The European Union’s proposed cybersecurity regulations targeting Chinese technology suppliers such as Huawei and ZTE, among others, could impose costs exceeding €367.8 billion ($432.8 billion) on the bloc between 2026 and 2030, according to a study commissioned by the China Chamber of Commerce to the EU (CCCEU) and conducted by KPMG.
The proposed rules aim to phase out telecom network equipment and components from what the EU classifies as “high-risk” suppliers across critical infrastructure sectors, intensifying tensions between Brussels and Beijing, Reuters news report said.
The new cybersecurity framework is expected to affect major Chinese telecom and technology vendors, including Huawei Technologies, which has strongly criticized the proposal. The European Union argues that reducing dependence on high-risk foreign suppliers is necessary to protect strategic infrastructure, telecommunications networks, and energy systems from potential cyber threats.
According to the KPMG-backed report, the replacement of Chinese equipment across 18 critical sectors would create a significant financial burden for European economies. Costs would stem from the removal and replacement of hardware, asset write-downs, operational inefficiencies, and delays in digital transformation initiatives. The report highlighted telecommunications and energy as the sectors facing the greatest disruption because they are central to Europe’s green transition and digitalization strategy.
Germany is projected to bear the largest economic impact, with estimated losses reaching €170.8 billion over the five-year period. Other heavily affected countries include France, Italy, Spain, Poland, and the Netherlands, each expected to face losses exceeding €10 billion. The study warns that large-scale supplier replacement could slow deployment of next-generation digital infrastructure, including 5G networks, smart grids, and renewable energy systems.
The debate comes as the European Commission continues tightening scrutiny of foreign technology providers in critical infrastructure. Earlier this week, the Commission recommended limiting the use of EU funding for projects involving power inverters supplied by companies deemed “high-risk.” European officials warned that such equipment could theoretically be exploited to remotely disrupt electricity networks within EU member states.
China has pushed back strongly against the proposed measures. Beijing has demanded that references to “countries posing cybersecurity concerns” and “high-risk suppliers” be removed from the draft legislation. Chinese authorities have also warned that they may introduce countermeasures if the EU proceeds without substantial revisions. The proposed cybersecurity rules are still in the early stages of the EU legislative process. Negotiations between EU governments and the European Parliament are expected to continue for months, with amendments likely before the regulations become law.
