China is expected to set up a long-delayed Nasdaq-style stock exchange next year to fund start-up ventures, in the Southern China''s Shenzhen in 2008, say reports in Chinese newspapers quoting Wang Shouren, vice chairman, Shenzhen-based Venture Capital Association.

The application to set up the exchange is being processed by the Chinese cabinet, Wang was reported having said at a financial forum.

China has keen on such an exchange with simpler listing and other regulations, but plans were put on the backburner partly because of the end of the internet bubble in 2000.

But calls among domestic financial industry officials for setting up such an exchange have been growing over the past year, as foreign bourses step up their efforts woo Chinese listings.

Such an exchange will provide an exit route for private equity investors, who have poured billions of dollars into the world''s fastest-growing major economy.

The China Securities Journal carried a similar report on Monday. It also said more than 1,000 domestic enterprises were hoping to list on the proposed Nasdaq-style board.

China launched its main stock exchanges in Shanghai and Shenzhen in the 1990s, where most of the more than 1,400 listed companies are state-controlled firms. It opened a second board in Shenzhen especially for small and medium-sized firms in 2004.