Although exports were improving with the world economy recovering from the global financial crisis, Yu Zuhong, director of a small machinery manufacturer in China, was still worried.

"There are too many hidden problems and pressure and I dare not be too optimistic about this year' s trade outlook," Yu said at the 107th China Export and Import Trade Fair, or Canton Fair, which opened Thursday in the southern city of Guangzhou.

Yu runs the Hangzhou Xiaoshan Transwell Building Instrument Factory, which employs 70 workers and exports welding machines and equipment for PE, PPR, PB pipes to the European Union, United States and African countries.

Yu said the appreciation of yuan, or China' s currency renminbi, and soaring costs of raw materials and labors would all squeeze the already meager profit margin.

"I' m afraid hard time will hit again in the second half of this year," he said. Because of the concern, the company' s previous 60-million-yuan (8.8 million U.S. dollars) planned investment for this year was halved, he said.

The company suffered a heavy blow last year with exports plunging 38 percent from 2008 level because of falling demand in the E.U. and U.S. markets, which accounted for 40 percent of the company' s total exports.

Ci Peng, sales director of the Shandong-based Bantal Electrical Appliances Co., Ltd., had similar concerns. "Actually, trade improvement does not look like what customs figures suggest at the beginning of the year and I don' t think we can return to the pre-crisis level in such a short period."

Ci' s company, with more than 1,000 employees, churns out 500,000 energy-saving lamps every month but the capacity cannot meet rising orders at present.

However, based on the feedback from his clients from countries such as Russia and Iran, Ci said orders might drop slightly in the second half this year.

As the world' s largest exporter, China' s exports grew by 24.3 percent from March last year to 112.11 billion U.S. dollars, while imports jumped 66 percent to 119.35 billion U.S. dollars, leaving a 7.24 billion U.S. dollar deficit, China' s first since May 2004.

Economists played down concerns that a trade deficit would hamper the country' s strong economic growth, saying the deficit is a temporary phase, considering the robust overseas economic recovery and slowdown in China's imports.

Combined the first three months, China still reported a trade surplus of 14.49 billion U.S. dollars n the first quarter, a fall of 76.7 percent from the same period of last year, according to customs statistics.

However, unlike small exporters, some large-scale companies were quite optimistic about the future and made aggressive plans. Haier, China' s largest home appliance manufacturer, forecast a more encouraging sales this year because of the global economic recovery. The company now sells products to more than 160 countries and regions around the world.

Zhang Qingfu, Haier' s managing director for overseas business division in Middle East and Africa, expected sales in the regions to increase more than 50 percent this year from a year earlier as the company strove to promote expansion and marketing.

"Despite some challenges, the overall business climate is improving this year," he said.

Domestic export enterprises must improve quality and services to enhance comprehensive competitiveness on the global market, he said.

Yu, who had spent 35 years on research and development, said the Chinese government must enhance the protection of intellectual property right to encourage enterprises' technology innovation.