BEIJING, July 5 (Reuters) - Tianjin, a port city just east of Beijing, has ordered 40 factories to shut for the Olympics, the latest dramatic step taken by China to ensure that pollution does not spoil the Games in August.

The factories, including two cement makers, will be closed from July 25 to Sept. 20, the official Xinhua news agency reported on Saturday. It gave no estimate of economic losses from the closures in the city, about 115 km (70 miles) from the capital.

The Tianjin order follows news on Friday that Tangshan, an industrial city about 150 km (90 miles) east of Beijing, will shut nearly 300 factories this month to improve air quality for the Games. (See story [nSP38342])

Tianjin, which will host some of the Olympic soccer matches, will also halt construction at 26 building sites near its stadiums.

Beijing, one of the most polluted cities in the world, has spent 140 billion yuan ($20.43 billion) to combat chronic pollution in its preparations for the Olympics, which open on Aug. 8.

But China's capital city was still shrouded in thick smog this week, with buildings just a few hundred feet away barely visible -- the kind of air quality that would embarrass the authorities and potentially disrupt sporting events during the Olympics because of health concerns.

From July 1, vehicles that fail to meet emissions standards have been banned from entering downtown Beijing. And from July 20, Beijing will launch a traffic control system to take half of the city's 3 million cars off the road, using an odd-even licence plate system.

The Beijing municipal government issued rules in April ordering industrial firms such as Shougang Group, one of China's major steel producers, to reduce or stop production from July 20. (Reporting by Simon Rabinovitch; Editing by Jeremy Laurence) (For more stories visit our multimedia website "Road to Beijing" at http://www.reuters.com/news/sports/2008olympics; and see our blog at http://blogs.reuters.com/china)

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