The tremor in Yunnan province, near the border with Sichuan, was at a depth of 26 kilometres (16 miles) and hit early Saturday morning, USGS said.
It struck seven kilometres (four miles) from the town of Xiluodu in Yongshan County, which is home to the Xiluodu Dam - one of the tallest in the world.
The China Earthquake Networks Center put the depth of the quake at 13 kilometres with a magnitude of 5.3, according to state news agency Xinhua.
Residents ran out of their houses after they were woken up by the quake at 6.40 am (2240 GMT on Friday), Xinhua reported.
"We strongly felt the quake, but it did not last long," said a local resident.
Authorities are checking the losses caused by the tremor, a Yongshan publicity official told Xinhua.
Southwest China is prone to earthquakes, with a quake in the Yunnan tourist area of Shangri-La killing three people in September last year and leaving 55,000 homes damaged.
A magnitude 6.6 earthquake in Sichuan province killed about 200 people in April 2013, five years after almost 90,000 people were killed by a huge tremor in the same province.
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