Catholics who were persecuted by the state in China should be prepared for martyrdom.
"If the circumstance so requires, then we must be ready for martyrdom, there is no choice," he said.
He called on the Holy See to do more to protect Catholics in China, who are often subjected to harassment and intimidation by authorities.
The Chinese Communist Party forced Chinese Roman Catholics to cut their ties with the Vatican in 1951, shortly after it seized power.
Worship is allowed only in state-sanctioned churches, which recognise the Pope as a spiritual leader but appoint their own priests and bishops.
Millions of Chinese, however, belong to unofficial, "underground" congregations that are loyal to Rome.
Cardinal Zen, who was the archbishop of Hong Kong until he retired in April, said the Vatican should be more concerned with Chinese Catholics' religious freedom than with any moves towards switching diplomatic recognition from Taiwan to Beijing.
In 2007, Pope Benedict XVI sent a letter to Catholics in China, praising the underground church but also urging the faithful to reconcile with followers of the official church.
Cardinal Zen, an outspoken advocate of freedom of worship and a critic of Beijing, said the letter was supposed to have ushered in a new season of relations with Chinese authorities but had failed to do so.
"We've come to the point where it's not possible and just to accept compromise as we did before," he told the Vatican-affiliated missionary news agency AsiaNews.
"In these two years there hasn't been a turn toward clarity. In fact, it seems to me that we're taking a worrisome slide along the slope of compromise."
A planned assembly of official Chinese priests and bishops this year would be "a slap in the face" and an "insult" to the Pope" because it would "completely ignore" his letter.
Pope Benedict XVI has made improving often-tense relations with Beijing a priority of his papacy and has sought to unify the country's 12 million faithful under his wing.
But there has been little tangible evidence of progress in his four-year effort, and the Liu Bainian, a spokesman for the Catholic Patriotic Association of China, declined to comment on Cardinal Zen's remarks, saying they were his personal comments.
Meanwhile Pope Benedict said in Rome that the ordination of priests planned by an ultraconservative group would not be valid even though he lifted the excommunications of the organisation's leaders, including a British bishop, earlier this year.
The Vatican said the breakaway Society of Pius X has no official status within the Catholic Church.
The group announced earlier this month that it planned to ordain three priests and three deacons on June 27 at a seminary in Germany.
In January, Benedict caused outrage among moderate Catholics and Jewish groups when he lifted the excommunication of the society's four bishops, including Bishop Richard Williamson, who has denied the Holocaust.
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