EU May Face Losses of USD432.4 Billion If New Cybersecurity Rules Force Chinese Supplies Out, Report Says
Publish Date: 2026-05-06 23:56:00
Source Domain: www.yicaiglobal.com
Using an unordered list, summarize the following article with between 4 and 8 key points. (Yicai) May 7 — The European Union’s proposed revision of the Cybersecurity Act that will lead to the mandatory replacement of Chinese suppliers across 18 critical sectors could lead to economic losses of EUR367.8 billion (USD432.4 billion) for member states over five years, according to a new report.The new rules, known as CSA2, would cause direct losses of EUR146.2 billion from replacing hardware, dismantling, and asset write-downs, according to the report jointly released by the China Chamber of Commerce to the EU and accounting giant KPMG yesterday.Social losses, including efficiency drops and delayed digitalization, would top EUR103 billion, system reconstruction and resource losses could reach EUR80.9 billion (USD95.1 billion), and legal costs related to dispute resolution, recertification, and compliance may top EUR36.8 billion, the report said.The European Council introduced the Cybersecurity Act to enhance the EU’s capability of resisting cyber threats in December 2024. The European Commission proposed a revision of the act to block out “high-risk suppliers” from 18 critical sectors, including energy, telecommunications, and transportation, this January.”The criteria for identifying so-called ‘high-risk suppliers’ appear to be politically targeted,” said Liu Jiandong, chairman of CCCEU. “This approach politicizes commercial decision-making and runs counter to the EU’s own principles of equality and non-discrimination.””We firmly oppose a one-size-fits-all, mandatory exclusion policy,” Liu stressed. “Rational dialogue, not security-driven decoupling, should guide cooperation between China and the EU in key industries.”Energy and telecommunications, two foundational pillars of the EU’s green and digital transitions, would bear nearly 40 percent of the losses and logistics and manufacturing 31 percent, with other segments, including financial infrastructure, health, and public services, bearing the rest, according to the report.Regarding specific countries, Germany would face the biggest hit at EUR171 billion, followed by France at EUR46 billion and Italy at EUR37 billion. Spain, Poland, and the Netherlands would also see over EUR10 billion in losses.The impact of CSA2 would gradually intensify and fully materialize after 2028 as the rules take effect, the report noted. A loss of EUR39.1 billion would occur this year and EUR55.1 billion next year, jumping to EUR93 billion in 2028, EUR91 billion in 2029, and EUR89.6 billion in 2030.China and the EU have developed extensive industrial linkages in green transition, digital infrastructure, intelligent manufacturing, and energy efficiency over the past decades, which have contributed to the EU’s goals of economic competitiveness, digital transformation, and green transition, the report said. There is no substantiated evidence of Chinese firms violating EU cybersecurity rules, it stressed.The report called on EU institutions to return to technological neutrality, evidence-based regulation, proportionality, and non-discrimination. The EU should reject political screening, stop advancing mandatory exclusion based on country of origin, and return to international standards for cybersecurity governance, it noted.Editors: Dou Shicong, Martin Kadiev
