Market forces underpin mutually beneficial trade

Editor's note: Chinese-made air conditioners, particularly those featuring both portable indoor units and easy-to-install outdoor units, were in high demand across Europe during the heat wave last month. Zhang Monan, deputy head of the department of American and European studies at the China Center for International Economic Exchanges, told China Central Television that the swift response of Chinese manufacturers to this surge in demand highlights China's robust manufacturing capabilities. Below are excerpts of the interview. The views don't necessarily represent those of China Daily.

The booming sales of Chinese-made air conditioners in Europe underscore China's comprehensive industry chains and its massive industrial base. Chinese manufacturers responded rapidly to the sudden increase in demand from European consumers, quickly providing the European market with products to meet the demand.

Despite the recent fluctuations and frictions in China-European Union relations, the popularity of Chinese air conditioners in Europe shows that market forces prevail over the mindset prevalent in Brussels that unjustifiably overemphasizes security.

China's industry chains are expanding overseas. In the air-conditioning sector, for instance, Chinese manufacturers have been active in the European market for years, and they have a high degree of localization. They set up R&D centers in Europe to tailor their innovations to local demand and have built marketing and sales networks there.

China-EU economic and trade relations have undergone tremendous changes over the past five years. As China's industries keep upgrading, certain trade frictions have emerged. The EU recently rolled out a series of laws and regulations targeting Chinese enterprises, including the Industrial Accelerator Act, which has introduced uncertainties and challenges to bilateral trade.

Nevertheless, both sides are now more inclined to resolve structural trade issues through consultation rather than a trade war. The newly established China-EU trade and investment consultation mechanism serves as a sound and long-term institutional framework for resolving trade differences and acts as a guardrail to contain China-EU frictions.

The EU is famous for the "Brussels effect", its ability to make the influence of its rules and laws extend beyond its borders and into the global market. It has formulated a set of high-standard economic and trade rules and laws while advancing digital and green transitions. For example, the EU introduced the Carbon Border Adjustment Mechanism in January, which poses pressures and challenges to China's exports.

In response, China needs to step up efforts to participate in the formulation of rules and standards. For instance, China can cooperate with the EU to jointly formulate standards and rules in the digital and green sectors. The carbon emissions reduction and carbon finance fields offer good opportunities for deepening such cooperation.