EU would lose hundreds of billions if China firms outlawed: CCCEU warns

He warned that the proposal could damage the EU's digital competitiveness and economic security.

"We firmly oppose a one-size-fits-all, mandatory exclusion policy. Rational dialogue, not security-driven decoupling, should guide cooperation between China and the EU in key industries," he added.

Gary Cai, a partner with KPMG and head of its economic research institute, warned the proposal reflects a broader shift in EU policy thinking.

"In basic research and standard setting, while China has clear strength in engineering, rapid application, and large-scale manufacturing, together we are key drivers of global green and digital innovation," he said. "However, competition and rivalry are gaining weight, while partnership is weakening, and risk is becoming a central approach in EU trade policy toward China."