NYTimes: Roger cohen - The World's Watchmaker

[marginlized]

Tommy Hilfiger, Jennifer Lopez, Coach, Titan, Trump — name the brand and Leung is manufacturing their watches in China’s southern Guangdong Province, the place that is now the world’s factory.

Leung was wearing a great hulk of a watch called a Bonja. It’s big in Gulf states, where it retails for about $4,000. Leung told me he’s paid $200 for this model and that leaves him a comfortable margin. For Juicy Couture watches that retail in New York for $95, he gets eight dollars. He’s still making money on that. In general he receives about 8 percent of the retail price, or about 40 bucks for a $495 Lacoste watch.

Every electronic device from a basic cellphone up tells the time. So a watch is now redundant, no more than a fashion accessory. It’s thriving in that role. You can be all-American like Hilfiger, or very French like Lacoste. Then you get China to develop that image at low cost.

The average worker at Dailywin earns about $150 to $200 a month, before overtime, ranging higher for supervisors. About 70 percent of the more than 400 workers are women, many from inland provinces, living six to a room in on-premise dormitories and sending their earnings home.

The low renminbi rate is about growth, jobs and exports. That’s the fundamental underpinning of the Chinese Communist Party’s hold on power (even a 3% increase would hurt). China came through the downturn but, as Dailywin’s difficulties suggest, it did not come through unscathed. Jobs were lost, painful adjustments made. I don’t see China risking its renewed growth to cool U.S. Congressional ire over high American unemployment.

Edit: http://www.nytimes.com/2010/02/09/opinion/09iht-edcohen.html