The unrest in Guangdong province, the heartland of China's export-oriented light industry, is the latest in a series of protests that have flared across the country amid rising unemployment linked to the global economic crisis.

The riot occurred on Tuesday night in Dongguan, one of Guangdong's major export hubs, after as many as 2,000 workers gathered to protest at the Kaida Toy Factory over their severance pay, the Guangzhou Daily reported.

The report said that up to 500 workers rioted, while 1,500 others 'looked on'.

The workers overcame the resistance of 1,000 policemen sent to contain the crowd, smashed police vehicles and stormed into the office, breaking windows and computer monitors, said the Xinhua news agency.

Five people were injured in the violence. There were no reports of arrests.

The factory, owned by a Hong Kong company in Dongguan's Zhongtang township and employing a workforce of more than 6,000, is in the process of laying off its contracted workers, according to the Guangzhou Daily.

One worker surnamed Hu, quoted by the paper, said that the factory laid off over 380 workers last Wednesday, giving more severance pay to workers who had been employed for more than seven years and less to other workers.

'Many workers thought this was unfair and negotiations between the factory and the workers did not reach a resolution on the issue,' the paper quoted Mr Hu as saying, adding more job losses were expected this week.

By yesterday morning, peace had returned to the site after Dongguan's top officials arrived to calm the protesters, reported Sina.com.

Southern China has enjoyed an export-driven boom in recent years, supplying the world with cheap toys, gadgets and clothes.

But amid the downturn in the global economy, coupled with rising labour costs, expensive raw materials and the appreciation of the Chinese currency, factories have found it difficult to make ends meet.

Up to 7,000 laid-off workers staged a similar protest in Dongguan last month after the Hong Kong-owned toy factory they worked at, one of the country's biggest, closed down.

AGENCE FRANCE-PRESSE, ASSOCIATED PRESS