The EU, which aims to support Britain and the United States in upholding human rights in Hong Kong, was due to make its statement on Monday at a meeting of EU foreign ministers, but failed to win the necessary agreement from all 27 EU states.
"Hungary's argument was that the EU already has too many issues with China," a senior EU diplomat told Reuters. A second senior diplomat confirmed the blockage and Hungary's position. An EU official said the statement had been withdrawn from the EU's approval process.
China and the EU imposed tit-for-tat sanctions over Western accusations of human rights abuses in Xinjiang on March 22.
Hungarian diplomats in Brussels were not immediately available for comment. Budapest reluctantly supported the EU sanctions last month, calling them "pointless", and hosted China's defence minister for an official visit days after the EU sanctions decision.
Hungary is a large recipient of Chinese investment. In the past both Hungary and Greece, where China's COSCO Shipping has a majority stake in Greece's largest port, have blocked EU statements on China.
Beijing's top representative in Hong Kong this week warned foreign powers that they would be taught a lesson if they tried to interfere in China's management of the global financial hub, as tensions escalated between China and Western governments over the city.
The West says the new Hong Kong security law breaks a promise to maintain a high degree of autonomy for the city since its 1997 return to Chinese rule. China's supporters say the law has restored order following mass anti-government and anti-China protests in 2019.
The impasse is the latest blow to the EU's credentials as a defender of human rights, one of the diplomats said, and raises questions about the economically powerful EU's "soft power" that relies on inspiring countries to follow its example by outlawing the death penalty and upholding press freedoms.
It also underscores the EU's challenge in balancing business ties with China, its second-largest trade partner, and its ability to speak out against Chinese government crackdowns in Hong Kong, on human rights lawyers since 2015 and on Muslim Uighurs in northwestern China.
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