Daring to Kick Out China: The Risks Are Fatally Serious
The European Union’s move to remove technology suppliers from China from strategic sectors is expected to cause significant economic losses. The value is even said to exceed US$400 billion or approximately Rp7,000 trillion over the next five years.
This risk arises after the European Union proposed new cybersecurity rules that will gradually eliminate components and equipment from suppliers deemed ‘high-risk’, including Chinese companies like Huawei.
The China Chamber of Commerce to the European Union (CCCEU) in its latest report states that this policy could burden the European economy by up to €367.8 billion or about US$432.8 billion during the 2026-2030 period.
Citing Reuters, the report prepared jointly with KPMG mentions that the European Union must replace installed hardware, record asset value declines, and face reductions in efficiency and delays in digitalisation.
This initiative is becoming a boomerang for the European Union. The energy and telecommunications sectors are expected to be the most affected. Yet, these two sectors are the backbone of the European Union’s green and digital transition agenda.
Germany is projected to be the country with the greatest impact. The costs that Europe’s largest economy must bear are estimated to reach €170.8 billion.
In addition to Germany, five other countries expected to suffer losses exceeding €10 billion are France, Italy, Spain, Poland, and the Netherlands.
On the other hand, China is beginning to increase pressure on Brussels. Beijing is asking the European Union to remove clauses related to high-risk countries and high-risk suppliers in the draft rules.
Last week, the Chinese government even threatened to take retaliatory steps if the European Union continues the policy without major changes.
Meanwhile, the European Commission is also expanding restrictions on Chinese technology. On Monday, the Commission recommended restrictions on the use of European Union funds for projects using electric inverters from high-risk suppliers.
The European Union considers these devices potentially usable to shut down member states’ electricity grids remotely.