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Wednesday, 27 March, 2002, 09:33 GMT
Beijing protesters block traffic
Protester outside Beijing Automobile
The protesters were angry about unpaid benefits
About 200 retired workers have staged a protest in the Chinese capital Beijing to demand unpaid pension benefits.

The workers demonstrated outside the gates of the state-run Beijing Automobile works on Wednesday morning, blocking traffic.

Man carrying baskets of oranges
China is bracing itself for millions of job losses
Police initially looked on - before eventually holding talks with the workers, who dispersed peacefully.

The protest follows major demonstrations in north-east China this month by retired and unemployed workers.

One report said Wednesday's protesters had been expecting to negotiate with managers at the plant, which is close to Beijing's eastern business district. When they found the gates locked, they reportedly sat and stood in the road outside, blocking traffic for several hours.

An official at the company told the BBC the firm had not paid the workers their health care fees since 1998, and their retirement pensions since 1999. She said the factory, which has stopped production, simply did not have enough money.

She said the company's manager had been away at a meeting, but the workers were planning to return on Thursday in the hope of seeing him.

Welfare gap

Such protests in the heart of the Chinese capital are rare, but they have become increasingly common in other parts of the country as China grapples with painful reforms of its state industry.

Earlier this month up to 50,000 retired oil workers protested in the north-eastern town of Daqing, and 30,000 workers demonstrated in another north-east town, Liaoyang, to demand unpaid pensions and wages.

The protests highlight a key problem in China's current welfare system - factories are often responsible not only for providing for their retired workers, but also for paying unemployment benefits to the same workers they have made redundant.

The government has acknowledged the problem poses a threat to social stability, and is in the process of setting up a national social security network.

The need has been made all the more urgent by fears that China's entry into the World Trade Organisation will lead to millions of new redundancies.

But setting up the new welfare system will take several years, and in some areas of the country, enterprises and local governments are currently struggling to keep up payments.

Suspicions of official corruption have exacerbated tensions among laid off workers.

See also:

22 Mar 02 | Asia-Pacific
China labour protest suspended
19 Mar 02 | Business
China's unemployment challenge
18 Mar 02 | Asia-Pacific
Chinese labour protests spread
13 Mar 02 | Asia-Pacific
Chinese oil workers in massive protest
21 Sep 01 | Asia-Pacific
Chinese labour activist jailed
19 Sep 01 | Business
Inside China: Workers on the move
11 Mar 01 | Asia-Pacific
China unveils huge welfare plan
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