Rug weaving in China dates back to as early as the seventeenth century. Beginning in the eighteenth century, workshops in Beijing were established to weave carpets for the imperial palace. In the early 1920’s and 30’s, American companies became involved in China's rug weaving industry as well, so as to bring Chinese products to the American market. In the last forty to fifty years, the Chinese Government set up and owned many more of the rug weaving workshops. Recently, a few privately owned Chinese companies with little success have taken on the challenge to compete with government owned factories. The reason for their failure seems to be that the government prices their inventory below profit margins so as to attract buyers from other countries, knowingly losing money in the process, but both gaining business, and providing jobs for thousands of their citizens.