Beijing is expected to remove investment restrictions on mobile phone manufacturing, according to market leader TCL Mobile Communications. George Guo Aiping, vice-president of corporate strategy and investment, said he had learned that the authorities might do away with industry access restrictions in issuing licences to domestic and foreign mobile handset makers next year or in 2004. The move could usher in a price war in the sector as the more cost-effective Taiwanese and South Korean players were expected to flood the mainland market, Mr Guo said. 'Domestic mobile-phone makers that merely assemble parts imported from Taiwan and South Korea will have no living space,' Mr Guo said. The strength of the Taiwanese and South Korean handset makers lies in their ability to produce the chips and modules and to design mobile phones based on the chips. Beijing has stopped issuing new licences for mobile phone production in an apparent attempt to ease the fierce competition, mainly in product quality and features. The authorities have so far issued 27 licences for the production of GSM (global system for mobile communications) handsets and 19 licences for production of CDMA (code division multiple access) handsets to both domestic and foreign manufacturers. Foreign brands dominate the mainland's mobile handset market, accounting for 82 per cent at the end of April, according to a survey. Domestic brands accounted for only 18 per cent. Huizhou-based TCL Mobile was the third-largest mobile-phone maker in the mainland with a 10.2 per cent market share, up from a mere 2 per cent last year, the survey found. United States-based Motorola and Finland's Nokia were the largest producers. Mr Guo said TCL Mobile would try to boost market share by launching more new models and expanding production.