The blast occurred on Saturday at an explosives packing workshop owned by 761 Explosive in Zhaoyuan city, in the coastal province of Shandong, the official Xinhua News Agency said, citing a local official.
The report said 31 people were in the workshop when the blast occurred.
Rescuers were searching on Sunday for nine workers still missing, it said. The two injured were taken to hospital in a stable condition, it said.
An investigation into the cause is under way, it said.
Explosives are widely available in China for mining and construction.