The explosion occurred at around 7:05 PM local time at Yuhang District in Hangzhou, capital of Zhejiang Province.
No casualties have been reported so far, state-run Xinhua news agency reported.
The blaze engulfed an area of about 2,000 square metres.
As of 7:50 PM, firefighters and 29 fire engines had been dispatched to douse the flames.
The blazes have been put under control, local government said, adding that further investigations were underway.