In 1949, Taiwan had 10,000 cotton spindles. Fifteen years later it has 500,000 for an increase of 50 times to make cotton textiles the Republic of China's fastest growing industry. The cotton textile industry of today is second only to food processing, which includes the sugar that once dominated the Taiwan economy.
The rapid development of cotton textiles is attributed primarily to government encouragement and assistance, an adequate supply of raw cotton, increase in domestic and foreign demand, and the efforts of entrepreneurs and technicians.
During the three four-year economic plans from 1953 to 1964, the cotton textile industry consistently outran the goals set for it. The government plan for 1962, for instance, was to increase cotton spindles to 380,000; the actual expansion was to 470,000.
The planned and actual expansion of the industry in the last 12 years is set forth in the accompanying table.
In 1954, the Ministry of Economic Affairs established a special committee to carry out plans to expand the textile industry. The annual increase of spindles was planned at 20,000 and looms were limited to 10,000. As this limitation was relaxed, new cotton textile mills were established. The biggest increase in spindles was the 120,000 of 1961. Growth then slowed as the United States and other countries imposed quotas on Taiwan textiles.
To clothe its own people, Taiwan need, only 170,000 spindles. The amount of cotton supplied tinder U.S. aid in the early 1950s was based on this number. With further expansion came the battle for export markets. Overseas textile sale3 soared from US$336,000 in 1954 to US$44,000,000 in 1963. They are continuing to climb and so is the number of spindles, which will total 550,000 by next July.
New Machinery
Taiwan has 24 large cotton textile mills. Before 1951, looms and spinning machines were old-fashioned. Production was slow and quality was poor. From that year on, mills began to buy new machinery abroad. Even these machines are becoming technologically obsolescent; the process of keeping up is a continuous one. These are among the steps taken by the industry:
1. Quality control. Almost every mill has established an effective system that includes continuous testing. Steady improvement has resulted.
2. Improvement of cotton combing. Many mills are using the newest types of combing machines and producing top-quality yarn.
3. Replacement of obsolete machinery.
4. Air-conditioning. Taiwan is sub-tropical and work efficiency has been enhanced by providing a temperate plant environment.
Cotton's Competition
About 75 per cent of the cotton yarn produced on Taiwan is used for cloth. The following table shows output from 1946 to 1963:
Cotton cloth output was nearly 300 million yards in 1962 and 1963, or nearly 30 yards per person. Actually, Taiwan cannot use even half that much. Consumption is low because the island is subtropical and also because of the growing popularity of man-made fibers. With large stockpiles, textile mills have had to battle each other and Japan, Hongkong, and Red China for foreign markets.
Textile exports in the first seven months of 1964 totaled US$35,200,000, of which more than 80 per cent was from cottons. Buyers include the United States, Britain, South Vietnam, Iran, Thailand, South Korea, Africa, Latin America, and Hongkong. Manufacturers sometimes have sold their product at less than cost so as to import cotton and continue production. At first, only white cotton cloth was exported. Then came dyed and figured fabrics and new garments. In the first seven months of this year, garment exports totaled US$8,132,000 and are expected to total US$15,000,000 for 1964. The accompanying table shows total textile exports in contrast with cotton exports.
The industry's biggest handicap is Taiwan agriculture's inability to raise cotton. The subtropical climate and typhoon attacks are insurmountable obstacles. Foreign exchange earned by textile exports must be used to buy cotton.
35,000 Workers
The cotton textile industry employs about 35,000 workers. For 475,000 spindles, it pays NT$240 million (US$6 million) in taxes. It has been the principal contributor to price stabilization. During the last decade, prices of commodities other than textiles have risen by from 32 per cent to 97 per cent, while those of cotton textile have risen only 4 per cent.
In the international textile market, two principal competitors-Japan and the Peiping regime-have often dumped their textile" abroad to win or hold customers. The Chinese mainland supposedly has 7,200,000 spindles, woefully insufficient for the more than 600 million people there. Despite the ragged clothing of the mainland people, Peiping has been dumping textiles in Southeast Asia and Africa. Free China's exports to Southeast Asia have been materially affected; last year almost every textile mill in Taiwan had a sizable stockpile of cotton textiles.
Cotton also is being challenged by man-made fibers, just as in the United States and Japan. Taiwan enters 1965 with 100,000 Spindles devoted to artificial fibers and the total will continue to grow. The government is understandably following a policy of natural selection-so that the most adoptable textiles will survive.
Cotton mill operators know that they must take advantage of the newest machinery as well as their low labor costs. They are also counting on cotton's natural advantages in warm-weather wear all around the world.