Yan said he was grateful as he accepted the annual USD 10,000 prize today at Prague's City Hall.
Each spring, it is awarded to authors whose works "appeal to readers regardless of their origin, nationality and culture."
Past winners have included American novelist Philip Roth, Nobel laureates Elfriede Jelinek of Austria and Harold Pinter of Britain, and Israeli author Amos Oz.
Based in Beijing, Yan fell afoul of authorities there with "Dream of Ding Village," about the AIDS crisis caused by HIV-contaminated blood, and "To Serve the People," with a character who can be aroused only when his lover smashes images of Chairman Mao.
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