New Zealand's government is investigating claims that clothes imported from China contain dangerous levels of formaldehyde.
Many New Zealanders' clothes are made in China
The government acted after the Target TV programme claimed that fabrics in children's clothes contained 900 times the UN's safe level of the chemical.
Formaldehyde, used to stop mildew, can also cause skin irritations and cancer.
The discovery is the latest in a series of safety scares involving Chinese exports of goods such as toys and food.
'Made in China' under threat
"We are very concerned about this issue and if action needs to taken, we will act very quickly," said New Zealand's Ministry of Consumer Affairs spokeswoman Liz MacPherson.
"We can recall products, we can ban them and we can establish mandatory safety standards and obviously we'll be considering all of those options," she told reporters.
Mattel recalled millions of toys over safety concerns
Earlier this month toy maker Mattel recently recalled millions of Chinese-made toys because of concerns about the use of toxic lead paints and strong magnets.
Questions have also been asked about the safety of other products, such as tyres, toothpaste and various foodstuffs.
Chinese officials have said the world should have more faith in the Made in China label.
"Although recalls are necessary, it is unfair to decide that all products made in China are unqualified," Li Changjiang, director of the General Administration of Quality Supervision, Inspection and Quarantine is quoted as telling the Associated Press.
Mr Li said he believed there was a "new trend in trade protectionism".
That has been dismissed by European Union trade commissioner Peter Mandelson.