Industry news

The queue outside the Hangzhou Convention and Exhibition Center last week was not made of spectators. It was made of buyers carrying purchase lists. RACC2026, the sixth China International Air Conditioning, Ventilation, Refrigeration and Cold Chain Expo, opened on October 22 with 528 exhibitors, visitors from 109 countries and regions, and more than 2,000 pre-registered overseas trade professionals.

Ramzan Sharif, chairman of the Pakistan HVACR Association, brought a delegation of more than fifty people. His shopping list was unusually specific: walk-in cold rooms, large warehouse cold storage units, and the components that go with them. Md Golam Sarour Robin of the Bangladesh Cold Storage Association was on his fourth trip with a delegation; he came looking for energy-efficient cold storage equipment, low-power compressors, and efficient installation hardware.

Those details say more about where the industry sits than any press release. Domestic cooling demand has hit its ceiling. Growth no longer means selling more units; it means replacing the old ones with something that draws less power. And overseas buyers have changed their criteria. They are no longer comparing prices. They are comparing energy figures that can survive an audit.

Natural refrigerants leave the show floor

An October report from Refrigeration Express put the position bluntly: R32 is a transitional answer. It can carry the industry through this window, but not through the GWP controls tightening globally after 2030. What is actually being pushed forward is R290 and CO2.

Midea's cumulative global R290 air conditioner sales have passed ten million units. Gree used the Canton Fair to launch a compressor platform built for R290 operating conditions, covering extreme heat and extreme cold. Carrier, York and Hitachi used Chillventa to release R290 commercial heat pumps and low-GWP VRF systems aimed at Europe's boiler replacement market. Binglun and Sanhua are simultaneously industrializing CO2 valves and R290 electrical safety controls. When the component supply chain moves, the transition is real — not just a posture struck at a launch event.

It would be wrong, however, to describe this as a wholesale swap. R290 is an A3 flammable refrigerant. Pipe design, charge limits, leak detection and explosion-proof electronics all have to be redone. China has a serious shortage of technicians certified to install and service A3 systems. CO2 transcritical systems run at pressures far above conventional fluorinated systems, so compressors and valves stay expensive and upfront investment stays heavy. The realistic path is segmented: R290 first for Europe-bound units, R32 as the near-term bridge in domestic residential air conditioning, CO2 for supermarkets, industrial cold rooms and large commercial projects. Three tracks, running at once.

Liquid cooling took the imagination, not the kitchen

The most crowded booth belonged to Sanhua. Marketing director Zeng Minchu reduced the new lineup to three phrases: globally leading, green quality, built for what comes next. The first two describe the core business — four-way valves, electronic expansion valves, high-temperature heat pumps. The third is liquid cooling: quick couplings, turbine flow meters, pressure sensors, plate heat exchangers, components originally built for air conditioning and automotive thermal management now being pushed into data centers. One of the six conference tracks was devoted solely to energy storage and data center thermal management. The organizer has already announced a dedicated liquid cooling show for next year.

Capital and media attention drifting toward liquid cooling is both a gift and a warning for kitchen refrigeration. The gift: heat exchangers, inverters and valves are shared components, and heavy investment on the compute side will push their cost curves down. Kitchen equipment benefits downstream. The warning: talent and production capacity get siphoned. Engineers who used to design valves now design cold plates, and small manufacturers of purpose-built kitchen units find hiring harder than before.

Domestic installation of commercial kitchen air conditioning has grown at roughly 27 percent a year for three years. Hotels and restaurants, social dining, institutional canteens and bakery production together account for over 92 percent of demand. The market is large enough. But the competition has shifted from who can build the machine to who can hold a service network together while labor is tight.

What the market segmentation numbers actually mean

Several industry outlets published similar breakdowns in October. White-label conversions — a residential unit with a filter bolted on — account for roughly 42 percent of the market, with an average service life of 18 to 24 months. Generic industrial air conditioners from established HVAC brands account for about 37 percent; performance is acceptable, but there is no directional airflow work, and energy consumption runs high. Purpose-built brands that focus exclusively on kitchen conditions hold about 21 percent, and their total cost of ownership is lower despite a higher sticker price.

Another set of figures is more arresting. Put a residential air conditioner in a commercial kitchen and within about three months you get oil-fouled evaporator coils, corroded housings and damp electricals. Annual maintenance spending can exceed twice the purchase price of the unit.

The cost of kitchen cooling equipment was never the purchase price. It is the purchase price plus three to five years of repairs, downtime and replacement, minus whatever it contributes to throughput. A 42 percent market share represents a large number of operators who have not yet run that arithmetic. Shanghai's Huangpu District has already folded commercial kitchen temperature and humidity compliance into its restaurant grading system, and Suzhou, Hangzhou and Ningbo show signs of following. Once that kind of local assessment spreads, kitchen cooling stops being a matter of owner preference and becomes a compliance item. Purchasing logic tilts toward purpose-built equipment.

Export: timing beats price

Zhejiang's refrigeration base is complete, from components to finished units. Juhua handles refrigerant, Sanhua handles controls, Deye and Jingchuang handle heat pumps and controllers. Speaking at the opening, Yan Jia of the Zhejiang Council for the Promotion of International Trade said the sector has moved from being a traditional supporting industry to a critical enabler of low-carbon development and digital infrastructure. Chen Guangming, chairman of the Zhejiang Refrigeration and Air Conditioning Industry Association, framed it closer to the business itself: the low-carbon transition has shifted from a policy requirement to an intrinsic market demand.

For exporters of kitchen equipment, two hard conditions now appear on most overseas inquiries: low-GWP refrigerant, and energy figures that can be independently verified. Pakistani representatives raised a more practical demand — if Chinese suppliers want a larger share, shipping finished units is not enough. Joint ventures with local small and medium manufacturers, local assembly, those are the next step.

Put the three forces together. Refrigerant transition raises unit cost; domestic component substitution pulls it back down. Regulation that folds temperature and humidity into restaurant grading strengthens the case for purpose-built machines. Liquid cooling's talent drain tightens the labor market. The likely outcome is consolidation, with the middle layer — generic units lightly modified for kitchen use — getting squeezed out.

For buyers, the question changes from "what does this unit cost" to "how much trouble does it save me over three years." Finos has been supplying commercial kitchen cooling and refrigeration equipment on that basis, and we have been aligning with upstream suppliers on refrigerant routing since last year. Efficiency ratings, parts commonality and overseas certification matter more than marketing copy.