LG Electronics plans to withdraw its mobile communication business from China next year, a source near to the issue told China Securities Journal on Wednesday.

LG's mobile phone business has been sluggish since 2010. The company does not release new models any more and is trying to clear its inventory.

According to statistics, LG's entire global market share has fallen sharply to 3.1 percent from 10 percent in 2009.

LG China has cut 1,000 jobs since October in its hand-held department. In August, LG's air conditioner business was withdrawn from China.

LG's mobile business suffers from a lack of capital and poor distribution channel and technology in China, which led to its decline, industry insiders said. The company also made wrong decision by taking no action during the emergence of smartphones in 2010. Its products cannot compete against Samsung and Apple in the high-end market and also cannot compete against Huawei and Lenovo in the low-end market.

The company's refrigerators and washing machine business in China is also looking gloomy, with fewer models and no price advantages.