**Exhibit      99.1**

| **Press                Release** | Source:                Harbin Electric Inc. |
|----------------------------------|---------------------------------------------|

**Harbin      Electric Reports Record Revenues and Operating Profits for the First Quarter      2008 -- Sales Grew 65% Year-Over-Year**

|  | -- | Total                revenues were $22.5 million, an increase of 65% compared to $13.6                million in the first quarter of                2007 |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | -- | Operating                profit was $8.6 million, up 68% compared to the first quarter 2007 |
|--|----|---------------------------------------------------------------------------------------------|

|  | -- | Net                income was $5.4 million, a 57% increase from the first quarter of2007 |
|--|----|------------------------------------------------------------------------------------------|

|  | -- | Diluted                EPS were $0.27, compared to $0.19 for the first quarter                2007 |
|--|----|----------------------------------------------------------------------------------------------------|

|  | -- | Automobile                micro-motors business exceeded expectations with approximately                $9 million in revenues |
|--|----|--------------------------------------------------------------------------------------------------------------------------------|

| Financial                  Highlights for the First Quarter 2008 |
|------------------------------------------------------------------|
|                                                             |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |   | Q12008 |   |   | Q12007 |   |   | YoY%                  Change |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |
| Revenue                                                          |   | $ | 22,458,185 |   | $ | 13,626,214 |   |   | 65 | % |
| Gross                  Profit                                    |   | $ | 10,759,477 |   | $ | 6,857,928 |   |   | 57 | % |
| Gross                  Profit Margin                             |   |   | 47.9 | % |   | 50.3 | % |   |   |   |
| Operating                  Income                                |   | $ | 8,635,823 |   | $ | 5,125,625 |   |   | 69 | % |
| Operating                  Margin 38.5%                          |   |   | 37.6 | % |   |   |   |   |   |   |
| Net                  Income                                      |   | $ | 5,353,236 |   | $ | 3,404,063 |   |   | 57 | % |
| Net                  Profit Margin                               |   |   | 23.8 | % |   | 25.0 | % |   |   |   |
| Diluted                  EPS                                     |   | $ | 0.27 |   | $ | 0.19 |   |   | 41 | % |

----

----

----

----

| A                  S S E T S                                                                                                                                                                                                                                                                                                                                                                       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                               |   |   | March                  31, |   |   | December                  31, |   |
|                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 2008 |   |   | 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                               |   |   | UNAUDITED |   |   |   |   |
| CURRENT                ASSETS:                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Cash                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 36,904,184 |   |   | 45,533,893 |   |
| Accounts                  receivable, net of allowance                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |
| for                  doubtful accounts of $121,071                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| and                  $116,238 as of March 31, 2008                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| and                  December 31, 2007, respectively                                                                                                                                                                                                                                                                                                                                               |   |   | 29,575,532 |   |   | 23,216,543 |   |
| Inventories                                                                                                                                                                                                                                                                                                                                                                                        |   |   | 2,554,312 |   |   | 2,570,929 |   |
| Other                  receivables                                                                                                                                                                                                                                                                                                                                                                 |   |   | 1,149,591 |   |   | 326,639 |   |
| Advances                  on inventory purchases                                                                                                                                                                                                                                                                                                                                                   |   |   | 2,738,306 |   |   | 1,772,204 |   |
| Total                  current assets                                                                                                                                                                                                                                                                                                                                                              |   |   | 72,921,925 |   |   | 73,420,208 |   |
|                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| PLANT                  AND EQUIPMENT, net                                                                                                                                                                                                                                                                                                                                                          |   |   | 26,838,936 |   |   | 23,858,035 |   |
|                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| OTHER                  ASSETS:                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| Debt                  issue costs, net of                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| amortization                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 1,986,537 |   |   | 2,214,717 |   |
| Advances                  on equipment purchases                                                                                                                                                                                                                                                                                                                                                   |   |   | 31,277,020 |   |   | 24,328,386 |   |
| Advances                  on intangible assets                                                                                                                                                                                                                                                                                                                                                     |   |   | 1,442,280 |   |   | 1,384,710 |   |
| Deposits                  on acquisition                                                                                                                                                                                                                                                                                                                                                           |   |   | 714,000 |   |   | -- |   |
| Intangible                  assets, net of                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| accumulated                  amortization                                                                                                                                                                                                                                                                                                                                                          |   |   | 5,897,800 |   |   | 5,899,989 |   |
| Other                  assets                                                                                                                                                                                                                                                                                                                                                                      |   |   | 413,676 |   |   | 397,263 |   |
| Cross                  currency hedge receivable                                                                                                                                                                                                                                                                                                                                                   |   |   | 121,837 |   |   | 145,945 |   |
| Deposit                  in derivative hedge                                                                                                                                                                                                                                                                                                                                                       |   |   | 1,000,000 |   |   | 1,000,000 |   |
| Total                  other assets                                                                                                                                                                                                                                                                                                                                                                |   |   | 42,853,150 |   |   | 35,371,010 |   |
|                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| Total                  assets                                                                                                                                                                                                                                                                                                                                                                      |   |   | 142,614,011 |   |   | 132,649,253 |   |
|                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| L                  I                  A B I L I T I E                  S            A                  N D                             S                  H A R E H O L D E R                  S'          E Q U I T                  Y |
|                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| CURRENT                  LIABILITIES:                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| Accounts                  payable                                                                                                                                                                                                                                                                                                                                                                  |   |   | 128,504 |   |   | 263,314 |   |
| Other                  payables                                                                                                                                                                                                                                                                                                                                                                    |   |   | 221,636 |   |   | 1,380,119 |   |
| Other                  payables -- related party                                                                                                                                                                                                                                                                                                                                                   |   |   | -- |   |   | 45,491 |   |
| Accrued                  liabilities                                                                                                                                                                                                                                                                                                                                                               |   |   | 63,024 |   |   | 83,099 |   |
| Customer                  deposits                                                                                                                                                                                                                                                                                                                                                                 |   |   | 345,172 |   |   | 333,253 |   |
| Taxes                  payable                                                                                                                                                                                                                                                                                                                                                                     |   |   | 1,772,402 |   |   | 839,299 |   |
| Interest                  payable                                                                                                                                                                                                                                                                                                                                                                  |   |   | 253,823 |   |   | 1,122,000 |   |
| Total                  current liabilities                                                                                                                                                                                                                                                                                                                                                         |   |   | 2,784,561 |   |   | 4,066,575 |   |
|                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| NOTES                  PAYABLE, net of debt discount                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| $15,745,236                  and $16,878,269 as of                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| March                  31, 2008 and December 31,                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| 2007,                  respectively                                                                                                                                                                                                                                                                                                                                                                |   |   | 32,465,660 |   |   | 33,121,731 |   |
|                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| FAIR                  VALUE OF DERIVATIVE INSTRUMENT                                                                                                                                                                                                                                                                                                                                               |   |   | 15,338,258 |   |   | 10,844,372 |   |
|                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| Total                  liabilities                                                                                                                                                                                                                                                                                                                                                                 |   |   | 50,588,479 |   |   | 48,032,678 |   |
|                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| COMMITMENTS                  AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                     |   |   | -- |   |   | -- |   |
|                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| SHAREHOLDERS'                  EQUITY:                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |
| Common                  Stock, $0.00001 par value,                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| 100,000,000                  shares authorized,                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| 18,370,456                  and 18,143,156                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| shares                  issued and outstanding                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
| as                  of March 31, 2008 and                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |
| December                  31, 2007, respectively                                                                                                                                                                                                                                                                                                                                                   |   |   | 183 |   |   | 181 |   |
| Paid-in-capital                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 46,212,369 |   |   | 44,970,589 |   |
| Retained                  earnings                                                                                                                                                                                                                                                                                                                                                                 |   |   | 36,643,931 |   |   | 32,281,312 |   |
| Statutory                  reserves                                                                                                                                                                                                                                                                                                                                                                |   |   | 10,005,079 |   |   | 9,014,462 |   |
| Accumulated                  other comprehensive loss                                                                                                                                                                                                                                                                                                                                              |   |   | (836,030 | ) |   | (1,649,969 | ) |
| Total                  shareholders' equity                                                                                                                                                                                                                                                                                                                                                        |   |   | 92,025,532 |   |   | 84,616,575 |   |
| Total                  liabilities and                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |
| shareholders'                  equity                                                                                                                                                                                                                                                                                                                                                              |   |   | 142,614,011 |   |   | 132,649,253 |   |

----

| HARBIN                  ELECTRIC, INC. AND SUBSIDIARIES                           |
|-----------------------------------------------------------------------------------|
|                                                                              |
| CONSOLIDATED                  STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME |
| FOR                  THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007               |
| (PRELIMINARY                  AND UNAUDITED)                                      |
|                                                                              |   |   |   |   |   |   |   |
|                                                                              |   |   | FOR                  THE THREE MONTHS |   |
|                                                                              |   |   | ENDED                  MARCH 31, |   |
|                                                                              |   |   | 2008 |   |   | 2007 |   |
|                                                                              |   |   |   |   |   |   |   |
| REVENUES                                                                          |   |   | 22,458,185 |   |   | 13,626,214 |   |
|                                                                              |   |   |   |   |   |   |   |
| COST                  OF SALES                                                    |   |   | 11,698,708 |   |   | 6,768,286 |   |
|                                                                              |   |   |   |   |   |   |   |
| GROSS                  PROFIT                                                     |   |   | 10,759,477 |   |   | 6,857,928 |   |
|                                                                              |   |   |   |   |   |   |   |
| RESEARCH                  AND DEVELOPMENT EXPENSE                                 |   |   | 97,695 |   |   | 217,840 |   |
|                                                                              |   |   |   |   |   |   |   |
| SELLING,                    GENERAL AND ADMINISTRATIVEEXPENSES                    |   |   | 2,025,959 |   |   | 1,514,463 |   |
|                                                                              |   |   |   |   |   |   |   |
| INCOME                  FROM OPERATIONS                                           |   |   | 8,635,823 |   |   | 5,125,625 |   |
|                                                                              |   |   |   |   |   |   |   |
| OTHER                  EXPENSE (INCOME), NET                                      |   |   |   |   |   |   |   |
| Other                  income, net                                                |   |   | (4,787 | ) |   | (2,456 | ) |
| Non-operating                  expense (income),                                  |   |   |   |   |   |   |   |
| net                                                                               |   |   | 13,977 |   |   | (6,321 | ) |
| Interest                  expense, net                                            |   |   | 2,282,780 |   |   | 1,730,339 |   |
| Total                  other expense (income),                                    |   |   |   |   |   |   |   |
| net                                                                               |   |   | 2,291,970 |   |   | 1,721,562 |   |
|                                                                              |   |   |   |   |   |   |   |
| INCOME                  BEFORE PROVISION FOR INCOME                               |   |   |   |   |   |   |   |
| TAXES                                                                             |   |   | 6,343,853 |   |   | 3,404,063 |   |
|                                                                              |   |   |   |   |   |   |   |
| PROVISION                  FOR INCOME TAXES                                       |   |   | 990,617 |   |   | -- |   |
|                                                                              |   |   |   |   |   |   |   |
| NET                  INCOME                                                       |   |   | 5,353,236 |   |   | 3,404,063 |   |
|                                                                              |   |   |   |   |   |   |   |
| OTHER                  COMPREHENSIVE INCOME (LOSS)                                |   |   |   |   |   |   |   |
| Foreign                  currency translation                                     |   |   |   |   |   |   |   |
| adjustment                                                                        |   |   | 5,307,825 |   |   | 704,668 |   |
| Change                  in fair value of                                          |   |   |   |   |   |   |   |
| derivative                  instrument                                            |   |   | (4,493,886 | ) |   | -- |   |
|                                                                              |   |   |   |   |   |   |   |
| COMPREHENSIVE                  INCOME                                             |   |   | 6,167,175 |   |   | 4,108,731 |   |
|                                                                              |   |   |   |   |   |   |   |
| EARNINGS                  PER SHARE                                               |   |   |   |   |   |   |   |
| Basic                                                                             |   |   |   |   |   |   |   |
| Weighted                  average number of                                       |   |   |   |   |   |   |   |
| shares                                                                            |   |   | 18,209,978 |   |   | 16,600,451 |   |
| Earning                  per share                                                |   | $ | 0.29 |   | $ | 0.21 |   |
|                                                                              |   |   |   |   |   |   |   |
| Diluted                                                                           |   |   |   |   |   |   |   |
| Weighted                  average number of                                       |   |   |   |   |   |   |   |
| shares                                                                            |   |   | 19,952,721 |   |   | 18,016,627 |   |
| Earning                  per share                                                |   | $ | 0.27 |   | $ | 0.19 |   |

----

| HARBIN                  ELECTRIC, INC. AND SUBSIDIARIES             |
|---------------------------------------------------------------------|
|                                                                |
| CONSOLIDATED                  STATEMENTS OF CASH FLOWS              |
| FOR                  THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 |
| (PRELIMINARY                  AND UNAUDITED)                        |
|                                                                |
|                                                                |   |   | 2008 |   |   | 2007 |   |
| CASH                  FLOWS FROM OPERATING ACTIVITIES:              |   |   |   |   |   |   |   |
| Net                  income                                         |   | $ | 5,353,236 |   | $ | 3,404,063 |   |
| Adjustments                  to reconcile net income                |   |   |   |   |   |   |   |
| to                  cash provided by (used in)                      |   |   |   |   |   |   |   |
| operating                  activities:                              |   |   |   |   |   |   |   |
| Depreciation                                                        |   |   | 211,710 |   |   | 103,730 |   |
| Amortization                  of intangible                         |   |   |   |   |   |   |   |
| assets                                                              |   |   | 242,303 |   |   | 22,946 |   |
| Amortization                  of debt issuance                      |   |   |   |   |   |   |   |
| costs                                                               |   |   | 228,181 |   |   | 123,109 |   |
| Amortization                  of debt discount                      |   |   | 1,343,929 |   |   | 1,133,033 |   |
| Gain                  on derivative instrument                      |   |   | (168,214 | ) |   | -- |   |
| Stock                  based compensation                           |   |   | 456,232 |   |   | 246,458 |   |
| Change                  in operating assets and                     |   |   |   |   |   |   |   |
| liabilities                                                         |   |   |   |   |   |   |   |
| Accounts                  receivable                                |   |   | (5,286,259 | ) |   | (637,101 | ) |
| Inventories                                                         |   |   | 120,299 |   |   | (297,191 | ) |
| Other                  receivables                                  |   |   | (815,265 | ) |   | (176,578 | ) |
| Other                  receivables - related                        |   |   |   |   |   |   |   |
| parties                                                             |   |   | -- |   |   | (6,321 | ) |
| Advances                  on inventory purchases                    |   |   | (877,424 | ) |   | (692,308 | ) |
| Other                  assets                                       |   |   | -- |   |   | (133,507 | ) |
| Accounts                  payable                                   |   |   | (139,993 | ) |   | (87,502 | ) |
| Other                  payables                                     |   |   | (1,172,757 | ) |   | (1,906 | ) |
| Other                  payables - Related Party                     |   |   | (46,377 | ) |   | 14,882 |   |
| Accrued                  liabilities                                |   |   | (18,598 | ) |   | -- |   |
| Customer                  deposits                                  |   |   | (1,896 | ) |   | 8,480 |   |
| Taxes                  payable                                      |   |   | 879,686 |   |   | (223,419 | ) |
| Interest                  payable                                   |   |   | (868,177 | ) |   | (1,122,000 | ) |
| Net                  cash (used in)                                 |   |   |   |   |   |   |   |
| provided                  by operating                              |   |   |   |   |   |   |   |
| activities                                                          |   |   | (559,384 | ) |   | 1,678,868 |   |
|                                                                |   |   |   |   |   |   |   |
| CASH                  FLOWS FROM INVESTING ACTIVITIES:              |   |   |   |   |   |   |   |
| Advances                  on intangible assets                      |   |   | -- |   |   | 331,350 |   |
| Advances                  on equipment purchases                    |   |   | (5,813,976 | ) |   | (12,530,558 | ) |
| Additions                  to intangible assets                     |   |   | (697,544 | ) |   | (198,998 | ) |
| Additions                  to plant and equipment                   |   |   | (2,164,933 | ) |   | (284,156 | ) |
| Deposit                  on acquisition                             |   |   | (698,850 | ) |   | -- |   |
| Net                  cash used in investing                         |   |   |   |   |   |   |   |
| activities                                                          |   |   | (9,375,303 | ) |   | (12,682,362 | ) |
|                                                                |   |   |   |   |   |   |   |
| CASH                  FLOWS FINANCING ACTIVITIES:                   |   |   |   |   |   |   |   |
| Proceeds                  received from conversion                  |   |   |   |   |   |   |   |
| of                  warrants and options                            |   |   | 785,548 |   |   | -- |   |
| Repayment                  of notes payable                         |   |   | (2,000,000 | ) |   | -- |   |
| Net                  cash used in financing                         |   |   |   |   |   |   |   |
| activities                                                          |   |   | (1,214,452 | ) |   | -- |   |
|                                                                |   |   |   |   |   |   |   |
| EFFECTS                  OF EXCHANGE RATE CHANGE IN                 |   |   |   |   |   |   |   |
| CASH                                                                |   |   | 2,519,430 |   |   | 657,437 |   |
|                                                                |   |   |   |   |   |   |   |
| DECREASE                  IN CASH                                   |   |   | (8,629,709 | ) |   | (10,346,057 | ) |
|                                                                |   |   |   |   |   |   |   |
| CASH,                  beginning of period                          |   |   | 45,533,893 |   |   | 67,313,919 |   |
|                                                                |   |   |   |   |   |   |   |
| CASH,                  end of period                                |   | $ | 36,904,184 |   | $ | 56,967,862 |   |

----

----

----