More than 7,000 workers went on strike at a southern Chinese factory making New Balance, Adidas and Nike shoes, clashing with police in a protest over layoffs and wage cuts, a rights group said.

Dozens of workers were injured on Thursday as police tried to break the strikers' blockade of the main road in the factory town near Dongguan in Guangdong province, China Labor Watch said in a statement late Friday.

The strike at the Yucheng factory in Huangjiang township took place in the wake of layoffs last month of 18 managers, a move seen by workers as a preparation for the factory's relocation, the New York-based group said.

One of the fired managers told the China Business News his departure was part of a plan to shift production north to Jiangxi province to save on rising costs in the Pearl River Delta around Dongguan, a key manufacturing centre.

The strike was the latest in a series of incidents involving labour disputes and perceived social injustices in Guangdong, known as the workshop of the world for the tens of millions of migrant workers who toil in factories there.

Workers at the Yucheng factory were also angered by the recent elimination of performance bonuses and a ban on the overtime they said they need to meet the cost of living.

A report in the Yangcheng Evening news quoted a worker surnamed Zhang complaining about the changes.

"Our basic monthly salary is only 1,100 yuan ($173), and we earn our pocket money by working overtime," she said.

The newspaper said that the Huangjiang government had interceded, telling the factory managers to repeal the ban on overtime.

Calls to the factory, which is owned by a Taiwan investment group, went unanswered.

Li told AFP that according to his sources, the strike had ended after management agreed to allow workers to work overtime.

US 'frustrated' by China restrictions: ambassador
Beijing (AFP) Nov 18, 2011 - America's ambassador to China on Friday cited "growing frustrations" over the country's business climate, as he urged Beijing to further open markets and allow its currency to appreciate.

Gary Locke's remarks, in a speech in Beijing, came ahead of key trade talks between the two countries which start Sunday.

Analysts expect Beijing's currency controls, market access restrictions and lax intellectual property rights protection to top the agenda for the annual meeting of the US-China Joint Commission on Commerce and Trade.

"China's current business climate is frankly causing growing frustrations among foreign business and government leaders," Locke said, according to a transcript released by the US embassy.

He criticised a lack of transparency in Chinese government policy and urged Beijing to abolish limits on foreign investment, like requiring joint ventures in some sectors as a requirement for market entry.

Locke added "substantial" barriers remained for foreign firms investing in the energy, financial services and telecommunications sectors, while they were virtually barred from mining, power generation and transportation.

"These policies are ultimately counter-productive, preventing China from receiving the capital, the technology, the management expertise and jobs that would come with a more open investment environment," he said.

The US envoy also called on Beijing to improve its protection of intellectual property, saying American and other foreign companies lose billions of US dollars annually from theft in China.

Repeating similar remarks by US President Barack Obama in recent days, Locke said China should let its yuan currency gain more rapidly against the US dollar.

"Market reforms in China and global economic growth could be further enhanced by allowing China's exchange rate to appreciate more rapidly," he said.

Obama on Sunday said China has not done enough to allow the yuan to reach a fair market level. US officials say an under-valued yuan has brought a flood of cheap Chinese exports, causing the US trade deficit with China to swell.

Chinese state media reacted angrily to Obama's comments, made after an Asia-Pacific Economic Cooperation summit, accusing him of "scapegoating" Beijing for his country's economic woes.