Chunghwa Picture Tubes, Taiwan’s third-largest flat panel maker, hopes to raise Rmb3.6bn($435m)for expansion in China by taking its Fuzhou plant public on the Shanghai A-share market this year.

A successful listing would represent a significant advance for foreign-funded companies seeking access to China’s local-currency stock market.

Chunghwa’s initial public offering ,if approved, would be only the second on the local Chinese bourse by a fully foreign-funded company. It would also be much larger than Zhejiang King Refrigeration , a Taiwanese –funded air conditioner maker which raised Rmb280m late last year.

Sophia Tsao , a CPT investor relations executive, said :”We have applied to sell 900m shares of our Fuzhou plant ,which will be priced at Rmb4 each”

However, it is not clear how quickly Chinese regulators may approve the application. The China Securities Regulatory Commission has rationed listings over the last year so as not to flood the struggling market with too many new shares. But the local A-share market has staged a small recovery since November, and recorded a large increase in turnover , which may encourage the CSRC to allow more IPOs.

Several analysts expressed strong doubts over the feasibility of the plan and the motives behind any approval China might grant.

Thomas Liu, head of Friendly Business Group, a Taiwanese- owned consultancy, said :”In Hong Kong , Taiwan or the US, you will be granted approval if you fulfill the conditions spelled out in listing regulations, but in China , there are many gray areas, and approval is often a political decision.”

China may want to allow a number of Taiwanese companies to list in China, as a political gesture to encourage continued cross-strait trade and economic co-operation. Chinese authorities could attempt to gain Taiwanese businesses’ goodwill in the run-up to Taiwan’s March presidential election by approving IPO applications quickly.

The go –ahead for the Zhejiang King Refrigeration IPO , which came earlier than expected , had been a political gesture , people close to the company said.

Mr. Liu said the CPT application also went against the CSRC’s policy of” picking small-to medium –sized firms from diversified sectors for listing to let the market grow in a balanced way. “

Officials at Taiwanese companies in China said Global Union, a Taiwan –controlled bathroom equipment maker in Shenzhen, was the most likely next candidate to get application.

Taiwan’s government pledged last year it would liberalise rules under which Taiwanese companies could raise money on the domestic market for investments in China, but has delayed those plans.