1/4
"Germany’s model plodded profitably along. But the pillars it relied on to do that — cheap Russian natural gas and the Chinese market — are collapsing."
Actually there is a third, much more important, pillar that Germans don't like to talk about.
nytimes.com
"Germany’s model plodded profitably along. But the pillars it relied on to do that — cheap Russian natural gas and the Chinese market — are collapsing."
Actually there is a third, much more important, pillar that Germans don't like to talk about.
nytimes.com
2/4
That pillar is the slow growth since 2003 in German wages relative to German productivity. As German workers received a smaller share of what they produced, this was the obverse of transfers that directly or indirectly subsidized German businesses.
That pillar is the slow growth since 2003 in German wages relative to German productivity. As German workers received a smaller share of what they produced, this was the obverse of transfers that directly or indirectly subsidized German businesses.
3/4
This is why German businesses might be mis-diagnosing the problem with China. It isn't geo-political tensions that are eroding German sales to China so much as the intensification in the past 4 years of transfers from the household sector to subsidize Chinese manufacturers.
This is why German businesses might be mis-diagnosing the problem with China. It isn't geo-political tensions that are eroding German sales to China so much as the intensification in the past 4 years of transfers from the household sector to subsidize Chinese manufacturers.
4/4
For years I've argued that one inevitable result would be the expansion of the Chinese share of global manufacturing and exports, and that is exactly what is happening. It is likely to continue happening with or without a resolution of geo-political tensions.
For years I've argued that one inevitable result would be the expansion of the Chinese share of global manufacturing and exports, and that is exactly what is happening. It is likely to continue happening with or without a resolution of geo-political tensions.
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