About 7,000 workers who lost their jobs after toy-making factories shutdown will receive back pay from the local government in Guangdong.

Two factories of the Smart Union Group (Holdings) Limited, a Hong Kong listed company and supplier to U.S. Mattel Inc., were shut down on Oct. 15. More than 7,000 workers lost their jobs, said Xu Hongfei, deputy government chief of the Zhangmutou Township in the Dongguan City, where the factories were based.

The company owed its workers at least six weeks of wages totaling 24 million yuan (about 3.5 million U.S. dollars), he said.

"The boss is nowhere to be found so the township government is offering payment for the time being," Xu said. He added that wages have already been distributed to the workers.

He Ming, who used to work for Smart Union, told Xinhua that he only received 1,800 yuan for working 13 days in October.

"My monthly wage was about 3,000 yuan and the money given by the government was about the amount that the factory should pay me. I'm satisfied," he said.

Township deputy head Xu said the government will not cover unemployment compensations that the company should have granted its employees.

About 1,000 workers decided to hire lawyers to have their legal rights safeguarded.

The local government promised to help people find jobs if they want to stay in the area.

Dongguan is a major base for Chinese toy exporters, but the rising yuan and escalating production costs forced many factories to go bust.

The General Administration of Customs said in a report Monday that 3,631 toy exporters, about half of the industry's businesses, shut down in 2008.