Home / Knowledge / News / Apparel/Garments / China haven for Taiwanese investments in clothing sector
China haven for Taiwanese investments in clothing sector
29
Dec '08
Since the thawing of relations between China and Taiwan in the last few years, Taiwanese investments in Mainland China have been growing from strength to strength. China has put forth a slew of incentives and there are many other attractive factors to attract investments from companies in Taiwan. Among many suitable areas for the investments, the incentives and factors in the clothing sector in China have a lot to offer.

One of the biggest factors is the low wages that were prevalent in China in the garment sector. Since the industry is labour intensive, the benefits are out weighed by other factors. Labour is also available abundantly. The cultures and backgrounds are similar so adjusting can be done very fast. The land rents prevailing in some of the provinces are also on the lower side.

Other incentives and attractive factors include preferential tax and investment incentives for Taiwanese companies and the last but not the least is that more preferential tariffs were available to Chinese garment industry in the post quota restrictive period from the US, the EU and many other countries, than those available to other countries. All these factors made China an attractive location for investments in the clothing sector.

During the period 1991-2007, from amongst the total amount of overseas investment from Taiwanese clothing industry, 60 percent of that investment flowed into Chinese mainland. But specific factors occasionally affected investment proportion. For instance the North American Free Trade Area Act in 1994 led to a fall in investment ratio from 92 percent in 1993 to 51 percent in 1994 in China.

When the Taiwanese government declared the policy of no haste with more patience in 1996, investment ratio in the mainland got reduced to only 8 percent and again from 1998 to 2000, due to continual impact of Asian financial crisis, investment ration proportion in the mainland dropped to 35 percent, 12 percent and 39 percent respectively from the Taiwanese clothing companies.

Except for the above mentioned periods, for most of the other years, investment ratio in relation to overall global investment ration was maintained above 70 percent, especially after the global economy started its upward march 2001 onwards, after which the proportion of investments from Taiwan started growing and has been able to touch as much as 99 percent of total overseas investment by the Taiwan clothing industry

However, since the beginning of 2007, China began to increase the minimum wage, to carry out the new "Implementation Regulations of Enterprise Income Tax Law", and "Labor Contract Law", due to which investments from Taiwan clothing industry have been affected which has meant a gain for countries like Vietnam and Bangladesh, with Vietnam in particular having very low wage costs.

Fibre2fashion News Desk - China

Must ReadView All

President Donald Trump; Courtesy: White House

Textiles | On 23rd Jan 2017

US textile industry eager to work with President Trump

The US textile industry is eager to work with President Donald Trump...

Textiles | On 23rd Jan 2017

LyondellBasel expands Texas plant ethylene capacity

US based producer of petrochemicals and speciality chemicals...

Textiles | On 23rd Jan 2017

China’s cotton imports down 39% in 2016

China’s total cotton imports declined by 39.1 per cent to ...tons in...

Interviews View All

Yashiki Gumber
Sahiba Fabrics

Fabric does not restrict us from fashion trends

Manfred Mentges
Sedo Treepoint GmbH

We see a higher demand in colour management systems, as customers see big...

Rajiv Sirohi
Shara

‘Portugal is taking away a major share of the mill made sector.’

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
January 2017

January 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search