Many shops and restaurants are nearly empty

Chinese airlines are set to receive a financial boost from the government to help cope with the cost of the Sars virus, according to official press reports.

China will give 100 million yuan ($12.1m) in aid to airlines and other travel businesses to help limit the damage caused by Sars, state media has reported.

Dwindling visitor numbers coupled with domestic advice not to travel has hit the region's tourist industry hard.

Economists have said the virus could cut 1% off China's projected economic growth of 7% this year.

Cheap loans

News of the financial help came as China Eastern Airlines, China's third biggest airline, said it was losing 20 million yuan ($2.4m) per day because of the virus.

The airline said passenger numbers were down 80% in the first two weeks of May, reducing income to just 20% of that received in the first two weeks of March.

Some hotels in Beijing and Shanghai have closed temporarily and many restaurants are closed as customers stay at home to minimise their chance of contracting the flu-like virus.

Finance minister Jin Renqing told the official Xinhua news agency that the government would try and help the tourist industry by offering subsidies to cover interest payments on bank loans.

An announcement in state newspapers also said China's central bank had ordered commercial lenders to provide short-term, low-interest loans to airlines, travel industries and retailers in regions worst-hit by Sars.

Manufacturing hit

The government had earlier ordered companies in areas badly affected by the disease not to lay-off employees.

But Japanese group Matsushita Electrical Industrial, maker of Panasonic goods, said it had closed two plants in Beijing after five workers were found to have Sars.

Matsushita, which currently employs over 50,000 people in China, said it was taking precautions to curb the spread of the illness.