The climbers from Britain and Australia were close to Nangpa La, a mountain pass near Mount Everest when the Chinese guards fired at a group of people as they prepared to cross into Nepal.
"We felt a bit shocked and upset because we came to climb the mountain and here we are watching people being shot," said Steve Lawes, a British climber who was at the advance base camp on Cho-Oyu, the world's sixth highest mountain.
The area is about 20km west of Mount Everest.
Lawes, who returned to Nepal's capital Kathmandu at the weekend, said that the guards took aim at a group of about 20 or 30 people in dark clothing.
"I heard two single shots, I assume those were the warning shots," he said. "There were two more shots quite widely spaced - bang, bang.
"I saw one person fall. A little later that person got up and went another 15 metres and maybe there was one or two [more] shots. I think the same person fell."
An Australian climber who declined to be named said: "I looked through the telescope. I saw two objects - the first one looked like it was a backpack and the second one was definitely a body."
The body was lying at the glacier for almost 28 hours before the Chinese soldiers took it away, Lawes said.
"I was disgusted that the body was left there for so long".
Tibetan refugee groups, as well as the London-based international campaign for Tibet, said a young nun was killed in the incident, and a young boy may also have died.
Lawes said soon after the shooting at least 10 Tibetan children walked through the climbers' base camp escorted by three soldiers.
There has been no official Chinese comment about the incident.
Hundreds of Tibetans cross the Himalayas into Nepal every year.
Nepal is home to more than 20,000 Tibetan refugees but recent arrivals are not allowed to stay there and must continue on to neighbouring India.
Many make their way to Dharmasala, a town in northern India where their exiled leader, the Dalai Lama, has been living since 1959 after a failed uprising against Chinese rule.