Survivors were taken to 16 hospitals with 640 people being treated for injuries. Thirty-two of them were critically injured, it said.
The fire at a plant owned by the Tianjiayi Chemical Company spread to neighbouring factories. Children at a kindergarten in the vicinity were also injured in the blast, media reported.
The cause of the explosion was under investigation, but the company - which produces more than 30 organic chemical compounds, some of which are highly flammable - has been cited and fined for work safety violations in the past, the China Daily said.
President Xi Jinping, who is in Italy on a state visit, ordered all-out efforts to care for the injured and to "earnestly maintain social stability", state television said.
Authorities must step up action to prevent such incidents from happening and find out the cause of the blast as quickly as possible, Xi added.
"There have recently been a series of major accidents, and all places and relevant departments must fully learn the lessons from these," the report cited Xi as saying.
The Jiangsu environmental protection bureau said in a late Thursday statement the environmental monitoring station in the area had found no abnormal concentrations of toluene, xylene or benzene.
Concentrations of acetone and chloroform outside the perimeter of the explosion zone were also within normal limits, it added.
Jiangsu will launch inspections on chemical producers and warehouses, according to an emergency notice published by official media on Friday.
The notice, published on the news website of Jiangsu province's Communist Party, said the government would shut down any chemical firms found not complying with regulations on dangerous chemicals.
Public anger over safety standards has grown in China over industrial accidents ranging from mining disasters to factory fires that have marred three decades of swift economic growth.