Government ministers have focused their attention on textile imports from developing economies. China is considered to be the main source of the problem. In a recent interview for the Italian newspaper Il Gazzettino, Minister Emma Bonino said that "Chinese dumping is a real problem to be considered". "In the last five years - she added - at least one thousand Italian shoe factories were obliged to close down, leaving small business enterprises in a disastrous economic situation".

Beppe Modenese, honorary president of the National Fashion Chamber, is particularly fearful of what he sees as unfair trading practices. He calls counterfeit "a dirty business". Sales for thousands of apparel companies located all around Italy have lost an amount of €2.4 billion with nearly half of that coming from exports. Selling into foreign markets has become tough for all Italian producers.

According to Luca Rinfreschi, head of the Prato's chamber of commerce, fabric producers in the area are suffering from the cheaper imports from China. "We are all in favour of an open market but, unless the same rules apply to everyone, there is no way that fabric manufacturers in this area can compete properly," Rinfreschi said to Italian magazine Economy.

Chinese manufacturing companies have been successful year after year. In 2000 they had a small nibble of the fashion market. Now it is a solid business with increasing export success. The growth of China has now become colossal.

Italian designers have already been challenged by the arrival of ultra-cheap chains such as H&M and Zara, whose products are often made in the Far East. The first Zara shop was opened in Milan in 2002. It is a megastore of  2.500 m2 located in Corso Vittorio Emanuele, the main shopping area of the Italian fashion capital. But the “Dragon threat” is even more scaring. Chinese companies have lower environmental standards and less welfare and tax costs than Italian manufacturers. "I have seen fabrics from China which are being sold in Italy at less than the cost to produce them," Rinfreschi said.

Threat or opportunity: here is the big question. Only for a small number of Italian luxury companies China can offer hope on the horizon. The secret is gaining brand recognition in Asia and take advantage of the new market. Salvatore Ferragamo has celebrated a decade in Beijing with its central store. "Thanks to an early start, we are in good position and we have to make sure we maintain it," says Ferragamo. "They appreciate especially things that are not made in China. And we are 100 percent made in Italy."