Reports from the scene near the border with Myanmar indicate the magnitude-5.4 quake toppled houses and some people are still buried beneath debris.
The first pictures from the area, provided by Chinese television, clearly show panic in the streets.
China Central Television said the quake hit while many people, including students, were home for a customary midday rest.
Soldiers from the Chinese Army were on their way to help with rescue efforts.
The epicenter was in Shiming Village, just over a mile from the county seat, but triggered a power outage across Yingjiang, which has a population of about 300,000 people, the official Xinhua News Agency said.
The mountainous area lies 1,500 miles southwest of Beijing, close to the border with Myanmar, and is home to many ethnic groups on both sides of the border, which sees heavy traffic in people and goods.
Myanmar officials have acknowledged the quake, but have not commented on injuries or damage.
The website of the Chinese government earthquake monitoring station said the quake measured at a magnitude of 5.8 at a depth of 6 miles, but the U.S. Geological Survey measured the quake at a magnitude of 5.4 and at a deeper 21 miles.
The Associated Press contributed to this report.