The country had just a little more than 10,000 donors for the more than one million people who needed transplants every year, Deputy Health Minister Huang Jiefu said in a statement on the ministry's website (www.moh.gov.cn).
Huang said the 17 Japanese had come to China as tourists.
"China resolutely opposes organ transplant tourism," the statement said, adding an investigation into the case had already begun.
"Medical institutions and staff who carried out the organ transplants against the rules will be severely dealt with according to the law." The China Daily said China performs the second-largest number of organ transplant operations in the world, behind the United States, with some 5,000 operations each year.
Last year, China penalised three hospitals for illegally selling human organs to foreigners.
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