China Warns Tougher Regulation Would Cost Europe €370 Billion

The China Chamber of Commerce to the European Union (CCCEU) warned that proposed revisions to the EU Cybersecurity Act could result in a bill of almost €370 billion by 2030. The Chinese base their analysis on tougher restrictions for Chinese suppliers across six sectors.

A study carried out by KPMG was conducted for the CCCEU in response to the EU-proposed CSA2 cybersecurity legislation amendments, which the Chinese body claims suggest introducing supplier restrictions based on country of origin rather than a technical risk assessment. In the report, the CCCEU estimated cumulative economic losses of €367.8 billion for member states over five years, equivalent to nearly two full years of the EU’s annual budget. This is based on mandatory replacement of suppliers across sectors, including energy, telecoms, manufacturing, and financial infrastructure.

Energy and telecoms, branded the foundational pillars of the EU’s green and digital transitions, would bear nearly 40% of total economic loss, amounting to €79.9 billion and €57.4 billion, respectively. Other segments include financial infrastructure at €49.9 billion; health and research at €33.8 billion; and public services at €32.2 billion. The CCCEU continued to stress that the impact of mandatory supplier replacement would not be confined to telecoms equipment, but would spread across network systems, supply-chain coordination, public services, financial infrastructure, and research and innovation systems, creating cross-sector and cross-departmental costs.

It stated Germany, France, Italy, Spain, Poland, and the Netherlands would face losses above €10 billion. Germany would encounter the highest cost at €170.8 billion, reflecting the scale of its industrial base and deep integration of the Chinese supply chain across manufacturing, telecoms, and energy. The CCCEU further noted there is no substantiated evidence to date of a technical backdoor or violation of EU cyber rules by Chinese companies operating in the bloc. Instead of pursuing the proposed amendments, the CCCEU called on institutions to return to technological neutrality, evidence-based regulation, proportionality, and non-discrimination.