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Four houses collapsed and 10 others were damaged on Saturday night in Lufeng County in the eastern part of Guangdong Province.
Some houses sunk several meters below ground in the incident, which affected at least 50 people from 10 families, who all escaped unscathed.
The direct economic losses came to more than one million yuan (US$120,000).
Lufeng County government has set up a task force to help deal with the consequences of the collapse, and provide temporary accommodation in government dormitories.
Over-pumping of ground water was thought to be the major cause of the collapse, which is the subject of a police investigation.
The accident took place in the county's Chikeng Township at about two am. One resident, who had just arrived home, found that his house was gradually sinking and collapsing.
He told his relatives and neighbors to leave their houses immediately, without even stopping to gather some personal belongings.
Most of the three-storey buildings, which were on a river bank, were constructed in 1991.
Local people used to live on the second and third floors, while the ground floor was used for shops and garages.
Pumping of the ground water began in 1995 when a local fisherman, whose family name is Yu, contracted a section of the local river for fishing.
But local residents' concerns over the impact of the pumping were disregarded by the local township government.
Yu has disappeared following the collapse.
(China Daily January 28, 2003)
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