SOURCE: First China Pharmaceutical Group, Inc.

First China Pharmaceutical Group, Inc.

December 13, 2010 09:00 ET

First China Pharma Views New Chinese Foreign Healthcare Investment Policies as Huge Opportunity

HONG KONG--(Marketwire - December 13, 2010) - First China Pharmaceutical Group, Inc. (OTCBB: FCPG) ("First China" or the "Company"), a rapidly growing pharmaceutical distribution company headquartered in Yunnan, China, was extremely pleased by recent reports from the official Xinhua news agency regarding announcements from the Chinese Central Government declaring new policies to encourage private funds, including overseas capital, to be channeled into the medical sector to meet the country's increasingly diversified demands on health care.

The new policies, regarded as a "guideline to encourage and lead social capital to sponsor health care institutions," clearly stipulated that social capital should enjoy preferential treatment when China adjusted or increased medical resources and social funds would be encouraged to participate in government restructuring of hospitals.

As a result, overseas investment is now welcomed to sponsor hospitals, while the procedures would be further simplified, including a requirement for local governments to amend their documents accordingly and abandon policies that impede the development of non-government medical institutions.

The new policies also encourage social funds to be invested in government hospital reforms and convert some government-backed hospitals into non-government institutions to reduce the ratio of public hospitals, said an official with the medical and health care system reform office under the State Council.

China will deepen the opening-up of medical institutions and turn the overseas-invested medical sector from the "limited [toward foreign investment]" category into a category that allows foreign investment, the official said. China plans to cancel limits on caps of shares for foreign investors in the jointly invested medical organizations, and solely foreign invested medical units would first be piloted and then gradually expanded, the official said.

To achieve this, China would simplify the approval processes in opening hospitals. The policies were part of China's new round of medical reforms launched last year. "After five to 10 years, China can settle its problems in health care and provide sufficient health care services to the public," said Liu Guo'en, a professor with the Guanghua Management College under the Beijing University. Liu called the new policies "unprecedented" in boosting private and overseas funding to sponsor health care organizations.

Company Chairman and CEO Mr. Wang states, "This news is truly extraordinary and comes at a key phase of First China's growth. The initiative is designed by government mandate to dramatically increase the number and quality of healthcare providers in China. With this growth will come increased demands for medical and drug distribution services that achieve recognized modern standards. This fits our business model exactly and with this single announcement we feel certain it will spur our infrastructural growth well beyond our initial estimations for at least the next decade. Needless to say, we are very pleased and applaud the vision and determination of the Central Government in this decision."

Details of the company's business, finances, appointments and agreements can be found as part of the Company's continuous public disclosure as a reporting issuer under the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission's ("SEC") EDGAR database.

About First China Pharmaceutical Group, Inc. (OTCBB: FCPG)
First China Pharmaceutical Group, Inc. aims to develop a high growth pharmaceutical distribution company generating significant revenue from the sale of healthcare products in China. As part of its business strategy, the Company has acquired the assets of Kun Ming Xin Yuan Tang Pharmacies Co. Ltd. (XYT), which includes a strategic advantage over its competitors as it is believed to be one of a limited number of pharmaceutical distribution companies in Yunnan Province that has obtained government approval to fulfill orders over the internet. First China Pharmaceutical Group plans to continue the rapid growth of the company from its current position as a provider of approximately 5,000 drugs to more than 4,700 pharmacies, hospitals and clinics in China's Yunnan Province. For more information visit: www.firstchinapharma.com

Notice Regarding Forward-Looking Statements
This news release contains "forward-looking statements" as that term is defined in Section 27A of the United States Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, regulatory incentives, the development of new business opportunities, and projected costs, revenue, profits and results operations. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with new projects and development stage companies. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K for the most recent fiscal year, our quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission.

ON BEHALF OF THE BOARD
First China Pharmaceutical Group, Inc.
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Zhen Jiang Wang
Chairman and CEO

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