UPDATE 2-Shanghai restricts business visas before Olympics

(Adds business groups' comments, paragraphs 7-10)

By Jason Subler

BEIJING, July 24 (Reuters) - China's financial hub, Shanghai, is restricting the issue of business visas ahead of the Beijing Olympics, underlining the lengths to which authorities are going to keep out unwanted foreigners.

Business groups have already complained about tightened visa policies ahead of the August Games, which have included a ban on citizens of 33 countries applying for Chinese visas in Hong Kong.

The Shanghai Foreign Economic Relations and Trade Commission said it will postpone approval of notification letters needed for business visas until mid-September for all but essential travel, ruling out visits for market research, training or to carry out inspections.

The curbs were being introduced on orders from above and were meant to "ensure the smooth hosting of the Olympics and safeguard the city's social stability during the Olympics", the city commission said in a notice posted on its website.

While foreigners will be allowed to apply for business visas for "urgent" matters, the Chinese organisation that is inviting them will need to give detailed supporting documentation.

The South China Morning Post reported that Beijing has introduced similar curbs, as have Qingdao, Shenyang and Qinhuangdao -- all of which will host some Olympic events.

"While we understand the circumstances that have necessitated this decision, we do not necessarily agree with the measures that have been taken which affect the U.S. business community," Brenda Foster, president of the American Chamber of Commerce in Shanghai, said in an e-mailed statement.