Witnesses said a number of bearded men came to the house in three jeeps and barged into the place where the Chinese also had set up a small factory to manufacture three-wheel auto-rickshaws.
"All the attackers were bearded and they fled without looting anything," Peshawar police chief Abdul Majeed Marwat said. He did not say what could be the motive for the attack on the Chinese, who had lived in the area for three years.
The wounded Chinese man said in hospital unknown men entered the house and sprayed bullets at them. "My son and two nephews were killed, everything is finished," he said. "We do not what was their motive."
A senior security official in Islamabad said the attack appeared to in revenge for the ongoing efforts by security forces to drive out militants holed up in the Lal Masjid in the capital.
"It appears to be an act of terrorism committed by those unhappy about the government action against the Lal Masjid following the abduction of Chinese women last month," the official said.