China Mobile, the mainland's biggest mobile network operator, has won approval to set up a subsidiary in Taiwan, the PCWorld reported on Tuesday.

But China Mobile will not be able to use the subsidiary to invest in Taiwan's telecommunications sector yet, as authorities there still forbids such investments, said the report.

China Mobile's new subsidiary, Zong, was originally intended as the Taiwanese subsidiary through which China Mobile could buy a 12 percent stake in Far EasTone Telecommunications.

"China Mobile very much hopes that Taiwan, in its next round of announcements on mainland corporate investment in Taiwan, will open to telecommunications sector investment. When that time comes, China Mobile will apply to use Zong to invest in Far EasTone," China Mobile said on Tuesday.

For now, the new subsidiary will be used to source telecommunications gear and handsets on the island.

China Mobile and Far EasTone already work together closely on technology issues and the boards of both companies have already agreed to the 12 percent investment, ahead of approval by regulators.

Last month, the two companies agreed to jointly develop a next-generation TD-LTE (Time-Division Long Term Evolution) mobile network in Taiwan for testing purposes. Far EasTone is already operating a test network based on TD-SCDMA (TD Synchronous Code-Division Multiple Access), a 3G technology created in China's mainland to reduce its reliance on foreign technologies. TD-LTE is the newer technology, a generation ahead of TD-SCDMA, and is meant to provide speedy broadband wireless for mobile Internet browsing on smartphones and laptops.

Zong is the brand China Mobile uses in Pakistan to promote its mobile telecommunications business there.