Big hand for duty cut on watches
Retailers welcome lower levies on Swiss timepieces but they are unlikely to stop Chinese from buying luxury items abroad
The latest tariff reduction agreement between Switzerland and China is expected to cut the retail prices of Swiss watches, but is likely to do little to change mainland consumers' habit of shopping for expensive timepieces outside their home market.
The Ministry of Commerce said earlier this week that China has agreed to cut import tariffs on Swiss watches by 60 per cent over the next decade as part of a free-trade agreement signed during Premier Li Keqiang's visit to Switzerland last week.
The retail prices of Swiss watches will decrease slowly under the new policy in China. This will definitely attract more Chinese consumers to buy Swiss watches locally
The tariff adjustment was hailed as a stimulus for the local high-end watch market, which has been slowing down in recent months as the government cracks down on extravagant spending by officials.
Philippe Charriol, chief executive of the Swiss watch and jewellery brand Charriol, which has more than 110 franchise stores in China, said: "We have been expecting this [tariff cut] for years.
"The retail prices of Swiss watches will decrease slowly under the new policy in China. This will definitely attract more Chinese consumers to buy Swiss watches locally," Charriol said.
Currently, the tariff rate for Swiss watches imported into China is around 15 per cent. The reductions will start with a cut of almost a fifth this July, followed by a 5 per cent cut each year for nine years.
Zhang Hongguang, deputy director of the China Horologe Association and a participant in the tariff negations with Switzerland, said he expects the impact of the tariff cut on local watch market to be limited.