China's rising labour costs and growing risks stemming from bilateral tensions prompt Japanese companies to move some operations to more inviting territories. A case in point is Funai Electric.

Funai Electric, which makes DVD and Blu-ray Disc recorders and printers in China for export to the US and other markets - and to whom Philips sold its Lifestyle Entertainment Business Group last month - plans to shift production of entry-level and mid-priced models to a factory it will build in the Philippines, reports Nikkei.

The new plant, scheduled to open next year, will be located in an industrial park near Manila. Funai also plans to increase the output capacity of its television factory in Thailand in the summer of 2014.

"Funai has achieved growth through a business model that involves making TVs and DVD recorders at low cost in China and supplying them to others on an OEM basis. In addition to its own plant in China, the company outsources production to two other factories," says Nikkei. These facilities accounted for 90% of its total appliance production at the end of fiscal 2011. It aims to lower this figure to less than 50% to avoid the risk of relying too heavily on China, after being hit by wage hike demands when anti-Japan demonstrations broke out last year.

Monthly basic pay for factory workers in China grew roughly 40% over five years to $328 as of October 2012, according to the Japan External Trade Organization. In comparison, workers receive $253 in the Philippines, $145 in Vietnam and $53 in Myanmar.

Story filed 22.02.13