Two senior officials have been suspended in Jinning county, Kunming, after a month-long probe into the mysterious disappearance of many young people.
More than a dozen residents of the rural backwater have vanished, alarming the public and prompting the central government to send investigators.
Many rumours about the reason for the mysterious disappearances - ranging from murder to cannibalism - have circulated online.
Da Qiming, chief of the county's public security bureau, and Zhao Huiyun, deputy secretary of Jincheng township, were suspended yesterday for failing to take action to solve the 'vicious' crime, Xinhua reported.
State media have not revealed the exact number of victims and have said little about a suspect, Zhang Yongming , who was arrested earlier this month.
Reports have said only that many people are missing and that a team of criminal investigation experts from Beijing has been on the scene for weeks. The Ministry of Public Security sent a senior officer to Jinning on Monday to lead the probe.
Local police have been under fire for nearly a month, with some relatives of those missing complaining that reports submitted as long as five years ago had failed to spur the local government into action.
The case was looked into only when reports about missing people were reported by the media and spread on internet.
The earliest report, by the Kunming-based Chuncheng Evening News three weeks ago, put the number of possible victims at eight and said they were aged from 12 to 19 and were all males.
But the Shanghai-based Dongfang Daily reported on Monday that the number of people missing had reached 17.
Internet users have speculated that the final count could range between 20 and 50, with some rumours saying that victims were dissected and eaten. No such reports have been confirmed.
The provincial public security department said police found the remains of the latest victim, a 19-year-old first-year university student, in Zhang's house two weeks ago.
The 56-year-old farmer was found in possession of the victim's mobile phone, credit card and driver's licence, it said.
Police did not reveal whether they had found the victim's whole body, only saying that his death was confirmed using samples retrieved from the suspect's property.
Zhang's neighbours told newspapers that he had been jailed for life in the late 1970s for murder but was released after serving 20 years. Villagers said he made a living by growing vegetables, barely said hello to fellow villagers and spent most of his free time with his dogs.
Some neighbours expressed doubts that Zhang, a small man, could kill and move so many young victims by himself.
The Dongfang Daily said some of the victims were reportedly last seen at a busy crossroads two kilometres from Zhang's home. Police have not explained how he could have transported the victims from the busy road to his home in the centre of town.
Zhang's home is less than 300 metres from a county high school and only two minutes' walk from a bustling provincial highway.
It is not known whether Zhang is linked to all the disappearances, but rumours have circulated on the internet that police unearthed more than 50 pairs of shoes at his house.
Some microblog postings have claimed that Zhang has confessed to more than 20 murders.