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The decision follows strikes at Toyota and Honda's Chinese assembly lines by workers disgruntled with their pay and working conditions, and inability to progress through Japanese-dominated company ranks.
Although non-Japanese already make up half of Komatsu's European and North American management staff, its biggest market China will be the first country where its top management will be entirely replaced by locals, a spokesman said.
The firm, which has a 20-percent share of China's hydraulic shovel market, also plans to set up an educational system to groom up-and-coming Chinese staff in its corporate culture, the spokesman added.
"Since most of our staff are local, it is important to have a set-up that gauges their opinions and enhances communication," he told AFP.
Labour issues in China have come to the forefront in recent weeks after strike action and a spate of suicides at Taiwanese technology supplier Foxconn, which counts Apple, Dell and Sony among its clients.
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