The 32 crew members of the Iranian oil tanker which caught fire following the collision are missing.
Chinese authorities have dispatched eight ships for the search and rescue operation, while South Korea have sent a plane and coastguard ship to help.
The Panama-registered tanker Sanchi was sailing from Iran to South Korea when it collided with the Hong Kong-registered freighter CF Crystal in the East China Sea, 257 kilometers (160 miles) off the coast of Shanghai, China's Ministry of Transport said. The 225-meter-long second vessel CF CRYSTAL, carrying 64,000 tonnes of grain, was partly damaged in the collision.
By comparison, the Exxon Valdez was carrying 1.26 million barrels of crude oil when it spilled 260,000 barrels into Prince William Sound off Alaska in 1989.
"Sanchi is floating and burning as of now", the ministry said.
There were 30 Iranians and two Bangladeshis on the tanker, but all were missing as of Sunday, Chinese authorities said. The size of the oil slick caused by the accident also was not known.
The Chinese and South Korean Coast Guard's are responding.
State media CCTV showed pictures of the tanker ablaze and billowing plumes of thick dark smoke.
It was due to arrive at Daesan in South Korea from Kharg Island in Iran on Sunday, according to Reuters ship tracking.
The tanker, managed by the National Iranian Tanker Company, was insured by internationally credited insurers, according to Iran's oil ministry.
Hanwha Total was not immediately available for comment. All 21 members of the Chinese freighter's crew, all of which who are Chinese nationals, have been rescued.
The incident marked the first major maritime incident involving an Iranian tanker since the lifting of global sanctions on Iran in January 2016.
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