China grapples with 40,000-worker shoe strike.

• Position: Business

BEIJING -- Chinese police hauled away dozens of workers Friday to break up a march on a factory complex targeted by tens of thousands of laborers striking against the world's largest maker of athletic shoes, while a government trade union said it would mediate the labor dispute.

More than 40,000 workers went on strike this week against Yue Yuen Industrial (Holdings) Ltd., bringing production to a halt at the manufacturer, which makes shoes for companies including Nike and Adidas. About 1,000 workers marched down a street Friday after workers rejected a company proposal.

The Guangdong Federation of Trade Unions urged the workers to act rationally, but said it was "taking a clear-cut stand'' that the workers' rights must be protected. The federation said it had instructed its municipal agency in the southern city of Dongguan -- where the factory complex is located -- to mediate.

The workers have been striking since April 5 to demand the Taiwanese-owned company make social security contributions as required by Chinese law and meet other demands.

Management of Yue Yuen could not immediately be reached for comment, but in a public announcement Thursday, the company offered to make social security payments only if the workers would agree to retroactively pay their own required contributions into the fund. It said those refusing to return to work Thursday would be punished, but did not specify how.

Advocates for the workers said the company had deceived its workers and violated the rules by failing to pay into the country's social security program and should be held accountable for the missed contributions. However, some labor experts have noted that workers in the past have preferred...