Hong Kong health authorities on Saturday urged the public not to panic after the southern Chinese city reported its first human case of bird flu in 18 months in a two-year-old boy.

Hong Kong officials said the Chinese boy was in serious condition after testing positive for the deadly H5N1 strain of avian influenza and the city had raised the bird flu alert level to "serious".

Hong Kong and Chinese health authorities said investigations revealed that the boy, who lives in the neighbouring Chinese province of Guangdong, had visited a local wet market and had contact with a live duck in mid-May.

He later developed a fever and runny nose and was taken for treatment at a Hong Kong private clinic on May 26.

"The boy's parents are all along asymptomatic, which means the chance of a human-to-human transmission is slim," a spokesman from the Hong Kong Centre for Health Protection said in a statement.

The spokesman said the boy was in intensive care while his parents were being quarantined at the same hospital.

A government spokeswoman confirmed it was the first human case of bird flu in Hong Kong since November 2010, which involved a 59-year-old woman.

China's state-run Xinhua news agency said Guangdong was on "high alert" but tests has so far found no signs of an outbreak.

Hong Kong is particularly nervous about infectious diseases after an outbreak of the deadly respiratory disease SARS in 2003 killed 300 people in the city.

The Asian financial hub was the site of the world's first major outbreak of bird flu among humans in 1997, when six people died from a mutated form of the virus, which is normally confined to poultry. Millions of birds were then culled.

The latest infection prompted Hong Kong Health Minister York Chow to convene an emergency meeting as he announced a series of preventive measures while reassuring the public that it was an "isolated" case.

"We feel that there is no need for panic among Hong Kong citizens," he told reporters.

Chow said there were no plans to ban live poultry imports for the time being, but inspection and disinfection would be stepped up at markets. Schools and various institutions have been asked to be on alert.

"We think it is an important measure to take particularly for Hong Kong, because we had experiences of outbreaks of avian influenza in Hong Kong," he said.

"For this particular case, so far the chance of it being spread to other humans is relatively low. But we still need to go through the whole process of analysing the origin and channel of the infection and have to study the virology of the virus."

The H5N1 strain has killed more than 350 people worldwide since 2003, according to WHO statistics, with the latest fatality reported on Monday involving a 10-year-old Cambodian girl.

Concerns about avian influenza have risen in the region with China, Vietnam and Indonesia all reporting deaths from the virus this year.

The virus typically spreads from birds to humans through direct contact, but experts fear it could mutate into a form easily transmissible between humans, with the potential to kill millions in a pandemic.