The United Nations Conference on Trade and Development (Unctad) has warned developing countries in Asia that they are likely to face greater competition from China in light manufactured goods such as leather, textiles, clothing and travel goods.

A report released by Unctad said that developing countries in Asia should improve productivity levels to compete with China and make the most of the growing Chinese market.

Unctad secretary-general Rubens Ricupero said: "China's constant growth in international trade could pose a problem for countries that are too reliant on the same kind of exports that are extremely dependent on cheap labour". However, he pointed out that the Chinese market provides a good opportunity for countries exporting high-tech products such as equipment and machinery and raw materials.