TCL, China's No. 1 maker of domestically sold televisions, began making "mid-sized" sets for the Panasonic brand of Matsushita, the world's largest consumer-electronics firm. In return, Matsushita may make high-end digital equipment for TCL for sale in China.

The two companies said in April they will make and sell products for each other. TCL, facing falling profit margins from cell-phone manufacturing, is seeking to boost TV sales by a fifth to 9.5 million units this year.

The Panasonic TVs will be sold through TCL sales channels, mainly in China's interior. It declined to give the size of the order. It is under-stood Matsushita may have TCL make other products.

TCL International parent TCL Corp. in August became the sole distributor of televisions made by Royal Philips Electronics NV. in five Chinese provinces.

Osaka-based Matsushita follows rival Sanyo Electric Co. in tying up with a Chinese firm to expand distribution. Matsushita expects sales of 450 billion yen (US$3.8 billion) in China this year, and aims to boost that to 1 trillion yen in three years.

Sichuan Changhong Electric Co. is China's biggest TV maker. Excluding exports, TCL is the largest. TCL International stock fell 3.6 percent to HK$2.025 in Hong Kong at noon yesterday.

(eastday.com January 28, 2003)