Children from Dongtang town in Renhua country were found to have "elevated" levels of lead in their blood after inhaling lead-contaminated air and eating food tainted with lead, Xinhua said.
Th e natural level of lead in Dongtang is also higher than usual as the town sits on a lead-zinc ore belt which raises the lead content in the soil, Xinhua said.
The report did not name the factories responsible for the lead emissions and was based on preliminary investigations that tested the blood samples of 531 residents last month.
Lead poisoning is prevalent in China and has sparked protests in the past among angry parents of children hurt by heavy metal pollution. Lead is especially damaging to children as it can impede learning and affect behaviours.
To counter widespread public anger, Beijing has promised to crack down on lead pollution. An industry body said last May China could shut three quarters of lead-acid battery plants in the next two or three years to cut local lead demand.
China is the world's largest consumer of refined lead, with 70 percent used for making batteries.
Lead poisoning builds up through regular exposure to small amounts of lead and damages the nervous and reproductive systems, kidneys, as well as causing high blood pressure and anaemia.
In 2009, protesters broke into one smelting plant they blamed for the lead poisoning of more than 600 children, smashing trucks and tearing down fences before the police stopped them.
(Reporting by Koh Gui Qing; Editing by Sanjeev Miglani)
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