BRUSSELS, May 6 (Xinhua) -- Excluding Chinese suppliers under the European Union's proposed revision of the Cybersecurity Act could cost EU member states about 367.8 billion euros (434 billion U.S. dollars) over five years, according to a joint report released Wednesday by the China Chamber of Commerce to the EU (CCCEU) and KPMG.
The report estimated that the losses would stem from direct economic damage, social costs, indirect costs linked to system reconstruction and potential legal expenses.
Germany would bear the largest burden, with estimated losses of 170.8 billion euros (200 billion dollars), followed by France and Italy, the report said.
The legislation, known as CSA2, was proposed by the European Commission at the beginning of this year. The draft introduced highly subjective and arbitrary "non-technical risks" in the name of cybersecurity and supply chain security. In particular, the draft would identify "countries posing cybersecurity concerns" and "high-risk suppliers," and exclude listed countries and suppliers from relevant EU supply chains across 18 sectors, including energy, transport, and information and communications technology.
"The criteria for identifying so-called 'high-risk suppliers' appear to be politically targeted," CCCEU Chairman Liu Jiandong said at a press conference on Wednesday.
"This approach politicises commercial decision-making and runs counter to the EU's own principles of equality and non-discrimination," he said.
Liu warned that the proposal could weaken the EU's digital competitiveness and undermine its economic security.
According to the report, there has been no substantiated evidence so far of "technical backdoors" or violations of EU cybersecurity rules by Chinese companies operating in the bloc.
The report also warned that origin-based screening measures could violate World Trade Organization rules, breach bilateral investment treaties and trigger compensation claims.
"Mandatory replacement is unlikely to achieve meaningful security gains," the report said, adding that such measures could crowd out innovation investment, increase fiscal burdens on member states and reduce household incomes.
The CCCEU called on the EU to adopt technology-neutral rules instead of supplier bans based on origin, and said it remained ready to engage constructively with EU institutions on a framework that balances security, openness and competitiveness.
"Rational dialogue, rather than security-driven decoupling, should guide cooperation between China and the EU in key industries," Liu said. ■