A three-year-old boy has survived a fall from a sixth-floor balcony in southwest China after neighbours caught him with a large blanket, according to state media.

Video of Monday's incident shows the boy clinging onto a slab and trying to climb back up onto the balcony, while his feet kept slipping.

Moments later, he lets go and falls onto a large, white blanket held open by onlookers.

"I looked up and saw a child was dangling up there. My first reaction was to find something to catch him," said Zhu Yanhui, an employee of a local property management company, who had rushed to the scene.

"I thought about rushing over there and catch him with my bare hands, but that would not have worked," Zhu told state broadcaster CCTV.

CCTV said the child had no injuries.

"I held out the blanket along with others all the while keeping my eyes on the child. I looked at the blanket wondering whether we could catch him safely. My only thought was to keep him safe," Zhu said. 

The incident happened while the boy was home alone, while his grandmother was out buying groceries, police said.

It's unclear how he managed to open the glass railing on the balcony.