In his visit to China last weekend with chief members of the board of directors, Philips Group's president and CEO, Mr. Kleisterlee clarified the rumor that Phillip will reorganize with several Chinese digital home appliance manufacturers.

Kleisterlee said that although they have kept constant contact with some Chinese companies, they never had any negotiations with Konka or Skyworth regarding re-organization. He did admit, however, that Philips plans to expand capital cooperation in China, saying they are considering expand services in many different fields, and it is likely that they will enter into alliances with some Chinese enterprises provided that the two are complementary to one another.