Europe will face simultaneously the "service wave" from the United States and the "goods wave" from China
Washington relies on service exports, while Beijing bets on goods exports. Europe will be hit by both waves, analyzes Patrick Artus, member of the Cercle des économistes and economic advisor at Ossiam, in an op-ed published in Le Figaro.
According to Artus, the U.S. economic model is not favorable to wage earners, characterized by a persistent skewing of income distribution toward corporations and their shareholders. Since 2010, median wages have seen only a 9% increase in purchasing power, while corporate earnings per share have nearly quadrupled. In the past year alone, real wages in the U.S. declined by 0.4%, while real earnings per share rose by 7%.
This economic model, highly detrimental to employees yet advantageous for corporations, does come with certain benefits. Asset wealth has grown (the S&P 500 rose 72% over five years, and the Nasdaq Composite increased by 77%); companies have the capacity for substantial investment—statistics show that U.S. corporate R&D spending accounts for 2.7% of GDP, compared to 1.5% in Europe; intellectual property investment exceeds 7% of GDP, versus 4.3% in Europe.
However, the cost of this model is weak household consumption. Despite a sharp drop in household savings rates—falling to 2.6% in April 2026 from 5% a year earlier—the annualized real household consumption growth in the first quarter of 2026 was still just 1.4%. Moreover, most materials involved in investments such as semiconductors, memory chips, and hard drives are imported, leading to rapid import growth: a year-on-year increase of 21.1% in the first quarter of 2026, and 15% in the second quarter of 2025—thus failing to stimulate domestic U.S. economic growth. Consequently, due to its deeply unfavorable structure for wage earners, the United States is suffering from low growth.
What economic policies can China and the U.S. adopt?
In his article, Artus points out that the U.S. could change its income distribution model toward one more favorable to wage earners—but this is not the current trend. Due to the significant share of foreign suppliers (mainly Asian) in technological investments, the country’s trade deficit in goods cannot be reduced. For the U.S., the only viable path forward is to continue expanding service exports (corporate services, financial services, patent royalty fees): since early 2026, its service trade surplus has reached $340 billion annually.
The sole possible engine for China’s economic growth lies in exports. Indeed, in July 2026, export volumes measured by value grew by 23.9% year-on-year; in 2025, total export volume increased by 10%.
The article concludes that Europe thus faces a clear danger. If the U.S. pursues growth through service exports, and China through goods exports, Europe will find itself caught between the "service wave" from the U.S. and the "goods wave" from China.
Original article: toutiao.com/article/1874638976555018/
Disclaimer: The views expressed in this article are those of the author alone.