Chip Starnes has had quite a day at the office. In fact, the 42-year-old US executive hasn’t been able to leave his medical supply plant in Beijing for five days because he has been held hostage by dozens of workers demanding redundancy packages like those given to 30 co-workers in a shuttered section of the plant.

Mr Starnes, who is co-proprietor of the Florida-based company Specialty Medical Supplies, said local government officials had come to the factory on the outskirts of Beijing on Saturday and coerced him into signing an agreement to meet workers’ demands.

All this despite the fact that the 100 workers left at the plant were not about to be laid off. The workers are expecting their payoffs to arrive by wire transfers today. Around 80 employees have blocked off the plant’s exits and deprived the barricaded Mr Starnes of sleep by shining bright lights through the windows of his office and banging on the glass to keep him awake. “I feel like a trapped animal,” Mr Starnes told The Associated Press from his first-floor window. “I think it’s inhumane what is going on. I have been in this area for 10 years and created a lot of jobs. I would never have thought in my wildest imagination something like this would happen.”

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Given the coercive deal was brokered by the local government Mr Starnes is not expecting help from the police, although they are at the site to “maintain order”. Workers inside the factory compound in the Huairou district in Beijing’s north-eastern suburbs declined to speak to the press.

Representatives from the US Embassy joined police outside the gate yesterday and were eventually let in. Embassy spokesman Nolan Barkhouse said the two sides were on the verge of an agreement and that Mr Starnes would have access to his attorneys.

His plight is indicative of broader changes currently taking place in China. Rising inflation and production costs mean the years of China being the factory of the world appear numbered, certainly at the lower end of the manufacturing scale. Goldman Sachs on Monday became the latest investment bank to downgrade its forecast for Chinese economic growth this year, and any overseas companies are looking elsewhere for cheap labour in countries like Bangladesh, Cambodia and Vietnam. There is considerable fear among China’s workers that overseas manufacturers may choose to move.

Specialty Medical Supplies has been winding down its plastics division in Beijing in readiness to move it to Mumbai, India. Mr Starnes arrived in China last Tuesday to lay off the last 30 people, some of whom had been working at the site for up to nine years so their compensation packages were “pretty nice,” he said.

The demands for redundancy pay-offs began on Friday. Trapping the boss in the building until money is paid up is not unusual in China, though these days it is rare to hear of foreign managers being treated in this way .