The blast occurred at an industrial park, the city government of Yancheng in Jiangsu province said. A statement on its official social media account said the explosion originated at the Tianjiayi Chemical production facility and its cause was under investigation.
Nearly 400 personnel and 86 fire trucks were dispatched to the scene, the statement said.
A video posted on state broadcaster CCTV's website shows huge plumes of smoke spewing from a factory building and spreading over the area. Windows and garage doors appear to shatter at the moment of the blast.
A man staying at a hotel 5 to 6 kilometers (about 3 miles) from the explosion said by phone that glass in buildings along the entire street shattered, and at least four people in his hotel were wounded.
The man, who asked to be identified only by his surname, Ding, said a student at a nearby elementary school was also hurt.
As of 5 p.m. Thursday, 31 people had been rescued, CCTV reported.