Just hours after Cardinal Joseph Ratzinger was named Pope Benedict XVI, a Chinese foreign ministry spokesman said Beijing is willing to improve the relationship between China and the Vatican on two conditions.
One is that the Vatican break off diplomatic relations with Taiwan and recognize the government in Beijing and that Taiwan is an inseparable part of China. The other is that the Vatican not interfere in internal Chinese affairs, including in the name of religion.
See also a previous Asia Times article about relations between the Catholic Church and China.