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Thursday, 6 September, 2001, 06:14 GMT 07:14 UK
China denies Matsushita ban
Panasonic GD93 mobile phone
Matsushita has recalled four of its Panasonic phones
China's telecoms regulator has denied banning Japan's Matsushita from selling mobile phones in China for one year.

Reports on Thursday suggested that a ban had been implemented because Matsushita referred to Taiwan as an independent country.

A senior official at the Ministry of Information Industry has disputed the ban in the official China Daily newspaper, though admitted that a ban had been considered.

The government complained about the handsets displaying "ROC", the abbreviation for Republic of China, when calling Taiwan, which considers it a renegade province.

The ban would not have had a serious impact on the company's profits because China's mobile phone market is still developing, but the firm admitted on Thursday to be worried about the future impact of a 12 month penalty.

"China will soon become the world's biggest market for mobile phones so it (the ban) could have an impact (on profits)," a spokesman said.

In August, MCI said it was recalling mobile phones in China because of their reference to Taiwan as ROC.

Japan's largest mobile phone maker said on Thursday it was calling back four Panasonic models - GD50, GD90, GD92 and GD93 - to rewrite their software. It did not say how many handsets would be affected.

The Chinese subsidiary of Matsushita will continue to make phones at its factories in China to be sold overseas.

MCI sold about a million mobile handsets in China in the year to March and had been trying to boost output for an expected explosion of demand.

Matsushita loss

Meanwhile, speculation has heightened that Matsushita Electric would report a major loss in the financial year to March 2002, due to a global slump in demand for mobile phones and computers.

"We posted a big loss in the first quarter to June and things are not looking good for the rest of the year," a spokesman said.

A report Thursday warned the leading consumer electronics firm would incur 100bn yen ($840m) loss to March 2002.

That follows it reporting its first ever loss last quarter since listing on the stock market 33 years ago.

The company's commitments to a early retirement plan and the restructuring of its manufacturing plants would be responsible, the Nihon Keizai newspaper said.

See also:

26 Jul 01 | Business
Mobile phone giant goes into the red
21 Aug 01 | Business
Japan phone giants forge alliance
22 Jun 01 | Business
China punishes Japanese imports
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