The fossilised remains date to 38 000 to 42 000 years ago, making it the oldest modern human skeleton from eastern Eurasia, and one of the oldest modern humans from the region, the authors of the paper said.
The specimen is basically a modern human, but with a few archaic characteristics in the teeth and hand bone.
The discovery casts further doubt on the longstanding "Out of Africa" theory which holds that when modern Homo sapiens spread eastwards from sub-Saharan Africa to Eurasia about 65 000 to 25 000 years ago, they simply replaced the native late archaic humans, said anthropologist Erik Trinkaus.
"The evidence has been steadily growing for some time with respect to western Eurasia to show that these modern humans interbred with local archaic humans as they spread," said Trinkaus.
"We haven't had good fossil data from eastern Eurasia to indicate whether the same thing was happening there. But this fossil, which is the first from China to be securely dated to this time period, proves that this interbreeding went on there too."
The fossils were recovered from the Tianyuan Cave, Zhoukoudian, near Beijing, China in 2003.
Researchers say it should yield further clues about the transition from archaic to modern humans in eastern Eurasia.
"The discovery promises to provide relevant palaeontological data for our understanding of the emergence of modern humans in eastern Asia," added Trinkaus, a professor of anthropology at Washington University in St Louis, Missouri.
The study appears in the Proceedings of the National Academy of Sciences and was co-authored by Trinkaus and Hong Shang, a colleague in the same department at Washington University and a scholar at the Institute of Vertebrate Palaeontology and Palaeoanthropology at the Chinese Academy of Sciences.