Far Eastern Group, one of Taiwan's leading textile and garment companies, is flouting the wishes of the island's textile authorities by planning research and development centres in mainland China.

The move to upgrade its mainland production activities is being made in advance of the country joining the World Trade Organisation (WTO), which is expected to boost the volume of cross-strait textile trade. The company believes that strengthening its R&D capability in mainland China will help maintain a competitive edge after WTO entry. 

Far Eastern already uses China as a manufacturing base where it is able it to take advantage of lower land and labour costs. But textile bodies fear that setting up research and development centres in mainland China as well will drain Taiwan of its experienced textile technicians and designers. They would rather see the island transform itself into an Asian textile design centre after WTO entry.

Undeterred, Far Eastern said it now plans to trim its island workforce through retirement schemes, layoffs and natural wastage over the next five years. It also underlined that current weak demand will not affect its mainland investment plans.