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Senior Chinese Official Warns of Economic Downturn

A senior Chinese official warns the country's economy is slowing at an "accelerated" rate and could lead to social unrest.

National Development and Reform Commission chairman Zhang Ping says Thursday data gathered this month shows China's economic downturn is deepening as the impact of the global financial crisis spreads.

He says an increase in bankruptcies and production cuts by major manufacturers would likely cause large-scale unemployment, and trigger social instability.

The Bank of China cut the country's benchmark lending rate by more than a full percentage point Wednesday in an attempt to help the economy.

Earlier this month, officials unveiled an almost $590-billion plan aimed at spurring economic growth.

Still, tensions have been rising. Hundreds of laid-off workers trashed the offices of the Kaida toy factory in southern China Wednesday following a pay dispute. Last month, 7,000 people marched in protest after losing their jobs at another toy company.

Thursday, the Hong Kong firm that owns the Kaida toy factory agreed to improve compensation packages for its laid off workers.