10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10−Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2013

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission File Number: 001-34566

CHINA BIOLOGIC PRODUCTS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	75-2308816
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

18th Floor, Jialong International Building

19 Chaoyang Park Road

Chaoyang District, Beijing 100125

People’s Republic of China

(Address of principal executive offices, Zip Code)

(+86) 10-6598-3111

(Registrant’s telephone number, including area code)

_____________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨	Accelerated filer  x
Non-accelerated filer  ¨ (Do not check if a smaller reporting company)	Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨ No x

The number of shares outstanding of each of the issuer’s classes of common stock, as of August 6, 2013 is as follows:

Class of Securities	Shares Outstanding
Common Stock, $0.0001 par value	26,952,945

 

Quarterly Report on Form 10-Q
Three and Six Months Ended June 30, 2013

TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION
Item 1.Financial Statements	1
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.Controls and Procedures	26
PART II
OTHER INFORMATION
Item 1.Legal Proceedings	26
Item 1A.Risk Factors	27
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.Defaults Upon Senior Securities	27
Item 4.Mine Safety Disclosures	28
Item 5.Other Information	28
Item 6.Exhibits	28

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Contents	Page
Unaudited Condensed Consolidated Balance Sheets	1
Unaudited Condensed Consolidated Statements of Comprehensive Income	2
Unaudited Condensed Consolidated Statements of Cash Flows	3
Notes to the Unaudited Condensed Consolidated Financial Statements	5

CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	Note	June 30, 2013		December 31, 2012
		USD		USD
ASSETS
Current Assets
Cash and cash equivalents			147,264,448		129,609,317
Accounts receivable, net of allowance for doubtful accounts	2		17,821,673		11,206,244
Inventories	3		80,907,813		75,679,173
Prepayments and other current assets			5,503,155		5,664,919
Total Current Assets			251,497,089		222,159,653
Property, plant and equipment, net	4		62,337,422		51,325,177
Intangible assets, net	5		3,104,210		3,541,582
Land use rights, net			6,373,176		5,818,709
Deposits related to land use rights	6		16,669,167		14,752,574
Restricted cash	7		2,786,502		2,912,145
Equity method investment			10,937,307		10,537,310
Total Assets			353,704,873		311,047,150
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Short-term bank loans	8		4,860,000		7,935,000
Accounts payable			3,018,095		2,908,624
Due to related parties	14		4,055,925		4,081,624
Other payables and accrued expenses			25,895,823		25,423,349
Advance from customers			2,381,166		2,857,420
Income tax payable			3,333,141		4,513,075
Total Current Liabilities			43,544,150		47,719,092
Deferred income	7		2,972,700		2,912,145
Other liabilities			3,410,801		2,996,749
Total Liabilities			49,927,651		53,627,986
Stockholders’ Equity
Common stock: par value $0.0001; 100,000,000 shares authorized; 26,952,945 and 26,629,615 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively			2,695		2,663
Additional paid-in capital			67,303,915		62,251,731
Retained earnings			150,220,786		119,143,000
Accumulated other comprehensive income			18,826,850		14,072,322
Total equity attributable to China Biologic Products, Inc.			236,354,246		195,469,716
Noncontrolling interest			67,422,976		61,949,448
Total Stockholders’ Equity			303,777,222		257,419,164
Commitments and contingencies	13		-		-
Total Liabilities and Stockholders’ Equity			353,704,873		311,047,150

See accompanying notes to Unaudited Condensed Consolidated Financial Statements.

1

CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

		For the three months ended						For the six months ended
	Note	June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012
		USD			USD			USD			USD
Sales	12		53,580,523			50,466,339			107,612,255			97,693,800
Cost of sales			16,122,262			16,130,889			32,739,020			31,846,616
Gross profit			37,458,261			34,335,450			74,873,235			65,847,184
Operating expenses
Selling expenses			2,441,727			4,165,242			4,278,120			8,991,349
General and administrative expenses			8,866,071			7,932,372			17,553,168			15,078,166
Research and development expenses			835,150			929,489			1,748,242			1,640,077
Income from operations			25,315,313			21,308,347			51,293,705			40,137,592
Other income/ (expenses)
Equity in income of an equity method investee			610,997			451,891			739,945			1,474,303
Change in fair value of derivative liabilities			-			559,758			-			1,769,140
Interest expense			(198,739	)		(157,635	)		(434,913	)		(766,198	)
Interest income			995,757			765,717			1,643,819			1,309,112
Other expenses, net			-			(1,797	)		-			(102,786	)
Total other income, net			1,408,015			1,617,934			1,948,851			3,683,571
Earnings before income tax expense			26,723,328			22,926,281			53,242,556			43,821,163
Income tax expense	9		3,745,649			3,333,616			8,352,551			6,510,331
Net income			22,977,679			19,592,665			44,890,005			37,310,832
Less: Net income attributable to noncontrolling interest			6,815,753			6,753,894			13,812,219			11,514,755
Net income attributable to China Biologic Products, Inc.			16,161,926			12,838,771			31,077,786			25,796,077
Net income per share of common stock:	15
Basic			0.60			0.50			1.15			1.00
Diluted			0.57			0.46			1.11			0.90
Weighted average shares used in computation:	15
Basic			26,880,459			25,875,164			26,833,262			25,738,145
Diluted			28,067,303			26,627,160			27,967,080			26,581,824
Net income			22,977,679			19,592,665			44,890,005			37,310,832
Other comprehensive income:
Foreign currency translation adjustment, net of nil income taxes			4,428,715			136,178			5,825,256			1,313,135
Comprehensive income			27,406,394			19,728,843			50,715,261			38,623,967
Less: Comprehensive income attributable to noncontrolling interest			7,723,790			6,750,933			14,882,947			11,766,768
Comprehensive income attributable to China Biologic Products, Inc.			19,682,604			12,977,910			35,832,314			26,857,199

See accompanying notes to Unaudited Condensed Consolidated Financial Statements.

2

CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES

UNAUDITED CONDESENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the six months ended
	June 30, 2013			June 30, 2012
	USD			USD
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		44,890,005			37,310,832
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		3,105,739			2,281,223
Amortization		702,556			1,525,267
(Gain)/ loss on sale of property, plant and equipment		(70,363	)		60,518
Allowance for doubtful accounts, net		-			21,895
Provision for doubtful accounts - other receivables and prepayments		6,202			35,637
Write-down of obsolete inventories		-			49,703
Deferred tax expense		720,679			26,341
Share-based compensation		3,047,962			1,992,958
Change in fair value of derivative liabilities		-			(1,769,140	)
Equity in income of an equity method investee		(739,945	)		(1,474,303	)
Change in operating assets and liabilities:
Accounts receivable		(6,314,643	)		(4,692,006	)
Prepayment and other current assets		(101,135	)		(292,473	)
Inventories		(3,616,165	)		2,045,191
Accounts payable		242,365			(1,546,373	)
Other payables and accrued expenses		(2,033,594	)		(2,977,473	)
Advance from customers		(529,984	)		401,393
Due to related parties		(140,697	)		1,255,867
Income tax payable		(1,260,254	)		(2,185,825	)
Net cash provided by operating activities		37,908,728			32,069,232
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for property, plant and equipment		(11,912,603	)		(5,098,533	)
Payment for intangible assets and land use right		(1,137,556	)		(796,707	)
Dividend received		560,980			555,310
Purchase of short-term investment		-			(1,348,610	)
Proceeds from sale of property, plant and equipment		83,731			-
Net cash used in investing activities		(12,405,448	)		(6,688,540	)

See accompanying notes to Unaudited Condensed Consolidated Financial Statements.

3

CHINA BIOLOGIC PRODUCTS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

	For the six months ended
	June 30, 2013			June 30, 2012
	USD			USD
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock option exercised		2,668,916			-
Proceeds from warrants exercised		-			4,500,000
Proceeds from short term bank loans		4,808,400			-
Repayment of short term bank loans		(8,014,000	)		(11,106,200	)
Acquisition of noncontrolling interest		(1,963,913	)		-
Dividend paid by subsidiaries to noncontrolling interest shareholders		(8,110,168	)		(4,379,016	)
Net cash used in financing activities		(10,610,765	)		(10,985,216	)
EFFECTS OF FOREIGN EXCHANGE RATE CHANGE ON CASH		2,762,616			679,914
NET INCREASE IN CASH		17,655,131			15,075,390
Cash and cash equivalents at beginning of period		129,609,317			89,411,835
Cash and cash equivalents at end of period		147,264,448			104,487,225
Supplemental cash flow information
Cash paid for income taxes		8,892,126			8,669,815
Cash paid for interest expense		198,900			204,982
Noncash investing and financing activities:
Acquisition of property, plant and equipment included in payables		1,554,828			347,439
Exercise of warrants that were liability classified		-			3,641,279

See accompanying notes to Unaudited Condensed Consolidated Financial Statements.

4

CHINA BIOLOGIC PRODUCTS INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2013 AND 2012

NOTE 1 – BASIS OF PRESENTATION, SIGNIFICANT CONCENTRATION AND RISKS

(a) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted by rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The December 31, 2012 consolidated balance sheet was derived from the audited consolidated financial statements of China Biologic Products, Inc. (the “Company”). The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the December 31, 2012 audited consolidated financial statements of the Company included in the Company’s annual report on Form 10-K for the year ended December 31, 2012.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the financial position as of June 30, 2013, the results of operations for the three and six months ended June 30, 2013 and 2012, and cash flows for the six months ended June 30, 2013 and 2012, have been made. All significant intercompany transactions and balances are eliminated on consolidation.

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment and intangibles with definite lives, the allowance for doubtful accounts, the fair value determinations of equity instruments and stock compensation awards, the realizability of deferred tax assets and inventories, intangible asset, land use right and property, plant and equipment, and accruals for income tax uncertainties and other contingencies. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions.

(b) Significant Concentration and Risks

The Company’s operations are carried out in the People’s Republic of China (the “PRC”) and are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other matters.

The Company maintains cash balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits for its bank accounts located in the United States or may exceed Hong Kong Deposit Protection Board insured limits for its bank accounts located in Hong Kong. Cash balances maintained at financial institutions or state-owned banks in the PRC are not covered by insurance. Total cash at banks as of June 30, 2013 and December 31, 2012 amounted to $146,777,083 and $129,289,461, respectively, of which $73,923 and $76,101 are insured, respectively. The Company has not experienced any losses in uninsured bank deposits and does not believe that it is exposed to any significant risks on cash held in bank accounts.

The Company’s two major products are human albumin and human immunoglobulin for intravenous injection (“IVIG”). Human albumin accounted for 42.5% and 38.7% of the total sales for the three months ended June 30, 2013 and 2012, respectively, and 40.2% and 46.4% of the total sales for the six months ended June 30, 2013 and 2012, respectively. IVIG accounted for 39.4% and 42.1% of the total sales for the three months ended June 30, 2013 and 2012, respectively, and 43.5% and 37.4% of the total sales for the six months ended June 30, 2013 and 2012, respectively. If the market demands for human albumin and IVIG cannot be sustained in the future or the price of human albumin and IVIG decreases, the Company’s operating results could be adversely affected.

Substantially all of the Company’s customers are located in the PRC. As of June 30, 2013 and 2012, the Company had no significant concentration of credit risk. There were no customers that individually comprised 10% or more of the total sales during the three months and six months ended June 30, 2013 and 2012, respectively. No individual customer represented 10% or more of trade receivables at June 30, 2013 and December 31, 2012, respectively. The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers.

There were no suppliers that comprised 10% or more of the total purchases for the three months and six months ended June 30, 2013 and 2012, respectively. No individual vendor represented more than 10% of accounts payables as at June 30, 2013. Two vendors individually represented more than 10% of accounts payables as at December 31, 2012.

5

NOTE 2 – ACCOUNTS RECEIVABLE

Accounts receivable at June 30, 2013 and December 31, 2012 consisted of the following:

	June 30, 2013			December 31, 2012
	USD			USD
Accounts receivable		18,245,922			11,621,851
Less: Allowance for doubtful accounts		(424,249	)		(415,607	)
Total		17,821,673			11,206,244

A provision for doubtful accounts of nil and a reversal of the allowance for doubtful accounts of $12,953 was recorded during the three months ended June 30, 2013 and 2012, respectively. A provision for doubtful accounts of nil and $21,895 was recorded for the six months ended June 30, 2013 and 2012, respectively. There was no write-off of accounts receivable for the three and six months ended June 30, 2013 and 2012, respectively.

NOTE 3 – INVENTORIES

Inventories at June 30, 2013 and December 31, 2012 consisted of the following:

	June 30, 2013		December 31, 2012
	USD		USD
Raw materials		34,286,954		29,596,746
Work-in-process		24,544,953		24,524,142
Finished goods		22,075,906		21,558,285
Total		80,907,813		75,679,173

No inventory write-down was recorded during the three months ended June 30, 2013 and 2012, respectively. An inventory write-down of nil and $49,703 was recorded for the six months ended June 30, 2013 and 2012, respectively.

NOTE 4 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at June 30, 2013 and December 31, 2012 consisted of the following:

	June 30, 2013			December 31, 2012
	USD			USD
Buildings		31,296,990			25,183,496
Machinery and equipment		27,169,226			29,625,166
Furniture, fixtures, office equipment and vehicles		7,121,204			6,513,482
Total property, plant and equipment, gross		65,587,420			61,322,144
Accumulated depreciation		(23,479,901	)		(24,356,752	)
Total property, plant and equipment, net		42,107,519			36,965,392
Construction in progress		14,813,753			3,501,404
Prepayment for property, plant and equipment		5,416,150			10,858,381
Property, plant and equipment, net		62,337,422			51,325,177

Depreciation expense for the three months ended June 30, 2013 and 2012 was $1,571,232 and $1,184,498, respectively. Depreciation expense for the six months ended June 30, 2013 and 2012 was $3,105,739 and $2,281,223, respectively.

NOTE 5 – INTANGIBLE ASSETS, NET

Intangible assets at June 30, 2013 and December 31, 2012 consisted of the following:

	June 30, 2013
	Weighted
	average	Gross					Net
	amortization	carrying		Accumulated			carrying
	period	amount		amortization			amount
		USD		USD			USD
Amortizing intangible assets:
Permits and licenses	10 years		5,091,360		(2,477,006	)		2,614,354
GMP certificate	5 years		2,578,198		(2,282,267	)		295,931
Long-term customer relationship	4 years		7,675,560		(7,675,560	)		-
Others			342,231		(148,306	)		193,925
Total			15,687,349		(12,583,139	)		3,104,210

6

	December 31, 2012
	Weighted
	average	Gross					Net
	amortization	carrying		Accumulated			carrying
	period	amount		amortization			amount
		USD		USD			USD
Amortizing intangible assets:
Permits and licenses	10 years		4,987,647		(2,119,622	)		2,868,025
GMP certificate	5 years		2,525,679		(1,955,360	)		570,319
Long-term customer relationship	4 years		7,519,206		(7,519,206	)		-
Others			214,520		(111,282	)		103,238
Total			15,247,052		(11,705,470	)		3,541,582

Amortization expense for intangible assets was $391,452 and $733,794 for the three months ended June 30, 2013 and 2012, respectively. Amortization expense for intangible assets was $655,152 and $1,456,810 for the six months ended June 30, 2013 and 2012, respectively. Estimated amortization expenses for the next five fiscal years are $511,058 in 2014, $509,278 in 2015, $503,715 in 2016, $469,606 in 2017 and $426,774 in 2018.

NOTE 6 – DEPOSITS RELATED TO LAND USE RIGHT

As of June 30, 2013, the deposits mainly represented a $13,510,800 (equivalent RMB83,400,000) refundable payment made by Guizhou Taibang to the local government in connection with the public bidding for a land use right in Guizhou Province. The payment will be refunded within one year following the completion of the bidding process. If the Company is successful in the bid, the land use right will be used for the construction of a new manufacturing facility to comply with the new GMP standard effective by the end of 2013. However, due to potential delays in government approval procedures with respect to the land use right for such site, the Company may not be able to complete the construction of the new production facility as planned. In order to mitigate the operation disruption at Guizhou Taibang, the Company started to upgrade its existing production facility to meet the new GMP standard in June 2013. The production of the related facilities was suspended and the total production capacity of the Company is expected to decrease in part of 2013 and 2014.

NOTE 7 – RESTRICTED CASH

On November 1, 2012, Guizhou Taibang entered into an agreement with the Financial Bureau of Huaxi District, Guiyang City. Pursuant to the agreement, the Financial Bureau of Huaxi District provided $2,972,700 (equivalent RMB18,350,000) to Guizhou Taibang to subsidize the technical upgrade in respect of the new GMP standard (see Note 6). The agreement is valid for a three-year period. The usage of this fund must be under the supervision of the Financial Bureau of Huaxi District and cannot be used for other purposes. During the six months ended June 30, 2013, $186,198 was used in the technical upgrade in respect of the new GMP standard.

NOTE 8 – SHORT-TERM BANK LOANS

The Company’s bank loans as of June 30, 2013 and December 31, 2012 consisted of the following:

	Maturity	Annual
Loans	date	interest rate			June 30, 2013		December 31, 2012
					USD		USD
Short-term bank loan, unsecured	August 1, 2013		6.00	%		-		3,174,000
Short-term bank loan, unsecured	September 3, 2013		6.00	%		-		3,174,000
Short-term bank loan, unsecured	September 3, 2013		6.00	%		-		1,587,000
Short-term bank loan, unsecured	May 12, 2014		6.00	%		4,860,000		-
Total						4,860,000		7,935,000

Interest expense on short-term bank loans was $79,410 and $45,765 for the three months ended June 30, 2013 and 2012, respectively. Interest expense on short-term bank loans was $198,900 and $204,982 for the six months ended June 30, 2013 and 2012, respectively.

The Company did not have any revolving line of credit as of June 30, 2013.

NOTE 9 – INCOME TAX

On October 31, 2011, Shandong Taibang received a notice from the Shandong provincial government that the High and New Technology Enterprise qualification has been renewed for an additional three years which entitled it to a 15% preferential income tax rate from 2011 to 2013.

7

According to Cai Shui [2011] No. 58 dated July 27, 2011, Guizhou Taibang, being a qualified enterprise located in the western region of PRC, enjoys a preferential income tax rate of 15% effective retroactively from January 1, 2011 to December 31, 2020.

The Company’s effective income tax rates were 14% and 15% for the three months ended June 30, 2013 and 2012, respectively. The Company’s effective income tax rates were 16% and 15% for the six months ended June 30, 2013 and 2012, respectively.

As of and for the six months ended June 30, 2013, the Company did not have any unrecognized tax benefits and thus no interest and penalties related to unrecognized tax benefits were recorded. In addition, the Company does not expect that the amount of unrecognized tax benefits to change significantly within the next 12 months.

NOTE 10 – OPTIONS AND NONVESTED SHARES

Options

A summary of stock options activity for six months ended June 30, 2013 is as follow:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
				USD				USD
Outstanding as of December 31, 2012		2,648,609			9.39		7.65		18,374,422
Granted		33,000			10.48
Exercised		(323,330	)		8.25				4,267,299
Forfeited and expired		(150,680	)		6.78
Outstanding as of June 30, 2013		2,207,599			9.75		7.45		29,679,283
Vested and expected to vest		2,207,599			9.75		7.45		29,679,283
Exercisable as of June 30, 2013		1,387,587			9.65		6.60		18,788,752

The 33,000 stock options granted during the six months ended June 30, 2013 had a weighted average fair value of $8.37 per share or an aggregate of $276,250 on the date of grant, determined based on the Black-Scholes option pricing model using the following weighted average assumptions:

	For six months ended
	June 30, 2013
Expected volatility		104	%
Expected dividends yield		0	%
Expected term		5 years
Risk-free interest rate (per annum)		0.72	%
Fair value of underlying ordinary shares (per share)	$	10.57

For the three months ended June 30, 2013 and 2012, the Company recorded stock compensation expense of $1,230,066 and $1,030,539, respectively, in general and administrative expenses. For the six months ended June 30, 2013 and 2012, the Company recorded stock compensation expense of $2,694,999 and $1,992,958, respectively, in general and administrative expenses.

As of June 30, 2013, approximately $4,733,962 of stock compensation expense with respect to the non-vested stock options is to be recognized over approximately 2.71 years.

Nonvested shares

A summary of nonvested shares activity for the six months ended June 30, 2013 is as follows:

	Number of nonvested shares		Grant date weighted average fair value
			USD
Outstanding as of December 31, 2012		120,000		9.85
Granted		22,500		18.58
Vested		-		-
Forfeited		-		-
Outstanding as of June 30, 2013		142,500		11.23

8

For the three months ended June 30, 2013 and 2012, the Company recorded stock compensation expense of $183,161 and nil respectively in general and administrative expenses. For the six months ended June 30, 2013 and 2012, the Company recorded stock compensation expense of $352,963 and nil respectively in general and administrative expenses.

As of June 30, 2013, approximately $1,037,755 of stock compensation expense with respect to nonvested shares is to be recognized over approximately 2.52 years.

NOTE 11 – FAIR VALUE MEASUREMENTS

Management used the following methods and assumptions to estimate the fair value of financial instruments at the relevant balance sheet dates:

· Short-term financial instruments (including accounts receivable, other receivables, short-term bank loans, accounts payable, other payables and accrued expenses, and amount due to related parties) – The carrying amounts of the short-term financial instruments approximate their fair values because of the short maturity of these instruments.

NOTE 12 – SALES

The Company’s sales are primarily derived from the manufacture and sale of Human Albumin and Immunoglobulin products. The Company’s sales by significant types of product for the three months ended June 30, 2013 and 2012 are as follows:

	For the three months ended
	June 30, 2013		June 30, 2012
	USD		USD
Human Albumin		22,764,711		19,539,419
Immunoglobulin products:
Human Immunoglobulin for Intravenous Injection		21,097,154		21,239,174
Other Immunoglobulin products		5,494,261		6,987,822
Placenta Polypeptide		3,037,991		2,509,202
Others		1,186,406		190,722
Total		53,580,523		50,466,339

The Company’s sales by significant types of product for the six months ended June 30, 2013 and 2012 are as follows:

	For the six months ended
	June 30, 2013		June 30, 2012
	USD		USD
Human Albumin		43,266,022		45,329,702
Immunoglobulin products:
Human Immunoglobulin for Intravenous Injection		46,759,025		36,500,900
Other Immunoglobulin products		10,593,986		10,773,101
Placenta Polypeptide		5,222,154		4,620,011
Others		1,771,068		470,086
Total		107,612,255		97,693,800

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Capital commitments

As of June 30, 2013, commitments outstanding for the purchase of property, plant and equipment approximated $5,200,000.

Legal proceedings

Dispute among Guizhou Taibang Shareholders over Raising Additional Capital

In May 2007, a 91% majority of Guizhou Taibang’s shareholders approved a plan to raise additional capital from private strategic investors through the issuance of an additional 20,000,000 shares of Guizhou Taibang at RMB2.80 per share. The plan required all existing Guizhou Taibang shareholders to waive their rights of first refusal to subscribe for the additional shares. The remaining 9% minority shareholder of Guizhou Taibang’s shares, Guizhou Jie’an Company (“Jie’an”), did not support the plan and did not waive its right of first refusal. In May 2007, the majority shareholders caused Guizhou Taibang to sign an Equity Purchase Agreement with certain investors, pursuant to which the investors agreed to invest an aggregate of $7,475,832 (or RMB50,960,000) in exchange for 18,200,000 shares, or 21.4%, of Guizhou Taibang’s equity interests. At the same time, Jie’an also subscribed for 1,800,000 shares, representing its pro rata share of the 20,000,000 shares being offered. The proceeds from all parties were received by Guizhou Taibang in accordance with the agreement.

9

In June 2007, Jie’an brought suit in the High Court of Guizhou province, China, against Guizhou Taibang and the three other original shareholders of Guizhou Taibang, alleging the illegality of the Equity Purchase Agreement. In its complaint, Jie’an claimed that it had a right to acquire the 18,200,000 shares offered to the strategic investors under the Equity Purchase Agreement. In September 2008, the Guizhou High Court ruled against Jie’an and sustained the Equity Purchase Agreement. In November 2008, Jie’an appealed the Guizhou High Court judgment to the People’s Supreme Court in Beijing. In May 2009, the People’s Supreme Court sustained the original ruling and denied the rights of first refusal of Jie’an over the 18,200,000 shares.

During the second quarter of 2010, Jie’an requested that Guizhou Taibang register its 1.8 million shares of additional capital injection with the local Administration for Industry and Commerce, or AIC, pursuant to the Equity Purchase Agreement, and such request was approved by the majority shareholders of Guizhou Taibang in a shareholders meeting held in the second quarter of 2010. However, the Board of Directors of the Company is withholding its required ratification of the shareholders’ approval of Jie’an’s request, pending the outcome of the ongoing litigation. In March 2012, the Company received a subpoena that Jie’an brought suit in the People’s Court of Huaxi District, Guizhou Province, against Guizhou Taibang, alleging Guizhou Taibang’s withholding of its request. Jie’an requested that Guizhou Taibang register its 1.8 million shares of capital injection, pay dividends associated with these shares, as well as the related interest and penalty from May 2007 to December 2011 amounting to $3,967,500 (or RMB25,000,000) in aggregate, and return the over-paid subscription of $228,528 (or RMB1,440,000), as well as the interest and penalty, amounting to $1,587,000 (or RMB10,000,000) in aggregate. The People’s Court of Huaxi District, Guizhou Province, has accepted Jie’an’s suit. In May 2012, Guizhou Taibang was informed by the court that the case was postponed upon the request from Jie’an and no exact hearing date has been provided as of the date of this report. If the Company decides to ratify the approval or the case is ruled in Jie’an’s favor, Dalin’s ownership in Guizhou Taibang will be diluted from 54% to 52.54% and Jie’an may be entitled to receive its pro rata share of Guizhou Taibang’s profits since the date of Jie’an’s capital contribution became effective. As this case is closely tied to the outcome of the strategic investors’ dispute stated below, the Company does not expect Jie’an to prevail. As of June 30, 2013, the Company had recorded, in its balance sheet, payables to Jie’an in the amounts of RMB5,040,000 (approximately $816,480) for the additional funds received in relation to the 1.8 million shares of capital infusion, RMB1,440,000 (approximately $233,280) for the over-paid subscription and RMB2,736,575 (approximately $443,325) for the accrued interest.

As a result of this dispute, the strategic investors’ equity ownership in Guizhou Taibang and the related increase in registered capital of Guizhou Taibang have not been registered with the local AIC. In January 2010, the strategic investors brought suit in the High Court of Guizhou Province against Guizhou Taibang alleging Guizhou Taibang’s failure to register their equity interest in Guizhou Taibang with the local AIC and requesting the distribution of their share of Guizhou Taibang’s dividends declared since 2007. Dalin was also joined as a co-defendant as it is the majority shareholder and exercises control over Guizhou Taibang’s day-to-day operations.

In October, 2010, the High Court of Guizhou ruled in favor of the Company and denied the strategic investors’ right as shareholders of Guizhou Taibang, as well as their entitlement to the dividends. In light of the Guizhou ruling, the Company returned the proceeds of $1,699,040 (or RMB11,200,000) to one of the strategic investors in November 2010. In October 2010, the other strategic investors appealed to the PRC Supreme Court in Beijing on the ruling of the High Court of Guizhou. The PRC Supreme Court overruled the decision of the High Court of Guizhou and remanded the case to the High Court of Guizhou for retrial. In January 2012, the strategic investors re-filed their case to the High Court of Guizhou requesting, in addition to the share distribution, the distribution of dividends and interest in the amount of RMB18,349,345 (approximately $2,972,594) and RMB2,847,000 (approximately $461,214), respectively. In December 2012, the High Court of Guizhou affirmed the judgment against the strategic investors. In January 2013, the strategic investors appealed to the PRC Supreme Court in Beijing on the ruling again. The PRC Supreme Court accepted the case for retrial. The Company does not expect the strategic investors to prevail because, upon evaluation of the Equity Purchase Agreement, the Company believe that the Equity Purchase Agreement is void due to certain invalid pre-conditions and the absence of shareholder authorization of the initial investment.

In April 2013, the Company countersued the strategic investors in the Intermediate Court of Guiyang City alleging their breach of the Security Law in the PRC and requested a consideration of $6,064,800 (or RMB38,000,000) for the related expenses and losses, and Guizhou Intermediate Court accepted the case. The Company is awaiting the hearing of the above cases as of the date of this report.As of June 30, 2013, Guizhou Taibang has set aside the strategic investors’ initial fund along with RMB15,942,138 (approximately $2,582,626) in accrued interest, and RMB509,600 (approximately $82,555) for the 1% penalty imposed by the agreement for any breach in the event that Guizhou Taibang is required to return their original investment amount to the strategic investors. If strategic investors prevail in their suit, Dalin’s interests in Guizhou Taibang may be reduced to approximately 41.3%.

NOTE 14 – RELATED PARTY TRANSACTIONS

The material related party transactions undertaken by the Company with related parties for the three months ended June 30, 2013 and 2012 are presented as follows:

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	For the three months ended
	June 30, 2013		June 30, 2012
	USD		USD
Commission expenses with related parties(1)		909,057		852,948

The material related party transactions undertaken by the Company with related parties for the six months ended June 30, 2013 and 2012 are presented as follows:

	For the six months ended
	June 30, 2013		June 30, 2012
	USD		USD
Commission expenses with related parties(1)		1,552,312		1,581,483

The related party balances as at June 30, 2013 and December 31, 2012 are presented as follows:

Liabilities	Purpose	June 30, 2013		December 31, 2012
		USD		USD
Other payable – a related party(1)	Commission		204,120		339,272
Other payable – a related party(2)	Loan		2,358,720		2,311,044
Other payable – a related party(3)	Contribution		1,493,085		1,431,308
Total other payable – related parties			4,055,925		4,081,624

⁽¹⁾During the year ended December 31, 2011, Guizhou Taibang signed an agency contract with Guizhou Eakan Co., Ltd. (“Guizhou Eakan”), an affiliate of one of the Guizhou Taibang’s noncontrolling interest shareholders, pursuant to which Guizhou Taibang would pay commission to Guizhou Eakan for the promotion of the product of Placenta Polypeptide. As of June 30, 2013, Guizhou Taibang accrued commission payable of $204,120 for service rendered by Guizhou Eakan. For the three months ended June 30, 2013, commission expense for service rendered by Guizhou Eakan was $909,057. For the six months ended June 30, 2013, commission expense for service rendered by Guizhou Eakan was $1,552,312.

⁽²⁾Guizhou Taibang has payables to Guizhou Eakan Investing Corp., amounting to approximately $2,358,720 and $2,311,044 as of June 30, 2013 and December 31, 2012, respectively. Guizhou Eakan Investing Corp. is one of the noncontrolling interest shareholders of Guizhou Taibang. The Company borrowed this interest free advance for working capital purpose for Guizhou Taibang. The balance is due on demand.

⁽³⁾Guizhou Taibang has payables to Jie’an, a noncontrolling interest shareholder of Guizhou Taibang, amounting to approximately $1,493,085 and $1,431,308 as of June 30, 2013 and December 31, 2012, respectively. In 2007, Guizhou Taibang received additional contributions from Jie’an of $962,853 (or RMB6,480,000) to maintain Jie’an’s equity interest in Guizhou Taibang at 9%. However, due to a legal dispute among shareholders over raising additional capital as discussed in the legal proceeding section (see Note 13), the contribution is subject to be returned to Jie’an. During the second quarter of 2010, Jie’an requested that Guizhou Taibang register its 1.8 million shares of additional capital contribution with the local AIC, pursuant to the Equity Purchase Agreement, and such registration was approved by the majority shareholders of Guizhou Taibang in a shareholders’ meeting held in the second quarter of 2010. However, the Board of Directors of the Company is withholding its required ratification of the shareholders’ approval of Jie’an’s request until the completion of the ongoing litigations. If the Company decided to ratify the approval, Dalin’s ownership in Guizhou Taibang will be diluted from 54% to 52.54% and Jie’an will be entitled to receive its pro rata share of Guizhou Taibang’s profits since the date of Jie’an contribution became effective. As this case is closely tied to the outcome of the strategic investors’ dispute stated above, the Company has set aside Jie’an’s additional fund of RMB5,040,000 (approximately $816,480), the over-paid subscription of RMB1,440,000 (approximately $233,280) along with RMB2,736,575 (approximately $443,325) in accrued interest and penalty as of June 30, 2013.

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NOTE 15 - NET INCOME PER SHARE

The following table sets forth the computation of basic and diluted net income per share for the periods indicated:

	For the three months ended
	June 30, 2013			June 30, 2012
	USD			USD
Net income attributable to China Biologic Products, Inc.		16,161,926			12,838,771
Earnings allocated to participating nonvested shares		(85,227	)		-
Net income allocated to common stockholders used in computing basic net income per common stock		16,076,699			12,838,771
Change in fair value of warrants		-			(559,758	)
Net income used in diluted net income per common stock		16,076,699			12,279,013
Weighted average shares used in computing basic net income per common stock		26,880,459			25,875,164
Diluted effect of warrants		-			311,200
Diluted effect of stock option		1,186,844			440,796
Weighted average shares used in computing diluted net income per common stock		28,067,303			26,627,160
Net income per common stock – basic		0.60			0.50
Net income per common stock – diluted		0.57			0.46

During the three months ended June 30, 2013, no option was antidilutive and excluded from the calculation of diluted net income per common stock.

During the three months ended June 30, 2012, 1,544,000 options with an average exercise price of $11.98 were excluded from the calculation of diluted net income per common stock since they were antidilutive.

The following table sets forth the computation of basic and diluted net income per share for the periods indicated:

	For the six months ended
	June 30, 2013			June 30, 2012
	USD			USD
Net income attributable to China Biologic Products, Inc.		31,077,786			25,796,077
Earnings allocated to participating nonvested shares		(157,615	)		-
Net income allocated to common stockholders used in computing basic net income per common stock		30,920,171			25,796,077
Change in fair value of warrants		-			(1,769,140	)
Net income used in diluted net income per common stock		30,920,171			24,026,937
Weighted average shares used in computing basic net income per common stock		26,833,262			25,738,145
Diluted effect of warrants		-			390,507
Diluted effect of stock option		1,133,818			453,172
Weighted average shares used in computing diluted net income per common stock		27,967,080			26,581,824
Net income per common stock – basic		1.15			1.00
Net income per common stock – diluted		1.11			0.90

During the six months ended June 30, 2013, no option was antidilutive and excluded from the calculation of diluted net income per common stock.

During the six months ended June 30, 2012, 1,544,000 options with an average exercise price of $11.98 were excluded from the calculation of diluted net income per common stock since they were antidilutive.

NOTE 16 – SUBSEQUENT EVENT

On August 2, 2013, the Company entered into a redemption agreement with one of its individual shareholders, pursuant to which the Company would repurchase 1,479,704 shares of common stock for a consideration of US$29,594,080.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Special Note Regarding Forward Looking Statements

In addition to historical information, this report contains 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. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; expectations regarding governmental approvals of our new products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those identified in Item 1A “Risk Factors” described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

Use of Terms

Except as otherwise indicated by the context and for the purposes of this report only, references in this report to:

· “China Biologic”, the “Company”, “we”, “us”, or “our”, are to the combined business of China Biologic Products, Inc., a Delaware corporation, and its direct and indirect subsidiaries;

· “Taibang Biological” are to our wholly owned subsidiary Taibang Biological Limited, a BVI company, formerly Logic Express Limited;

· “Taibang Holdings” are to our wholly-owned subsidiary Taibang Holdings (Hong Kong) Limited, a Hong Kong company, formerly Logic Holdings (Hong Kong) Limited;

· “Taibang Biotech” are to our wholly owned subsidiary Taibang Biotech (Shandong) Co., Ltd., a PRC company, formerly Logic Management and Consulting (China) Co., Ltd.;

· “Taibang Beijing” are to our wholly owned subsidiary Taibang (Beijing) Pharmaceutical Research Institute Co., Ltd., a PRC company, formerly Logic Taibang Biotech Institute (Beijing);

· “Dalin” are to our wholly owned subsidiary Guiyang Dalin Biologic Technologies Co., Ltd., a PRC company;

· “Shandong Taibang” are to our majority owned subsidiary Shandong Taibang Biological Products Co. Ltd., a sino-foreign joint venture incorporated in China;

· “Taibang Medical” are to our wholly owned subsidiary Shandong Taibang Medical Company, a PRC company;

· “Guizhou Taibang” are to our majority owned subsidiary Guizhou Taibang Biological Products Co., Ltd., a PRC company, formerly Guiyang Qianfeng Biological Products Co., Ltd.;

· “Huitian” are to our minority owned investee Xi’an Huitian Blood Products Co., Ltd., a PRC company;

· “Board” are to our board of directors;

· “BVI” are to the British Virgin Islands;

· “Hong Kong” are to the Hong Kong Special Administrative Region of the People’s Republic of China;

· “PRC” and “China” are to the People’s Republic of China;

· “SEC” are to the Securities and Exchange Commission;

· “Securities Act” are to the Securities Act of 1933, as amended;

· “Exchange Act” are to the Securities Exchange Act of 1934, as amended;

· “Renminbi” and “RMB” are to the legal currency of China;

· “U.S. dollars”, “dollars” ,“USD”and “$” are to the legal currency of the United States; and

· “New GMP Standard” are to the Drug Good Manufacturing Practice Regulations enacted by China’s Ministry of Health on February 12, 2001 and the Good Manufacturing Practice Implementation Guidelines published by China’s State Food and Drug Administration on February 24, 2011.

13

Overview of Our Business

We are a biopharmaceutical company principally engaged in the research, development, manufacturing and sales of human plasma-based pharmaceutical products in China. We have two majority owned subsidiaries, Shandong Taibang, a company based in Tai’an, Shandong Province and Guizhou Taibang, a company based in Guiyang, Guizhou Province. We also hold a minority equity interest in Huitian, a company based in Xi’an, Shaanxi Province. The human plasma-based biopharmaceutical manufacturing industry in China is highly regulated by both provincial and central governments. Accordingly, the manufacturing process of our products is strictly monitored from the initial collection of plasma from human donors to finished products.

Our principal products are human albumin and immunoglobulin products. Albumin has been used for almost 50 years to treat critically ill patients by replacing lost fluid and maintaining adequate blood volume and pressure. Immunoglobulin is used for certain disease prevention and treatment by enhancing specific immunity. These products use human plasma as the principal raw material. Human albumin and human immunoglobulin for intravenous injection, or IVIG products, are our top-selling products. Sales of human albumin products represented approximately 42.5% and 38.7% of our total sales for each of the three months ended June 30, 2013 and 2012, respectively, and 40.2% and 46.4% of our total sales for the six months ended June 30, 2013 and 2012, respectively. Sales of IVIG products represented approximately 39.4% and 42.1% of our total sales for each of the three months ended June 30, 2013 and 2012, respectively, and 43.5% and 37.4% of our total sales for the six months ended June 30, 2013 and 2012, respectively. All of our products are prescription medicines administered in the form of injections.

We sell our products primarily to hospitals and inoculation centers in the PRC directly or through approved distributors. We usually sign short-term contracts with customers and therefore our largest customers have changed over the years. For the three months ended June 30, 2013 and 2012, our top 5 customers accounted for approximately 13.9% and 13.4%, respectively, of our total sales. For the six months ended June 30, 2013 and 2012, our top 5 customers accounted for approximately 10.5% and 13.8%, respectively, of our total sales. As we continue to expand our geographic presence and diversify our customer base and product mix, we expect that our largest customers will continue to change from year to year.

We operate and manage our business as a single segment. We do not account for the results of our operations on a geographic or other basis.

Our principal executive offices are located at 18^th Floor, Jialong International Building, 19 Chaoyang Park Road, Chaoyang District, Beijing 100125, the People’s Republic of China. Our corporate telephone number is + (86) 10-6598-3111 and our fax number is + (86) 10-6598-3222. We maintain a website at http://www.chinabiologic.com that contains information about our company, but that information is not part of this report.

Recent Development

Shandong Taibang

On June 28, 2013, Shandong Taibang obtained the renewed GMP certification from the China Food and Drug Administration in respect of its plasma production facility.

As the current manufacturing facility of Shandong Taibang is located in the scenic area of Mount Tai, it has no room for future production expansion. Shandong Taibang therefore plans to build a new production facility at a new site in the Taian city, Shandong province, before the current GMP expires in mid 2018. In order to ensure that the new facility will meet the new GMP standards and have sufficient time for a smooth operational transition, Shandong Taibang has initiated the process of applying for land use right for a parcel of land in Taian city with local government.

Guizhou Taibang

In June 2013, Guizhou Taibang suspended its plasma production and started the upgrade of plasma production facility. Guizhou Taibang is expected to complete the upgrade in six to nine months.

Equity Compensation

On August 2, 2013, the independent directors of the Company, acting upon the recommendation of the Compensation Committee, approved and authorized the issuance of an aggregate of 230,000 shares of restricted stock under the 2008 Plan to employees of the Company, including:

· 80,000 shares of the Company’s restricted stock to Mr. David (Xiaoying) Gao, Chief Executive Officer and Chairman of the Board;

· 30,000 shares of the Company’s restricted stock to Mr. Ming Yang, our CFO;

· 20,000 shares of the Company’s restricted stock to Mr. Ming Yin, our senior corporate vice president;

14

· 5,000 shares of the Company’s restricted stock to Ms. Zhijing Liu, our corporate vice president;

· 20,000 shares of the Company’s restricted stock to Mr. Gang Yang, our corporate vice president and the general manager of Guizhou Taibang, and

· an aggregate of 75,000 shares of the Company’s restricted stock to other employees.

The restricted stock granted to each of the employees will vest annually over a 4-year period in four equal portions, with the first portion vesting on the one year anniversary of the grant date.

On August 2, 2013, the Board, acting upon the recommendation of the Compensation Committee, approved and authorized the issuance of an aggregate of 47,000 shares of the Company’s restricted stock to non-executive directors, of which 5,000 shares of the Company’s restricted stock to Mr. Bing Li, 6,000 shares of the Company’s restricted stock to Mr. Wenfang Liu, 9,000 shares of the Company’s restricted stock to Mr. Yungang Lu, 10,000 shares of the Company’s restricted stock to Mr. Sean Shao, 6,000 shares of the Company’s restricted stock to Mr. Zhijun Tong, 6,000 shares of the Company’s restricted stock to Mr. Albert (Wai Keung) Yeung and 5,000 shares of the Company’s restricted stock to Mr. Charles Zhang. The restricted stock granted to each of the non-executive directors will vest annually over a 2-year period in two equal portions, with the first portion vesting on the one year anniversary of the grant date.

The Company is expected to enter into a restricted stock grant agreement with each of the aforementioned grantees in mid August, 2013. A copy of the form of such agreement is filed as Exhibit 3.3 to this quarterly report on Form 10Q and incorporated herein by reference.

Second Quarter Financial Performance Highlights

The following are some financial highlights for the three months ended June 30, 2013:

· Sales: Sales increased by $3,114,184, or 6.2%, to $53,580,523 for the three months ended June 30, 2013, from $50,466,339 for the same period in 2012.

· Gross profit: Gross profit increased by $3,122,811, or 9.1%, to $37,458,261 for the three months ended June 30, 2013, from $34,335,450 for the same period in 2012.

· Income from operations: Income from operations increased by $4,006,966, or 18.8%, to $25,315,313 for the three months ended June 30, 2013, from $21,308,347 for the same period in 2012.

· Net income attributable to the Company: Net income increased by $3,323,155, or 25.9%, to $16,161,926 for the three months ended June 30, 2013, from $12,838,771 for the same period in 2012.

· Diluted net income per share: Diluted net income per share was $0.57 for the three months ended June 30, 2013, as compared to $0.46 for the same period in 2012.

15

Results of Operations

Comparison of Three Months Ended June 30, 2013 and June 30, 2012

The following table sets forth key components of our results of operations for the periods indicated.

(All amounts, other than percentages, in U.S. dollars)

	For the three Months Ended June 30
	2013						2012
	$			% of Total Sales			$			% of Total Sales
SALES		53,580,523			100.0			50,466,339			100.0
COST OF SALES		16,122,262			30.1			16,130,889			32.0
GROSS MARGIN		37,458,261			69.9			34,335,450			68.0
OPERATING EXPENSES:
Selling expenses		2,441,727			4.6			4,165,242			8.3
General and administrative expenses		8,866,071			16.5			7,932,372			15.7
Research and development expenses		835,150			1.6			929,489			1.8
Total operating expenses		12,142,948			22.7			13,027,103			25.8
INCOME FROM OPERATIONS		25,315,313			47.2			21,308,347			42.2
OTHER INCOME (EXPENSES):
Equity in income of equity method investee		610,997			1.1			451,891			0.9
Change in fair value of derivative liabilities		-			-			559,758			1.1
Interest expense		(198,739	)		(0.4	)		(157,635	)		(0.3	)
Interest income		995,757			1.9			765,717			1.5
Other expenses, net		-			-			(1,797	)		(0.0	)
Total other income, net		1,408,015			2.6			1,617,934			3.2
EARNINGS BEFORE INCOME TAX EXPENSE		26,723,328			49.9			22,926,281			45.4
INCOME TAX EXPENSES		3,745,649			7.0			3,333,616			6.6
NET INCOME		22,977,679			42.9			19,592,665			38.8
Less: Net income attributable to non-controlling interest		6,815,753			12.7			6,753,894			13.4
NET INCOME ATTRIBUTABLE TO COMPANY		16,161,926			30.2			12,838,771			25.4
NET INCOME PER SHARE OF COMMON STOCK
BASIC		0.60						0.50
DILUTED		0.57						0.46

Sales

Our sales increased by 6.2%, or $3,114,184, to $53,580,523 for the three months ended June 30, 2013, compared to $50,466,339 for the three months ended June 30, 2012. The increase in sales during 2013 was primarily attributable to a mix of price and volume increases in certain of our plasma based products. In addition, foreign currency translation accounted for 1.8% of the sales increase.

The following table summarizes the breakdown of sales by significant types of product:

	For the three Months Ended June 30,								Change
	2013				2012
	$		%		$		%		Amount			%
Human Albumin		22,764,711		42.5		19,539,419		38.7		3,225,292			16.5
Immunoglobulin products:
IVIG		21,097,154		39.4		21,239,174		42.1		(142,020	)		(0.7	)
Other Immunoglobulin products		5,494,261		10.3		6,987,822		13.8		(1,493,561	)		(21.4	)
Placenta Polypeptide		3,037,991		5.7		2,509,202		5.0		528,789			21.1
Others		1,186,406		2.1		190,722		0.4		995,684			522.1
Totals		53,580,523		100.0		50,466,339		100.0		3,114,184			6.2

16

During the three months ended June 30, 2013 as compared to the three months ended June 30, 2012, the prices of all of our approved plasma products either recorded an price increase or remained relative stable. For the three months ended June 30, 2013 as compared to the three months ended June 30, 2012:

· the average price for our approved human albumin products, which accounted for 42.5% of our total sales for the three months ended June 30, 2013, increased by approximately 12.1% and, excluding the impact of foreign currency, their average price in RMB term increased by approximately 10.3%; and

· the average price for our approved IVIG products, which accounted for 39.4% of our total sales for the three months ended June 30, 2013, increased by approximately 0.9%, and excluding the impact of foreign currency, their average price in RMB term decreased by approximately 0.9%.

The price increase of human albumin products was mainly due to the increase of retail price ceiling announced by Chinese National Development and Reform Commission (“NDRC”) in January 2013, which came into effect on February 1, 2013. This increased retail price ceiling provides us with more flexibility in pricing our human albumin products and allows us to increase our ex-factory prices in certain regional markets. NDRC also adjusted retail price ceilings for IVIG in September 2012, which came into effect on October 8, 2012. The new retail price ceilings for IVIG products are lower than the current prevailing market prices in some of our regional markets. As a result, some of local governments revised tender price ceilings for IVIG products. We have appealed to local governments for favorable pricing policy in selective regional markets and have successfully gained support from certain provincial governments in lifting the tender price ceilings for IVIG products. Therefore, the average price of our IVIG products remained stable in the second quarter of 2013 as compared to the same period of 2012 in spite of the retail price ceiling adjustment.

The sales volumes of our products in general depend on market demands and our production volumes. The production volumes of our IVIG and human albumin products depend primarily on general plasma supply. The production volumes of our hyper-immune products, which include human rabies immunoglobulin, human hepatitis B immunoglobulin and human tetanus immunoglobulin products, are subject to the availabilities of specific vaccinated plasma and our production capacity. The supply of specific vaccinated plasma in general requires several months of lead time. Our production facility currently can only accommodate the production of one type of hyper-immune products at any given time and we rotate the production of different types of hyper-immune products from time to time in response to market demand. As such, the sales volume of any given type of hyper-immune products may vary significantly from quarter to quarter. Given the planned production suspension of Guizhou Taibang starting from June 2013, we decreased the sales volume of some of our products in the three months ended June 30, 2013 in order to smooth out the impact of the reduced production volume and maintain our sales channels and customer relationship during the period of Guizhou Taibang production suspension.

Sales volume for our human albumin products increased slightly by 3.9% in the second quarter of 2013 as compared to the same period of 2012. The increase in sales volumes of human albumin products was primarily due to the strong market demand for human albumin products. Sales volume for our IVIG products decreased by 1.6% in the second quarter of 2013 as compared to the same period of 2012.

Cost of sales & gross profit

	For the three Months Ended June 30,						Change
	2013			2012			Amount			%
Cost of sales	$	16,122,262		$	16,130,889		$	(8,627	)		(0.1	)%
as a percentage of total sales		30.1	%		32.0	%					(1.9	)%
Gross Profit	$	37,458,261		$	34,335,450		$	3,122,811			9.1	%
Gross Margin		69.9	%		68.0	%					1.9	%

Our cost of sales was $16,122,262, or 30.1% of our sales, for the three months ended June 30, 2013, as compared to $16,130,889, or 32.0% of our sales for the same period in 2012. Our gross profit was $37,458,261 and $34,335,450 for the three months ended June 30, 2013 and 2012, respectively, representing gross margins of 69.9% and 68.0%, respectively. In general, our cost of sales and gross margin are impacted by the volume and pricing of our finished products, our raw material costs, production mix and respective yields, inventory provisions, production cycles and routine maintenance costs.

The decrease in cost of sales in the three months ended June 30, 2013 as compared to the same period in 2012 was in line with the decrease in sales volumes, mainly immunoglobulin products. We decreased the sales volume during the three months ended June 30, 2013 in response to the production suspension starting from June 2013. The improvement of gross margin in the three months ended June 30, 2013 as compared to the same period in 2012, was mainly due to the improved gross margin of human albumin products as a result of price increases and the improved utilization efficiency of plasma following the newly-launched Factor VIII products.

17

Operating expenses

	For the three Months Ended June 30,						Change
	2013			2012			Amount			%
Operating expenses	$	12,142,948		$	13,027,103		$	(884,155	)		(6.8	)%
as a percentage of total sales		22.7	%		25.8	%					(3.1	)%

Our total operating expenses decreased by $884,155, or 6.8%, to $12,142,948, for the three months ended June 30, 2013, from $13,027,103 for the same period in 2012. As a percentage of sales, total expenses decreased by 3.1% to 22.7% for the three months ended June 30, 2013, from 25.8% for the same period in 2012. The decrease of the total operating expenses was mainly due to the decrease of the selling expenses as discussed below.

Selling expenses

	For the three Months Ended June 30,						Change
	2013			2012			Amount			%
Selling expenses	$	2,441,727		$	4,165,242		$	(1,723,515	)		(41.4	)%
as a percentage of total sales		4.6	%		8.3	%					(3.7	)%

For the three months ended June 30, 2013, our selling expenses decreased by $1,723,515, or 41.4%, to $2,441,727, from $4,165,242 for the three months ended June 30, 2012. As a percentage of sales, our selling expenses for the three months ended June 30, 2013 decreased by 3.7% to 4.6%, from 8.3% for the three months ended June 30, 2012. The decrease was mainly due to the fact that we lowered the commission rate for certain products during the second half of 2012. Further, we have taken steps to impose stricter control on the selling expenses since the second half of 2012. However, we carried out the promotional and conference activities for our new product Factor VIII starting from the second quarter of 2013. As a result, we expect our selling expenses as a percentage of sales will increase in the following quarters.

General and administrative expenses

	For the three Months Ended June 30,						Change
	2013			2012			Amount		%
General and administrative expenses	$	8,866,071		$	7,932,372		$	933,699		11.8	%
as a percentage of total sales		16.5	%		15.7	%				0.8	%

For the three months ended June 30, 2013, our general and administrative expenses increased by $933,699, or 11.8%, to $8,866,071, from $7,932,372 for the three months ended June 30, 2012. General and administrative expenses as a percentage of sales increased by 0.8% to 16.5% for the three months ended June 30, 2013, from 15.7% for the three months ended June 30, 2012. The increase in general and administrative expenses was mainly due to an increase in expenses related to payroll and employee benefits as a result of general salary increases, an increase of share-based compensation and an increase in legal expenses relating to the corporate defense against the proposed share acquisition by Shanghai RAAS Blood Products Co., Ltd. (“Shanghai RAAS”), a public company listed on the Shenzhen Stock Exchange and a direct competitor of the Company in China.

Research and development expenses

	For the three Months Ended June 30,						Change
	2013			2012			Amount			%
Research and development expenses	$	835,150		$	929,489		$	(94,339	)		(10.1	)%
as a percentage of total sales		1.6	%		1.8	%					(0.2	)%

For the three months ended June 30, 2013 and 2012, our research and development expenses were $835,150 and $929,489, respectively, representing an decrease of $94,339, or 10.1%. As a percentage of sales, our research and development expenses for the three months ended June 30, 2013 and 2012 were 1.6% and 1.8%, respectively. The research and development expenses remained consistent for the three months ended June 30, 2013, as compared to the same period in 2012.

18

Change in fair value of derivative liabilities

	For the three Months Ended June 30,					Change
	2013		2012			Amount			%
Change in fair value of derivative liabilities	$	-	$	559,758		$	(559,758	)		(100.0	)%
as a percentage of total sales		-		1.1	%					(1.1	)%

Our warrants issued in June 2009 are classified as derivative liabilities carried at fair value. For the three months ended June 30, 2013 and 2012, we recognized a gain from the change in fair value of derivative liabilities in the amounts of nil and $559,758, respectively. The recognized gain from the change in the fair value of derivative liabilities in the three months ended June 30, 2012 was mainly due to a decrease in the price of our common stock from $9.28 per share as of March 31, 2012 to $8.55 and $9.22, respectively, as of the two warrants exercise dates. All warrants have been exercised by the end of June 2012.

Income tax

	For the three Months Ended June 30,						Change
	2013			2012			Amount		%
Income tax	$	3,745,649		$	3,333,616		$	412,033		12.4	%
as a percentage of total sales		7.0	%		6.6	%				0.4	%

Our provision for income taxes increased by $412,033, or 12.4%, to $3,745,649 for the three months ended June 30, 2013, from $3,333,616 for the same period in 2012. Our effective income tax rates were 14.0% and 14.5% for the three months ended June 30, 2013 and 2012, respectively. The effective income tax rate remained consistent for the three months ended June 30, 2013, as compared to the same period in 2012. Tax rate applicable to our major operating subsidiaries in the PRC for 2012 and 2013 is 15%.

Net income attributable to the Company

	For the three Months Ended June 30,						Change
	2013			2012			Amount		%
Net income attributable to the Company	$	16,161,926		$	12,838,771		$	3,323,155		25.9	%
as a percentage of total sales		30.2	%		25.4	%				4.8	%

Our net income attributable to the Company increased by $3,323,155, or 25.9%, to $16,161,926 for the three months ended June 30, 2013, from $12,838,771 for the same period in 2012. Net income attributable to the Company as a percentage of total sales was 30.2% and 25.4% for the three months ended June 30, 2013 and 2012, respectively, as a result of the cumulative effect of the foregoing factors.

Comparison of Six Months Ended June 30, 2013 and June 30, 2012

The following table sets forth key components of our results of operations for the periods indicated.

(All amounts, other than percentages, in U.S. dollars)

	For the six Months Ended June 30
	2013						2012
	$			% of Total Sales			$			% of Total Sales
SALES		107,612,255			100.0			97,693,800			100.0
COST OF SALES		32,739,020			30.4			31,846,616			32.6
GROSS MARGIN		74,873,235			69.6			65,847,184			67.4
OPERATING EXPENSES:
Selling expenses		4,278,120			4.0			8,991,349			9.2
General and administrative expenses		17,553,168			16.3			15,078,166			15.4
Research and development expenses		1,748,242			1.6			1,640,077			1.7
Total operating expenses		23,579,530			21.9			25,709,592			26.3
INCOME FROM OPERATIONS		51,293,705			47.7			40,137,592			41.1
OTHER INCOME (EXPENSES):
Equity in income of equity method investee		739,945			0.7			1,474,303			1.5
Change in fair value of derivative liabilities		-			-			1,769,140			1.8
Interest expense		(434,913	)		(0.4	)		(766,198	)		(0.8	)
Interest income		1,643,819			1.5			1,309,112			1.3
Other expenses, net		-			-			(102,786	)		(0.1	)
Total other income, net		1,948,851			1.8			3,683,571			3.8
EARNINGS BEFORE INCOME TAX EXPENSE		53,242,556			49.5			43,821,163			44.9
INCOME TAX EXPENSES		8,352,551			7.8			6,510,331			6.7
NET INCOME		44,890,005			41.7			37,310,832			38.2
Less: Net income attributable to non-controlling interest		13,812,219			12.8			11,514,755			11.8
NET INCOME ATTRIBUTABLE TO COMPANY		31,077,786			28.9			25,796,077			26.4
NET INCOME PER SHARE OF COMMON STOCK
BASIC		1.15						1.00
DILUTED		1.11						0.90

19

Sales

Our sales increased by 10.2%, or $9,918,455, to $107,612,255 for the six months ended June 30, 2013, compared to $97,693,800 for the six months ended June 30, 2012. The increase in sales for the six months ended June 30, 2013 was primarily attributable to a mix of price and volume increases in certain of our plasma based products. In addition, foreign currency translation accounted for 1.1% of the sales increase.

The following table summarizes the breakdown of sales by significant types of product:

	For the six Months Ended June 30,								Change
	2013				2012
	$		%		$		%		Amount			%
Human Albumin		43,266,022		40.2		45,329,702		46.4		(2,063,680	)		(4.6	)
Immunoglobulin products:
IVIG		46,759,025		43.5		36,500,900		37.4		10,258,125			28.1
Other Immunoglobulin products		10,593,986		9.8		10,773,101		11.0		(179,115	)		(1.7	)
Placenta Polypeptide		5,222,154		4.9		4,620,011		4.7		602,143			13.0
Others		1,771,068		1.6		470,086		0.5		1,300,982			276.8
Totals		107,612,255		100.0		97,693,800		100.0		9,918,455			10.2

During the six months ended June 30, 2013 as compared to the six months ended June 30, 2012, all of our approved plasma products recorded price increases. For the six months ended June 30, 2013 as compared to the six months ended June 30, 2012:

· the average price for our approved human albumin products, which accounted for 40.2% of our total sales for the six months ended June 30, 2013, increased by approximately 10.1% and, excluding the impact of foreign currency, their average price in RMB term increased by approximately 9.0%; and

· the average price for our approved IVIG products, which accounted for 43.5% of our total sales for the six months ended June 30, 2013, increased by approximately 1.5%, and excluding the impact of foreign currency, their average price in RMB term increased by approximately 0.4%.

The price increase of human albumin products was mainly due to the increase of retail price ceiling announced by NDRC in January 2013, which came into effect on February 1, 2013. This increased retail price ceiling provide us with more flexibility in pricing our human albumin products and allows us to increase our ex-factory prices in certain regional markets. NDRC also adjusted retail price ceilings for IVIG in September 2012, which came into effect on October 8, 2012. The new retail price ceilings for IVIG products are lower than the current prevailing market prices in some of our regional markets. As a result, some of local governments revised tender price ceilings for IVIG products. We have appealed to local governments for favorable pricing policy in selective regional markets and have successfully gained support from certain provincial governments in lifting the tender price ceilings for IVIG products. Therefore, the average price of our IVIG products remained relative stable in the first half of 2013 as compared to the same period of 2012 in spite of the retail price ceiling adjustment.

20

The sales volumes of our products in general depend on market demands and our production volumes. The production volumes of our IVIG and human albumin products depend primarily on general plasma supply. The production volumes of our hyper-immune products, which include human rabies immunoglobulin, human hepatitis B immunoglobulin and human tetanus immunoglobulin products, are subject to the availabilities of specific vaccinated plasma and our production capacity. The supply of specific vaccinated plasma in general requires several months of lead time. Our production facility currently can only accommodate the production of one type of hyper-immune products at any given time and we rotate the production of different types of hyper-immune products from time to time in response to market demand. As such, the sales volume of any given type of hyper-immune products may vary significantly from quarter to quarter. Given the planned production suspension of Guizhou Taibang starting from June 2013, we decreased the sales volume of some of our products in the six months ended June 30, 2013 in order to smooth out the impact of the reduced production volume and maintain our sales channels and customer relationship during the period of Guizhou Taibang production suspension.

Sales volume for our human albumin products decreased by 13.3% during the six months ended June 30, 2013 as compared to the same period of 2012. The decrease in sales volumes of human albumin products was primarily due to our increase of inventory level of these products in preparation for the production suspension in Guizhou Taibang during the same period. Sales volume for our IVIG products increased by 26.2% during the six months ended June 30, 2013 as compared to the same period of 2012. The increase in sales volumes of IVIG products was primarily due to our marketing efforts focused on IVIG promotion and the engagement of new distributors to sell IVIG in new territories in the first half of 2013.

Cost of sales & gross profit

	For the six Months Ended June 30,						Change
	2013			2012			Amount		%
Cost of sales	$	32,739,020		$	31,846,616		$	892,404		2.8	%
as a percentage of total sales		30.4	%		32.6	%				(2.2	)%
Gross Profit	$	74,873,235		$	65,847,184		$	9,026,051		13.7	%
Gross Margin		69.6	%		67.4	%				2.2	%

Our cost of sales was $32,739,020, or 30.4% of our sales, for the six months ended June 30, 2013, as compared to $31,846,616, or 32.6% of our sales for the same period in 2012. Our gross profit was $74,873,235 and $65,847,184 for the six months ended June 30, 2013 and 2012, respectively, representing gross margins of 69.6% and 67.4%, respectively. In general, our cost of sales and gross margin are impacted by the volume and pricing of our finished products, our raw material costs, production mix and respective yields, inventory provisions, production cycles and routine maintenance costs.

The increase in cost of sales in the six months ended June 30, 2013 as compared to the same period in 2012 was largely due to the change of product mix to include products with higher per-unit cost. The increase of our overall gross margin in the six months ended June 30, 2013 as compared to the same period in 2012, was mainly due to the improved gross margin of human albumin products as a result of price increases and the improved utilization efficiency of plasma following the newly-launched Factor VIII products.

Operating expenses

	For the six Months Ended June 30,						Change
	2013			2012			Amount			%
Operating expenses	$	23,579,530		$	25,709,592		$	(2,130,062	)		(8.3	)%
as a percentage of total sales		21.9	%		26.3	%					(4.4	)%

Our total operating expenses decreased by $2,130,062, or 8.3%, to $23,579,530, for the six months ended June 30, 2013, from $25,709,592 for the same period in 2012. As a percentage of sales, total expenses decreased by 4.4% to 21.9% for the six months ended June 30, 2013, from 26.3% for the same period in 2012. The decrease of the total operating expenses was mainly due to the decrease of the selling expenses as discussed below.

Selling expenses

	For the six Months Ended June 30,						Change
	2013			2012			Amount			%
Selling expenses	$	4,278,120		$	8,991,349		$	(4,713,229	)		(52.4	)%
as a percentage of total sales		4.0	%		9.2	%					(5.2	)%

For the six months ended June 30, 2013, our selling expenses decreased by $4,713,229, or 52.4%, to $4,278,120, from $8,991,349 for the six months ended June 30, 2012. As a percentage of sales, our selling expenses for the six months ended June 30, 2013 decreased by 5.2% to 4.0%, from 9.2% for the six months ended June 30, 2012. The decrease was mainly due to the fact that we lowered the commission rate for certain products during the second half of 2012. Further, we have taken steps to impose stricter control on the selling expenses since the second half of 2012. However, we carried out the promotional and conference activities for our new product Factor VIII starting from the second quarter of 2013. As a result, we expect our selling expenses as a percentage of sales will increase in the following quarters.

21

General and administrative expenses

	For the six Months Ended June 30,						Change
	2013			2012			Amount		%
General and administrative expenses	$	17,553,168		$	15,078,166		$	2,475,002		16.4	%
as a percentage of total sales		16.3	%		15.4	%				0.9	%

For the six months ended June 30, 2013, our general and administrative expenses increased by $2,475,002, or 16.4%, to $17,553,168, from $15,078,166 for the six months ended June 30, 2012. General and administrative expenses as a percentage of sales increased by 0.9% to 16.3% for the six months ended June 30, 2013, from 15.4% for the six months ended June 30, 2012. The increase in general and administrative expenses was mainly due to an increase in expenses related to payroll and employee benefits as a result of general salary increases, an increase of share-based compensation and an increase in legal expenses relating to the disputes among Guizhou Taibang shareholders and the corporate defense against the proposed share acquisition by Shanghai RAAS.

Research and development expenses

	For the six Months Ended June 30,						Change
	2013			2012			Amount		%
Research and development expenses	$	1,748,242		$	1,640,077		$	108,165		6.6	%
as a percentage of total sales		1.6	%		1.7	%				(0.1	)%

For the six months ended June 30, 2013 and 2012, our research and development expenses were $1,748,242 and $1,640,077, respectively, representing an increase of $108,165, or 6.6%. As a percentage of sales, our research and development expenses for the six months ended June 30, 2013 and 2012 were 1.6% and 1.7%, respectively. The research and development expenses remained consistent for the six months ended June 30, 2013, as compared to the same period in 2012.

22

Change in fair value of derivative liabilities

	For the six Months Ended June 30,					Change
	2013		2012			Amount			%
Change in fair value of derivative liabilities	$	-	$	1,769,140		$	(1,769,140	)		(100.0	)%
as a percentage of total sales		-		1.8	%					(1.8	)%

Our warrants issued in June 2009 are classified as derivative liabilities carried at fair value. For the six months ended June 30, 2013 and 2012, we recognized a gain from the change in fair value of derivative liabilities in the amounts of nil and $1,769,140, respectively. The recognized gain from the change in the fair value of derivative liabilities in the six months ended June 30, 2012 was mainly due to a decrease in the price of our common stock from $10.46 per share as of December 31, 2011 to $8.55 and $9.22, respectively, as of the two warrants exercise dates. All warrants have been exercised by the end of June 2012.

Income tax

	For the six Months Ended June 30,						Change
	2013			2012			Amount		%
Income tax	$	8,352,551		$	6,510,331		$	1,842,220		28.3	%
as a percentage of total sales		7.8	%		6.7	%				1.1	%

Our provision for income taxes increased by $1,842,220, or 28.3%, to $8,352,551 for the six months ended June 30, 2013, from $6,510,331 for the same period in 2012. Our effective income tax rates were 15.7% and 14.9% for the six months ended June 30, 2013 and 2012, respectively. The effective income tax rate remained consistent for the six months ended June 30, 2013, as compared to the same period in 2012. Tax rate applicable to our major operating subsidiaries in the PRC for 2012 and 2013 is 15%.

Net income attributable to the Company

	For the six Months Ended June 30,						Change
	2013			2012			Amount		%
Net income attributable to the Company	$	31,077,786		$	25,796,077		$	5,281,709		20.5	%
as a percentage of total sales		28.9	%		26.4	%				2.5	%

Our net income attributable to the Company increased by $5,281,709, or 20.5%, to $31,077,786 for the six months ended June 30, 2013, from $25,796,077 for the same period in 2012. Net income attributable to the Company as a percentage of total sales was 28.9% and 26.4% for the six months ended June 30, 2013 and 2012, respectively, as a result of the cumulative effect of the foregoing factors.

Liquidity and Capital Resources

To date, we have financed our operations primarily through cash flows from operations, augmented by short-term bank borrowings and equity contributions by our stockholders. As of June 30, 2013, we had $147,264,448 in cash, primarily consisting of cash on hand and demand deposits.

The following table provides the summary of our cash flows for the periods indicated: 

Cash Flow

	Six Months Ended June 30,
	2013			2012
Net cash provided by operating activities	$	37,908,728		$	32,069,232
Net cash used in investing activities		(12,405,448	)		(6,688,540	)
Net cash used in financing activities		(10,610,765	)		(10,985,216	)
Effects of exchange rate change on cash		2,762,616			679,914
Net increase in cash		17,655,131			15,075,390
Cash at beginning of the period		129,609,317			89,411,835
Cash at end of the period	$	147,264,448		$	104,487,225

23

Operating Activities

Net cash provided by operating activities for the six months ended June 30, 2013 was $37,908,728, as compared to $32,069,232 for the same period in 2012. The increase in net cash provided by operating activities was mainly in line with the increase of the net income excluding non-cash items for the six months ended June 30, 2013 as compared to the same period in 2012.

Investing Activities

Our use of cash for investing activities is primarily for the acquisition of property, plant and equipment and land use rights. Net cash used in investing activities for the six months ended June 30, 2013 was $12,405,448, as compared to $6,688,540, for the six months ended June 30, 2012. During the six months ended June 30, 2013 and 2012, we paid $11,912,603 and $5,098,533, respectively, for acquisition of property, plant and equipment at Shandong Taibang and Guizhou Taibang. The investing activities for the six months ended June 30, 2013 mainly consisted of construction of premises for Cao Xian Plasma Company, production facility for new product Factor VIII , office building for Shandong Taibang and production facility for placenta polypeptide.

Financing Activities

Net cash used in financing activities for the six months ended June 30, 2013 totaled $10,610,765, as compared to net cash used in financing activities of $10,985,216 for the same period in 2012. The net cash used in financing activities for the six months ended June 30, 2013 was mainly due to a repayment of $8,014,000 of short-term bank loans and a dividend of $8,110,168 paid by our subsidiaries to the noncontrolling interest shareholders, partially offset by the proceeds of $4,808,400 from short-term bank loans and the proceeds of $2,668,916 from options exercised. The net cash used in financing activities for the six months ended June 30, 2012 was mainly due to a repayment of $11,106,200 of short-term bank loans and a dividend of $4,379,016 paid by our subsidiaries to the noncontrolling interest shareholders, partially offset by the net proceeds of $4,500,000 from warrants exercised.

Management believes that the Company has sufficient cash on hand and continuing positive cash inflow, from the sale of its plasma-based products in the PRC market, for its operations.

Obligations under Material Contracts

The following table sets forth our material contractual obligations as of June 30, 2013:

	Payments Due by Period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Short-term bank loans	$	4,860,000		4,860,000		-		-		-
Operating lease commitment		1,427,506		469,889		771,751		12,378		173,488
Capital commitment		5,200,000		4,940,000		260,000		-		-
Total	$	11,487,506		10,269,889		1,031,751		12,378		173,488

Seasonality of Our Sales

Our operating results and operating cash flows historically have not been subject to seasonal variations. This pattern may change, however, as a result of new market opportunities or new product introductions.

Inflation

Inflation does not materially affect our business or the results of our operations.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our investors.

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Critical Accounting Policies

Critical accounting policies are those we believe are most important to portraying our financial conditions and results of operations and also require the greatest amount of subjective or complex judgments by management. Judgments and uncertainties regarding the application of these policies may result in materially different amounts being reported under various conditions or using different assumptions. There have been no material changes to the critical accounting policies previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Our operations are carried out in the PRC and we are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. Accordingly, our business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy. Our results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

Interest Rate Risk

We are exposed to interest rate risk primarily with respect to our short-term bank loans. Although our short-term loans are fixed for the terms of the loans, the terms are typically three to twelve months for short-term bank loans and interest rates are subject to change upon renewal. There was no material changes in interest rates for short-term bank loans acquired during the six months ended June 30, 2013.

A hypothetical 1.0% increase in the annual interest rates for all of our credit facilities under which we had outstanding borrowings as of June 30, 2013 would decrease net income before provision for income taxes by approximately $24,300 for the six months ended June 30, 2013.

Management monitors the banks’ prime rates in conjunction with our cash requirements to determine the appropriate level of debt balances relative to other sources of funds. We have not entered into any hedging transactions in an effort to reduce our exposure to interest rate risk.

Foreign Exchange Risk

While our reporting currency is the U.S. Dollar, all of our consolidated revenues and consolidated costs and majority of expenses are denominated in RMB. All of our assets are denominated in RMB, except certain cash balances. As a result, we are exposed to foreign exchange risk as our revenues and results of operations may be affected by fluctuations in the exchange rate between U.S. Dollars and RMB. If RMB depreciates against the U.S. Dollar, the value of our RMB revenues, earnings and assets as expressed in our U.S. Dollar financial statements will decline. Assets and liabilities are translated at exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and shareholders’ equity is translated at historical exchange rates. Any resulting translation adjustments are not included in determining net income but are included in determining other comprehensive income, a component of stockholders’ equity. We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.

The value of the RMB against the U.S. dollar and other currencies is affected by, among other things, changes in China’s political and economic conditions. Since July 2005, the RMB has not been pegged to the U.S. dollar. Although the People’s Bank of China regularly involved in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future, PRC authorities may lift restrictions on fluctuations in RMB exchange rate and lessen involvement in the foreign exchange market.

Account Balances

We maintain balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits for the banks located in the United States or may exceed Hong Kong Deposit Protection Board insured limits for the banks located in Hong Kong. Balances at financial institutions or state-owned banks within the PRC are not covered by insurance. Total cash in banks as of June 30, 2013 and December 31, 2012 amounted to $146,777,083 and $129,289,461, respectively, $73,923 and $76,101 of which are covered by insurance, respectively. We have not experienced any losses in such accounts and we do not believe that we are exposed to any significant risks on our cash in bank accounts.

Inflation

Inflationary factors such as increases in the cost of our sales and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses as a percentage of net sales if the selling prices of our products do not increase with these increased costs.

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Market for Human Albumin and IVIG

Our two major products, human albumin and IVIG, accounted for 42.5% and 39.4% of the total sales for the three months ended June 30, 2013, respectively. If the market demands for human albumin or IVIG cannot be sustained in the future or if there is substantial price decrease in either or both products, our operating results could be materially and adversely affected.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15(e), our management has carried out an evaluation, with the participation and under the supervision of our Chief Executive Officer, Mr. David (Xiaoying) Gao and our Chief Financial Officer, Mr. Ming Yang, of the effectiveness of the design and operation of our disclosure controls and procedures, as of June 30, 2013. Based on that evaluation, Mr. Gao and Mr. Yang concluded that our disclosure controls and procedures were effective as of June 30, 2013.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the second quarter of 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may become involved in various lawsuits and legal proceedings arising in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business. Other than the legal proceedings set forth below, we are currently not aware of any such legal proceedings or claims that we believe will have a material adverse affect on our business, financial condition or operating results.

Dispute among Guizhou Taibang Shareholders over Raising Additional Capital

In May 2007, a 91% majority of Guizhou Taibang’s shareholders approved a plan to raise additional capital from private strategic investors through the issuance of an additional 20,000,000 shares of Guizhou Taibang at RMB2.80 per share. The plan required all existing Guizhou Taibang shareholders to waive their rights of first refusal to subscribe for the additional shares. The remaining 9% minority shareholder of Guizhou Taibang’s shares, Guizhou Jie’an Company (“Jie’an”), did not support the plan and did not waive its right of first refusal. In May 2007, the majority shareholders caused Guizhou Taibang to sign an Equity Purchase Agreement with certain investors, pursuant to which the investors agreed to invest an aggregate of $7,475,832 (or RMB50,960,000) in exchange for 18,200,000 shares, or 21.4%, of Guizhou Taibang’s equity interests. At the same time, Jie’an also subscribed for 1,800,000 shares, representing its pro rata share of the 20,000,000 shares being offered. The proceeds from all parties were received by Guizhou Taibang in accordance with the agreement.

In June 2007, Jie’an brought suit in the High Court of Guizhou province, China, against Guizhou Taibang and the three other original shareholders of Guizhou Taibang, alleging the illegality of the Equity Purchase Agreement. In its complaint, Jie’an claimed that it had a right to acquire the 18,200,000 shares offered to the strategic investors under the Equity Purchase Agreement. In September 2008, the Guizhou High Court ruled against Jie’an and sustained the Equity Purchase Agreement. In November 2008, Jie’an appealed the Guizhou High Court judgment to the People’s Supreme Court in Beijing. In May 2009, the People’s Supreme Court sustained the original ruling and denied the rights of first refusal of Jie’an over the 18,200,000 shares.

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During the second quarter of 2010, Jie’an requested that Guizhou Taibang register its 1.8 million shares of additional capital injection with the local AIC, pursuant to the Equity Purchase Agreement, and such request was approved by the majority shareholders of Guizhou Taibang in a shareholders meeting held in the second quarter of 2010. However, the Board of Directors of the Company is withholding its required ratification of the shareholders’ approval of Jie’an’s request, pending the outcome of the ongoing litigation. In March 2012, the Company received a subpoena that Jie’an brought suit in the People’s Court of Huaxi District, Guizhou Province, against Guizhou Taibang, alleging Guizhou Taibang’s withholding of its request. Jie’an requested that Guizhou Taibang register its 1.8 million shares of capital injection, pay dividends associated with these shares, as well as the related interest and penalty from May 2007 to December 2011 amounting to $3,967,500 (or RMB25,000,000) in aggregate, and return the over-paid subscription of $228,528 (or RMB1,440,000), as well as the interest and penalty, amounting to $1,587,000 (or RMB10,000,000) in aggregate. The People’s Court of Huaxi District, Guizhou Province, has accepted Jie’an’s suit. In May 2012, Guizhou Taibang was informed by the court that the case was postponed upon the request from Jie’an and no exact hearing date has been provided as of the date of this report. If the Company decides to ratify the approval or the case is ruled in Jie’an’s favor, Dalin’s ownership in Guizhou Taibang will be diluted from 54% to 52.54% and Jie’an may be entitled to receive its pro rata share of Guizhou Taibang’s profits since the date of Jie’an’s capital contribution became effective. As this case is closely tied to the outcome of the strategic investors’ dispute stated below, the Company does not expect Jie’an to prevail. As of June 30, 2013, the Company had recorded, in its balance sheet, payables to Jie’an in the amounts of RMB5,040,000 (approximately $816,480) for the additional funds received in relation to the 1.8 million shares of capital infusion, RMB1,440,000 (approximately $233,280) for the over-paid subscription and RMB2,736,575 (approximately $443,325) for the accrued interest.

As a result of this dispute, the strategic investors’ equity ownership in Guizhou Taibang and the related increase in registered capital of Guizhou Taibang have not been registered with the local Administration for Industry and Commerce, or AIC. In January 2010, the strategic investors brought suit in the High Court of Guizhou Province against Guizhou Taibang alleging Guizhou Taibang’s failure to register their equity interest in Guizhou Taibang with the local AIC and requesting the distribution of their share of Guizhou Taibang’s dividends declared since 2007. Dalin was also joined as a co-defendant as it is the majority shareholder and exercises control over Guizhou Taibang’s day-to-day operations.

In October, 2010, the High Court of Guizhou ruled in favor of the Company and denied the strategic investors’ right as shareholders of Guizhou Taibang, as well as their entitlement to the dividends. In light of the Guizhou ruling, the Company returned the proceeds of $1,699,040 (or RMB11,200,000) to one of the strategic investors in November 2010. In October 2010, the other strategic investors appealed to the PRC Supreme Court in Beijing on the ruling of the High Court of Guizhou. The PRC Supreme Court overruled the decision of the High Court of Guizhou and remanded the case to the High Court of Guizhou for retrial. In January 2012, the strategic investors re-filed their case to the High Court of Guizhou requesting, in addition to the share distribution, the distribution of dividends and interest in the amount of RMB18,349,345 (approximately $2,972,594) and RMB2,847,000 (approximately $461,214), respectively. In December 2012, the High Court of Guizhou affirmed the judgment against the strategic investors. In January 2013, the strategic investors appealed to the PRC Supreme Court in Beijing on the ruling again. The PRC Supreme Court accepted the case for retrial. The Company does not expect the strategic investors to prevail because, upon evaluation of the Equity Purchase Agreement, the Company believes that the Equity Purchase Agreement is void due to certain invalid pre-conditions and the absence of shareholder authorization of the initial investment.

In April 2013, the Company countersued the strategic investors in the Intermediate Court of Guiyang City alleging their breach of the Security Law in the PRC and requested a consideration of $6,064,800 (or RMB 38,000,000) for the related expenses and losses, and Guizhou Intermediate Court accepted the case. The Company is awaiting the hearing of the above cases as of the date of this report. As of June 30, 2013, Guizhou Taibang has set aside the strategic investors’ initial fund along with RMB15,942,138 (approximately $2,582,626) in accrued interest, and RMB509,600 (approximately $82,555) for the 1% penalty imposed by the agreement for any breach in the event that Guizhou Taibang is required to return their original investment amount to the strategic investors. If strategic investors prevail in their suit, Dalin’s interests in Guizhou Taibang may be reduced to approximately 41.3%.

ITEM 1A. RISK FACTORS.

As of the date of this filing, there have been no material changes from the risk factors disclosed in the Company’s Annual Report on Form 10-K filed on March 12, 2013. We operate in a changing environment that involves numerous known and unknown risks and uncertainties that could materially affect our operations. The risks, uncertainties and other factors set forth in our Annual Report on Form 10-K may cause our actual results, performances and achievements to be materially different from those expressed or implied by our forward-looking statements. If any of these risks or events occurs, our business, financial condition or results of operations may be adversely affected.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

We have not sold any equity securities during the second quarter of 2013 that were not previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K that was filed during the quarter. No repurchases of our common stock were made during the second quarter of 2013.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

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ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

We have no information to disclose that was required to be in a report on Form 8-K during the second quarter of 2013, but was not reported. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

ITEM 6. EXHIBITS.

The list of exhibits in the Exhibit Index to this report is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 6, 2013	CHINA BIOLOGIC PRODUCTS, INC.
	By:	/s/ David (Xiaoying) Gao
		David (Xiaoying) Gao, Chief Executive Officer
		(Principal Executive Officer)

By:	/s/ Ming Yang
	Ming Yang, Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

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EXHIBIT INDEX

Exhibit No.	Description
3.1	Amended and Restated Certificate of Incorporation of China Biologic Products, Inc.
3.2	Second Amended and Restated Bylaws of China Biologic Products, Inc.
3.3	The form of a Restricted Stock Grant Agreement
31.1	Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Interactive data files pursuant to Rule 405 of Regulation S-T (furnished herewith)

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EX-3.3

Exhibit 3.3

CHINA BIOLOGIC PRODUCTS, INC.

2008 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

Unless otherwise defined herein, the terms defined in the China Biologic Products, Inc. 2008 Equity Incentive Plan (the “Plan”) will have the same defined meanings in this Restricted Stock Award Agreement (the “Award Agreement”).

I. NOTICE OF RESTRICTED STOCK GRANT

Participant Name:

You have been granted the right to receive an Award of Restricted Stock, subject to the terms and conditions of the Plan and this Award Agreement, as follows:

Grant Number
Date of Grant	August 15, 2013
Vesting Commencement Date	August 16, 2014
Total Number of Shares Granted

Vesting Schedule:

Subject to any acceleration provisions contained in the Plan or set forth below, the Restricted Stock will vest and the Company’s right to reacquire the Restricted Stock will lapse in accordance with the following schedule:

The Restricted Stock will be vested in four equal portions on a year basis over a 4-year period, with the first portion vesting on August 16, 2014; provided that the participant is employed by the Company on each vesting date.

By Participant’s signature and the signature of the representative of China Biologic Products, Inc. (the “Company”) below, Participant and the Company agree that this Award of Restricted Stock is granted under and governed by the terms and conditions of the Plan and this Award Agreement, including the Terms and Conditions of Restricted Stock Grant, attached hereto as Exhibit A, all of which are made a part of this document. Participant has reviewed the Plan and this Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Award Agreement and fully understands all provisions of the Plan and Award Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and Award Agreement. Participant further agrees to notify the Company upon any change in the residence address indicated below.

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PARTICIPANT:	CHINA BIOLOGIC PRODUCTS, INC.
Signature	By
Print Name	Title
Residence Address:

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EXHIBIT A

TERMS AND CONDITIONS OF RESTRICTED STOCK GRANT

1.            Grant of Restricted Stock. The Company hereby grants to the individual named in the Notice of Grant attached as Part I of this Award Agreement (the “Participant”) under the Plan for past services and as a separate incentive in connection with his or her services and not in lieu of any salary or other compensation for his or her services, an Award of Restricted Stock, subject to all of the terms and conditions in this Award Agreement and the Plan, which is incorporated herein by reference. Subject to Section 18 of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Award Agreement, the terms and conditions of the Plan will prevail.

2.            Escrow of Shares.

(a)          All Restricted Stock will, upon execution of this Award Agreement, be delivered and deposited with an escrow holder designated by the Company (the “Escrow Holder”). The Restricted Stock will be held by the Escrow Holder until such time as the Restricted Stock vest or the date Participant ceases to be a Service Provider.

(b)          The Escrow Holder will not be liable for any act it may do or omit to do with respect to holding the Restricted Stock in escrow while acting in good faith and in the exercise of its judgment.

(c)          Upon Participant’s termination as a Service Provider for any reason, the Escrow Holder, upon receipt of written notice of such termination, will take all steps necessary to accomplish the transfer of the unvested Restricted Stock to the Company. Participant hereby appoints the Escrow Holder with full power of substitution, as Participant's true and lawful attorney-in-fact with irrevocable power and authority in the name and on behalf of Participant to take any action and execute all documents and instruments, including, without limitation, stock powers which may be necessary to transfer the certificate or certificates evidencing such unvested Restricted Stock to the Company upon such termination.

(d)          The Escrow Holder will take all steps necessary to accomplish the transfer of Restricted Stock to Participant after they vest following Participant’s request that the Escrow Holder do so.

(e)          Subject to the terms hereof, Participant will have all the rights of a stockholder with respect to the Shares while they are held in escrow, including without limitation, the right to vote the Shares and to receive any cash dividends declared thereon.

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(f)          In the event of a reorganization, recapitalization, stock split, stock dividend, extraordinary cash dividend, combination of shares, merger, consolidation, rights offering, spin off, split off, split up, or any other event identified by the Administrator affecting Shares occurs, the Restricted Stock will be increased, reduced or otherwise changed, and by virtue of any such change Participant will in his or her capacity as owner of unvested Restricted Stock be entitled to new or additional or different shares, cash or securities (other than rights or warrants to purchase securities); such new or additional or different shares, cash or securities will thereupon be considered to be unvested Restricted Stock and will be subject to all of the conditions and restrictions which were applicable to the unvested Restricted Stock pursuant to this Award Agreement. If Participant receives rights or warrants with respect to any unvested Restricted Stock, such rights or warrants may be held or exercised by Participant, provided that until such exercise any such rights or warrants and after such exercise any shares or other securities acquired by the exercise of such rights or warrants will be considered to be unvested Restricted Stock and will be subject to all of the conditions and restrictions which were applicable to the unvested Restricted Stock pursuant to this Award Agreement. The Administrator in its absolute discretion at any time may accelerate the vesting of all or any portion of such new or additional shares, cash or securities, rights or warrants to purchase securities or shares or other securities acquired by the exercise of such rights or warrants.

(g)          The Company may instruct the transfer agent for its Shares to place a legend on the certificates representing the Restricted Stock or otherwise note its records as to the restrictions on transfer set forth in this Award Agreement.

3.            Vesting Schedule. Except as provided in Section 4, and subject to Section 5, the Restricted Stock awarded by this Award Agreement will vest in accordance with the vesting provisions set forth in the Notice of Grant. Restricted Stock scheduled to vest on a certain date or upon the occurrence of a certain condition will not vest in Participant in accordance with any of the provisions of this Award Agreement, unless Participant will have been continuously a Service Provider from the Date of Grant until the date such vesting occurs.

4.            Administrator Discretion. The Administrator, in its discretion, may accelerate or waive the vesting of the balance, or some lesser portion of the balance, of the unvested Restricted Stock at any time, subject to the terms of the Plan. If so accelerated or waived, such Restricted Stock will be considered as having vested as of the date specified by the Administrator.

5.            Forfeiture upon Termination of Status as a Service Provider. Notwithstanding any contrary provision of this Award Agreement, the balance of the Restricted Stock that have not vested at the time of Participant’s termination as a Service Provider for any reason will be forfeited and automatically transferred to and reacquired by the Company at no cost to the Company upon the date of such termination and Participant will have no further rights thereunder. Participant will not be entitled to a refund of the price paid for the Restricted Stock, if any, returned to the Company pursuant to this Section 5. Participant hereby appoints the Escrow Agent with full power of substitution, as Participant’s true and lawful attorney-in-fact with irrevocable power and authority in the name and on behalf of Participant to take any action and execute all documents and instruments, including, without limitation, stock powers which may be necessary to transfer the certificate or certificates evidencing such unvested Shares to the Company upon such termination of service.

6.            Death of Participant. Any distribution or delivery to be made to Participant under this Award Agreement will, if Participant is then deceased, be made to Participant’s designated beneficiary, or if no beneficiary survives Participant, the administrator or executor of Participant’s estate. Any such transferee must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.

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7.          Withholding of Taxes. Notwithstanding any contrary provision of this Award Agreement, no certificate representing the Restricted Stock may be released from the escrow established pursuant to Section 2, unless and until satisfactory arrangements (as determined by the Administrator) will have been made by Participant with respect to the payment of income, employment and other taxes which the Company determines must be withheld with respect to such Shares. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit Participant to satisfy such tax withholding obligation, in whole or in part (without limitation) by (a) paying cash, (b) electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value (as of the date that the taxes are to be withheld) equal to the withholding amount, (c) delivering to the Company already-owned Shares having a Fair Market Value (as of the date that the taxes should be withheld) equal to the withholding amount. To the extent determined appropriate by the Company in its discretion, it will have the right (but not the obligation) to satisfy any tax withholding obligations by reducing the number of Shares otherwise deliverable to Participant.If Participant fails to make satisfactory arrangements for the payment of any required tax withholding obligations hereunder at the time any applicable Shares otherwise are scheduled to vest pursuant to Sections 3 or 4, Participant will permanently forfeit such Shares and the Shares will be returned to the Company at no cost to the Company.

8.          Rights as Stockholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant or the Escrow Agent. Except as provided in Section 2, after such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.

9.          No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE RESTRICTED STOCK PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THESE RESTRICTED STOCK OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

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10.         Address for Notices. Any notice to be given to the Company under the terms of this Award Agreement will be addressed to the Company, at China Biologic Products, Inc. ., at 18F Jialong International Tower, No. 19 Chaoyang Park, Chaoyang District, Beijing, 100125 China, or at such other address as the Company may hereafter designate in writing.

11.         Grant is Not Transferable. Except to the limited extent provided in Section 6, the unvested Restricted Stock subject to this grant and the rights and privileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any unvested Restricted Stock subject to this grant, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void.

12.         Binding Agreement. Subject to the limitation on the transferability of this grant contained herein, this Award Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

13.         Additional Conditions to Release from Escrow. The Company will not be required to issue any certificate or certificates for Shares hereunder or release such Shares from the escrow established pursuant to Section 2 prior to fulfillment of all the following conditions: (a) the admission of such Shares to listing on all stock exchanges on which such class of stock is then listed; (b) the completion of any registration or other qualification of such Shares under any state or federal law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, which the Administrator will, in its absolute discretion, deem necessary or advisable; (c) the obtaining of any approval or other clearance from any state or federal governmental agency, which the Administrator will, in its absolute discretion, determine to be necessary or advisable; and (d) the lapse of such reasonable period of time following the date of grant of the Restricted Stock as the Administrator may establish from time to time for reasons of administrative convenience.

14.         Plan Governs. This Award Agreement is subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of this Award Agreement and one or more provisions of the Plan, the provisions of the Plan will govern. Capitalized terms used and not defined in this Award Agreement will have the meaning set forth in the Plan.

15.         Administrator Authority. The Administrator will have the power to interpret the Plan and this Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Restricted Stock have vested). All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon Participant, the Company and all other interested persons. No member of the Administrator will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Award Agreement.

-6-

16.         Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to the Restricted Stock awarded under the Plan or future Restricted Stock that may be awarded under the Plan by electronic means or request Participant’s consent to participate in the Plan by electronic means. Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through any on-line or electronic system established and maintained by the Company or another third party designated by the Company.

17.         Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.

18.         Agreement Severable. In the event that any provision in this Award Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Award Agreement.

19.         Modifications to the Agreement. This Award Agreement constitutes the entire understanding of the parties on the subjects covered. Participant expressly warrants that he or she is not accepting this Award Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Award Agreement or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company. Notwithstanding anything to the contrary in the Plan or this Award Agreement, the Company reserves the right to revise this Award Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) or to otherwise avoid imposition of any additional tax or income recognition under Section 409A of the Code in connection to this Award of Restricted Stock.

20.         Amendment, Suspension or Termination of the Plan. By accepting this Award, Participant expressly warrants that he or she has received an Award of Restricted Stock under the Plan, and has received, read and understood a description of the Plan. Participant understands that the Plan is discretionary in nature and may be amended, suspended or terminated by the Company at any time.

21.         Governing Law. This Award Agreement will be governed by the laws of the Delaware, without giving effect to the conflict of law principles thereof.

-7-

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, David (Xiaoying) Gao, certify that:

1. I have reviewed this quarterly report on Form 10-Q of China Biologic Products, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.  

Date: August 6, 2013

/s/ David (Xiaoying) Gao

David (Xiaoying) Gao

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Ming Yang, certify that:

1. I have reviewed this quarterly report on Form 10-Q of China Biologic Products, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.  

Date: August 6, 2013

/s/ Ming Yang

Ming Yang

Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, David (Xiaoying) Gao, the Chief Executive Officer of CHINA BIOLOGIC PRODUCTS, INC. (the “Company”), DOES HEREBY CERTIFY that:

1.   The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.   Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

IN WITNESS WHEREOF, each of the undersigned has executed this statement this 6^th day of August, 2013.

/s/ David (Xiaoying) Gao

David (Xiaoying) Gao

Chief Executive Officer

(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to China Biologic Products, Inc. and will be retained by China Biologic Products, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. 

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Ming Yang, the Chief Financial Officer of CHINA BIOLOGIC PRODUCTS, INC. (the “Company”), DOES HEREBY CERTIFY that:

1.   The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.   Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

IN WITNESS WHEREOF, each of the undersigned has executed this statement this 6^th day of August, 2013.

/s/ Ming Yang

Ming Yang

Chief Financial Officer

(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to China Biologic Products, Inc. and will be retained by China Biologic Products, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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SALES

6 Months Ended

Jun. 30, 2013

Sales [Abstract]

SALES

NOTE 12 – SALES

The Company’s sales are primarily derived from the manufacture and sale of Human Albumin and Immunoglobulin products. The Company’s sales by significant types of product for the three months ended June 30, 2013 and 2012 are as follows:

	For the three months ended
	June 30, 2013		June 30, 2012
	USD		USD
Human Albumin		22,764,711		19,539,419
Immunoglobulin products:
Human Immunoglobulin for Intravenous Injection		21,097,154		21,239,174
Other Immunoglobulin products		5,494,261		6,987,822
Placenta Polypeptide		3,037,991		2,509,202
Others		1,186,406		190,722
Total		53,580,523		50,466,339

The Company’s sales by significant types of product for the six months ended June 30, 2013 and 2012 are as follows:

	For the six months ended
	June 30, 2013		June 30, 2012
	USD		USD
Human Albumin		43,266,022		45,329,702
Immunoglobulin products:
Human Immunoglobulin for Intravenous Injection		46,759,025		36,500,900
Other Immunoglobulin products		10,593,986		10,773,101
Placenta Polypeptide		5,222,154		4,620,011
Others		1,771,068		470,086
Total		107,612,255		97,693,800

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SCHEDULE OF MATERIAL RELATED PARTY TRANSACTIONS (Details) (USD $)	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Related Party Transactions [Line Items]
Commission expenses with related parties(1)	$ 909,057	[1]	$ 852,948	[1]	$ 1,552,312	[1]	$ 1,581,483	[1]

[1] During the year ended December 31, 2011, Guizhou Taibang signed an agency contract with Guizhou Eakan Co., Ltd. (“Guizhou Eakan”), an affiliate of one of the Guizhou Taibang’s noncontrolling interest shareholders, pursuant to which Guizhou Taibang would pay commission to Guizhou Eakan for the promotion of the product of Placenta Polypeptide. As of June 30, 2013, Guizhou Taibang accrued commission payable of $204,120 for service rendered by Guizhou Eakan. For the three months ended June 30, 2013, commission expense for service rendered by Guizhou Eakan was $909,057. For the six months ended June 30, 2013, commission expense for service rendered by Guizhou Eakan was $1,552,312.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Sales	$ 53,580,523	$ 50,466,339	$ 107,612,255	$ 97,693,800
Cost of sales	16,122,262	16,130,889	32,739,020	31,846,616
Gross profit	37,458,261	34,335,450	74,873,235	65,847,184
Operating expenses
Selling expenses	2,441,727	4,165,242	4,278,120	8,991,349
General and administrative expenses	8,866,071	7,932,372	17,553,168	15,078,166
Research and development expenses	835,150	929,489	1,748,242	1,640,077
Income from operations	25,315,313	21,308,347	51,293,705	40,137,592
Other income/ (expenses)
Equity in income of an equity method investee	610,997	451,891	739,945	1,474,303
Change in fair value of derivative liabilities	0	559,758	0	1,769,140
Interest expense	(198,739)	(157,635)	(434,913)	(766,198)
Interest income	995,757	765,717	1,643,819	1,309,112
Other expenses, net	0	(1,797)	0	(102,786)
Total other income, net	1,408,015	1,617,934	1,948,851	3,683,571
Earnings before income tax expense	26,723,328	22,926,281	53,242,556	43,821,163
Income tax expense	3,745,649	3,333,616	8,352,551	6,510,331
Net income	22,977,679	19,592,665	44,890,005	37,310,832
Less: Net income attributable to noncontrolling interest	6,815,753	6,753,894	13,812,219	11,514,755
Net income attributable to China Biologic Products, Inc.	16,161,926	12,838,771	31,077,786	25,796,077
Net income per share of common stock:
Basic	$ 0.60	$ 0.50	$ 1.15	$ 1.00
Diluted	$ 0.57	$ 0.46	$ 1.11	$ 0.90
Weighted average shares used in computation:
Basic	26,880,459	25,875,164	26,833,262	25,738,145
Diluted	28,067,303	26,627,160	27,967,080	26,581,824
Net income	22,977,679	19,592,665	44,890,005	37,310,832
Other comprehensive income:
Foreign currency translation adjustment, net of nil income taxes	4,428,715	136,178	5,825,256	1,313,135
Comprehensive income	27,406,394	19,728,843	50,715,261	38,623,967
Less: Comprehensive income attributable to noncontrolling interest	7,723,790	6,750,933	14,882,947	11,766,768
Comprehensive income attributable to China Biologic Products, Inc.	$ 19,682,604	$ 12,977,910	$ 35,832,314	$ 26,857,199

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INTANGIBLE ASSETS, NET

6 Months Ended

Jun. 30, 2013

Finite-Lived Intangible Assets, Net [Abstract]

INTANGIBLE ASSETS, NET

NOTE 5 – INTANGIBLE ASSETS, NET

Intangible assets at June 30, 2013 and December 31, 2012 consisted of the following:

	June 30, 2013
	Weighted
	average		Gross				Net
	amortization		carrying		Accumulated		carrying
	period		amount		amortization		amount
			USD		USD		USD
Amortizing intangible assets:
Permits and licenses		10 years		5,091,360		(2,477,006)		2,614,354
GMP certificate		5 years		2,578,198		(2,282,267)		295,931
Long-term customer relationship		4 years		7,675,560		(7,675,560)		-
Others				342,231		(148,306)		193,925
Total				15,687,349		(12,583,139)		3,104,210

	December 31, 2012
	Weighted
	average		Gross				Net
	amortization		carrying		Accumulated		carrying
	period		amount		amortization		amount
			USD		USD		USD
Amortizing intangible assets:
Permits and licenses		10 years		4,987,647		(2,119,622)		2,868,025
GMP certificate		5 years		2,525,679		(1,955,360)		570,319
Long-term customer relationship		4 years		7,519,206		(7,519,206)		-
Others				214,520		(111,282)		103,238
Total				15,247,052		(11,705,470)		3,541,582

Amortization expense for intangible assets was $391,452 and $733,794 for the three months ended June 30, 2013 and 2012, respectively. Amortization expense for intangible assets was $655,152 and $1,456,810 for the six months ended June 30, 2013 and 2012, respectively. Estimated amortization expenses for the next five fiscal years are $511,058 in 2014, $509,278 in 2015, $503,715 in 2016, $469,606 in 2017 and $426,774 in 2018.

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INVENTORIES (Tables)

6 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

SCHEDULE OF INVENTORIES

Inventories at June 30, 2013 and December 31, 2012 consisted of the following:

	June 30, 2013		December 31, 2012
	USD		USD
Raw materials		34,286,954		29,596,746
Work-in-process		24,544,953		24,524,142
Finished goods		22,075,906		21,558,285
Total		80,907,813		75,679,173

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SCHEDULE OF NET INCOME PER SHARE RECONCILIATION (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Net income attributable to China Biologic Products, Inc.	$ 16,161,926	$ 12,838,771	$ 31,077,786	$ 25,796,077
Earnings allocated to participating nonvested shares	(85,227)	0	(157,615)	0
Net income allocated to common stockholders used in computing basic net income per common stock	16,076,699	12,838,771	30,920,171	25,796,077
Change in fair value of warrants	0	(559,758)	0	(1,769,140)
Net income used in diluted net income per common stock	$ 16,076,699	$ 12,279,013	$ 30,920,171	$ 24,026,937

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Capital commitments

As of June 30, 2013, commitments outstanding for the purchase of property, plant and equipment approximated $5,200,000.

Legal proceedings

Dispute among Guizhou Taibang Shareholders over Raising Additional Capital

In May 2007, a 91% majority of Guizhou Taibang’s shareholders approved a plan to raise additional capital from private strategic investors through the issuance of an additional 20,000,000 shares of Guizhou Taibang at RMB2.80 per share. The plan required all existing Guizhou Taibang shareholders to waive their rights of first refusal to subscribe for the additional shares. The remaining 9% minority shareholder of Guizhou Taibang’s shares, Guizhou Jie’an Company (“Jie’an”), did not support the plan and did not waive its right of first refusal. In May 2007, the majority shareholders caused Guizhou Taibang to sign an Equity Purchase Agreement with certain investors, pursuant to which the investors agreed to invest an aggregate of $7,475,832 (or RMB50,960,000) in exchange for 18,200,000 shares, or 21.4%, of Guizhou Taibang’s equity interests. At the same time, Jie’an also subscribed for 1,800,000 shares, representing its pro rata share of the 20,000,000 shares being offered. The proceeds from all parties were received by Guizhou Taibang in accordance with the agreement.

In June 2007, Jie’an brought suit in the High Court of Guizhou province , China, against Guizhou Taibang and the three other original shareholders of Guizhou Taibang, alleging the illegality of the Equity Purchase Agreement. In its complaint, Jie’an claimed that it had a right to acquire the 18,200,000 shares offered to the strategic investors under the Equity Purchase Agreement. In September 2008, the Guizhou High Court ruled against Jie’an and sustained the Equity Purchase Agreement. In November 2008, Jie’an appealed the Guizhou High Court judgment to the People’s Supreme Court in Beijing. In May 2009, the People’s Supreme Court sustained the original ruling and denied the rights of first refusal of Jie’an over the 18,200,000 shares.

During the second quarter of 2010, Jie’an requested that Guizhou Taibang register its 1.8 million shares of additional capital injection with the local Administration for Industry and Commerce, or AIC, pursuant to the Equity Purchase Agreement, and such request was approved by the majority shareholders of Guizhou Taibang in a shareholders meeting held in the second quarter of 2010. However, the Board of Directors of the Company is withholding its required ratification of the shareholders’ approval of Jie’an’s request , pending the outcome of the ongoing litigation. In March 2012, the Company received a subpoena that Jie’an brought suit in the People’s Court of Huaxi District, Guizhou Province, against Guizhou Taibang, alleging Guizhou Taibang’s withholding of its request. Jie’an requested that Guizhou Taibang register its 1.8 million shares of capital injection, pay dividends associated with these shares, as well as the related interest and penalty from May 2007 to December 2011 amounting to $3,967,500 (or RMB25,000,000) in aggregate, and return the over-paid subscription of $228,528 (or RMB1,440,000), as well as the interest and penalty, amounting to $1,587,000 (or RMB10,000,000) in aggregate. The People’s Court of Huaxi District, Guizhou Province, has accepted Jie’an’s suit. In May 2012, Guizhou Taibang was informed by the court that the case was postponed upon the request from Jie’an and no exact hearing date has been provided as of the date of this report . If the Company decides to ratify the approval or the case is ruled in Jie’an’s favor, Dalin’s ownership in Guizhou Taibang will be diluted from 54% to 52.54% and Jie’an may be entitled to receive its pro rata share of Guizhou Taibang’s profits since the date of Jie’an’s capital contribution became effective. As this case is closely tied to the outcome of the strategic investors’ dispute stated below, the Company does not expect Jie’an to prevail. As of June 30, 2013, the Company had recorded, in its balance sheet, payables to Jie’an in the amounts of RMB5,040,000 (approximately $816,480) for the additional funds received in relation to the 1.8 million shares of capital infusion, RMB1,440,000 (approximately $233,280) for the over-paid subscription and RMB2,736,575 (approximately $443,325) for the accrued interest.

As a result of this dispute, the strategic investors’ equity ownership in Guizhou Taibang and the related increase in registered capital of Guizhou Taibang have not been registered with the local AIC. In January 2010, the strategic investors brought suit in the High Court of Guizhou Province against Guizhou Taibang alleging Guizhou Taibang’s failure to register their equity interest in Guizhou Taibang with the local AIC and requesting the distribution of their share of Guizhou Taibang’s dividends declared since 2007. Dalin was also joined as a co-defendant as it is the majority shareholder and exercises control over Guizhou Taibang’s day-to-day operations.

In October, 2010, the High Court of Guizhou ruled in favor of the Company and denied the strategic investors’ right as shareholders of Guizhou Taibang, as well as their entitlement to the dividends. In light of the Guizhou ruling, the Company returned the proceeds of $1,699,040 (or RMB11,200,000) to one of the strategic investors in November 2010. In October 2010, the other strategic investors appealed to the PRC Supreme Court in Beijing on the ruling of the High Court of Guizhou. The PRC Supreme Court overruled the decision of the High Court of Guizhou and remanded the case to the High Court of Guizhou for retrial. In January 2012, the strategic investors re-filed their case to the High Court of Guizhou requesting, in addition to the share distribution, the distribution of dividends and interest in the amount of RMB18,349,345 (approximately $2,972,594) and RMB2,847,000 (approximately $461,214), respectively. In December 2012, the High Court of Guizhou affirmed the judgment against the strategic investors. In January 2013, the strategic investors appealed to the PRC Supreme Court in Beijing on the ruling again. The PRC Supreme Court accepted the case for retrial. The Company does not expect the strategic investors to prevail because, upon evaluation of the Equity Purchase Agreement, the Company believe that the Equity Purchase Agreement is void due to certain invalid pre-conditions and the absence of shareholder authorization of the initial investment.

In April 2013, the Company countersued the strategic investors in the Intermediate Court of Guiyang City alleging their breach of the Security Law in the PRC and requested a consideration of $6,064,800 (or RMB38,000,000) for the related expenses and losses, and Guizhou Intermediate Court accepted the case. The Company is awaiting the hearing of the above cases as of the date of this report. As of June 30, 2013, Guizhou Taibang has set aside the strategic investors’ initial fund along with RMB15,942,138 (approximately $2,582,626) in accrued interest, and RMB509,600 (approximately $82,555) for the 1% penalty imposed by the agreement for any breach in the event that Guizhou Taibang is required to return their original investment amount to the strategic investors. If strategic investors prevail in their suit, Dalin’s interests in Guizhou Taibang may be reduced to approximately 41.3%.

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SCHEDULE OF STOCK OPTIONS VALUATION ASSUMPTION (Details) (USD $)	6 Months Ended
	Jun. 30, 2013
Expected volatility	104.00%
Expected dividends yield	0.00%
Expected term	5 years
Risk-free interest rate (per annum)	0.72%
Fair value of underlying ordinary shares (per share)	$ 10.57

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SCHEDULE OF NET INCOME PER SHARE - BASIC AND DILUTED (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Weighted average shares used in computing basic net income per common stock	26,880,459	25,875,164	26,833,262	25,738,145
Diluted effect of warrants	0	311,200	0	390,507
Diluted effect of stock option	1,186,844	440,796	1,133,818	453,172
Weighted average shares used in computing diluted net income per common stock	28,067,303	26,627,160	27,967,080	26,581,824
Net income per common stock - basic	$ 0.60	$ 0.50	$ 1.15	$ 1.00
Net income per common stock - diluted	$ 0.57	$ 0.46	$ 1.11	$ 0.90

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SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Total property, plant and equipment, gross	$ 65,587,420	$ 61,322,144
Accumulated depreciation	(23,479,901)	(24,356,752)
Total property, plant and equipment, net	42,107,519	36,965,392
Construction in progress	14,813,753	3,501,404
Prepayment for property, plant and equipment	5,416,150	10,858,381
Property, plant and equipment, net	62,337,422	51,325,177
Buildings [Member]
Total property, plant and equipment, gross	31,296,990	25,183,496
Machinery and Equipment [Member]
Total property, plant and equipment, gross	27,169,226	29,625,166
Furniture, Fixtures, Office Equipment and Vehicles [Member]
Total property, plant and equipment, gross	$ 7,121,204	$ 6,513,482

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SHORT-TERM BANK LOANS (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

SCHEDULE OF SHORT-TERM BANK LOANS

The Company’s bank loans as of June 30, 2013 and December 31, 2012 consisted of the following:

	Maturity		Annual			June 30,
Loans	date		interest rate			2013		December 31, 2012
						USD		USD
Short-term bank loan, unsecured		August 1, 2013		6.00	%		-		3,174,000
Short-term bank loan, unsecured		September 3, 2013		6.00	%		-		3,174,000
Short-term bank loan, unsecured		September 3, 2013		6.00	%		-		1,587,000
Short-term bank loan, unsecured		May 12, 2014		6.00	%		4,860,000		-
Total							4,860,000		7,935,000

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INTANGIBLE ASSETS, NET (Tables)

6 Months Ended

Jun. 30, 2013

Intangible Assets Disclosure [Abstract]

SCHEDULE OF INTANGIBLE ASSETS

Intangible assets at June 30, 2013 and December 31, 2012 consisted of the following:

	June 30, 2013
	Weighted
	average		Gross				Net
	amortization		carrying		Accumulated		carrying
	period		amount		amortization		amount
			USD		USD		USD
Amortizing intangible assets:
Permits and licenses		10 years		5,091,360		(2,477,006)		2,614,354
GMP certificate		5 years		2,578,198		(2,282,267)		295,931
Long-term customer relationship		4 years		7,675,560		(7,675,560)		-
Others				342,231		(148,306)		193,925
Total				15,687,349		(12,583,139)		3,104,210

	December 31, 2012
	Weighted
	average		Gross				Net
	amortization		carrying		Accumulated		carrying
	period		amount		amortization		amount
			USD		USD		USD
Amortizing intangible assets:
Permits and licenses		10 years		4,987,647		(2,119,622)		2,868,025
GMP certificate		5 years		2,525,679		(1,955,360)		570,319
Long-term customer relationship		4 years		7,519,206		(7,519,206)		-
Others				214,520		(111,282)		103,238
Total				15,247,052		(11,705,470)		3,541,582

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OPTIONS AND NONVESTED SHARES (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Number of Options, Granted			33,000
Stock compensation expense related to options	$ 1,230,066	$ 1,030,539	$ 2,694,999	$ 1,992,958
Weighted average grant date fair value of options granted			$ 8.37
Aggregate fair value of options granted			276,250
Stock compensation expense with respect to non-vested stock option	4,733,962		4,733,962
Stock compensation expense to be recognized with respect to non-vested stock option			2 years 8 months 16 days
Stock compensation expense related to nonvested shares	183,161	0	352,963	0
Stock compensation expense to be recognized with respect to non-vested shares			$ 1,037,755
Stock compensation expense with respect to non-vested shares weighted average vesting period			2 years 6 months 7 days

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SCHEDULE OF ACCOUNTS RECEIVABLE (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Accounts receivable	$ 18,245,922	$ 11,621,851
Less: Allowance for doubtful accounts	(424,249)	(415,607)
Total	$ 17,821,673	$ 11,206,244

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SCHEDULE OF INTANGIBLE ASSETS (Details) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Gross carrying amount	$ 15,687,349	$ 15,247,052
Accumulated Amortization	(12,583,139)	(11,705,470)
Net carrying amount	3,104,210	3,541,582
Permits and Licenses [Member]
Weighted average amortization period	10 years	10 years
Gross carrying amount	5,091,360	4,987,647
Accumulated Amortization	(2,477,006)	(2,119,622)
Net carrying amount	2,614,354	2,868,025
Gmp Certificate [Member]
Weighted average amortization period	5 years	5 years
Gross carrying amount	2,578,198	2,525,679
Accumulated Amortization	(2,282,267)	(1,955,360)
Net carrying amount	295,931	570,319
Long-Term Customer-Relationship [Member]
Weighted average amortization period	4 years	4 years
Gross carrying amount	7,675,560	7,519,206
Accumulated Amortization	(7,675,560)	(7,519,206)
Net carrying amount	0	0
Others [Member]
Gross carrying amount	342,231	214,520
Accumulated Amortization	(148,306)	(111,282)
Net carrying amount	$ 193,925	$ 103,238

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SCHEDULE OF NONVESTED SHARES ACTIVITY (Details) (USD $)	6 Months Ended
	Jun. 30, 2013
Number of nonvested shares, Outstanding	120,000
Grant date weighted average fair value, Outstanding	$ 9.85
Number of nonvested shares, Granted	22,500
Grant date weighted average fair value, Granted	$ 18.58
Number of nonvested shares, Vested	0
Grant date weighted average fair value, Vested	$ 0
Number of nonvested shares, Forfeited	0
Grant date weighted average fair value, Forfeited	$ 0
Number of nonvested shares, Outstanding	142,500
Grant date weighted average fair value, Outstanding	$ 11.23

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NET INCOME PER SHARE (Tables)

6 Months Ended

Jun. 30, 2013

Net Income Loss Per Share Disclosure [Abstract]

SCHEDULE OF EPS- BASIC AND DILUTED

The following table sets forth the computation of basic and diluted net income per share for the periods indicated:

	For the three months ended
	June 30, 2013			June 30, 2012
	USD			USD
Net income attributable to China Biologic Products, Inc.		16,161,926			12,838,771
Earnings allocated to participating nonvested shares		(85,227	)		-
Net income allocated to common stockholders used in computing basic net income per common stock		16,076,699			12,838,771
Change in fair value of warrants		-			(559,758	)
Net income used in diluted net income per common stock		16,076,699			12,279,013
Weighted average shares used in computing basic net income per common stock		26,880,459			25,875,164
Diluted effect of warrants		-			311,200
Diluted effect of stock option		1,186,844			440,796
Weighted average shares used in computing diluted net income per common stock		28,067,303			26,627,160
Net income per common stock – basic		0.60			0.50
Net income per common stock – diluted		0.57			0.46

	For the six months ended
	June 30, 2013			June 30, 2012
	USD			USD
Net income attributable to China Biologic Products, Inc.		31,077,786			25,796,077
Earnings allocated to participating nonvested shares		(157,615	)		-
Net income allocated to common stockholders used in computing basic net income per common stock		30,920,171			25,796,077
Change in fair value of warrants		-			(1,769,140	)
Net income used in diluted net income per common stock		30,920,171			24,026,937
Weighted average shares used in computing basic net income per common stock		26,833,262			25,738,145
Diluted effect of warrants		-			390,507
Diluted effect of stock option		1,133,818			453,172
Weighted average shares used in computing diluted net income per common stock		27,967,080			26,581,824
Net income per common stock – basic		1.15			1.00
Net income per common stock – diluted		1.11			0.90

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SHORT-TERM BANK LOANS (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Interest expense on short-term bank loans	$ 79,410	$ 45,765	$ 198,900	$ 204,982

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PROPERTY, PLANT AND EQUIPMENT (Tables)

6 Months Ended

Jun. 30, 2013

Property, Plant and Equipment [Abstract]

SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at June 30, 2013 and December 31, 2012 consisted of the following: 

	June 30, 2013		December 31, 2012
	USD		USD
Buildings		31,296,990		25,183,496
Machinery and equipment		27,169,226		29,625,166
Furniture, fixtures, office equipment and vehicles		7,121,204		6,513,482
Total property, plant and equipment, gross		65,587,420		61,322,144
Accumulated depreciation		(23,479,901)		(24,356,752)
Total property, plant and equipment, net		42,107,519		36,965,392
Construction in progress		14,813,753		3,501,404
Prepayment for property, plant and equipment		5,416,150		10,858,381
Property, plant and equipment, net		62,337,422		51,325,177

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BASIS OF PRESENTATION, SIGNIFICANT CONCENTRATION AND RISKS

6 Months Ended

Jun. 30, 2013

Basis Of Presentation Significant Concentration and Risks [Abstract]

BASIS OF PRESENTATION, SIGNIFICANT CONCENTRATION AND RISKS

NOTE 1 – BASIS OF PRESENTATION, SIGNIFICANT CONCENTRATION AND RISKS

(a) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted by rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The December 31, 2012 consolidated balance sheet was derived from the audited consolidated financial statements of China Biologic Products, Inc. (the “Company”). The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the December 31, 2012 audited consolidated financial statements of the Company included in the Company’s annual report on Form 10-K for the year ended December 31, 2012.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the financial position as of June 30, 2013, the results of operations for the three and six months ended June 30, 2013 and 2012, and cash flows for the six months ended June 30, 2013 and 2012, have been made. All significant intercompany transactions and balances are eliminated on consolidation.

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment and intangibles with definite lives, the allowance for doubtful accounts, the fair value determinations of equity instruments and stock compensation awards, the realizability of deferred tax assets and inventories, intangible asset, land use right and property, plant and equipment, and accruals for income tax uncertainties and other contingencies. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions.

(b) Significant Concentration and Risks

The Company’s operations are carried out in the People’s Republic of China (the “PRC”) and are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other matters.

The Company maintains cash balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits for its bank accounts located in the United States or may exceed Hong Kong Deposit Protection Board insured limits for its bank accounts located in Hong Kong. Cash balances maintained at financial institutions or state-owned banks in the PRC are not covered by insurance. Total cash at banks as of June 30, 2013 and December 31, 2012 amounted to $146,777,083 and $129,289,461, respectively, of which $73,923and $76,101 are insured, respectively. The Company has not experienced any losses in uninsured bank deposits and does not believe that it is exposed to any significant risks on cash held in bank accounts.

The Company’s two major products are human albumin and human immunoglobulin for intravenous injection (“IVIG”). Human albumin accounted for 42.5% and 38.7% of the total sales for the three months ended June 30, 2013 and 2012, respectively, and 40.2% and 46.4% of the total sales for the six months ended June 30, 2013 and 2012, respectively. IVIG accounted for 39.4% and 42.1% of the total sales for the three months ended June 30, 2013 and 2012, respectively, and 43.5% and 37.4% of the total sales for the six months ended June 30, 2013 and 2012, respectively. If the market demands for human albumin and IVIG cannot be sustained in the future or the price of human albumin and IVIG decreases, the Company’s operating results could be adversely affected.

Substantially all of the Company’s customers are located in the PRC. As of June 30, 2013 and 2012, the Company had no significant concentration of credit risk. There were no customers that individually comprised 10% or more of the total sales during the three months and six months ended June 30, 2013 and 2012, respectively. No individual customer represented 10% or more of trade receivables at June 30, 2013 and December 31, 2012, respectively. The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers.

There were no suppliers that comprised 10% or more of the total purchases for the three months and six months ended June 30, 2013 and 2012, respectively. No individual vendor represented more than 10% of accounts payables as at June 30, 2013. Two vendors individually represented more than 10% of accounts payables as at December 31, 2012.

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INVENTORIES

6 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 3 – INVENTORIES

Inventories at June 30, 2013 and December 31, 2012 consisted of the following:

	June 30, 2013		December 31, 2012
	USD		USD
Raw materials		34,286,954		29,596,746
Work-in-process		24,544,953		24,524,142
Finished goods		22,075,906		21,558,285
Total		80,907,813		75,679,173

No inventory write-down was recorded during the three months ended June 30, 2013 and 2012, respectively. An inventory write-down of nil and $49,703 was recorded for the six months ended June 30, 2013 and 2012, respectively.

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DEPOSITS RELATED TO LAND USE RIGHT

6 Months Ended

Jun. 30, 2013

Deposits Related To Land Use Right [Abstract]

DEPOSITS RELATED TO LAND USE RIGHT

NOTE 6 – DEPOSITS RELATED TO LAND USE RIGHT

As of June 30, 2013, the deposits mainly represented a $13,510,800 (equivalent RMB83,400,000) refundable payment made by Guizhou Taibang to the local government in connection with the public bidding for a land use right in Guizhou Province. The payment will be refunded within one year following the completion of the bidding process. If the Company is successful in the bid, the land use right will be used for the construction of a new manufacturing facility to comply with the new GMP standard effective by the end of 2013. However, due to potential delays in government approval procedures with respect to the land use right for such site, the Company may not be able to complete the construction of the new production facility as planned. In order to mitigate the operation disruption at Guizhou Taibang, the Company started to upgrade its existing production facility to meet the new GMP standard in June 2013. The production of the related facilities was suspended and the total production capacity of the Company is expected to decrease in part of 2013 and 2014.

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PROPERTY, PLANT AND EQUIPMENT

6 Months Ended

Jun. 30, 2013

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

NOTE 4 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at June 30, 2013 and December 31, 2012 consisted of the following: 

	June 30, 2013		December 31, 2012
	USD		USD
Buildings		31,296,990		25,183,496
Machinery and equipment		27,169,226		29,625,166
Furniture, fixtures, office equipment and vehicles		7,121,204		6,513,482
Total property, plant and equipment, gross		65,587,420		61,322,144
Accumulated depreciation		(23,479,901)		(24,356,752)
Total property, plant and equipment, net		42,107,519		36,965,392
Construction in progress		14,813,753		3,501,404
Prepayment for property, plant and equipment		5,416,150		10,858,381
Property, plant and equipment, net		62,337,422		51,325,177

Depreciation expense for the three months ended June 30, 2013 and 2012 was $1,571,232 and $1,184,498, respectively. Depreciation expense for the six months ended June 30, 2013 and 2012 was $3,105,739 and $2,281,223, respectively.

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DEPOSITS RELATED TO LAND USE RIGHT (Narrative) (Details)	Jun. 30, 2013 USD ($)	Jun. 30, 2013 CNY
Deposits related to land use right	$ 13,510,800	83,400,000

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OPTIONS AND NONVESTED SHARES (Tables)

6 Months Ended

Jun. 30, 2013

Options and Nonvested Shares [Abstract]

SCHEDULE OF STOCK OPTIONS ACTIVITY

A summary of stock options activity for six months ended June 30, 2013 is as follow:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
			USD				USD
Outstanding as of December 31, 2012		2,648,609		9.39		7.65		18,374,422
Granted		33,000		10.48
Exercised		(323,330)		8.25				4,267,299
Forfeited and expired		(150,680)		6.78
Outstanding as of June 30, 2013		2,207,599		9.75		7.45		29,679,283
Vested and expected to vest		2,207,599		9.75		7.45		29,679,283
Exercisable as of June 30, 2013		1,387,587		9.65		6.60		18,788,752

SCHEDULE OF STOCK OPTIONS VALUATION ASSUMPTION

	For six months ended
	June 30, 2013
Expected volatility		104	%
Expected dividends yield		0	%
Expected term		5 years
Risk-free interest rate (per annum)		0.72	%
Fair value of underlying ordinary shares (per share)	$	10.57

SCHEDULE OF NONVESTED SHARES ACTIVITY

A summary of nonvested shares activity for the six months ended June 30, 2013 is as follows:

	Number of  nonvested shares		Grant date weighted average fair value
			USD
Outstanding as of December 31, 2012		120,000		9.85
Granted		22,500		18.58
Vested		-		-
Forfeited		-		-
Outstanding as of June 30, 2013		142,500		11.23

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BASIS OF PRESENTATION, SIGNIFICANT CONCENTRATION AND RISKS (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Total cash at bank including insured amount	$ 146,777,083		$ 146,777,083		$ 129,289,461
Cash, Insured Amount	$ 73,923		$ 73,923		$ 76,101
Customers that individually comprised 10% or more of the total sales	0	0	0	0
Suppliers that comprised 10% or more of the total purchases	0	0	0	0
Customers represented 10% or more of trade receivables	0		0		0
Suppliers that represented more than 10% of accounts payables	0		0		2
Human Albumin [Member]
Major product sales percentage	42.50%	38.70%	40.20%	46.40%
Human Immunoglobulin For Intravenous Injection [Member]
Major product sales percentage	39.40%	42.10%	43.50%	37.40%

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PROPERTY, PLANT AND EQUIPMENT (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Depreciation	$ 1,571,232	$ 1,184,498	$ 3,105,739	$ 2,281,223

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NET INCOME PER SHARE (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Options excluded from the calculation of diluted net income per share of common stock	0	1,544,000	0	1,544,000
Average exercise price of options excluded from the calculation of diluted net income per share of common stock		$ 11.98		$ 11.98

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SCHEDULE OF SALES BY PRODUCT TYPE (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Sales	$ 53,580,523	$ 50,466,339	$ 107,612,255	$ 97,693,800
Human Albumin [Member]
Sales	22,764,711	19,539,419	43,266,022	45,329,702
Human Immunoglobulin For Intravenous Injection [Member]
Sales	21,097,154	21,239,174	46,759,025	36,500,900
Other Immunoglobulin Products [Member]
Sales	5,494,261	6,987,822	10,593,986	10,773,101
Placenta Polypeptide [Member]
Sales	3,037,991	2,509,202	5,222,154	4,620,011
Others [Member]
Sales	$ 1,186,406	$ 190,722	$ 1,771,068	$ 470,086

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INCOME TAX (Narrative) (Details)	0 Months Ended	1 Months Ended	3 Months Ended		6 Months Ended
	Jul. 27, 2011	Oct. 31, 2011	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Companys effective income tax rates			14.00%	15.00%	16.00%	15.00%
Preferential tax rate	15.00%	15.00%

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Common Stock, Par Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Stock, Shares, Issued	26,952,945	26,629,615
Common Stock, Shares, Outstanding	26,952,945	26,629,615

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INCOME TAX

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

INCOME TAX

NOTE 9 – INCOME TAX

On October 31, 2011, Shandong Taibang received a notice from the Shandong provincial government that the High and New Technology Enterprise qualification has been renewed for an additional three years which entitled it to a 15% preferential income tax rate from 2011 to 2013.

According to Cai Shui [2011] No. 58 dated July 27, 2011, Guizhou Taibang, being a qualified enterprise located in the western region of PRC, enjoys a preferential income tax rate of 15% effective retroactively from January 1, 2011 to December 31, 2020.

The Company’s effective income tax rates were 14% and 15% for the three months ended June 30, 2013 and 2012, respectively. The Company’s effective income tax rates were 16% and 15% for the six months ended June 30, 2013 and 2012, respectively.

As of and for the six months ended June 30, 2013, the Company did not have any unrecognized tax benefits and thus no interest and penalties related to unrecognized tax benefits were recorded. In addition, the Company does not expect that the amount of unrecognized tax benefits to change significantly within the next 12 months.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 44,890,005	$ 37,310,832
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	3,105,739	2,281,223
Amortization	702,556	1,525,267
(Gain)/ loss on sale of property, plant and equipment	(70,363)	60,518
Allowance for doubtful accounts, net	0	21,895
Provision for doubtful accounts - other receivables and prepayments	6,202	35,637
Write-down of obsolete inventories	0	49,703
Deferred tax expense	720,679	26,341
Share-based compensation	3,047,962	1,992,958
Change in fair value of derivative liabilities	0	(1,769,140)
Equity in income of an equity method investee	(739,945)	(1,474,303)
Change in operating assets and liabilities:
Accounts receivable	(6,314,643)	(4,692,006)
Prepayment and other current assets	(101,135)	(292,473)
Inventories	(3,616,165)	2,045,191
Accounts payable	242,365	(1,546,373)
Other payables and accrued expenses	(2,033,594)	(2,977,473)
Advance from customers	(529,984)	401,393
Due to related parties	(140,697)	1,255,867
Income tax payable	(1,260,254)	(2,185,825)
Net cash provided by operating activities	37,908,728	32,069,232
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for property, plant and equipment	(11,912,603)	(5,098,533)
Payment for intangible assets and land use right	(1,137,556)	(796,707)
Dividend received	560,980	555,310
Purchase of short-term investment	0	(1,348,610)
Proceeds from sale of property, plant and equipment	83,731	0
Net cash used in investing activities	(12,405,448)	(6,688,540)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock option exercised	2,668,916	0
Proceeds from warrants exercised	0	4,500,000
Proceeds from short term bank loans	4,808,400	0
Repayment of short term bank loans	(8,014,000)	(11,106,200)
Acquisition of noncontrolling interest	(1,963,913)	0
Dividend paid by subsidiaries to noncontrolling interest shareholders	(8,110,168)	(4,379,016)
Net cash used in financing activities	(10,610,765)	(10,985,216)
EFFECTS OF FOREIGN EXCHANGE RATE CHANGE ON CASH	2,762,616	679,914
NET INCREASE IN CASH	17,655,131	15,075,390
Cash and cash equivalents at beginning of period	129,609,317	89,411,835
Cash and cash equivalents at end of period	147,264,448	104,487,225
Supplemental cash flow information
Cash paid for income taxes	8,892,126	8,669,815
Cash paid for interest expense	198,900	204,982
Noncash investing and financing activities:
Acquisition of property, plant and equipment included in payables	1,554,828	347,439
Exercise of warrants that were liability classified	$ 0	$ 3,641,279

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SUBSEQUENT EVENT (Narrative) (Details) (Subsequent Event [Member], USD $)	0 Months Ended
	Aug. 02, 2013
Subsequent Event [Member]
Subsequent Event [Line Items]
Stock repurchased during period, Shares	1,479,704
Stock repurchased during period, Value	$ 29,594,080

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CONDENSED CONSOLIDATED BALANCE SHEETS(USD ($))	Jun. 30, 2013	Dec. 31, 2012
Current Assets
Cash and cash equivalents	$ 147,264,448	$ 129,609,317
Accounts receivable, net of allowance for doubtful accounts	17,821,673	11,206,244
Inventories	80,907,813	75,679,173
Prepayments and other current assets	5,503,155	5,664,919
Total Current Assets	251,497,089	222,159,653
Property, plant and equipment, net	62,337,422	51,325,177
Intangible assets, net	3,104,210	3,541,582
Land use rights, net	6,373,176	5,818,709
Deposits related to land use rights	16,669,167	14,752,574
Restricted cash	2,786,502	2,912,145
Equity method investment	10,937,307	10,537,310
Total Assets	353,704,873	311,047,150
Current liabilities
Short-term bank loans	4,860,000	7,935,000
Accounts payable	3,018,095	2,908,624
Due to related parties	4,055,925	4,081,624
Other payables and accrued expenses	25,895,823	25,423,349
Advance from customers	2,381,166	2,857,420
Income tax payable	3,333,141	4,513,075
Total Current Liabilities	43,544,150	47,719,092
Deferred income	2,972,700	2,912,145
Other liabilities	3,410,801	2,996,749
Total Liabilities	49,927,651	53,627,986
Stockholders' Equity
Common stock: par value $0.0001; 100,000,000 shares authorized; 26,952,945 and 26,629,615 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively	2,695	2,663
Additional paid-in capital	67,303,915	62,251,731
Retained earnings	150,220,786	119,143,000
Accumulated other comprehensive income	18,826,850	14,072,322
Total equity attributable to China Biologic Products, Inc.	236,354,246	195,469,716
Noncontrolling interest	67,422,976	61,949,448
Total Stockholders’ Equity	303,777,222	257,419,164
Commitments and contingencies
Total Liabilities and Stockholders’ Equity	$ 353,704,873	$ 311,047,150

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COMMITMENTS AND CONTINGENCIES (Narrative) (Details)					1 Months Ended		1 Months Ended				3 Months Ended	6 Months Ended		56 Months Ended
	Jun. 30, 2013 USD ($)	Jun. 30, 2013 CNY	Apr. 30, 2013 USD ($)	Apr. 30, 2013 CNY	May 31, 2009 Equity Purchase Agreements [Member]	Jun. 30, 2007 Equity Purchase Agreements [Member]	Jan. 31, 2012 Dispute Among Guizhou Taibang Shareholders Over Raising Additional Capital [Member] USD ($)	Jan. 31, 2012 Dispute Among Guizhou Taibang Shareholders Over Raising Additional Capital [Member] CNY	Nov. 30, 2010 Dispute Among Guizhou Taibang Shareholders Over Raising Additional Capital [Member] USD ($)	Nov. 30, 2010 Dispute Among Guizhou Taibang Shareholders Over Raising Additional Capital [Member] CNY	Jun. 30, 2010 Dispute Among Guizhou Taibang Shareholders Over Raising Additional Capital [Member]	Jun. 30, 2013 Dispute Among Guizhou Taibang Shareholders Over Raising Additional Capital [Member] USD ($)	Jun. 30, 2013 Dispute Among Guizhou Taibang Shareholders Over Raising Additional Capital [Member] CNY	Dec. 31, 2011 Dispute Among Guizhou Taibang Shareholders Over Raising Additional Capital [Member] USD ($)	Dec. 31, 2011 Dispute Among Guizhou Taibang Shareholders Over Raising Additional Capital [Member] CNY	May 31, 2007 Dispute Among Guizhou Taibang Shareholders Over Raising Additional Capital [Member] USD ($)	May 31, 2007 Dispute Among Guizhou Taibang Shareholders Over Raising Additional Capital [Member] CNY
91% controlling interest of Guizhou Taibang's shareholders																91.00%	91.00%
Issuance of an additional 20,000,000 shares of Guizhou Taibang																20,000,000	20,000,000
Shares price of additionally issued shares																	2.80
Remaining 9% noncontrolling interest																9.00%	9.00%
Investors agreed to invest																$ 7,475,832	50,960,000
Exchange for 18,200,000 shares																18,200,000	18,200,000
21.4%, of Guizhou Taibang's equity interests																21.40%	21.40%
Subscribed for 1,800,000 shares																1,800,000	1,800,000
Share of the 20,000,000 shares being offered																20,000,000	20,000,000
Right to acquire common stock shares						18,200,000
Accrued interest												2,582,626	15,942,138
Penalty												82,555	509,600
1% penalty imposed by agreement												1.00%	1.00%
Dalin's interests in Guizhou Taibang could be reduced to approximately 41.3%												41.30%	41.30%
Company returned proceeds									1,699,040	11,200,000
Request for distribution of dividends of $2,972,594 (or RMB 18,349,345)							2,972,594	18,349,345
Request for interest in amount of $461,214 (or RMB 2,847,000)							461,214	2,847,000
Requested that Guizhou Taibang register its 1.8 million shares of additional capital infusion with the local AIC											1,800,000
Related interest and penalty from May 2007 to December 2011 amounting to RMB 25,000,000														3,967,500	25,000,000
Return over - paid subscription														228,528	1,440,000
Interest and penalty, amounting to RMB 10,000,000 (approximately $1,587,000) in aggregate														1,587,000	10,000,000
Dalins ownership in Guizhou Taibang will be diluted from 54%														54.00%	54.00%
Diluted to 52.54%														52.54%	52.54%
Payables to Jie'an for the additional funds received												816,480	5,040,000
Payables to Jie'an for over-paid subscription	233,280	1,440,000										233,280	1,440,000
Payable to Jie'an for the accrued interest												443,325	2,736,575
Gain Contingency, Unrecorded Amount			6,064,800	38,000,000
Capital commitment,amount commited	$ 5,200,000
Denied the rights of first refusal of Jie’an over the 18,200,000 shares					18,200,000

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SALES (Tables)

6 Months Ended

Jun. 30, 2013

Sales Disclosure [Abstract]

SCHEDULE OF SALES BY PRODUCT TYPE

The Company’s sales are primarily derived from the manufacture and sale of Human Albumin and Immunoglobulin products. The Company’s sales by significant types of product for the three months ended June 30, 2013 and 2012 are as follows:

	For the three months ended
	June 30, 2013		June 30, 2012
	USD		USD
Human Albumin		22,764,711		19,539,419
Immunoglobulin products:
Human Immunoglobulin for Intravenous Injection		21,097,154		21,239,174
Other Immunoglobulin products		5,494,261		6,987,822
Placenta Polypeptide		3,037,991		2,509,202
Others		1,186,406		190,722
Total		53,580,523		50,466,339

The Company’s sales by significant types of product for the six months ended June 30, 2013 and 2012 are as follows:

	For the six months ended
	June 30, 2013		June 30, 2012
	USD		USD
Human Albumin		43,266,022		45,329,702
Immunoglobulin products:
Human Immunoglobulin for Intravenous Injection		46,759,025		36,500,900
Other Immunoglobulin products		10,593,986		10,773,101
Placenta Polypeptide		5,222,154		4,620,011
Others		1,771,068		470,086
Total		107,612,255		97,693,800

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ACCOUNTS RECEIVABLE (Tables)

6 Months Ended

Jun. 30, 2013

Receivables [Abstract]

SCHEDULE OF ACCOUNTS RECEIVABLE

Accounts receivable at June 30, 2013 and December 31, 2012 consisted of the following:

	June 30, 2013		December 31, 2012
	USD		USD
Accounts receivable		18,245,922		11,621,851
Less: Allowance for doubtful accounts		(424,249)		(415,607)
Total		17,821,673		11,206,244

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SCHEDULE OF SHORT-TERM BANK LOANS (Details) (USD $)	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Short-term Debt	$ 4,860,000	$ 7,935,000
Unsecured Loan 1 [Member]
Maturity date	Aug. 01, 2013
Debt Instrument, Interest Rate, Stated Percentage	6.00%
Unsecured Debt, Current	0	3,174,000
Unsecured Loan 2 [Member]
Maturity date	Sep. 03, 2013
Debt Instrument, Interest Rate, Stated Percentage	6.00%
Unsecured Debt, Current	0	3,174,000
Unsecured Loan 3 [Member]
Maturity date	Sep. 03, 2013
Debt Instrument, Interest Rate, Stated Percentage	6.00%
Unsecured Debt, Current	0	1,587,000
Unsecured Loan 4 [Member]
Maturity date	May 12, 2014
Debt Instrument, Interest Rate, Stated Percentage	6.00%
Unsecured Debt, Current	$ 4,860,000	$ 0

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SCHEDULE OF RELATED PARTY TRANSACTIONS (Details) (USD $)	Jun. 30, 2013		Dec. 31, 2012
Due to Related Parties, Current	$ 4,055,925		$ 4,081,624
Commission [Member]
Due to Related Parties, Current	204,120	[1]	339,272	[1]
Loan [Member]
Due to Related Parties, Current	2,358,720	[2]	2,311,044	[2]
Contribution [Member]
Due to Related Parties, Current	$ 1,493,085	[3]	$ 1,431,308	[3]

[1] During the year ended December 31, 2011, Guizhou Taibang signed an agency contract with Guizhou Eakan Co., Ltd. (“Guizhou Eakan”), an affiliate of one of the Guizhou Taibang’s noncontrolling interest shareholders, pursuant to which Guizhou Taibang would pay commission to Guizhou Eakan for the promotion of the product of Placenta Polypeptide. As of June 30, 2013, Guizhou Taibang accrued commission payable of $204,120 for service rendered by Guizhou Eakan. For the three months ended June 30, 2013, commission expense for service rendered by Guizhou Eakan was $909,057. For the six months ended June 30, 2013, commission expense for service rendered by Guizhou Eakan was $1,552,312.

[2] Guizhou Taibang has payables to Guizhou Eakan Investing Corp., amounting to approximately $2,358,720 and $2,311,044 as of June 30, 2013 and December 31, 2012, respectively. Guizhou Eakan Investing Corp. is one of the noncontrolling interest shareholders of Guizhou Taibang. The Company borrowed this interest free advance for working capital purpose for Guizhou Taibang. The balance is due on demand.

[3] Guizhou Taibang has payables to Jie’an, a noncontrolling interest shareholder of Guizhou Taibang, amounting to approximately $1,493,085 and $1,431,308 as of June 30, 2013 and December 31, 2012, respectively. In 2007, Guizhou Taibang received additional contributions from Jie’an of $962,853 (or RMB6,480,000) to maintain Jie’an’s equity interest in Guizhou Taibang at 9%. However, due to a legal dispute among shareholders over raising additional capital as discussed in the legal proceeding section (see Note 13), the contribution is subject to be returned to Jie’an. During the second quarter of 2010, Jie’an requested that Guizhou Taibang register its 1.8 million shares of additional capital contribution with the local AIC, pursuant to the Equity Purchase Agreement, and such registration was approved by the majority shareholders of Guizhou Taibang in a shareholders’ meeting held in the second quarter of 2010. However, the Board of Directors of the Company is withholding its required ratification of the shareholders’ approval of Jie’an’s request until the completion of the ongoing litigations. If the Company decided to ratify the approval, Dalin’s ownership in Guizhou Taibang will be diluted from 54% to 52.54% and Jie’an will be entitled to receive its pro rata share of Guizhou Taibang’s profits since the date of Jie’an contribution became effective. As this case is closely tied to the outcome of the strategic investors’ dispute stated above, the Company has set aside Jie’an’s additional fund of RMB5,040,000 (approximately $816,480), the over-paid subscription of RMB1,440,000 (approximately $233,280) along with RMB2,736,575 (approximately $443,325) in accrued interest and penalty as of June 30, 2013.

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INTANGIBLE ASSETS, NET (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Amortization expense for amortizing intangible assets	$ 391,452	$ 733,794	$ 655,152	$ 1,456,810
2014	511,058		511,058
2015	509,278		509,278
2016	503,715		503,715
2017	469,606		469,606
2018	$ 426,774		$ 426,774

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INVENTORIES (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Write-down of obsolete inventories	$ 0	$ 0	$ 0	$ 49,703

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SCHEDULE OF INVENTORIES (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Raw materials	$ 34,286,954	$ 29,596,746
Work-in-process	24,544,953	24,524,142
Finished goods	22,075,906	21,558,285
Total	$ 80,907,813	$ 75,679,173

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SHORT-TERM BANK LOANS

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

SHORT-TERM BANK LOANS

NOTE 8 – SHORT-TERM BANK LOANS

The Company’s bank loans as of June 30, 2013 and December 31, 2012 consisted of the following:

	Maturity		Annual			June 30,
Loans	date		interest rate			2013		December 31, 2012
						USD		USD
Short-term bank loan, unsecured		August 1, 2013		6.00	%		-		3,174,000
Short-term bank loan, unsecured		September 3, 2013		6.00	%		-		3,174,000
Short-term bank loan, unsecured		September 3, 2013		6.00	%		-		1,587,000
Short-term bank loan, unsecured		May 12, 2014		6.00	%		4,860,000		-
Total							4,860,000		7,935,000

Interest expense on short-term bank loans was $79,410 and $45,765  for the three months ended June 30, 2013 and 2012, respectively. Interest expense on short-term bank loans was $198,900 and $204,982  for the six months ended June 30, 2013 and 2012, respectively.

The Company did not have any revolving line of credit as of June 30, 2013.

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RELATED PARTY TRANSACTIONS (Tables)

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

SCHEDULE OF RELATED PARTY TRANSACTION

The material related party transactions undertaken by the Company with related parties for the three months ended June 30, 2013 and 2012 are presented as follows:

	For the three months ended
	June 30, 2013		June 30, 2012
	USD		USD
Commission expenses with related parties(1)		909,057		852,948

The material related party transactions undertaken by the Company with related parties for the six months ended June 30, 2013 and 2012 are presented as follows:

	For the six months ended
	June 30, 2013		June 30, 2012
	USD		USD
Commission expenses with related parties(1)		1,552,312		1,581,483

⁽¹⁾During the year ended December 31, 2011, Guizhou Taibang signed an agency contract with Guizhou Eakan Co., Ltd. (“Guizhou Eakan”), an affiliate of one of the Guizhou Taibang’s noncontrolling interest shareholders, pursuant to which Guizhou Taibang would pay commission to Guizhou Eakan for the promotion of the product of Placenta Polypeptide. As of June 30, 2013, Guizhou Taibang accrued commission payable of $204,120 for service rendered by Guizhou Eakan. For the three months ended June 30, 2013, commission expense for service rendered by Guizhou Eakan was $909,057. For the six months ended June 30, 2013, commission expense for service rendered by Guizhou Eakan was $1,552,312.

SCHEDULE OF RELATED PARTY TRANSACTIONS

The related party balances as at June 30, 2013 and December 31, 2012 are presented as follows:

Liabilities	Purpose	June 30, 2013		December 31, 2012
		USD		USD
Other payable – a related party(1)	Commission		204,120		339,272
Other payable – a related party(2)	Loan		2,358,720		2,311,044
Other payable – a related party(3)	Contribution		1,493,085		1,431,308
Total other payable – related parties			4,055,925		4,081,624

⁽¹⁾During the year ended December 31, 2011, Guizhou Taibang signed an agency contract with Guizhou Eakan Co., Ltd. (“Guizhou Eakan”), an affiliate of one of the Guizhou Taibang’s noncontrolling interest shareholders, pursuant to which Guizhou Taibang would pay commission to Guizhou Eakan for the promotion of the product of Placenta Polypeptide. As of June 30, 2013, Guizhou Taibang accrued commission payable of $204,120 for service rendered by Guizhou Eakan. For the three months ended June 30, 2013, commission expense for service rendered by Guizhou Eakan was $909,057. For the six months ended June 30, 2013, commission expense for service rendered by Guizhou Eakan was $1,552,312.

⁽²⁾Guizhou Taibang has payables to Guizhou Eakan Investing Corp., amounting to approximately $2,358,720 and $2,311,044 as of June 30, 2013 and December 31, 2012, respectively. Guizhou Eakan Investing Corp. is one of the noncontrolling interest shareholders of Guizhou Taibang. The Company borrowed this interest free advance for working capital purpose for Guizhou Taibang. The balance is due on demand.

⁽³⁾Guizhou Taibang has payables to Jie’an, a noncontrolling interest shareholder of Guizhou Taibang, amounting to approximately $1,493,085 and $1,431,308 as of June 30, 2013 and December 31, 2012, respectively. In 2007, Guizhou Taibang received additional contributions from Jie’an of $962,853 (or RMB6,480,000) to maintain Jie’an’s equity interest in Guizhou Taibang at 9%. However, due to a legal dispute among shareholders over raising additional capital as discussed in the legal proceeding section (see Note 13), the contribution is subject to be returned to Jie’an. During the second quarter of 2010, Jie’an requested that Guizhou Taibang register its 1.8 million shares of additional capital contribution with the local AIC, pursuant to the Equity Purchase Agreement, and such registration was approved by the majority shareholders of Guizhou Taibang in a shareholders’ meeting held in the second quarter of 2010. However, the Board of Directors of the Company is withholding its required ratification of the shareholders’ approval of Jie’an’s request until the completion of the ongoing litigations. If the Company decided to ratify the approval, Dalin’s ownership in Guizhou Taibang will be diluted from 54% to 52.54% and Jie’an will be entitled to receive its pro rata share of Guizhou Taibang’s profits since the date of Jie’an contribution became effective. As this case is closely tied to the outcome of the strategic investors’ dispute stated above, the Company has set aside Jie’an’s additional fund of RMB5,040,000 (approximately $816,480), the over-paid subscription of RMB1,440,000 (approximately $233,280) along with RMB2,736,575 (approximately $443,325) in accrued interest and penalty as of June 30, 2013.

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RESTRICTED CASH (Narrative) (Details)	0 Months Ended		6 Months Ended
	Nov. 01, 2012 USD ($)	Nov. 01, 2012 CNY	Jun. 30, 2013 USD ($)	Dec. 31, 2012 USD ($)
Restricted cash	$ 2,972,700	18,350,000	$ 2,786,502	$ 2,912,145
Restricted cash and cash equivalent item agreement validity	3 years	3 years
Restricted cash used in the technical upgrade in respect of the new GMP standard			$ 186,198

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 11 – FAIR VALUE MEASUREMENTS

Management used the following methods and assumptions to estimate the fair value of financial instruments at the relevant balance sheet dates:

• Short-term financial instruments (including accounts receivable, other receivables, short-term bank loans, accounts payable, other payables and accrued expenses, and amount due to related parties) – The carrying amounts of the short-term financial instruments approximate their fair values because of the short maturity of these instruments.

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RESTRICTED CASH

6 Months Ended

Jun. 30, 2013

Restricted Cash and Investments [Abstract]

RESTRICTED CASH

NOTE 7 – RESTRICTED CASH

On November 1, 2012, Guizhou Taibang entered into an agreement with the Financial Bureau of Huaxi District, Guiyang City. Pursuant to the agreement, the Financial Bureau of Huaxi District provided $2,972,700 (equivalent RMB18,350,000) to Guizhou Taibang to subsidize the technical upgrade in respect of the new GMP standard (see Note 6). The agreement is valid for a three-year period. The usage of this fund must be under the supervision of the Financial Bureau of Huaxi District and cannot be used for other purposes. During the six months ended June 30, 2013, $186,198 was used in the technical upgrade in respect of the new GMP standard.

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ACCOUNTS RECEIVABLE

6 Months Ended

Jun. 30, 2013

Receivables [Abstract]

ACCOUNTS RECEIVABLE

NOTE 2 – ACCOUNTS RECEIVABLE

Accounts receivable at June 30, 2013 and December 31, 2012 consisted of the following:

	June 30, 2013		December 31, 2012
	USD		USD
Accounts receivable		18,245,922		11,621,851
Less: Allowance for doubtful accounts		(424,249)		(415,607)
Total		17,821,673		11,206,244

A provision for doubtful accounts of nil and a reversal of the allowance for doubtful accounts of $12,953 was recorded during the three months ended June 30, 2013 and 2012, respectively. A provision for doubtful accounts of nil and $21,895 was recorded for the six months ended June 30, 2013 and 2012, respectively. There was no write-off of accounts receivable for the three and six months ended June 30, 2013 and 2012, respectively.

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RELATED PARTY TRANSACTIONS (Narrative) (Details) Share data in Millions, unless otherwise specified	3 Months Ended		6 Months Ended	12 Months Ended
	Jun. 30, 2013 USD ($)	Jun. 30, 2010	Jun. 30, 2013 USD ($)	Dec. 31, 2007 USD ($)	Dec. 31, 2007 CNY	Jun. 30, 2013 CNY	Dec. 31, 2012 USD ($)
Accrued Sales Commission	$ 204,120		$ 204,120
Commission expense for service rendered	909,057		1,552,312
Payables to Guizhou Eakan Investing Corp.	2,358,720		2,358,720				2,311,044
Guizhou Taibang received additional contributions from Jie'an of $962,853 to maintain Jie'an equity interest				962,853	6,480,000
Jie’an requested that Guizhou Taibang register its 1.8 million shares of additional capital contribution with the local AIC		1.8
Dalins ownership in Guizhou Taibang will be diluted from 54%			54.00%
Ownership in Guizhou Taibang will be diluted to 52.54%			52.54%
Jie'an's additional fund	816,480		816,480			5,040,000
Accrued interest and penalty for Jie'an's additional fund	443,325		443,325			2,736,575
Payables to Jie'an Noncontrolling Interest	1,493,085		1,493,085				1,431,308
Maintain Jie'an equity interest in Guizhou Taibang at 9%				9.00%	9.00%
Payables to Jie'an for over-paid subscription	$ 233,280		$ 233,280			1,440,000

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SCHEDULE OF STOCK OPTIONS ACTIVITY (Details) (USD $)	6 Months Ended
	Jun. 30, 2013
Outstanding, Number of Options	2,648,609
Outstanding, Weighted Average Exercise Price	$ 9.39
Outstanding, Weighted Average Remaining Contractual Term in Years	7 years 7 months 24 days
Outstanding, Aggregate Intrinsic Value	$ 18,374,422
Number of Options, Granted	33,000
Weighted Average Exercise Price, Granted	$ 10.48
Number of Options, Exercised	(323,330)
Weighted Average Exercise Price, Exercised	$ 8.25
Aggregate Intrinsic Value, Exercised	4,267,299
Number of Options, Forfeited and expired	(150,680)
Weighted Average Exercise Price, Forfeited and expired	$ 6.78
Outstanding, Number of Options	2,207,599
Outstanding, Weighted Average Exercise Price	$ 9.75
Outstanding, Weighted Average Remaining Contractual Term in Years	7 years 5 months 12 days
Outstanding, Aggregate Intrinsic Value	29,679,283
Number of Options, Vested and expected to vest	2,207,599
Weighted Average Exercise Price, Vested and expected to vest	$ 9.75
Weighted Average Remaining Contractual Term in Years, Vested and expected to vest	7 years 5 months 12 days
Vested and expected to vest, Aggregate Intrinsic Value	29,679,283
Number of Options, Exercisable	1,387,587
Weighted Average Exercise Price, Exercisable	$ 9.65
Weighted Average Remaining Contractual Term in Years, Exercisable	6 years 7 months 6 days
Aggregate Intrinsic Value, Exercisable	$ 18,788,752

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ACCOUNTS RECEIVABLE (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Provision for Doubtful Accounts	$ 0	$ 0	$ 0	$ 21,895
Reversal Of Allowance For Doubtful Accounts	$ 0	$ 12,953	$ 0	$ 0

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 14 – RELATED PARTY TRANSACTIONS

The material related party transactions undertaken by the Company with related parties for the three months ended June 30, 2013 and 2012 are presented as follows:

	For the three months ended
	June 30, 2013		June 30, 2012
	USD		USD
Commission expenses with related parties(1)		909,057		852,948

The material related party transactions undertaken by the Company with related parties for the six months ended June 30, 2013 and 2012 are presented as follows:

	For the six months ended
	June 30, 2013		June 30, 2012
	USD		USD
Commission expenses with related parties(1)		1,552,312		1,581,483

The related party balances as at June 30, 2013 and December 31, 2012 are presented as follows:

Liabilities	Purpose	June 30, 2013		December 31, 2012
		USD		USD
Other payable – a related party(1)	Commission		204,120		339,272
Other payable – a related party(2)	Loan		2,358,720		2,311,044
Other payable – a related party(3)	Contribution		1,493,085		1,431,308
Total other payable – related parties			4,055,925		4,081,624

⁽¹⁾During the year ended December 31, 2011, Guizhou Taibang signed an agency contract with Guizhou Eakan Co., Ltd. (“Guizhou Eakan”), an affiliate of one of the Guizhou Taibang’s noncontrolling interest shareholders, pursuant to which Guizhou Taibang would pay commission to Guizhou Eakan for the promotion of the product of Placenta Polypeptide. As of June 30, 2013, Guizhou Taibang accrued commission payable of $204,120 for service rendered by Guizhou Eakan. For the three months ended June 30, 2013, commission expense for service rendered by Guizhou Eakan was $909,057. For the six months ended June 30, 2013, commission expense for service rendered by Guizhou Eakan was $1,552,312.

⁽²⁾Guizhou Taibang has payables to Guizhou Eakan Investing Corp., amounting to approximately $2,358,720 and $2,311,044 as of June 30, 2013 and December 31, 2012, respectively. Guizhou Eakan Investing Corp. is one of the noncontrolling interest shareholders of Guizhou Taibang. The Company borrowed this interest free advance for working capital purpose for Guizhou Taibang. The balance is due on demand.

⁽³⁾Guizhou Taibang has payables to Jie’an, a noncontrolling interest shareholder of Guizhou Taibang, amounting to approximately $1,493,085 and $1,431,308 as of June 30, 2013 and December 31, 2012, respectively. In 2007, Guizhou Taibang received additional contributions from Jie’an of $962,853 (or RMB6,480,000) to maintain Jie’an’s equity interest in Guizhou Taibang at 9%. However, due to a legal dispute among shareholders over raising additional capital as discussed in the legal proceeding section (see Note 13), the contribution is subject to be returned to Jie’an. During the second quarter of 2010, Jie’an requested that Guizhou Taibang register its 1.8 million shares of additional capital contribution with the local AIC, pursuant to the Equity Purchase Agreement, and such registration was approved by the majority shareholders of Guizhou Taibang in a shareholders’ meeting held in the second quarter of 2010. However, the Board of Directors of the Company is withholding its required ratification of the shareholders’ approval of Jie’an’s request until the completion of the ongoing litigations. If the Company decided to ratify the approval, Dalin’s ownership in Guizhou Taibang will be diluted from 54% to 52.54% and Jie’an will be entitled to receive its pro rata share of Guizhou Taibang’s profits since the date of Jie’an contribution became effective. As this case is closely tied to the outcome of the strategic investors’ dispute stated above, the Company has set aside Jie’an’s additional fund of RMB5,040,000 (approximately $816,480), the over-paid subscription of RMB1,440,000 (approximately $233,280) along with RMB2,736,575 (approximately $443,325) in accrued interest and penalty as of June 30, 2013.

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OPTIONS AND NONVESTED SHARES

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

OPTIONS AND NONVESTED SHARES

NOTE 10 – OPTIONS AND NONVESTED SHARES

Options

A summary of stock options activity for six months ended June 30, 2013 is as follow:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
			USD				USD
Outstanding as of December 31, 2012		2,648,609		9.39		7.65		18,374,422
Granted		33,000		10.48
Exercised		(323,330)		8.25				4,267,299
Forfeited and expired		(150,680)		6.78
Outstanding as of June 30, 2013		2,207,599		9.75		7.45		29,679,283
Vested and expected to vest		2,207,599		9.75		7.45		29,679,283
Exercisable as of June 30, 2013		1,387,587		9.65		6.60		18,788,752

The 33,000 stock options granted during the six months ended June 30, 2013 had a weighted average fair value of $8.37 per share or an aggregate of $276,250 on the date of grant, determined based on the Black-Scholes option pricing model using the following weighted average assumptions:

	For six months ended
	June 30, 2013
Expected volatility		104	%
Expected dividends yield		0	%
Expected term		5 years
Risk-free interest rate (per annum)		0.72	%
Fair value of underlying ordinary shares (per share)	$	10.57

For the three months ended June 30, 2013 and 2012, the Company recorded stock compensation expense of $1,230,066 and $1,030,539, respectively, in general and administrative expenses. For the six months ended June 30, 2013 and 2012, the Company recorded stock compensation expense of $2,694,999 and $1,992,958, respectively, in general and administrative expenses.

As of June 30, 2013, approximately $4,733,962 of stock compensation expense with respect to the non-vested stock options is to be recognized over approximately 2. 71 years.

Nonvested shares

A summary of nonvested shares activity for the six months ended June 30, 2013 is as follows:

	Number of  nonvested shares		Grant date weighted average fair value
			USD
Outstanding as of December 31, 2012		120,000		9.85
Granted		22,500		18.58
Vested		-		-
Forfeited		-		-
Outstanding as of June 30, 2013		142,500		11.23

For the three months ended June 30, 2013 and 2012, the Company recorded stock compensation expense of $183,161 and nil respectively in general and administrative expenses. For the six months ended June 30, 2013 and 2012, the Company recorded stock compensation expense of $352,963 and nil respectively in general and administrative expenses.

As of June 30, 2013, approximately $1,037,755 of stock compensation expense with respect to nonvested shares is to be recognized over approximately 2. 52 years.

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BASIS OF PRESENTATION, SIGNIFICANT CONCENTRATION AND RISKS (Policies)

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Basis of Presentation

(a) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted by rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The December 31, 2012 consolidated balance sheet was derived from the audited consolidated financial statements of China Biologic Products, Inc. (the “Company”). The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the December 31, 2012 audited consolidated financial statements of the Company included in the Company’s annual report on Form 10-K for the year ended December 31, 2012.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the financial position as of June 30, 2013, the results of operations for the three and six months ended June 30, 2013 and 2012, and cash flows for the six months ended June 30, 2013 and 2012, have been made. All significant intercompany transactions and balances are eliminated on consolidation.

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment and intangibles with definite lives, the allowance for doubtful accounts, the fair value determinations of equity instruments and stock compensation awards, the realizability of deferred tax assets and inventories, intangible asset, land use right and property, plant and equipment, and accruals for income tax uncertainties and other contingencies. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions.

Significant Concentration and Risks

(b) Significant Concentration and Risks

The Company’s operations are carried out in the People’s Republic of China (the “PRC”) and are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other matters.

The Company maintains cash balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits for its bank accounts located in the United States or may exceed Hong Kong Deposit Protection Board insured limits for its bank accounts located in Hong Kong. Cash balances maintained at financial institutions or state-owned banks in the PRC are not covered by insurance. Total cash at banks as of June 30, 2013 and December 31, 2012 amounted to $146,777,083 and $129,289,461, respectively, of which $73,923and $76,101 are insured, respectively. The Company has not experienced any losses in uninsured bank deposits and does not believe that it is exposed to any significant risks on cash held in bank accounts.

The Company’s two major products are human albumin and human immunoglobulin for intravenous injection (“IVIG”). Human albumin accounted for 42.5% and 38.7% of the total sales for the three months ended June 30, 2013 and 2012, respectively, and 40.2% and 46.4% of the total sales for the six months ended June 30, 2013 and 2012, respectively. IVIG accounted for 39.4% and 42.1% of the total sales for the three months ended June 30, 2013 and 2012, respectively, and 43.5% and 37.4% of the total sales for the six months ended June 30, 2013 and 2012, respectively. If the market demands for human albumin and IVIG cannot be sustained in the future or the price of human albumin and IVIG decreases, the Company’s operating results could be adversely affected.

Substantially all of the Company’s customers are located in the PRC. As of June 30, 2013 and 2012, the Company had no significant concentration of credit risk. There were no customers that individually comprised 10% or more of the total sales during the three months and six months ended June 30, 2013 and 2012, respectively. No individual customer represented 10% or more of trade receivables at June 30, 2013 and December 31, 2012, respectively. The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral from its customers.

There were no suppliers that comprised 10% or more of the total purchases for the three months and six months ended June 30, 2013 and 2012, respectively. No individual vendor represented more than 10% of accounts payables as at June 30, 2013. Two vendors individually represented more than 10% of accounts payables as at December 31, 2012.

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NET INCOME PER SHARE

6 Months Ended

Jun. 30, 2013

Net Income Loss Per Share Disclosure [Abstract]

NET INCOME PER SHARE

NOTE 15 – NET INCOMEPER SHARE

The following table sets forth the computation of basic and diluted net income per share for the periods indicated:

	For the three months ended
	June 30, 2013		June 30, 2012
	USD		USD
Net income attributable to China Biologic Products, Inc.		16,161,926		12,838,771
Earnings allocated to participating nonvested shares		(85,227)		-
Net income allocated to common stockholders used in computing basic net     income per common stock		16,076,699		12,838,771
Change in fair value of warrants		-		(559,758)
Net income used in diluted net income per common stock		16,076,699		12,279,013
Weighted average shares used in computing basic net income per common stock		26,880,459		25,875,164
Diluted effect of warrants		-		311,200
Diluted effect of stock option		1,186,844		440,796
Weighted average shares used in computing diluted net income per common stock		28,067,303		26,627,160
Net income per common stock – basic		0.60		0.50
Net income per common stock – diluted		0.57		0.46

During the three months ended June 30, 2013, no option was antidilutive and excluded from the calculation of diluted net income per common stock.

During the three months ended June 30, 2012, 1,544,000 options with an average exercise price of $11.98 were excluded from the calculation of diluted net income per common stock since they were antidilutive.

The following table sets forth the computation of basic and diluted net income per share for the periods indicated:

	For the six months ended
	June 30, 2013		June 30, 2012
	USD		USD
Net income attributable to China Biologic Products, Inc.		31,077,786		25,796,077
Earnings allocated to participating nonvested shares		(157,615)		-
Net income allocated to common stockholders used in computing basic net income per common stock		30,920,171		25,796,077
Change in fair value of warrants		-		(1,769,140)
Net income used in diluted net income per common stock		30,920,171		24,026,937
Weighted average shares used in computing basic net income per common stock		26,833,262		25,738,145
Diluted effect of warrants		-		390,507
Diluted effect of stock option		1,133,818		453,172
Weighted average shares used in computing diluted net income per common stock		27,967,080		26,581,824
Net income per common stock – basic		1.15		1.00
Net income per common stock – diluted		1.11		0.90

During the six months ended June 30, 2013, no option was antidilutive and excluded from the calculation of diluted net income per common stock.

During the six months ended June 30, 2012, 1,544,000 options with an average exercise price of $11.98 were excluded from the calculation of diluted net income per common stock since they were antidilutive.

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Document And Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 06, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Trading Symbol	CBPO
Entity Common Stock, Shares Outstanding		26,952,945
Entity Registrant Name	China Biologic Products, Inc.
Entity Central Index Key	0001369868
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer

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SUBSEQUENT EVENT

6 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

SUBSEQUENT EVENT

NOTE 16 – SUBSEQUENT EVENT

On August 2, 2013, the Company entered into a redemption agreement with one of its individual shareholders, pursuant to which the Company would repurchase 1,479,704 shares of common stock for a consideration of US$29,594,080.