A little-known maker of refrigeration equipment has become the first Taiwan-funded firm to gain regulatory approval to list in the Chinese mainland's A-share market.

The move opens a crack in the door for Taiwan firms to tap the mainland's US$500-billion stock market for capital.

It also gives them a venue for raising funds to finance their operations on the mainland in the face of curbs on Taiwan firms borrowing from banks at home to invest on the mainland.

The Chinese Government recently approved the application by Zhejiang Guoxiang Industrial Freezer Co - the manufacturer of fans, ventilators, transport coolers and water cooler chilling units - to list in yuan-denominated A-share market, said Li Weiyi, spokesman for the Taiwan Affairs Office under the State Council.

"This is the first Taiwan-funded enterprise to win approval to list on the mainland."

Earlier, Li told reporters several other Taiwan-funded firms had applied to list in the mainland's A-share market.

He did not elaborate.

Taiwan's Giant Manufacturing, Tingyi Holdings and Want Want have said they are interested in listing in the A-share market.

Guoxiang, owned by several investors, including Taiwan businessman H. K. Chen and Shangfeng Industrial, had applied to the market regulator - China Securities Regulatory Commission - to issue 40 million A shares for between 7 and 8 yuan (80-90 US cents) per share, market sources said.

Trade, investment and civilian exchanges have boomed since the late 1980s between the island and the mainland.

Taiwan businesses combined have invested about US$100 billion in the mainland.

Appliance maker Tsann Kuen was the first Taiwan company to list in the mainland. It has hard-currency B shares on Shenzhen's bourse.

Some foreign-funded firms in the Chinese mainland are considering listing on the A-share market - Asia's second-biggest, after Japan, with a market value of US$500 billion - to raise capital and shore up their local profiles.

In Taipei, H. K. Chen, chairman of Guoxiang's Taiwan parent, King Machinery Co, said the company applied for the mainland listing two years ago.

He said the firm received the approval notice a few days ago.

Government rules require the company, based in East China's Zhejiang Province, to sell a 30-per-cent stake in the initial public offering (IPO), Chen said.

He declined to give further details.

"We are doing quite well, in both Taiwan and the mainland," Chen said by telephone from Taoyuan, which is near Taipei.

King Machinery's sales in China have grown about 30 per cent annually in recent years, and last year exceeded 400 million yuan (US$48.1 million).

The company has posted good profits in China, Chen said. He declined to elaborate.

Company sales last year in Taiwan hit NT$600 million (US$19.17 million).

Chen said he decided to move his business to the mainland in 1991. He began opening production lines there in 1993.

Chen's son, H. G. Chen, runs the company's operations on the mainland.