Thanks DustyB, I'm a big fan of Chinese deco rugs myself. I have another one that is more of a classic "Nichols" type:

This one is from an estate sale and I only paid $100. It is about 4x6 and I washed it twice to bring out the colors in the flowers. It took the washing and detergent fairly well, barely any fade. I overcast the fringes and repaired about four inches of selvedge using cotton from the fringe. As the picture shows it matches my apartment-sized sofa fairly well. But going back to the original post, the fringe on that rug does appear to be part of the foundation; it looks as though the rug was knotted and then the warps were stitched to create a machine finished fringe. I do not think the rug has enough wear to have had the fringe repaired, as the pile is very high in all areas. To me it seems it was taken off of the loom after hand-knotting, and then rather than making a knotted fringe, they used a machine to stitch warps into a fringe.