There have been no diplomatic ties between the Chinese and the Vatican until the 2018 agreement. The agreement is about bishops' appointments.
The Vatican has had no diplomatic relations with China since 1951, but in 2018 Pope Francis stepped up efforts to start ties with Beijing. On September 22, 2018, China and the Vatican signed a historic agreement concerning bishops' appointments in China. Through this agreement, the Chinese government also recognizes the pope as head of China's Catholics. It is said that the deal works to maintain communications and to improve relations between both sides. Moreover, Vatican spokesman Greg Burke described the agreement as not political but pastoral, allowing the faithful to have bishops in association with Rome, but at the same time recognized by Chinese authorities. There is no such annual allocation of two billion U.S. dollars to the Vatican under the agreement.