One of Europe’s leading industrialists has said the continent’s largest companies will invest more money in jobs and innovation at home as the attractions of investing in China diminish and the US turns more protectionist.

Carl-Henric Svanberg, chairman of the European Round Table of Industrialists and head of Swedish truckmaker Volvo, vaunted the merits of European stakeholder capitalism over the American and Chinese models, saying it was more sustainable despite the heavier burden of taxation and red tape.

“I actually think it works better here than it does in the east and west. That doesn’t mean that America, with their way of doing things, haven’t been able to drive growth harder, they have. But I think over time if inequality keeps on growing it will come back and bite them,” he said in an interview with the Financial Times.