BEIJING (AP) _ Hundreds of police forcibly dispersed laid-off state factory workers in southwestern China today after three days of protests over unpaid benefits, a human rights group reported.

Police hit some of the machinery factory workers after they erected obstacles to block traffic in Suining, the Hong Kong-based Information Center of Human Rights and Democratic Movement in China reported.

About 700 workers took part in the protest, and they were confronted by 250 officers, the human rights group said.

A duty officer at city police headquarters, Li Xianyong, denied there had been protests or arrests.

Protests have become common in many cities as state factories faced with crippling debts and forced into free markets cut payrolls.

Many have no money to pay required welfare stipends, pensions and medical benefits.

Sichuan, the inland province where Suining is located, has been particularly hard hit. Factories built there as part of a Cold War program to keep industries away from coastal regions thought vulnerable to foreign attack are now too far from the markets and money they need.

The Suining machinery factory fired all but 100 of its 1,300 staff and was sold to a development company last year, the Information Center said.

The laid-off workers began their protests Wednesday after the factory announced it would no longer be paying the required monthly living expenses, the group said.

Finance Minister Xiang Huaicheng, in unveiling the national budget last week, ordered local governments to put aside sufficient funds to care for the unemployed, promising Beijing would make up any shortfall.

His boss, Premier Zhu Rongji, told members of the national legislature not to resort to ``crude'' or ``dictatorial'' measures to deal with social problems.