China-Biotics, Inc. Continues to Broaden Bulk Additives Client Base

SHANGHAI, China, Aug. 21 /Xinhua-PRNewswire-FirstCall/ -- China-Biotics, Inc. (OTC Bulletin Board: CHBT) (“China-Biotics,” “the Company”), a leading Chinese firm specializing in the manufacture, research, development, marketing and distribution of probiotics products, today announced it signed a one-year contract with Henan Square Pharmaceutical Co., Ltd. (“Square Pharmaceutical”) to supply probiotics for Square Pharmaceutical’s probiotics-based medicines. The agreement runs through July 2009.

Square Pharmaceutical is a GMP-certified pharmaceutical company based in Henan Province. It has a portfolio of more than 60 medicines and supplements, one of which is Chang Wei Ning Capsule, a probiotics-based medicine used to improve stomach and intestinal health.

“Square Pharmaceutical marks our fifth bulk additives customer, all of which have signed contracts before we begin production at our new manufacturing facility,” said Mr. Jinan Song, China-Biotics’ Chairman and Chief Executive Officer. “We have accelerated the pace of new customer acquisition for our additive business in preparation for launching our new plant. Currently, we are in negotiations with another 50 potential commercial customers, of which 30 have begun sample testing for their newly developed probiotics-based products. We expect our new 150-metric-ton probiotics facility to come online in the fourth quarter of 2008. We look forward to increasing the number of business customers in order to occupy the capacity of our new plant when it is up and running.”

China-Biotics aims to become one of the largest probiotics suppliers in the world once the new plant starts production. During the past fiscal quarter, sales of bulk additives to commercial customers totaled $1 million, or 8.8% of sales, contributing meaningful sales for the first time.

About Henan Square Pharmaceutical Co., Ltd.

Based in Henan Province, China, Square Pharmaceutical is engaged in the development, manufacturing and distribution of pharmaceuticals and supplements. At its GMP-certified production facility, it manufactures more than 60 products.

About China-Biotics, Inc.

China-Biotics, Inc. (“China-Biotics,” “the Company”), a leading manufacturer of biotechnology products and supplements, engages in the research, development, marketing and distribution of probiotics dietary supplements. Through its wholly owned subsidiary, Shanghai Shining Biotechnology Co., Ltd., the Company has operations in Shanghai. Its proprietary product portfolio contains live microbial nutritional supplements under the “Shining” brand. Currently, the products are sold OTC through large distributors to pharmacies and supermarkets in Shanghai, Jiangsu, and Zhejiang. China-Biotics plans to launch 300 Shining brand retail outlets in major cities in China. Currently, China-Biotics is strategically expanding its production capacity of probiotics to meet growing demand in the bulk additive market. For more information, please visit http://www.chn-biotics.com .

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, but are not limited to, the Company’s ability to market existing and new products, ability to access to capital for expansion, and changes from anticipated levels of sales, future national or regional economic and competitive conditions, changes in relationships with customers, dependence on its flagship product profits and other factors detailed from time to time in the Company’s filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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