Christmas has not yet arrived, but businesswoman Jiang Qing is already putting away unsold Santa hats, socks and other decorations in her 30-square-meter store. For her, the peak Christmas sales season is October, and this year's sales have not been plentiful.

Speaking of a one-third drop in sales in 2023, River said, "I can't say it was a good year." Like other merchants in Yiwu Commodity City, which is known as the world's largest wholesale market, Jiang's store is small. But most of her sales come from exports.

After years of strict restrictions on the new crown epidemic, China's easing of border controls in early 2023 has sparked expectations. But for many exporters like Jiang in the eastern city of Yiwu, business was better in 2022, when consumers around the world went on a post-pandemic splurge spree.

"Luckily, we have the Russian and Middle Eastern markets to offset the weak demand from big players in the U.S. and Europe," Jiang said. Other traders in the market expressed similar sentiments.

The 260,000-square-meter (equivalent to about 36 soccer fields) shopping center seems to have more visitors than in previous years. But traders said that this footfall does not necessarily translate into sales.

"Customers in the U.S. and Europe are generally asking for a 10 percent reduction in our catalog prices, citing higher inflation in their countries," said one fake Christmas tree seller.

China's exports broke a six-month streak of declines in November with a 0.5 percent increase, but total exports for the first 11 months were still down 5.2 percent. Imports have fallen 6 percent over the past 11 months.

Exports to the major U.S. market saw the biggest drop of 13.8 percent through the end of November, while exports to the European Union and Southeast Asia were down 11 percent and 5.5 percent, respectively. China would have faced an even bleaker picture had it not been for strong auto exports - which surged 71% in the 11 months to the end of November compared with the same period in 2022.

Since the end of last year, China's exports have fallen about 16% in dollar terms, estimates Capital Macro. As a result, excluding the initial pandemic blockade, exporters' net profit margins have fallen to their lowest level since 2010.

"China's strong export momentum in the post-pandemic years has come to an end, with annual export growth in negative territory for most of 2023," said Arjen van Dijkhuizen, senior economist at ABN AMRO. "In addition to base effects, this reflects cooling global demand due to sharp currency tightening and a shift in global demand to services after the epidemic."

U.S. toymaker Hasbro has factories in Asia but sells its products around the world. The company announced last week that it would lay off 15 percent of its workforce, affecting 900 people, due to weak demand. That's on top of the 1,000 full-time positions the company cut earlier this year.

Some retailers have taken aggressive price cuts to gain market share. But Chen Liguo, who sells mugs and clothes to customers in the U.S. and Europe through online marketplaces Shein and Temu, said increased advertising spending has cut already low profit margins by about 15 percent, compared with 20 percent a year ago.

Without advertising, Chen said, "the goods won't attract eyeballs." He expressed concern about the sustainability of sales in these markets known for ultra-low prices. "Business will be tougher in 2024 due to competition and bilateral tensions."

Temu's parent company, Pinduoduo Holdings, briefly went public in the U.S. last month after reporting strong earnings, making it the Chinese company with the highest market capitalization. But Pinduoduo, like other Chinese companies in the U.S., faces increased scrutiny, with U.S. lawmakers reportedly vowing to close "loopholes" in import rules.

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Economists expect China's plummeting exports to bottom out in the coming months due to a cyclical upturn in global trade, but they don't see a major rebound.

"Many Chinese policymakers and business executives have assumed that the export markets of the U.S. and the European Union will be less important in the long run," said Steven Olson, a senior fellow at the Hinrich Foundation in Singapore.

Instead, emerging markets in Southeast Asia and domestic consumption will become more important. Olson said, "Overall, exports may become less important in driving China's economic growth."