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Originally, I thought it made perfect sense for China to have no diplomatic relations with a small Catholic nation like the Holy See. However, I looked at a map that showed me that many countries with little to no Catholic population that aren't part of the Western hemisphere have diplomatic ties to the Vatican (like Japan, India, and Vietnam).

Countries with foreign relations with Holy See

Also, China seems to have a goal of expanding its influence as a nation in other parts of the globe, something that relations with the Vatican would potentially help the Chinese Communist Party accomplish. So with that said, I want to know why the Vatican and China have no diplomatic ties with one another.

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Relations between China and the Holy See have been stranded by a variety of factors. For one, Bishops of the Mainland Chinese branch of the Catholic Church known as the CCPA (Chinese Catholic Patriotic Association) are appointed by the Chinese governmentand overseen by the Communist Party of China. According to Catholic doctrine, only the pope can appoint bishops. Thus, the CCPA is not recognized by the Holy See or the Pope or other Catholics, making it a big issue if the Communist Party wanted to establish a diplomatic relationship with such a religious nation. Things may change somewhat as on September 22, 2018, China and the Holy See signed an agreement that would allow the Pope to have the power to appoint and veto Chinese bishops that are approved by the Communist Party of China. Yet, this has established no diplomatic relationship so far because another issue is the embassy in Taiwan the Holy See has since China doesn't recognize the Taiwanese government and sees the nation as a part of China, though back in 2007, the Vatican said it would be willing to move its embassy to mainland China.

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    Np. To be clear it's not the only reason -- the Chinese are still cracking down on Christians in good old Ming/Qing fashion, and destroying churches as explained in the wiki reference I linked to in my first comment. But IMHO Taiwan is the main boil.
    – Denis de Bernardy
    Feb 1, 2020 at 22:29

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