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 at 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 per cent, prompting Beijing to retaliate with additional tariffs of 10 to 15 per cent on selected US imports.

Beyond tariffs, regulatory scrutiny of Chinese firms has also increased. In December 2024, the US authorities widened an existing ban on the export of high-end chips and chip manufacturing equipment to China, adding more chip-making tools and other fresh restrictions.

Some experts warn that such restrictions could extend to other sectors, further complicating compliance for Chinese businesses operating abroad.

Professor Li Changan at the University of International Business and Economics in Beijing told state media Global Times that many Chinese firms may face more scrutiny under the pretext of non-compliance, given a rise in protectionism and growing discrimination against Chinese firms in some countries and regions.

Prof ...