I think Burberry do make bags in China now, although not every model. As for the price, I think one big part that determines the price is the need. As long as people are willing to pay, they do not need to justify that the price is "reasonable". (In fact, I believe the price is much much higher than the real cost of making it for almost all the high-end bags.)
Another example is Mulberry. They do make bags in China and in Turkey, as well as in England. And their leather bags are usually around $1000...