Taiwanese enterprises fail to endure RMB appreciation

April 15, 2008 - China

A large number of Taiwan garment enterprises operating in China are expected to close down due to rapid appreciation of RMB.

Experts have analyzed that export-oriented companies will face the most amount of difficulty while one third of the traditional clothes business firms with very low standards of technology will encounter a similar fate.

However, enterprises having latest technology with very strong production capacity may be able to survive for at least one or two years. Thereafter, the situation is likely to change and these companies in all its likelihood may stand firm in both the domestic and foreign markets.

This apart, these successful enterprises will also attract orders a great deal more than they had in the previous years.

As of now, strengthening of RMB has virtually paralyzed the textile industry, especially, the clothes manufacturing enterprises in China. To the extent that Taiwanese entrepreneurs who initially planned to set up their new production base in China, have switch to other countries like Cambodia, Vietnam and Indonesia.