Shifting to domestic demand

"The number of buyers coming from these areas also decreased, as there is still weak demand in these markets," said Liu Jianjun, a spokesman for the fair and the China Foreign Trade Center, who added that Chinese exporters must diversify their sales to both global and domestic markets.

Liu Juan, the general manager of the export department at Guangdong Winto Ceramics Co Ltd, which was exhibiting at the Fair, said: "Export business is much harder than before the 2008 financial crisis, owing to rising tariffs, and frequent trade investigations, and overseas business is now just a subsidiary part of our business.

"Domestic orders account for 70 percent of our revenue. Demand in the domestic market, with a population of more than 1.3 billion, is huge and stable.

"Domestic consumers emphasize brand value and have stronger purchasing power than those in the European Union.

"We also have the advantage of knowing the esthetic and cultural needs of domestic consumers far better than overseas buyers," she added.

Wang En, the project manager of Hautek Industries Co Ltd, a Zhengjiang-based water purifier manufacturer established in 1985, is also firmly focused on sales at home.

"We used to sell our purifiers to the Middle East, Southeast Asia and Africa.

"But overseas business has not been good in recent years and overseas demand remains weak in the first half of this year and hard to predict for the whole year.

"However, currency fluctuation has become our top challenge and even a currency fluctuation of 2 to 3 percent can significantly erode our profit margin, which is below 10 percent now. Domestic exporters are competing fiercely on price," he said.

"In contrast, sales in the domestic market grow more than 10 percent each year and the profit from sewage treatment is three to four times, owing to our high-end technology."

Wang added that the government also supports the sewage treatment industry and provides 80 or even 100 percent of working capital if needed.

"We are very confident in the prospects of the domestic market."

But the Chinese market also presents challenges, he added.

"It's hard to get professional employees and developing after-sale services is a challenge, as we used to be an exporter.