Police last week shut down a factory which for eight months produced cigarette lighters in a primary school attended by more than 140 children in the city of Langfang, Hebei province, the official media reported.
According to the Legal Daily, the Bazhou City Shuangfa Lighter Factory rented part of the primary school at the village of Xiaojiabao in Langfang to make lighters after signing a contract with the village committee in August.
Under the contract, the students continued to use the southern part of the school for their studies.
The report said putting the factory in the school seriously endangered the safety of students and teachers. Chinese law prohibits the use of school properties for commercial profits.
After the villagers reported the violation to police, a search of the factory uncovered more than 20,000 lighter parts, petrol and oxygen cylinders.
The report said the factory owner had been held for questioning but did not say if the village committee would also be interviewed.