Taiwan made the world's watches — then wages rose and production moved to China

Through the 1980s, Taiwan was one of the world's largest watch manufacturing centres, producing watches under contract for Omega, Bulova, Citizen, Casio and Seiko. The industry was built on precision manufacturing skills and competitive labour costs, with hundreds of factories employing skilled workers across the island.

By the 1990s, rising wages and labour shortages in Taiwan made contract manufacturing uncompetitive against mainland China and India. Clients pressed suppliers for lower prices, and factories operated on razor-thin margins. The Taiwan Watch & Clock Industrial Association reported that over 80% of manufacturers had moved production to mainland China, shifting to a 'Taiwan takes orders, China produces, China ships' model.

The industry association's membership fell from over 400 companies to around 200. The Taiwan Ministry of Economic Affairs' Trade Administration describes the industry as facing a survival crisis. Factories that did not relocate closed. The industry's failure to build its own brands or transition to higher-value design and R&D work meant that the cost advantage was the only thing protecting it, and when that disappeared, the work followed.