GUANGZHOU: Du Haiqun was standing next to a job advertisement noticeboard near the gate of a factory in Zhangmutou, Dongguan.

"I have collected my owed salary from the local government. And now I need a new job in the city," he said.

Du was one of more than 7,000 workers who had lost their jobs after Smart Union shut down two of its factories in Dongguan and are looking for new jobs.

After the Hong Kong-listed toy maker announced its factory closures early last week, local government immediately acted on the news and settled owed wages on behalf of the factories.

"Besides settling wages, we are also calling on other factories to offer jobs to the affected workers," said Xu Hongfei, deputy government chief of the Zhangmutou Township. "Dongguan is still a place where workers can make money."

Smart Union owed its workers at least six weeks of wages totaling 24 million yuan, according to Xu.

"The government will not cover unemployment compensations that the company should have granted its employees. But there is one thing for sure - we will help people find jobs by encouraging more employers to hire them if they want to stay in the area," the deputy government chief said.

According to Xu, the government has been working with two new factories to hire workers who had lost their jobs.

"They are so experienced and skilled that they can easily find new jobs here," said Xu.

An earlier report by Xinhua News Agency quoted an unnamed official from the provincial labor authority saying it would work with the economic reform committee to set up a special foundation to provide assistance to the workers.

However, Zhang Xiang, publicity director of the Guangdong Provincial Labor and Social Security Department, who talked to China Daily yesterday, denied the existence of such a plan.

"So far, it is only a suggestion by some experts," said Zhang. "It is impossible for us to set up such a foundation."

"If the workers are not paid, they can seek judicial help. We have introduced a measure to deal with labor disputes," said Zhang.

Dongguan, in the heart of the Pearl River Delta region, is a major base for toy exporters, but the rising yuan and increasing production costs forced many factories to shut down.

Industrial experts have predicted that as many as half of the toy manufacturers in the region could go out of business in the two years ahead.

(HK Edition 10/24/2008 page1)