China tells SMEs to be familiar with foreign laws amid tensions with US

China has urged its small and medium-sized enterprises (SMEs) to familiarize themselves with foreign laws in their overseas operations, in what analysts call a timely reminder amid worsening US-China trade tensions.

- Aw Cheng Wei

China has urged its small and medium-sized enterprises (SMEs) to familiarize themselves with foreign laws in their overseas operations, in what analysts call a timely reminder amid worsening US-China trade tensions.

This was among the guidelines released on March 13 by 15 government departments, including the central bank and the ministries of finance and commerce.

Under the guidelines, SMEs are urged to "comply with international rules and practices" and "effectively respond to external risks related to trade protectionism, export controls and multilateral bank sanctions".

Analysts see the move as an important reminder, given that SMEs—unlike larger corporations—lack the resources and expertise to navigate complex international regulations, making them more vulnerable to compliance risks.

"As more and more Chinese firms engage in cross-border economic activities, and as rising trade tensions complicate the world trading system, the risk of non-compliance by Chinese firms has been rising," Professor Hu Guangzhou of the China Europe International Business School in Shanghai told The Straits Times.

Trade tensions between China and the US have escalated since President Donald Trump started his second term. On March 4, Washington doubled duties on Chinese imports to 20 percent, prompting Beijing to retaliate with additional tariffs of 10 percent to 15 percent on selected US imports.