Danish toymaker Lego Group plans to start building its first factory in China next year, but some local toy manufacturers have already claimed it could lead to tougher domestic competition.

The factory will be built in Jiaxing, in the middle of the Yangtze River Delta, about 100 kilometers from Shanghai, where the group is also planning to locate a regional distribution center for Asia.

Officials did not specify exactly how much it would invest, but Reuters reported it could create about 2,000 jobs once fully operational in 2017.