The statement came three days after local workers clashed with Madagascar security forces, leaving two people dead, before they looted the sugar plant in Morondava.

The embassy said the Chinese staff evacuated the factory because of fears for their safety.

"We hope the Madagascar government will take necessary measures to properly handle the attack at the Morondava sugar plant and to erase the ill impact this incident has brought to the country's international image and its ability to attract foreign investments so as to create a good environment for Madagascar to cooperate with China and other countries," the statement said.

Madagascar Prime Minister Roger Kolo and the country's industry minister, Jules Etienne Rolland, have pledged to try to resolve the situation.

The labor protest started when the plant's seasonal workers demanded contracts that offer better pay and better conditions, according to reports.

The Chinese Embassy said the requests were unreasonable, and that the workers began in early November to block the factory, cutting off utilities, harassing employees and sabotaging equipment.

Confrontation escalated after Madagascar security forces arrested two strike leaders.

On Wednesday, about 500 workers rushed to a base of the security forces to demand the release of their colleagues, and police fired tear gas and live ammunition, the Madagascar Tribune reported. Two people died. Police said they were acting in self-defense because some workers had guns and machetes

The official China News Service said the workers were armed with axes, slingshots and rocks.

Rioters then converged on the factory, looted its sugar supply and set fire to a building. Some looters carried bags of sugar on their backs or in carts and wheelbarrows, and some of it was quickly sold on the illegal market, according to reports.

China is Africa's largest trading partner, but closer ties have resulted in sometimes violent labor disputes.

___

Associated Press writer Christopher Torchia in Johannesburg contributed to this report. (**)

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