On July 22nd, local time, the European edition of the American 'Politio News Network' (POLITIO EU) cited a report from the renowned industry organization Global Mobile System Association (GMSA), stating that the EU's plan to eliminate Chinese telecom network providers such as Huawei could cost up to four times more than the EU's official estimates.
A report published by GMSA on the same day stated that the direct cost of replacing these Chinese devices would amount to 30 to 40 billion euros. This figure is significantly higher than the EU Commission’s annual estimate of 3.4 to 4.3 billion euros over a three-year period, with the total cost of the latter being approximately 10 to 13 billion euros.
Under the guise of so-called “safety,” the new Cybersecurity Act proposed by the EU will require many industries to dismantle and replace a large number of Chinese devices, and prohibit Chinese suppliers from participating in the construction of key infrastructure.
In addition to this latest report by GMSA, in fact, as early as May 6th of this year, the Hong Kong 'South China Morning Post' also quoted a latest report indicating that this move would incur an astonishing cost of up to 367.8 billion euros for the European Union over the next five years.
According to a report jointly released by the China Chamber of Commerce in the EU (CCCEU) and KPMG, the high cost of this legislation is mainly due to the need to dismantle and replace a large number of Chinese hardware devices. The cost alone could reach up to 146.2 billion euros. Other costs include resource reallocation, service interruptions, employment adjustments, and legal fees.
The revised Cybersecurity Act proposed by the European Commission in January this year aims to restrict the use of Chinese equipment in 18 “key areas”, including detection devices, networked and automated vehicles, power supply and storage systems, water supply systems, as well as drones and anti-drone systems. Additionally, cloud services, medical equipment, surveillance devices, aerospace services, and semiconductors are also classified as “key areas”.
On April 17th, the Ministry of Commerce of China officially submitted comments on the draft revision of the EU’s Cybersecurity Law to the European Commission, expressing China’s serious concerns and official position.
According to a spokesperson for the Ministry of Commerce, China believes that the draft introduces highly subjective and arbitrary factors known as “non-technical risks” under the pretext of network security and supply chain security. In particular, the draft lists countries and suppliers considered to pose “network security concerns” and “high-risk suppliers”. In 18 industries such as energy, transportation, and ICT, these listed countries and suppliers are completely excluded from EU-related supply chains. This is a typical example of economic and trade issues being politicized and security-oriented.
In the comments, China suggested that the European side remove the provisions regarding "countries of concern to cybersecurity" and "non-technical risks" from the draft. It also recommended that the criteria for identifying "high-risk suppliers" and related restrictive measures be removed or substantially revised.
