Textiles help in bankrolling leap into computers

By , Special to The Christian Science Monitor

The Republic of China plans to achieve a transition to a high-technology industrialized state through stepped-up exports of textiles.

It sounds like a paradox. After all, textiles are one of the first basic industries established by most newly developing countries.

But Vincent Sieuw, director of the Board of Foreign Trade, explains government strategy this way: ''Textiles are still the largest single export item (currently 23 percent of the total). In the long run, of course, we want to see that reduced, because there are simply too many problems involved . . . tight import quotas in major markets, growing competition from countries that still have a low wage structure, and so on.

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''But this country is now in a crucial transitional period as we seek to move up-market, away from labor-intensive, increasingly unprofitable industries and into the technology-intensive ones.

''However, our financial resources are limited. Therefore, we have to step up our efforts to pay for the increased imports of machinery and technology. As a result, textiles in the next 5 or 10 years are going to be even more important than ever.''

Taiwan is not directly involved in the new international multifibers trading agreement (MFA-3), which legalized rigid import controls by the United States and the European Community, for example. But, as one of Asia'a biggest textile exporters, it cannot escape the impact of such controls.

Mr. Sieuw says: ''I have to keep visiting the US -- which takes a third of our exports -- Europe, Canada, and Japan pleading for an increased quota or at least no reduction. But all we can hope to do is slow down the rate of decline long enough to achieve our overall objectives, if we are lucky.''

Officials of leading textile companies accept that their share of the pie is gradually going to be reduced.

Taiwan's annual economic growth rates of more than 20 percent the past two decades have meant a fast-rising standard of living and wage explosion which make it impossible for it to continue competing profitably at the ''bottom end of the market.'' The emphasis now is on upgrading quality, streamlining management, and improving production rates through greater automation.

For the moment, the effort seems to be paying off. Industry leaders point out that in the past few years the volume of textile exports has not increased at all, but the value has gone up regularly by 15 to 20 percent.

''That undoubtedly means quality is improving, because no one is going to pay more otherwise,'' observes the Board of Foreign Trade's director.

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