Investment scheme sparks clashes in Chinese city

BEIJING (Reuters) - Discontent over a banned investment scheme erupted into two days of clashes between residents and security forces in a small city in southern China, according to reports on Friday.

Protesters in Jishou, Hunan province, blocked roads and trains on Wednesday and Thursday to demand government action after a "fund-raising company failed to pay them back as promised", Xinhua news agency reported.

The official report did not mention any violence, injuries or arrests in the confrontation that ended on Thursday night. But a Hong Kong group, the Information Center for Human Rights and Democracy, said 20 protesters had been detained and 50 were injured.

Overseas-based Chinese-language news websites also showed pictures they said showed the angry standoff between Jishou residents and riot police.

One report (www.epochtimes.com) said the illegal funds had first been encouraged by city officials eager to drum up capital for local businesses, and protesters accused officials of skimming money from the funds.

The Xinhua report said Hunan province vice governor Xu Xianping arrived in Jishou on Thursday to defuse the tensions. Executives of the investment scheme were "controlled", it said, apparently referring to their detention.

The Hong Kong group added in a separate statement that thousands of migrant workers had also clashed with police in the eastern coastal city of Ningbo after protesting the injury of a worker at a local factory.

The protests are the latest of a series of confrontations in rural inland parts that has triggered alarm about corruption and discontent. Since the lead-up to the August Olympic Games, the Chinese government has shown unusual candor about such unrest, reporting clashes that in the past were not mentioned.

In June, thousands of residents rioted and torched police and government buildings in Weng'an, Guizhou province, after claims spread that police covered up the rape and murder of a girl.

In another recent clash in Yunnan province, two people were killed when 500 rubber farmers armed with knives fought police, injuring 41 officers.

(Reporting by Chris Buckley; Additional reporting by Ben Blanchard)