The European Union on Friday formally agreed to restrict “high-risk” vendors from building next-generation 5G mobile technology, a move that brings the bloc closer to the US, which has been lobbying its allies to exclude Huawei, reports South China Morning Post.

“If there is no market access from the Chinese side for certain areas, this will of course also be reflected in the fact that market access to the European market will be narrower,” Merkel was quoted as saying by the media.

Merkel last week slammed China on the recent developments in Hong Kong.

She voiced her concerns over other “dreadful and often horrible” human rights issues, media reports said.

Merkel made the remarks on Wednesday at the Bundestag, the German parliament, ahead of a two-day European Union special summit where all heads of government will gather to discuss China as a top item of the agenda, underlining Europe’s deepening sense of unease amid the US-China rivalry, reports South China Morning Post.

"We have pointed out we are deeply concerned about the development in Hong Kong, where the 'one country, two systems' principle is being increasingly undermined. We are going to keep addressing that, just as we do on the dreadful and often horrible treatment of minority rights in China," she was quoted as saying by the media.

The Chinese government enacted the national security law in Hong Kong in late June.

The law adjusts security policies in Hong Kong to Beijing's perception of crime and punishment with regard to separatism, subversion, terrorism and collusion with foreign countries.

The legislation has provoked a backlash from the Hong Kong opposition and the West. In protest, the United States has ended preferential economic treatment for the city.