AT 6.30 in the morning, a haggard group is checking out of the China hotel in Guangzhou, the glow of Cathay Pacific champagne subdued by the stale reek of last night’s Tsingtao beers downed with Chinese partners in a smoke-filled bar.

Everything about the buying business in China is fast: schedule, decisions, payment and delivery. There is not much time for second thoughts and none at all for mistakes.

But on that first morning, after the long haul through Hong Kong to the Pearl River delta, the man in the check-out queue does not feel dynamic. On the wrong side of 40, as he puts it, the man we will call Daniel considers himself a veteran of the buying circuit in China after more than 40 visits. There is not much romance left in it for him.

He has seen the rice fields transformed into factories and rutted tracks turned into highways; watched container trucks sweep down to once sleepy fishing ports and fought his way through thousands of buyers in markets and trade fairs built on the sites of Mao Tse-tung’s collective farms.

Daniel has offered to do something unheard of. For the next few days, on a guarantee that his commercial confidentiality will be respected, he will take The Sunday Times inside the mysterious process by which a piece of cheap plastic leaves a Chinese factory for 22p and ends up on a discount-store shelf in Britain priced at 99p.

“The single-price buyer is the toughest in the world,” said Daniel. Every cost has to fit inside that magic number: 99p in Britain and 99 cents in America. “It’s a zero-sum game.”

It’s also one of the fastest-growing retail markets. Tesco and Asda will add to Daniel’s competitive headaches when their own one-price sections get up to speed. There are one-euro stores across Europe and even 100 yen shops in Japan, all selling toys, trivia, accessories - anything that fits the price formula.

“Low-income groups see them as a necessity and high-income groups see them as amusing,” said Daniel.

“It’s just things. Things you don’t even know you want. A lot of the time when you get this stuff home you realise you shouldn’t have bought it. That’s why at the low end of the market they create a sense of adventure. In the US they call it a treasure hunt. And believe me, we’re at the low end.”

Everybody loves a bargain, except the men fighting it out inside that remorseless equation: 22p to 99p. That’s why bonding with the Chinese suppliers, who exist on some of the slimmest margins anywhere, is a must on the first night in town.

Another must is the Chinese man gabbling into his mobile phone as he walks alongside Daniel to board the China Eastern airbus for a two-hour flight to Ningbo, on the eastern seaboard.

Lai, to give him an assumed name, is a descendant of the “compradors” who made fortunes as intermediaries for an earlier generation of Daniels when British traders first came ashore at Canton in the 19th century.

He is fixer, translator, travel manager, bargainer, drinking companion and sage. No foreigner, however fluent their Chinese (and Daniel’s is nonexistent), can manage without a Lai. He can make you a fortune or help you lose it. Lai, it turns out, could be game for either. Daniel lives with that.

As the crowded plane takes off, Lai is still abusing a supplier by phone in loud Zhejiang-province dialect. Their neighbours in row 36 are hawking noisily. Daniel’s tatty seat fails to recline. He dozes.

Ningbo is the commercial capital of Zhe-jiang, a city with a 2,000-year history that has been entirely forgotten in the rush to the future. Its grubby hotels are more expensive than Beijing, its taxi drivers are rogues, its restaurants a rip-off and its bar girls mercenary. It is also a place of soaring wealth — economic growth may be more than 15% a year.

“The suppliers will pick us up from the hotel,” said Daniel. “The Chinese are very hospitable — as long as you’re spending money.”

The old school of buyers worked from the ground up, poring through Chinese business directories and walking round factories writing orders on forms printed in triplicate.

Daniel is young enough to have caught the internet age. He and Lai have already done their fieldwork on Alibaba.com and MadeInChina.com, which list thousands of factories and agents. They will order by e-mail and pay by electronic transfer. But not just yet.

“You have to look at the product and at the guy making it,” said Daniel.

It is a two-day task of dizzying variety. One factory is a gleaming showpiece, proud to invite callers into a spotless showroom with an in-house coffee shop that does lattes. “Okay for the Marks & Spencer boys, I guess,” said Daniel, moving on.

Another is a Dickensian shambles with a few sample toys grudgingly placed on a grimy plastic table in the manager’s office. But Daniel whips out his calculator and his bible of cost sheets, does the sums, and is pleased. The owners are so delighted that they insist on an immediate lunchtime “banquet” at a nearby restaurant, where copious fiery spirits wash down a selection of slithery delicacies, unidentifiable even to seasoned China hands.

Lai, Daniel’s right-hand man, sometimes assumes that no foreigner understands basic Chinese. After a few drinks, he is locked in a discussion over figures and percentages that don’t sound like the ones quoted to Daniel. Informed of this, his boss shrugs wearily. The factory calls go on and on.

That night, a throng of xiaojie, Chinese slang for working girls, descends on the buyers unwinding in the bars and massage par-lours around the hotels.

“Cheap sex in China is like any cheap product in China,” sighed Daniel, sipping his £5 pint of Guinness. “You get what you pay for.”

He turns in early, but not before telling of the night when a happy supplier sent xiaojie up to his team’s rooms to celebrate a deal with a free lesson in the refinements of Oriental civilisation. “None of the guys turned it down,” said Daniel slyly.

In reality, the mathematics are more fascinating than the venality of Chinese business culture. And in any case, Daniel doesn’t feel superior. He knows a colleague from a major British retail chain who retired early after years of amassing 5% kickbacks from Chinese suppliers in a Swiss account.

“Here are the crown jewels,” said Daniel during a quiet patch one afternoon, rustling through his cost sheets. And this is how it works.

Take a typical, small plastic toy. It leaves the Chinese factory and goes into a shipping container at the port for a “free on board” (FOB) price of 22p. Daniel will pay for shipping, British customs duty, insurance and unloading into a warehouse. His costs bring the price “landed” in the UK to 31.5p.

“We’ll aim to sell that to the retailer for 45p,” explained Daniel. The retailer sells it for 99p, but will keep only 81.7p of that — the rest is 17.5% Vat.

“So we work on the basis that the landed price at our warehouse is one third of retail,” said Daniel, “but the free rider here is the UK Treasury. So who’s ripping whom off?”

Along the chain, the Chinese factories, Daniel, the shippers and the retailers are fighting over the margins. Every day, every load, every week.

The numbers get even harsher when you look at the Chinese end. Their 22p is Daniel’s baseline. He reckons that due to high commodity prices, raw materials eat up 15.5p. That leaves the factory with 6.5p to cover wages, overheads and profits.

“Think about that,” said Daniel. “It means that the labour costs in China could double and you would hardly notice it.

The squeeze is in the middle.”

Not for the small fry like him are the social audits, compliance documents and worker standards that major brand names insist on. “They have to,” said Daniel, “because nobody wants to end up on the front page of the News of the World. For us, it’s all about price.”

It’s in search of the elusive margin that Daniel and Lai hire a taxi for £65 to drive inland for three hours.

On the way he waxes lyrical about the buyers’ holy grail. “Holograph ‘bling phone’ stickers for mobiles — eight pence a pack FOB in Ningbo and a quid in the shops,” he said dreamily, “that’s a nice one.”

They go to Yiwu, a place that was paddy fields 25 years ago and is now, as the official literature puts it modestly, “the largest wholesale market in the world” with 100,000 businesses spread over 2.6m square metres.

“If you spend three minutes in each booth it will take you a whole year,” Yiwu boasts of its brand-new complex.

Daniel and Lai are three-minute men. In the cosmopolitan throng, the Brits are lost among buyers from Mexico, Sri Lanka, Nigeria, Russia and the Middle East, all with their Chinese sidekicks, hustling to drive down the asking price.

“If an initial quote is out by 15%-20% I’ll lose interest,” said Daniel. “They need to know we’re not from Harrods or Debenhams. I’ll say, okay, can you show me some real prices? It’s cost me five grand to get here. I’m not here to be nice. Most of the time they’ll just laugh. They don’t give a shit.”

Once Daniel has found the product, got the price, identified the factory and made the deal, he starts to assume risk.

“It’s impossible to enforce anything legal with China,” he said, “and to be fair they’d have no idea how to go after a crooked Brit in our courts.”

It demands an astonishing degree of trust on both sides. In general, the factory will start a production run on receipt of Daniel’s order. He will try not to pay a deposit, although some Chinese firms insist on 30% up front.

“We’d expect the goods to be loaded about 30 days after order,” he said.

With Daniel’s goods container on the dock-side at Ningbo, the factory will fax a copy of the bill of lading to him in London.

Then he must transfer payment in full to the factory’s account in China through HSBC in Hong Kong.

“You are trusting that on receipt of the funds the factory releases the original bill of lading and allows us to receive the goods,” said Daniel. “If they don’t, you’re f****d. And of course the customer has paid in full and in advance for goods he’s never seen.”

The buyers’ lore of disaster is legion: the consignment of blue colanders that arrived a lurid yellow; the container of gel-based air fresheners out of which poured a molten mass of purple sludge on arrival in Britain; the toy weighted with toxic mud as ballast. Goods can be short, broken or defective.

Then there is the “long firm” Chinese scam. “A long firm is a confidence trick,” explained Daniel.

“The buyer visits someone. Their prices are unusually low. He’s suspicious, so he just places a small trial order. It’s perfect. So he places another, and another. It can run six or eight months like this. They build up a load of customers. Then one day the guy in China takes the money, ships containers stuffed with rocks and waste products all over the world, and vanishes.”

Of course, the buyers could pay for professional inspections, or work through agents, but that eats into the precious margins. Both Chinese and British write off the occasional loss and trade on.

There’s a converted military airfield at Yiwu, but the civilian flight connections don’t work and Daniel is trying to get home for the weekend. So he hauls his bags onto a crowded train to Shanghai, scrambling for the last China Eastern flight to Hong Kong and the Cathay Pacific connection to Heathrow. It is one working week, four cities and countless three-minute meetings since he landed. Within the month, £280,000 in orders will flow through HSBC into China; 60 to 90 days after that, the ships will heave into sight off England and Daniel’s tat will be on a shelf somewhere near you. All for 99p.