Apollo economist says China Shock 2.0 hits US tech, EVs
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China's export boom has shifted from low-cost goods to high-tech products like EVs and semiconductors, threatening US companies in advanced industries. Apollo Global Management chief economist Torsten Slok declared 'China Shock 2.0 is here' in a Friday note. Federal Reserve economists reached a similar conclusion in May, finding China now produces its own inputs and imports fewer manufactured goods.
Key Facts
- China's exports rose 24% in July, with high-tech exports surging nearly 41% in January-July from a year earlier.
- BYD surpassed Tesla as the world's largest seller of fully electric vehicles in 2025, delivering 2.26 million battery-electric cars versus Tesla's 1.6 million.
- Federal Reserve economists wrote in May that China's export drivers shifted from labor-intensive goods in the early 2000s to capital- and tech-intensive industries now.
- China's semiconductor exports doubled in the January-July period from a year earlier.
The Shift to High-Tech Exports
China's export mix has moved from clothing, furniture, and electronics to electric vehicles, semiconductors, and other high-tech goods. High-tech exports surged nearly 41% in the first seven months of 2025 compared with the same period a year earlier. Semiconductor exports doubled over that period, while overall exports rose 24% in July. Federal Reserve economists noted in May that China's export drivers changed from labor-intensive goods in the early 2000s to capital- and tech-intensive industries now.
Competitive Pressure on US Companies
Apollo Global Management chief economist Torsten Slok wrote on Friday that China is increasingly exporting products advanced economies once expected to dominate domestically. BYD delivered 2.26 million battery-electric cars in 2025, surpassing Tesla's 1.6 million. Ford CEO Jim Farley called BYD the 'best in the business' on cost, supply chains, manufacturing, and intellectual property. Slok referenced Brad Setser, a Council on Foreign Relations senior fellow and former US Trade Representative adviser, who first flagged that China now controls cutting-edge production itself.
Declining Import Demand
During China's first export boom, Chinese factories often imported parts, assembled finished products, and shipped them abroad, allowing foreign manufacturers to benefit as component suppliers. Federal Reserve economists found that China is increasingly making those inputs itself, so as exports have risen, imports of manufactured goods have fallen. Setser noted that shrinking Chinese import demand means the export surplus floods other markets.
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Apollo economist says China Shock 2.0 hits US tech, EVs
