The 98-meter freighter sent out a distress call as the ship began to founder in strong winds off the mouth of the Yangtze River.
The freighter was loaded with a cargo of water-absorbing mineral sands, and the crew of 15 was taken off shortly before the ship foundered in darkness.
The Ministry of Transport's Donghai Rescue Bureau and the Shanghai Maritime Safety Administration dispatched four rescue vessels as soon as the call was received, according to a statement from the administration.
The freighter, owned by a transportation company in Nanjing, Jiangsu Province, had been carrying 4,725 tons of mineral sands from Nantong, Jiangsu Province, to Longkou, Shandong Province.
Ships carrying mineral sands are more likely to be involved in accidents because the sand has a tendency to absorb water, increasing its weight, according to a press officer with the Shanghai Maritime Safety Administration, and the indident is to be investigated.