From this source ( http://seattlepi.nwsource.com/printer2/index.asp?ploc=b&refer=http://seattlepi.nwsource.com/national/1104AP_China_Vatican.html)
The two major obstacles to Sino-Vatican ties are the Holy See's recognition of China's rival, Taiwan, and its power to appoint bishops - which Beijing views as interference in its internal affairs.
The Vatican has indicated it is willing to give up ties with Taiwan, which split from China amid civil war in 1949, but the two sides have not appeared to make headway on the issue of bishop appointments. If Beijing conceded on the matter, it would pre-empt the authority of the Chinese Patriotic Catholic Association.
Zen speculated that it was the church leaders - not the Chinese government leadership - who are the driving force behind the recent bishop ordainments.
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