Apple Inc is reportedly making progress in its bid to launch the iPhone 3G on the biggest piece of the product’s world market – China. A Chinese government business paper reported that negotiations between the Cupertino, California-based software maker and China Mobile are going well and the latest version of the iPhone may hit the Chinese shelves soon.

"(Apple CEO) Steve Jobs and I hope the iPhone will enter China as soon as possible," said China Mobile CEO Wang Jianzhou on Tuesday.

"We are discussing this issue but we do not have an agreement," he told reporters at ITU Telecom Asia 2008 exhibition in Bangkok.

China Mobile has a nondisclosure agreement with Apple so Wang probably won’t say much about how talks between the two companies are going until the agreement is reached.

However, both sides gave no details about the highly-anticipated agreement that would get the iPhone onto the Chinese mobile network, the largest in the world.

The situation between Apple and China Mobile improved considerably after the American software developer dropped in June its demands for revenue sharing. Apple changed it business way after Wang criticized the American company’s business model of getting a share of service revenues in any deal.

As for the iPhone 3G and the Chinese market, it seems that about 800,000 Apple handsets are already in use there, a fact which may have contributed to China Mobile’s lack of enthusiasm regarding Apple’s old business way to share revenue.

China has about 600 million mobile phone subscribers and China Mobile holds about 415 of them. Asia’s biggest country is just “a huge and potentially lucrative market for Apple to get into,” as Michael Gartenberg, vice president of mobile strategy for Jupitermedia, said.