A US executive held captive by workers in his Beijing factory since Friday said the dispute that has kept him behind the plant's barred windows was a misunderstanding over pay.
Chip Starnes, president of the Florida-based Speciality Medical Supplies, said about 100 workers were demanding severance packages identical to those offered to 30 employees laid off from the company's plastics division, which was moved to India to lower production costs, Reuters reported.
The workers' demands followed rumors that the entire plant was being closed, though Starnes said no more layoffs were planned.
"We never had that intention. They were never told they were going to lose their jobs," Starnes said on Tuesday.
"It (the rumor) ran rampant and quickly spiraled out of control. It's a sad situation. "
Starnes said he was never physically harmed but had been intimidated, and was unhappy about the way local authorities have handled the dispute.
"I think disappointment is a really good word," the 42-year-old said from a window of the factory in the Beijing suburb of Huairou where the firm has been operating for nearly a decade.
A number of plain-clothes police officers could be seen standing outside the factory compound. Authorities said they were in place to maintain order, though they had not acted to end the stand-off.
Starnes said his lawyers were in talks with the workers with mediation from the district labor administration and labor union.
Chu Lixiang, head of the Huairou labor union's rights and interests department, said Starnes had not paid the workers for two months and they feared the plant was closing and that he would run away without paying severance.
"The workers' request, firstly, will be for the company to pay up. Second, they (the managers) need to abide by the law, to deliver compensation as deserved. That's all," Chu said.
Strikes and work disputes in China have become more common as workers demand greater compensation and the pool of cheap labor shrinks.
"We just ask that our boss pays our salary and the labor compensation we deserve," said Gao Ping, an employee for six years.
Foreign Ministry spokeswoman Hua Chunying told reporters at a daily briefing that she hoped the issue could be "resolved through dialogue".