The blaze took place after midnight in a three-storey building in Qingyuan City, Guangdong province, and was put out shortly before 1:00 am local time, according to the police.
A preliminary investigation found that the fire was caused by arson, the Qingyuan public security department said on its Weibo social media account.
"The public security authorities are stepping up their investigation," the authorities in Qingyuan said.
The suspect got into an argument, then used a motorcycle to block the building's door and lit the fire, state broadcaster CCTV said, adding that the suspect was on the lam.
The police statement did not describe the location of the fire but state media said it occurred in a small KTV house, or karaoke lounge.
A video from the scene posted by state-run daily Global Times on Twitter shows flames leaping from a building on a tree-lined street at night, as a crowd looked on and at least one rescue vehicle flashed its lights.
Singing karaoke is a popular activity in China, with even shopping centres featuring booths where people can sit and sing their favourite songs.
Larger KTV lounges proliferate as well, often spanning across multiple floors in a building, with narrow corridors linking dozens of individual rooms together.
The lounge where the fire occurred was smaller, with only one corridor for entry and exit, state TV said.
Merrymakers often go for a buffet dinner and sing and drink with a small group of friends in the private rooms late into the night.
Deadly fires are common in China, where safety regulations are widely flouted and enforcement is often lax.
Five of the injured are receiving treatment in a hospital, state TV said.
Common fires
A blaze that killed 38 people at a nursing home in 2015 sparked soul-searching about safety standards in China. Courts jailed 21 people, including firefighters and government staff, over the fire last year.
The legal representative of the Kangleyuan Nursing Home was sentenced to nine years in prison for constructing an illegal extension to the property, while the contractor was given a six-year sentence for using flammable materials to build an extension.
In the days following the accident, China's top safety watchdog said the facility had poorly-designed fire exits, while safety checks, fire and electricity management, and the emergency response system were all found lacking.
More than two dozen people were killed in two fires in Beijing's migrant neighbourhoods late last year.
The first blaze, which killed 19 people in November, prompted authorities to begin tearing down unsafe buildings in the capital, driving hundreds of thousands of down on their luck residents out in the middle of winter.
Eyewitness? Submit your stories now via social or:
Email: eyewitness@pulse.ng
![The woman was recorded, among others, while bathing [BI]](data:image/svg+xml;charset=utf8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20width%3D'300'%20height%3D'172'%20data-ring-placeholder%3D'1'%3E%3C%2Fsvg%3E "The woman was recorded, among others, while bathing [BI]")
