The quake hit Yunnan Province bordering Myanmar, leaving 30 people injured, state-run Xinhua news agency said.
The report said the quake left a trail of destruction, damaging over 3200 houses, 700 of which were collapsed.
The quake hit Eryuan County, Dali Bai Autonomous Prefecture at 1:41 pm. The epicentre was in Xishan Township with a depth of 9-km.
About 55,000 people in Eryuan were affected by the quake, said the Yunnan Provincial Civil Affairs Department.
A number of Chinese provinces, specially in the south western region have been experiencing moderate quakes in the recent weeks with tremors striking every week one part or the other sparking fears among the local people.
The China Earthquake Administration and the Yunnan Provincial government have initiated a grade-III emergency response.
Some 34 aftershocks have been recorded after the quake.