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Tourism companies in south China's Guangdong Province are expected to receive 1 billion yuan (US$120 million) in loans to help offset the losses suffered as a result of the SARS outbreak.
The government will pay 50 million (US$6.04 million) of their interest payments.
The discount interest plan is a one-year plan and complements a self-support scheme already set up by the companies themselves.
The first batch of 10 tourism enterprises concluded a 280 million yuan (US$33.8 million) loan contract last Friday. The 10 include the Guangzhou Chime Long Group, Guangzhou White Swan Hotel and Guangdong China Travel Service.
The banks involved are local branches of the Bank of China, China Industrial and Commercial Bank, China Agricultural Bank and Bank of Communications.
Zheng Tongyang, chairman of the Guangdong Provincial Tourism Administration, said: "Most of the loans are going to large and key enterprises."
Support should be given companies with good potential for development and a competitive edge, Zheng added.
However, it is not clear when the next group of beneficiary enterprises will receive loans.
Tang Hao, secretary-general of the Guangdong provincial government, suggested that the loans be used to adjust enterprises' improper ways of operating and to upgrade their products.
"Pushing forward the construction of public infrastructure, public safety, cleaning up the environment and better service should be the major tasks of the enterprises that have received loans," Tang said.
Tourism sectors in the province have experienced heavy losses since March due to the outbreak of the potentially fatal SARS virus.
For the whole month of May, almost all travel agencies made no profits whatsoever.
Star-rated hotels in the province saw their May turnover slump 80 percent year-on-year, while scenic spots experienced a decline of 70 percent.
(China Daily June 18, 2003)
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