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Local manufacturers call for more state assistance

This article was published by the Taiwan Headlines on March 6, 2006. It reports that since Taiwan's accession to the World Trade Organization (WTO) in 2002, many domestic industries have been feeling vulnerable about all kinds of cheap imports. Some of them choose to participate in street demonstrations and voice their desire for more government support.

A recent protest was organized by towel manufacturers and attended by their counterparts from the ceramics, furniture and hosiery industries, who accused the government of giving no warning before opening up the local market to foreign imports. They were particularly angry that on average, cheap products imported from China undercut local ones by about one-fifth.

In order to comply with its WTO commitments, Taiwan eliminated import controls on over 99 percent of 10,912 official import product categories. The remaining categories are mostly agricultural, and either require special import permits or are otherwise restricted.

Some scholars and market experts point out that local manufacturers did not receive enough warning from the government and were left with no time to develop strategies that would help them to compete with cheap imports. However, other experts suggest that while the government should enact safeguard measures to protect industries, it should also actively encourage and assist the industries to upgrade themselves.

In the case of the towel industry, the government lifted its ban on Chinese towel imports in February 2002, but it did not discuss with local industries about the ways to promote their competitiveness until October 2005. By then, the market share of Chinese towels had surged to 70 percent, from 45.54 percent in 2002.