By Xinhua writer Cao Xiaofan

    BEIJING, Aug. 5 (Xinhua) -- A steel company executive's death from a beating during a riot at state-owned Tonghua Iron & Steel Co. Ltd. in China's northeastern Jilin Province resulted from workers' fears and anxieties, observers said Wednesday.

    The workers were facing wage cuts and layoffs as a result of the company's looming makeover ensuing from a merger in which Beijing-based Jianlong Heavy Machinery Group would buy a majority stake in Tonghua.

    General manager, Chen Guojun, installed by Jianlong according to the merger plan, was beaten to death during a 1,000 strong workers' protest on July 24.

    A CONTROVERSIAL RECONSTRUCTION

    Jianlong, one of the China's largest private steelmakers, has made attempts to invest in Tonghua from as early as 2005, but suspended a buy-out deal early this year because of financial losses ensuing from the global recession. It resumed the takeover bid in July, triggering broad dissatisfaction among the State steel giant's workers as downsizing and salary reduction rumors swirled.

    "We prefer working for the state-owned company.

    It makes us feel more secure," said a Tonghua worker.

    Anxieties stemming from worker hardship and uncertain prospects finally turned into rage because Chen Guojun was receiving a hefty income.

    Domestic media reported the average workers' monthly salary had been slashed to a top limit of

    1,000 yuan (146 U.S. dollars) from 2005 while Chen earned about 3 million yuan a year. In addition, workers were worried about downsizing following Jianlong's takeover of Tonghua.

    IDENTITY INSECURITY

    The underlying reason for the protest and death was the insecurity of the State mill workers, who

    not only faced a transformation of identity in working for private enterprise, but were also deprived of their right to information about the reconstruction, said economist Liang Xiaomin, a professor at Tsinghua University.

    Workers in State-owned enterprises usually reject overtures from private companies, which are regarded as pursuing "overwhelmingly" business interests but neglecting social responsibilities, said Liu Qingbo, a professor at the Jilin Business and Technology College.

    "Insecurity is prone to lead to social unrest, triggering mass incidents," Liang said.

    DEFENDING WORKERS' INTEREST

    China's government has stressed the importance of safeguarding employees' interests and rights since nationwide reforms in state-owned enterprises started during the 1990s.

    It specified a range of compensation measures for laid-off workers in a document regulating SOE reconstruction in 2006.

    But the prescription was often put aside by groups with vested interests. "In practice, the interests of employees are taken lightly," Liang said.

    He said besides the payment of monetary compensation to employees whose interests had been impeded, reconstruction talks should include representatives defending workers' interests.

    Government, private enterprises, society at large and individuals should make efforts to ease the worries of workers who suffered losses in company makeovers, he said.

    There was a need for multiple channels to be introduced to soften the impact on workers resulting from reconstruction as well as to improve the social security environment, said Wang Xiaolu, a researcher from the Chinese Economic Institution Reform Committee.