China sent in the Army to restore order today after a student was killed and dozens of people were hurt when police in a central Chinese town used batons to beat back 20,000 villagers demonstrating against a steep rise in bus fares.

The unusually large and violent protest reflected the difficulties faced by hundreds of millions of poor farmers struggling to eke out a living on the land while market-oriented economic reforms are bringing prosperity much more rapidly to China’s urban population.

The protest is likely to embarrass the Government, which is holding the 12-day annual session of China’s parliament, the National People’s Congress, in Beijing.

China’s leaders are acutely aware of the tensions caused by the country’s economic transformation, which has prompted a mass movement of rural poor to fast-growing cities in search of work.

Tian Chengping, Minister of Labour and Social Security, gave a warning today that the Government would be able to find work for just half of the 24 million people expected to join the labour market this summer, a figure equivalent to the population of Australia.

As the demonstrations in the remote and mountainous town of Zhushan entered a fourth day, the Government deployed a regiment from the Guangzhou Military Command in neighbouring Guangdong province and 400 special police from the Hunan provincial capital, Changsha.

Residents began to mass around a government building last Friday to protest against the new price of tickets for buses running along the main route linking the village to the nearest town, and continued to gather throughout the weekend.

They were angered after the price doubled over the Chinese New Year holiday, which ended officially on March 4, to 10 yuan (65p), plus an additional 30p for a bag, and then remained at that level after the festival ended.

The protest turned violent yesterday, with police wading into the crowd wielding batons. Demonstrators retaliated by throwing bricks and rocks, witnesses said.

One witness, who declined to be identified, said: “People were very angry and were shouting ‘Beat the government dogs to death’.”

The witness said that more than 1,500 paramilitary police and riot police wearing helmets and carrying batons yelled back “Beat them to death.”

Jiang Zhaoyuan, a Zhushan farmer, said he saw a young man pummelled by three or four policemen with batons. He said: “It was more than three hours before he could stand.”

Five police vehicles were set on fire and the car of the local contractor who had taken over the bus company and its route to a district in Yongzhou city was also burnt.

Residents of Zhushan, who typically earn about 500 yuan (£35) a month, felt they could not afford the the increase in the cost of transport.

Further fuelling their rage was a view among farmers that the businessman who had taken over the bus route was colluding with local officials to make money. When he refused to listen to their protests about the sharp increase in the fare, and threatened to bring in his people to flatten the village, the farmers attacked his car. That prompted officials to send in the police, further aggravating tempers.

Qing Zhao, a local teacher, said he had heard that four schoolboys had been wounded and that one had later died. He said: “Who knows what will happen next. People are scared from seeing so many policemen and soldiers.”

Road blocks were thrown up yesterday to seal off the area, a regiment of soldiers was deployed and police put up notices calling on people who had taken part in the demonstration to turn themselves in. Local officials were visiting homes and telling people to remain calm and to keep off the streets, promising that the bus fare would be cut.

The incident is the latest outburst of public discontent that has highlighted the pains of China’s economic transition. Job creation is a key concern for the Communist Government, which has faced protests by laid-off state industry workers and widespread complaints from rural migrants over unpaid wages and other forms of abuse.

Those seeking employment will include almost five million university graduates and people laid off by moribund state industries, as well as rural labourers who continue to flood towards cities. The state will do its best to create nine million new jobs in 2007, while up to three million job vacancies would open up through retirement.

Times Recommends

• Michael Jackson: Not the final chapter
• Indian Army spends10m rupees on golf buggies
• Sacha Baron Cohen forced to tone down Brüno