EU Moves to Limit Chinese Firms’ Involvement in Critical Infrastructure

The European Union is set to announce plans on Tuesday aimed at preventing “high-risk” Chinese suppliers from participating in Europe’s critical infrastructure, as the bloc intensifies efforts to reduce its reliance on third countries.

Relations between Brussels and Beijing have remained tense, with the EU adopting a firmer stance on trade and security matters involving China. While European officials frequently cite concerns over unfair competition, security considerations have also become a major factor, often echoed by the United States.

As part of the move, the European Commission is expected to publish proposed revisions to the bloc’s cybersecurity framework, targeting foreign companies viewed as potential security risks. In 2023, the Commission urged member states to remove equipment from Huawei and ZTE from their mobile networks due to security concerns. The new proposal would seek to make such exclusions mandatory, according to an EU official.

Although existing rules allow national authorities to impose restrictions on high-risk vendors, fewer than half of EU member states have taken steps to limit or exclude them. A binding framework would strengthen enforcement across the bloc.

The United States has long barred Huawei from its networks and has encouraged allies to adopt similar measures over concerns about surveillance risks. Any compulsory EU restrictions could also affect other Chinese firms operating in sectors such as solar energy.

The Commission may further propose adding “sovereignty” requirements to the certification system for cloud service cybersecurity. Such a move could also affect US-based firms, which currently dominate much of the European cloud services market.

France has been a strong advocate of stricter rules, though progress has been slowed by divisions among the EU’s 27 member states.

In addition, the Commission is expected on Wednesday to present a proposal for a Digital Networks Act aimed at restructuring Europe’s telecommunications sector. The EU hopes the initiative will enhance competitiveness and attract investment, though critics argue that fragmented national regulations in sectors such as telecoms and defence make scaling difficult.

Funding remains a key challenge, with Brussels estimating that about €200 billion will be needed to modernise Europe’s telecoms infrastructure. A draft of the proposal reportedly does not include provisions for “fair share” payments from major technology companies, despite calls from telecom operators. The idea has faced strong opposition and became less likely following an EU–US tariff agreement last year, which included assurances against such fees.

The draft also indicates that member states would be given until 2035 to phase out copper-based telecoms networks, allowing more time for the transition to faster fibre systems.

Both the cybersecurity proposal and the Digital Networks Act will require approval from EU member states and the European Parliament before they can take effect.