Liquid milk sold by three leading companies in the country was found to be contaminated with melamine, the same chemical found in baby formula which killed four infants and caused various urinary tract problems among 6,244 infants, China Daily reported.
In tests of liquid milk in recent days, 24 of the 1,202 batches were contaminated, the newspaper said, quoting the country's inspection agency.
The agency, however, said the level of contamination was not enough to pose a major threat to people's health.
The report said the tainted liquid milk was traced to the top Yili and Mengniu brands and Shanghai-based Bright Dairy. All three were ordered to recall all contaminated products.
Chinese authorities canceled all national inspection exemptions previously given to food producers.
Melamine, used in plastics but is banned from the food industry, is a chemical that makes milk appear rich in protein, the reports said.
In the tainted baby formula scandal, the death of the fourth baby was reported Thursday in northwestern Xinjiang region. The other three babies died of kidney failure in Gansu and Zhejiang provinces.
Of those sickened, about 1,300 of them remained hospitalized.
Dairy giant Sanlu in Hebei province in north China was the first company to be exposed by the scandal. Since then melamine had been found in 69 batches of baby milk powder produced by 22 other companies.