An indictment unsealed in California charged 24 defendants with conspiracy to distribute cocaine and methamphetamine and money laundering offenses.
Drug Enforcement Administration (DEA) chief Anne Milgram said a multi-year investigation dubbed "Operation Fortune Runner" had "uncovered a partnership between Sinaloa Cartel associates and a Chinese criminal syndicate operating in Los Angeles and China to launder drug money."
The Justice Department said the Chinese "underground bankers" had helped the cartel transfer drug profits from the United States to Mexico.
Chinese nationals are barred by that country's laws from moving more than $50,000 a year out of China, it said, and some individuals seeking to move more than that seek "informal alternatives" to move funds.
"Drug traffickers increasingly have partnered with Chinese underground money exchanges to take advantage of the large demand for US dollars from Chinese nationals," it said.
And Beijing's Ministry of Public Security said Wednesday it had worked on a US tip-off to arrest a suspect surnamed Tong involved in "drug-related money laundering".
The suspect and others had operated a car dealership in the United States that offered a currency exchange service for buyers, Beijing said.
"Later, they switched business and engaged in illegal foreign exchange trading and other criminal activities," it said in a post on social media platform Weibo.
"This case is a recent successful case of Sino-US anti-drug cooperation," it added.
Documents released by the US also name a fugitive suspect called Peiji Tong as having been involved in a scheme to "launder drug trafficking proceeds in the United States".
The Justice Department said 20 of the 24 defendants named in the indictment are to appear in court in Los Angeles in the coming weeks.
Homeland Security Advisor Liz Sherwood Randall said China and Mexico had each arrested one individual in connection with the case.
Randall said China's actions "build on the commitment made between President (Joe) Biden and President Xi (Jinping) at the Woodside Summit in November 2023 to resume bilateral cooperation to combat global illicit drug manufacturing and trafficking."
The Justice Department said $5 million in narcotics proceeds had been seized during the investigation, along with 302 pounds (137 kilograms) of cocaine, 92 pounds of methamphetamine and 3,000 Ecstasy pills.
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