The nation’s furniture industry has suffered substantial financial losses after several international furniture manufacturers entered and started dominating the market. The signing of the cross-strait service trade agreement would only compound its suffering by allowing more competitors into the already saturated sector, industry representatives said yesterday.
New Taipei City Furniture Commerce Association chairman Chien Lung-fu (簡隆富) said there used to be up to 700 furniture manufacturers and retailers in the city in the industry’s heyday, which ended about a decade ago when many Taiwanese businesspeople started investing in Chinese furniture makers and importing their low-cost products to Taiwan.
“At that time, the majority of consumers had little knowledge of the differences between furniture manufactured locally and those made in China. All they knew was that there was no need to spend extra money on a locally produced sofa when there were cheaper options [from China],” Chien said.
Chien said the import of furniture made in China dealt the industry a serious blow and that the adverse effects it brought did not ease up until the public learned the hard way that home furnishings from China, however inexpensive they were, were often crudely made.
However, because of the economic downturn in recent years, the number of furniture sellers in the city has been cut in half, Chien said, adding that despite the surge in house prices, most homes were bought by property speculators and were therefore left empty and unfurnished.
Former chairman of the association, Tu Jung-li (塗榮立), who is also the president of a 20-year-old Taiwanese furniture brand, said the word “misery” best encapsulated the predicaments faced by the industry in recent years.
“Due to the difficulties in acquiring land and the rising costs of hiring domestic workers, many Taiwanese furniture makers have moved their businesses to China,” Tu said.
To make matters worse, the government has signed a treaty that will open up the industry to Chinese investors, Tu said, allowing them to integrate production and marketing of furniture and squeeze local proprietors’ market shares.
“The industry has hit rock bottom and signing the service trade deal is like adding salt to an already festering wound,” Tu added.
Tu said local furniture chains and businesses that provided furnishings for hotels were expected to suffer most from the agreement, as newly built hotels might shift their furniture orders from Taiwanese manufacturers to Chinese makers after the latter are permitted to manufacture and sell their products in Taiwan without having to worry about shipping costs.
“Neither small furniture makers nor large furniture chains would be able to withstand the fierce competition once Chinese investors are allowed to open furniture retail stores across Taiwan,” Tu said.
Since the government signed the pact with China on June 21 without any prior consultations with the sectors potentially affected by the treaty, it should draw up complementary measures to help local businesses ride out the crisis.
Under the cross-strait agreement, which needs to be ratified by the Legislative Yuan before it can take effect, 64 Taiwanese sub-sectors would be opened up to Chinese investment, including transportation, tourism and traditional Chinese medicine.
Meanwhile, China would open 80 sub-sectors to Taiwan.