The two countries are at opposite ends of scale in terms of production and pricing IN THE INTERNATIONAL pecking order of watchmaking, Swiss watches are still taking the top spot in prestige, even though watchmakers from the mainland, Hong Kong, Japan and other Asian countries make and export far more timepieces at a much lower cost. Last year, 25 million watches left Switzerland, compared to 1 billion timepieces exported from China, the world's largest exporter of watches, and 700 million pieces from Hong Kong. Yet in terms of value, Switzerland is by far the world's largest watch exporter. The average ex-factory price of a Chinese watch is US$1, in Hong Kong it is US$5, in Malaysia US$8 and in Singapore US$17. The average value of watches exported from Switzerland last year, however, was US$329. The Swiss label is perceived as a mark of quality when it comes to traditional watchmaking, although several German companies now produce fine watches, too. Demand for prestige Swiss brands is increasing rapidly: the Swatch Group, which produces 17 watch brands, from Swatch to Breguet, reported an increase of 24 per cent in sales of its prestige brands last year. The Federation of the Swiss Watch Industry predicts that the value of Swiss watch exports will increase by a further 6 to 7 per cent this year. Watch collecting also seems to be attracting more followers than ever. Last year, Euro150 million ($1.5 billion) was spent on watches sold at auction. Across social, educational and political barriers, many men and women throughout the world dream of acquiring a good watch. Since the 1970s, when quartz watches first offered a reliable, accurate and often affordable alternative to mechanical watches, quartz timekeeping has dominated the world. Now in the quality watch market there is a clear move in favour of traditional mechanical watches, those that are made with springs, balance wheels and a wealth of traditional skill passed down from generation to generation. Why should mechanical watches, which are inherently less accurate than their quartz counterparts, come back into fashion? It is partly because those who can afford a good watch appreciate traditional values and materials, as well as craftsmanship and fine materials, instead of the sameness that comes from mass produced quartz watches. Perhaps it is also because a really good mechanical watch could still be working in 100 or 200 years if it is cared for properly. Conversely, a quartz watch will become obsolete and useless as soon as the right battery is no longer available - and that could be in as little as 10 or 20 years, with technology changing so fast. Many Swiss watchmakers are using the latest technology to design their watches and using new materials for watch cases, bracelets and straps. Ceramic is becoming more popular for watch cases and bracelets, and this year some companies have even used palladium for watch cases. This year, the tourbillon is the feature that has become de rigueur among serious collectors and watchmakers. It is one of the most demanding features to incorporate in a watch. There have been reports in the past few months that tourbillon production lines have been established on the mainland and South Korea. These factories are said to be producing tourbillon watches at prices from Euro500 to Euro1,000 each, compared to Euro50,000 to Euro200,000 or more for European models. So far, the Swiss and German manufacturers of high quality tourbillon timepieces don't seem to be worried by this very low-price competition. After some years of competing in the volume watch market, Japan's Seiko and Citizen have moved upmarket and both place increasing emphasis on their ability to devise technologically advanced solutions to timekeeping. Citizen has made its mark with EcoDrive technology, which uses light as its energy source. Seiko harnesses the energy produced by the natural movement of the wrist to power their Kinetic watches. In BaselWorld this year, Seiko announced that its unique Spring Drive technology was going into commercial production. This hybrid system uses many conventional watchmaking techniques, such as a mainspring and self-winding mechanism, as well as electromagnetism, as part of the system that regulates the time - it overturns five centuries of watchmaking tradition. It might be said that the Swiss concentrate on recreating and improving upon their great heritage, using the application of 21st century technology and materials - while the Japanese are keen to invent tomorrow's technology today.