Chinese exports increased 18 percent in the first half of 2026, according to Beijing customs data, sparking concerns of a second China shock that could deepen deindustrialization in Europe and other regions. The surge follows Beijing’s effort to offset a multiyear property market downturn that erased about $10 trillion in household wealth, prompting the government to expand manufacturing capacity for electric vehicles, lithium‑ion batteries and solar equipment. Export growth is driven by high‑tech goods such as electric vehicles and semiconductors, while domestic demand remains weak, leaving factories with excess output that is being shipped abroad; U.S. imports from China were essentially flat in the first half of the year, though American data show a 30 percent decline through May. Chinese firms are circumventing tariffs by routing goods through Vietnam, Mexico and other countries, leading to notable increases in imports from those nations; LC Sign, a Guangzhou‑based sign manufacturer, expanded its workforce to about 350 employees after a tariff‑related sales dip in 2024, and its U.S. sales have recovered since a truce between the United States and China reduced trade barriers. European leaders, including German Chancellor Friedrich Merz and French President Emmanuel Macron, have called for coordinated action to protect regional industry, and the European Union plans to lower its steel tariff‑free quota and consider broader industrial subsidies and domestic content requirements; Volkswagen has announced the closure of four German plants and a reduction of 100,000 jobs as it seeks to compete with Chinese automotive manufacturers, which are expanding capacity for an additional five million vehicles annually. The situation remains unresolved, with the United States preparing additional tariffs aimed at excess capacity, while China’s leadership has signaled a shift toward stimulating household consumption, and the European Union is expected to unveil its policy package in September.