SHANGHAI/MEXICO CITY - Mexico was flying home dozens of its citizens on Tuesday quarantined in China over fears of a new flu virus and announced plans to revive its economy hit by the deadly epidemic, which showed signs of easing.

An Aeromexico plane arrived in Beijing to pick up Mexican nationals there, after taking on dozens in Shanghai. The flight was scheduled to head south to Guangzhou and then to neighboring Hong Kong before flying home.

None of the 70 or so Mexicans quarantined in mainland China have shown symptoms of the H1N1 flu, but they have been caught up in a drama about how far governments should go to stifle fears the virus could creep across their borders.

The row has strained what had been a warming relationship but, with Beijing courting Latin America as a trade and diplomatic partner, the damage appears unlikely to last.

Xinhua reported that a Chinese chartered flight had retrieved 79 Chinese nationals in Mexico City before heading to Tijuana, where it was expected to pick up 20 more. China has suspended direct scheduled flights to Mexico.

Mexico is considered the epicenter of the flu outbreak that has infected more than 1,200 people in 21 countries over the past week. To date, 27 deaths have been officially confirmed -- 26 in Mexico and one in the United States -- though more than 100 are suspected to have died from the flu.

Its global spread has kept alive fears of a possible pandemic, although scientists say this strain does not appear more deadly than seasonal flu.

Other flu-affected nations also have had citizens caught up in China's quarantine measures.

U.S., CANADIANS QUARANTINED

A spokesman for the U.S. embassy in Beijing, Richard Buangan, said at least four U.S. citizens were quarantined at one point but most of them have been released. The United States had not issued any protest over the matter, he said.

Chinese Foreign Ministry spokesman Ma Zhaoxu told a news conference 25 Canadian students were also in quarantine in a northeast Chinese city but had shown no flu symptoms.

An official with the Canadian embassy in Beijing said his government knew of the quarantine in a hotel in Changchun, but he put the number of students affected at 22. The students from the University of Montreal came to China last week for language studies, according to Canadian news reports.

South Korea confirmed its second case of H1N1 flu, a nun who had been in contact with the first patient, health ministry officials said on Tuesday. The first patient was a 51-year-old nun who had visited Mexico and showed symptoms after returning to South Korea. She has since recovered.

Mexican President Felipe Calderon announced a stimulus package, including a temporary tax cut for cruise lines visiting Mexico, in a bid to lure back shiploads of foreign visitors.

The new H1N1 flu strain has walloped the tourism sector, accounting for 8 percent of Mexico's economy, prompting major operators like Carnival Cruise Lines to cancel visits.

Calderon said details of the stimulus plan would be given in coming days, telling the nation in a televised broadcast: We're going to come out of this experience successfully and soon.

He repeated government assurances that Mexico was over the worst of its own epidemic.

Calderon condemned the quarantine measures against Mexican citizens overseas as discriminatory.

China has denied that, saying isolation was the correct procedure. China's vast population and patchy medical infrastructure make it vulnerable should the virus take hold.

In Hong Kong, some 300 guests and staff remained quarantined in a hotel where China's single confirmed H1N1 case, a 25-year-old Mexican man, had stayed.

TRADE TENSIONS OVER PORK

While the new H1N1 virus is not food-borne, fears of cross-border contagion stirred up international trade tensions after about 20 nations banned imports of pigs, pork and other meat from the United States, Canada and Mexico, the three most flu-affected countries.

Canada threatened to take China to the World Trade Organization unless Beijing backs down from its ban on imports of pigs and pork from the province of Alberta, where a herd of pigs was found to have the H1N1 strain.

China's Foreign Ministry said it was within its rights to take emergency health measures.

Health experts, citing precedents such as the 1918 Spanish Flu pandemic that killed millions of people, warn the latest epidemic could attack more violently a few months from now.

With infections of the new flu strain cropping up across the globe, the World Health Organization wavered over whether it might declare a full pandemic alert.

WHO chief Margaret Chan said the apparent good news from Mexico over the epidemic had to be treated with caution.

Before issuing a level 6 pandemic alert, the WHO would need to see the virus spreading within communities in Europe or Asia.

No one can say right now how the pandemic will evolve or indeed whether we are going into a pandemic, Chan told a U.N. General Assembly session.

While U.S. hog futures fell on Monday over the flu alert, Mexico's peso made its biggest gains in more than six months and stocks jumped as health fears eased.

European finance ministers said they saw no evidence the H1N1 flu was hurting Europe's economy.

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