The disaster at the Splendid Star shop was made worse by the lack of any proper fire-fighting equipment in Manus province in the impoverished Pacific nation's north, where the blaze started early Friday.
The dead included six women and four men.
Manus provincial police commander Chief Inspector David Yapu said the fire in Lorengau town quickly engulfed the building, trapping the 10 inside.
"The fire spread out quickly to the other parts of the supermarket and into the bedrooms where the 10 were sleeping," Yapu told The National newspaper.
The cause of the fire is not known.
Chinese foreign ministry spokesman Lu Kang said in Beijing that the supermarket was run by Chinese nationals and said 10 were missing.
"There was a fire in a supermarket run by Chinese nationals in Papua New Guinea. Ten Chinese employees are missing," said Lu. "So far we have found four bodies at the scene."
The PNG Post Courier newspaper said the remains were burned beyond recognition and DNA samples were being taken to the capital Port Moresby to identify them.
According to The National, Manus does not have a fire truck or any firemen and although police were quickly at the scene, they were helpless.
"This is an outstanding issue that appropriate government agencies must address," Yapu said.
"We need a fire service in our province. We have to protect our families and our homes from fires too.
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