The red, blue, yellow and green books in his research center are filled with 218,000 cuts of fabric based on an investment of 20 million yuan since November 2009. Tu says Babei plans to pour another 40 million yuan into it by 2014, when the number of patterns is expected to grow to 600,000.

"The main purpose is to lower the design costs for other manufacturers. Local companies spend an average of 300 yuan to research and develop a new tie pattern. By interacting with our database, this should drop to 150 yuan," he says, adding that the database will be available to clients worldwide for a fee.

"In a few years, we hope our foreign customers will be able to customize our own designs easily using this tool."

Babei was registered in 1993 as a joint venture with a French apparel maker, but is now wholly Chinese owned. Some of the companies in the cluster have European investors or partners, but only businessmen from Iran and South Korea have their own companies here.

Local businessmen say they are fed up with dealing with the Koreans after having had their fingers burned once too often - they will only accept pre-shipping payments now - but many are seeking opportunities with European or American companies.

For Babei, its French influence lingers on - even its name is a contraction of the Chinese characters for Paris (Bali) and Beijing -courtesy of an exclusive arrangement with Pierre Cardin to use the latter's brand name on ties sold in the domestic market.

According to Zhou Qingyu, vice-secretary-general of the Shengzhou City Tie Profession Association, the local industry has bucked the trend once, and it will do so again as the government provides incentives for local companies to venture overseas.

"The global market for ties is going to continue to shrink, but we'll keep biting a bigger chunk of it," he says confidently. "We've been trying to add value to our products for several years and we'll continue along this path to stay ahead."

This means importing more cutting-edge manufacturing tools from Europe, like the rapier jacquard machine, and liaising with foreign designers, among other measures. Babei snapped up an Italian design studio in Como six or seven years ago to collate European trends and ship them back to China.

Meanwhile, the local tie association has for the last year held monthly seminars during which it invites prestigious foreign and Chinese designers like Chen Wei from Shanghai to hold seminars and exchange ideas with local artists.

Workers add the finishing touches to silk ties at a factory owned by Zhejiang Dalouis Garment Co Ltd in Shengzhou's tie industrial zone. Neckties require 25 manufacturing steps before they hit the rack. Matt Hodges / China Daily

"We are trying to create our own big brands here, but at present the brands are barely recognized overseas," says Zhou, adding that 467 companies have registered trademarks in the city. Of these, 10 are pushing to increase their brand awareness internationally.

In support of this, the government is offering subsidies of 3 percent to any local company that purchases or cooperates with a foreign brand based on consideration of at least 10 million yuan. For smaller capital investments, it promises financial aid amounting to 2 percent.