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U.S.-CHINA INDUSTRIAL EXCHANGE, INC.
ANNOUNCES THE RESULTS FOR THE FIRST QUARTER 1995

BETHESDA, MARYLAND - May 12, 1995 - U.S. -CHINA INDUSTRIAL EXCHANGE, INC. (NASDAQ:CHDX), a leading American company in market representation, sales and consulting services for Western business in China since 1981, today announced its results for the three months ended March 31, 1995. The company reported a net loss for the period of $212,000 or $0.06 per share. In the same period a year earlier the company had earnings of $224,000 or $0.14 per share.

Historically, the Company has looked to annualized rather than quarterly results because of the inherent fluctuations of the Chinese purchasing cycles. The Company noted that the timing of its earnings is influenced to a large extent by the uncertainty of the annual Chinese budgeting process, the scheduling of the availability of funds, and the availability of credit from the Chinese banking system to the Company’s customers.

"The current credit policies of the Chinese government have been affecting us negatively since they were implemented in 1993. We are not surprised to see period to period fluctuation and we have experienced downswings before. That is part of doing business in China," Roberta Lipson, President and CEO said in Beijing. "Our financial position is very strong in spite of these quarterly results cash-on-hand is over $5 million and our per share book value is more than $2.50. The demand for our existing products in the marketplace remains extremely high, and we are working with our customers in a variety of ways to help them find funding for purchases; our efforts to obtain tied aid funding from the Export Import Bank is a part of that."

We have recently introduced two exciting medical technologies in China as well; automated clinical chemistry analyzers from Johnson & Johnson Clinical Diagnostic and laser imaging systems from Polaroid, Lipson also noted. "The response of the Chinese market to these introductions has been very positive. While we expect the current sluggishness to continue to affect our performance significantly through the second quarter of 1995, we are optimistic that the second half of the year will show a recovery. We are already seeing the 1995 purchase approvals working their way through the Chinese bureaucratic system. We have learned over the years that patience is the key at times such as this."

For the three month period ended March 31, total revenue, comprised of net sales plus net commission income, decreased by 11.3% to $3,115,000 as compared to the same period in 1994. Net sales (the larger component of total revenue) increased by 33.8% to $2,810,000 while net commission income decreased by 60.7% to $305,000. Total gross profit on sales and net commission income decreased by 28.4% to $899,000 compared to the earlier period. Company representatives in the United States noted that the arrangements being developed with Johnson & Johnson Clinical Diagnostics cover the marketing, sale, technical support and retail distribution in China of automated clinical chemistry and reagent systems. These products utilize a unique "dry slide" technology and are the market leader in the United States. The Polaroid imaging product allows hard copy transparencies to be made from a variety of imaging modalities using new digital dry film technology. This product area is compatible with the Company’s well established ultrasound product as well as other clinical imaging systems such as CT, MRI and X-ray. Both new product areas represent leading edge health care systems being introduced in China for the first time. The Company believes this will continue to support its position as a leading independent supplier of first quality health care products to the People’s Republic of China.

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