The gynaecologist from Fuping County Maternal and Child Health Care Hospital surnamed Zhang, allegedly sold a newborn to a man and woman from neighbouring Shanxi Province for 21,600 yuan (USD 3,494) last month.
Police found that Zhang lied to the mother of the baby born on July 16 saying that her child had a congenital infectious disease and disability.
The gynaecologist then tricked the mother into letting her handle the baby, state-run Xinhua news agency reported.
The mother, surnamed Dong, believed her baby had been abducted and reported the incident to police on July 20.
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Police are still searching for the second buyers and the baby.
By today afternoon, another four families in Fuping had reported experiences similar to Dong's to local police.
Further investigation should be launched to determine whether the other families' newborn babies were trafficked and if their cases are related to the latest child trafficking case, the report said.
Local media in Shaanxi reported that seven local families have had similar experiences.