Some companies are planning to create internationally recognizable brands in order to sell them, not overseas, but back to Chinese consumers at a competitive price, says Sherwin Zhang, sales manager for Zhejiang Dalouis Garment Co Ltd. His biggest customers are based in Germany and Poland.

"Several European and foreign companies have expressed interest in investing with us. While this is not something we're considering right now, it may be further down the road," he says.

When asked if he was trying to launch his product overseas, Babei CEO and former government official Jin Yao shook his head and says "it will be very difficult".

"The biggest project we're now engaged in now is establishing ourselves in China," he says, adding that Babei already has 260 men's clothing outlets on the mainland.

Never one to lose sight of an opportunity, the business-savvy Jin saw his company's total sales volume almost double to 1.883 billion yuan from 2008 to 2009 - but only after it diversified into other areas such as men's apparel, textiles and bedding.

A diminutive man dressed in a fur-lined trench coat, Jin plays the role of "cluster captain" in Shengzhou's tie industry as defined by Jean-Pierre Jeannet, professor of global strategy and marketing at Swiss business school IMD.

As chairman of the local tie association, part of Jin's job is making sure the cluster works in close collaboration wherever possible to keep costs down and stay afloat, although many firms still went bankrupt in 2008 due to the global credit crunch.

"We tend to help each other out," Dalouis' Zhang says. "For example if we get too many orders, we'll offload them to one of the other companies that are struggling. That way we all win. The bosses also meet regularly to decide on prices and keep the competition healthy."

Shengzhou is one of the few places that benefited from the recent global credit crunch, when key players in established tie-making cities like Como, Italy, either went bankrupt or relocated their orders and factories from neighboring countries such as South Korea and Vietnam to here.

Before 2008, Shengzhou accounted for about half of the world market. At the end of 2009, it had gobbled up some 60 percent of the pie despite seeing exports slip 12 percent year-on-year as global sales contracted way faster than the city's export-led market.

Meanwhile, Shengzhou's tie-makers posted healthy growth again last year and continued to attract more capital and investment. Total exports from January to November stood at 188 million euros, up 15.2 percent from the previous year, according to statistics provided by the tie association.

The same figures show the number of companies with assets of least 5 million yuan jumping from 78 to 110 from 2007-2009.

"I think Shengzhou's share could keep growing until it accounts for 80 percent of the world market," says Zhang.

"Most of the tie makers here are now focused on research and development. They know they've reached the limit in terms of meeting demand, so they're not trying to expand their production capacity anymore".

His 10-man creative team churns out 300 new patterns a month, which helped Dalouis shift enough neckties last year to warrant 4.6 million euros in revenue, an improvement on the year before, says. An annual tie festival in the city reminds the designers, workers and bosses of the cluster's emphasis on healthy competition, he adds.