The blast occurred after gas filled the tunnel, which was being bored in the province of Guizhou, leaving 12 injured and 12 trapped, according to the official Xinhua news agency.
Over 2,000 rescue workers searched the tunnel for survivors before ending the operation at 4:45 am Wednesday morning, it said.
The cause of the accident is under investigation, the report said, adding that the tunnel was designed to pass through a coal seam.
The country has been on a high-speed rail building spree for over a decade, putting up over 17,000 kilometres (10,500 miles) of track at a rapid clip, raising concerns about corner-cutting.
Industrial accidents are common in China, where safety regulations are often poorly enforced.
In 2015, the country recorded 66,000 workplace deaths, according to the most recent government statistics.
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