China : SARS Outbreak Damaging Textile Production

Taiwanese businessmen in China are suffering increasing difficulties and losses in the wake of the months-long attempt by the Beijing government to cover-up the outbreak of the severe acute respiratory syndrome (SARS).

Taiwanese government officials, traders, and academics have predicted that the SARS outbreak would slow the increase of Taiwanese capital investment in the People's Republic of China, even if they believe that the mainland still offers a highly favorable production environment for manufacturers.

Indeed, Taiwanese businessmen around China report that sales have slipped some 30 percent in the past two to three weeks as Chinese residents are becoming increasingly hesitant to go to public places now that they are better informed about the severity of the epidemic by the state-run media.

On the other hand, Shanghai SOGO General Manager Jiang Ching-nan related that consumption of medical soap, surgical masks and disinfectants have soared.

Similarly, Jinan Juda Fiber Co Ltd General Wang Ke-zhang said that commercial interactions with his textile manufacturing firm, located in Shangdong, are also apparently decreasing.

The SARS outbreak, meanwhile, is also damaging Taiwanese textile production in Fujian province.

Stanley Hsu,  president of Taiwan Merchant Investment Association in Fuzhou, said he expected orders for his textile company to decline 10 to 15 percent.

In recent years, the Taiwan government has tried to promote a "Go South" policy to encourage Taiwanese businessmen to diversify into Southeast Asia and reduce the over-reliance on the Chinese market.

Aside from worrying about the coming shrinking economy, some of the Taiwanese businessmen are worried about how to remove their Taiwanese employees from China, if they are infected by SARS.