The body, measuring 1.62 metres, features perfectly preserved skin and hair remnants of the man believed to be in his 40s when he died.
It was found at a construction site on a less frequented section of the ancient Silk Road on the edge of China's Qinghai-Tibet plateau in Mang'ai town, Xinhua reported.
The face looks calm and hands are crossed above the abdomen. It is being cared for by Haixi Prefectural Museum of Ethnology.
Archaeologists will use DNA tests to find out the man's ethnicity and identity, said Xin Feng.
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The mummy was found amid dried reeds, dyed cloth mats, a horse's hoof, and sheep bones -- thought to be funeral objects for the upper class of the time.
Mummies are usually formed in very dry environments which prevent bodies from decay.
The area where the body was found is on the northern edge of the plateau close to Taklamakan Desert.
Mummified bodies have been found along the ancient Silk Road inside China as it crosses a wide stretch of arid land in present-day's Xinjiang Uygur Autonomous Region.
Some were Caucasian, a testimony to the ancient Silk Road's heyday as a global trade route.