Rival puts authorities in picture with claim of company breaking price rules

When the mainland's top television-manufacturer Sichuan Changhong Electric Appliances slashed the prices of its colour sets, rivals responded in drastically different fashions.

The second-largest producer, Konka Group, and another manufacturer, Chuangwei Group, followed with similar reductions.

But a third company, Xiahua Electronic, took a slightly different approach. It sent a letter to the State Development Planning Commission (SDPC) accusing Changhong of selling below cost and dumping televisions, the Beijing Morning Post reported.

Three other unnamed companies are also reported to be considering similar action.

Changhong Beijing office manager Tang Caiguo said:'A company cannot sell below profit. It doesn't make sense.' Changhong cut prices on all its colour televisions by up to 1,000 yuan (about HK$930.80) a week after the government announced it would severely punish manufacturers who were found to be selling below cost.

'Whether or not Changhong's price cuts are legal or illegal cannot be determined until the investigation is completed,' SDPC deputy secretary Zheng Xinli said recently.