Europe is learning to adapt to a hotter climate. It should take the same approach to economic dependencies: manage the consequences, but also change the conditions that created them
If Europeans need any reminder of the real impact of climate change, they should simply look out of the window. This summer, a few extra degrees of sustained heat have forced school closures, disrupted railways and cut nuclear power plant output. More than 25,000 excess deaths across Europe have been attributed to extreme heat so far, while wildfires are causing over €15bn of economic damage.
The increasing intensity of heatwaves is generally attributed to climate change as a result of the global reliance on fossil fuels. While cutting carbon emissions remains the focus of EU climate policy, European governments also need to ensure that their societies can better adapt to extreme weather. Many households have already taken matters into their own hands by turning to portable air conditioners—often Chinese-made—for relief.
And China’s air-conditioner export boom points to a broader challenge: whether confronting extreme weather or fragile economic dependencies, Europeans need to adapt to the consequences while also addressing underlying sources of vulnerability. They should not just accept the status quo; here, some answers may lie in the lessons of China’s own industrial transformation.
China leads on AC
Once again, when Europe looks for a climate solution, China has one ready to ship. China is a powerhouse in technologies used to mitigate climate change, from solar panels to wind turbines; it is also a vital player in helping Europe adapt to warmer temperatures. China produces over 80% of the world’s air conditioners: exports of Chinese AC units to the EU rose by 43% year on year in the first half of 2026. Chinese brands now account for 41% of the European market, up from 27% in 2023.
This success is not only about price and scale. Chinese manufacturers have adapted their products for the European market: for example, Midea’s PortaSplit model is tailored to overcome cumbersome building regulations and high installation costs. Chinese manufacturers were also early adopters of refrigerants less harmful to the climate, ensuring their products meet Europe’s strict environmental rules.
Chinese state media and officials were quick to present the boom in AC unit sales as a success for EU-China trade: it is a “natural result of complementary advantages” and demonstrates the mutually beneficial nature of the EU-China economic relationship. China’s industrial specialisation, supply-chain efficiency and technological competitiveness, they argue, mean manufacturers respond swiftly to shifts in global demand. AC is an example of China acting as an “enabling superpower” in providing efficient and affordable products that respond to climate change—as Beijing would say, a win-win.
Saying yes to adaptation
But this is not all. Chinese commentators say that Europe should not only adapt to the hotter climate—it should adapt to the patterns of EU-China trade. They portray the EU’s de-risking and trade-defence measures to tackle economic imbalance with China as economically self-defeating, arguing that Europe lacks confidence in its own industries. European policymakers, they say, are approaching trade as a game of “cold statistics” that will ultimately hurt ordinary consumers.
This is a fatalistic prescription for industrial policy from a country that refuses to accept that its position in global supply chains or its existing competitive advantage is fixed. For decades, Beijing has made industrial upgrading a central policy objective that has reoriented global trade patterns. Europeans are experiencing this firsthand in the AC boom, where China’s position reflects decades of deliberate industrial upgrading. And now Beijing is advising Europe to be content with trade patterns as they stand: strange advice, given that this would not pass the political sniff test in Zhongnanhai.
Since Deng Xiaoping, Chinese leaders have not simply passively adapted to their inherited competitive advantages. Neither do they treat the existing global division of labour as an efficient market outcome to be preserved. This is especially the case when such patterns risk constraining China from developing the sectors it considers strategically important—robotics, clean technology or aviation, for example.
Saying no to adaptation
China’s industrial transformation did not happen through market forces alone. Its latest five-year plan emphasises “self-reliance and controllability” as a guiding principle for technologies underpinning critical infrastructure, including energy systems. Over the years, under the banners of Made in China and Dual Circulation, the country has deployed large-scale subsidies, preferential financing from state banks, government-guided investment funds, public procurement, favourable access to land and infrastructure, and requirements around joint ventures, localisation and technology transfer.
These policies helped Chinese firms “import, digest and absorb” foreign know-how, build scale, and create globally competitive and innovative companies across supply chains. But while the European debate on competitiveness centres on many of the same concepts, European politicians, industries and member states are divided over future industrial policy. One prevailing idea is that Europe should pull a “reverse Deng” by ushering in a new era of industrial policy capable of matching the scale of support and protection that China extended to its domestic industries during the 1990s and 2000s.
But Europe should be cautious in trying to beat China at its own game. It has no centralised state to direct capital and help companies navigate commercial losses in pursuit of their goals. The main lessons from China’s industrial policy lie in the assumptions behind it: Europeans should minimise dependencies that could be strategically constraining; industrial competitiveness is not only about efficient production; Europeans should preserve their ability to source and scale critical technologies through viable alternatives, ensuring they have options should conditions change.
This logic is becoming more relevant as climate shocks intensify and geopolitics grows more volatile.
What Europeans should do
Europeans need to consider what such options would look like in practice. To borrow the question posed by Chinese commentators: what could Europe do right now without Chinese air conditioners?
Cooling is becoming essential infrastructure. Much like heating and water, Europe will need a broader portfolio of solutions to meet demand. AC is part of the answer, alongside low-energy and passive-cooling technologies such as evaporative cooling, reflective roofs and building retrofits, and stronger building standards. But Europe does not need to develop every solution itself; it could build a network of alternative suppliers and production capabilities.
For example, Singapore and the Gulf states are confronting many similar challenges and could be potential partners in deploying more efficient solutions such as district cooling. Europe can build similar partnerships in clean-tech supply chains. South Korea, the second-largest battery manufacturer globally, holds 78% of installed battery capacity in Europe. It can learn from countries such as Japan, which has diversified its rare-earth supply through partnerships with Australia and Malaysia, as well as Vietnam. India doubled solar-cell manufacturing capacity in the first half of 2026 alone, backed by localisation incentives extending to upstream components like ingots and polysilicon.
China will remain part of Europe’s clean-tech supply chains. For Europe, preserving its options does not mean that it needs to produce every critical technology in the clean-tech supply chain. But it should work with external partners to maintain commercially viable alternatives at scale. This can be done through reciprocal access to public procurement markets, targeted incentives and shared product standards.
Where climate and competitiveness collide
Fundamentally, having options means being able to adapt to a problem while tackling its cause. Climate policy offers a useful framework: Europeans have concluded that the impact of heatwaves or floods are not inevitable; they are not relying on AC, seawalls and floodgates as their only response. Instead, they are tackling the cause of climate change by pursuing adaptation while mitigating the underlying problem through cuts in fossil-fuel emissions.
Europe should dare to do the same with its competitiveness and economic dependencies. Rather than simply adapting to change, its governments should invest in Europe’s capacity to innovate, work with partners and build alternatives, with the aim of reducing vulnerabilities and helping preserve its choices.
The summer heat of 2026 is a reminder of the cost of delayed climate action. The same lesson applies to economic security: adapting to today’s dependencies in the name of efficiency will leave Europe with fewer options—and come with a larger bill—tomorrow.
The European Council on Foreign Relations does not take collective positions. ECFR publications only represent the views of their individual authors.
Facts Only
* Sustained heat has forced school closures, disrupted railways, and cut nuclear power plant output across Europe.
* More than 25,000 excess deaths have been attributed to extreme heat in Europe so far.
* Wildfires are causing over €15 billion in economic damage.
* China produces over 80% of the world’s air conditioners.
* Exports of Chinese AC units to the EU rose by 43% year on year in the first half of 2026.
* Chinese brands now account for 41% of the European AC market, up from 27% in 2023.
* Chinese manufacturers adapted products like Midea’s PortaSplit to address building regulations and installation costs.
* Chinese manufacturers adopted refrigerants less harmful to the climate.
* Chinese state media framed AC sales as a result of complementary advantages in EU-China trade.
* China's industrial transformation involved large-scale subsidies, preferential financing, government investment funds, and requirements for localization.
Executive Summary
Europe is facing the challenges of adapting to a hotter climate, which has resulted in increased heatwaves causing school closures, railway disruptions, and reduced nuclear power output, alongside economic damage from wildfires. This situation exists alongside efforts to cut carbon emissions under EU policy. A key development involves adaptation to economic dependencies, where some households have adopted Chinese-made air conditioners for cooling relief. China’s dominance in air conditioner production is linked to its position as a technology leader and has been framed by Chinese officials as a mutually beneficial trade result stemming from complementary advantages.
The debate extends beyond climate response to include the structure of EU-China trade relationships. Some commentators argue that Europe should adapt not only to climate change but also to the patterns established by EU-China trade, suggesting current de-risking measures are self-defeating. Conversely, there is a counterargument that this view ignores China's historical role in industrial upgrading and development. The text explores whether European adaptation should be focused on accepting the status quo or challenging the underlying structures of global supply chains, drawing lessons from China's industrial transformation.
Full Take
The narrative juxtaposes immediate physical adaptation (managing heat) with structural economic adaptation (managing dependencies). The core tension lies in whether European policy should prioritize immediate operational responses or long-term strategic shifts regarding global industrial structure. China’s demonstration of technological export—specifically AC units—is framed as a win-win, showcasing how supply chain efficiency can be leveraged for both climate mitigation and economic gain. This creates a complex dilemma for Europe: whether to accept established trade patterns that benefit from existing efficiencies or to pursue decoupling efforts, which are viewed by some as economically self-defeating given China’s historical influence in setting global trade norms.
The analysis of China’s industrial policy highlights a fundamental divergence in approach. China achieved its growth through state-directed investment and control over industrial upgrading, creating specific supply chain advantages. Europe is debating whether to replicate this model, which involves centralized capital direction, or to focus on decoupling via alternative sourcing and innovation. The implication is that simply reacting to climate change by adopting external solutions (like Chinese ACs) may leave Europe dependent, whereas pursuing true sovereignty requires building internal resilience and viable alternatives across critical technologies. The pattern observed is a push for strategic self-determination in the face of globally integrated systems, often resulting in policy deadlock between immediate pragmatic responses and long-term structural goals.
What alternative pathways exist beyond the presented dichotomy? If industrial competitiveness is not solely about efficient production but also about preserving options, then fostering diverse, geographically distributed clean-tech supply chains becomes a strategic necessity rather than an optional choice. The dependency on external manufacturing for necessary adaptation functions exposes vulnerabilities rooted in historical power dynamics. Future resilience depends on developing non-reliant alternatives, as suggested by the exploration of partners like Singapore, South Korea, and India in building diversified material and cooling supply chains. The central question shifts from managing climate impact to controlling the conditions of future economic interaction.
Sentinel — Human
The article presents a structured argument comparing Europe's approach to climate adaptation against China's industrial transformation, advocating for a strategy of building diverse supply chains rather than passively accepting existing dependencies.