As China’s mammoth trade surplus stokes global tensions, Beijing has enacted sweeping new regulations to investigate and punish foreign companies that stop using Chinese suppliers in response to political pressure at home. Foreign business groups expressed strong concern about the vaguely worded rules, which took effect when Premier Li Qiang signed them on April 7. Analysts warned that the regulations could make it harder for foreign companies to divest from joint ventures in China or shift orders to overseas suppliers. The new regulations are part of Beijing’s broader effort to counter what it sees as rising protectionism in the West, driven by a surge in Chinese exports and growing concerns about trade imbalances. China’s exports exceeded imports by almost $1.2 trillion last year, and the country notched another large surplus in the first quarter.

Full report : Multinationals in China are concerned that the regulations could allow authorities to penalize companies and executives for shifting supply chains to other countries.