Komatsu Forklift Co will establish a subsidiary in Shanghai, China, early next year.

According to the Nikkei Business Daily, Komatsu's Chinese arm will be staffed by 10 and have a capitalisation of USD400,000. Staff will increase as the operation expands.

The business would sell diesel-powered forklifts manufactured by German partner Linde AG in China under the Komatsu brand name. It would also sell Komatsu and Linde forklifts imported from Japan and Germany.

Komatsu told the newspaper it aimed to sell 1,500 forklifts a year by 2005.