The 49-year-old was shot dead yesterday just four days after an offensive led by a former rebel commander to purge the eastern city of Islamist militia left 79 people dead.
"Unidentified gunmen forced two other Chinese construction workers to show them the office of the site foreman and then went in and shot him several times," a security source said.
"The other two Chinese staff were later released," the source said, adding that he had no word on the identity or motive of the killers.
There has been a string of attacks on foreigners in Libya, particularly in the east.
Benghazi was the cradle of the 2011 uprising that toppled long-time dictator Muammer Gaddafi.
But it has also seen near-daily attacks on security and other targets in recent months as the weak Tripoli government struggles to rein in former rebel brigades turned militias.