Starting around 1996, vast quantities of low-priced towels from China flooded Taiwan's market, being either smuggled in or passed off as originating in other countries, and local factories began closing their doors in the face of this dumping. The towel industry shrank so much that now there are less than 30 towel factories left struggling in Huwei.
民國 85 年以後，台灣市場出現大量走私或假冒第三地進口的大陸毛巾，在對岸毛巾低價傾銷的影響下，大廠紛紛關門，毛巾業萎縮，目前全台灣只剩下雲林虎尾不到 30 家毛巾廠仍苦撐。