The Vatican and Beijing's Communist leadership signed the secretive agreement on the thorny issue in 2018, giving both sides a say in the naming of bishops in China.
The historic accord was last renewed for two years in October 2022 against a backdrop of tensions over the position of the country's estimated 12 million Catholics.
The deal -- whose contents have not been made public -- aims to reunite Chinese Catholics split between official and underground churches, while giving the pope the final say in bishops' appointments.
"Through friendly consultations, the two sides have decided to extend the agreement for another four years," foreign ministry spokesman Lin Jian told a regular briefing on Tuesday, going on to hail improving ties with the Vatican.
"Both China and the Vatican have given positive evaluations on the results of implementing this agreement," Lin said.
"The two sides will maintain talks with a constructive spirit and continue to promote the improvement of China-Vatican relations."
The Vatican and China do not have diplomatic relations, as the Vatican is one of a handful of countries that recognise Taiwan.
A rupture of relations in the 1950s split China's Catholic faithful between the two camps, one state sanctioned and the other underground.
The agreement has drawn criticism from within the Church, with some seeing it as allowing the Communist government a stranglehold over the country's Catholics.
Many believers maintain that government repression against the underground Church still takes place despite the China-Vatican rapprochement.
Since the landmark 2018 agreement, Beijing has appointed some bishops without consultations with the Vatican.
Last year, the Vatican said China had appointed a new bishop of Shanghai, the country's largest Catholic diocese.
And in November 2022, the Vatican expressed regret at the appointment of a bishop in a Chinese diocese that the Holy See does not recognise.
China's constitution guarantees religious freedom.
But rights groups say religious organisations face routine persecution and that freedom to worship is severely curtailed -- a trend they say has worsened under President Xi Jinping.
In September, Pope Francis praised China as "a great country".
"I believe that China is a promise and a hope for the Church," he said.
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