Labor authorities in south China's manufacturing base of Guangdong Province are considering setting up a fund to help workers laid off in factory closures caused by the rippling global financial crisis.

More than 1,000 workers at a Hong Kong-invested electrical appliance plant in Shenzhen City took to the streets on Sunday to demand the government intervene to secure their unpaid wages.

The Bailingda Industrial (Shenzhen) Co. Ltd. officially closed its production line on Monday, leaving 1,500 staff out of work.

It was the second Hong Kong-listed firm in Guangdong to go bust in a month, after the closure of Smart Union Group (Holdings) Limited last Friday, which laid off 7,000 workers in Dongguan City. Both were export-oriented manufacturers.

Bailingda, with an annual capacity of 5 million units, produced household electrical appliances such as coffee pots, irons and radiators for the North American and European markets. Smart Union made toys for Mattel Inc., Hasbro Inc. and other US. companies.

An official with the provincial labor and social security bureau, who declined to be named, said the bureau had been working with the provincial development and reform commission to set up a benefit fund to help workers in difficulties because of unpaid salaries.

Bureau head Liu Youjun declined to comment on the fund or the demands of redundant workers, but he said the labor bureau would help laid-off workers find new jobs and obtain unemployment insurance. The bureau would also consider legal measures to bring the companies to account.

"The current labor problems cannot be resolved simply by government departments. The cooperation of banks and foreign trade departments is also needed to deal with wage defaults," he said.

A Bailingda worker surnamed Liu said he and his co-workers had not been paid since August.

A district court in Bao'an District, Shenzhen, confirmed that it had sealed the plant's fixed assets to prevent them being plundered by angry suppliers.

(Xinhua News Agency October 21, 2008)