SOURCE: Yasheng Group

March 22, 2007 08:00 ET

YaSheng Set to Expand Agricultural-Biotech R&D Spending Along With China Trends

REDWOOD CITY, CA -- (MARKET WIRE) -- March 22, 2007 -- The YaSheng Group (PINKSHEETS: YHGG) over the past 10 years has & will continue to Expand Agricultural-Biotech R&D spending along with China's National Trends. YaSheng has led the way in North West China in R&D through their Educational Institutes and high tech R&D Growing Centers. As the company implements its international expansion plans the past and future investments into R&D will continue to fuel that growth.

An article in the The Financial Times London, published March 16, 2007 by Salamander Davoudiin, best reflects YaSheng Past and Future plans in R&D in their agriculture sector.

"Chinese set to quadruple Agro-Biotech spending"

The Chinese government is expected to more than quadruple its spending on biotechnology by 2010 as part of its strategy to improve national food security.

"Spending on biotechnology is expected to increase fivefold," said Zhang Liang Chen, president of the Agricultural University of China.

Jikun Huang, director of the Centre for Chinese Agricultural Policy in Beijing, said spending on agricultural biotechnology was due to at least double, although the budget for the next five years had yet to be finalized.

"There will be a very substantial increase in investment in biotechnology, especially agricultural biotechnology," he said.

China already accounts for 20 per cent of the global research and development investment in agricultural biotechnology.

According to Mr. Huang, the Chinese government spent $200m on agro-biotech in 2003, an amount that has since doubled.

China's population currently stands at 1.3bn, or about 20 per cent of the world's total. By 2020 it is expected to have climbed to 1.5bn. Yet the country lays claim to only 7 per cent of the world's total arable land.

YaSheng Group has invested over $3.5 million into R&D for their agro industry alone in the past 5 years. Some examples have been positive results in their production of Hops, Potato, Corn, Cotton and Alfalfa, which have opened up new long term contracts with companies such as KFC, Qingdao & Yanjing National Breweries, and other major companies because the improvements increased production and quality. YaSheng Group has also been able to benefit from draught and insect resistant strains, as well as high tech drip irrigation systems to save water.

YaSheng expects to invest over $5 million in research and development into the Agricultural Biotech segment alone over the next 5 years to continue this trend. "Establishing the ability to produce foods that meet many international standards and domestic demands remains a key focus of the company," says Chairman Zhou Cheng Sheng. "With the demands of Natural Organics on the rise and the conflicts revolving around genetically modified foods and the need to feed a large population we must be diverse in our growing methods for long term stability."

The company has many projects that will come on line over the next two years resulting from the past investments and successful pilot projects in the agro sector. "Our concept is to keep a regular cycle of new innovative products on line as old business cycles retire. These modernized products will replace the outdated ones, therefore continue the growth and viability of the company long term," adds the Chairman. "This will be best reflected in the second half of our 5 & 10 year expansion plan." The company continues to restructure from traditional business lines and focus on profitable products as part of the preparation for Strategic International Restructuring and the Global Expansion Plan.

About YaSheng Group:

The YaSheng Group (PINKSHEETS: YHGG) is a diversified industrial conglomerate incorporated in Redwood City, California, and operates in hi-tech agriculture, salt chemistry and biological technology as its core business with advantages in rich land, mineral resources, capital and technology reserves.

Through three major industries, Agriculture, Chemical, and Biotechnology, the company's operating categories include: chemical engineering, agricultural production, biotech, pharmaceuticals, textile products, printing and dyeing, commercial trading, beverages and inorganic salt manufacturing. With total assets of approximately $1.5 billion USD and over 15,000 employees, YaSheng Group has 155,097,355 shares issued and outstanding as of December 1, 2004.

Further information concerning YaSheng Group can be found on the corporate website:

Forward-Looking Statements:

Certain statements contained in this press release are forward-looking statements that involve risks and uncertainties. The statements contained herein that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended.

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