China's share of US apparel imports reached their highest ever level in September 2008, a new analysis says, contradicting earlier fears that China was becoming uncompetitive.

According to The Source, the monthly review from apparel trading consultancy Clothesource, China accounted for 42.8% of US apparel imports in September, the latest month for which data is available.

Furthermore, this growth has accelerated since March, when Chinese imports reached a mere 20% of US clothing imports.

The analysis shows that from September 2007 to March this year, American buyers moved away from China amid a falling dollar and fears that prices would rise after rapid pay hikes.

Clothesource analysed the volume of imported clothes reported in the latest data from the US government's Office of Textile and Apparel.

CEO Mike Flanagan believes that wage rises have had less of an impact on clothes prices than expected.

"Depending on the garment, wages account for 10-20% of the production cost for most apparel," he said.

"And as the Chinese currency rose in value, the rising price of many dollar-denominated inputs - from oil through imported cotton, to the cost of freight - hit Chinese factories less than their competitors in Asia or the Americas.

"Actual factory-gate prices of clothes in China hardly moved" he added.

"For most of 2008, clothes inflation in Chinese currency has been from 1.5% to 2.5%. On average, US buyers, even with the sinking dollar, have paid between 5% and 10% more in dollars than a year ago."

The news comes at an intriguing moment for US President-elect Barack Obama.

During his campaign, he pledged support to US yarn and fabric makers in their campaign for punitive taxes on Chinese imports when America's quotas are withdrawn at the end of this year.

But on 15 November, the US and the other 19 members of the G-20 pledged they were "rejecting protectionism" and "would refrain from raising new barriers to trade".

While Chinese imports were thought to be falling, the contradiction didn't matter. Now they are growing again, Obama may be faced with a tricky dilemma.