Taiwanese apparel companies more than ever need transferring their production capacities to low-cost countries.
After labour costs steadily rose in the past two decades, Taiwan is now facing a surge in competition from China as a result of quotas' phasing-out.
A sharp appreciation of the Taiwan dollar also led to less orders from US buyers in 2004 and January-February 2005, Taiwanese apparel companies this week said.
Woven apparel exports were down more than 18% in volume terms (kilos) in 2004 while declining 13% in value to US$986 million.
Knit apparel exports were less affected, however, with a 8% decrease in volume terms while shipments only slided 1.46% in value terms to US$678 million.
Sales to US buyers were not so bad with exports of knit and woven apparel exports to Taiwan's largest market down 7% and 9%, respectively.
The US market accounts for 70% of total Taiwanese apparel exports.
The decline in direct sales to the US market also reflects relocation to other countries.
A large number of Taiwanese capacities were already transferred to Jordan or Central America to take advantage of duty-free access to the US market.
Sales to Hong Kong were dramatically down in the past year, with a 42% fall in chapter 61 (knit apparel) in volume terms and even a 59% decline in chapter 62 (woven apparel).
Lower sales to Hong Kong usually reflect more direct shipments to China.
Exports to continental China were up 43% in value terms under chapter 61 while down 49% under chapter 62, however.
Shipments to the European Union also substantially fell with a double-digit decline observed on major markets.
More surprisingly, sales to Asian markets are soaring. Shipments of knit apparel to Vietnam rose 47% in volume terms while exports to Indonesia and Bangladesh were up 24% and 26%, respectively, although from low levels.
Low-priced articles were sold to those markets, confirming that remaining Taiwanese capacities could be relocated to China and Vietnam in the short term in order to sustain cost pressure.
