Julia Su, a sales manager at Shanghai Eastern Resources Arts & Crafts, has spent the past two decades sourcing products such as Christmas tinsel and ornaments from a network of small workshops in the Yangtze River Delta, one of China’s key export bases, and arranging containers to ship them to wholesalers and retailers on the other side of the world.

Her company’s annual turnover of US$50 million hints at the clout of the thousands of Chinese “foreign trade firms” which link numerous family-run factories with Western consumers in an extensive global value chain. By providing a bridge between overseas buyers and Chinese producers – facilitating paperwork and shipments – they made juicy profits in the 15 years following China’s 2001 accession to the World Trade Organisation as the country’s exports grew more than eightfold.

However, after witnessing the greatest overseas sales boom in the country’s history, Su, 48, now worries that China’s whole export system is being uprooted, leaving a gaping hole in its economic landscape and no obvious means to cover it.

US Republican presidential candidate Donald Trump already lambasts China as a currency manipulator, but Su said a weaker yuan would not be sufficient to refuel its US$2.3 trillion export machine in the face of irreversible changes in the country’s demographic structure, economic development and the state of the world market.

“A less valuable yuan acts as a short-term boost,” she said. “But the long-term outlook remains clouded.”

Larry Hu, the head of China economics at Macquarie Group, said the country no longer had the luxury of relying on cheap exports to fuel its economic growth.

“China will be lucky if exports don’t drag growth down,” he said. “Global trade turnover is shrinking and China has already taken the biggest share of the pie. In fact, zero growth in exports wouldn’t be bad.”

China accounted for 13.8 per cent of global merchandise exports last year according to WTO data – the highest share any country has enjoyed since the United States in 1968 – so it’s not surprising its exports would stagnate or even fall.

“Headwinds still loom as there’s been no fundamental improvement in external demand,” said Liu Tao, a senior researcher with Bank of Communications, who counted June’s British vote to leave the European Union among the gusts continuing to batter external demand.

Chinese policymakers are aware that the golden days of exports are gone. Beijing targeted trade growth of 6 per cent last year, only to see it fall 7 per cent. Once bitten, Premier Li Keqiang decided against including a trade growth target in his government work report this year.

Researchers at the People’s Bank of China downgraded its trade forecasts for 2016 in June, now predicting a 1 per cent decline instead of a 3.1 per cent rise. In the first half of the year, the value of overseas shipments fell 7.7 per cent in US dollar terms, according to Chinese customs data.

However, the biggest problems for Chinese exporters are found at home, with continually rising labour costs at the top of the list.

Su said she had to raise prices by about 10 per cent a year to accommodate rising labour costs from her suppliers and, as a result, some of her clients had gone elsewhere.

“The exporting industry was overly optimistic in the past, assuming that Vietnam, Malaysia or India couldn’t compete with China,” she said. “Those countries alone may not be big enough to compete with China, but what if their manufacturing capacity is combined?”

Shanghai has been increasing minimum wages since 1993, with an 8.4 per cent jump this year to 2,190 yuan (HK$2,584) a month, the highest on the mainland. Its minimum wage is now 71 per cent higher than it was five years ago and more than triple the level of 690 yuan in 2005.

Even though China’s economic growth has slowed to its lowest level in a quarter of a century, labour cost have not stopped rising, with the labour pool shrinking rapidly as a result of three decades of the one-child policy. In the first half of this year, six provinces or municipalities raised minimum wages by an average of 11.1 per cent, according to data from the Ministry of Human Resources and Social Security.

Some exporters have tried to move to cheaper places to save money, but the results have been mixed.

Song Qing, who runs a toy sourcing business in Shanghai for a German client, said one of her suppliers had complained about Shandong workers’ lack of diligence after shifting production from Zhejiang to the northeastern province.

“The supplier was surprised to find that local workers refused to work overtime,” Song said. “It’s a new experience to him as the staff in Zhejiang, even though complained about long working hours, were still willing to work overtime as long as they were properly paid.”

There are some bright spots amid the export gloom, with overseas sales of drones, a product that did not exist when China joined the WTO, surging 720 per cent last year. DJI, a Shenzhen-based start-up, accounts for about two thirds of the world’s drone market.

Meanwhile Xiaomi and Huawei Technologies, latecomers to mobile phone production, are now jostling for market share with Apple and Samsung.

But for China’s army of small exporters, the search for new markets can be a dangerous path.

Guo Xuliang, who produces flashlights for export in Ningbo, Zhejiang province, said he was testing the waters of the camping light business after a fall in flashlight sales. He said he had spent 160,000 yuan to produce a new line of camping light and hoped to export them to developing Southeast Asian markets, which were frequently afflicted by blackouts.

“It’s like a gamble,” the 38-year-old, second-generation manager of the family business said in his spacious office, opposite a sample room stuffed with colourful flashlights. “I really don’t know whether I will succeed in the new line of business.”

He checked his WeChat social media account on his smartphone from time to time for updates on the project.

Guo is emblematic of the entrepreneurs in China’s affluent, export-oriented coastal areas. He drives a BMW sedan, owns multiple properties and runs a two-storey factory along a country road.

A decade ago, he felt the winds of change in China’s economy and abandoned his father’s polluting and energy-intensive business of recycling aluminium from industrial scrap, switching to the production of flashlights for the overseas market.

But his company is now struggling in the face of a price war that shows no signs of ending anytime soon.

“We used to enjoy a [profit] margin of 30 per cent during the heydays, but now we are struggling to keep it near 10 per cent,” Guo said. Meanwhile, his workforce has shrunk from 100 workers to about 40.

Shao Jianfang runs a similar factory and has met with a similar fate. His factory used to employ 160 workers when revenue peaked at 70 million yuan a year, but at least a quarter of the workforce has been sacked as revenue has fallen.

“It’s easier said than done when it comes to upgrading or transition,” Shao said. “I haven’t decided on the shift yet as I still need more time to work on a plausible way out.”

“Let’s talk about something else,” he suggested.