China and the Vatican are preparing to resume a long-stalled dialogue as changes of leadership on both sides have created an opportunity for communication, people close to the Roman Catholic Church said.
But the recent mass demolition of churches - both Catholic and Protestant - in Wenzhou, Zhejiang, and the election of a state-sanctioned bishop in Chengdu, Sichuan, make it doubtful the two sides can bridge major differences, the two people said.
"The atmosphere is quite positive for both sides to restart the dialogue now," a person close to the Holy See said, highlighting hopes generated by the relatively new leadership in both the Vatican and Beijing.
The Vatican was now waiting for Beijing to confirm the time and location of the talks, he added. Another person close to the Hong Kong church said the meeting could happen this year.
If formal talks are held they would be the first between the two sides since 2010, when Beijing's unilateral ordination of bishops damaged what had been an improving relationship.
Relations were further strained in 2012 when Thaddeus Ma Daqin, an outspoken bishop in Shanghai, was detained hours after he announced his resignation from the leadership of the Chinese Catholic Patriotic Association, the officially sanctioned church which the Holy See does not recognise.
Previous talks sought to address key issues, such as the unilateral ordination of bishops, and to pave the way for resuming diplomatic ties.
Bishop John Fang Xingyao, chairman of the Chinese Catholic Patriotic Association, said now was the ideal time to resume a relationship with the Vatican.
"My understanding is that China is hoping to establish diplomatic ties with the Vatican, and most people in the Vatican share this view too. This is the best time to do so; we shouldn't miss it," Fang said.
The Vatican has insisted that the issue of unilateral ordination should be addressed before formal ties can be established. But Fang said that the best way to resolve the issue was to resume diplomatic ties.
Pope Francis, hailed as a great communicator who does not shy away from thorny issues, raised hopes with his election last year that he could make headway on the relationship.
The pontiff has yet to make any public pronouncement on China. But he has reached out to the nation's faithful by sending them messages ahead of special prayers dedicated to Chinese Catholics in May this year and last year.
In an interview with an Italian newspaper in March, Pope Francis revealed that he exchanged congratulatory messages with President Xi Jinping following each other's appointment last year. This was seen as a sign of warming ties.
But last month the authorities in Wenzhou demolished more than 60 churches, raising concerns of a crackdown on religion.
The source close to the Vatican said initial feedback on the demolitions indicated they could stem from an isolated policy authorised by the local government. But the incident could complicate the dialogue, the source added.
Another potential stumbling block is the election of Joseph Tang Yuenge as bishop of the Chengdu diocese in May. The Vatican must now decide whether to approve Beijing's choice.
Should Beijing ordain him without the Holy See's recognition, it would test the Vatican's reaction, the Hong Kong church source said.
"Since the Pope's election, everybody is watching how he is going to engage with China … whether he is going to take a stronger approach, or if he is going to make a compromise."