Police have revealed that the factories were filled with pregnant women, all of whom were given food and a place to sleep.
“Thirty-seven newborn babies were found and none of them were healthy"
After they gave birth, they were paid up to £10,000 for their newborn baby - with boys being worth more money than girls.
However, despite the high costs involved, the babies were not well cared for.
They were often transported in large handbags and suitcases to prospective buyers.
And the infants were reportedly fed inappropriate food, including instant noodles, as they waited to be sold off.
At least seven of the rescued newborn babies was found to have a sexually-transmitted disease or AIDS, which was presumably passed on by the mothers.
A police spokesman said: “Thirty-seven newborn babies were found and none of them were healthy, with at least seven having a sexually-transmitted disease or AIDS.
“The conditions in the factory were unhygienic and totally unsuitable for unsupervised childbirth and the babies were taken from the mothers as soon as they were born.
“We also found evidence that they were being fed takeaway noodles and leftovers.
“The mothers arrived here en masse where they gave birth and then left with a pile of money.”
Over 100 gang members, believed to be running the illegal baby factory in Beijing, were arrested.
They face a long jail sentence, or even execution, if found guilty.