Hong Kong, May 20, 2005 – Global Sources' (NASDAQ: GSOL) China Sourcing Report: Denim Garments shows mainland China's denim garment industry exported US$1.8 billion worth of product in 2004 – 30 percent of total global output. Makers are concerned about export taxes, fierce price competition in the post-quota era and US trade safeguards.

The Denim Garments report profiles 71 suppliers and provides specifications for 112 top-selling export products. It provides coverage of leading and emerging supply centers, plus insight into industry capacity, output, and research and development spending. Global Sources China Bureau compiled the report from on-site factory visits, face-to-face interviews and extensive questionnaires.

More than 70 percent of makers cited price competition as the major challenge faced by the industry.

Prices were expected to drop following the elimination of WTO quotas in January 2005. More than 45 percent of makers believe that possible US import caps, combined with intense post-quota competition and government-imposed taxes will force them to lift prices. However, 44 percent said they intend to keep prices at current levels.

Michael Kleist, editor-in-chief of Global Sources Garments & Textiles, said: "Many small and mid-size makers have invested heavily in capacity upgrades in anticipation of the quota-free market. Now, with new taxes affecting some garment lines, the threat of US trade safeguards, and fierce price competition – the future looks uncertain."

The report shows China's denim garment makers are trying to maintain a competitive edge by investing in R&D including the use of multiple washes, embroidery and custom-made buttons or rivets. Some companies are also investing in brand development to gain greater international market share.

The Denim Garments report is the latest title in the Global Sources China Sourcing Report series. The reports help buyers make better-informed purchasing decisions. They complement Global Sources' sourcing and product information services, which include Asian Sources trade magazines, Global Sources Online and China Sourcing Fairs.

The China Sourcing Report: Denim Garments is available at www.globalsources.com/astj/denmirpress for US$395.