Although they are now spending less on the metal, several factors are preventing China suppliers from decreasing product quotes.

Prices of steel products will, at best, remain stable as rising labor outlay and the appreciating yuan negate recent reductions in material costs. Some suppliers even plan to augment quotes.

The persistent labor shortage has nearly driven growth in China's export industries to a halt. More than half of the 477 respondents to a Global Sources survey said their overseas revenue did not increase during the past year, due mainly to the shortage. Forty-four percent even recorded a drop in exports, most by up to 10 percent.

Outsourcing and automating production are the key measures suppliers have taken to stem the negative effects of the labor shortage. Factories that were unable to find permanent or even part-time workers outsourced some processes to nearby plants. Many also invested in advanced machinery both to boost productivity and reduce the number of staff by as much as 50 percent.

The higher one-year lending rate may be affecting larger makers more than smaller ones, but the difficulty in obtaining funding is adding to SMEs' cost pressures.

Small and midsize enterprises in China are feeling the proverbial noose closing down on them.

An increasing number of suppliers are using natural fibers and recycled fabrics as their way of adding value to releases. Energy-saving technologies are adopted as well.

Eighty percent of China's textile mills are now capable of making "green" fabrics, including those made from colored cotton and recycled fibers. But while the trend for environment-friendly textiles is growing, such fabrics are not likely to go mainstream in the short term.