Thousands of small & medium-sized exporting companies in China have realized it is unrealistic to focus on export scale and growth rate in the withering export market. They should seize every opportunity, be market-focused and offer innovative products.

Ms. Ye's two factories in Hunan manufacture "green" furniture – all raw materials from wood to glue and paint are all environmental materials. A third-party verifying organization checks sources of bamboo and installation methods of furniture to ensure it is done in an eco-friendly way. Americans believe Ms. Ye is one of the most eco-friendly furniture manufacturers in the world. Many top retailers in the U.S. are willing to sell her products.

This was one of those Chinese entrepreneurs' success stories Professor Glenn Carroll shared with hundreds of Chinese managers at the Stanford - Chief Executive China Executive Development Program, a joint program organized by Chief Executive China and Stanford Graduate School of Business.

"Consumers in developed countries tend to buy products that match their particular interest. For example, a lot of consumers favor green products, while some are obsessed with traditional Chinese products," said Carroll. He believes the act of buying represents one's trust in the brand and endorsement of the company's concept.

According to a recent buyer survey released by Global Sources, a leading B2B media company, 57% of surveyed buyers expect to increase or maintain the total value of imports from China in 2009. Meanwhile, it is inevitable that buyers will be demanding better product quality at better prices, making product innovation more challenging for suppliers.

Guangxi Sanhuan Enterprise, a porcelain manufacturer, had good results after attending a trade fair in China. According to its representative, the company develops 2 to 3 products a day on average. Continuous innovation not only meets clients needs but also increases the Company's competiveness during the financial crisis.

Another example proving innovation is the way to success is a new invention from Cixi Shinkai – an igniter with "steady" flame. Cixi Shinkai spent three years to develop this technology. The quality of the newly invented product meets EU standards and is sold at half the price of similar products. Therefore, it has gained much attention from overseas buyers.

Professor Glenn Carroll and Hayagreeva Rao from Stanford Graduate School of Business conducted two surveys on China suppliers' opinion on "innovation" and "market-focused".

Among thousands of surveyed suppliers, 95% believe it is vital to understand clients' needs and establish market-focused strategy to boost innovation.

"This clearly shows that China suppliers have gradually noticed the ability to produce innovative products matching clients' requirement is a critical factor to excel in the competitive market," said Craig Pepples, Chief Operating Officer of Global Sources, partner of the survey.