Japanese electronics giant NEC is to switch production of personal computers to China to save money.

"We plan to manufacture and assemble 70% of PCs sold in Japan in China," from 10% at present, a company spokesman said.

NEC has faced big losses in its chip-making businesses and last year entered a tie up with Hitachi to save money.

It already makes PC parts in China and Taiwan but most of the assembly work is currently done in Japan.

"It is much cheaper to produce in China", the NEC spokesman said.

NEC posted a net loss of 155bn yen (�800m; $1.2bn) for the final three months of 2001.

The switchover, set to begin by June, will could mean job cuts at two assembly factories north of Tokyo.

NEC will switch staff at the Gunma factories in Gunma over to service roles, the spokesman said.

But there will be only 500 jobs there as compared to 650 now.

"If manufacturing personnel do not want to change jobs then maybe some will be forced to leave", the spokesman said.