The China Earthquake Networks Centre monitored the epicentre of the quake, which occurred at 9:15 am, at a depth of seven kilometres.
Shallow earthquakes cause more damage despite moderate intensity.
Local authorities have said casualties are likely as the rescue teams rushed to the area.
The epicentre is located in Kata Town, the site of two major Buddhist temples, Soren, director of the Regional Seismological Bureau, was quoted as saying by state-run Xinhua news agency.
Samba, chief of Kata Town, said he is aware of casualties in Guodong Village, some 10 kms from the township seat.
Township authorities have sent machinery for emergency repairs and to assist quake relief.
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