More than 300 children from Shaanxi province developed chronic lead poisoning after living just a few hundred metres from a large smelter.
An environmental assessment concluded that residents from Fengxiang county should not live within one kilometre of the Changqing industrial park, state media reported. However, 425 households have lived within 300 metres since the factory opened in 2006. The authorities have not issued any health alerts.
Parents from two affected villages estimated that at least 300 out of the 864 children there were made ill because of exposure to lead. An earlier report by Xinhua said that out of 239 children under 12 years who were examined, 138 showed an unusually high level of lead in their blood.
The lead and zinc smelting plants produce 200,000 tonnes of lead-zinc each year.
Many children were three times over the safe level, meaning they could suffer lifelong illness.
Last week, furious villagers besieged the industrial park and forced the smelter to shut for two days.
Many parents said their children's growth had been stunted, and that they had trouble concentrating at school and slept badly at night because of the air.
