"We found five bodies inside the ship... we're still continuing our search-and-rescue operation for the remaining seven," a Japanese coastguard official told AFP.
Thursday's collision occurred 400 kilometres (250 miles) north of the Oki Islands in the Sea of Japan, also known as the East Sea.
The Chinese vessel, the 290-ton "Lurong Yuanyu 378", had 16 crew members in total. Four have already been rescued.
The Hong Kong-flagged ship was identified as "Brightoil Lucky", a 63,294-ton tanker carrying 21 crew members.
The tanker's crew were believed to be safe.
Japan has deployed three patrol boats to search for the missing crew, after responding to a plea for help from their Chinese counterparts.
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