How would a US trade probe affect Chinese businesses?

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US President Donald Trump signed a memorandum on Monday to crack down on trade with China, and trade representative Robert Lighthizer said his office will launch a probe and take action if necessary.

The probe will look into China's alleged violation of global rules in technology policies in intellectual property.

Analysts say Chinese tech companies based in the US, and those in constant business contacts with US tech companies, are most likely to take a direct hit or even face investigation.

However, China's exports of heavy machinery, garments and toys — which are in the largest export volume to the US — might be the worst bruised.

US President Donald Trump signs the memorandum regarding China’s alleged theft of US intellectual property on Monday, local time, in the white house. /VCG Photo

That’s because the US is now eager to protect its domestic manufacturing, a sector that increasingly overlaps with Chinese businesses.

Trade bans or tariff hikes on Chinese exports used to serve the best of US’s interests, when Chinese products mainly went to low-end markets while the US was taking up the mid-high end.

But now Chinese exports are getting into high-end markets after years of upgrade and the US is feeling the heat.

This latest trade friction also follows the US lifting preliminary duties on China’s aluminum imports up to 81 percent.

China's foreign trade has grown steadily in the first half of 2017. Its trade value climbed to 15.5 trillion yuan, up 18.5 year on year.

Exports to US also grew 18 percent in the same period, the highest among China's major trading partners, followed by European Union's 16 percent and Japan's 12 percent.

“China actually needs to import more products from the US now, and the US should export more high-tech products to China as that’s an advantage from the US’s side. Section 301 will cause more trade friction and hurt both,” said Zhang Jianping, Director General of Center for Regional Cooperation of the Ministry of Commerce.

(Du Zhongyan contributed to the story)

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