The squeeze of Europe (2)
In a competitive environment, growing companies move down the experience curve by being faster than their stagnating competitors at cutting costs, improving quality… (assuming they have similar factor costs).
Despite rising wage costs, Chinese companies continue to improve their cost and quality competitiveness compared to their European counterparts, including Germany. Even with international expansion, European companies remain stuck in low growth.
Meanwhile, American companies benefit from a deep and expanding domestic market, with the corresponding benefits of economies of scale, cheap energy, and a strong innovation ecosystem.
Caught in between, Europe finds itself squeezed, like a marginal, low-growth competitor.