Before accompanying the Chinese premier, Li Keqiang, on a visit to a neighbourhood ravaged by the earthquake in Sichuan two weeks ago, Fan Jiyue, a county party chief, took an important precaution: he removed his wristwatch.
His concern was understandable. China’s new leadership is cracking down hard on ostentatious displays of wealth by party officials and corruption. As a result, expensive watches – a popular gift given by those seeking to win favour with Chinese businessmen and politicians – have become a source of unwanted attention.
Unfortunately for Mr Fan, unwanted attention is precisely what his move brought him: the watch-shaped tan lines on his wrist were spotted by China’s eagle-eyed netizens, and pictures of the local official’s unadorned arm went viral on the Chinese internet. With predictable alacrity, the country’s censors had soon blocked searches for Mr Fan.
This sudden hostility to extravagance, which set in last autumn after Xi Jinping took over as Chinese president, has led to a big slowdown in Swiss watch exports to China – which over the past 10 years has been the fastest growing market for the Alpine nation’s timepieces.
In 2002, China’s Swiss watch imports were worth just SFr94.2m. By 2012 that figure had surged to SFr1.65bn ($1.77bn), and China had become the world’s third-biggest buyer of Swiss watches.
Just as significantly, over the same period the value of Swiss watch exports to Hong Kong – where many mainland Chinese buy watches to take advantage of favourable tax rates – has almost tripled to SFr4.4bn, making it by far the world’s largest Swiss watch market.
However in recent months, the trend has gone into reverse. In the first three months of this year, the value of Swiss watch exports to China is down 26 per cent compared with the same period a year ago. Exports to Hong Kong are 9 per cent lower.
March was particularly disappointing, with sales to China down 31 per cent and Hong Kong down 8 per cent. “This is one of the worst monthly performances in Greater China for over three years,” wrote Thomas Chauvet, an analyst at Citi, in a note to clients.
At the glitzy annual Baselworld watch and jewellery fair this week in Switzerland, however, watch executives were putting on a brave face.
“Of course business in China is slowing down. The whole luxury business is slowing down,” says Jean-Frédéric Dufour, chief executive of Zenith, one of LVMH’s stable of brands.
“But it will start up again. China is moving forward.”
Fran?ois Thiébaud, head of the Swiss exhibitors’ committee at Baselworld, and also president of Tissot, one of the many marques owned by the Swatch Group, takes a similar line.
“In the US you have a slowdown every four years because of the [presidential] elections. But then things pick up again,” he says. “It is the same in China. They have had a change of leadership and spending has slowed down because people are uncertain. When they are more certain, they will spend again. We have already seen more Chinese at Basel this year.”
Just how soon the recovery will come, though, is moot. “I suspect [the crackdown] will last through most of the year if not longer,” says Jon Cox, head of Swiss research at Kepler Capital Markets.
However, not all watchmakers have been equally affected by Mr Xi’s war on extravagance. Mr Thiébaud says Tissot has been spared, suggesting that its watches – the bulk of which sell for between SFr300 and SFr1000 – are not in the expensive segment preferred by those seeking to win favours from Chinese officials and businessmen.
Analysts agree. “[The crackdown] will mainly impact the high end – watches retailing for $10,000,” says Mr Cox.
Yet even within the high end, some watchmakers have managed to dodge the slowdown. Thierry Stern, head of Patek Philippe, one of the most exclusive watch brands, says that his company’s strategy of limiting production to a maximum of 53,000 pieces per year, even in the face of much higher demand, means that a fall in Chinese buying is not a problem.
One big reason why the executives milling around the watch stalls in Basel are relatively optimistic is that although the Chinese may now think twice about buying at home, they are still buying abroad, particularly in Europe. “At the high end, people often want to buy an object in the place it was made,” says Mr Thiébaud.
A further reason for watchmakers’ equanimity is that previous anti-corruption initiatives in China have been more notable for their initial severity than their durability.
Yet even if Mr Xi’s crackdown proves more enduring than those of his predecessors, China’s economic growth and the emergence of its middle class will eventually offset its chilling effect on illegitimate gift-giving, says Mr Cox.
然而，增长重启多久会到来还是个未知数。开普勒资本市场(Kepler Capital Markets)瑞士研究主管乔恩?柯克斯(Jon Cox)表示：“我觉得（反腐）至少会持续到今年年底，可能还会更久。”
然而，即便在高端品牌中，也有一些躲过了放缓的命运。最高档的品牌之一百达翡丽(Patek Philippe)总裁泰瑞?斯登(Thierry Stern)表示，百达翡丽奉行限量生产策略，需求量再高，每年最多也只生产5.3万块，所以中国的购买量减少不是什么问题。