Ding Meng

WARNING: Wearing Gold Lorex symbol of corruption

The luxury watch industry is taking a pounding and the finger is pointed at the crack down on corruption in China.

Global luxury sales and epic Chinese political corruption have become so inextricably intertwined over the last decade that the recent kerfuffles in Chinese politics—the investigations and convictions and pledges of propriety—have been nothing but trouble for the privileged few. That became clear last fall, when political disorder in Beijing made it difficult to know which faction would end up on top, and one luxury-brand representative told the Journal that sales were down because “no one knows who to bribe.”

Some of the heaviest hearts are in the luxury-watch business. No industry has enjoyed such a warm embrace in China as the one that packs such enormous monetary value into a small, easily exchanged physical object. And, sure enough, the luxury watch business enjoyed a banner year in 2011, growing forty per cent. But then China’s anti-corruption campaign began, and by September, Bo Xilai was in handcuffs, and watch exports to China suffered a devastating blow—down 27.5 per cent compared to a year earlier, according to the Federation of the Swiss Watch Industry. China Daily quoted an industry consultant saying the anti-corruption drive “hurts the luxury watch business a lot.”  Read more »

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