Rising production costs are driving many Chinese companies to rethink their growth pattern. At the Canton Fair, Chinese companies are adjusting their strategies to gain a competitive edge.

The days of cheap products are numbered.

Increasing raw material and labor costs, and RMB appreciation have resulted in a 3 to 5% increase in the cost of high-end audio products from Panyu-based CAV Audio. The company sells a full range of

amplifiers, speakers, audio rack to the US and European markets. Upward price pressure is making life difficult for company manager Zhong Liping.

Zhong Liping, Int'l Manager, CAV Audio, said, "Most of our deals were signed a year ago in US dollars. It's difficult for us to change the price now. RMB appreciation in particular has eaten away our profit. "

On Friday, the yuan strengthened to a record high against the dollar. The central parity rate of the RMB stands at slightly above 6.5 to the US dollar. Losing their edge on cost, many companies are looking

at other ways to achieve sustainable development.

"...many companies are beginning to invest in R&D, and come up with better products..."

A new addition to the company's traditional product range. These lighting batteries have been created to boost Guangzhou-based Tiger Head Battery Group’s brand image. Each battery has an uninterrupted

lighting time of more than forty hours, and can be recharged a thousand times. The product embodies all today’s buzz words: low carbon, energy saving and a trendy design.

Zhou Songyi, Vice Manger, Guangzhou Tiger Head Battery Group, said, "They are one of a kind. We’ve received a lot of enquiries from international buyers at the fair. We hope this product can boost our sales, and also the image of Chinese products around the world. "

Zhou says the company will continue to put innovation at its core, for it's innovation which creates long term wealth.