The fire broke out shortly after midnight in the city of Taizhou in Zhejiang province and left two people hospitalised in serious condition while 10 others received minor injuries.
The nature of the blast is not clear, but an official at the police station in Fengxian county said that the explosion was under investigation.
The school bus, carrying children between the ages of four and seven, burst into flames after it crashed in a tunnel in eastern China.
Police have released new images and video of the suspect and say they are close to identifying him.
The third typhoon to strike Taiwan this month has killed at least four people and injured hundreds of others.
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