Excluding Chinese suppliers under the European Union's proposed revision of the Cybersecurity Act will not deliver the security gains Brussels desires, but could instead weaken the bloc's digital competitiveness and crowd out innovation investment, experts have warned.
The warning comes as the EU reviews its draft legislation, which would identify "countries posing cybersecurity concerns" and "high-risk suppliers" and exclude them from 18 sectors, including energy, transport, and information and communications technology.
Earlier this month, the bloc restricted funding for renewable energy projects using inverters from suppliers in its list of "high-risk countries" such as China, in an attempt to tackle its so-called cybersecurity threats.
According to a joint report released last week by the China Chamber of Commerce to the EU (CCCEU) and global advisory firm KPMG, the EU could face an estimated loss of as much as 367.8 billion euros ($430.54 billion) over the next five years if Brussels excludes Chinese suppliers.
The cumulative economic losses for EU member states would be "equivalent to nearly two full years of the EU's annual budget", the report said, noting that Germany would bear the largest burden, with estimated losses of 170.8 billion euros, followed by France and Italy.
