Chinese government regulations forced Apple to remove Wi-Fi from the iPhone before it could be sold through China Unicom -- but if the carrier has their way, that limitation may soon be lifted.

The Wall Street Journal is reporting that China Unicom has been working to get a Wi-Fi-equipped iPhone into customers’ hands this year. Speaking to reporters outside of the annual session of National People’s Congress, China Unicom chief executive Chang Xiaobing confirmed that a change in Chinese regulations last year has paved the way for a Wi-Fi iPhone to be sold there, but didn’t indicate how soon it might happen.

China Unicom is one of three Chinese state-owned cell phone carriers, and the one who nabbed the lucrative exclusive on the iPhone. However, when the device launched there last October, sales were lukewarm -- mostly blamed on the device’s high price and lack of Wi-Fi, although the fact that plenty of grey market handsets had already infiltrated the country certainly didn’t help, either.

Apple and China Unicom currently charge between $730 and $1,020 for the iPhone (not including discounts on service), which is higher than the grey market devices coming into the county by way of Hong Kong and other places. Unicom will lower iPhone prices “if conditions permit,” according to Chang.

Chinese regulations require that handset makers who want to include wireless Internet use their own “homegrown standard” called WAPI. That would have forced Apple to remove the Wi-Fi standard used everywhere else, so the decision was made to ship the device without any kind of wireless Internet, only 3G.

China Unicom’s Chang notes that if the new iPhone model is introduced, the company will “consider compensating current users who lack Wi-Fi, perhaps by allowing greater use” of Unicom’s 3G network.

Unicom currently has 145.7 million EDGE users and 3.6 million 3G users as of the end of January. Competitor China Mobile has 3.9 million 3G users out of a total of 527.4 million mobile users, which makes it the largest in the world.