The electrical appliances price war in China is set to continue, potentially forcing some manufacturers to close down, one of the largest distributors of electrical appliances in China says. Shanghai Communication and Electrical Appliances Commercial (Group) Corp (SCEAC) general manager Lu Huasheng said gross profit margins had already been squeezed to 4 per cent. 'The colour television market is the epicentre but price competition on air-conditioners and refrigerators is also fierce,' he said. 'Retail prices have already been adjusted down 10 per cent compared to last year.' SCEAC, the largest electrical appliances distributor in Shanghai with annual turnover of $4 billion yuan (about HK$3.71 billion), recorded $28 million yuan attributable profit last year, up 4 per cent. The state-owned company has signed a joint-venture deal with US company General Electric (GE) to source and distribute home appliances ranging from refrigerators to washing machines under GE's brand name in China and other overseas countries. Total investment in the venture is US$6 million, with SCEAC injecting $1.2 million. Mr Lu expects first year sales from the joint venture to reach 150 million yuan. The company has also struck a deal with electrical appliances distributor Wo Kee Hong (Holdings) to distribute Wo Kee Hong's products in China.