Free trade and wider tariff and non-tariff barriers is threatening China's garment industry according to senior industry officials.

Industry officials say the European Union cancelling restrictions on garment imports from six countries in Eastern Europe is set to have an effect on trade.

The US also signed a rule last year giving Africa more favoured treatment in garment imports.

If the products use materials provided by another country, then garments from Africa are free from tariffs and quotas.

Latest statistics confirm industry fears. China's garment exports totalled US$6bn last year, up 7.3 per cent. That of Mexico, in the North America Free Trade Area, reached US$8.7bn, up 11.5 per cent.

One Chinese business owner warned: "When the US and EU is totally opened to China in 2005 according to the World Trade Organisation treaty, these countries will have taken away more market share after years of favoured policy and Chinese garments will not be competitive by then."

By Deborah Bowyer