Updated at 5.31pm: A multinational research centre has criticised telecoms regulator , the Ministry of Information Industry (MII), for its harsh treatment of the Japanese Electronic giant, Matsushita which had led to job losses. The criticism came from the Ministry of Foreign Trade and Economic Co-operation's Multinational Firm Research Centre. The centre's director, Wang Zhile, said it was not only Matsushita that needed to learn a lesson because ''the MII did not do its job properly in the first place''. In August, the Ministry ordered Matsushita's mainland joint venture to suspend mobile phone production for being ''politically incorrect''. At the end of August the MII revoked the licences of six of Matsushita's Panasonic mobile phone models for violating the 'One China' principle. It also ordered Matsushita's Beijing plant to halt handset production for one year pending a further Ministry review. Earlier in August, Matsushita's mainland office began receiving customer complaints about a Panasonic handset whose menu for country or area codes said that the area code '886' was for the ROC, or Republic of China. Customers objected that this was a mistake because the mainland government rejects the idea of a Republic of China. A politically correct handset, they pointed out, would indicate that the '886' code was for TW, or Taiwan, which Beijing considers to be a renegade province - not a separate country. Matsushita's Beijing office responded by publishing several apologies in Chinese newspapers and by starting a large voluntary recall of handsets on the mainland. But the Ministry was not satisfied and decided to punish the company. Mr Wang maintains that the case has wider implications both for Chinese government agencies and multinationals. He says that after China enters the World Trade Organisation there could be more such cases because of the inevitable friction between national interest and international convention. 'The government needs to learn how to manage a crisis fairly while multinationals learn to stay within the limits of local law.' He explained further that all mobile phone models produced on the mainland have to be tested by a Ministry-backed agency before they are licensed. It was therefore unfair to say that the blame rested entirely with the manufacturer, because Ministry personnel failed to see it in the first place. He thought the MII has gone too far with Matsushita because the error did not appear to be intentional. 'There's no question that they [Matsushita] made a serious political error, but we need to draw a line between what is [deliberate] and what is not,' Mr Wang said. He pointed out that, 'Matsushita was also singled out unfairly from several other mobile phone makers that have made the same error.' His research showed that similar problems cropped up on six Motorola handset models and on one Siemens model. Even domestic manufacturers Electronic and TCL have had problems with a 'One China' phone menu backlash earlier this week. A Matsushita (Beijing) official told Beijing's China Economic Times on Thursday that at least half of its workforce were retrenched because of the MII suspension order. The official said that 99 per cent of the plant's 696 employees were mainlanders.