San Francisco Frontiers - EU risks financial hit if Chinese suppliers forced out: trade group

The European Union in January proposed banning foreign telecoms equipment-makers over network access concerns that could pose risks to national security.

Although the EU never named any companies, officials said the targets included Chinese suppliers Huawei and ZTE.

Now the Chinese Chamber of Commerce to the EU (CCCEU) in a report jointly prepared with consultancy KPMG said if the proposal becomes law, the bloc would lose "367.8 billion euros ($432.2 billion) over five years".

There would be additional costs for companies beyond telecoms operators, the report said, including the need to replace already purchased equipment.

There would also be greater administrative and legal expenses, and delays.

The report estimated Germany would suffer the biggest loss, with a bill of more than 170 billion euros, while France would lose around 46.3 billion euros.

"Strengthening cybersecurity and protecting critical infrastructure is a legitimate and widely shared objective," CCCEU president Liu Jiandong said.

"The question is how to get the balance right," he told reporters, criticising the "politically targeted" criteria for identifying "high-risk" suppliers.

Brussels has sought to exclude certain suppliers after less than half of the EU's 27 member states implemented its 2023 recommendation to exclude Huawei and ZTE from 5G networks.

The EU's cybersecurity rules will become law once they are approved by member states and the European Parliament.

China has threatened to retaliate if the rules are adopted.

P.Thomas--SFF