Residents watch after setting up fireworks as part of Chinese new year celebrations, in central Beijing early Feb 10, 2013. [Photo/Agencies]

BEIJING - One week ahead of Spring Festival, China's firework companies are feeling heavy pressure as they face a stagnant market going into their busiest sales period, with demand shrinking amid bans on firework displays.

Setting off fireworks during the Lunar New Year is an age-old tradition in China, with ancient superstitions believing the light and sound would scare away evil spirits. In more recent years, they're used to bring a festive atmosphere during the country's most important holiday.

However, fireworks have been increasingly blamed for contributing to the country's smog problem, pushing local governments to implement measures forbidding or limiting firework displays.

Yan Zhengbin, an official with the Ministry of Public Security, said a total of 138 cities have introduced bans and 536 cities have issued restrictions so far.

Though the move has been applauded by those concerned for the environment, companies who rely on fireworks for a living are feeling unprecedented pressure.

According to a salesman with Panda Fireworks based in the central Hunan Province, the company has stocked 150,000 cases of fireworks, much less than previous years.

"The orders we have received this year have fallen off, with 20 percent less than last year," he said.

A salesman surnamed Wang with Beifanghuapao firework company in the northeastern Jilin Province said business has been on a downward slope during the past few years.

Sales for this year have been reduced by half from the same period last year, he said, adding their current inventory may be enough to satisfy sales for the next few years with the current market outlook.

"The company will have to consider turning to other business if the market continues to deteriorate," Wang said.

In Beijing, the official period to sell fireworks has been shortened from 20 to 11 days this year. The number of licensed retail outlets was down by 20 percent year on year to 942. The city has stocked up 315,000 cases of fireworks, which is 200,000 cases less than last year.

In December, government of Nanchang, capital of east China's Jiangxi Province announced the cancellation of a large-scale fireworks display which was scheduled to be held on December 31 in order to "reduce emission of pollution and maintain fine air quality".

Lidu fireworks company, located in Jiangxi, is a leading producer of large-scale fireworks. The company's vice general manager Hou Zhongping said their business has been hit by nationwide cancellations of large fireworks shows in the past few years.