CHINA has the advantage in an expected trade war by showcasing a new range of tools it's prepared to use if Donald Trump makes good on his threat to punish China with tariffs,reports Bloomberg.

Restrictions imposed this month by the Biden administration on China's access to vital components for Al chips provoked Beijing into providing the world a preview of its targets in a second trade war.

Days after the curbs, Chinese leader Xi Jinping opened a probe into Nvidia Corp and banned the export of several rare materials with military applications. Beijing has also limited sales to the US and Europe of key components used to build drones.

Beijing's response took a page out of the American and European playbook, extending its export control regime to include a ban on selling some goods to the US by applying it to companies both inside and outside China.

The retaliation appeared calibrated to threaten the US without rocking the fragile bilateral relationship, or inviting blowback on China's own economy. Most of the swipes seemed symbolic: Exports of the affected metals to America largely dried up this year after earlier curbs, while Chinese companies are already moving to source domestic chips.