DREAMWEAVER: Carpets produced in Hotan, northwest ChinA's Xinjiang region, are proving popular worldwide (YIN DONGXUN)

I saw an advertisement for a 30-foot by 30-foot silk Persian carpet in a pan-Middle Eastern newspaper recently with the punch line "If your palace needs it, contact us." Palaces and carpet weavers are synonymous with the oil-soaked Middle East. As an occasional collector of Oriental rugs, I was stunned to learn the attention-grabbing advert wasn't placed by an Iranian or Turkish carpet magnate, but rather by a factory in central China's Henan Province.

Based in Zhengzhou, the populous provincial capital, carpet maker Henan Yilong Carpet Co. draws customers from the United Arab Emirates and Libya, countries steeped in carpet-weaving tradition. Factory-made Persian carpets have become affordable centerpieces for China's millions of new apartment owners. As with cars and clothes, China may be using its assembly lines to churn out copies of Persian rugs, treasured heirlooms in Iran, where craftsmen often take months to weave one 3-meter by 4-meter rug.

But that's not the full story. While cheap, manufactured rugs lack the precision and charm of hand woven originals and are usually of a gaudy hue, some of China's carpet makers are drawing on a local tradition in carpet making to compete on quality. Henan has a thousand-year-old tradition of making silk carpets. I hadn't realized how rich the local carpet making tradition was until I started to visit some of the carpet shops in Beijing selling this rather less well-known counterpart of the more celebrated Persian and Turkish rugs.

Curiosity took me to Henan to visit Yilong, which sells its wares in the United States and the EU. The firm, located outside Zhengzhou, charges top dollar for its weaves.

In business since 1987, Yilong claims to be China's largest producer and exporter of handmade Persian carpets. While I was there, several Arab customers thumbed carpets stacked in neat piles in its warehouses.

Yilong's 2,600 carpet weavers, many of them working out of their own homes, make carpets based on the company's own 500 distinct Persian-style designs. The firm exports an average $12 million worth of carpets a year to 35 countries, the bulk of them in the Middle East. Yilong also sells in Europe, and counts respected London carpet retailer Leon Norrell among its clients.

Today it churns out factory made copies of Persian and Turkish motifs, but China has a proud carpet-making heritage of its own, partly a legacy from the period when China and Persia were both ruled by the Mongol regime in the 13th and 14th centuries, who disseminated crafts like carpet making and porcelain, unique to certain territories within the Mongol empire. But carpet making in China was largely restricted to weaving traditional Chinese motifs such as the phoenix and dragon into carpets for the royal court. Many of those rugs were woven in Henan, but even there the carpet making crafts died out last century.