I don't think China is intentionally making cheap stuff. Because they very well do make high precision stuff too. I think some casio watches off the top of my head are made in China. They're made pretty well too. Ofc some are made in Thailand and their best stuff is made in Japan so they can keep a tighter watch on their most elite stuff.
Stuff in China is made cheap because that's what people ask for. If people want more expensive stuff I have no doubt that China can produce that as well. Because of China's ultra capitalist industrial machine, they are capable of producing so much so quick for so cheap.