A breeze of cool air — and a chance for clearer thinking in Europe

This summer Europe was hit by a record-breaking heatwave. As millions of Europeans turned to Chinese air conditioners for relief, some politicians reached for tariffs, quotas, and trade restrictions. The question is not whether Europe needs protection from Chinese products, but why products that meet genuine needs are being treated as a threat.

Genuine demand, not overcapacity

The debate over the so-called "overcapacity of China" often overlooks a basic question: if supply were truly excessive, why are consumers scrambling to buy? Europe's air-conditioner market offers a compelling answer. Chinese companies are winning not because they produce more — but because they build products that better serve local needs.

The key to their success lies in solving problems that European manufacturers have not. They have tailored their products to meet Europe's stringent regulatory requirements and overcome installation challenges. Portable, drill-free designs, quiet operation, and high energy efficiency have removed barriers to installation in older European buildings. Trade statistics underscore this trend. From January to June 2026, China's air-conditioner exports to the European Union (EU) reached US$3.76 billion, up 43 percent year on year — the highest level on record for the period. Exports of portable air conditioners surged by more than 70 percent, and Chinese factories have been running around the clock to keep up with demand.

This once again demonstrates that products offering good value and meeting real needs naturally gain market acceptance, and the current structure of China-EU trade is shaped by market demand and complementary strengths.

Competitiveness matters

Beneath the surge in demand for Chinese air-conditioners lie deeper structural challenges in Europe's economy. Europe's energy prices are two to three times higher than in the United States, while electricity costs for many energy-intensive industries significantly exceed those in China; Europe accounts for only about 5 percent of global investment in artificial intelligence, while much of its traditional manufacturing sector has struggled to adapt. Research from Germany's Kiel Institute finds that about two-thirds of Germany's lost share in third-party markets stems from its lack of competitiveness, rather than Chinese competition.

Comparative advantage is what counts in the global marketplace. Europe's real challenge is not China's enhanced industrial capacity, but its own structural weaknesses.

Protectionism is no solution — Win-win cooperation is

Despite media rhetoric about a "China Shock 2.0," market realities tell a different story. China's manufacturing success reflects its capacity to innovate, mass-produce, and respond swiftly to market demand—these are not capabilities to displace European industries, but to help meet local demand, support the green transition, and create new opportunities for investment and growth. This is not a "China shock" but a China opportunity.

The real danger is that protectionism will turn that opportunity into a missed one. Trade barriers cannot restore competitiveness or accelerate innovation; they merely raise costs across supply chains, burden businesses — especially small and medium-sized enterprises — and ultimately leave consumers paying the price.

Protectionism also fuels a self-defeating cycle of restrictions and retaliation. On July 23, the EU adopted its 21st‑round sanctions package against Russia, under which several Chinese entities were added to a list and made subject to tightened export‑control requirements for dual‑use items. In response, China's Ministry of Commerce adopted countermeasures to safeguard China's legitimate interests. Such tit-for-tat actions increase uncertainty, weaken business confidence, and leave both sides worse off. Ultimately, protectionism produces no winners.

Europe stands to gain far more from partnership than from confrontation. European goods — from high-quality consumer products to advanced technologies — have long enjoyed strong demand in the Chinese market. As China pursues higher-quality, greener, and more innovation-driven development, fresh opportunities are emerging for both sides. Strengthening cooperation, not erecting new barriers, is a surer path to sustainable growth, competitiveness, and shared prosperity.

Encouragingly, dialogue is already moving forward. In late June, the first meeting of the China-EU Trade and Investment Consultation Mechanism produced the first joint statement under the framework of this new mechanism, establishing a framework for resolving differences through negotiation. That positive momentum continued when China and the United Kingdom held the 15th Joint Economic and Trade Commission (JETCO) in London in July and agreed to further strengthen bilateral trade and investment cooperation.

The cool breeze from Chinese air conditioners may have cooled European homes this summer. Now, as the debate continues, what Europe needs most are cool heads and open trade.

Zheng Yin is an observer on international affairs.