Their vehicle plunged into a deep ravine off the mountainous Karakoram Highway after the bomber rammed his car into them and detonated his explosives, police said.
Beijing has poured billions of dollars into Pakistan in recent years, but Chinese-funded projects have sparked resentment and their citizens have frequently come under attack.
Images shared with AFP show smoke rising from the valley, near Besham city in Khyber Pakhtunkhwa province.
"Five Chinese and their local driver were killed in the attack," Muhammad Ali Gandapur, a senior provincial police official, told AFP.
He said the vehicle was travelling between the Dasu hydroelectric dam site, under construction by the China Gezhouba Group Company, and the capital Islamabad.
Zahid Khan, a senior local police official, told AFP that "a suicide bomber crashed his vehicle into theirs".
"The vehicle caught fire and plunged down the ravine," he said.
In 2021, a bus carrying engineers to the same construction site was hit by a bomb, killing 13 people including nine Chinese workers.
Tuesday's attack comes days after security forces killed at least seven militants as they attempted to storm the offices of Gwadar Port in southwest Pakistan, considered a cornerstone of Chinese investment.
Militants also killed one soldier as they attempted to storm a major naval air base in the country's southwest, Pakistan's military said Tuesday.
"Strategic projects and sensitive sites vital for Pakistan's economic progress and the well-being of its people are being targeted as a conscious effort to retard our progress and slow discord between Pakistan and its strategic allies and partners, most notably China," the army said.
The Chinese embassy in Islamabad described the bombing as a "terrorist act" in a statement reported by Beijing's state media.
"The Chinese embassy and consulates in Pakistan strongly condemn this terrorist act, and express deep condolences for the victims of both countries and extend sincere sympathies to the families of the victims," the embassy said.
And Beijing's foreign ministry urged Pakistan "thoroughly investigate the incident as soon as possible, hunt down the perpetrators, and bring them to justice".
"We ask Pakistan to take effective measures to ensure the safety and security of Chinese nationals, projects, and institutions in Pakistan," a spokesperson said.
The United States also condemned the attack, with State Department spokesman Matthew Miller saying: "No country should suffer acts of terror."
- 'Plotted to disrupt' -
Beijing is Islamabad's closest regional ally, readily providing financial assistance to bail out its often struggling neighbour.
"China and Pakistan are all-weather strategic cooperative partners and iron-clad friends," Beijing's foreign ministry said.
"Any attempt to undermine China-Pakistan cooperation will never succeed," it added.
The China-Pakistan Economic Corridor (CPEC) has seen tens of billions of dollars funnelled into massive transport, energy and infrastructure projects -- part of Beijing's transnational "Belt and Road" scheme.
Prime Minister Shehbaz Sharif and as well as Pakistan's interior and foreign ministers arrived at China's embassy in Islamabad within hours of the bombing.
"Once again, the adversaries of the China-Pakistan Economic Corridor (CPEC) have plotted to disrupt it through such cowardly acts," Sharif said in a statement.
"However, they will never succeed in their malevolent ambitions."
Separatist groups say locals see little benefit from major Chinese projects, with most jobs going to outsiders.
The security of Chinese workers has long been of concern to both countries.
"The Chinese workers were already scared and feared that another attack was coming," said Azeem Khalid, a Chinese investment expert at COMSATS University Islamabad.
"With every such incident, the speed of the project will be slower."
In 2019, gunmen stormed a luxury hotel in Balochistan province overlooking the flagship Chinese-backed deep-water seaport in Gwadar that gives strategic access to the Arabian Sea -- killing at least eight people.
In June 2020, Baloch insurgents targeted the Pakistan Stock Exchange, which is partly owned by Chinese companies, in the commercial capital of Karachi.
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