Insiders agreed that this move indicated an escalation of the price war in the air conditioner market, China Securities reported Monday.

Aux said the high price has scared Chinese residents off and hindered the development of the air conditioner industry.

Statistics show that China households bought 12 million air conditioners in 2000. But China's 100 air conditioner producers churned out 22 million.

Aux noted that there are two different ways of cutting prices, normal price readjustment and an unreasonable price war. Aux opposes the way of expanding market share with lower-than-normal prices.

"What Aux suggests is to cooperate with major air conditioner makers to put the market into order through price readjustment, and drive low quality air conditioners out of the market," a spokesman for the firm said.

(Xinhua 02/20/2001)