The explosion of the truck carrying Nitramine, a highly volatile chemical used for detonators in explosives, occurred Monday afternoon in Mili county in Yunnan province, the official Xinhua news agency reported.
A report in the Yunnan newspaper posted on the popular Sina.com website carried a photo showing a row of two-story buildings with walls blown out and roofs torn away.
"It looks just like scenes of the aftermath of an atom bomb that I've seen on television," local resident Deng Shuquan was quoted by the newspaper as saying.
The homes of some 17 families were completely destroyed, the newspaper said. According to a preliminary investigation, truck driver Li Hongwen parked the cargo truck near his home on Monday instead of delivering the Nitramine to a chemical warehouse as he was supposed to, the newspaper said.
Li and his wife have since gone missing and may have fled, it said.