Experts say the intensity, scope and duration of the heatwave could make it one of the worst recorded in global history.
Half of China's vast territory is now experiencing drought as the country goes through its hottest summer on record, with more high temperatures forecast for today.
A chart from the National Climate Centre showed on Wednesday that swathes of southern China, including the Tibetan Plateau, were experiencing "severe" to "extraordinary" drought conditions.
The world's second-largest economy has been hit by record heat, flash floods and droughts. Scientists say the extreme weather phenomena are becoming more frequent and intense due to climate change.
Southern China has recorded its longest continuous period of high temperatures since records began more than 60 years ago, the agriculture ministry said this week.
The worst-affected area is the Yangtze river basin, stretching from coastal Shanghai to Sichuan province in China's southwest. It is home to over 370 million people and contains several manufacturing hubs including the megacity of Chongqing.
The China Meteorological Administration predicted continued high temperatures of up to 40 degrees Celsius (104 degrees Fahrenheit) in Chongqing and the provinces of Sichuan, Jiangxi and Zhejiang on Thursday.
Record low water levels
China's State Council on Wednesday announced a $1.45 billion (10 billion yuan) subsidy to support rice farmers experiencing drought conditions which authorities have warned pose a "severe threat" to this year's autumn harvest.
China produces more than 95 percent of the rice, wheat and maize it consumes, but a reduced harvest could mean increased demand for imports in the world's most populous country -- putting further pressure on global supplies already strained by the conflict in Ukraine.
Officials also called for "a combination of measures to increase water sources to fight drought, first ensure drinking water for the people, ensure water for agricultural irrigation," the State Council added.
Wednesday's CCTV evening news broadcast showed trucks supplying villagers who lacked drinking and agricultural water in rural Sichuan and Chongqing, with remote mountain areas particularly hard hit.
Temperatures as high as 45C (113F) have led multiple Chinese provinces to impose industrial power cuts, as cities struggle to cope with a surge in demand for electricity partly driven by people cranking up the air conditioning.
Record low water levels on the Yangtze River have also put pressure on the region's hydropower generators.
The heat broke records in Sichuan, where a temperature of 43.9C (111F) was recorded Wednesday afternoon, the province's Meteorological Service Centre said in a statement.