HONG KONG, (AFP) - Hong Kong officials were making frantic efforts to track down anyone that had contact with a Mexican who has tested positive for swine flu, as residents remained cautiously calm.

The city was placed on its highest health alert after the 25-year-old man tested positive for the A(H1N1) virus on Friday, the first confirmed case of swine flu in Asia.

As some pharmacies sold out of protective masks, more than 300 guests and staff at a hotel where the Mexican stayed were to be quarantined for seven days.

Officials were Saturday trying to reach anyone who may have come into contact with the infected man during his journey from Mexico, via Shanghai, as they tried to halt the spread of the virus.

"This is a critical moment," Hong Kong Health Secretary York Chow told legislators.

In particular, officials were trying to trace around 10 passengers who sat near the Mexican on China Eastern Airlines flight MU 505 from Shanghai and the two taxi drivers who drove him after he arrived in Hong Kong.

"If (the taxi drivers) don't appear and if they have already got infected, the consequence will be unimaginable," Chow said, adding they were liaising with police and taxi drivers' associations.

But he also said many of the measures were precautionary and residents should not panic.

"At this stage, there is no sign of a potential outbreak in our community," he said.

The Mexican man was admitted to hospital in Hong Kong on Thursday night suffering from a fever and tested positive on Friday for the flu virus. He was in a stable condition, authorities have said.

Two travelling companions and a Hong Kong friend were also been placed in quarantine, although Chow said they had shown no flu symptoms.

Chow said that six people who sat close to the Mexican had already left Hong Kong, while 19 were being held in isolation as a precaution.

China said Saturday it was to put all passengers on the man's flight from Mexico to Shanghai under quarantine, after suspending all flights from the Latin American country on Friday.

Although on high alert and with the memory of the deadly 2003 SARS outbreak still fresh, the Hong Kong government has not cancelled any public events or exhibitions.

SARS killed close to 300 people in Hong Kong and residents have been quick to step up hygiene measures since swine flu began to spread around the globe in the past week.

Protective face masks have become much more common on public transport and in restaurants. Sales of disinfectants have also spiked, while offices have been warned to step up cleaning measures.

But while cautious, the city's residents did not stay indoors.

The Central bar district was still busy on Friday night and the annual Cheung Chau Bun Festival, which marks the end of an 18th Century plague on one of the city's outlying islands, was still bustling with visitors Saturday.

Before the confirmed case, Hong Kong had previously announced a series of tough measures, including introducing the power to detain anyone showing symptoms of the virus after arriving from an infected area.

But the decision to close the Metropark Hotel, which even Chow called "draconian", has drawn criticism.

"It is stupid to lock up the hotel, as most people in the hotel did not contact (the infected man) at all," infectious diseases expect Lo Wing-lok told the South China Morning Post.

"I believe this is going to be an international joke... overseas, healthy tourists are going to be locked up in Hong Kong for seven days."

The government said Saturday that 12 of the hotel guests had refused to remain at the hotel and had been moved to a rural holiday camp which has been specially designated as an isolation zone.

In South Korea, authorities Saturday confirmed the second case in Asia, while Denmark and France have joined the list of countries who have detected the virus.

Mexico's government has confirmed 16 people have died from swine flu, with 381 infected.