The Baoan district government in Shenzhen has set up a 100 million yuan (HK$113 million) compensation fund for workers who have been laid off by enterprises that have collapsed during the current economic downturn, local media said. Shenzhen Communist Party Secretary Liu Yupu made the remarks after visiting a factory owned by Hong Kong luxury watchmaker and retailer Peace Mark Company in Xixiang town on Sunday, the Southern Metropolis News reported. Referring to the spate of bankruptcies among Hong Kong-funded factories in Baoan district, Mr Liu was quoted as saying that 100 million yuan had been set aside by the district government for an emergency compensation fund for workers who had been laid off. Mr Liu also called on officials to pay attention to the difficulties faced by manufacturers whose main markets were overseas. Last Tuesday, officials from a local labour office in nearby Longgang district paid approximately 3.4 million yuan to about 900 workers laid off by a Hong Kong-owned toymaker in Longhua town. Qiu Weiquan , a labour official in charge of the delivery of back pay, said local authorities could get back part of the payments they paid workers by auctioning assets in some bankrupt enterprises. He warned, however, that some money might not be recoverable. 'Of course, the government may suffer a certain loss if the asset [sold] cannot cover the debt,' Mr Qiu said. But not everyone showed sympathy for the authorities, who might be forced to use public funds to save workers abandoned by bosses. Dong Baohua , a professor at East China University of Politics and Law in Shanghai, blamed the new Labour Contract Law introduced across the nation this year for the mass closure of firms in the Pearl River Delta.