‘China has arrived’: From $1,000 Gucci sneakers to German cars, China is coming for the industries that made Europe rich

Gucci built its luxury reputation on Italian craftsmanship, but its newest $1,000 sneakers break with its 105-year-old tradition with a new label: Made in China. But instead of citing the cheap labor long associated with Chinese factories, the fashion house said it picked a Chinese manufacturer known for its “technological know-how” and ability to meet the brand’s quality standards.

Gucci told Reuters it will keep making its other products in Italy. But unlike the connotation a “Made in China” sticker carried from days of yore, the move to China is the latest signal of Chinese manufacturing moving into Europe’s most storied industries, like high-end consumer goods and cars.

“I think symbolically, China has arrived,” Ker Gibbs, former president of the American Chamber of Commerce in Shanghai, told Fortune. “It’s no longer a place where only cheap stuff gets manufactured and poor quality this and that.”

The shift is part of what some economists, like Apollo Global Management chief economist Torsten Slok, have dubbed the second China Shock. Cheap clothes, furniture, and electronics made in China poured into Western markets in the first wave in the early 2000s. Now, China is exporting electric vehicles and industrial machinery that compete with Europe’s established manufacturers, while its factories have gained the technical expertise to produce high-end goods for luxury brands like Gucci, whose sales have halved in the last three years and whose parent company Kering cut prices to deal with slow demand. 

Howard Yu, a professor of........

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