Matthew Costello, corporate vice-president of Sony Ericsson and head of global operations, said the move would enable the world's fourth-largest cell phone maker to "be more close to our manufacturing activity".

He added: "Roughly 90 percent of (Sony Ericsson's) finished products, including handsets and accessories, are now manufactured locally in China."

The 50-50 joint venture between Japanese electronics company Sony and Swedish telecom equipment maker Ericsson has in the past two years cut the number of its suppliers from around 300 to 175 at present, Costello said.

"Currently, roughly 80 percent of our suppliers are Asia-headquartered," Costello said, without saying how many are based in China.

China, he said, has become not only the most important market for its mobile phones but also a major center for manufacturing and sourcing.

Under a transformation strategy the company has embarked on since early 2008, its R&D capacity in China will focus on developing mid-tier to lower-end mobile phones both for local and global markets, while the facilities in Japan and the US would mainly develop smart phone products.

Sony Ericsson, which held a global supply conference in Beijing yesterday, has reported losses in past quarters and said the rest of the year would be difficult, with the overall market likely to shrink at least 10 percent.