Gucci has introduced $1,000 sneakers labeled Made in China, breaking with the luxury house's 105-year association with Italian production while saying the selected manufacturer was chosen for its technological know-how and ability to meet Gucci's quality standards. Gucci said its other products will continue to be made in Italy. The move comes as Chinese manufacturers expand from lower-cost exports into luxury goods, electric vehicles and industrial machinery, a shift some economists call the second China Shock. China's manufacturing wages remain below those in Taiwan and South Korea, while its suppliers have accumulated Western-standard expertise through decades of partnerships, including Volkswagen's operations in China. The shift is putting European companies under pressure, particularly Germany's industrial sector. German exports to China fell 9.7% last year as imports rose 8.8%, and German car exports to China dropped by a third. Volkswagen's deliveries in China fell 36.6% in the second quarter, and the company said it would cut its model lineup by up to half and 100,000 jobs. European automakers have responded with tariffs and partnerships: Chinese-owned carmakers outsold Japanese brands in Europe for the first time in May, while Volkswagen invested $706 million for a nearly 5% stake in Xpeng in 2023 and agreed to develop cars with it for China.