The world's second-largest economy has been pouring money into the sleepy Southeast Asian nation, a fellow Communist state, over the last several years and became its largest investor in 2014.
Beijing's official news agency Xinhua identified one of the victims as an employee of a Chinese mining company operating in the mountainous centre of the country.
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The blast, which it repeatedly described as an "attack", occurred in Xaysomboun province, it said.
Unexploded ordnance is an enduring problem in Laos. During the Vietnam War, US warplanes dropped more than two million tonnes of munitions in some 580,000 bombing missions aimed at cutting North Vietnamese supply lines through the country.
An estimated 30 per cent of the devices failed to detonate and 50,000 people have been killed by the explosives since the end of the war.
China's foreign ministry confirmed the deaths, describing the incident as a "violent attack" but not giving details of the method or the suspected motive.
"We advise Chinese citizen to increase security precautions," foreign ministry spokeswoman Hua Chunying told a regular briefing.
The Chinese embassy in Vientiane said in a statement that two of its staff had visited the injured survivor, a civilian surnamed Zhou, in hospital.
A special envoy of Chinese president Xi Jinping is scheduled to go to Laos this week, Xinhua reported separately, following a visit by US Secretary of State John Kerry. He met the Lao prime minister on Monday as the US courts its former wartime foe.
President Barack Obama is due to travel to the rural landlocked nation later this year for a summit of Southeast Asian countries, marking the first visit by a US president.
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