Shanghai Watch Factory made China's first wristwatch — then went bankrupt in 1999

Shanghai Watch Factory was founded in April 1958 as China's first modern watch factory, the result of a 58-person team that assembled the first 18 prototype wristwatches in September 1955. The A581 model, released in 1958, sold for ¥60 — two months' salary — and became one of the era's 'four big things' a man needed before marriage. By 1970 the factory produced 2.28 million watches in a single year, and at its peak in the early 1980s it turned out 10,000 watches per day with 16,000 employees across its main and satellite plants. One in four Chinese watch-wearers owned a Shanghai watch.

Shanghai Watch was a planned-economy monopoly. When China liberalized its markets in the 1980s, ending the rationing system, foreign quartz watches from Seiko, Citizen, and Casio flooded in. The Shanghai brand — mechanical, heavy, unchanged — lost its status overnight. By the late 1980s the factory was piling up unsold inventory. By 1990 it was already insolvent, surviving on state subsidies. A 1994 attempt at shareholding reform failed to turn the business around.

In 1999, the original Shanghai Watch Factory was formally declared bankrupt after accumulating massive losses. The factory that had produced 120 million watches worth ¥1.2 billion over 40 years was wound up. In April 2000 it was reborn as Shanghai Watch Industry Co., Ltd., a public company with about 600 employees — a fraction of the 16,000 who had once worked there. The brand survived, but the crown jewel of Chinese watchmaking was gone.