Connect with us

Emerging Markets

‘Made in China’ watches gain domestic popularity

Published

on


If it was not before, China is now the world’s most important market for Swiss watches. Figures from the Federation of the Swiss Watch Industry (FHS) show exports of Swiss watches to China in August were up by almost half year-on-year and accounted for 15.7 per cent of the global total, relegating the US to second place.

But while the Chinese continue to lap up Swiss watches, they have little love for their own watchmaking culture. China is by a distance the world’s largest watch producer in terms of volume. According to the FHS, China exported 664.3m watches last year, compared with Switzerland’s 20.6m. But while the average export price of a Swiss watch was just under $1,000, Chinese watches left the country at a paltry $4 a piece.

Chinese watch industry insiders admit there are problems with the quality and perception of their products. “Our watches, especially luxury watches, lag behind the old watch powers in many aspects, such as design, manufacturing and brand influence,” says Zhang Hongguang, chairman of the China Horologe Association.

The CHA, based in Beijing and founded in 1985, says there are more than 200 “major active brands” in China, including Fiyta, which supplied Chinese astronaut Zhai Zhigang with the watch he wore on the country’s first successful spacewalk in 2008. The association also says Seagull, a company based in Tianjin and founded in 1955, makes 5.2m mechanical movements a year, the biggest total globally.

Peacock P501-1 Tourbillon

Fiyta Clover automatic

Chinese collectors show little interest in these brands. “Modern Chinese watches are not something that interests me,” says Daniel Sum, who in 2017 co-founded the Shanghai Watch Gang, a watch enthusiast group. But there are signs that is changing. During the pandemic, guochao, the Chinese trend for products designed in China, has gathered pace. “There’s a fatigue with western brands,” says Robin Tallendier, a French Sinophile whose Hong Kong-based watch company Atelier Wen openly makes mechanical watches in China and decorates them with Chinese cultural symbols.

“The crisis has accelerated the trend of national pride and the trend of domestic consumption. Growing local pride and growing local consumption of local goods are going to help the emergence of local high-end luxury brands with a domestic identity.”

Mr Zhang agrees. “The added value of high-end imported watches is mainly in the brand,” he says. “And the pursuit of those watches is a manifestation of the immaturity of consumer behaviour. I am convinced that this is a temporary phenomenon and that rational consumption will become the mainstream.”

But there is still a long way to go. Mr Tallendier admits it has been hard to find customers in China. “Our results were not as good as outside mainland China,” he says, adding that most of the 600 sales he has made since Atelier Wen’s 2018 launch were to non-Chinese. “Chinese people do still crave western watches, but ‘Made in China’ is getting a foothold.”

Atelier Wen – Porcelain Odyssey, Hao Red Edition © Atelier Wen

Age plays a part. Guochao is particularly pronounced among younger Chinese. “More and more young Chinese people like watches made in China, especially those with Chinese cultural connotations or Chinese craftsmanship,” says Li Wei, head of the domestic horologe department at the CHA.

“The current goal is to develop the domestic market,” says GuiLin Hou, general manager of the Dandong Peacock Watch Factory, which is part of the Fosun group and one of China’s largest watch manufacturers. “The Chinese market is large enough that there are enough opportunities. Chinese young people work hard and have a strong pursuit of a happy life. This is an inexhaustible driving force for China’s development.”

China’s independent scene is also on the march. Shenzhen-based Lin Yong Hua taught himself watchmaking and produced his first watch in 2006. In 2019, he was invited to become a member of Switzerland’s prestigious Académie Horlogère des Créateurs Indépendants, or AHCI, which counts celebrated watchmakers François-Paul Journe and Philippe Dufour among its 29 members.

“Most Chinese are willing to believe in Chinese brands, so I have confidence in the development of Chinese watchmaking,” says Mr Lin, who hand-crafts about 20 watches a year under the dial name LYH. “Once, we only looked at production numbers, but now Chinese brands are turning their eyes to the improvement of technology, together with the promotion of the brands themselves.”

Domestic appreciation of China’s independents is growing. “These brands are slowly developing,” says Mr Sum of the Shanghai Watch Gang. “I’ve seen quality significantly improve over the years and I would consider a piece in the future.”

No one is expecting the shift to happen quickly, though. “It will take time to change people’s perception of Chinese watches,” says Mr Li of the CHA. “But with the improvement of the quality of Chinese manufacturing and the research and promotion of history, I believe that there will be major changes in the future.”

Mr Zhang of the CHA believes the Chinese will one day think of Chinese watches as being in the same league as Swiss pieces. “The Chinese watch industry continues to work hard to improve craftsmanship, upgrade manufacturing, create original designs, accelerate equipment updates and provide consumers with high-end watches,” he says. “Chinese people will love Chinese-made watches like Swiss watches, and domestic high-end brand-name watches will sooner or later become mainstream in the watch market in my country.”



Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Emerging Markets

Hong Kong-Taiwan spat threatens cross-Strait business

Published

on

By


Official representation between Hong Kong and Taiwan is set to end this year as mounting political tensions threaten one of the region’s most important trade and investment relationships.

The number of staff in Taiwan’s representative office in Hong Kong has dwindled over the past two years as the territory has stopped issuing visas, with the documents of those who remain due to expire by the end of November.

Hong Kong also abruptly suspended operations of its representative office in Taipei two weeks ago, ending its official presence there. The stand-off has grown so severe that Taipei has begun making contingency plans for a situation without on-the-ground representation in Hong Kong, two senior Taiwanese government officials said.

The breakdown in relations follows rising military tensions between Taiwan and China and a crackdown by Beijing on pro-democracy groups in Hong Kong that has led some activists in the territory to seek refuge in Taipei.

China claims Taiwan as part of its territory and has threatened to annex it if the island fails to submit to its control indefinitely.

Analysts said that cutting official channels would undermine Hong Kong’s traditional role as a conduit for business and financial exchanges between Taiwan and China. Despite the dispute with Beijing over sovereignty, Taiwanese companies are among the largest foreign investors, employers and exporters in mainland China.

Taiwan air force personnel during the visit by President Tsai Ing-Wen
Military tensions between China and Taiwan have escalated, but investment and trade across the Taiwan Strait remains important to both countries © Ritchie B Tongo/EPA-EFE/Shutterstock

A significant part of trade across the Taiwan Strait trade goes through Hong Kong, and many Taiwanese investors in China also use Hong Kong for financial, taxation and legal purposes. Last year, Taiwan was Hong Kong’s second-largest trading partner, while Hong Kong was Taiwan’s fifth-largest, with HK$504bn (US$65bn) in total bilateral trade. Taiwanese companies invested US$912m in Hong Kong in 2020, while Hong Kong-registered companies invested US$555m in Taiwan.

“Hong Kong has been a springboard for Taiwanese companies into mainland China and it has also been a springboard for Chinese [companies] into Taiwan,” said Liu Meng-chun, a research section director at the Chung-Hua Institution for Economic Research, a Taiwanese government-backed think-tank.

Tensions between Hong Kong and Taipei have escalated over the past two years after the territory started demanding Taiwanese diplomats sign documents declaring their country part of China as a precondition for being issued a visa.

After Taipei refused, the number of staff at its office in Hong Kong began to dwindle, from 20 to eight today, according to the Mainland Affairs Council, Taiwan’s cabinet level China policy body.

Hong Kong, meanwhile, said it was temporarily closing its Taipei office because “Taiwan’s series of actions in recent years has severely damaged Hong Kong-Taiwan relations”.

A Hong Kong government official suggested the suspension came on instructions from Beijing.

“I think Beijing is of the opinion that [Taiwan’s representative office] affects national security,” said Sung Yun-wing, an economics professor at the Chinese University of Hong Kong, who is also a member of a semi-official think-tank, the Chinese Association of Hong Kong and Macao Studies, in Beijing.

“There have been reports that Taiwan has been encouraging the protest movement in Hong Kong, which has turned violent, so the protest movement is not only against the Hong Kong government but also Beijing,” said Sung. He added China was also concerned Taiwan was “sheltering” Hong Kong protesters.

While Taipei has been careful to avoid being seen as making it too easy for Hong Kong dissidents to flee to Taiwan, civil society groups in the country have supported the protest movement with advice, money and logistics. “This is something we cannot interfere with as they have done nothing illegal,” said a senior Taiwanese China policy official.

Historically, Hong Kong’s most important economic role in the Taiwan-China trade has been as a sea and air trans-shipment hub for Taiwanese companies to supply their factories in southern China with components.

Trade Secrets

The FT has revamped Trade Secrets, its must-read daily briefing on the changing face of international trade and globalisation.

Sign up here to understand which countries, companies and technologies are shaping the new global economy.

While analysts suggested that much of this commerce could continue even if official ties between Taiwan and Hong Kong were severed, they foresaw a sizeable impact on financial services, tourism and education.

“Hong Kong plays a very important role for Taiwanese private wealth management,” said Patrick Chen, head of Taiwan research at CLSA, the brokerage.

He said many Taiwanese individuals had accounts in Hong Kong, where the local units of Taiwan’s banks offered them offshore investment products not accessible under the island’s stricter regulations.

Liu of the Chung-Hua Institution for Economic Research said many Taiwanese enterprises kept profits from their China operations with their Hong Kong affiliates for tax purposes.

“These things would become a lot more cumbersome without official representation because you would have to start sending documents back and forth for notarisation,” Liu said.



Source link

Continue Reading

Emerging Markets

Nato leaders fret China’s Atlantic ambitions

Published

on

By


China’s growing military and economic presence in the Atlantic region is expected to trigger a rare warning from Nato leaders about the potential security threat when they meet on Monday, diplomats said. 

From joint Chinese drills with Russia to western worries that China wants to set up military bases in Africa, the Nato focus reflects China’s primacy among western foreign policy concerns, in particular those of US president Joe Biden.

“This is not about ‘Nato going to China’,” said Claudia Major, a defence analyst at the German Institute for International and Security Affairs. “It’s about ‘China is coming to Europe and we have to do something about it’.”

In 2015, joint military drills with Russia brought the Chinese navy into the Mediterranean and the heart of Europe for the first time. Since then, China has built up the largest naval fleet in the world and invested in critical European infrastructure, including ports and telecoms networks.

“China [through its navy] has come through the Indian Ocean, into the Gulf, up to the Red Sea and they’ve been in the Mediterranean,” according to one British military official, who said China had not yet deployed submarines in the north Atlantic but could do so in future.

“You build nuclear submarines for range and stealth. And China does like to test the boundaries.”

The planned joint statement by the transatlantic security alliance, which diplomats said was still under discussion and subject to change, would be only the second time that Nato leaders have addressed the subject of China head-on. The first was in December 2019, at the insistence of the administration of Donald Trump.

But Biden is understood to be pushing for tougher language than the bland “opportunities and challenges” terminology used that time.

Nonetheless, how to deal with the issue represents a dilemma for the 30-member group, which was originally set up in 1949 to deal with cold war-era threats.

Internally, Nato countries are divided over how to treat China: member Hungary, for one, has good political relations with Beijing.

In addition, there is reluctance to confront Beijing in its own Pacific region — although the UK and France have followed the US in deploying ships to carry out freedom of navigation exercises in the South China Sea.

Chinese and Russian marines take part in joint exercises in China’s Guangdong province
Chinese and Russian marines take part in joint exercises in China’s Guangdong province © Li Jin/Getty

China’s joint military operations with Russia are viewed as a particularly unwelcome development by some Nato members. As well as their annual military exercises, Beijing and Moscow have recently added joint missile defence drills and training for internal security forces.

“Their [the Chinese/Russian] relationship is transactional and pragmatic rather than ideological,” the UK military official said. “But working together in any form provides confidence. And confidence is something we should be wary of.”

As the Center for a New American Security, a bipartisan US think-tank, warned in a January report: “Where Russian and Chinese interests align, Moscow and Beijing could eventually co-ordinate their combined capabilities to challenge US foreign policy.”

Another Nato anxiety is Africa, which China could use to expand its military presence in the Atlantic as part of its long-term goal to become a truly global armed force.

Gen Stephen Townsend, head of US Africa Command, told the US Senate in April that his “number-one global power competition concern” was what he described as Chinese efforts to establish a militarily useful naval facility on Africa’s west coast. “I am talking about a port where they can rearm with munitions and repair naval vessels,” he said.

Experts on the Chinese military said there was no evidence that Beijing was trying to establish such a west African base, yet. However, China has a base in Djibouti and has already used international anti-piracy missions in the Gulf of Aden to train thousands of military personnel and to build military relations with countries outside its usual neighbourhood.

Each time a naval contingent finishes deployment, for example, it typically takes a detour on the way home. Some have visited the Mediterranean and the east and west coasts of Africa.

Another trend vexing Nato allies is the growing involvement of Chinese companies in critical infrastructure in Europe, such as through telecommunications company Huawei.

Chinese state shipping company Cosco also owns a controlling stake in Piraeus, Greece’s largest port, and is reportedly in talks to invest in a Hamburg port terminal.

Such economic ties complicate Nato’s efforts to create a unified approach on China — as do the political relationships between Beijing and friendly European leaders.

That creates the potential for clashes, with the tougher stance of Washington and Jens Stoltenberg, Nato’s secretary-general, who last month warned that China was “coming to us” in areas including cyber space, Africa and the Arctic.

“There is a risk that having this discussion within Nato surfaces very uncomfortable differences between allies on how much China is actually perceived as a threat,” said Sarah Raine, an expert in geopolitics and strategy at the International Institute for Strategic Studies.

“The fact is that there are countries which are seen by hawks as making very pro-China arguments within Nato, at least with regards to being robust but not confrontational.”

Additional reporting by Katrina Manson in Washington



Source link

Continue Reading

Emerging Markets

Sponsors pull out of Copa America in Brazil over Covid risk

Published

on

By


A trio of corporate sponsors — Mastercard, Ambev and Diageo — have pulled their brands from the Copa America football competition in Brazil, which is due to kick off on Sunday in spite of the country’s raging Covid-19 crisis.

Latin America’s largest nation offered to host the regional tournament at the end of last month after previous co-hosts Argentina and Colombia cancelled. Buenos Aires cited an increasing number of coronavirus cases, while Bogotá blamed domestic protests.

Brazil’s decision to step in, which had the backing of rightwing president Jair Bolsonaro, drew censure from many medical figures and opposition politicians, who argued it risked further spreading the virus as the pandemic continues unabated in the country.

Mastercard said after careful analysis it had decided to remove its branding from this year’s Copa America, though it will remain a sponsor of the competition, which was already postponed in 2020.

British alcoholic drinks group Diageo, which owns Smirnoff, Guinness and Johnnie Walker, said it would stop all brand activities “given the current health situation in Brazil and in respect of the timing of the Covid-19 pandemic”.

Latest coronavirus news

Follow FT’s live coverage and analysis of the global pandemic and the rapidly evolving economic crisis here.

“The sponsorship terms were agreed upon when the event was scheduled to be held in Colombia and Argentina,” the company added. “Diageo reiterates its commitment to society, observing safety protocols and institutional actions that contribute to the mitigation of the pandemic.”

Brazilian beer maker Ambev, which is part of the world’s largest brewer AB InBev, said “its brands will not be present at the Copa America”. 

The votes of no confidence come as Brazil faces a potential third wave of Covid-19 infections with the cooler season setting in.

At more than 480,000 lives lost, the country has the second-highest death toll from the respiratory disease after the US. A shortage of jabs has stymied vaccination campaigns.

“We are still in a very serious situation,” said Marcelo Ramos, a researcher in public health at the Fiocruz biomedical institute. “When it was announced that Brazil would host the Copa America, the message was that we are in a calm situation, which does not correspond to reality.” 

However, the country’s health minister this week insisted holding the football competition would not generate any additional risk of contamination, since no fans would be attending matches. 

Bolsonaro has earned international opprobrium for his handling of the pandemic, which has included disparaging the use of masks and talking down the importance of vaccines.

But the former army captain received a boost when the Brazilian department store chain Havan, whose co-founder Luciano Hang is a vociferous supporter of the president, announced it would sponsor the tournament.

“I’m sure it will be a competition that will delight the entire Brazilian population”, he said.

This week Brazil’s supreme court rejected attempts to bar the country from hosting the Copa America. 

The Brazilian Football Confederation and the South American Football Confederation did not respond to requests for comment.



Source link

Continue Reading

Trending