Gucci has launched $1,000 sneakers manufactured in China, marking a first for the Italian luxury house, which highlights Chinese technological expertise rather than cheap labor. Analysts are calling it the ‘second China Shock’: after cheap clothing and electronics in the 2000s, China now exports electric vehicles and industrial machinery directly competing with European manufacturers. Germany is the hardest hit country: its exports to China fell 9.7% in 2023 while imports rose 8.8%, and its trade deficit with China grew by a third. Volkswagen saw its deliveries in China drop 36.6% in the second quarter and plans to cut its model lineup by half and 100,000 jobs, the biggest restructuring in its history. Chinese carmakers outsold Japanese brands in Europe for the first time in May, confirming China’s push into high-end manufacturing.
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