The Ministry of Public Safety said 92 children and two adult women were freed in the investigation, which began in March in Henan Province in central China.
The ministry said in a written statement 301 people had been arrested since Sept. 11.
The alleged kidnapping ring operated in Yunnan and Sichuan provinces. Victims were abducted and then sent off to other areas of the country.
The BBC said child trafficking has become a chronic problem in China, in part because the country's one-child policy has led to a thriving black market for adoptions.
Victims are also sold to buyers who use them for household labor, prostitution or as brides for unmarried males.
China's official Xinhua News Agency said the Ministry of Public Security was working with the Supreme People's Court and other agencies to draft legislation to stiffen penalties for human trafficking.
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