A dynamic domestic market is now a necessity: The examples of China, the United States and the European Union

The organisation of global production processes is shifting towards a model where production is located in proximity to the final buyers of goods. This model is gradually replacing the previous one based on value chain segmentation. If production is located in proximity to the final buyers of goods, then for a country to attract investment, it must have vigorous domestic demand ( a dynamic domestic market). So how are the major countries responding to this new system? China is indeed moving from an export-led growth model (a mercantilist model) to one where growth is driven by growth in domestic demand (consumption, investment, services, etc.); The Trump administration is trying to get production to shift back to the United States not by relying on the dynamism of its domestic demand, even though it is highly vigorous , but by using protectionism, leading to a rise in import prices, which will weaken domestic demand in the United States; Despite the single market, the European Union does not have dynamic domestic demand. The creation of the single market has not intensified trade between the EU countries, probably because the national markets for goods and services remain segregated.