Daikin to shift production of large air conditioners to China

Asian Economic News, August 20, 2001

OSAKA, Aug. 16 Kyodo

Daikin Industries Ltd. will shift production of large air conditioners for the Chinese market to China to avoid the country's 100% tariff on imports of Japanese air conditioners, company officials said Thursday.

The Osaka-based company, Japan's largest maker of commercial-use air conditioners, said it will start producing large air conditioners for buildings as early as October at a joint company in Shanghai that currently makes smaller products.

The move is in response to the 100% tariff that China has slapped on imports of Japanese air conditioners, automobiles and mobile phones since June in retaliation over emergency ''safeguard'' curbs Japan adopted against Chinese imports of some farm products in April.

''Considering factors such as costs, we had already been thinking of starting local production, but the tariff measure quickened our decision,'' said a company official, noting that a 100% tariff ''virtually makes it impossible to export.''

Daikin currently produces air conditioners destined for China at its factory in Sakai, Osaka Prefecture, and exports about 5 billion yen worth of products annually.