Taiwan's （CHINA) textile industry is recovering from the impact of the 2005 removal of textile quotas worldwide, thanks to government efforts to breathe new life into the industry, according to the Industrial Development Bureau (IDB) under the Ministry of Economic Affairs.

Taiwan's garment, towel and socks factories were hard-hit after January 2005 because international buyers shifted their orders to other countries where production costs were lower.

Most of these factories were initially forced to depend on the domestic market for survival, but according to the IDB, many have since recovered, benefiting from an $735NT million ($23US.2 million) IDB program that helped many small enterprises in the textile industry upgrade themselves and secure 1,000 jobs.

One example of the plan's success was sweater factories that made use of an IDB plan to allow imports of wool yarn from China. They used the yarn to weave patches that were then exported to other countries and sewn into sweaters.

A total of 2.42 million sweaters have been exported in this manner since July 2005, according to bureau statistics, boosting average factory capacity utilization rates in Taiwan's sweater industry from 20 per cent in 2005 to 80 per cent at present.

Another program launched in April 2006 to help Taiwan's towel industry, coupled with measures to impose anti-dumping duties on towel imports from China, has helped Taiwan's towel factories increase their capacity utilization rate to 60 per cent.

As a result, output value increased by over 50 per cent to $480NT million in 2007, bureau figures show.

The socks industry also has shown increased competitiveness, with its exports between January and September 2007 reaching $85US.23 million, up $2US.5 million from the same period of 2006.

Taiwan's textile industry had been a major foreign exchange earner for five decades. However, growing competition from other countries in recent years has forced several textile plants to relocate to Southeast Asia, China, and Central America, where production costs are lower.

The industry has since shifted its export focus to midstream and upstream fiber and yarn products. The primary destinations for Taiwan's textile exports are Hong Kong, China, the United States, and Vietnam.