China's state-controlled Catholic church has ordained the "automatic successor" to one of the bishops.
Beijing's previous appointments have caused tensions with Rome
Paul Xiao Zeijiang was ordained as Catholic coadjutor, or assistant bishop, in Guizhou province on Sunday.
The ordination is reported to be the first since the Pope's letter in June, calling for closer ties between the Vatican and China's official church.
Reports from Rome said the candidate had the approval of both the Vatican and supporters of the Pope in China.
As coadjutor, Xiao, 40, will "automatically succeed" the current bishop of Guizhou diocese, 88-year-old Anicetus Wang Chongyi, the China Daily newspaper said.
The ceremony took place in Guiyang, capital of south-west China's Guizhou province, on Sunday. The date is also celebrated worldwide as the day of Mary's birth.
Over 3,000 priests and other representatives attended the ordination ceremony, and bishops from other dioceses were the coordinating prelates, China Daily said.
China had severed ties with the Vatican in 1951, amid anger at the Vatican's recognition of Taiwan.
Relations between China and the Vatican have been strained in recent years due to Beijing's insistence that the official Patriotic Church has the right to appoint bishops without Rome's approval.
The Vatican excommunicated two bishops last year for being illegally ordained.
China estimates eight to 12 million Catholics are split between the state church and an underground church which is loyal to the Vatican.
However, Pope Benedict XVI has sought to improve relations between China and Rome, and sent a letter to Chinese Catholics last month, urging reconciliation between the two groups.
The letter stressed that the Vatican is open to negotiations for resuming diplomatic relations, and has accepted the authority of many bishops appointed unilaterally by the Patriotic Church.
State media had quoted Liu Bainian, vice-president of the Chinese Catholic Patriotic Association (CCPA), as saying that China would accelerate bishop appointments in response to a "dire" shortage.
It is expected that the ordination of bishops in other dioceses will follow.