Judges praised Mo Yan's "hallucinatoric realism", saying it "merges folk tales, history and the contemporary".
But Mo Yan's told the committee he's both "overjoyed and scared" at the award.
His win is said to have been warmly welcomed by Chinese authorities - a stark contrast to when outspoken Beijing critic Gao Xingjian won the prize in 2000 while living in France.
China disowned Gao's award, the same way they did when dissident writer Liu Xiaobo won the Nobel Peace Prize in 2011.
Presenter: Liam Cochrane
Speaker: Christopher Rea, assistant professor of Chinese literature, University of British Columbia and postdoctoral fellow at the Australian National University's Centre on China in the World
REA: Mo Yan is one of China's innovative writers. He's known for a series of massive novels, which he began writing in the 1980s and these novels are distinguished by a very powerful voice that tried to work through issues from China's history, particularly those related to violence and political corruption. But also reaches beyond the topical, beyond issues like the abuses of the Chinese Communist Party, to also totally focused on very human issues, so his books are replete with sex, violence and what I would call a history, dealing with history as a type of cyclical bodily trauma.
COCHRANE: I understand Mo Yan isn't his real name, the name he was given when he was a child. Why the change?
REA: A lot of Chinese writers adopt pen names. His original name was Guan Moye. So Mo Yan has a Moy in it and it sounds like, well the pen name he chose means "don't speak" and this is an injunction that he said was given to him, but it has kinder allegorical implications. He was part of the Cultural Revolution generation. I guess he was about in his teens when the Cultural Revolution started in 1966, and this was a period where a lot of people had to suppress their own voices and so since the 1980s, through Mo Yan's work and the work of other novelists, a lot of these voices have burst out and began, Mo Yan's is one of the most powerful for novels like "Red Sorghum" to "Life and Death are Wearing Me Out", "Big Breasts and Wide Hips", "The Republic of Wine".
The notion that he's an hallucinatory writer I think is a pretty apt description. He doesn't relate the history of say the Japanese invasion as kind of a very textbook account. It's one where villages are kind of complicit in a lot of the violence that happens. A lot of these stories are actually set in a fictionalised version of Mo Yan's own home town, Gaomi Township, in Shandong Province, and he has a very Wagnerian type of take on local culture, but it's one that is almost nightmarish in its intensity and its violence.
COCHRANE: So how has the award been received in China?
REA: With jubilation, it's a vindication of China's status as a literary nation, it is I guess a balm, or a salve on an open wound, a wound that's been open for essentially a century that the award has been offered, where no Chinese citizen has won it until now. And we see references to this in works from the 1940s where they'll be a story about a novelist whose so famous in China, he's just called the writer. He's fame is that deafening and then the government and this whole scholarly apparatus will try to translate his works into esperanto so he can compete for the Nobel Prize, but unfortunately the Nobel Prize community doesn't read esperanto and so the whole nation was plunged into despair when he loses.
So I mean this has been going on, this concern for obsession has been going on for decades and now, finally, a writer whose won many other awards, who has been endorsed by other Nobel Laureates, like Kenzaburo Oe, who was the 1994 Nobel Laureate in Literature. Finally, the Swedish Academy (word indistinct) whether it's a response to Chinese wishes, I doubt they would think of it in that term, but it certainly fulfils a very dear, long held wish.
COCHRANE: Well, I guess there has been talk of this award being a way of the Nobel Committees kind of apologising or making up for choosing dissident winners in the past, in both Liu Xiaobo and Gao Xingjian. Do you think that that holds any water?
REA: Not, really. I think that is a very attractive notion, especially because the Chinese government in particular has responded to each of these perceived indignities, the award to Gao Xingjian, a French citizen and dissident Liu Xiaobo, a Chinese citizen, but a dissident for the peace prize. They responded with fury, shame and indignation and so finally again, we have someone that's recognised both by the official China and kind of popular China as a true literary talent and so, yes, maybe they feel like, it's making up for past wrongs, but I doubt that the Swedish Academy would it see it that way.
COCHRANE: And is a lot of his work translated into English?
REA: Yes, and so I think Howard Goldblatt has been Mo Yan's real champion in the English speaking world and so Mo Yan's one of the best translated novelists of contemporary China, both in that we have a lot of his works and that the translations are very good. So I see this prize as being not only a testament to the power of Mo Yan's work, but also that of his translators.