China suffered its worst industrial accident in a year on Saturday when an explosion killed at least 69 people and injured more than 120 at a factory that makes wheels for U.S. carmakers, including General Motors.

The blast in the wealthy eastern province of Jiangsu occurred around 7:30 a.m. local time in Kunshan city, about an hour's drive from Shanghai, after an explosion ripped through a workshop that polishes wheel hubs.

A preliminary investigation suggested the blast at Kunshan Zhongrong Metal Products Co Ltd. was triggered when a flame was lit in a dust-filled room, the local government said at a news conference, describing the incident as a serious safety breach.

State news agency Xinhua said two company representatives had been taken into police custody and that the death toll had risen to 69 by late Saturday.

Xinhua quoted Chinese President Xi Jinping as demanding a full inquiry into the blast and saying those found responsible must be punished.

I've never seen so many patients with burns on over 80 per cent of their bodies. - Local doctor

Survivors with charred skin were seen being wheeled into ambulances as residents recalled hearing the explosion from two kilometres away. At the site of the blast, television images showed wrecked walls and heavy machinery that had been hurled through windows.

"We heard a really loud blast at about 7 a.m. this morning so we rushed out of our dormitories," said Zhou Xu, a 26-year-old working at a plant across the site.

"First the ambulance came, then as the news surfaced in the media, many families - especially the wives - rushed to the site to see if their husbands were okay."

A security guard from an adjacent factory, who declined to be named, said the impact from the explosion was so great that it shattered the windows of his guard house, located about 500 metres away from the site of the blast.

80 per cent burns

Images online and on state television showed large plumes of black smoke billowing from a white low-rise building. Many of the injured, who appeared badly burnt in scorched clothing, were shown lying on wooden pallets, waiting to be stretchered on to trucks, public buses and ambulances.

Four emergency blood-donation centres were set up in the city to assist casualties, some of whom will be taken to Shanghai and other nearby cities for treatment later on Saturday, state television said.

"In my 20 years of work, I've never seen so many patients with burns on over 80 per cent of their bodies," a senior unnamed doctor was quoted as saying on the Weibo microblog account of China's CCTV.Urged by President Xi to spare no efforts in the rescue works, Kunshan's government said it was bringing in doctors from Shanghai and other regions.

The Kunshan government said 264 workers were at the site when the explosion struck and 44 died immediately. (The Associated Press)

The doctor said the final death toll could be "very high."

China, the world's second-largest economy, has a poor record on workplace safety. Workers are often poorly trained or ill-equipped to protect themselves from industrial accidents.

By early afternoon, the police had cordoned off the ageing factory and blocked media access to the local hospital.

Authorities had also cleaned up the factory's exterior. A crowd of bystanders and a row of fire-trucks parked in the compound were the only outward signs of the calamity that had occurred hours earlier.

Kunshan Zhongrong could not be reached for a comment. Its website said the firm is wholly owned by an unidentified foreign investor, employs 450 workers and counts General Motors and other U.S. companies as clients.

The Kunshan government said 264 workers were at the site when the explosion struck and 44 died immediately. Xinhua cited officials as saying that the number of injured totalled 187.

"Of course, the foreign owner of the company will shoulder the responsibility," said Duan Shenyi, a user of China's microblog Weibo said on Saturday. "But because we lack a workers' union, we do not have enough supervision of companies."

A fire at a poultry slaughterhouse in the northeast province of Jilin in June 2013 killed 120 people. The blaze was blamed on poor management, a lack of government oversight and locked or blocked exits.