Both the New York Times and BBC News report that what less than two weeks ago looked like improved relations between China and the Vatican now seems to have been derailed as China's Catholic Church installed two bishops in the last three days without Vatican approval. The Chinese Catholic Patriotic Association, the alternative church hierarchy in China, picked the two prelates, but it is likely that the moves had top-level government approval.
UPDATE: On Thursday, Pope Benedict XVI strongly condemned China's conduct. (Reuters report.)