An early investigation said the accident was caused by explosives illegally stored at a home in Hengshan County in Shaanxi Province, Xinhua said.
The explosives were owned by a man who moved the materials to his brother's house after officials shut down his illegal factory, the report said.
Xinhua said that police were pursuing the suspect.
Officials in Hengshan County could not be immediately reached on Monday night.
China has ordered strengthened measures to prevent explosions following several deadly blasts. Homemade bombs exploded by a man bearing a grudge against family members and neighbors leveled several buildings in the northern city of Shijiazhuang in March, killing 108 people.
That same month, an explosion leveled a schoolhouse in the southern province of Jiangxi, killing 42 teachers and students.
The government blamed the school explosion on a deranged bomber. Parents said the students had been forced to make fireworks by school administrators.
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