Broadcaster CCTV quoted authorities in the city of Yinchuan as saying that the bus suddenly caught fire at around 07:00 local time (23:00 GMT Monday), trapping some people inside.
Officials are looking for a man in connection with the fire.
Amateur footage posted online showed the bus engulfed in flames.
Authorities have named the man, Ma Yongping, and released his picture and personal identification number, saying he was a "major suspect" in the case.
Yinchuan authorities said that of the 32 injured, eight were severely hurt while the rest had light to moderate injuries. All have been sent to a hospital for treatment.
Along with several accidents there have been cases of deliberately set fires in recent years, as was the case in June 2013 when 48 people died on a Xiamen bus. Authorities said then that a suicidal man had started the fire.
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