In October 1978, Vice Premier Deng Xiaoping came to Japan to sign the Japan-China Peace and Friendship Treaty. While in Japan, he visited our TV Division in Ibaraki, Osaka where he queried the founder, "Mr. Matsushita, you are called the god of management in Japan. Would you be willing to help us advance the modernization of China?" The founder immediately responded, "We will do whatever we can to contribute to the modernization of China." At that moment, Matsushita Electric's China business started with the aim of "contributing to the betterment of people's lives in China."
Accepting an invitation from Deng Xiaoping, the founder visited China in 1979 and 1980 where they talked about a "plan to establish a joint venture as Japan-China Electronic Industries Federation" for the purpose of facilitating the modernization of the electronics industry in China. But, this was not approved by the Electronic Industries Association of Japan so the founder decided, "If that's the case, Matsushita Electric will single-handedly undertake this joint venture project."
Based on the idea of "selecting a business category which will be most appreciated in China," CRTs, a core component of color TVs, for which China depended on imports, was selected to be manufactured. After several years of negotiations with the Chinese authorities, in 1987 Beijing Matsushita Color CRT Co., Ltd. (BMCC) was established as the first joint venture in China.
Pursuant to our company's management philosophy, "Develop people before making products," all 250 Chinese employees selected to be on the first production line received practical training in Japan for six months prior to the start of production and they reached a level of proficiency no less than Japanese for both speed and quality. In June 1989, the first locally-produced CRT units were completed in Beijing. Thereafter, this joint venture continued to increase production and sales dramatically.
There is an interesting episode from the founder's visit to China in 1979. When he visited Beijing Television Manufacturing which was the technical cooperation partner, he surprised people when he commented, "You are putting a great effort into the development of color TV. If you continue your effort like this, in several years you will surely catch up with us in Japan technologically and develop new technologies that don't exist in Japan. When that time comes, please first come to Matsushita Electric to sell your technologies." This wasn't lip service. He really meant it. Today, China is the world's biggest market and the "factory of the world" including research and development. The founder was the first to believe in China's potential and future.
In the 1990s, our company established one manufacturing facility after another in China. Having those many facilities individually doing development, manufacturing, distribution, and after-sales service was inefficient and there was an increasing need to have a controlling company that conducts marketing and business support activities in an efficient and uniform manner as Matsushita Group. Nevertheless, though they tried to communicate this necessity to Chinese government officials, their response was generally cautious like "Our country has not opened up the market for foreign capital businesses and if such a company is made, its profits will all be moved out of the country." In this context, in 1993 President Yoichi Morishita met with Vice Premier Zhu Rongi and received a basically-positive response. Then, a project to establish a controlling company got underway.
In 1994, President Morishita visited China again. In a meeting attended by leaders of the state electronics industry department, Vice Premier Zhu Rongi presented what was decided, "Under the leadership of Founder Konosuke Matsushita, Matsushita Electric started developing businesses in China in a friendly way. With a management policy that fits the situation in China, they have established many companies and invested substantial resources. I will give permission to establish Matsushita Electric (China) Co., Ltd. as long as it is a company offering services in a broad sense with no hierarchical relationship with other Matsushita Group companies in China." Thus, Matsushita Electric (China) Co., Ltd. (CMC; current Panasonic Corporation of China) was established as the industry's first company to provide comprehensive business support.
Establishment of CMC was also an experimental project for the Chinese government. In April 1995, for the purpose of facilitating further capital import, the Chinese Ministry of Foreign Trade and Economic Cooperation issued the guidelines for establishing a holding company that promotes investment by large multinational enterprises. The CMC project laid a sound foundation for this.
CMC became self-capitalized in 2002; became a regional headquarters in 2003; was renamed Panasonic Corporation of China (PCN) based on the global brand unification policy in 2005; and has been operating successfully to this day.