In Europe, public health officials across the 25-nation European Union began a two-day exercise on Wednesday to test their readiness to respond to a human flu pandemic.

The Xinhua news agency, quoting the Health Ministry, said the 35-year-old victim had developed fever and pneumonia-like symptoms on Nov. 11 after contact with sick and dead poultry in the eastern Anhui province. She died on Nov. 22.

Xinhua said tests by China's Centre for Disease Control and Prevention had proved positive for the deadly H5N1 strain of avian influenza.

A poultry worker from Anhui died of bird flu on Nov. 10.

The H5N1 virus is endemic in poultry in many parts of Asia and migratory birds have recently carried it to birds in eastern Europe and Kuwait.

Both the World Bank and Asian Development Bank have warned of the huge economic costs of a human pandemic should the virus mutate into a form that can spread easily among people.

The United Nations food and farming body (FAO) said on Wednesday it estimated the economic impact of the bird flu outbreak so far at $10 billion, including losses in farming, trade and tourism.

LATEST VICTIM

Xinhua said the woman who died was surnamed Xu and came from Xiuning County in Anhui. The previous victim, a 24-year-old woman, came from Zongyang County in Anhui.

In Geneva, World Health Organisation spokesman Dick Thompson said the agency had been informed by the Chinese of the latest death earlier in the day.

"It seems to be at some distance from the other case in Anhui province, and unrelated to it," Thompson said.

"But there will have to be a full investigation into all the circumstances," he added.

Thompson said the latest death did not change the WHO's overall risk assessment on bird flu. "There are going to be sporadic cases as long as the disease is circulating in animals," he told Reuters.

Another confirmed case in China, a nine-year-old boy, survived infection while his dead sister is a suspected case.

China announced plans last week to vaccinate billions of birds to help curb the spread of the virus.

The FAO applauded the move.

"We are supporting them, but we require a number of guarantees concerning these operations," FAO Chief Veterinary Officer Joseph Domenech told delegates at the Rome-based body.

Domenech later told Reuters that the FAO wanted assurances about the quality of the vaccines -- all of which will be made in China -- and will monitor the vaccination programme.

BIRD FLU FEARS

Fears over bird flu are spreading around the globe.

Europe began testing its readiness for a pandemic in a two-day drill based on an imaginary emergency scenario.

"The exercise aims to test the ability of national and European decision-makers to coordinate their response to an influenza pandemic," European Commission health spokesman Philip Tod said.

Vietnam, where bird flu has killed 42 people, put chicken off the menu for foreign visitors and told tour operators to steer clear of any spots where bird flu outbreaks have occurred in poultry.

France, whose poultry industry has been hard hit by fears of bird flu, launched an advertising campaign on Wednesday to reassure consumers that cooked chicken is safe to eat.