The China Southwest Airlines flight went down at 4:20 p.m. local time near its destination of Wenzhou, a city about 800 miles southeast of Beijing, Xinhua said.
The Russian-made Tupolev-154 was carrying 50 passengers and 11 crew, the agency said. The plane is about the same size and weight as the Boeing 727.
One villager was injured in the crash, possibly by debris, and taken to a hospital, said a local farmer, who refused to give his name in a telephone interview. He said the plane came down in a field.
"I heard it. There was a whirring sound and then an explosion. The sound was extremely loud," according to the farmer, who said he was a few hundred yards from the crash site. "There was fire. It was very big."
Chinese air carriers are especially busy at this time of year as millions of people travel home to celebrate the Lunar New Year, the nation's biggest holiday, which this year started Feb. 16.
China's last major air disaster was in May 1997, when a Boeing 737 crash-landed at an airport in the southern city of Shenzhen, killing 35 people.
In June 1994, a TU-154 slammed into a field in northern China, killing all 160 people aboard in the country's worst air disaster.
An official newspaper said Wednesday that China plans to spend $1.2 billion on upgrading its air traffic control systems to reduce accidents and risks.