The US on Wednesday expressed concern that ever more sophisticated drug-trafficking cartels were using China’s inadequately controlled financial system to launder their proceeds, possibly even getting tax breaks in the process.

Releasing its annual report on drug-trafficking worldwide, the State Department’s bureau for international narcotics and law enforcement affairs pointed to significant progress in Latin America in 2005, as well as positive US efforts to reduce drug abuse domestically that accounts for some 20,000 deaths a year.