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China crisis: Bosses run, workers riot

world Updated: Nov 27, 2008 01:05 IST
Reshma Patil

Reports of fleeing factory managers continue out of China’s richest province even after the government’s top leaders fanned across the troubled export zones in a confidence-building tour last week.

On Tuesday, over 500 enraged toy factory workers smashed police vehicles and stormed factory gates, damaging computers and office property in Dongguan in the southern Guangdong province, State-run media Xinhua reported on Wednesday.

“The company’s managers fled their offices on Tuesday night,’’ Xinhua said, adding that about 1,000 police and security guards tried to control the mob.

China is the world’s top toy exporter and this should have been its busiest season making Christmas gifts for American and European children.

But falling demand from recession-hit global clients, the strengthening of the yuan against the dollar and the rising cost of labour and raw materials has hit the heart of the made-in-China manufacturing zone.

Dongguan saw a similar protest last month when a few thousand laid-off workers hit the streets to protest the abrupt closure of a major Hong Kong-owned company that made toys for clients like Mattel. The bosses fled and the local government paid about $3.5 million in back wages to calm the angry workers.

In Guangdong alone, about 7,000 factories were closed or shifted this year, according to the State-run China Daily.

The latest incident occurred a week after social security minister Yin Weimin said that China’s job scene is ‘grim’ and preventing labour unrest is his ‘top concern.’

The protests erupted in a dispute over compensation offered to a batch of sacked workers by the Kaida Toy Corporation, which employs about 8,000.

Xinhua quoted Liu Xiyuan, an employee who worked for the company for 21 years and rejected the offer of eight months’ salary. “It would have meant all my 21 years of work wouldn’t count,’’ Liu, 45, was quoted saying.