Local authorities said a 69-year-old man died on Wednesday in Wuhan, the central Chinese city believed to be the epicentre of an outbreak of a coronavirus from the same family as the deadly SARS pathogen.
No human-to-human transmission has been confirmed so far, but Wuhan's health commission has said the possibility "cannot be excluded".
The enigmatic illness has caused alarm because of its connection to SARS (Severe Acute Respiratory Syndrome), which killed nearly 650 people across mainland China and Hong Kong in 2002-2003.
Pneumonia linked to the new virus has hit at least 41 people in China, with the outbreak centred around a seafood market in Wuhan.
Of these 12 have recovered and been discharged from hospital, according to the Wuhan health commission, while five others are in a serious condition.
The second man to die became sick on December 31 and his condition worsened two weeks ago, it said, with the disease causing pulmonary tuberculosis and damage to multiple organ functions.
Three other cases have been detected – two in Thailand and one in Japan – with health managers in both countries saying the patients had visited Wuhan prior to their hospitalisation.
Thailand reported its second case of the coronavirus on Friday: a 74-year-old Chinese woman who had arrived from Wuhan earlier this week.
Her condition is improving, said Thai health officials, who urged people not to panic as there was "no spread of the virus" in the Southeast Asian country.
The World Health Organization (WHO) said Thursday that "much remains to be understood about the new coronavirus".
Not enough was known to "draw definitive conclusions about how it is transmitted," a statement added.
The latest fatality comes as China prepares for its busiest travel season of the year next week, when millions of people take buses, trains and planes for Lunar New Year.
Wuhan is a main hub in China's vast railway network and connects train lines that crisscross the country's north-south and east-west axes, from Beijing to Guangzhou, Nanjing to Chengdu.
A WHO doctor has said it would not be surprising if there was "some limited human-to-human transmission, especially among families who have close contact with one another".
China has not announced any travel restrictions but authorities in Hong Kong have stepped up detection measures, including rigorous temperature checkpoints for inbound travellers.
The Wuhan health commission said one man who had been diagnosed worked at Huanan Seafood Wholesale Market, but his wife, who also had the virus, reported "no history of exposure" at the facility.
The first case in Thailand had not reported visiting the seafood market, the WHO said Tuesday. The woman was reported to be in a stable condition earlier this week.
The patient in Japan, who was released from hospital, had also not visited the market. Japanese officials said it was possible that the man had been in contact with a person infected with the virus while in Wuhan.
The US Centers for Disease Control and Prevention has issued a Level 1 "Watch" alert for travellers to Wuhan, saying they should practise normal precautions and avoid contact with animals and sick people.
After the second death was reported, online discussion spread in China over the severity of the Wuhan coronavirus -- and how much information the government is hiding from the public.
Several complained about censorship of online posts, while others made comparisons to 2003, when Beijing drew criticism from the WHO for under-reporting the number of SARS cases.
"Scarier than panic is treating something too lightly," wrote a Chinese web-user on Weibo, the country's Twitter-like social media platform.
"It's so strange," wrote another, citing the overseas cases in Japan and Thailand. "They all have Wuhan pneumonia cases but (in China) we don't have any infections outside of Wuhan -- is that scientific?" – Rappler.com