Page last updated at 06:25 GMT, Monday, 17 August 2009 07:25 UK

Steel protest ends privatisation

A Chinese worker walks past rolls of steel (file image)
It is the second time in a month that workers have stopped a privatisation

The Chinese government has been forced to cancel the privatisation of a steel firm following worker protests, the country's state-run media has reported.

The cancellation of the deal to sell state-owned Linzhou Steel in Henan province came after staff held an official hostage for four days.

It was the second time in under a month that worker militancy in the steel industry has halted a privatisation.

At the end of July, a boss at Tonghua Steel was killed in violent protests.

Plans to sell a stake in Tonghua to private firm Jianlong Steel were subsequently shelved.

In the latest case, the government had hoped to sell Linzhou Steel to another private business, Fengbao Iron & Steel.

The local official from Anyang, one of the main cities in Henan province, was released after the government pledged to abandon the takeover.

A growing number of workers at China's numerous state-run steel firms are opposed to privatisations as they fear large scale redundancies resulting from moves to boost efficiency.

Linzhou employs 5,122 workers.

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