OSAKA, Japan -- Matsushita Electric Works Ltd. in partnership with a company in Dalian, China, has set up a joint firm to make and sell electric carpets for the Chinese market.

The company said it expects demand for electric carpets to grow in China. Electric carpets function like electric blankets, using electricity to heat up.

The joint firm, Dalian Matsushita Electric Works Ltd., will be set up by the end of the month. The Matsushita group will have a 65% stake, and Liaoning No. 2 Radio Factory (Group) a 35% share. The company will begin production in July. It hopes to turn out 100,000 electric carpets annually by 2005.