Most of the victims were female workers who were assembling fuses for firecrackers, the official Xinhua News Agency said.
It said the blast took place on Friday and reduced the factory in the city of Cenxi in the Guangxi autonomous region into rubble. It shook nearby buildings and blew out windows.
The cause was not immediately clear, Xinhua said.
A man reached at the Guangxi Work Safety Bureau said that two factory executives were detained. He gave no other details.
The man only gave his last name as Chen, which is common among China's bureaucrats when speaking to the press.
Cenxi is about 2,000 kilometers (1,200 miles) southwest of Beijing.
Workplace safety is a major problem in China where enforcement of laws is lax with factories themselves usually left to decide whether to follow them.