Mainland officials are believed to have approved the American-developed CDMA 2000 mobile phone standard, a move that would be a serious blow to European equipment suppliers.
The government had been hesitant to approve CDMA (code division multiple access) wireless technology and instead has favoured the European GSM (global system for mobile) standard, which dominates mainland networks.
Swedish mobile vendor Ericsson, with the co-operation of European partners, has developed wideband CDMA (W-CDMA), which is incompatible with CDMA 2000 - a third-generation wireless technology developed by US manufacturer Qualcomm.
Adoption of CDMA 2000 would be a major gift to the United States, said a source.
US companies would greatly benefit from sales of equipment and licensing manufacturing agreements for handsets.
The People's Liberation Army - which generates profits by selling excess network capacity for civilian mobile networks - could also cash in because it has a nationwide spectrum for CDMA.
