Hong Kong's watch and clock industry plays a leading role in the global market. The city is not only the largest importer of complete watches, but also the second-largest exporter of complete watches and clocks. The industry's importance in the local import and export trade is hence evident.

Statistics on watch exports in the past five years tell the story. The gross export value of watches in 2010 reached HK$57.61 billion and rose to HK$68.88 billion a year later. It then grew to HK$74.34 billion in 2012, with the value of watches exported hitting HK$77.05 billion. Last year, the gross export value amounted to HK$80.32 billion. Although the absolute value of gross exports has been growing continuously, the rate of increase has been declining, with the yearly increment slipping from a high of HK$11.3 billion to HK$3.2 billion. The slower growth shows growing pressure on the watch export business.

The fundamental reason for the slowed growth in watch exports is the below-average economic performance of the US and European markets, which are the main importers of Hong Kong watches. Many of the players in the city's watch and clock industry are small and medium-sized companies. They are less competitive compared with large global players, which have effectively monopolized the US market and elbowed out Hong Kong brands. As for Europe, it's still being haunted by the debt crisis. Earlier this year, the European Union decided to launch a quantitative easing package, which led to the euro plunging within a short period. As a result, the Hong Kong dollar, which is pegged to the greenback, has become stronger, weakening the competitiveness of Hong Kong products, including watches.

Against this background, the central government's "One Belt, One Road" initiative looks promising for the SAR's watch and clock trade. The China-led initiative couldn't have been timelier. It was proposed by President Xi Jinping last year aimed at boosting economic development and cooperation in Asia, Europe and Africa, as well as facilitating political and infrastructure links, trading, capital allocation and cultural communication among the continents.

The initiative involves 65 countries with a total population of 4.4 billion, or 61 percent of the world's population, and accounts for an aggregate GDP of $21 trillion, or 29 percent of the world's GDP. With such a gigantic market, the initiative is bound to offer vast business opportunities for Hong Kong's watch and clock industry.

"One Belt, One Road", also known as the Silk Road Economic Belt, mainly refers to the land route connecting China and Europe. At present, seven China-Europe railways have been opened to traffic, connecting key cities and countries along the route. The "One Road" stands for the Maritime Silk Road, which is oriented to markets in Southeast Asia and Africa. For the watch and clock industry in Hong Kong, the "One Belt" not only provides a chance for the revival of the European market, but also suggests opportunities for developing new markets in the Middle East. Through "One Road", the emerging markets in Southeast Asia and Africa will be easier to tap, and the initiative will bring to the industry a new world for development.

Hong Kong watches are regarded by consumers as exquisite, novel and creative. This reputation is renowned worldwide and has attracted many buyers with good taste. According to this positioning, we should be able to give full play to our advantages. On one hand, we don't have to compete with mainland private companies in the low-end watch market, and there's no need to fight for the top-end watch market either. We should stick to the mid-range market, which will be greatly expanded as the "One Belt, One Road" initiative rolls out.

(HK Edition 06/29/2015 page8)