China suppliers are boosting overseas shipments to developing countries amid softening exports to Europe as the region grapples with its debt crisis.

More than 40 percent of respondents in a survey conducted by Global Sources said they will increase deliveries to South and Latin America, the Middle East, Africa and Eastern Europe in the months ahead.

The Asia-Pacific is also an attractive alternative, particularly because of China's free trade agreement with many countries in the region.

Other than strengthening their foothold in nontraditional destinations abroad, suppliers are looking to the domestic market to sustain sales. Facilitating this approach are the China government's policies aimed at raising local consumption by improving income and social welfare.

To attract new overseas and domestic buyers, companies are planning to speed up the release of new products and enhance their current selections by expanding R&D budgets.

About 10 percent of makers are trying to control production outlay, while a handful may even relocate their factories to low-cost areas. A very small number of suppliers said they have no choice but to close down factories.

The majority of survey respondents said the debt crisis in Europe has affected exports, with 34 percent reporting significant impact.

Shipments at 66 percent of companies have declined in the past couple of months. Nearly one-third of these makers said exports have dropped more than 25 percent.

Customs data confirms export growth has been sluggish recently. China's shipments to Europe grew by 11 percent YoY in September and only 7.5 percent in October. In comparison, the rate of growth in July and August stood at a robust 22 and 24 percent, respectively.

More than 45 percent of surveyed suppliers have experienced lower order volumes from the region as buyers remain cautious of building up inventory. This is particularly evident in the computer, consumer electronics and communications industries with almost 60 percent of suppliers reporting smaller shipments.

Companies interviewed for the survey also feel pressure pricewise. A growing number of buyers in Europe are negotiating for lower quotes at a time when spending for materials, components and labor is climbing, thereby eroding margins. This trend is more apparent in low-value products such as garments and fashion accessories.

Suppliers are already taking measures to sustain their Europe business. Close to 60 percent of surveyed makers are planning to enhance products with value add-ons. Flexible pricing and smaller minimum order requirements are also expected to attract buyers from the region.

Amid fears of an economic contraction early next year, China suppliers are cautiously optimistic with their export projections. A modest 29 percent believe shipments to Europe will rise in 2012, while 34 percent expect revenue to remain unchanged.

Close to 40 percent, however, foresee exports to the region falling further. Most of these companies expect shipments to drop between 10 and 20 percent.

This survey was mostly conducted in China's primary export centers of Guangdong, Zhejiang and Jiangsu provinces, and Shanghai.

A total of 581 suppliers were interviewed from various industries, including home products, electronics, hardware and DIY, gifts and premiums, garments and textiles, solar and energy-saving products, garments and textiles and electronic components.

A cross-section of emerging, midsize and large companies was surveyed. One-third of respondents have relatively small operations with less than $1 million in annual exports. Midsize businesses that post sales of $1.1 million to $5 million represent 42 percent of interviewees. Large enterprises account for one-quarter of the respondent base.