Kyocera suspends mobile phone exports to China

Kyocera, one of Japan's leading cellular phone makers, suspended production in early July of components for PHS (Personal Handyphone System) handsets destined for export to China, a company spokesman said on Tuesday.

The suspension is a temporary response to the Chinese government's decision to impose a 100 percent levy on imports of Japanese cell phones, automobiles and air conditioners, according to Masaaki Ito, a spokesman for Kyocera. The tariffs were imposed on June 22 in retaliation for the Japanese government's emergency import restrictions against Chinese agricultural products.

Kyocera exports only components for telephones, not assembled devices, but discovered early this month that the import tariffs applied to it too, Ito said.

Kyocera's President and Chief Executive Officer (CEO) Yasuo Nishiguchi said in an interview with the Japanese newspaper Nihon Keizai Shimbun this month that the company is moving its production to China at the end of this year or the beginning of next year. Nothing has been planned for this decision, yet, said Ito.

The temporary suspension of production is expected to be a big loss for the company, since Kyocera earned 10 billion yen ($80 million) from China's fast growing PHS handsets market in fiscal year 2000 and predicted revenue of 30 billion yen for this fiscal year, according to Ito.

"The forecast of when this is over is completely unknown," said Ito, adding he hoped the retaliation would end soon since the company's PHS parts production is largely demanded by the market. From April to June, the division was on track to meet its revenue target, but the production suspension has put that in doubt, Ito said. "The earnings would be influenced from July on, but as soon as we start the production in China, that might change for the better," he said.

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