War

Explaining when, why, and by whom.

By 1998, China stood at a historic crossroads. Between 1985 and the mid-1990s, its export economy had exploded—rising from a modest few billion dollars to nearly $200 billion. With talk of World Trade Organization (WTO) membership accelerating, reformist leaders believed the time had come for China to embrace globalization and enter a new era of economic modernization.

But while some saw opportunity, others saw vulnerability. Beneath the surface of China’s apparent opening was a profound internal struggle—one that pitted reform-minded technocrats against a deeply entrenched hardline elite. That elite, shaped by a string of traumas and betrayals, believed that the West’s long-term goal was not partnership, but subjugation. And from that belief was born a quiet but potent strategy: the Reverse Opium War.

A Triple Shock That Changed China’s Course

To understand why this effort was launched covertly, one must first understand the psychological foundation that shaped it. Between 1989 and 1990, three seismic events struck China in rapid succession, each six months apart. Together, they reshaped the political environment and silenced the country’s reformist ambitions.

The first blow was the Tiananmen Massacre of June 1989. The violent crackdown on peaceful pro-democracy protesters in Beijing shattered hopes that the Chinese Communist Party (CCP) might allow limited political liberalization. Reformist leaders like Zhao Ziyang were purged, and a culture of surveillance, censorship, and zero tolerance for dissent was institutionalized. Stability became the regime’s top priority, and any hint of political experimentation was treated as an existential threat.

Then came the collapse of the Soviet Union, a moment that terrified China’s leadership. The message was clear: even the mightiest of Communist regimes could crumble if reform went too far. Reformers like Hu Yaobang and Zhao Ziyang were no longer viewed as visionaries but as dangerous idealists who could bring about the Party’s undoing.

The third and most personal betrayal came in 1990 with the defection of Xu Jiatun (pictured on right), Beijing’s top official in Hong Kong and a longtime ally of Zhao. Xu’s decision to seek asylum in the United States was not just an embarrassment; it was a threat. He had intimate knowledge of China’s most sensitive political and financial operations in Hong Kong and Macau. His flight to the West inflamed paranoia at the highest levels of the CCP and reinforced the view that reformers could not be trusted.

These three events hardened China’s ruling elite. From their perspective, the era of experimentation was over. The new governing consensus was authoritarian resilience—maintain the facade of openness, but trust only in control, discipline, and secrecy.

Zhu Rongji’s Gamble—and the Shadow Opposition

Yet even in this hardened environment, some leaders still believed that China’s future lay in reform. Chief among them was Premier Zhu Rongji (pictured above), a pragmatic technocrat and economic reformer who viewed WTO membership as China’s gateway to lasting prosperity. He argued that international integration would impose necessary discipline on Chinese institutions, raise standards, and provide long-term stability through economic interdependence.

Zhu found an ally in Jiang Zemin (pictured above), China’s President and Party General Secretary. Jiang, eager to craft a legacy that would define his leadership, supported WTO accession as a symbol of China's arrival on the world stage.

But the reformist project had a powerful adversary—one that did not operate in the open.

That adversary was Ye Xuanning (pictured above), the son of revolutionary legend Ye Jianying and the director of the PLA’s General Political Department Liaison Office. Known as China’s spymaster-in-chief, Ye had quietly amassed influence by orchestrating a series of bold operations against the US which resulted in unprecedented transfers of US military technology to China – both legal and illegal. He was a master of the covert, and within elite circles, he was referred to simply as “the boss.”

Ye opposed Zhu Rongji’s vision—not because he objected to economic growth, but because he did not want to give up China’s covert strategies. Since the early 1980s, Ye was involved in espionage and influence operations against the West. Ye believed he could direct future operations that would significantly weaken the West – he also had direct access to a vast network of commercial enterprises aligned with the PLA that would have to be terminated if Zhu Rongji had his way. Profits from many of the enterprises were growing as China’s economy grew; not only that, but the covert operations connected to these enterprises were infiltrating regional and global business communities and governments. In his view, the openness required by WTO membership could expose China’s covert capabilities and limit its ability to wage political warfare. He believed that China’s true advantage lay in exploiting the openness of others while protecting its own core from foreign influence.

The Jiang-Ye Pact: Reform on the Surface, Subversion Behind the Curtain

To stop the reformists from gaining total control, Ye Xuanning needed leverage. He found it in Beijing Party Secretary Chen Xitong (pictured above), Jiang Zemin’s chief political rival. Ye used his intelligence networks to orchestrate an anti-corruption investigation that brought Chen down. By eliminating a major threat to Jiang’s authority, Ye won the President’s lasting gratitude—and a political favor in return.

Ye proposed a quiet deal: he would formally retire from his military post, creating the impression that he was stepping back from politics. He would continue to run covert influence operations from behind the scenes, using his informal networks and intelligence operatives to pursue China’s clandestine agenda.

Jiang agreed. The deal allowed Zhu Rongji’s WTO push to proceed—on the surface and China’s $200 billion in exports in 1995 grew to $1 trillion by 2005! But behind the scenes, Ye was now free to ensure that China’s integration into the global system would not be a surrender, but a strategic infiltration. China would appear to embrace global economic norms, but it would simultaneously launch an invisible campaign of political warfare, economic manipulation, and elite co-option across Western democracies.

This dual-track strategy—public cooperation, private subversion—was born out of the trauma of 1989–1990 and the secret accord between Jiang and Ye. It was not declared, not debated, not published. It was, from the start, a covert effort that would unfold quietly over decades.

Ye’s Covert Strategy Evolves into the Reverse Opium War

With his “off-the-books” status confirmed, Ye Xuanning intensified his campaign of political warfare against the West. He could now deploy his network of Chinese organized crime operatives more aggressively—so long as their operations remained under the radar, a hallmark of Ye’s covert prowess. The effort to infiltrate Canada as a gateway to North America was already well underway, as documented in the Canadian intelligence Sidewinder Report. But the case of Lai Changxing provided an opportunity to supercharge the so-called Vancouver Model, layering large-scale money laundering on top of ongoing narcotics and human trafficking networks. This became the spark for what would become the Reverse Opium War.

For a comprehensive account of this history—including Xi Jinping’s role and how he ultimately benefited from Ye Xuanning’s mastery of covert operations—readers can consult the Ye-Xi Clique updated white paper published June 9, 2025 here on WideFountain. For in-depth reporting on China’s strategy to overwhelm Canada through non-linear warfare, we also recommend following Sam Cooper’s Substack, The Bureau.