During the Hong Kong Watch & Clock Fair, Mr. Tse Wai Hang, the Co-chairman of the Fair's Organizing Committee announced that Hong Kong's export of watches and clocks increased by 14% to a value of US$ 2.5 billion in the first half of the year.
The increase of 14% for the first six months of the year is in fact quite remarkable given that around 30% of Hong Kong's watch business is normally written during the Basel Fair, and unless you have been hiding in an igloo in the arctic circle for the last few months, you certainly know that the Hong Kong manufacturers were forbidden by the Swiss Government to sell their products in the ill-fated Zurich section of BaselWorld because of the SARS outbreak.
Despite the fiasco the situation has been partially resolved by the propitious signing of an agreement between MCH Basel Exhibition Ltd, (the BaselWorld organizers) and the Hong Kong Trade Development Council whereby Hong Kong's manufacturers return to a new, specially conceived pavilion in Basel.
The new agreement
Beneath a huge sign that proclaimed 'Hong Kong returns to Basel' René Kamm CEO of MCH Swiss Exhibitions and Frederick Lam, Deputy Executive Director, HKTDC, under the watchful eye of Franz von Däniken, the State Secretary of the Swiss federal Department of Foreign Affairs and Henry Tang, the Financial Secretary for the HKSAR Government, signed an agreement marking a new era of partnership between Hong Kong and Basel.
The new agreement, which is valid for six years, gives Hong Kong exhibitors the prime location in Hall 6, a new exhibition building called the Hall of Universe just behind the existing Hall 5. Exhibitors will be guaranteed stable participation fees at a competitive rate as of 2004.
In the speeches that followed the signing, René Kamm said, "This is a special moment for us, not only because it signifies the satisfactory resolution of a very difficult situation caused by the SARS [outbreak], it also marks the beginning of a new relationship and partnership with Hong Kong.
"Hong Kong has a special place in BaselWorld not only for the fact that it is the only Asian territory represented in our Exhibitor's Committee, but also because it is one of those territories whose presence has been expanding rapidly in the last twenty years.
"For us Hong Kong is not only an attraction for buyers, it has also set an excellent example for other countries in terms of the highest standard in presentation and design of its pavilion and stands.
“This agreement represents a win-win-win solution for exhibitors from Hong Kong, the HKTDC and our company MCH.”
A special focal point
René Kamm went on to assure exhibitors that the new Hall of Universe will be a special attraction and focal point at BaselWorld since one of the world's leading designers has been hired for its creation.
The building will cost MCH more than 40 million Swiss francs over the six-year period of the agreement and will remain in place from year to year only to be opened for the duration of BaselWorld.
After praising the dignity and unity displayed by the Hong Kong delegation in Switzerland, Frederick Lam explained that, “The governing Council of TDC has approved an up-front payment to guarantee the provisions of this partnership deal for at least six years. This is a financial commitment TDC has undertaken to ensure the best interests of HK's watch and jewellery industries - and of each individual exhibitor. This agreement, I am happy to say, has the support of the Swiss and Hong Kong authorities - and most importantly the support of Hong Kong's jewellery and watch industries.”
Frederick Lam concluded by thanking the various Hong Kong associations for their professionalism and pragmatism and René Kamm for responding swiftly to the HKTDC's proposals.
An integral part of the agreement was that the Hong Kong contingent dropped all legal action against BaselWorld management for loss of earnings and expenses incurred at the Zurich pavilion. The action against the Swiss Government by both MCH Swiss Exhibitions and HKTDC is not affected by this agreement.
The importance of Hong Kong
Hong Kong remains the second largest exporter of complete watches in both value and quantity, whilst its clock exports are ranked the largest in value terms and second in quantity. The US and the EU remain Hong Kong's largest markets with a combined total of almost 46% of its total exports, whilst countries such as China, Japan, Switzerland and Germany remain very important importers of watches made in Hong Kong.
This year, in the January to June period there were important increases of exports over the corresponding period of 2002 to Germany (+47%), Japan (+32%), Taiwan (+28%) South Africa and Singapore (both +25%). In its re-exports of watches - i.e. those with parts from, or assembled elsewhere - there was an increase of 16%. These figures are corroborated in the import figures which now place China as the largest exporter to Hong Kong with a 42% increase in 2002 and an 18% increase for the first six months of this year. Switzerland remains the second most important supplier with an 8% increase in 2002 and an impressive 24% increase in the January-June period of this year.
Given the importance of Hong Kong's exports and its imports, the signing of this new agreement between BaselWorld and the HKTDC not only makes good business sense to both parties, but also it underlines the recognition of Hong Kong as a major player in today's capricious world of watchmaking.