Are there high levels of formaldehyde in Chinese clothes?

As if food safety concerns are not enough, there comes this story from New Zealand:

First it was pet food, then toys. Now the safety of Chinese-made clothes is being called into question.

New Zealand's Ministry of Consumer Affairs is investigating claims that clothes contaminated with high levels of formaldehyde are being sold in New Zealand.

Exposure to high levels of formaldehyde can cause cancer in humans.

The claims are being aired on NZ television program Target.

The program's director, Candace McNabb, says her team arranged scientific tests when they came across the story.

"We were tipped off by a consumer who contacted us because her son had bought 100 per cent cotton pants and had an allergic reaction to them," she said.

"So we started looking into the types of chemicals that are used in production and manufacture of clothing and treatments that they receive along the way. For example, something like formaldehyde is used to prevent mould and mildew, things like that."

Full story here from ABC News of Australia.