One key reason behind Taiwan’s lackluster economy over the past decade is the steady loss of business to lower-cost rivals in mainland China and Taiwanese companies taking their business across the strait to bigger markets.
Those that stay, many of which are small and medium-sized enterprises, have been undergoing constant transformation in order to survive.
Textile companies are prime examples.
These businesses are building up niche capabilities in textile research and development backed by the petrochemical industry, an entrepreneur, surnamed Chiu, told Hong Kong Economic Journal Monthly.
Major sports brands including Nike and Adidas are sourcing materials from Taiwan, which excels in supplying synthetic fabrics that are warm, stretchable or fluorescent, as well as functional fabrics that are anti-bacterial, tear-resistant or even aromatic.
“Yoga is a very popular activity in the US and Europe. The fabric for yoga wear is mostly made in Taiwan,” he said.
Chiu warned against investing in China.
“As far as I know, for SMEs like us, eight out of 10 lost money,” he said.
“Without scale, it’s hard to survive in mainland China. Wages are climbing and the tax burden is also getting heavier.”
– Contact us at [email protected]