China's High-End Manufacturing Push Threatens Europe's Core Industries
Gucci's new $1,000 sneakers are being made in China, a sign that Chinese manufacturing is moving into Europe's high-end industries. Economists describe a second China Shock as Chinese firms export electric vehicles and machinery and compete with established European manufacturers. China built much of its expertise through ties with European companies such as Volkswagen, while its manufacturing wages remain lower than in Europe and East Asia.
Gucci’s $1,000 sneakers are produced in China by a manufacturer selected for technical skill and quality, while its other goods remain Italian-made. This reflects China’s move into high-end consumer goods and automobiles, not just low-cost production.
Economists describe a second wave of Chinese export competition: after early-2000s clothing, furniture and electronics, China now exports EVs and machinery. European ties, notably Volkswagen’s 1980s-era operations, helped train Chinese suppliers. Chinese factory pay averaged $629 monthly last year, below Taiwan’s $1,341 and South Korea’s $2,075.
European manufacturing workers and regions tied to cars and machinery could face further restructuring as Chinese competitors expand. Consumers may benefit from more high-end goods made in China, though brand prestige and quality perceptions could shift. Chinese factory workers might gain higher-skill roles, yet lower average wages than in Taiwan or South Korea may persist. The broader impact may depend on how quickly European firms adapt and whether displaced workers find comparable opportunities.