Panasonic sells around $1.84 billion worth of home appliances in China annually. It makes kitchen appliances at plants in Shanghai, Hangzhou and Amoy, selling them at large retailers and online. But competition is intensifying from companies such as Xiaomi, a big Chinese smartphone maker, which is strengthening its lineup of attractively designed, affordably priced home appliances.

New 4.5 billion yen ($41 million) plant will make kitchen appliances such as microwave ovens and rice cookers, and is scheduled to begin production in 2021. Panasonic decided to build the new factory in Jiaxing, Zhejiang Province, anticipating medium- to long-term growth in China.

In reality Panasonic wants to cut some of production outside China, as they are also worried with slowly deteriorating China-Japan and Korea-Japan relations.

It is expected that Xiaomi will start to eat Panasonic pie in 2020.