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From AFP:

Over 2,000 factory workers in China launched a protest after their employer, an Italian maker of luxury sofas, closed down in the wake of the global financial crisis, local authorities said Thursday.

DeCoro, a leather upholstery producer with a factory in the southern city of Shenzhen, ran into liquidity problems last year and from November was unable to pay wages on time, the Shenzhen government reported.

On January 8, the workers went on strike in protest over not having been paid for two months, according to a statement from the city government faxed to AFP.

One week later, the workers launched a sit-in, refusing to leave the factory, after they learned that the company's legal representative and managing staff from Hong Kong and further abroad had disappeared.

The city government did not elaborate but the Hong Kong-based South China Morning Post newspaper reported Thursday that the protest had spilled into the streets, and the workers had blocked traffic.

"Hundreds of workers in the factory blocked roads as soon as they were aware that their Italian boss had fled in mid-January," an unnamed Shenzhen official told the paper.

After the two rounds of protest, the Shenzhen labour bureau stepped in and paid out the two months' worth of unpaid salaries to the company's staff on January 23.

It also offered them retraining and help to find new jobs. There was no mention of any further protests.

The Shenzhen government declined further comment, referring to its statement. DeCoro could not immediately be reached for comment.

The trade publication Furniture Today last month quoted DeCoro's chief executive, Luca Ricci, as saying the company had opted for voluntary liquidation due to "tough global business conditions".

"The assets are much bigger than the liability so we think we can make money and pay all our suppliers," Ricci told the publication. "We want to be correct and pay everybody."

One of the Chinese government's main worries amid the global crisis is the impact the tougher conditions will have on unemployment, and the risk of social unrest as millions lose their jobs.

About 20 million have already lost their jobs in the crisis, according to central government data.