Human Rights Watch said the refugees in Yunnan province are at risk of being returned to a combat zone, and it urged the Chinese government to give them temporary protection and permit the United Nations and humanitarian agencies free access to them.
The Kachin minority in northern Myanmar has been fighting government forces since last June, when the authorities sought to shut down a Kachin militia base near a hydropower dam construction project. The hostilities ended a 17-year cease-fire and displaced about 75,000 people.
"Many Kachin refugees have already endured terrible abuses and war in Burma, only to settle into a life of dire struggle in Yunnan," said Sophie Richardson, China director at Human Rights Watch, in its report.
"Until it is safe for the Kachin to return home, the Chinese government has a responsibility to ensure their safety and well-being," she said. Burma is Myanmar's former name.
Shortages of food and potable water and inadequate shelter, sanitation and medical care are the main problems, says Human Rights Watch.
"We live in a group, side by side, so sicknesses spread quickly," a Kachin farmer told Human Rights Watch researchers. "If one child gets sick, every child gets sick, and we don't have any medicines.
The report also says most refugee children in Yunnan have no access to schools and the adults, desperate for paying work, are forced to be day laborers and are at risk of exploitatios.
The refugees currently depend on limited support provided by local aid organizations, churches and a few small international organizations in southwestern China, according to Human Rights Watch. All of them are short of funding and resources.
"What we need urgently now are medicines and drinking water," Zhang Shengqi, a Chinese journalist and aid volunteer who blogs about the refugees, told The Associated Press in a telephone interview from Bangkok.
He said the Chinese government has been reluctant to send aid to the refugees because it didn't want to disturb its friendly relations with Myanmar's military, which still wields much power despite giving way to an elected, nominally civilian government last year.
Human Rights Watch says that while China has generally let Kachin refugees stay, it ordered about 300 people to return to Myanmar.
"The forced returns put the refugees at grave risk and created a pervasive fear of forced return among the Kachin refugees who remain in Yunnan," the group says.
Human Rights Watch says international agreements obligate China not to force back refugees threatened because of their ethnicity, religion or political beliefs, even if China is not a party to those agreements.
When China was accused of closing its border to refugees when fighting began last year, it insisted it had adhered to international standards.
A Kachin health official who crosses the border frequently to provide medical care to refugees said he did not think China had been barring or pushing back refugees recently.
"The Chinese government used to insist on returning our refugees, but recently no such orders are being carried out," Hing Wawm, the deputy chief of Kachin State's Health Department, said by phone. "The soldiers usually tighten border controls when conditions become very unstable."
China's foreign ministry said it was looking into the new report. Government offices in Yunnan province and the city of Ruili, which abuts the Myanmar border, did not respond to telephoned and faxed requests for comment.
Associated Press researcher Zhao Liang in Beijing contributed to this report.