China's top producer of colour televisions, Changhong, is negotiating joint projects with Japanese electronics giant Toshiba after failing to reach agreement with Dutch company Philips.
'Our chairman has just returned from talks in Tokyo,' an official of Changhong's sales division said yesterday. 'The negotiations are going well. We will definitely co-operate with them. But the results remain secret.'
Changhong, a former military factory at Mianyang, in Sichuan province, accounted for 25 per cent of China's television sales, or about 30 million sets, last year and is looking to expand.
Competition in the colour-television market between mainland and foreign brands is intense, with capacity more than double national demand. Price wars since 1996 drove the industry into the red last year for the first time and forced producers to look for strategic partners.
The Financial Daily reported on Wednesday that Changhong was preparing to buy Toshiba's colour-television operations in Dalian, where it produces one million sets a year.
'There are many rumours circulating,' the official said. 'I will not comment on them. What we can say is that Toshiba wants to co-operate in many fields with major Chinese producers, including production of colour televisions and other electrical appliances.'
He said Changhong originally had negotiated with Philips of Holland but struck differences over which side would hold a majority share and control projects.