Wang Gui, who was 45 and had had a stroke, set the inpatient section of the home in Hailun, Heilongjiang province, on fire after another resident allegedly stole 200 yuan ($33) from him, the Xinhua news agency said, quoting the local police.
Wang and 10 other people, the oldest aged 87, died and two others were injured, the report said.
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The nursing home housed 283 mostly senior citizens, Xinhua said. It was built in 2005 and has 450 beds for people in the northeastern area who have no source of income.
Wang was sent there as he had nobody to take care of him after his stroke, it added.
Social tensions have been mounting in China in recent years against a backdrop of a widening income gap and abuses of public power, with disputes even over trifling issues sometimes triggering serious incidents.
