HVAC (heating, ventilation, air conditioning)
Industry Overview
Development of commercial refrigeration equipment manufacturing started in late 2000, and China now has the largest HVAC&R market in the world. At the same time, it is also the largest manufacturer of HVAC&R products. The top three Chinese manufacturers, Haier, Midea and GREE, are able to supply 50% of the world’s demand for HVAC&R products. Although the market has at times reached a growth rate of 10%, the domestic manufacturers are going through the stage of consolidation and re-adjustment. Due to the increase of costs, the over capacity of production and the rise in inventory many firms are creating a price war in the industry.
The Chinese market for green HVAC (heating ventilation and air conditioning) systems is worth approximately USD 1.6 billion as of year-end 2008. This is around 20% of the total HVAC market and 35% of the HVAC equipment market. Together with light green products (which have an indirect impact on energy consumption or are not specifically designed to be green), this rises to 63% of the total equipment market.
Market Opportunities
As the fastest growing market in the world, China is benefiting from favorable economic conditions, urban population growth, rising income, fast growing retail industry and busy lifestyles. China is recognized as one of the best commercial refrigeration equipment markets with strongest potential in the world. Commercial construction is driving much of the growth and will remain the main source of opportunities in the near future. Virtually all HVAC sales are to new (as opposed to retrofit) projects.
Best Prospects
In order to obtain a decent share of this huge market, U.S. manufacturers are targeting at the high-end market by introducing the best and most advanced technologies and products into China. To differential themselves from the local competitors, the U.S. products are benefited from their innovative design, cutting-edge technology and the up-front concepts of environmental protection and energy efficiency. These features are very advantageous to U.S. manufacturers as few of their local rivals are in the position to boast of.
Also, as the rapid development of retail industry, there is a high growth in demand for cold retail chains. The total output of China commercial refrigeration equipment is approximately 60,000. Most of them are joint-venture entities. There are more than 1000 frozen foods producers in China with total sales of 15 million tons annually, averaging 15 percent increase per year.
Regulatory Environment
Products must meet industry standards and be approved by both the MOHURD Construction Standards and the Bureau of Quality and Technical Supervision. The certification confirms the quality of the product and that it contains no hazardous elements. Roofing and insulation products must also obtain safety certifications from the fire bureau. As mentioned in the introduction, the “Building Energy Efficiency Administration Regulation” (BEEAR) mandates that all new buildings meet government energy efficiency standards in their design, construction, operation, and renovation. The regulations require that all wall materials, insulation, doors, windows, lighting, and heating and air conditioning systems have an inspection certificate, product specification, and product label that certify that the product meets local energy efficiency standards. Once installed, the products must be tested on site and have the results sent to a local quality testing institute.
Reports and Statistics
China: Cold Chain Logistics (October, 2010)
Development of preservation processes to ensure freshness and the market for refrigeration equipment have emerged as engines of economic development – there is a wide gap between China’s current cold storage and refrigerated warehouse capacity compared to that of developed countries.
China: Green Building Opportunities (October, 2009)
Because China mostly manufactures low-technology building products, there is a much larger market for specialized and cutting edge technologies. U.S. products must have niche markets and new technology.
China: Energy Efficiency Market and Opportunities (July, 2009)
China’s market for energy efficient products and services has only begun to develop. In recent years, the Chinese government has stressed the importance of energy efficiency and environmental protection.
China: Green Building (August, 2008)
This report briefly discusses relevant market issues pertaining to the export potential of green building products to China and with surveying the underlying materials and technologies being implemented in China green building initiatives.
Major Shows and Exhibitions
China Refrigeration Expo
Dates: April 7-9, 2011
Venue: Shanghai New International Expo Center
Website: http://www.cr-expo.com
Useful Websites
Links to non-Commercial Service organizations are provided solely as a convenience to our users. The Commercial Service makes no representations about the accuracy or suitability of the information provided on the following web sites. The FCS is not responsible for the content of the individual organization webpages found through these links, and their inclusion here should not be understood as an endorsement of these organizations.
Air-Conditioning, Heating, and Refrigeration Institute (AHRI) – Global Initiatives
Air-Conditioning, Heating, and Refrigeration Institute (AHRI) – IPR Resources
China Building Materials Industries Association
China Energy Conservation Program
U.S.-China Build
China-US Energy Efficiency Alliance
U.S.-China Business Council PRC Government Structure Report
Key Industry Contacts
China Ministry of Housing and Urban-Rural Development (MOHURD)
http://www.mohurd.gov.cn
Address: 3 SanLiHe Road, Haidian District, Beijing, 100835
Phone: (+86-10) 6839-4114
China Ministry of Civil Affairs
http://www.mca.gov.cn
Address: 147 BeiHeYan Street, Dongcheng District, Beijing 100721
Phone: (+86-10) 6523-5511
U.S. Commercial Service Contacts
The U.S. Commercial Service offers a broad array of market entry services to U.S. companies in the architecture, construction and engineering industries. Please refer to the following relevant contacts for additional information on how we can help you expand your business in China.
Beijing:
Tel: (86-10)8531-3000
Fax: (86-10)8531-3701
Elizabeth Shieh (Elizabeth.Shieh@trade.gov)
Cao Shujuan (Shujuan.Cao@trade.gov)
Shanghai:
Tel: (86-21)6279-7630
Fax: (86-21)6279-7639
Gregory Harris (Gregory.Harris@trade.gov)
Scott Yao (Scott.Yao@trade.gov)
Guangzhou:
Tel: (86-20)8667-4011
Fax: (86-20)8666-6409
Cathy Wang (Cathy.Wang@trade.gov)
Chengdu:
Tel: (86-28)8558-3992
Fax: (86-28)8558-9221
Cui Shiyang (Cui.Shiyang@trade.gov)
Shenyang:
Tel: 86-24-2322-1198 ext. 8141
Fax: 86-24-2322-2206
Huang Wei (Cathy.Feig@trade.gov)
