On June 29th, China and the European Union issued a joint statement that was described by foreign media as “remarkable”. Europe aims to reduce its trade deficit with China by October. At the same time, record-high temperatures in the European Union are driving an unprecedented demand for air conditioners from Chinese consumers.
The American consumer news and business channel (CNBC) reported on July 1 local time that Europe wishes to rebalance its trade with China, but it cannot do so without Chinese air conditioners. This example illustrates the difficulty for the EU in addressing the so-called "trade imbalance" issue.
On July 2, 2026, local time, in the town of Rouen in southern France, a woman was taking a shower after swimming at the beach. On that day, the temperature in Rouen reached as high as 37 degrees Celsius, and the heat wave affected most parts of Europe. Oriental IC
The EU has been constantly hyping up the issue of so-called 'trade imbalance' between China and Europe. It also claims that its trade deficit with China has reached a record level of 1 billion euros per day.
According to reports, on June 29 local time, after meeting with Wang Wentao, Minister of Commerce of China, Javier Solana, Commissioner for Trade and Economic Affairs of the European Commission, stated that tangible results should be achieved by October this year.
He said, “Not all problems will be solved or fixed, but we believe that our team has enough time to achieve tangible results from now until October.”
He pointed out that China’s exports to Europe continue to grow, while “our share in the Chinese market is shrinking”. He said, “This trend is not sustainable”.
According to the Ministry of Commerce website, during the talks on the 29th, both parties held comprehensive, in-depth, and constructive discussions regarding important economic and trade issues between China and Europe. It was confirmed that a formal trade and investment consultation mechanism between China and Europe will be established. This mechanism will include four major sections: trade and investment balance, export control, intellectual property rights, and the World Trade Organization. Additionally, a joint monitoring mechanism will be set up.
Both sides exchanged market access lists and agreed to promote a gradual resolution of their respective concerns. Both parties fully recognized the positive progress made in the Sino-European export control dialogue and agreed to strengthen dialogue, take further facilitation measures, and maintain the stability of the global supply chain. Both sides agreed to further enhance cooperation and exchanges related to intellectual property rights and the WTO framework.
Wang Wentao also expressed concerns regarding the EU's ban on inverter financing, the draft revision of the Cybersecurity Law, and the Industrial Accelerator Act.
Wang Wentao emphasized that China is not the root cause of the problems faced by the EU, but a partner in solving these problems. The relevant economic and trade measures taken by the EU and the restrictive measures against China seriously affect normal economic and trade cooperation between China and the EU, as well as the stability of global supply chains. He urged the EU to take into account the overall situation of Sino-EU economic and trade relations, pay attention to the serious concerns of China, and avoid escalating economic and trade frictions. The Chinese side is willing to strengthen dialogue and consultations with the EU through the Sino-EU trade and investment consultation mechanism, properly resolve differences and frictions, promote practical cooperation, and drive upward the balance of Sino-EU trade relations.
And as China and Europe met in Brussels, a historic heat wave led Europeans to rush to buy air conditioners, most of which were produced in China.
According to reports, Midea Group stated that as of June 29, orders for its PortaSplit portable air conditioners have exceeded 200,000 units, which is twice the number for the year 2025.
This air conditioner is considered to be designed specifically for Western European architectural regulations. The external unit of PortaSplit can be mounted on window frames without the need for drilling holes, and it is classified as furniture rather than a fixed device, thus avoiding restrictions on the modification of building facades in cities like Paris. Additionally, its refrigerant filling amount is 1.99 kilograms, which is less than the French official limit of 2 kilograms.
According to data from the International Energy Agency, the penetration rate of air conditioners in European households is about 20%, which is much lower than the nearly 90% in the United States. Asian home appliance manufacturers such as Midea are competing to fill this gap.
According to Euromonitor International data, none of the top five air-conditioning brands in Europe in 2025 are local brands from the European Union. Chinese brands such as Haier, Gree, and Midea account for 32% of the retail sales in the European market. Turkish firm Beko and Japanese company Daikin are also among the top five brands.
German management consulting firm Roland Berger's Global Management Committee Co-President Dennis Depp pointed out that from automobiles to precision machinery, half of the goods imported by the EU from China are technological products. "This has completely reversed compared to previous decades, and it is concerning for European industries. It could also become a problem for the EU's financial system."
He stated that the joint statement of the China-EU trade and investment consultation mechanism is a positive development, as it is 'the first of its kind in many years'.
He said that Europe needs to reach a consensus in order to avoid escalating confrontations. He believes that Chinese and European companies can compete globally, rather than clashing over market share.
According to reports, in 2025, the EU’s trade deficit with China is expected to increase by 15%, reaching 360 billion euros (approximately 2792.593 billion yuan). Deficits were reported by all 27 member countries. By the first quarter of 2026, the deficit is expected to reach 98 billion euros, the highest level since 2022.
