Businesses in China take a pre-Olympics hit

But walk through the hotel lobbies, Middle Eastern restaurants and the city's big trading emporium, where some 30,000 stalls are jammed together, and it's clear that this isn't a typical year.

"Business has never been so bad," said Ma Yi, manager of the Arabian Restaurant. "Well, what can we do? The Olympics has to open."

The Beijing Olympics in August may be China's biggest international event in decades, but the Games have hardly been a windfall for many businesses in Yiwu, about 200 miles south of Shanghai, and in other cities that rely heavily on foreign customers. The main issue: China's recently tightened visa restrictions, imposed ostensibly for public security reasons ahead of the Olympic Games.

The government is now requiring business-visa applicants to submit papers bearing official stamps from local governments and the hotels where they will be staying. What's more, foreigners can no longer use Hong Kong as an easy gateway to enter mainland China, as many have done for years.

"You know, there are many hotel reservation websites that cannot provide such stamps," said Jiang Fangzheng, assistant manager at Yiwu Hotel.

He says his four-star hotel can help with the paperwork, but customers are nonetheless canceling reservations every day. Government security in hotels has been tightened too, with police making random visits to guest rooms to check visitors' passports, he says.

"Foreign customers are simply afraid of the hassles," Jiang said. "They don't really understand it."

Leisure travel is also taking a pre-Olympics hit in China, with the recent earthquake in Sichuan province and the unrest in Tibet adding to the industry's woes. China's western region is one of the nation's biggest tourist draws, but the May 12 quake, which claimed nearly 70,000 lives, shut down places such as the Wolong Nature Reserve, the world's largest panda breeding center, outside the Sichuan capital of Chengdu. Damaged roads and government restrictions have made it difficult to travel to Jiuzhaigou, a scenic resort area in northern Sichuan, and farther west into Tibet.