Panasonic is about to shut down a Beijing factory producing lithium-ion batteries, thus putting 1,300 people out of work, Reuters has reported on Thursday.
The factory was producing batteries for mobile phones and cameras which is a shrinking market, thanks to the global success of smartphones.
"The global market for these products has been shrinking," Panasonic spokeswoman Yayoi Watanabe said to Reuters, adding the closure was more about global technology trends rather than the recent turmoil that has battered Chinese markets. Employees were informed of the closure in late July, she said.
The company wants to focus more on creating batteries for electric cars and energy-saving home systems.
Panasonic took over the plant from Sanyo Electric, a leading maker of lithium-ion batteries and solar panels which it acquired in 2010.
The deal failed to bring in much growth due to the emergence of South Korean manufacturers, analysts say, and the Japanese firm has since sold several Sanyo operations.
In June, Panasonic said it would invest about 60 billion yen (£323m) in the fiscal year through March in its auto business, including the production of batteries for Tesla, the American company making electric cars.
The company will handle almost 40 per cent of the cost of Tesla’s £3 billion Gigafactory in Nevada.
The Tesla Gigafactory 1 is a lithium-ion battery factory which is under construction primarily for Tesla Motors at the Tahoe Reno Industrial Center in Storey County, Nevada, US,slated to be operational by 2016 or 2017.
Nevada Governor Brian Sandoval estimated that Nevada would enjoy $100 billion (£64.5bn) in economic benefit over two decades from the construction of this factory.