With much of Hong Kong's manufacturing industry moving out to China, one business is planning to do the opposite.
Watchmakers are planning to move their trade back to the territory and expect their business to grow substantially in the coming years. They are all geared up and believe the move will create thousands of new jobs in the local market.
In the past, lacking the necessary technology, Hong Kong watchmakers had to rely on importing watch movements-the "mechanical hearts"-from Switzerland and Japan. Thus, profit margins for Hong Kong manufacturers were relatively low and incentives to invest in and develop the industry few.
A joint feasibility study by the 650-strong member Federation of Hong Kong Watch Trades & Industries Ltd with the Chinese University of Hong Kong and the relevant trade associations confirmed that it would now be possible to develop mechanical watch movement technologies in the territory and the government was asked to subsidise a HK$60 million project. Last year, the government agreed to grant HK$54 million with the watch manufacturers contributing the balance.
"The outlook for Hong Kong's watch manufacturing industry is promising," assures Jerry Tsang, vice-chairman for the federation. "We are the world's number one exporter of watches and if we have our own brands entirely produced here. We can become even more competitive." Hong Kong's total export of watches and clocks in 2001 was 40,224, climbing to 46,146 in 2005 with the US as the biggest importer followed by China and Japan.
With industry experts helping to develop the technology, it is expected that local manufacturers will be producing high-end luxury watches in three to five years. "Many people no longer simply regard watches as tools for checking time, they see them as status symbols. With increasing purchasing power, they don't mind spending a lot of money on a watch that features exquisite design and fine craftsmanship," Mr Tsang remarks.
Skilled engineers, creative designers and craftsmen will be needed to produce new lines of high quality watches. Smart sales and marketing executives will also be required to travel around the world and promote Hong Kong brands.
In order to foster more talent for the industry, the federation advises tertiary and vocational institutes on the subjects that should be included in their training. For example, The Hong Kong Institute of Vocational Education (Lee Wai Lee Campus) consulted the federation before running its three-year full-time higher diploma course on horological science technology. Mr Tsang believes that the training will flourish and that in time there will be degree courses on offer.
In a bid to enact the "specification of competency standards", on which the "recognition of prior learning" is based, a Watch and Clocks Industry Training Advisory Committee has also been set up in collaboration with the Education and Manpower Bureau and the Vocational Training Council.
Job creation and development
With the entire production process undertaken locally, Mr Tsang estimates that thousands of jobs will be created and qualified professionals can expect starting salaries of over HK$10,000. Those already in the industry will be able to upgrade themselves by studying evening courses or through on-the-job training.
As watches currently produced in Hong Kong rely on overseas made movements to complete the production process, they do not qualify for the zero-tariff benefit stipulated under the Closer Economic Partnership Arrangement (CEPA). "With the planned changes it makes sense to move our production back to Hong Kong," Mr Tsang concludes.
Moves to localise watch manufacturing industry
- Join hands with industry players to lobby the government
for funding to develop movement technology
- Move production plants from China back to Hong Kong to
cut costs and enjoy the tariff-free incentives
- Advise tertiary institutes on curriculum required to train
- Go for quality but not quantity in the production of watches