AN increasing number of cadres have spoken out in favour of state-guaranteed employment and welfare, which are being threatened by patriarch Mr Deng Xiaoping's market reforms. Chinese economists said reform of state enterprises in relatively conservative regions such as the northeast had slowed down because local cadres had qualms about massive layoffs. In a dispatch yesterday, the New China News Agency praised a number of state concerns for taking good care of redundant managers and other staff. ''We cannot lay off workers as in Western enterprises because this means putting a burden on society,'' said the director of the Fushun Petrochemical Machinery Factory, Mr Zhou Yougui. ''We must properly find a place for [superfluous staff] so that their talents and specialities can still be developed.'' NCNA described a number of factories which successfully found jobs for managers who had been laid off because of administrative streamlining. They were either transferred to ''front-line'' production positions or to the subsidiaries of the parent companies. The official news agency did not say what would happen to slimmed-down companies whose efficiency would suffer if they were obliged to re-employ redundant staff in other positions. Meanwhile, the official media has heaped praise on the Capital Iron and Steel Works. The 250,000 workers at the mammoth company in Beijing, popularly known as Shougang, enjoy services including schools, groceries, buses for workers' outings, hospitals and recreational centres. Employees can send their children to one of the 50 company-run kindergartens, which only charge a token fee. Welfare for employees is run by a workers' welfare management committee which has sub-committees looking after housing, health care, kindergartens and supplies. ''Liberal economists have argued that state concerns must be changed into share-holding companies to maximise efficiency,'' a Beijing economist said. However, he said, conservative cadres favoured the Shougang model, whose essence was a contractual agreement with Beijing that specified its annual level of profits.