All eyes on China

Christophe Roulet - This summer, China will be the centre of the world, or of the sporting world at least. With the Beijing Olympic Games set to open at 8 minutes past 8 on August 8th 2008 (for those it may have escaped, eight is a lucky number, believed to bring prosperity in Chinese culture).

This summer, China will be the centre of the world, or of the sporting world at least. With the Beijing Olympic Games set to open at 8 minutes past 8 on August 8th 2008 (for those it may have escaped, eight is a lucky number, believed to bring prosperity in Chinese culture), millions of people will be turning their attention to a country seeking international political recognition, having already made its mark economically. This mark is particularly strong in the watch sector. As statistics from the Federation of the Swiss Watch Industry show, China has become a major market for Swiss watch exports, ranking seventh. Add Hong Kong, which for tax purposes is a transit zone for many watch exports and which has supplanted the United States as the number-one market for Swiss timepieces, and the importance of the Celestial Empire for watch brands becomes clear. Swiss watch exports to China have grown phenomenally: +60% for the five months from January to May 2008 compared with the same period one year earlier, and +97% over two years. Put simply, Swiss watch Manufactures are doubling the value of their sales to China every two years… and the trend could well accelerate. Why Manufactures rather than manufacturers? Simply because Fine Watches are driving the sector, in particular when it comes to these new markets.

But there are two sides to the coin. While China may be the new eldorado for Swiss watches, as shown by the exponential increase in the number of boutique openings, it is also set to become a serious competitor. The tourbillon, reputed to be one of the major watch complications, no longer has any secrets for China’s foremost watch firms, and at a price that would make Abraham-Louis Breguet, its inventor, turn pale. How much longer before "Made in China" takes on the same magical ring as "Swiss Made"? On the eve of the Olympics, in which the Chinese authorities have invested billions and shown a level of preparation rarely seen before, the question is worth asking. Swiss firms have responded by building on a culture that originated with the profession itself but, as important as this may be, will it be enough? In a few years’ time, Chinese buyers of Swiss watches, currently recruited among the country’s wealthy elite, may well answer no. ■

Christophe Roulet

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