The European Union's latest decision to phase out Chinese components and equipment from critical infrastructure such as telecommunications and solar energy, on the pretext of safeguarding "security", reflects an ideological bias that threatens to undermine the cooperative and mutually beneficial Sino-EU trade relations.
The restrictive measures, set out by the European Commission on Tuesday in revisions to the EU Cybersecurity Act, build on actions taken in 2023 when the EU executive arm urged member states to exclude Huawei and ZTE from their mobile networks due to "security risks".
But if security truly was the issue, there would be a transparent, evidence-based process to address these concerns, rather than sweeping administrative bans. Such prejudicial actions not only damage the trust necessary for bilateral trade, but also harm the interests of European companies and consumers.
Chinese enterprises have been integral to the EU's technological advancement, providing high-quality and cost-effective solutions that have significantly contributed to the bloc's economic growth, job creation and digital transformation. From building 5G networks and advancing smart city projects in Europe, Chinese technology companies such as Huawei have demonstrated their commitment to compliance and innovation over the years.
The earlier targeting of Huawei and ZTE was influenced by external pressures from the United States, which has long sought to exclude Chinese entities from global technology markets. And the bloc has been pursuing so-called "de-risking" since then. Although recent pressure from the US and other realities have prompted the EU to adopt a more pragmatic approach, it hasn't softened its stance in the telecommunications sector, although the specific implementation varies from country to country.
This is because some European politicians still believe "security" to be a core issue in trade with China, and they try to mislead the EU to exclude Chinese suppliers. Ironically, these politicians pretend to be blind to the substantial security threats from the US, not only to the EU's economy and trade but also its members' territorial integrity.
The economic implications of excluding Chinese technology are profound. The financial burden of replacing established infrastructure is substantial, and the resultant delays in technological advancement could hinder Europe's competitiveness in the rapidly evolving digital landscape. This has been evidenced by the experience of the United Kingdom, where the exclusion of Huawei in 2020 led to significant delays and increased the costs of the country's 5G rollout.
It is estimated that replacing Chinese telecommunications equipment within the EU would cost billions of euros; over 90 percent of solar panels in the EU are manufactured in China, and manufacturing solar panels locally in the EU could be 160 percent more expensive than manufacturing them in China. Currently, Chinese inverters are used in the generation of over 200 gigawatts of power in the EU; and 70 percent of the inverters in newly installed solar power capacity in 2023 were imported from China, with Chinese products more than 20 percent cheaper than those from the EU.
Instead of excluding Chinese technology, the EU should focus on fostering innovation and building partnerships with Chinese companies that enhance its technological capabilities while respecting the principles of free trade.
China's leading position in certain industries is the result of continuous technological innovation and the advantages of its manufacturing system, and should not be portrayed as a "threat". China's development is a global opportunity, not a threat to any country.
It is imperative that the EU reassess its approach toward Chinese enterprises, and try to balance its "security" concerns with the benefits of continued collaboration with China.
The EU stands at a crossroads. It can either succumb to protectionist tendencies that threaten to isolate it in an interconnected world, or it can embrace a path of rational, unbiased engagement that features open trade and mutual benefit. The choice will not only influence the future of China-EU economic relations, but also determine the EU's role in the global economic order. European countries should rationally consider this from an objective perspective, reflecting on how its "de-risking" practices have distracted the bloc's attention from its real security threat while misleading it to falsely identify a partner as a "threat".
