UPDATE 2-China Electronics says cooperation with Sharp on hold

Fri Nov 9, 2012 6:41am EST

* Cooperation on 10G LCD panels postponed-China Elec chair

* Project had already received Beijing approval-chairman

* Sharp says no 10G agreement ever existed (Adds denial from Sharp)

BEIJING, Nov 9 (Reuters) - China Electronics Corp said a territorial spat between China and Japan had put on hold a plan to cooperate with Sharp Corp to build an advanced LCD plant - a plan the Japanese company later denied.

The cooperation on the production of 10th generation LCD panels has been approved by China's top economic planning agency but "has been delayed due to the widely known reason, including the purchase of the islands by the Japanese government," Rui Xiaowu, chairman of state-owned China Electronics told reporters on the sidelines of the Communist Party Congress in Beijing.

However, Sharp spokeswoman Miyuki Nakayama later denied the existence of such a cooperation plan.

"Sharp is not involved in this matter, and there is no fact of collaboration with China Electronics Corporation," she said via email.

Sharp last year said that cooperation with China Electronics Corp had stalled because Chinese authorities were only prepared to approve a 10th generation plant rather than the 8th generation facility earlier agreed. Sharp has so far been unwilling to export its most advanced LCD technology.

Xiaowu's earlier comment was taken as evidence of another hit to a Japanese firm following a surge in anti-Japanese sentiment in China.

Japanese car makers have reported a slide in sales in China since mid-September, when Japan's move to nationalise two disputed islands in the East China Sea, known as the Diaoyu in Chinese and the Senkaku in Japanese, triggered violent protests and calls for boycotts of Japanese products across China.

China Electronics and Sharp entered into a partnership in 2009 to jointly produce Sharp's 6th and 8th generation TFT-LCD panels. No formal agreement regarding 10th generation substrates was every announced.

In April, TPV Technology Ltd, a unit of China Electronics, said it would form a joint venture to build China's first 10th generation TFT-LCD factory. It did not disclose where it would acquire the necessary technology for 10th generation LCD panels, which is solely owned by Sharp. (Reporting by Lin Qi and Li Ran, Tim Kelly in TOKYO; Writing by Samuel Shen; Editing by Kazunori Takada, Muralikumar Anantharaman and Mark Potter)