China's exporters are feeling the squeeze as pressure grows to balance the country's trade figures, which saw a record surplus of 177.5 billion U.S. dollars in 2006.

At the 17th East China Fair in Shanghai, many Chinese exporters complained about the increasing pressure to sustain business growth.

"Compared with last year, the profit generated from exporting one U.S. dollar has decreased by 30 to 40 percent. Now we no longer take orders with a low added value," said Xu Biao, vice general manager of a glassware producer in Yangzhou, east China's Jiangsu Province.

Rising energy, raw material and labor costs, coupled with the Renminbi's appreciation have greatly narrowed exporters' margins. Xu's company has started to supply high-end glassware to big domestic stores.

"In contrast to the deteriorating export environment, Chinese domestic consumption is more vibrant," said Xu.

According to the organizers of the fair, quoted prices of export-oriented commodities this year's fair have risen by five to 10 percent over last year.

Premier Wen Jiabao pledged in his government work report on March 5 that the government would narrow the surplus, saying the country would increase imports of energy, raw materials, advanced technological equipment and key parts and components while optimizing the mix of export products.

The government has set a goal of reaching basic balance of international payments by 2010.

According to statistics of the National Bureau of Statistics, higher tariffs and other complementary measures have successfully cut China's exports of coal by 11.7 percent last year and crude oil by 21.4 percent.

The Ministry of Commerce said earlier this year that reducing the trade surplus was the "top priority" for trade development this year.

Some exporters are speeding up repositioning to tune in with the central government's changing macroeconomic policies.

Wu Weiqing, chairman of Shanghai Zhongxuan Export and Import Company, said big and medium-sized foreign trade companies should play a role of trade service provider rather than eyeing only export volume.

Source: Xinhua