Taiwan Fashion Targets China's Market

TAIPEI, Taiwan (AP) - 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.

But that could soon change, they say. 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.

"The era of mass producing textile goods is gone," he said. "We are now counting on creative designers ... instead of engineers who have little knowledge about what consumers want."

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 labor costs. Taiwan's textile exports totaled $9.4 billion in 2009, a 40 percent decline from the heyday of 1997. China is the island's largest market, taking 22 percent of the 2009 exports.

The weight of the China market was evident at the annual Taipei Fashion Week show opened last week in a downtown exhibition hall. Several Chinese department store operators were in attendance, and Huang said they are expected to make big purchases.

China levies a heavy 17 percent 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.

Pan mainly sells custom-made clothing to well-heeled Chinese consumers but believes the vast market across the Taiwan Strait offers something for everyone.

"There are more than a dozen levels of consumers in China," she said. "Everything from casual wear to top-end products could sell well. Unlike the Taiwanese, many Chinese pick up the dresses they like and don't wait for big discounts."

She said the time may be opportune for a big China move by Taiwanese designers, because many Chinese designers are still studying in the West, and are three to five years from making an impact in their home market.

The view is echoed by Fang Tong, a saleswoman from Hongdu Group, one of the Chinese firms attending the Taipei Fashion Week.

"The Taiwanese designers may do well on the mainland," Fang said. "Their clothes - priced much lower than the top Western designer houses - may fit the Chinese even better."

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 percent to zero in two years.

A spokeswoman for Ho Yu Textile Company, who would only give her surname Cho, said the lowering of tariffs means it is now economic for the company to export fabrics to China. The company is supplying fabrics to luggage makers in China for exporting the finished goods to Europe and the U.S.

Among the highlights at the fashion week show was the vibrant knitwear and ready-to-wear dresses created by Taipei native Chia Wenlan, founder and designer of Twinkle by Wenlan in New York, and recipient of Tokyo's prestigious Onward Kashiyama New Design Prize.

Chia, who used Taiwanese models for her first fashion show outside of New York, believes her clothes could be sold to Asian consumers without adaptation.

"We're absolutely interested in the mainland market ... and Greater China will be our most important market in the future," Chia told The Associated Press.