With Apple Watch prices set to top $20,000 in China, factories churn out knockoffs

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Mainland Chinese consumers looking to purchase an Apple Watch will face credit card bills far higher than their counterparts in Japan or Hong Kong thanks to the nation's oppressive luxury tax scheme, setting the stage for China's impressive counterfeiting industry to flood the streets with copycat devices.

A fake Apple Watch spotted by AppleInsider in Hong Kong. This device was listed for HK$499, or $64.

Apple Watch prices in mainland China are anywhere from 16 to 20 percent higher than they are in other countries, according to Apple. The 38-millimeter Sport model comes in at Â¥2,588 ($413) in the People's Republic, a healthy 15 percent premium over its $351 price tag in Hong Kong, while the top-of-the-line rose gold Edition clocks in at Â¥126,800 — more than $20,000.

Chinese consumers are used to seeing such inflated prices, thanks to the hefty luxury tax — which can exceed 30 percent — that China imposes on imported items. While some opt to eat the difference and others choose to shop overseas, many relatively poor buyers instead line up for copycat goods.

The knockoff production lines, known as shanzai, have already begun to churn out cheap imitation Apple Watches. AppleInsider spotted the above fake in a Hong Kong electronics stall last month, and the South China Morning Post found an array of similar forgeries for sale in Shenzhen, a manufacturing center just across the Hong Kong border.

Many of these look nearly identical to Apple's offering, though are generally only compatible with Google's Android mobile operating system.

Zhimeide's D Watch, which sells for less than $50 and mimics the Apple Watch's design exactly. | Via SCMP

One such device, from Chinese manufacturer Zhimeide, comes complete with a digital crown and the ability to control a connected handset's camera. The ¥298 ($48) device sports a 160 mAh battery that ostensibly provides standby time exceeding seven days, but which drops to three hours under heavy use.

The reproduction Apple Watches are merely the latest salvo in a long-running battle between Apple and Chinese counterfeiters, who primarily target the massively popular iPhone and iPad lineups. Some have even set up entirely fake Apple Stores, so convincing that employees actually believed they worked for Apple.

Apple's Beats unit has also felt the pressure, with lookalike headphones available in seemingly every electronics shop in China. The company filed suit against several Chinese counterfeiters last summer, seeking billions of dollars in damages.