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On January 20th local time, the European Commission released the revised draft of the "EU Cybersecurity Law", planning to gradually phase out the components and equipment of "high-risk suppliers" in 18 key areas such as 5G communication, semiconductors, power systems, autonomous driving, and medical equipment. This draft transforms the voluntary "supply chain toolkit" introduced in 2020 into a mandatory legal framework, and expands its application scope from 5G networks to various digital infrastructure fields such as detection equipment, connected vehicles, power supply, unmanned aircraft systems, cloud services, and space services.
The draft stipulates that mobile operators have a 36-month transition period to eliminate related components after the "high-risk supplier" list is announced. The elimination deadlines for fixed networks and satellite networks will be specified separately by the European Commission. Although the draft does not directly name any country or enterprise, industry analysis suggests that it is pointing to Chinese high-tech enterprises that have participated in the construction of Europe's digital infrastructure.
In response to this, Huawei promptly made a statement. "The legislative proposal that restricts or excludes non-EU suppliers based on the origin of the suppliers rather than factual evidence and technical standards violates the fundamental legal principles of the EU, such as fairness, non-discrimination and proportionality. It also does not comply with the EU's relevant obligations under the World Trade Organization (WTO) framework." A spokesperson for Huawei said that the company will closely monitor the subsequent developments of the legislative process and reserves the right to take measures to safeguard its own legitimate rights and interests.
On January 21st, Chinese Foreign Ministry Spokesperson Guo Jiakun stated at a regular press conference that China expresses serious concern over the draft. He emphasized that Chinese enterprises have been operating legally and in compliance with regulations in Europe for a long time and have never endangered European national security. He further pointed out that without any factual evidence, imposing restrictions or even prohibiting enterprises from participating in the market by using non-technical standards is a serious violation of market principles and fair competition rules. Facts have proved that some countries forcibly removing high-quality and safe equipment from enterprises has caused huge economic losses and seriously hindered the development of the local digital network industry.
On January 22nd, the spokesperson of the Ministry of Commerce, He Yongqian, stated at the press conference that China firmly opposes the discriminatory practices of the EU towards Chinese enterprises and its attempt to politicize economic and trade issues. "China expresses serious concern over this. Chinese enterprises have been operating legally and in compliance with regulations in Europe for a long time, providing high-quality products and services to the European people and effectively promoting the development of telecommunications and digital industries in Europe. However, the EU, without any factual basis, has listed some Chinese enterprises as high-risk suppliers and restricted their participation in 5G construction. We firmly oppose the discriminatory practices of the EU against Chinese enterprises and its erroneous approach of politicizing and generalizing economic issues and security concerns." He Yongqian said.
From an industrial perspective, this legislative trend in the EU has already caused widespread concerns among the European telecommunications industry. The European telecommunications lobbying organization Connect Europe warned that forcing the elimination and replacement of existing equipment would significantly increase the compliance and transformation burdens on operators, with additional regulatory and replacement costs potentially reaching several billion euros; at the same time, it may also affect the progress of 5G and 6G network construction.
At present, the next step of the EU legislative process requires consultation with member state governments and the European Parliament. There is still room for adjustments to the draft content.
