132 IN THE SHADOW OF THE DRAGON on low cost, low quality, and relatively primitive technology would not be sustainable over the long run. What the Chinese make up for in volume they lose in pricing. An example is the watch industry. China produces 1.2 billion watches a year, while Switzerland pro- duces 26 million, yet when seen in dollar terms, Switzerland accounts for 60 percent of the world market since the average Chinese watch sells wholesale for $2, while the average Swiss watch sells for more than $500. The production of low-cost textiles and shoes will inevitably migrate elsewhere in search of even less expensive labor, just as the industry previously migrated from Japan to South Korea, to Taiwan, to Southeast Asia, and then to China. The Downside to Outsourcing Manufacturing Multinationals initially went to China to manufacture their prod-