FOR exporters in Zhejiang Province's Yiwu, which supplies half of the world's Christmas products, the year 2010 started surprisingly well. Orders jumped to the greatest volume in years, following a slump during the world economic crisis.

But, even more surprisingly, after a year of hard work to meet the surging demand, the manufacturers ended up with barely any profits as Christmas approaches.

"Rising wages, the appreciation of the yuan and increasing raw material costs - we saw them coming. The problem is that we never expected them to get so bad within the year," said Chen Jinlin, general secretary of Yiwu's Christmas Goods Industry Association.

Rising demand from the global market burdened workers with seemingly endless work and overtime, while bosses racked their brains searching for raw materials.

"Yes, I earned more this year, but I'm not happy. It was a very tiresome year. Besides, everything has become more expensive," said a worker surnamed Zhuang with Hangtian Handicraft Co, a big Christmas goods maker in Yiwu.

Zhuang is to return home to Hubei Province for the coming Spring Festival. She expected the traditional New Year celebration would cost nearly 15,000 yuan (US$2,257) or half of her savings for the year. "It costs to travel, to have dinners, to give gifts. And I have a family to support."

Zhuang declined to give her full name, worrying her employer may frown upon her words.

"I understand the difficulties of our workers, but who understand the company's difficulties?" asked Li Genjun, deputy general manager of HHC.

The firm's labor costs have risen by 30 percent in 2010. "The wages have been raised from 1,200 to 1,700 yuan per month. And the workers are still unsatisfied," Li said.

Many of China's labor-intensive makers are having a hard time, as the supply of cheap manpower shrinks.

The turning point was 2004, before which China had an oversupply of manpower and workers had no say. After 2004, workers began to negotiate with employers, said Cai Fang, head of the Institute of Population and Labor Economics, Chinese Academy of Social Sciences.