The fire started after midnight in a three-storey building in Yingde, a town within Qingyuan City in Guangdong province, and was put out shortly before 1:00 am local time, according to the police.
A preliminary investigation found that it was caused by arson, the Qingyuan public security department said on its Weibo social media account.
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 he was on the lam.
Police said the suspect was captured in a village district, shortly after authorities offered a 200,000 yuan ($32,000) reward for information leading to the arrest of a man identified as a 32-year-old with burn marks on his hips.
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.
Unverified videos from the scene posted by local media show flames leaping from the building on a tree-lined street at night, with fire trucks and a crowd of onlookers on the road.
The five injured people are receiving treatment in a hospital, state TV said.
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.
Deadly fires are common in China, where safety regulations are widely flouted and enforcement is often lax.
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.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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