EU tech ban on China could cost $400bn, study says

A new study cited by China’s Chamber of Commerce to the EU warns that European Union plans to restrict or phase out technology from Chinese suppliers could cost the bloc more than $400 billion over the next five years.

The analysis, carried out by KPMG for the chamber, estimates that replacing Chinese equipment across 18 critical sectors could cost around €367.8 billion ($432.8 billion) between 2026 and 2030. The report argues that the financial impact would come from replacing existing hardware, writing down assets, reduced efficiency, and slower digital transformation, News.Az reports, citing Reuters.

The debate is linked to ongoing EU cybersecurity proposals aimed at limiting reliance on what the bloc calls “high-risk” suppliers in sensitive infrastructure. The measures are expected to affect several Chinese companies, including telecoms giant Huawei, which has been a central figure in global technology security disputes.

Under the proposed framework, the EU plans to gradually phase out equipment from suppliers deemed risky in key sectors such as energy, telecommunications, and digital infrastructure. Officials argue the move is intended to strengthen cybersecurity and reduce strategic vulnerabilities in critical systems.

However, the Chinese business lobby group behind the study warned that the economic consequences could be significant, particularly for large EU economies. It estimates that Germany alone could face costs of around €170.8 billion, making it the most affected member state, followed by France, Italy, Spain, Poland, and the Netherlands.

The energy and telecom sectors are expected to bear the heaviest burden, as both are central to the EU’s broader digitalisation and green transition strategies. Analysts note that replacing existing infrastructure in these areas could be complex and costly, especially given the scale of current integration.

The report also highlights concerns over potential delays in modernization efforts, suggesting that tighter restrictions could slow down digital development across the bloc.

Alongside the proposed restrictions, the European Commission has also floated limits on the use of EU funds for projects involving power inverters from “high-risk suppliers,” citing cybersecurity risks and the possibility of remote interference with electricity networks.

The proposals are still in the early stages of the EU legislative process and are expected to undergo further debate and amendment before any final decisions are made.

News.Az 

By Aysel Mammadzada