Jianlong told to drop tonghua buyout after clashes

27 Jul, 2009 (Bloomberg)

China’s Jilin provincial government ordered Jianlong Group to abandon a buyout of state-owned Tonghua Iron & Steel Group after workers protesting job losses killed a manager, state-run Beijing News said today.

The instruction, announced via Jilin’s television network last night, also ordered Beijing-based Jianlong to never again take part in any restructuring plan of Tonghua, the newspaper said. Closely held Jianlong had been Tonghua’s second-largest shareholder since 2005, Xinhua News Agency said separately.

The incident underscores the increasingly violent disputes in the country from northwestern Xinjiang province to southern Guangdong, as the global economic crisis brings simmering conflicts to a head, said Liu Kaiming, a labor-relations researcher in China. As many as 7 million Chinese college graduates will need jobs this year, adding to the 20 million job seekers every year, according to government figures.

“Many ordinary people in China are now filled with pent-up frustrations as they see their livelihood diminish with the economic crisis,” said Liu, executive director of the Institute of Contemporary Observation in Shenzhen. “It’s spreading from north to south, and many tiny disputes can easily be inflamed into major clashes.”

Up to 1,000 workers gathered at Tonghua’s factory in northeastern China’s Changchun city yesterday morning, demanding to meet manager Chen Guojun, appointed by Jianlong on July 22 to oversee the steel plant’s operation, Beijing News said. The workers refused Chen’s order to return to work, battered him with boots and pushed him from a second-storey office, the newspaper said, without citing a source for its information.

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