Video footage shows people running away from the Binjiang square in Hengdong city of Hunan Province and emergency vehicles parked at the scene.
The incident took place at 7.40 pm local time and the suspect arrested is a 54-year-old Chinese man named Yang Zanyun.
According to Beijing Youth Daily the suspect has served several prison sentences earlier for assault, arson and other related crimes.
A tweet from People’s Daily publication reveals 46 people have been injured after a Red SUV crashed into pedestrians intentionally.
The newspaper added police is investigating the crash and initial report does not point towards an act of terrorism. Motive of the driver is yet to be known.
Hengyang city government office too confirmed 46 people were injured.
In recent years China has experienced such violent public places attacks and sometimes those have been by people trying to settle personal scores.
However, occasionally the attacks are an act of terror too by militant separatists.
An SUV plowed in 2013 through a crowd in front of Forbidden City of Beijing. It crashed and caught fire. Three occupants and two others were killed.
Muslim separatists from the Ulghur ethnic minority group were blamed for the attack.