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Sony chair: China key to company growth
(AP)
Updated: 2005-10-17 19:54

Sony expects China's fast-expanding market for both entertainment and electronics to be a main source of growth in years to come -- despite the occasional political tension between Japan and China, chief executive Howard Stringer said Monday.

Stringer sidestepped questions about the potential repercussions from a visit by Japanese Prime Minister Junichiro Koizumi to a war shrine on Monday that drew immediate protests from both China and South Korea.

In the spring, Chinese resentment over Japanese wartime atrocities decades earlier swelled into violent protests and calls for boycotts of Japanese brand products. Those antagonisms died down as diplomats sought to restore calm, but are bound to resurface in the future.

"Sony is a global company with 70 percent of its earnings outside Japan and so local politics like that is less clear and appropriate for me to comment on," Stringer said at a news conference introducing company strategy in China.

"I have never actually met any Japanese politicians and I seem to be doing fine," said the Welsh-born Stringer, the first foreigner to head Sony.

"We look forward to a continuing strong relationship with China in many years to come and growing our businesses," he said.

Sony is on a campaign to build up its image in China as a brand that is "more energetic, cooler and much more fashionable than it was only a few years ago," said Kei Kodera, president of Sony (China) Ltd.

Sony products now reach only 10 percent to 20 percent of the population, leaving huge room for growth, he said.

"The fact you have GDP growth of almost 10 percent a year means millions of people are coming to a new stage where they can consume more consumer durable products," Kodera said, likening that growth to the addition of a new European country every year.

"At this moment we are quite confident about growth in China in the next four to five years," Kodera said. "We expect quite steady growth."

Sony announced a revival plan last month aimed mainly at boosting profits at its loss-making electronics unit by slashing 10,000 jobs or about 6 percent of Sony's global work force by the end of March 2008, closing 11 of its 65 plants and shrinking or eliminating 15 unprofitable electronics operations.

Although Sony has not said where the layoffs will be, they will not be in China.

"China is one of the few countries where I believe we are free from restructuring," Kodera said.



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