Al Jazeera's Beijing correspondent, Melissa Chan, says the number of casualties is expected to increase.
She added that the country's rail minister, Liu Zhijun, had been despatched from Beijing to the collision site in an indication of the severity of the incident.
A cargo worker at a nearby station was quoted by Reuters news agency as suggesting that the location of the trains, about 40 km from Zibo, indicated they were likely running at full speed at the time of the accident.
He said trains were already backing up near his station due to the collision.
China has one of the biggest and busiest rail networks in the world, carrying about one billion passengers a year, but has a relatively good safety record.
In one of the worst rail accidents in recent times, 126 people were killed and more than 200 injured when two trains collided in central China's Hunan province in 1997.
In January of this year a high-speed train ploughed into a group of rail workers conducting track repairs in eastern China, killing 18 people.
China has invested about $100bn in recent years to expand the capacity of its rail network, but analysts say the system has struggled to keep pace with the demands of the country's rapidly growing economy.