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Shanghai ordered all live poultry markets in the city closed on Friday after culling more than 20,000 birds to curb the spread of the H7N9 flu virus, which has killed six people in China.
The latest fatality was a 64-year-old farmer who died in Huzhou, in the eastern province of Zhejiang, local officials said according to the state Xinhua news agency.
He was the second person from Zhejiang to die from the bird flu strain, with the other four fatalities in Shanghai, China's commercial hub.
The number of confirmed infections rose to 16 with two new ones in neighbouring Jiangsu, and a seven-year-old girl was quarantined in Hong Kong for tests after she returned from Shanghai and showed flu-like symptoms, officials said.
Shanghai is China's biggest city with a population of 23 million people and municipal government spokesman Xu Wei said its live poultry markets were being shuttered temporarily for "public safety" purposes, and all trade in live poultry banned.
The moves came after the virus was found in pigeon samples from the Huhuai market in Shanghai, officials said, where a total of 20,536 chickens, ducks, geese and pigeons had been slaughtered.
Local television showed men in protective clothing and facemasks entering the market in the city's western suburbs during the night, and dozens of empty birdcages.
On Friday, the entrance to the poultry section was concealed with wooden boards and sealed off with plastic tape, with a police car parked nearby and white disinfectant powder sprinkled in the street.
Two staff members at the market told AFP the slaughter was completed overnight, but one added: "Of course, I'm worried."
Consumers in the city snapped up banlangen, a traditional Chinese medicine for colds made from the roots of the woad plant, used as a blue dye from ancient times.
"We sold out. People are buying it one after another. Everyone is afraid of bird flu," said an employee at the SPH drugstore in downtown Shanghai.
The outbreak was among the most popular topics on China's Twitter-like Sina Weibo, with 4.7 million posts referring to H7N9. "H7N9 is really frightening, I think you can easily catch it and easily die," said user Zhou Linlinlin.
Hong Kong stocks tumbled 2.73 percent as investors fretted over the flu, with airlines the hardest hit.
But the World Health Organization (WHO) has played down fears over the H7N9 strain, saying there was no evidence of human-to-human transmission, but that it was crucial to find out how the virus infects humans.
Like the H5N1 variant, which typically spreads from birds to humans through direct contact, experts fear such viruses could mutate into a form easily transmissible between humans, with the potential to trigger a pandemic.
Shanghai city health official Wu Fan also said Friday there was no evidence of human-to-human transmission. One person who had been in close contact with a victim had shown flu-like symptoms but tested negative for H7N9, she said.
The first two deaths from the virus, which had not been seen before in humans, occurred in February but were not reported by authorities until late March. Officials said the delay in announcing the results was because it took time to determine the cause of the illness.
In 2003 Chinese officials were accused of trying to cover up the outbreak of Severe Acute Respiratory Syndrome (SARS), which killed about 800 people around the world.
But the state-run China Daily on Friday quoted the ministry of health in Beijing as pledging "open and transparent exchanges with the WHO and other countries and regions".
US health authorities said Thursday they were liaising with domestic and international partners to develop a vaccine for the virus.
According to the WHO, the animal source of the infection and its mode of transmission are not yet clear.
"At this time there is no evidence of sustained human-to-human transmission," its spokesman Gregory Hartl said in Geneva.
Experts are concerned that the virus appears to have spread across a wide geographical area, with people sickened not only in Shanghai, but also the nearby provinces of Zhejiang, Jiangsu and Anhui.
"I am cautiously worried," virologist John Oxford of the Queen Mary University of London told AFP. "Because it is so geographically widespread I think it is trying to tell us something."