A security guard closes the gate as workers walk in a battery factory nearby Kanghua New Village, Thursday, Sept. 15, 2011 in Shanghai, China.SHANGHAI (AP) — Shanghai's environmental watchdog ordered two factories in its suburbs to halt production pending an investigation into the source of lead poisoning among children in a nearby village.

The Shanghai Environmental Protection Bureau said in a notice on its website Friday that it was studying lead emissions from the two factories, one of which is a large lead-acid battery plant run by U.S.-based Johnson Controls.

The Pudong district government, where the cases were found, issued a statement saying it believed the Johnson Controls factory was the main source of lead emissions in the area.

Milwaukee, Wisconsin-based Johnson Controls said it was taking residents' concerns about lead exposure very seriously and cooperating with the authorities, but that it had no reason to believe its battery factory was causing contamination.

The company earlier confirmed it had suspended production after hitting its annual lead use quota.

Staff at the other company, Shanghai Xinmingyuan Automobile Accessory Co., confirmed it had stopped its lead-related production, which the environment bureau said was unauthorized.

"We did not know that we cannot produce products with lead without a license," said Li Zhiliang, a manager at the factory, which according to trade websites makes wheel balance weights and plastic auto accessories for Shanghai Volkswagen.

Li said his plant did not produce any lead emissions.

"Actually our products have won awards for environmental protection," Li said.

Families living in Kanghua New Village, a small block of apartment buildings erected 15 years ago to house farm families moved to make way for the city's Kangqiao Industrial Zone, say recent checks showed many of their children had abnormally high blood lead levels.

The source of the lead contamination has not been confirmed. But the village is located just north of the zone and close to chemical, battery and electronics equipment factories.

Johnson Controls says its battery plant was named a "national model enterprise for occupational health and safety" in 2006. The factory has lead emissions at about one-seventh the Chinese national standard and employees are regularly tested to ensure their blood lead levels remain low enough, the company said in an emailed statement.

Earlier this week, the company announced it was expanding in China, planning a new $100 million plant to make start-stop batteries for vehicles. Such batteries cut fuel use and emissions by automatically shutting off a standard gas-powered engine when it idles and restarting it when the driver engages the clutch or releases the brake.

The company said it was considering several locations for the new factory.

Soaring use of cars and electric scooters is driving strong demand for lead acid batteries, and their production and recycling are a key source of lead contamination.

China has begun cracking down on emissions of lead and other heavy metals following scores of poisoning cases. But reports of clusters of cases in big cities like Shanghai are uncommon.

Lead poisoning can damage the nervous, muscular and reproductive systems, and children are particularly at risk.


AP researcher Fu Ting contributed to this report.