American Oriental Bioengineering, Inc. Implements Market-Driven Efficiencies at Formerly State-Owned HSPL.

NEW YORK -- AOBO Vice President and Director Min Jun Supervises Day-to-Day HSPL Operations

American Oriental Bioengineering Inc. (OTCBB:AOBO), a rapidly growing Chinese company which produces and distributes a broad range of pharmaceutical and nutriceutical products, today announced the successful integration of formerly state-owned Heilongjiang Songhuajiang Pharmaceutical (HSPL) into AOBO's market-driven operations and culture. AOBO appointed Min Jun, vice president and director of AOBO, as general manager of HSPL to oversee production, finance, technology, and sales and marketing of the acquired enterprise.

AOBO acquired 100 percent equity ownership of HSPL including all manufacturing assets, facilities, equipment, land and land use rights, raw materials, inventories, intellectual properties and technical talents on September 9, 2004. For more than 50 years HSPL has played an important role in the Chinese pharmaceutical industry. Its focus on R&D resulted in proprietary products such as Shuanghuanglian Lyophilized Powder Injection. The product is an important antiviral medicine and one of the most highly regarded herbal products certified by the Chinese Government for the treatment of SARS.

AOBO conducted a thorough review of HSPL's production facilities including personnel, equipment, and sales and marketing channels to develop and implement a plan to enhance the efficiency, overall productivity and profitability of the company. As a result, AOBO has:

--Repaired all machinery and equipment to ensure smooth operation of production facilities;

--Eliminated unnecessary expenditures to contain costs of operation;

--Updated the employment model to eliminate the outdated life-long employment agreements in preference of more flexible, market-driven employment;

--Provided intensive training in accordance with GMP manufacturing standard to the 231 retained staff members to update and develop the skills, knowledge and corporate culture required to effectively compete as a privatized entity;

--Implemented sales, marketing and promotions structures that highlight unique product attributes and stress competitive advantage in the marketplace.

"AOBO is already seeing the positive results of HSPL's newly streamlined operations," said Tony Liu, Chief Executive Officer of AOBO. "The first batch of products rolled off the improved production line in mid-October and have been extremely well received. And, we anticipate that ongoing effective management of HSPL combined with a focus on R&D will increase the depth and breadth of product offering to strengthen AOBO's position even further."

Liu continued, "The acquisition of HSPL strengthens AOBO's position in the industry and moves us closer to our goal of being a top five pharmaceutical company in China. Its R&D capabilities and existing products, facilities and staff should help raise our 2005 net profits by about 50 percent."

About American Oriental Bioengineering, Inc.

American Oriental Bioengineering, Inc. (OTCBB:AOBO) is a leading Chinese biotechnology company that uses proprietary processes for producing soybean protein peptide more efficiently than traditional extracting techniques. These techniques are used to manufacture and formulate supplemental and medicinal products. Soybean peptides are used widely in general food, health food products and medicines, among other applications. AOBO also produces Cease-Enuresis Soft Gel, the only Chinese FDA-approved first grade, prescription medicine that is specially formulated to help alleviate bed-wetting and incontinence. The Company is a leading producer of products in both the nutriceuticals and pharmaceuticals areas in China. For more information, visit http://www.bioaobo.com.

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks defined in this document and in statements filed from time to time with the Securities and Exchange Commission. All readers are encouraged to review the 8-K to be filed in connection with the acquisition discussed above, which outlines risk factors including debt obligations, deal terms and other relevant items. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the companies, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the companies disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.