Want to know why China's textile industry is so successful? Read this unusually frank interview with the charge d'affaires at China's embassy in South Africa.

China has been exporting textiles a long time -- Chinese silk was a big favourite with Egyptian aristocrats 2000 years ago. It also has abundant supply of cheap labour. But its current competitive strength stems from the 15 years China spent restructuring its textile industry in the run-up to WTO accession in 2002.

Prior to that, China's textile factories were using obsolete looms made in the 1920s and 1930s. With the WTO beckoning, Chinese government "made a decisive decision" to rejuvenate its industry.

The first move was to shift from extensive to intensive operation. That meant decreasing the number of spindles, reducing the number of employees and investing in the most productive enterprises.

The second move was to encourage home-grown innovation using Chinese scientists and technicians. The third measure was to import foreign technologies and technical know-how when needed. This continues to this day -- China has spent $18.8bn on importing advanced textile manufacturing equipment in the past five years. The official, using an unfortunate analogy, calls this process "blood transfusion".

The final step has been to encourage foreign investment in China's textile sector.

"If you do not have necessary funds to import foreign technology and equipment, you can attract foreign investment to do so. This is a win-win situation. You can keep as many workers as possible in the industry while foreign investors get their due profits. We call this 'going to the high sea by borrowing ships'".

And China's textile industry certainly has taken to the high seas in a big way. So much so, in fact, that the European Union last year had to impose limits on the growth of Chinese textile exports to the EU in ten "categories of concern", including bras, t-shirts and men's trousers. Exports soared after the abolition of EU quotas on Chinese textiles in January 2005.

Textile workers in South Africa fear a similar avalanche of cheap "Made in China" t-shirts if a proposed Free Trade Agreement between SA and China goes ahead.

SA's trade relationship with China is characterised by garments and textiles. Since 2003, SA has seen a 480% increase in clothing imports from China. In the same period, its textile industry has lost 62,000 jobs.

The textiles problem threatened to become a real deal-breaker block in the FTA negotiations, so China has now proposed to voluntarily limit exports and provide training for local personnel to improve the competitiveness of SA's domestic industry.