UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

                                   (Mark One)

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

                  For the Quarterly Period Ended June 30, 2008

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

              For the Transition Period from _________ to _________

                        Commission file number: 000-29523

                           China Pharma Holdings, Inc.
             (Exact name of registrant as specified on its charter)

          Delaware                                               73-1564807
  (State or other jurisdiction                                  (IRS Employer
of incorporation or organization)                            Identification No.)


         2nd Floor, No. 17, Jinpan Road, Haikou, Hainan Province, China
                    (Address of principle executive offices)

                            0086-898-66811730 (China)
              (Registrant's telephone number, including area code)
                                   Copies to:

                                   Charles Law
                                King and Wood LLP
                        Suite 1175, 125 S Market Street,
                               San Jose, CA 95113


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 past 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 is a shell company (as defined in
Rule 12b-2 of the Exchange Act. Yes [ ] No [X]

As of June 30, 2008,  42,278,938  shares of China Pharma  Holdings,  Inc. common
stock, par value $0.001 per share, were outstanding.

Transitional Small Business disclosure format:  Yes [  ]     No [X]

<PAGE>


                           China Pharma Holdings, Inc.

                                TABLE OF CONTENTS


Part I    Financial Information                                                1

Item 1.   Financial Statements                                                 1

          Condensed Consolidated Balance Sheets as of March 31, 2008 and
          December 31, 2007 (unaudited)                                        1

          Condensed Consolidated  Statements of Operations and Comprehensive
          Income  for the  Three  Months  Ended  March  31,  2008  and  2007
          (unaudited)                                                          2

          Condensed Consolidated  Statements of Cash Flows for the Three
          Months Ended March 31, 2008 and 2007 (unaudited)                     3

          Notes to Condensed Consolidated Financial Statements (unaudited)     4

Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations                                               10

Item 3.   Controls and Procedures                                             23

Part II   Other Information                                                   23

Item 1    Legal Proceedings                                                   23

Item 2    Unregistered Sales of Equity Securities and Use of Proceeds         24

Item 3    Defaults upon Senior Securities                                     24

Item 4    Submission of Matters to a Vote of Security Holders                 24

Item 5    Other Information                                                   24

Item 6    Exhibits                                                            24

Signatures                                                                    26




<PAGE>
<TABLE>
<CAPTION>

                          PART I FINANCIAL INFORMATION
ITEM 1. Financial Statements



                           CHINA PHARMA HOLDINGS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)

                                                               June 30,    December 31,
                                                                 2008          2007
                                                             -----------   -----------
                                                                           (Restated)
<S>                                                          <C>           <C>

ASSETS
Current Assets:
Cash and cash equivalents                                    $ 7,037,074   $ 1,830,335
Trade accounts receivable, less allowance for doubtful
accounts of $3,661,065 and $2,440,852, respectively           27,342,048    18,572,976
Other receivables, less allowance for doubtful
accounts of $94,997 and $43,908, respectively                    822,776       413,596
Advances to suppliers                                          6,260,588     2,757,320
Inventory                                                     14,976,919    14,448,771
                                                             -----------   -----------
Total Current Assets                                          56,439,405    38,022,998
                                                             -----------   -----------
Non-current Assets:
Property and equipment, net of accumulated depreciation of
$1,275,949 and $1,003,802, respectively                        2,603,819     2,625,216
Intangible assets, net of accumulated amortization of
$291,809 and $221,715, respectively                            2,498,375     2,063,252
Advances for purchases of intangible assets                    3,194,915       807,345
Deferred tax assets                                              375,606       187,509
                                                             -----------   -----------
Total Non-current Assets                                       8,672,715     5,683,322
                                                             -----------   -----------
TOTAL ASSETS                                                 $65,112,120   $43,706,320
                                                             -----------   -----------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable                                       $   607,489   $   297,299
Accrued expenses                                                  48,813       261,301
Accrued taxes payable                                          1,208,254       311,009
Other payables                                                   138,311        86,161
Advances from customers                                          500,773       261,583
Short-term notes payable                                       2,473,879     2,693,428
                                                             -----------   -----------
Total Current Liabilities                                      4,977,519     3,910,781
                                                             -----------   -----------
Research and development commitments                              36,381        34,181
                                                             -----------   -----------
Total Liabilities                                              5,013,900     3,944,962
                                                             -----------   -----------
Stockholders' Equity:
Common stock, $0.001 par value, 60,000,000 shares
authorized, 42,278,938 and 37,278,938 shares issued and
outstanding, respectively                                         42,279        37,279
Additional paid-in capital                                    21,062,586    11,678,606
Foreign currency translation adjustment                        5,559,346     2,839,304
Retained earnings                                             33,434,009    25,206,169
                                                             -----------   -----------
Total Stockholders' Equity                                    60,098,220    39,761,358
                                                             -----------   -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   $65,112,120   $43,706,320
                                                             -----------   -----------




         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.



                                       1
<PAGE>


                           CHINA PHARMA HOLDINGS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                            AND COMPREHENSIVE INCOME
                                   (unaudited)

                                                             For the three months            For the six months
                                                                ended June 30,                  ended June 30,
                                                        ----------------------------    ----------------------------
                                                             2008            2007            2008            2007
                                                        ------------    ------------    ------------    ------------

Revenue                                                 $ 11,278,803    $  8,570,256    $ 22,995,848    $ 15,804,024
Cost of revenue                                            5,325,992       4,670,685      11,235,760       8,605,524
                                                        ------------    ------------    ------------    ------------

Gross profit                                               5,952,811       3,899,571      11,760,088       7,198,500
                                                        ------------    ------------    ------------    ------------

Operating expenses:
Selling expenses                                             456,630         326,147         794,422         474,030
General and administrative                                   451,096         290,596         799,489         575,079
Research and development                                      37,226           4,477          37,226            --
Bad debt expense, net of recoveries                          612,413         (87,149)      1,079,813         934,058
                                                        ------------    ------------    ------------    ------------
Total operating expenses                                   1,557,365         534,071       2,710,950       1,983,167
                                                        ------------    ------------    ------------    ------------

Income from operations                                     4,395,446       3,365,500       9,049,138       5,215,333
                                                        ------------    ------------    ------------    ------------

Non-operating income (expenses):
Interest income                                                5,035          11,633           5,035          25,408
Interest expense                                             (50,440)        (58,942)        (95,713)       (115,841)
Other (expense) income                                       (77,450)          7,937         (77,450)        575,277
                                                        ------------    ------------    ------------    ------------
Total non-operating income (expense)                        (122,855)        (39,372)       (168,128)        484,844
                                                        ------------    ------------    ------------    ------------

Income before taxes                                        4,272,591       3,326,128       8,881,010       5,700,177
Income tax expense                                           235,292            --           653,170            --
                                                        ------------    ------------    ------------    ------------
Net income                                              $  4,037,299    $  3,326,128    $  8,227,840    $  5,700,177
                                                        ------------    ------------    ------------    ------------
Comprehensive income -
   foreign currency translation adjustments                  974,800         216,416       2,720,042         651,683
                                                        ------------    ------------    ------------    ------------
Comprehensive income                                    $  5,012,099    $  3,542,544    $ 10,947,882    $  6,351,860
                                                        ------------    ------------    ------------    ------------

Basic and Diluted Earnings Per Share                    $       0.10    $       0.09    $       0.22    $       0.15
                                                        ------------    ------------    ------------    ------------
Basic and Diluted Weighted Average Shares Outstanding     38,982,235      37,228,938      38,130,586      36,785,909
                                                        ------------    ------------    ------------    ------------




         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.




                                       2
<PAGE>



                           CHINA PHARMA HOLDINGS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

                                                    For the six months ended June 30,
                                                       --------------------------
                                                           2008           2007
                                                       -----------    -----------
Cash Flows from Operating Activities:                                 (Restated)

Net income                                             $ 8,227,840    $ 5,700,177
Depreciation and amortization                              332,077        201,540
Compensation paid with warrants                            120,042           --
Gain on sale of intangibles                                   --         (572,446)
Changes in assets and liabilities:
Trade accounts receivable                               (7,358,577)    (4,074,259)
Other receivables                                         (371,696)       235,008
Advances to suppliers                                   (3,231,357)    (2,079,529)
Inventory                                                  390,430     (1,828,719)
Deferred tax assets                                       (171,030)          --
Deferred offering costs                                       --           60,062
Trade accounts payable                                     282,790        341,285
Accrued expenses                                          (117,176)        57,740
Accrued taxes payable                                      852,319         (2,715)
Other payables                                             (57,543)       (75,127)
Advances from customers                                    216,039         33,704
                                                       -----------    -----------
Net Cash from Operating Activities                        (885,842)    (2,003,279)
                                                       -----------    -----------

Cash Flows from Investing Activities:
Purchase of property and equipment                         (16,683)       (25,931)
Purchase of intangible assets                             (424,170)          --
Advances for purchases of intangibles                   (2,269,286)          --
                                                       -----------    -----------
Net Cash from Investing Activities                      (2,710,139)       (25,931)
                                                       -----------    -----------

Cash Flows from Financing Activities:
Proceeds from sale of common stock and warrants          9,268,938      3,797,183
Payments of short term notes payable                      (381,753)          --
                                                       -----------    -----------
Net Cash Proceeds from Financing Activities              8,887,185      3,797,183
                                                       -----------    -----------

Effect of Exchange Rate Changes on Cash                    (84,465)        11,691
                                                       -----------    -----------
Net Change in Cash                                       5,206,739      1,779,664
                                                       -----------    -----------
Cash and Cash Equivalents at Beginning of Period         1,830,335        656,441
                                                       -----------    -----------
Cash and Cash Equivalents at End of Period             $ 7,037,074    $ 2,436,105
                                                       -----------    -----------


Supplemental Cash Flow Disclosure:
Cash paid for interest                                 $   143,893    $   115,841
Cash paid for income taxes                                 422,553           --


</TABLE>





         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.



                                       3
<PAGE>


                           CHINA PHARMA HOLDINGS, INC.
              UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2008

NOTE 1 - BASIS OF PRESENTATION

The accompanying  unaudited condensed consolidated financial statements of China
Pharma Holdings,  Inc. (the Company) and its subsidiaries were prepared pursuant
to the rules and  regulations  of the  United  States  Securities  and  Exchange
Commission.  Certain  information  and note  disclosures  normally  included  in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted pursuant
to such rules and regulations.  Management of the Company (Management)  believes
that the following  disclosures are adequate to make the  information  presented
not misleading. These condensed consolidated financial statements should be read
in conjunction with the audited consolidated  financial statements and the notes
thereto included in the Company's Form 10-KSB report for the year ended December
31, 2007.

These  unaudited  condensed   consolidated   financial  statements  reflect  all
adjustments  (consisting  only of normal  recurring  adjustments)  that,  in the
opinion  of  Management,  are  necessary  to  present  fairly  the  consolidated
financial  position  and  results of  operations  of the Company for the periods
presented.  Operating  results  for the six months  ended June 30,  2008 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2008.

Organization - Onny  Investment  Limited (Onny) was  incorporated in the British
Virgin  Islands on  January  12,  2005 and was a  development  stage  enterprise
through June 15, 2005. On June 16, 2005,  Onny  acquired all of the  outstanding
shares of Hainan  Helpson  Medical &  Biotechnology  Co., Ltd, a privately  held
Chinese joint venture (Helpson) and emerged from the development stage.

On October 19, 2005, Onny was reorganized as a wholly owned  subsidiary of China
Pharma Holdings, Inc., formerly TS Electronics (the Company).

Nature of  Operations - Helpson  manufactures  and markets  several  Western and
Chinese medicines sold mainly to hospitals and private retailers in The People's
Republic of China  (PRC),  through its  marketing  department  located in Hainan
Province. There are also nine other offices, with sales representatives in other
provinces and cities  throughout the PRC.  Helpson's other operating  activities
include biochemical products, health products, and cosmetics.

Accounting  Estimates - The  preparation  of financial  statements in conformity
with accounting  principles  generally  accepted in the United States of America
requires  management to make estimates and assumptions  that affect the reported
amounts of assets and liabilities  and the disclosures of contingent  assets and
liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting periods.  Actual results could differ
from those estimates.

Basic and Diluted  Earnings  per Common  Share - Basic and diluted  earnings per
common share are computed by dividing net income by the weighted-average  number
of common shares outstanding.  As of June 30, 2008 and 2007 potentially dilutive
securities  includes  warrants  outstanding to purchase a total of 2,652,941 and
1,252,941  shares,  respectively,  of Company common stock with exercise  prices
ranging  from $2.38 to $3.50 per  share.  These  have not been  included  in the



                                       4
<PAGE>

computation of earnings per share as their effect is antidilutive.

Recently  Enacted  Accounting  Standards  - In  September  2006,  the  Financial
Accounting  Standards Board (FASB) issued SFAS No. 157, Fair Value Measurements,
which defines fair value,  establishes  a framework for measuring  fair value in
generally  accepted  accounting  principles and expands  disclosures  about fair
value  measurements.  SFAS No. 157 is effective for fiscal years beginning after
November 15, 2007, and interim  periods  within those fiscal years.  In February
2008, the FASB issued FASB Staff Position (FSP FIN) No. 157-2 which extended the
effective date for certain  nonfinancial assets and nonfinancial  liabilities to
fiscal years  beginning after November 15, 2008. The adoption of the portions of
SFAS No.  157 that  were not  postponed  by (FSP  FIN) No.  157-2 did not have a
material impact on our consolidated  financial statements.  The Company does not
expect the adoption of the postponed portions of SFAS No. 157 to have a material
impact on our  consolidated  financial  statements.

In December 2007, the FASB issued SFAS No. 141(R),  Business  Combinations,  and
SFAS No. 160,  Noncontrolling  Interests in Consolidated  Financial  Statements.
SFAS No.  141(R)  requires  an  acquirer  to  measure  the  identifiable  assets
acquired,  the  liabilities  assumed  and any  non-controlling  interest  in the
acquiree at their fair values on the  acquisition  date, with goodwill being the
excess value over the net identifiable  assets acquired.  SFAS No. 160 clarifies
that a non-controlling  interest in a subsidiary should be reported as equity in
the consolidated financial statements, consolidated net income shall be adjusted
to  include  the net  income  attributed  to the  non-controlling  interest  and
consolidated comprehensive income shall be adjusted to include the comprehensive
income attributed to the non-controlling  interest.  The calculation of earnings
per share  will  continue  to be based on  income  amounts  attributable  to the
parent. SFAS No. 141(R) and SFAS No. 160 are effective for financial  statements
issued for fiscal years  beginning  after  December 15, 2008.  Early adoption is
prohibited. SFAS No. 141(R) and SFAS No. 160 are not expected to have a material
impact on our results of operations or financial position.

In March  2008,  the FASB issued SFAS No.  161,  "Disclosures  about  Derivative
Instruments  and Hedging  Activities",  an amendment  of SFAS No. 133.  SFAS 161
applies to all derivative  instruments and  non-derivative  instruments that are
designated and qualify as hedging  instruments  pursuant to paragraphs 37 and 42
of SFAS 133 and related  hedged  items  accounted  for under SFAS 133.  SFAS 161
requires entities to provide greater transparency through additional disclosures
about  how  and  why an  entity  uses  derivative  instruments,  how  derivative
instruments  and related  hedged items are  accounted for under SFAS 133 and its
related interpretations, and how derivative instruments and related hedged items
affect an entity's financial  position,  results of operations,  and cash flows.
SFAS 161 is effective as of the beginning of an entity's  first fiscal year that
begins after  November 15, 2008.  The Company does not expect SFAS 161 to have a
material impact on its results of operations or financial position.

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally  Accepted
Accounting Principles." SFAS 162 will provide framework for selecting accounting
principles to be used in preparing  financial  statements  that are presented in
conformity  with  U.S.  generally  accepted  accounting  principles  (GAAP)  for
nongovernmental  entities.  SFAS 162 will be  effective  60 days  following  the
Securities and Exchange  Commission's  approval of the Public Company Accounting
Oversight  Board  (PCAOB)  amendments  to AU Section  411.  The Company does not



                                       5
<PAGE>
<TABLE>
<CAPTION>

expect the  adoption  of SFAS 162 will have a material  impact on its  financial
condition or results of operation.

Restatement  of Financial  Statements -  Subsequent  to March 2008,  the Company
realized that the December 31, 2007 consolidated  financial statements needed to
be revised to correct an  overstatement  of advances paid to suppliers in amount
of $ 724,628,  an overstatement of other receivables in amount of $ 82,717,  and
an  understatement of advance for purchase of intangible assets in the amount of
$ 807,345.  The Company  concluded that advances made for purchase of intangible
assets  should  be  treated  as a  long-term  asset.  This  correction  was  not
considered  material in accordance  with SAB 108 for the year ended December 31,
2007 but is  considered  significant.  As a result,  the Company  corrected  the
financial  statements for December 31, 2007. The corrected  consolidated balance
sheet is included in these financial statements.  The correction of the December
31, 2007  financial  statements  had no effect on the  previously  reported  net
income. The effect of the restatement was as follows:



                                                            Reported      Restatement      As Restated
                                                            --------      -----------      -----------
<S>                                                         <C>           <C>              <C>
Considated Balance sheet as of December 31,2007
Other Receivables                                        $    496,313    $    (82,717)   $    413,596
Advances to suppliers                                       3,481,948        (724,628)      2,757,320
Total Current Assets                                       38,830,343        (807,345)     38,022,998
Advances for purchase of intangible assets                       --           807,345         807,345
Total Assets                                             $ 43,706,320    $       --        43,706,320

Considated Statement of Cash Flows
For the year ended December 31,2007
Other receivables                                        $   (111,660)   $     79,426    $    (32,234)
Advances to suppliers                                      (1,028,119)       (853,332)      1,881,451
Net Cash provided by Operating Activities                   2,801,898        (773,906)      2,027,992
Advances for purchase of intangible assets                       --           773,906         773,906
Net Cash used in Investing Activities                      (1,479,531)        773,906        (705,625)
Net Change in Cash                                          1,173,894    $       --      $  1,173,894

</TABLE>


NOTE 2 - INVENTORY

Inventory consisted of the following:


                                       June 30,    December 31,
                                         2008          2007
                                     -----------   -----------
         Raw materials               $10,509,311   $12,521,536
         Work in progress                   --          60,404
         Finished goods                4,467,608     1,866,831
                                     -----------   -----------
         Total Inventory             $14,976,919   $14,448,771
                                     -----------   -----------


NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:



                                       6
<PAGE>

                                         June 30,           December 31,
                                           2008                 2007
                                       -----------          -----------
Permit of land use                     $   409,889          $   385,102
Building                                 1,866,413            1,753,547
Plant, machinery and equipment           1,456,892            1,341,996
Motor vehicle                               45,799               37,193
Office equipment                           100,775               88,210
Construction in progress                      --                 22,970
                                       -----------          -----------
Total                                    3,879,768            3,629,018
Less: accumulated depreciation          (1,275,949)          (1,003,802)
                                       -----------          -----------
Property and Equipment, net            $ 2,603,819          $ 2,625,216
                                       -----------          -----------


Depreciation  is computed on a  straight-line  basis over the  estimated  useful
lives of the assets as follows:


                            Asset                   Life - years
      -----------------------------------------  ------------------
      Permit of land use                              40 - 70
      Building                                        20 - 35
      Plant, machinery and equipment                    10
      Motor vehicle                                   5 - 10
      Office equipment                                   5


For the six  months  ended  June 30,  2008 and 2007,  depreciation  expense  was
$201,645 and $187,957, respectively.

NOTE 4 - INTANGIBLE ASSETS

Intangible  assets  represent  the  costs  on  patents,  trademarks,   licenses,
techniques and formulas.  Intangible  assets have a  weighted-average  remaining
useful life of approximately  9.0 years.  Amortization of intangible  assets was
$130,432  and  $13,583  for the  six  months  ended  June  30,  2008  and  2007,
respectively.

In January  2007, the Company  entered  into an  agreement  to acquire a certain
pharmaceutical  formula  from an  unrelated  party  for  cash  for an  aggregate
purchase price of $424,170.  This has been recorded under the caption Intangible
assets in the accompanying balance sheet as of June 30, 2008.

NOTE 5 - DEBT

Short Term Notes Payable -On July 13, 2007, the Company  entered into a new line
of credit with the bank collateralized by certain land use rights, machinery and
equipment.  The  outstanding  advances  made  under  the  line  of  credit  were
$2,473,879 and $2,324,278 at June 30, 2008 and December 31, 2007,  respectively.
The line of credit was renewed  during the first  quarter of 2008 with due dates
of August and September of 2008 and bears interest  payable  monthly at the rate
of 7.84%.

Short Term Notes Payable to Former  Shareholders  - In January 2006, the Company
converted  its dividend  payable of  $4,402,147  into  short-term  notes bearing
interest at a rate of 2.25% per annum.  The final principal  balance of $369,150
was paid in January,  2008. The accrued interest of $213,545 was paid during the
second quarter of 2008.



                                       7
<PAGE>

NOTE 6 - INCOME TAXES

The Company accounts for its income taxes in accordance with SFAS No. 109, which
requires recognition of deferred tax assets and liabilities and their respective
tax bases and any tax credit carry forwards  available.  Deferred tax assets and
liabilities  are measured  using enacted tax rates  expected to apply to taxable
income in the years in which  those  temporary  differences  are  expected to be
recovered  or settled.  The effect on deferred tax assets and  liabilities  of a
change in tax rates is  recognized  in income in the period  that  includes  the
enactment date.

Undistributed  earnings of the Company's  foreign  subsidiary since  acquisition
amounted to approximately $31 million at June 30, 2008. Those earnings,  as well
as  the  investment  in  the  subsidiaries  of  approximately  $17  million  are
considered to be indefinitely  reinvested and, accordingly,  no U.S. federal and
state  income  taxes have been  provided  thereon.  Upon  distribution  of those
earnings in the form of dividends or otherwise,  the Company would be subject to
both U.S.  income taxes  (subject to an adjustment  for foreign tax credits) and
withholding   taxes  payable  to  the  PRC.   Determination  of  the  amount  of
unrecognized  deferred U.S. income tax liability is not practical because of the
complexities associated with its hypothetical calculation; however, unrecognized
foreign  tax  credits  may be  available  to  reduce a portion  of the U.S.  tax
liability.

On March 16,  2007,  the  National  People's  Congress  of China  passed the new
Enterprise Income Tax Law, (EIT Law), and on December 6, 2007, the State Council
of China issued the Implementation Regulations for the EIT Law which took effect
on January 1, 2008. The EIT Law and  Implementation  Regulations  Rules impose a
unified EIT of 25% on all  domestic-invested  enterprises  and Foreign  Invested
Entities, or FIEs, unless they qualify under certain limited exceptions.

The Company is located in a special region, which had a 15% corporate income tax
rate  before  the new EIT  Law.  The new  EIT  Law  abolished  the  preferential
corporate  income tax rate in the special region.  However,  because the Company
was in  existence  prior to the March 16,  2007  China tax law  change,  it will
gradually  transition to the new 25% tax rate over the next five years  starting
on January 1, 2008. The phase-in  income tax rate is 18% for 2008, 20% for 2009,
22% for 2010,  24% for 2011,  and 25% for 2012 and after.  Also,  the Company is
permitted to use their  remaining  tax holiday,  so they will continue to have a
favorable  income tax rate of 50% in effect  during  fiscal 2008 through 2010 as
determined by the PRC government and the regional tax authorities.

As a result of the above changes,  starting from 2008, the Company's  enterprise
income tax rate will be:


        Year                            Enterprise Income Tax Rate
        ----                            --------------------------
        2008                                     9%
        2009                                    10%
        2010                                    11%
        2011                                    24%
        2012 and after                          25%


The Company has also  incurred  various  other  taxes,  comprised  primarily  of
business  taxes,   value-added  taxes,  urban  construction   taxes,   education
surcharges and others. Any unpaid amounts are reflected on the balance sheets as
accrued taxes payable.



                                       8
<PAGE>

NOTE 7 - STOCKHOLDERS' EQUITY

On May 30, 2008 the Company  completed  an offering of Units priced at $2.00 per
Unit consisting of one share of Company common stock and a three-year warrant to
purchase one-fourth of one share of Company common stock at an exercise price of
$2.80 per  share.  The  Company  issued  5,000,000  shares  of common  stock and
three-year  warrants  to  purchase  1,250,000  shares  of  common  stock  to  17
accredited investors for gross proceeds of $10,000,000.  The net proceeds, after
deduction of related offering expenses of $731,062,  amounted to $9,268,938.  In
addition,  the placement agent in the transaction was issued three-year warrants
to purchase  300,000  shares of common  stock at an exercise  price of $2.98 per
share.  The proceeds were allocated to the warrants  issued to the investors and
the  placement  agent based upon their fair values of  $1,090,342  and $249,366,
respectively  and the balance of the proceeds of $8,952,511 was allocated to the
shares of common  stock.  The fair value of the warrants,  determined  using the
Black-Scholes   Option  Pricing  Model,   was  calculated  using  the  following
assumptions:  risk free interest rate of 2.93%,  expected  dividend yield of 0%,
expected volatility of 62.9% and an expected life of 3 years.

The common  shares and the shares  underlying  the  warrants  have  registration
rights, and the Company is required to file a registration  statement  including
said shares with the Securities and Exchange  Commission.  In the event that the
Company  does not file a  registration  statement  within 45 days of the closing
date of the offering,  or the registration  statement is not declared  effective
within the 90 or 120 day time  periods  from the closing  date as defined in the
registration rights agreement,  or if the Company fails to keep the registration
statement  effective,  the  Company  will be  required  to pay a penalty to each
investor equal to one percent (1%) of the purchase price for each 30 day period.
The Company filed a  registration  statement  with the  Securities  and Exchange
Commission  on July 11, 2008,  which has not yet been  declared  effective.  The
Company has not accrued any penalty under the registration  rights agreement but
will  evaluate  any  liability  related  to  the   effectiveness   date  of  the
registration statement at the end of each reporting period.

On June 24, 2008,  the Company  issued  three-year  warrants to purchase  75,000
shares of Company  common  stock at $2.80 per share and  three-year  warrants to
purchase  75,000  shares of the  Company's  common stock at $3.60 per share to a
vendor valued at $90,487.  The value was recorded as general and  administrative
expense in the accompanying financial statements as of the date of issuance.

Also on June 24, 2008, the Company issued three-year warrants to purchase 25,000
shares of Company  common  stock at $3.00 per share and  three-year  warrants to
purchase  25,000  shares of the  Company's  common stock at $3.50 per share to a
vendor valued at $29,554.  The value was recorded as general and  administrative
expense in the accompanying financial statements as of the date of issuance.

The fair values of the warrants  issued on June 24, 2008,  determined  using the
Black-Scholes   Option  Pricing  Model,  were  calculated  using  the  following
assumptions:  risk free interest rate of 3.14%,  expected  dividend yield of 0%,
expected volatility of 61.3% and an expected life of 3 years.

The Company has  outstanding  warrants to  purchase an  aggregate  of  1,202,941
shares of Company's  common stock at an exercise  price of $2.38 per share which
expire on January 29, 2010.



                                        9
<PAGE>

NOTE 8 - CONTINGENCIES

Economic  environment  -  Significantly  all of  the  Company's  operations  are
conducted  in  the  PRC,  and  therefore  the  Company  is  subject  to  special
considerations  and  significant  risks not typically  associated with companies
operating in the United States of America.  These risks  include,  among others,
the political,  economic and legal  environments and fluctuations in the foreign
currency  exchange rate. The Company's  results from operations may be adversely
affected by changes in the  political  and social  conditions in the PRC, and 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.

In addition,  all of the Company's  revenue is denominated in the PRC's currency
of  Renminbi  (RMB),  which  must be  converted  into  other  currencies  before
remittance  out of the PRC. Both the  conversion of RMB into foreign  currencies
and the  remittance of foreign  currencies  abroad  require  approval of the PRC
government.

Item 2. Management's Discussion and Analysis or Plan of operation

The following  discussion should be read in conjunction with China Pharma Inc.'s
consolidated  financial  statements and related notes included elsewhere in this
Current Report on Form 10-QSB.

This  filing  contains  forward-looking  statements.  The  words  "anticipated",
"believe",  "expect", "plan", "intend", "seek", "estimate",  "project", "could",
"may"  and  similar   expressions  are  intended  to  identify   forward-looking
statements. These statements include, among others, information regarding future
operations,  future  capital  expenditures,  and  future  net  cash  flow.  Such
statements  reflect  China  Pharma  management's  current  views with respect to
future events and  financial  performance  and involve risks and  uncertainties,
including  but  not  limited  to  changes  in  general   economic  and  business
conditions,  changes in foreign,  political,  social,  and economic  conditions,
regulatory initiatives and compliance with governmental regulations, the ability
to increase  market share,  and various other matters,  many of which are beyond
China  Pharma's  control.  Should  one or more of these  risks or  uncertainties
occur, or should underlying  assumptions  prove to be incorrect,  actual results
may vary materially and adversely from those anticipated, believed, estimated or
otherwise indicated. Consequently, all of the forward-looking statements made in
this filing are  qualified by these  cautionary  statements  and there can be no
assurance of the actual results or developments.

China  Pharma  Holdings,  Inc. is a specialty  bio-pharmaceutical  company  with
Scalable  GMP  certified  manufacturing  facilities.  We  currently  have  eight
different  production lines which develop,  manufacture,  and market Western and
Chinese medicines. Over the years we have developed a wide distribution network,
a professional  marketing  team,  and strong  research and  development  ("R&D")
capabilities.  We have a portfolio  of  therapeutics  that target the  following
areas: the central nervous system (CNS),  cardiovascular system, wound recovery,
and infectious diseases.  Our therapeutics target market segments,  both current
and future,  which cover high incidence and high mortality diseases with a large
patient  population.   We  also  have  a  highly  professional  and  experienced
management team.

Strong Revenue Growth and High Margins -We have experienced a compounded, annual
growth-rate  of over 80% in sales of our  therapeutics  since 2003.  For the six



                                       10
<PAGE>

months  ending June 30 2008,  the company  generated $23 million in revenue from
therapeutic  sales  compared to  $15,804,024  over the same  period in 2007,  an
increase of $7,191,824or  45.51%. . The gross margin achieved by our company was
51.14% of total revenue for the six months ending June 30, 2008, which is higher
than the  45.55%  of the  corresponding  period  in 2007,  and  higher  than the
industry  average  gross  margin of 34.2%.  We are able to compete in the highly
fragmented  pharmaceutical  industry through our diversified  therapeutics line,
cost control and strong sales network.  Our experienced  management team, market
insights  and strong R&D  capabilities  enable us to develop  and launch new and
improved generic products based on market demand.

Proven  Record of Success - We have a proven track record of success.  We have a
portfolio of over 30  specifications  of drugs that focus on the  treatment  of:
CNS, cardiovascular,  cerebrovascular,  and infectious diseases. Among these two
are market leaders:  PuSenOK(TM) and Buflomedil  hydrochloride.  We were awarded
the "National Key New Product" by the Ministry of Science and  Technology of the
People's  Republic of China  (PRC) with the State  Administration  of  Taxation,
Ministry of Commerce of the PRC, General  Administration of Quality Supervision,
Inspection  and  Quarantine  of the  PRC,  and  State  Environmental  Protection
Administration  of China.  We are a  profitable  company  with a low cost,  high
margin  business  model.  We are seeing a rapid  growth in sales with a constant
growth  in  income,  due to  our  focus  on  the  largest  segments  of  China's
pharmaceutical  market. We have eight different types of modern production lines
with  capacity to meet  future  demands.  In  addition,  our growth  strategy is
supported by the dynamic pharmaceutical  industry.

Clear Strategy for Growth - We are part of a rapidly growing industry,  in which
we are the leader in generic  drugs.  We have  created a  competitive  advantage
through a diverse  therapeutics line designed to target several specific patient
groups. Our research and development (R&D) is guided by the market and we target
brand  drugs  and new  generic  drugs in  China.  The R&D  covers a  variety  of
diseases,  but focuses on high incidence and high  mortality  diseases in China,
which need more effective treatment. In an attempt to remain a leading player in
the market,  we target  off-patent  drugs or drugs about to be  off-patent  with
cumulative global sales of over $1 billion.  We have 9 drugs on track to launch,
including a new  anti-drug-resistance  antibiotic  which has already entered the
State Food and Drug  Administration,  PRC (SFDA) technical  evaluation.  We also
have three drugs which are waiting for the SFDA's production approval.

I. Summary on 6 months ended June 30, 2008

For the six months ending June 30, 2008, the Company's  total revenue  increased
by over 45.51% to a record high of $23  million,  compared to $15.8  million for
the six months  ending June 30, 2007.  This rapid growth was due to sales of new
products,  increased sales of existing products,  increased  promotion of sales,
and  widened  distribution  channels.  This is  consistent  with China  Pharma's
strategy of launching  new products in an  increasingly  competitive  market and
exploring potential domestic markets.

The financial  performance  for the six months ending June 30, 2008 was improved
compared to the six months ending June 30, 2007.  Gross profit  increased 63.37%
to $11.76 million and net income,  not including  foreign  currency  translation
adjustment,  increased 44.34% to $8.23 million.  This growth was attributable to
the development of new product processes and new marketing activities.



                                       11
<PAGE>

For the six months  ending June 30, 2008,  earnings  per common share  increased
46.67% to $0.22 per share  compared to $0.15 per share for the six months ending
June 30,  2007.  China Pharma is working  closely  with  various  pharmaceutical
research  institutions  to develop more products to meet customers'  needs.  Our
focus is to create a steady increase in revenue. We have seen in the past that a
successful  strategy is the key to company operation.  Our strategy of continued
research  and  penetration  into the  pharmaceutical  market is essential to our
success.

We have also enhanced  internal  controls for accounting  and reporting.  In the
near future,  we will develop a more systematic and continuous  internal control
system for the  long-term  development  of the  company  and the  benefit of our
stakeholders and prospective investors.

II. Business Overview

We are  primarily  engaged  in the  research,  development,  manufacturing,  and
marketing  of  pharmaceutical  and  nutritional  supplements.  During  2007,  we
launched two new products, Alginic Sodium Diester and Granisetron hydrochloride.
In addition, we launched a new product Bumetanide in 2008.

We plan to expand our biotechnology  product portfolio.  Based on the foundation
established  by  some  of  our  widely   recognized   medicine  labels  such  as
Neurotrophic  peptide,  we have offered and will  continue to offer a variety of
biological  medicines.   Those  products,   including  the  injected  hepatocyte
growth-promoting  factors,  are expected to fuel  additional  growth in revenues
beyond what Neurotrophic peptide has provided.

One of our products,  Buflomedil Hydrochloride (which includes the raw material,
the  injectable  form of the product and tablet form) has received the following
recognitions, awards and designations:

o    The key technology project in Hainan in 2003 by Haikou Municipality.

o    The "National Key New  Products"  certificate  in 2003 by the State Science
     and Technology  Department,  State Taxation  Bureau,  Ministry of Commerce,
     State Bureau of Quality Supervision,  Inspection and Quarantine,  and State
     Environmental Protection Bureau.

o    The  "Best  Commercialized  Technology"  award in  Hainan in 2004 by Hainan
     Scientific and Technological Result Examination Committee.

In 2003, we attained GMP  authentication  and the award of "Best  Enterprise for
Supporting  SARS Medicine"  awarded by Hainan Food and Drug  Administration.  We
have an extensive  distribution  network with 16 sales offices and approximately
680 proxy agents covering 30 provinces,  municipalities,  and autonomous regions
around China. Our main market channels are GSP certified medical companies which
directly distribute to hospitals and the final market.

Onny Investment  Limited ("Onny") was incorporated in the British Virgin Islands
on January 12, 2005 and was a  development  stage  enterprise  through  June 15,
2005. On June 16, 2005,  Onny acquired all of the  outstanding  shares of Hainan
Helpson Medical & Biotechnology Co., Ltd, a privately held Chinese joint venture
(Helpson) and emerged from the development  stage. On October 19, 2005, Onny was
reorganized as a wholly owned subsidiary of China Pharma Holdings, Inc. formerly
TS Electronics, Inc. ("the Company").



                                       12
<PAGE>

Furthermore,  On May 30, 2008 the Company  completed an offering and issued five
million  shares of common  stock at a  purchase  price of $2.00 per  share,  and
three-year  warrants to  purchase an  aggregate  of 1.25  million  shares of the
Company's  common  stock at an exercise  price of $2.80 per share.  Net proceeds
from the offering of approximately  $9.3 million are expected to be used for the
expansion of the Company's  existing  product  line,  sales and  marketing,  and
general working capital purposes.

III. Trend in the Market

Studies show that due to the expansion and aging of the world's  population,  an
increasing  number  of  people  have  age-related  diseases,   such  as  cancer,
Alzheimer's disease,  diabetes,  and heart disease.  These diseases have already
become  prevalent,  particularly  in  developed  areas.  In a growing  and aging
population, people need to find more effective methods of treatment.

The main factors  driving the growth in market demand of China's  pharmaceutical
industry include economic growth,  improved  awareness of self-health  care, the
aging and the continued  urban  migration of the  population  and the start of a
complete   reform  of  the  health   system  which  has  greatly   improved  the
accessibility to and desire for medical care.  China's  increased demand for the
medical  industry in the future will  maintain  rapid  growth.  According to the
forecasts of IMS, China will become the seventh largest pharmaceutical market in
the world in 2009 and will jump to the second largest after the U.S.A.  in 2020,
with a market  capacity  of  US$220  billion.

We view  this  market  trend as an  opportunity.  However,  the best way to take
advantage of this  opportunity  is to identify our  business  risks  beforehand.
Generally speaking, there are three areas of risk:

o    External Risk

In recent years, the Chinese medical system has been reformed,  resulting in the
State  Department's  establishment  of a  basic  medical  insurance  system  for
employees.  Considering the effects of the social environment,  local government
involvement and government policies on the pharmaceutical industry in the PRC, a
large increase in sales can be expected.  Competition will also be strong across
the industry  overall.  Currently,  our existing products are competitive in the
market and possess growth potential. However, from a long-term perspective, some
major western  medicine  producers are also seeking  Chinese market share.  This
will present us with strong competition in the natural medicine market sector.

o    Operation Risk

One of the major uncertainties in our industry is the purchase of raw materials.
Raw materials are primarily affected by the geographical,  island environment of
Hainan Province.  Because of high transportation costs and the need to guarantee
production supply  requirements,  we have to store large amounts of inventory to
maintain  consistent  production levels. In addition,  part of the raw materials
need  to be  specially  ordered  which  further  increases  the  need  to  store
inventory. Finally, due to the increasing sales, we must store a large volume of
finished product and packaging material.

o    Foreign Currency Risk



                                       13
<PAGE>
<TABLE>
<CAPTION>

Substantially  all of our  operations  are  conducted  in the PRC. Our sales and
purchases are conducted  within the PRC in Chinese  Renminbi.  As a result,  the
effect of the exchange  rate  fluctuation  would  inevitably be considered to be
material to our business operations.

All of our revenues and expenses are accounted for in Renminbi  (RMB).  However,
we use  the  United  States  Dollar  (USD)  for  financial  reporting  purposes.
Conversion of Renminbi into foreign currencies is regulated by the People's Bank
of China  through a unified  floating  exchange  rate  system.  Although the PRC
government has stated its intention to support the value of the Renminbi,  there
can be no assurance  that such exchange rate will not become  volatile  again or
that the Renminbi will not devalue  significantly against the USD. Exchange rate
fluctuations may adversely affect the value, in USD terms, of our net assets and
income derived from its operations in the PRC.

IV Analysis for the three months ended June 30, 2008

The following  table presents the operations of the Company for the three months
ended June 30, 2007 and June 30, 2006; both are given in USD.


                           CHINA PHARMA HOLDINGS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                            AND COMPREHENSIVE INCOME
                                   (unaudited)

                                                                         For the three months
                                                                             ended June 30,

                                                            2008           2007         Changes       Variance
                                                        -----------    -----------    -----------    ----------
<S>                                                     <C>            <C>            <C>            <C>

Revenue                                                  11,278,803      8,570,256      2,708,547        31.60%
                                                        -----------    -----------    -----------    ----------
Cost of revenue                                           5,325,992      4,670,685        655,307        14.03%
                                                        -----------    -----------    -----------    ----------

Gross profit                                              5,952,811      3,899,571      2,053,240        52.65%
                                                        -----------    -----------    -----------    ----------


Operating expenses:

Selling expenses                                            456,630        326,147        130,483        40.01%
                                                        -----------    -----------    -----------    ----------
General and administrative                                  451,096        290,596        160,500        55.23%
                                                        -----------    -----------    -----------    ----------
Research and development                                     37,226          4,477         32,749       731.49%
                                                        -----------    -----------    -----------    ----------
Bad debt expense, net of recoveries                         612,413        (87,149)       699,562      -802.72%
                                                        -----------    -----------    -----------    ----------
Total operating expenses                                  1,557,365        534,071      1,023,294       191.60%
                                                        -----------    -----------    -----------    ----------


Income from operations                                    4,395,446      3,365,500      1,029,946        30.60%
                                                        -----------    -----------    -----------    ----------


Non-operating income (expenses):

Interest income                                               5,035         11,633         (6,598)      -56.72%
                                                        -----------    -----------    -----------    ----------
Interest expense                                            (50,440)       (58,942)         8,502       -14.42%
                                                        -----------    -----------    -----------    ----------
Other (expense) income                                      (77,450)         7,937        (85,387)    -1075.81%
                                                        -----------    -----------    -----------    ----------
Total non-operating income (expense)                       (122,855)       (39,372)       (83,483)      212.04%
                                                        -----------    -----------    -----------    ----------


Income before taxes                                       4,272,591      3,326,128        946,463        28.46%
                                                        -----------    -----------    -----------    ----------



                                       14
<PAGE>

Income tax expense                                          235,292           --          235,292
                                                        -----------    -----------    -----------    ----------
Net income                                                4,037,299      3,326,128    $   711,171        21.38%
                                                        -----------    -----------    -----------    ----------
Comprehensive income - foreign currency translation         974,800        216,416        758,384       350.43%
adjustments                                             -----------    -----------    -----------    ----------
Comprehensive income                                      5,012,099      3,542,544    $ 1,469,555        41.48%
                                                        -----------    -----------    -----------    ----------


Basic and Diluted Earnings Per Share                    $      0.10    $      0.09           0.01        15.92%
                                                        -----------    -----------    -----------    ----------
Basic and Diluted Weighted Average Shares Outstanding    38,982,235     37,228,938      1,753,297         4.71%
                                                        -----------    -----------    -----------    ----------
</TABLE>

Revenue

We generated  approximately  $11.28 million  revenue for the three months ending
June 30,  2008,  an increase  of $2.71  million,  which means a 31.60%  increase
compared to $8.57 million of the corresponding period in 2007. This increase was
primarily due to the following  elements.  Although the world economy fluctuated
due to energy problems and Sub-prime  Mortgages,  the medicine industry was less
sensitive than other industries. Furthermore, our outputs have met the increased
medicine market demand. We are increasing our marketing efforts for our products
and have widened our distribution channels. In the second quarter of 2008, PuSen
OK  continued  rapid  growth.  It  contributed  $1.88  million,  accounting  for
approximately 16.64% of total revenue, an increase of 84%, which means $550,503,
compared  to the same  period in 2007.  As a flagship  product,  PuSen OK is the
generic  version of Aleve-D(R)  and the most effective  non-drowsy  12-hour cold
medicine.  It is indicated to reduce nasal  congestion,  relieve pain and reduce
fever,  etc. In addition,  sales of some of our older  products have  increased:
Ozagrel Sodium for injection  contributed  $1,069,766,  or 9.52% of the revenue,
with an  increase  of  $391,406,  or 57.7%  compared to the same period of 2007;
Cerebroprotein  Hydroloysate  Injection for injection  contributed  $860,769, or
7.64%  of  the  revenue.  Furthermore,  due  to the  increased  recognition  and
acceptance by the customers of products launched last year, sales of Granisetron
Hydrochloride  Injection  and Alginic  Sodium  Diester  Injection  increased  to
$629,931  and  $585,335  respectively,  and  contributed  10.77% of the  revenue
together.  Another  aspect is the  recent  reforms  of the whole  pharmaceutical
industry  in China  implemented  by the  Chinese  government,  which have led to
greater  transparency and a more formalized  system.  Our  distribution  network
covers 30 of the 32 provinces,  municipalities  and autonomous regions in China.
In addition, we believe our improved production capacity will enhance the growth
of our existing and newly launched products.

Cost of Revenue

Cost of revenue for the three  months  ending June 30, 2008,  was  approximately
$5.33 million or 47.22% of total revenue,  compared to the corresponding  period
of 2007, which was $4.67 million or 54.50% of total revenue.  The increased cost
of revenue was  primarily  due to the  increased  revenue  for the three  months
ending June 30, 2008.

Gross Profit

Gross Profit for the three months  ending June 30, 2008 was $5.95  million,  and
accounted  for 52.78% of total  revenue.  It has  increased by 52.65%,  or $2.05
million, compared to 3.9million or 45.50% of total revenue of the second quarter
of 2007. The increased  sales in new products and high margin products result in
the substantial increase in gross profit.



                                       15
<PAGE>

Selling Expense

The  selling  expense  of the  second  quarter  of 2008 has  increased  to $0.46
million, an increase of $0.13 million,  or 40.01%,  compared to $0.33 million of
the second quarter of 2007. In line with the growth in revenue, we have invested
more  in the  expanding  of  our  distribution  channels  and  marketing  of our
products, which has increased selling expenses.

G & A Expenses

The general and administrative expenses of the three months ending June 30, 2008
has  increased  to $0.45  million,  an  increase  of $0.16  million,  or 55.23%,
compared  to $0.29  million of the same  period of 2007.  This  increase  mainly
results from the $0.12 million  influence of the warrants  issued to our IR firm
and financial consultancy company according to the requirements of GAAP and SEC.
In addition,  increases in the cost of  consumables  as well as the expansion of
business scale have pushed the increase of G&A expense.

Allowance for Bad Debts

The  allowance  for bad debt  for the  three  months  ending  June 30,  2008 has
increased to $0.61 million from minus  $0.09million  of the same period of 2007.
This is mainly  because the  proportion of long term bad debts  collected in the
second  quarter 2008 is less than that of the second  quarter  2007.  During the
normal course of business, we give unsecured credit to our customers.  We record
an allowance for bad debts based on age of outstanding  accounts  receivables at
the  end  of  the  period  in  accordance  with  generally  accepted  accounting
principles  in the PRC.  The  percentage  of a trade  receivable  that is deemed
doubtful is as follows: 100% after 720 days; 50 % after 360 days; and 7.5% up to
360 days.  During the 15 years of operating  history,  the company has never had
any uncollected receivables.

As to the  peculiarity of the Chinese  pharmaceutical  environment,  defaults in
payments  to  pharmaceutical  companies  by state owned  hospitals  are a normal
phenomenon. Over 90% of our drugs are sold to state owned hospitals, the greater
our business with the hospital,  the more  payments are  defaulted,  although in
actual fact, all the defaulted payments are eventually paid, it is only a matter
of time.

Income from Operation

Income  from  Operation  of the 2nd quarter of 2008  reached  $4.4  million,  an
increase of 30.60%,  or $1.03 million  compared to the same period of 2007. This
increase was  primarily  caused by the growth of revenue and gross profit in the
three months ending June 30, 2008.

Other (Expense) Income

In the three  months  ending June 30,  2008,  Other  income  decreased  to minus
$77,450,  a decrease of $85,387  compared  to the same  period of 2007.  This is
mainly due to the donation of medicine to the Sichuan Earthquake in May 2008. ii

Income Tax Expense



                                       16
<PAGE>
<TABLE>
<CAPTION>

Income tax expense for the three months  ending June 30, 2008 was  $235,292,  or
2.09%  of  revenue,  while  the  company  did not  have  any  income  tax in the
corresponding  period in 2007. We have been granted a `tax  holiday'  granting a
favorable rate of 50% of the tax rates.  This year we pay our tax at the rate of
9%.

Net Income

The net income as of the 2nd  quarter of 2008,  excluding  the effect of foreign
exchange  transactions,  was approximately $4.04 million, which is $0.71 million
higher than that of the 2nd quarter of 2007, approximately $3.33 million. It has
increased by 21.32%.

V Analysis for the six months ended June 30, 2008

The following  table  presents the  operations of the Company for the six months
ending June 30, 2007 and June 30, 2006; both are given in USD.


                           CHINA PHARMA HOLDINGS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                            AND COMPREHENSIVE INCOME
                                   (unaudited)


                                                                           For the six months
                                                                             ended June 30,

                                                            2008           2007         Change       Variance
                                                        -----------    -----------    -----------    ----------
<S>                                                     <C>            <C>            <C>            <C>
Revenue                                                  22,995,848     15,804,024      7,191,824        45.51%
                                                        -----------    -----------    -----------    ----------
Cost of revenue                                          11,235,760      8,605,524      2,630,236        30.56%
                                                        -----------    -----------    -----------    ----------


Gross profit                                             11,760,088      7,198,500      4,561,588        63.37%
                                                        -----------    -----------    -----------    ----------


Operating expenses:

Selling expenses                                            794,422        474,030        320,392        67.59%
                                                        -----------    -----------    -----------    ----------
General and administrative                                  799,489        575,079        224,410        39.02%
                                                        -----------    -----------    -----------    ----------
Research and development                                     37,226           --           37,226
                                                        -----------    -----------    -----------    ----------
Bad debt expense, net of recoveries                       1,079,813        934,058        145,755        15.60%
                                                        -----------    -----------    -----------    ----------
Total operating expenses                                  2,710,950      1,983,167        727,783        36.70%
                                                        -----------    -----------    -----------    ----------


Income from operations                                    9,049,138      5,215,333      3,833,805        73.51%
                                                        -----------    -----------    -----------    ----------


Non-operating income (expenses):


Interest income                                               5,035         25,408        (20,373)      -80.18%
                                                        -----------    -----------    -----------    ----------
Interest expense                                            (95,713)      (115,841)        20,128       -17.38%
                                                        -----------    -----------    -----------    ----------
Other (expense) income                                      (77,450)       575,277       (652,727)     -113.46%
                                                        -----------    -----------    -----------    ----------
Total non-operating income (expense)                       (168,128)       484,844       (652,972)     -134.68%
                                                        -----------    -----------    -----------    ----------



Income before taxes                                       8,881,010      5,700,177      3,180,833        55.80%
                                                        -----------    -----------    -----------    ----------
Income tax expense                                          653,170           --          653,170
                                                        -----------    -----------    -----------    ----------
Net income                                                8,227,840      5,700,177      2,527,663        44.34%
                                                        -----------    -----------    -----------    ----------



                                       17
<PAGE>

Comprehensive income - foreign currency translation       2,720,042        651,683      2,068,359       317.39%
adjustments                                             -----------    -----------    -----------    ----------

Comprehensive income                                     10,947,882      6,351,860      4,596,022        72.36%
                                                        -----------    -----------    -----------    ----------



Basic and Diluted Earnings Per Share                    $      0.22    $      0.15           0.06        39.25%
                                                        -----------    -----------    -----------    ----------
Basic and Diluted Weighted Average Shares Outstanding    38,130,586     36,785,909      1,344,677         3.66%
                                                        -----------    -----------    -----------    ----------
</TABLE>

Revenue

The amount of revenue was  approximately  $23million  for the six months  ending
June 30, 2008; this represents an increase of 45.51% or $7.2million  compared to
approximately  $15.8 million for the same period in 2007.  Satisfying the market
demand, PuSen OK contributed $3.77 million,  accounting for approximately 16.60%
of  total  revenue.  In  addition,  in the six  months  ending  June  30,  2008,
Buflomedil  and  Cerebroprotein  contributed  $2.39  million  or 10.39% of total
revenue and $1.71 million or 7.42% of total revenue respectively, an increase of
78.06% and 83.20%  compared to the same period of 2007. The other older products
also  realized  different  degrees  of  growth.  Furthermore,  due to  increased
recognition by the customers,  sales of Granisetron  Hydrochloride Injection and
Alginic  Sodium  Diester  Injection both launched in 2007 continued to grow, and
together contributed 10.76% of the revenue

Cost of Revenue

Cost of revenue for the six months ending June 30, 2008 was approximately  11.24
million or 48.86% of total revenue,  compared to  approximately  8.61 million or
54.45% of total  revenue,  for the six months ending June 30, 2007.  The cost of
revenue in 2008 has  increased  by 30.56%.  The  increased  cost of revenue  was
primarily  due to the  increased  revenue  for the six  months  ending  June 30,
2008.The  absolute  value  of the cost of  revenue  increased  in line  with the
revenue increase, but the proportion of cost of revenue, to revenue decreased.

Gross Profit

Compared to the gross  profits of  approximately  $7.2 million or 45.55% for the
first half year ending June 30, 2007, the gross margin for the six months ending
June 30, 2008 has increased by 63.37% or  approximately  $4.56 million to $11.76
million or 51.14% for the  corresponding  period in 2008. The increased sales in
new  products and high margin  products  result in the  substantial  increase in
gross profit.

Selling Expense

Selling price for the six months ending June 30, 2008 was $794,422,  or 3.45% of
total revenue,  which has increased by 67.59% compared to the $474,030, or 3.00%
of revenue, for the corresponding period of 2007. The strengthening in sales and
the increase in sales force resulted in the increase in selling expense.

G&A Expense

G&A expense has increased  from  approximately  $0.58 million for the six months
ending June 30, 2007 to  approximately  $0.8  million for the six months  ending



                                       18
<PAGE>

June 30, 2008. This increase mainly results from the $0.12 million  influence of
the warrants issued to our IR firm and financial  consultancy  company according
to the  requirements  of GAAP and SEC.  In  addition,  inflation  as well as the
expansion of business scale have pushed the increase of G&A expense.

Allowance for Bad Debts

The allowance for bad debt for the six months ending June 30, 2008 has increased
to $1.08 million from $0.93  million of the same period of 2007.  This is mainly
due to the absolute  value of accounts  receivable  increasing  in line with the
increased  revenue.  We  are  exploring  amendments  to  the  product  portfolio
structure  as well as  discovering  new sales  channels  and clients in order to
reduce the high A/R and long DSO.

Income from Operations

Income  from  operations  has  increased  by  approximately  $3.83  million,  to
approximately  9.05 million,  or 39.35% of the revenue,  which is an increase of
73.51%  compared  to $5.22  million,  or 33% of the  revenue  for the six months
ending June 30, 2007. This increase was primarily  caused by the dramatic growth
of revenue and gross profit in the six months ending June 30, 2008.

Income Tax expense

The income tax for the three months ending June 30, 2008 was $653,170,  or 2.84%
of the total revenue.  We have been granted a `tax holiday' granting a favorable
rate of 50% of the tax rates. This year we pay our tax at the rate of 9%.

Net Income

The net  income  as of the  first  half year of 2008,  excluding  the  effect of
foreign exchange transactions, was approximately $8.23 million, which was higher
than that of the corresponding  period of 2007,  approximately $5.7 million.  It
has  increased  by 44.34% or $2.53  million.  Based on the analysis  above,  the
increase  in net income was mainly  due to the large  increases  in revenue  and
gross margin.

VI Analysis of the Financial Position


                           CHINA PHARMA HOLDINGS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)


                                               For the six months ended June 30,

                                                       2008           2007
                                                   -----------    -----------
                                                                   (Restated)
Cash Flows from Operating Activities:

Net income                                           8,227,840      5,700,177
                                                   -----------    -----------
Depreciation and amortization                          332,077        201,540
                                                   -----------    -----------
Compensation paid with warrants                        120,042           --
                                                   -----------    -----------
Gain on sale of intangibles                               --         (572,446)
                                                   -----------    -----------



                                       19
<PAGE>


Changes in assets and liabilities:


Trade accounts receivable                           (7,358,577)    (4,074,259)
                                                   -----------    -----------
Other receivables                                     (371,696)       235,008
                                                   -----------    -----------
Advances to suppliers                               (3,231,357)    (2,079,529)
                                                   -----------    -----------
Inventory                                              390,430     (1,828,719)
                                                   -----------    -----------
Deferred tax assets                                   (171,030)          --
                                                   -----------    -----------
Deferred offering costs                                   --           60,062
                                                   -----------    -----------
Trade accounts payable                                 282,790        341,285
                                                   -----------    -----------
Accrued expenses                                      (117,176)        57,740
                                                   -----------    -----------
Accrued taxes payable                                  852,319         (2,715)
                                                   -----------    -----------
Other payables                                         (57,543)       (75,127)
                                                   -----------    -----------
Advances from customers                                216,039         33,704
                                                   -----------    -----------
Net Cash from Operating Activities                    (885,842)    (2,003,279)
                                                   -----------    -----------


Cash Flows from Investing Activities:


Purchase of property and equipment                     (16,683)       (25,931)
                                                   -----------    -----------
Purchase of intangible assets                         (424,170)          --
                                                   -----------    -----------
Advances for purchases of intangibles               (2,269,286)          --
                                                   -----------    -----------
Net Cash from Investing Activities                  (2,710,139)       (25,931)
                                                   -----------    -----------


Cash Flows from Financing Activities:


Proceeds from sale of common stock and warrants      9,268,938      3,797,183
                                                   -----------    -----------
Payments of short term notes payable                  (381,753)          --
                                                   -----------    -----------
Net Cash Proceeds from Financing Activities          8,887,185      3,797,183
                                                   -----------    -----------



Effect of Exchange Rate Changes on Cash                (84,465)        11,691
                                                   -----------    -----------
Net Change in Cash                                   5,206,739      1,779,664
                                                   -----------    -----------
Cash and Cash Equivalents at Beginning of Period     1,830,335        656,441
                                                   -----------    -----------
Cash and Cash Equivalents at End of Period           7,037,074      2,436,105
                                                   -----------    -----------

Supplemental Cash Flow Disclosure:


Cash paid for interest                             $   143,893    $   115,841
                                                   -----------    -----------
Cash paid for income taxes                             422,553           --
                                                   -----------    -----------

Cash and Cash Equivalent

As of June  30,  2008,  we had cash and cash  equivalents  of  $7,037,074.  This
represents  an  increase  of  $4,600,969  over  the  June 30,  2007  balance  of
$2,436,105;  and an increase of $5,206,739 over the December 31, 2007 balance of
$1,830,335.  The increase in cash and cash  equivalent is mainly due to the fund
raising  activities in this period.

During the six months ending June 30, 2008, cash flow from operating  activities
generated minus $885,842,  an increase of $1.12 million, or 55.78%,  compared to
minus  $2,003,279  in the same  period of 2007.  This  increase is mainly due to
strengthening the ability to collect accounts receivable.



                                       20
<PAGE>


On May 30, 2008 the Company  completed  an offering of Units priced at $2.00 per
Unit consisting of one share of Company common stock and a three-year warrant to
purchase one-fourth of one share of Company common stock at an exercise price of
$2.80 per  share.  The  Company  issued  5,000,000  shares  of common  stock and
three-year  warrants  to  purchase  1,250,000  shares  of  common  stock  to  17
accredited investors for gross proceeds of $10,000,000.  The net proceeds, after
deduction of related offering expenses of $731,062,  amounted to $9,268,938.  In
addition,  the placement agent in the transaction was issued three-year warrants
to purchase  300,000  shares of common  stock at an exercise  price of $2.98 per
share.  The proceeds were allocated to the warrants  issued to the investors and
the  placement  agent based upon their fair values of  $1,090,342  and $249,366,
respectively, and the balance of the proceeds of $8,952,511 was allocated to the
shares of common  stock.  The fair value of the warrants,  determined  using the
Black-Scholes   Option  Pricing  Model,   was  calculated  using  the  following
assumptions:  risk free interest rate of 2.93%,  expected  dividend yield of 0%,
expected volatility of 62.9% and an expected life of 3 years.

The common  shares and the shares  underlying  the  warrants  have  registration
rights, and the Company is required to file a registration  statement  including
said shares with the Securities and Exchange  Commission.  In the event that the
Company  does not file a  registration  statement  within 45 days of the closing
date of the offering,  or the registration  statement is not declared  effective
within the 90 or 120 day time  periods  from the closing  date as defined in the
registration rights agreement,  or if the Company fails to keep the registration
statement  effective,  the  Company  will be  required  to pay a penalty to each
investor equal to one percent (1%) of the purchase price for each 30 day period.
The Company filed a  registration  statement  with the  Securities  and Exchange
Commission  on July 11, 2008.  The Company has not accrued any penalty under the
registration  rights  agreement but will  evaluate any liability  related to the
effectiveness  date of the  registration  statement at the end of each reporting
period.

VII.   Off-Balance   Sheet   Arrangements

There were no off-balance sheet arrangements.

VIII. Commitments

At  June  30,  2008,  the  Company  had  no  material  commitments  for  capital
expenditures other than for those  expenditures  incurred in the ordinary course
of business.

IX. Recently Enacted Accounting  Pronouncements

In September  2006, the Financial  Accounting  Standards  Board ("FASB")  issued
Statement  of  Financial  Accounting  Standards  ("SFAS")  No.  157,  Fair Value
Measurements,  which  defines fair value,  establishes a framework for measuring
fair value in generally accepted  accounting  principles and expands disclosures
about  fair  value  measurements.  SFAS No. 157 is  effective  for fiscal  years
beginning  after  November 15,  2007,  and interim  periods  within those fiscal
years. In February 2008, the FASB issued FASB Staff Position (FSP FIN) No. 157-2
which  extended  the  effective  date  for  certain   nonfinancial   assets  and
nonfinancial  liabilities to fiscal years beginning after November 15, 2008. The
Company does not expect the  adoption of SFAS No. 157 to have a material  impact
on our consolidated financial statements.



                                       21
<PAGE>


In  February  2007,  the FASB issued  SFAS No.  159,  The Fair Value  Option for
Financial Assets and Financial  Liabilities.  SFAS No. 159 permits  companies to
choose to measure many  financial  instruments  and certain  other items at fair
value.  SFAS No. 159 is effective  for  financial  statements  issued for fiscal
years  beginning  after  November  15,  2007.  The  Company  does not expect the
adoption of SFAS No. 159 to have a material impact on our consolidated financial
statements.

In June 2007,  the Emerging  Issues Task Force of the FASB issued EITF Issue No.
07-3, "Accounting for Nonrefundable Advance Payments for Goods or Services to be
Used in Future  Research and  Development  Activities",  ("EITF  07-3") which is
effective for fiscal years beginning after December 15, 2007. EITF 07-3 requires
that  nonrefundable   advance  payments  for  future  research  and  development
activities  be deferred and  capitalized.  Such amounts will be recognized as an
expense as the goods are delivered or the related  services are performed.  EITF
07-3 is not expected to have a material  impact on our results of  operations or
financial position.

In December 2007, the FASB issued SFAS No. 141(R),  Business  Combinations,  and
SFAS No. 160,  Noncontrolling  Interests in Consolidated  Financial  Statements.
SFAS No.  141(R)  requires  an  acquirer  to  measure  the  identifiable  assets
acquired,  the  liabilities  assumed  and any  non-controlling  interest  in the
acquiree at their fair values on the  acquisition  date, with goodwill being the
excess value over the net identifiable  assets acquired.  SFAS No. 160 clarifies
that a non-controlling  interest in a subsidiary should be reported as equity in
the consolidated financial statements, consolidated net income shall be adjusted
to  include  the net  income  attributed  to the  non-controlling  interest  and
consolidated comprehensive income shall be adjusted to include the comprehensive
income attributed to the non-controlling  interest.  The calculation of earnings
per share  will  continue  to be based on  income  amounts  attributable  to the
parent. SFAS No. 141(R) and SFAS No. 160 are effective for financial  statements
issued for fiscal years  beginning  after  December 15, 2008.  Early adoption is
prohibited.  The Company has not yet determined  the effect on our  consolidated
financial statements, if any, upon adoption of SFAS No. 141(R) or SFAS No. 160.

In March  2008,  the FASB  issued SFAS No.  161,  Disclosures  about  Derivative
Instruments and Hedging Activities. SFAS No. 161 amends SFAS No. 133, Accounting
for  Derivative   Instruments  and  Hedging   Activities  to  require   enhanced
disclosures  concerning the manner in which an entity uses  derivatives (and the
reasons it uses them), the manner in which  derivatives and related hedged items
are  accounted  for under  SFAS No.  133 and  interpretations  thereof,  and the
effects that derivatives and related hedged items have on an entity's  financial
position,  financial performance,  and cash flows. SFAS No. 161 is effective for
financial  statements  of  fiscal  years and  interim  periods  beginning  after
November  15,  2008.  The  Company  has not yet  determined  the  effects on its
consolidated financial statements,  if any, that may result upon the adoption of
SFAS 161.

In May  2008,  The US  Financial  Accounting  Standards  Board  (FASB)  and  the
International Accounting Standards Board (IASB) published consultative documents
that seek public  comment on two of the eight  phases of their joint  project to
develop an improved  conceptual  framework.  The  objective of the project is to
develop an improved  conceptual  framework that provides a sound  foundation for
developing future  accounting  standards.  Further,  in June 2008, The Financial
Accounting  Standards  Board (FASB) issued an Exposure  Draft (ED) of a proposed
Statement  of  Financial  Accounting  Standards,   Disclosure  of  Certain  Loss
Contingencies--an  amendment of FASB  Statements No. 5 and 141(R).  The proposed



                                       22
<PAGE>

Statement  would be effective  for fiscal years ending after  December 15, 2008,
and interim and annual periods in subsequent fiscal years. In addition,  on June
06, 2008,  the Financial  Accounting  Standards  Board (FASB) issued an Exposure
Draft (ED) of a proposed Statement of Financial Accounting Standards, Accounting
for Hedging  Activities--an  amendment of FASB  Statement  No. 133. The proposed
Statement  would require  application of the amended  hedging  requirements  for
financial  statements issued for fiscal years beginning after June 15, 2009, and
interim periods within those fiscal years.

X. Conclusion

The  overall  performance  during  the six  months  ending  June  30,  2008  was
outstanding.  As a public company in the  pharmaceutical  industry,  we focus on
product innovation. In order to create products that are innovative and tailored
to the end user,  we must  concentrate  on R&D. As a result,  the  Company  will
continue to actively  pursue the  development  and  distribution of high-quality
products.  The  pharmaceutical  industry has been called an "industry of eternal
sunrise",  and China Pharma  forecasts  that our clear  growth  strategy and the
sustained growth in market demand will ensure our continued growth.

Item 3 - Controls and Procedures

Disclosure  controls  and  procedures  are  designed  to ensure  that  financial
information  is  accumulated  and  communicated  to  management,  including  the
Company's  CEO and CFO in a timely  manner and then  processed,  summarized  and
reported  within the time  periods  specified  in the  Securities  and  Exchange
Commission's rules and forms.

As required by Rule 13a-15 under the Securities Exchange Act of 1934, within the
90 days prior to the filing  date of this  report,  the  Company  carried out an
evaluation  of the  effectiveness  of the design and  operation of the Company's
internal controls over disclosure and reporting procedures.  This evaluation was
carried out under the  supervision and with the  participation  of the Company's
management,  including  the  Company's  President,  CEO and CFO. The Company has
taken steps to improve our internal  controls over recording and reporting which
were  disclosed as a material  weakness in Item 8A "Controls and  Procedures" of
our Annual  Report on Form  10-KSB for the fiscal year ended  December  31, 2007
(the "2007 Form 10-KSB").

As part of this correction process, we recruited three independent directors and
formed an Audit Committee in February 2008 to supervise the implementation of an
Internal Audit Department and to oversee the financial  reporting of the Company
including direct  communication with our independent  auditors.  There have been
other changes in the Company's internal controls subsequent to our assessment to
improve internal controls as indicated in the 2007 Form 10-KSB.


                           PART II. OTHER INFORMATION


Item 1   Legal Proceedings

From  time to time,  we may  become  involved  in  various  lawsuits  and  legal
proceedings which arise in the ordinary course of business.  However, litigation



                                       23
<PAGE>

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. We are currently
not aware of any such legal  proceeding  or claims  that we  believe  will have,
individually  or in the  aggregate,  a material  adverse effect on our business,
financial condition or operating results.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

On May 30, 2008, the Company  completed an offering of Units priced at $2.00 per
Unit consisting of one share of Company's common stock and a three-year  warrant
to purchase  one-fourth  of one share of  Company's  common stock at an exercise
price of $2.80 per share.  The Company issued  5,000,000  shares of common stock
and  three-year  warrants to  purchase  1,250,000  shares of common  stock to 17
accredited  investors  for gross  proceeds  of  $10,000,000.  In  addition,  the
placement agent in the transaction  was issued  three-year  warrants to purchase
300,000  shares of common  stock at an  exercise  price of $2.98 per share.  The
issuance was made in reliance on Section 4(2) of the Securities Act 1933 and was
made without general solicitation or advertising.

On June 24, 2008,  the Company  issued  three-year  warrants to purchase  75,000
shares of Company's  common stock at $2.80 per share and three-year  warrants to
purchase 75,000 shares of Company's common stock at $3.60 per share to FirsTrust
Group,  Inc. The issuance was made in reliance on Section 4(2) of the Securities
Act 1933 and was made without general solicitation or advertising.

Also on June 24, 2008, the Company issued three-year warrants to purchase 25,000
shares of Company's  common stock at $3.00 per share and three-year  warrants to
purchase  25,000  shares of Company's  common stock at $3.50 per share to Hayden
Communications International,  Inc. The issuance was made in reliance on Section
4(2) of the Securities  Act 1933 and was made without  general  solicitation  or
advertising.

Item 3 - Defaults upon Senior Securities

Not Applicable.

Item 4 - Submission of Matters to a Vote of Security Holders

None.

Item 5 - Other Information

None.

Item 6 - Exhibits

(a)   Exhibits

           31.1 -  Certification  of Chief  Executive  Officer  pursuant to Rule
           13a-14 and Rule 15d-14(a) of the Exchange Act.

           31.2 -  Certification  of Chief  Financial  Officer  pursuant to Rule
           13a-14 and Rule 15d-14(a) of the Exchange Act.



                                       24
<PAGE>


           32.1 - Certification  of the Chief Executive  Officer  pursuant to 18
           U.S.C.  Section  1350,  as adopted  pursuant  to  Section  906 of the
           Sarbanes-Oxley Act of 2002.

           32.2 - Certification  of the Chief Financial  Officer  pursuant to 18
           U.S.C.  Section  1350,  as adopted  pursuant  to  Section  906 of the
           Sarbanes-Oxley Act of 2002.





























                                       25
<PAGE>



                                   SIGNATURES


In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.



China Pharma Holdings, Inc.

Dated: August 5, 2008                               By:  /s/ Zhilin Li
                                                    -----------------------
                                                    Zhilin Li
                                                    Chief Executive Officer,
                                                    President and Director


Dated: August 5, 2008                               By:  /s/ Xinhua Wu
                                                    ---------------------
                                                    Xinhua Wu
                                                    Chief Financial Officer,
                                                    and Director



























                                       26
<PAGE>