Taiwan targeting China's fashion market

Taiwan -once known around the world for its cheap garment exports, Taiwan is now seeking to leverage a new opening to the China market to make its mark on the Asian fashion stage. While several Taiwanese designers have been recognized for their work internationally, government officials say the lack of a homegrown high-end design industry is holding them back.

A trade deal signed in June will make the Chinese market more open to the Taiwanese, slashing tariffs on goods including apparel and punishing mainland copycats of Taiwanese designs.

The deal is part of President Ma Ying-jeou's overall effort to reduce tensions with China, and build a more cooperative relationship across the 100 mile (160-kilometer) wide Taiwan Strait 61 years after the island and the mainland split amid civil war.

Vice Economics Minister Huang Chung-chiu said lower tariffs are good news for the island's fashion industry, but only if it learned to change its focus from mass production to market innovation.

Taiwan was once a dominant force in world textile production, but its ranking has slipped to No. 6 after many of its big players shifted operations to China in the 1990s to take advantage of lower labour costs. Taiwan's textile exports totalled $9.4 billion in 2009, a 40% decline from the heyday of 1997. China is the island's largest market, taking 22% of the 2009 exports.

China levies a heavy 17% duty on all imported clothing. Taiwanese garment makers say the impending tariff cuts could help their access to the mainland market, particularly because Chinese appear to have a keen interest in things coming from the self-ruled island Beijing still claims its own.

“Because of our shared culture, Taiwanese designers can cater to the needs of Chinese better than Westerners," said Gioia Pan, one of the few Taiwanese designers with stores in China.

Currently, fabrics account for the biggest export item of Taiwan's textile industry, and many fabric makers are ramping up production with tariffs expected to drop from 17% to zero in two years.