— This is the script of CNBC's news report for China's CCTV on May 28, Tuesday.
Welcome to the CNBC Business Daily.
Right on schedule. Just days after inking a free trade deal with Switzerland, China says it will cut duties on Swiss watches by 60 percent over the next decade.
The ministry of commerce says a deal will be signed in July and duties will go down by 18 percent in the first year.
But apart from import duties, there will still be value added tax and consumption tax. The pact will allow almost all Chinese goods and 84% of Swiss products to be duty free.
The move could be timely as our next guest says while demand for luxury goods has been waning in China, the slowdown is only temporary.
[Sound on tape by Francis Gouten, Director, Gouten Consulting: China was a soft tummy where all the brands when full like in Africa 200 years ago, the Western countries, there was no limit. Today there's a limit, the Chinese market will become a normal market with 1 billion consumers. Brands have to re-think about their strategy. But overall, if you analyze, the luxury business in the past 30 years, it was always increasing and never decreasing.
Gouten also says that with taxes on luxury goods still relatively high back home, Chinese shoppers are increasingly heading overseas to make their purchases.
[Sound on tape by Francis Gouten, Director, Gouten Consulting: I remember a time where the luxury tax in France was 33%, this was 30 years ago, and there was zero-tax in Switzerland but the best market was still France. Because people are going to a country not only for the money, they come for the lifestyle, they come for the quality of the service, and the people. Chinese going to Hong Kong it's a nice trip, it's not only for the purpose of buying.]
Chloe Cho, from CNBC's Asia headquarters.