As the death toll from a deadly strain of bird flu in China rises to 17, China watchers say they are closely following Beijing's handling of the outbreak although officials appear to have learned a trick or two from the SARS crisis a decade ago.
Eight fresh cases of the H7N9 bird flu virus have been reported in the eastern provinces of China this week, bringing the total figure of those infected to 82, Reuters reported. China is also investigating the possibility of human-to-human transmission of bird flu, a top Chinese health official was quoted as saying on Thursday.
Some analysts are drawing parallels with the outbreak of severe acute respiratory syndrome (SARS) between 2002 and 2003, which damaged international trade between China and other countries and led to the virtual shut down of Beijing, China's capital city.
If the bird flu epidemic accelerates in a similar fashion, investor sentiment could be severely damaged, said one analyst.
"The obvious benchmark is SARS. That was a catastrophe and the Chinese government learnt a lot of lessons from that," said Tim Condon, head of research for Asia at ING Financial Markets.
"At the moment the bird flu outbreak appears to be under control, but if it turns out to be much more virulent than expected you could see the same sort of reaction as we saw to SARS," he said.
The outbreak of SARS, a viral respiratory disease spread between humans, in South China and Hong Kong between the end of 2002 and the summer of 2003, affected around 8,000 and led to more than 700 deaths, according to the World Health Organization. Beijing was criticized at the time for its handling of the outbreak and downplaying the crisis, which led to panic and hurt China's economy.
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All About Confidence
Since the fresh strain of bird flu first emerged a few weeks ago China has slaughtered thousands of birds and closed some live poultry markets. YUM Brands, which runs the popular KFC brand in China, has said its March sales in its China restaurants fell 13 percent because of bird flu worries.
(Read More: Yum's China Sales Fall Sharply Amid Bird-Flu Scare)
Russia has started introducing medical check-ups for passengers returning from China, according to press reports, raising worries that China's tourism industry could be hurt by the bird-flu outbreak.
Condon said Beijing seems to be handling the outbreak differently in comparison to the SARS crisis and that was good for investor confidence.
"Back in 2003, they (Chinese authorities) were hiding the real numbers, and they even punished the doctor who revealed them. It was a real disaster. The authorities have now learned from that, and that means there is maybe a lower risk of a SARS level of panic," he added.
Alistair Chan, an economist at Moody's Analytics, agreed that the way China handles virus outbreaks has improved since SARS.
"The reaction seems much more mature," he said. "The government is getting the U.S. and Australia to advise them on the issue and there is less of a cover up going on."
So far the impact on Chinese markets appears to be limited although analysts say bird flu concerns could be a contributing factor to weakness in Chinese equities markets, which have taken a hit from news on Monday of an unexpected fall in China's first-quarter economic growth.
(Read More: Has China's Economy Hit a 'Dead End'?)
"There is some talk about it (bird flu) but people don't seem to be worried," said Michael Klibaner, head of Greater China research property company Jones Lang LaSalle in Shanghai, which has seen the most cases of bird flu in recent weeks. "There is no evidence of human-to-human transmission. If I see evidence of that, then of course I would have a very different view."
Patrick Chovanec, managing director and chief strategist at Silvercrest Asset Management, said he was carefully watching how bird flu outbreak would impact the economy.
"What is important to investors is how much this will disrupt the Chinese economy. Will it affect day-to-day business? Will it stop people transporting between cities? These practical implications are what will make people sit up and take notice," he added.