China’s vast export sector has been battered on several fronts recently according to the Los Angeles Times. Demand from foreign customers has slowed. The Renminbi is strengthening, making Chinese goods more expensive. Hourly wages are rising with additional pressure resulting from headlines about poor working conditions at Foxconn, the massive assembler of Apple tablets and phones.

Despite this, China has strengthened its position in the global supply chain. Already the world’s largest exporter, China’s share of global exports expanded during the recent global downturn, increasing to 10.7 per cent last year from about 9 per cent in 2008. When times are hard lower cost goods have a greater edge.

Economists say the slowdown may continue depending on how the European debt crisis develops, and the results of the central government’s two-year campaign to deflate the nation’s property bubble.

“China is offsetting the head winds because it keeps capturing more market share,” said Louis Kuijs, an economist at the Fung Global Institute in Hong Kong. “Yes, labour is becoming more expensive over time, but it’s still much cheaper than the U.S. or Europe. The ratio of price to quality is still far more favourable for production in China.”

Prices for Chinese exports have risen 21 per cent since 2005, but less than the 32 per cent increase on goods from India and 33 per cent rise on exports from Mexico in the same period.

China’s growing rate of imports, has been rising faster than exports since the 2008 financial crisis because of the country’s explosive construction demand.