Ye Xiaowen, director-general of the State Administration for Religious Affairs, met with the Vatican’s Ambassador to the United States during his visit to Washington DC. Ye Xiaowen emphasized that Beijing’s terms were for the Vatican to switch diplomatic recognition to China from Taiwan and for Rome to accept Beijing’s control over the Chinese church.
Beijing and the Vatican broke formal diplomatic relations after the Chinese Communists took power in 1949. Eight to twelve million Catholics in China are split between a state-sanctioned church, and an "underground" one. “Underground church” rejects government control and answers only to Rome.
Source: news.ifeng.com and Reuters, February 21, 2008-02-21