Most Chinese manufacturers plan to increase their export prices in the next 12 months, under pressure from growing raw material prices.

A China supplier survey conducted by Global Sources, a business-to-business media company, shows that nearly 70 per cent of manufacturers in China plan to raise export prices in the next 12 months.

The survey was conducted over six months, covering 741 consumer products exporters dealing with ovens, cosmetics, doors, taps, sports balls and swimwear.

"Higher metal and plastic prices, higher domestic labour costs and a potential revaluation of the yuan have resulted in many Chinese manufacturers predicting higher prices in the months ahead," said Michael Kleist, general manager of Global Sources' Content Development.

According to the latest statistics released by China's General Administration of Customs, exports rose nearly 26 per cent year-on-year to about US$600 billion in the past eight months, while imports reached US$505 billion, an increase of 21.6 per cent from a year ago.

China posted a record trade surplus of US$94.65 billion in the first eight months, a challenge to the country's policy to allow the yuan to rise gradually to leave exporters more time to adjust.

However, due to fierce competition 52 per cent of respondents expected to limit price increases to 10 per cent or less, the survey showed.

Kleist predicted that China's exports would continue strong growth, but may be "at a slower pace."

"Suppliers are still positive about export growth, with 100 per cent expecting some increase," he said. "However, as competition intensifies and costs rise, fewer suppliers are predicting large export growth increases."

This year 68 per cent of surveyed manufacturers expected export sales to increase by more than 5 per cent, compared with the 80 per cent at the second half of 2005; 32 per cent of suppliers predicted growth of 5 per cent or less while 19 per cent made this estimate in 2005.

Plans for capacity expansion have been scaled back, with 32 per cent of suppliers projecting increases of more than 20 per cent. The second-half 2005 survey showed 43 per cent expected to increase capacity by more than 20 per cent.

"Based on the surveys, suppliers can expect lower profit margins and buyers can expect higher prices in the months ahead," Kleist said.

The report also found that exports to the Middle East, Africa and member countries of the European Union are expected to grow.

North America and the European Union are key export markets for 61 per cent of surveyed suppliers, the report said. To avoid cutthroat competition in those markets, many suppliers are focusing on other regions.

"About 29 per cent say they are targeting Africa, the Middle East and non-EU European countries like Russia," it said. That's up from the 11 per cent reported in the first half of 2005.

Hong Kong-based Global Sources provides sourcing information to buyers and integrated marketing services to suppliers.