A herdsman in Inner Mongolia combs the cashmere from a goat

BBC Scotland understands that an offer for Dawson International has already been turned down.

The company owns yarn spinners Todd and Duncan in Kinross and Barrie knitwear makers in Hawick, Scottish Borders.

The Lingwu Zhongyin Cashmere Company said it was keen to get into the lucrative international market using Scotland's expertise and resources.

Vice president Mah Feng said: "The Scottish cashmere processing industry has a longer history than China and has a famous brand name in the cashmere industry in western countries."

Nancy Nicolson of BBC Radio Scotland's Grassroots programme recently travelled to Inner Mongolia to see how cashmere is produced.

She said it takes numerous processes, in both China and Scotland, to produce a cashmere sweater which costs well over �2,000 and carries labels like Chanel or Dolce & Gabbana.

Scotland is one of the big three cashmere importers, along with Italy and the US.

A large section of the Scots textile industry has made a niche for itself in the cashmere processing business.