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, 2007

[    ] 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 of                (IRS Employer Identification No.)
 incorporation or organization)

         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]



<PAGE>



As of June 30, 2007,  37,228,938  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 - June 30, 2007 and December
              31, 2006 (unaudited)                                             1

              Condensed Consolidated Statements of Operations and Comprehensive
              Income- Three months ended June 30, 2007 and 2006 (unaudited)    2

              Condensed  Consolidated  Statements  of Cash Flows -Three  months
              ended June 30, 2007 and 2006 (unaudited)                         3

              Notes to Condensed Consolidated Financial Statements (unaudited) 4

Item 2.       Management's Discussion and Analysis of Financial Condition and
              Results of Operations                                            7

Item 3.       Controls and Procedures                                         20

Part II       Other Information                                               20

Item 1        Legal proceedings                                               20

Item 2        Unregistered Sales of Equity Securities and Use of Proceeds     20

Item 3        Defaults upon senior securities                                 20

Item 4        Submission of matters to a vote of security holders             21

Item 5        Other information                                               21

Item 6.       Exhibits                                                        21

Signatures                                                                    22



<PAGE>
<TABLE>
<CAPTION>


Item 1 Financial Statements

                           CHINA PHARMA HOLDINGS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
                                                                          June 30,   December 31,
                                                                            2007        2006
                                                                       -----------   -----------
<S>                                                                    <C>           <C>
ASSETS
Current Assets:
Cash and cash equivalents ..........................................   $ 2,436,105   $   656,441
Trade accounts receivable, less allowance for doubtful
accounts of $2,548,926 and $1,562,494, respectively ................    16,538,297    12,101,979
Other receivables, less allowance for doubtful
accounts of $54,427 and $27,517, respectively ......................       706,632       355,554
Deferred offering costs ............................................          --          59,390
Advances to suppliers ..............................................     4,421,107     2,255,877
Inventory ..........................................................    12,391,586    10,277,887
                                                                       -----------   -----------
Total Current Assets ...............................................    36,493,727    25,707,128
                                                                       -----------   -----------
Non-current Assets:
Property and equipment, net of accumulated depreciation of
$713,323 and $619,649, respectively ................................     2,629,785     2,725,173
Intangible assets, net of accumulated amortization of
$202,600 and $135,656, respectively ................................        53,224        65,344
Deferred tax assets ................................................        17,159        16,736
                                                                       -----------   -----------
Total Non-current Assets ...........................................     2,700,168     2,807,253
                                                                       -----------   -----------
TOTAL ASSETS .......................................................   $39,193,895   $28,514,381
                                                                       -----------   -----------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable .............................................   $   835,347   $   477,291
Accrued expenses ...................................................       165,386       104,216
Accrued taxes payable ..............................................       168,897       167,419
Other payables .....................................................       113,827       185,096
Advances from customers ............................................       179,625       141,871
Accounts payable -related parties ..................................          --          22,650
Short-term notes payable ...........................................     6,698,773     6,533,649
                                                                       -----------   -----------
Total Current Liabilities ..........................................     8,161,855     7,632,192
                                                                       -----------   -----------
Research and development commitments ...............................        32,788        31,980
                                                                       -----------   -----------
Total Liabilities ..................................................     8,194,643     7,664,172
                                                                       -----------   -----------
Stockholders' Equity:
Common stock, $0.001 par value, 60,000,000 shares
authorized, 37,228,938 and 34,723,056 shares issued and outstanding;
respectively .......................................................        37,229        34,723
Additional paid-in capital .........................................    11,559,656     7,764,979
Foreign currency translation adjustment ............................     1,315,554       663,871
Retained earnings ..................................................    18,086,813    12,386,636
                                                                       -----------   -----------
Total Stockholders' Equity .........................................    30,999,252    20,850,209
                                                                       -----------   -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .........................   $39,193,895   $28,514,381
                                                                       -----------   -----------
</TABLE>

See the accompanying  notes to the unaudited  condensed  consolidated  financial
statements.






                                       1
<PAGE>
<TABLE>
<CAPTION>


                           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,
                                        ----------------------------  ---------------------------
                                            2007           2006          2007           2006
                                        -------------  -------------  ------------  -------------
<S>                                     <C>            <C>            <C>           <C>

Revenue                                  $ 8,570,256    $ 3,975,569   $15,804,024    $ 8,709,334
Cost of revenue                            4,670,685      2,105,082     8,605,524      4,631,549
                                        -------------  -------------  ------------  -------------
Gross profit                               3,899,571      1,870,487     7,198,500      4,077,785
                                        -------------  -------------  ------------  -------------

Operating expenses:
Selling expenses                             326,147         82,133       474,030        170,161
General and administrative                   203,447        436,340     1,583,523        680,321
Research and development                       4,477              -       840,881              -
                                        -------------  -------------  ------------  -------------
Total operating expenses                     534,071        518,473     2,898,434        850,482
                                        -------------  -------------  ------------  -------------

Income from operations                     3,365,500      1,352,014     4,300,066      3,227,303
                                        -------------  -------------  ------------  -------------

Non-operating income (expenses):
Interest income                               11,633             87        25,408            182
Interest expense                             (58,942)       (24,103)     (115,841)       (47,898)
Other income                                   7,937        120,803     1,490,544        120,461
Bad debt recovery                                  -        627,861             -        626,580
                                        -------------  -------------  ------------  -------------
Total non-operating income (expense)         (39,372)       724,648     1,400,111        699,325
                                        -------------  -------------  ------------  -------------

Income before taxes                        3,326,128      2,076,662     5,700,177      3,926,628
Income tax expense                                 -       (246,200)            -       (525,022)
                                        -------------  -------------  ------------  -------------
Net income                               $ 3,326,128    $ 1,830,462   $ 5,700,177    $ 3,401,606
                                        -------------  -------------  ------------  -------------
Comprehensive income - foreign currency      216,416         62,557       651,683        221,558
translation adjustments                 -------------  -------------  ------------  -------------
Comprehensive income                     $ 3,542,544    $ 1,893,019   $ 6,351,860    $ 3,623,164
                                        -------------  -------------  ------------  -------------

Basic and diluted earnings per common         $ 0.09         $ 0.05        $ 0.15         $ 0.10
share                                   -------------  -------------  ------------  -------------

Weighted-average common shares            37,228,938     34,723,056    36,785,909     34,723,056
outstanding                             -------------  -------------  ------------  -------------
</TABLE>


See the accompanying  notes to the unaudited  condensed  consolidated  financial
statements.






                                       2
<PAGE>



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



                                                   For the six      For the six
                                                   months ended     months ended
                                                     June 30,         June 30,
                                                       2007             2006
                                                  -------------   ------------
Cash Flows from Operating Activities:
Net income .....................................   $ 5,700,177    $ 3,401,606
Depreciation and amortization ..................       201,540        193,065
Changes in assets and liabilities:
Trade accounts receivable ......................    (4,074,259)    (3,348,145)
Other receivables ..............................      (337,438)       (97,112)
Advances to suppliers ..........................    (2,079,529)       161,868
Inventory ......................................    (1,828,719)      (945,068)
Deferred tax assets ............................          --           24,387
Deferred offering costs ........................        60,062           --
Trade accounts payable .........................       341,285        526,675
Accrued expenses ...............................        57,740         84,810
Accrued taxes payable ..........................        (2,715)      (122,285)
Other payables .................................       (75,127)          --
Advances from customers ........................        33,704         17,670
                                                   -----------    -----------
Net Cash Used in Operating Activities ..........    (2,003,279)      (102,529)
                                                   -----------    -----------

Cash Flows from Investing Activities:
Purchase of property and equipment .............       (25,931)      (144,790)
Purchase of intangible assets ..................          --           (2,477)
                                                   -----------    -----------
Net Cash (Used) by Investing Activities ........       (25,931)      (147,267)
                                                   -----------    -----------

Cash Flows from Financing Activities:
Proceeds from sale of common stock and warrants      3,797,183           --
Proceeds from short term notes payable .........          --           31,653
                                                   -----------    -----------
Net Cash Proceeds from Financing Activities ....     3,797,183         31,653
                                                   -----------    -----------

Effect of Exchange Rate Changes on Cash ........        11,691        (47,853)
                                                   -----------    -----------
Net Change in Cash .............................     1,779,664       (265,996)
Cash and Cash Equivalents at Beginning of Period       656,441        461,220
                                                   -----------    -----------
Cash and Cash Equivalents at End of Period .....   $ 2,436,105    $   195,224
                                                   -----------    -----------




See the accompanying  notes to the unaudited  condensed  consolidated  financial
statements.






                                       3
<PAGE>


                           CHINA PHARMA HOLDINGS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2007
                                   (unaudited)


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, 2006.

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,  2007 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2007.

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,  2007  potentially  dilutive
securities includes warrants outstanding to purchase a total of 1,252,941 shares





                                       4
<PAGE>

of Company common stock at an exercise  price of $2.38 per share.  These are not
included in the computation of fully diluted earnings per share as the effect is
anti-dilutive  due to the exercise  price of the warrants  exceeding  the market
price of the  stock at June 30,  2007.  There  are no  anti-dilutive  securities
outstanding at June 30, 2006.

Recently Issued  Accounting  Pronouncements - In September 2006, the FASB issued
Statement  of  Financial   Accounting  Standards  (SFAS)  No.  157,  Fair  Value
Measurements  (SFAS 157), which defines fair value,  establishes a framework for
measuring fair value in generally  accepted  accounting  principles and requires
additional  disclosures about fair value measurements.  SFAS 157 aims to improve
the  consistency  and  comparability  of fair value  measurements  by creating a
single definition of fair value. The Statement emphasizes that fair value is not
entity-specific,  but  instead  is a  market-based  measurement  of an  asset or
liability. SFAS 157 upholds the requirements of previously issued pronouncements
concerning fair value  measurements and expands the required  disclosures.  This
Statement  is  effective  for  financial  statements  issued  for  fiscal  years
beginning  after  November 15, 2007,  however  earlier  application is permitted
provided the reporting entity has not yet issued  financial  statements for that
fiscal  year.  The Company  does not believe  that the adoption of SFAS 157 will
have a material effect on its consolidated financial statements.

In  February  2007,  the FASB issued  SFAS No.  159,  The Fair Value  Option for
Financial  Assets and  Financial  Liabilities,  including  an  amendment of FASB
Statement No. 115 (SFAS 159). This  pronouncement  permits entities to choose to
measure many  financial  instruments  and certain other items at fair value that
are not currently  required to be measured at fair value.  SFAS 159 is effective
as of the beginning of an entity's  first fiscal year that begins after November
15,  2007.  The  impact  of  adopting  SFAS  159 on the  Company's  consolidated
financial statements, if any, has not yet been determined.

NOTE 2 - INVENTORY

Inventory consisted of the following:


                                           June 30,           December 31,
                                            2007                 2006
                                      ------------------   ------------------
Raw materials                               $ 9,293,117          $ 8,458,181
Work in progress                                 57,942            1,579,410
Finished goods                                3,040,527              240,296
                                      ------------------   ------------------
Total Inventory                            $ 12,391,586         $ 10,277,887
                                      ------------------   ------------------





NOTE 3 - 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.

According  to federal law in the People's  Republic of China (PRC),  enterprises
with foreign  investment and foreign  enterprises  doing business in the PRC are
generally subject to federal  enterprise income tax at a rate of 30%.  Effective
at the beginning of 2006 and extending through 2007, the PRC granted the Company





                                       5
<PAGE>

a tax holiday  that  allows the  Company to be exempt from income  taxes for the
first two profitable  years.  This tax holiday  further allows the Company to be
exempt from 50% of income  taxes during the third  through the fifth years.  The
reduced tax rate for 2008 through 2010 is 15%. Additionally,  Hainan province is
considered a developing  economic region which has a reduced  statutory tax rate
of 15%, which results in a tax holiday rate of 7.5% during the third through the
fifth years of profitability.

The Company has a deferred tax asset based upon the temporary  differences  from
the allowance for bad debt.  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.

NOTE 4 - NOTES PAYABLE

Short  Term  Notes  Payable - During  the third  quarter  of 2006,  the  Company
borrowed a total of $2,196,113 from a bank. The loans bore interest with a range
of 6.45% to 6.77%,  principal  and accrued  interest were due July and August of
2007 and were  collateralized  by land use rights,  machinery and equipment.  On
July 13, 2007 the  Company  renewed  the loans with the bank.  The renewed  loan
principal and accrued interest are due on April 25, 2008.

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.  As of June 30,  2007  these  notes and
accrued interest remain outstanding.

NOTE 5 - STOCKHOLDERS' EQUITY

On February 1, 2007, the Company  completed an offering of units priced at $1.70
per unit  consisting  of one share of  Company  common  stock  and a warrant  to
purchase  one-half of a share of Company  common  stock at an exercise  price of
$2.38 per share.  The Company received gross proceeds in the aggregate amount of
$4,259,900.  The net proceeds,  after deduction of related offering  expenses of
$462,717  amounted to  $3,797,183.  The Company issued an aggregate of 2,505,882
shares of common stock and issued  three-year  warrants to purchase an aggregate
of 1,252,941  shares of Company's common stock to 17 accredited  investors.  The
proceeds  were  allocated  to the  warrants  based  upon  their  fair  value  or
$2,010,219,  and the  balance of the  proceeds  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 4.80%,  expected  dividend yield of 0%, expected  volatility of
124.39% and an expected life of 3 years.

The common  shares and the shares  underlying  the  warrants  have  registration
rights and,  accordingly a registration  statement was filed with the Securities
Exchange Commission on March 30, 2007 within the 60 day period prescribed by the
registration rights agreement. The registration statement was declared effective
on May 4, 2007.

NOTE 6 - TRANSFERS OF TECHNOLOGY

During the first quarter of 2007,  the Company  entered into  agreements to sell
certain pharmaceutical  formulas presently in the research and development stage
with two separate  transactions to third parties for an aggregate sales price of
$1,479,792  which is recorded as other income,  transfer (sales) tax of $73,990,
which has been  recorded  as part of general  and  administrative  expenses  and
$836,404  recorded  as  research  and  development  expense in the  accompanying
statement of operations and  comprehensive  income for the six months ended June





                                       6
<PAGE>

30, 2007. The amounts due under the contracts  were collected  during the second
quarter of 2007.

NOTE 7 - 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 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 (CNY or (Y)), which must be converted into other  currencies  before
remittance  out of the PRC. Both the  conversion of CNY 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.


I. The Six Months Ended June 30, 2007 In Brief

During the six months ended June 30, 2007,  China Pharma continued to show sound
growth and outstanding financial performance.  For the six months ended June 30,
2007, the Company's  total revenue  increased by over 81.46% to a record high of
$15.8  million  compared to $8.7 million for the six months ended June 30, 2006.
This rapid  growth  was due to  increased  sales of  existing  products  and the
products  that were  developed  during  the second  half year of 2006.  This was
consistent  with  China  Pharma's  strategy  of  launching  new  products  in an
increasingly competitive market and exploring potential domestic markets.






                                       7
<PAGE>


The  financial  performance  for the six  months  ended June 30,  2007  improved
compared to the six months ended June 30, 2006. Gross profit increased 76.53% to
$7.2  million  and  net  income,  not  including  foreign  currency  translation
adjustment,  increased  67.57% to $5.7 million.  This growth was attributable to
the development of new product processes and new marketing activities.

For the six months  ended June 30, 2007,  earnings  per common  share  increased
58.18% to $0.15 per share  compared to $0.10 per share for the six months  ended
June  30,  2006.  China  Pharma  started  working  closely  with  a  variety  of
professional  pharmaceutical  research  institutions  to deliver more functional
products  tailored  to the  demands  of the  end-user.  Management's  goals  are
centered on achieving stable profit growth. Accordingly, we operate the business
based  on  strategic  principles,  which  have  proven  successful.   Thoroughly
exploring the potential in the pharmaceutical field is the key to our success.

We are also concerned with corporate  governance as a modern enterprise.  In the
near future,  we will  establish a more  systematic  and long  lasting  internal
controls   process  for   prospective   development   and  the  benefit  of  our
shareholders.


II. Business Overview

China Pharma is primarily engaged in the research, development, manufacture, and
marketing  of  pharmaceutical  and  nutritional  supplements.  During  2006,  we
launched two new products, Ozagrel Sodium for Injection and Gastrodin Injection.

We plan to expand our  biotechnology  product  series.  Based on the  foundation
established  by some of  Helpson's  widely  recognized  medicine  labels such as
Neurotrophicpeptide,  we have  launched and will continue to launch a variety of
biological medicine, including the injected hepatocyte growth-promoting factors,
which are expected to fuel additional growth beyond that of Neurotrophicpeptide.

One of our products, Buflomedil Hydrochloride (including raw material, injection
and troche) has been recognized in the following ways:

o  Designated  as the key  technology  project  in  Hainan  in  2003 by  Hai'kou
Municipality.

o Received the best commercialized  technology award in Hainan in 2004 by Hainan
Scientific and Technological Result Examination Committee.

o Awarded 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.

In  2003,  Helpson  attained  GMP  authentication  and  the  prize  as the  best
enterprise  for  supporting  SARS  medicine  awarded  by  Hainan  Food  and Drug
Administration,  demonstrating our industry leadership. For the six months ended
June 30, 2007,  our products  have been  distributed  to more than 29 provinces,
sovereignties,  and autonomous regions around China. Our products have been sold
in more than 29 provinces,  sovereignties,  and autonomous  regions.  We have 16
sales offices and  approximately  550 proxy agents  throughout the PRC. The main






                                       8
<PAGE>

channels we use to deliver our products are as follows:  (1) Distribution system
(Proxy  Agents);  (2) Direct  sale  system to  hospitals;  (3)  Distribution  of
products to end-market through local medical companies.

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 theF 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).

Additionally,  on February 1, 2007, China Pharma fulfilled a fund raising equity
offering of units priced at $1.70 each  consisting  of one share of common stock
and a warrant to  purchase  one-half  of a share of common  stock at an exercise
price of $2.38 per share.  China Pharma received gross proceeds in the aggregate
amount of $4,259,900.  The net proceeds,  after  deducting the related  offering
expenses  of $462,717  amounted to  $3,797,183.  In total,  we issued  2,505,882
shares of common stock and issued  three-year  warrants to purchase an aggregate
of 1,252,941 shares of common stock to 17 accredited investors.


III. Trend in the Market.

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

Patient  empowerment  has been a factor  in  high-quality  healthcare.  Many are
better  informed about the importance of health issues and medical  advancement.
Naturally,  people  today are  demanding  greater  care and access to the latest
medical procedures and medicines.

Helpson views 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 aspects of risks:

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 social environment and the governmental policy in the
pharmaceutical industry in PRC, a large increase in sales can be expected due to
local  government  involvement in the industry.  Competition will also be strong
across the industry  overall.  Currently,  the Company's  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 make the Company face strong  competition in the
natural medicine market sector.

o Operation Risk
One of the major  uncertainties in the Company is the purchase of raw materials.
Raw materials are primarily affected by the geographical,  island environment of






                                       9
<PAGE>

Hainan  Province.  Because of high  transportation  costs and the need to supply
production requirements,  the Company has to store large amounts of inventory to
maintain consistent  production levels. In addition,  partial raw materials need
to be specially  ordered  which further  increases the need to store  inventory.
Finally,  due to the increasing  sales, the Company must store a large volume of
packaging material.

o Foreign Currency Risk
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.  But 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 could 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 to the Financial Performance

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






                                       10
<PAGE>
<TABLE>
<CAPTION>



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

                                                    For the three months
                                                      ended June 30,             Change       Variance
                                               ----------------------------

                                                  2007             2006
                                              ------------    ------------
<S>                                            <C>            <C>             <C>             <C>
Revenue ...................................   $  8,570,256    $  3,975,569    $  4,594,687    115.57%
Cost of revenue ...........................      4,670,685       2,105,082       2,565,603    121.88%
                                              ------------    ------------    ------------    --------

Gross profit ..............................      3,899,571       1,870,487       2,029,084    108.48%
                                              ------------    ------------    ------------    --------

Operating expenses:
Selling expenses ..........................        326,147          82,133         244,014    297.10%
General and administrative ................        203,447         436,340        (232,893)   -53.37%
Research and development ..................          4,477            --             4,477
                                              ------------    ------------    ------------    --------
Total operating expenses ..................        534,071         518,473          15,598      3.01%
                                              ------------    ------------    ------------    --------

Income from operations ....................      3,365,500       1,352,014       2,013,486    148.92%
                                              ------------    ------------    ------------    --------

Non-operating income (expenses):
Interest income ...........................         11,633              87          11,546  13271.26%
Interest expense ..........................        (58,942)        (24,103)        (34,839)   144.54%
Other income ..............................          7,937         120,803        (112,866)   -93.43%
Bad debt recovery .........................           --           627,861        (627,861)  -100.00%
                                              ------------    ------------    ------------    --------
Total non-operating income (expense) ......        (39,372)        724,648        (764,020)  -105.43%
                                              ------------    ------------    ------------    --------

Income before taxes .......................      3,326,128       2,076,662       1,249,466     60.17%
Income tax expense ........................           --          (246,200)        246,200   -100.00%
                                              ------------    ------------    ------------    --------
Net income ................................   $  3,326,128    $  1,830,462    $  1,495,666     81.71%
                                              ------------    ------------    ------------    --------
Comprehensive income - foreign currency ...        216,416          62,557         153,859    245.95%
translation adjustments ...................           --              --              --          --
Comprehensive income ......................   $  3,542,544    $  1,893,019    $  1,649,525     87.14%
                                              ------------    ------------    ------------    --------

Basic and diluted earnings per common share   $       0.09    $       0.05    $       0.04     69.48%
                                              ------------    ------------    ------------    --------

Weighted-average common shares outstanding      37,228,938      34,723,056       2,505,882      7.22%
                                              ------------    ------------    ------------    --------
</TABLE>



Analysis for the Three Months Ended June 30, 2007

Revenues

Revenues  increased to  approximately  $8.57  million for the three months ended
June 30, 2007 as compared to  approximately  $3.98  million for the three months
ended June 30, 2006. This represents an increase of approximately  $4.59 million
or 115.57%. This increase was due largely to the increased sales of new products
for the three months ended June 30, 2007. In the second quarter, PuSenOK (TM), a
Gastrodin  injection,  which reached the market  expectation,  increased  market
share and  increased  revenues  by  approximately  $1.18  million  more than the






                                       11
<PAGE>

corresponding  period in 2006.  In  addition,  the mature  products  of Cefaclor
dispersible  tablets and  Neoandrographolade  (Chinese plant medicine)  revenues
dramatically  increase by $1.14 million in the second quarter.  The new products
of Hepatocyte  growth-promoting  factor for  injection,  Ozagrel,  a Granisetron
Hydrochloride  injection which was issued after June 2006 boosted the revenue by
$1.32  million.  On the other  hand,  because of Chinese  medical  control,  the
medicine market is a good marketing  environment.  The distribution  network has
been further  developed over a majority of the 29 provinces or regions in China.
Furthermore, with the improvement of production capacity, a significant increase
in sales has been made possible by an increased yield capacity,  both in new and
existing products.

Cost of Revenue

Cost of revenue for the three months ended June 30, 2007 was approximately $4.67
million or 54.50% of revenues as compared to $2.10 million or 52.95% of revenues
for the three months ended June 30, 2006.  The increased cost of revenue was due
primarily to the increased revenue for the three months ended June 30, 2007.

Gross Profit

Gross profit for the three months  ended June 30, 2007 was  approximately  $3.90
million or 45.50% of revenues as compared to $1.87 million or 47.05% of revenues
for the three months ended June 30, 2006.  The gross profit for the three months
ended June 30, 2007 was higher than that for the  corresponding  period by $2.03
million,  representing a 108.48% increase. The increase was primarily due to the
higher revenue for the three months ended June 30, 2007.

Selling Expenses

Selling  expenses  have  increased  due to an  increase  in  distribution  cost.
Relative  to the  total  operating  expenses,  selling  expenses  accounted  for
approximately  61% of total  operating  expenses for the three months ended June
30, 2007. The two reasons are the expense for the printing and  distributing  of
throwaway materials increased and increased salary,  travel, and office expenses
from employing 35 additional sales representatives.

General & Administrative Expenses

General and  administrative  expenses  decreased from approximately $0.4 million
for the three months ended June 30, 2006 to  approximately  $0.2 million for the
three months ended June 30, 2007. The slight decrease is mainly from the Company
spending less on entertainment expenses, travel expenses, and office expenses.

Income from Operations

There was an increase in income from operations from approximately $1.35 million
for the three months ended June 30, 2006 to approximately  $3.37 million for the
three months ended June 30, 2007.  The increase was primarily due to an increase
in capacity and customers for the three months ended June 30, 2007.

Other Income






                                       12
<PAGE>


The amount of other income  decreased  for the three months ended June 30, 2007.
It was approximately $7,937 which was decrease of 93.43% compared to $120,803 or
3% of revenues for the corresponding  period in 2006. The decrease is from a tax
subsidy for the  corresponding  period in 2006,  but no subsidy was received for
the three months ended June 30, 2007.

Bad Debt Recovery

For  the  three  months  ended  June  30,  2006,  the  Company  collected  trade
receivables  which were past due and were accrued in the  allowance for bad debt
at March 31,  2006,  the result was a bad debt  recovery of  $627,861  for these
trade receivables. For the three months ended June 30, 2007, there were no trade
receivables collected that had been previously allowed against.

Income Tax Expense

For the three months ended June 30,  2007,  the Company had no tax expense.  The
People's  Republic of China  granted the Company a tax holiday  that allowed the
Company to be exempt from income taxes in 2007.

Net Income

Net income, excluding the effect of foreign currency translation, was $3,326,128
for the three  months  ended June 30,  2007.  It was 81.71%  higher than the net
income of $1,830,462 for the three months ended June 30, 2006. The corresponding
growth in operations  resulting in revenue  increases caused the cost of revenue
and related expenses, as a percentage of total revenues, to increase.

Analysis for the Six Months Ended June 30, 2007

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









                                       13
<PAGE>
<TABLE>
<CAPTION>



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

                                                    For the six months
                                                     ended June 30,             Change         Variance
                                            --------------------------------
                                                  2007            2006
                                              ------------    ------------
<S>                                           <C>             <C>             <C>             <C>
Revenue ...................................   $ 15,804,024    $  8,709,334    $  7,094,690      81.46%
                                              ------------    ------------    ------------    --------
Cost of revenue ...........................      8,605,524       4,631,549       3,973,975      85.80%
                                              ------------    ------------    ------------    --------

Gross profit ..............................      7,198,500       4,077,785       3,120,715      76.53%
                                              ------------    ------------    ------------    --------

Operating expenses:
Selling expenses ..........................        474,030         170,161         303,869     178.58%
General and administrative ................      1,583,523         680,321         903,202     132.76%
Research and development ..................        840,881            --           840,881
                                              ------------    ------------    ------------    --------
Total operating expenses ..................      2,898,434         850,482       2,047,952     240.80%
                                              ------------    ------------    ------------    --------

Income from operations ....................      4,300,066       3,227,303       1,072,763      33.24%
                                              ------------    ------------    ------------    --------

Non-operating income (expenses):
Interest income ...........................         25,408             182          25,226   13860.44%
Interest expense ..........................       (115,841)        (47,898)        (67,943)    141.85%
Other income ..............................      1,490,544         120,461       1,370,083    1137.37%
Bad debt recovery .........................           --           626,580        (626,580)   -100.00%
                                              ------------    ------------    ------------    --------
Total non-operating income (expense) ......      1,400,111         699,325         700,786     100.21%
                                              ------------    ------------    ------------    --------

Income before taxes .......................      5,700,177       3,926,628       1,773,549      45.17%
Income tax expense ........................           --          (525,022)        525,022    -100.00%
                                              ------------    ------------    ------------    --------
Net income ................................   $  5,700,177    $  3,401,606    $  2,298,571      67.57%
                                                              ------------    ------------    --------
Comprehensive income - foreign currency ...        651,683         221,558         430,125     194.14%
translation adjustments ...................           --              --              --
Comprehensive income ......................   $  6,351,860    $  3,623,164    $  2,728,696      75.31%
                                              ------------    ------------    ------------    --------

Basic and diluted earnings per common share   $       0.15    $       0.10    $       0.06      58.18%
                                              ------------    ------------    ------------    --------

Weighted-average common shares outstanding      36,785,909      34,723,056       2,062,853       5.94%
                                              ------------    ------------    ------------    --------
</TABLE>

Revenues

Revenues increased to approximately $15.80 million for the six months ended June
30, 2007 as compared to  approximately  $8.71  million for the six months  ended
June 30, 2006.  This  represents an increase of  approximately  $7.09 million or
81.46%.  In the second  quarter,  PuSenOK  (TM),  a Gastrodin  injection,  which
reached the market expectation, increased market share and increased revenues by
approximately  $2.65  million  more than the  corresponding  period in 2006.  In
addition,   the  mature   products   of   Cefaclor   dispersible   tablets   and
Neoandrographolade  (Chinese plant medicine) revenues  dramatically  increase by






                                       14
<PAGE>

$2.06   million  in  the  second   quarter.   The  new  products  of  Hepatocyte
growth-promoting  factor for  injection,  Ozagrel,  a Granisetron  Hydrochloride
injection,  which issued  after June 2006 boosted the revenue by $2.72  million.
Additionally,  because of Chinese medical control, the medicine market runs in a
better  marketing  environment.   The  distribution  network  has  been  further
developed over a majority of the 29 provinces or regions in China. Further, with
the improvement of production capacity, a significant increase in sales has been
made possible by an increased yield capacity, both in new and existing products.

Cost of Revenue

Cost of revenue for the six months ended June 30, 2007 was  approximately  $8.61
million or 54.45% of revenues as compared to $4.63 million or 53.18% of revenues
for the six months ended June 30, 2006.  The  increased  cost of revenue was due
primarily to the increased revenue for the six months ended June 30, 2007.

Gross Profit

Gross  profit for the six months  ended June 30,  2007 was  approximately  $7.20
million or 45.55% of revenues as compared to $4.07 million or 46.82% of revenues
for the six months  ended  June 30,  2006.  The gross  profit the for six months
ended June 30, 2007 was higher than that for the  corresponding  period by $3.12
million,  representing a 76.53% increase.  The increase was primarily due to the
higher revenue for the six months ended June 30, 2007.

Selling Expenses

Selling  expenses  have  increased  due to an  increase  in  distribution  cost.
Relative  to the  total  operating  expenses,  selling  expenses  accounted  for
approximately  16.35% of total operating  expenses for the six months ended June
30,  2007.Thereasons  are that the expense for the printing and  distributing of
throwaway materials increased and due to the salary, travel expenses, and office
expenses from employing 35 additional sales representatives.

General & Administrative Expenses

General and administrative expenses increase from approximately $0.6 million for
the six months ended June 30, 2006 to  approximately  $1.58  million for the six
months ended June 30, 2007. The allowance for doubtful accounts was increased as
a result of an increase in trade  receivable  for the six months  ended June 30,
2007.

Research and Development

As one of our  strategies,  selling  certain  formulas  to other  pharmaceutical
companies  is not an  expedient  tactic;  instead,  it is an organic part of our
overall strategy for development.  We have solid R&D  capabilities,  and selling
some formulas out of our newly developed  formulas can make greater profits than
otherwise  maturing  them into final  products  for  marketing.  Selling of such
formulas won't pose any unfavorable impact upon the Company.

Income from Operations






                                       15
<PAGE>


There was an increase in income from operations from approximately $3.23 million
for the six months ended June 30, 2006 to  approximately  $4.30  million for the
six months  ended June 30,  2007.The  increase was  primarily  due to the higher
revenue for the six months ended June 30, 2007.

Other Income

The amount of other income  increased for the six months ended June 30, 2007. It
was  approximately  $1.49  million or 9.43% of revenue  which was an increase of
1137.37% compared to $120,461 or 1.38% of revenues for the corresponding  period
in 2006.The increase came from the sale of the drug formula.

Income Tax Expense

For the six months  ended June 30,  2007,  the Company had no tax  expense.  The
People's  Republic of China  granted the Company a tax holiday  that allowed the
Company to be exempt from income taxes in 2007.

Net Income

Net income, excluding the effect of foreign currency translation, was $5,700,177
for the six months ended June 30, 2007. It was 67.57% higher than the net income
of $3,401,606 for the six months ended June 30, 2006. The  corresponding  growth
in  operations  resulting  in revenue  increases  caused the cost of revenue and
related expenses, as a percentage of total revenues, to increase.

V. Analysis of Fthe Financial Position

Liquidity and Capital Resource

As of June 30, 2007,  the Company had cash and cash  equivalents  of $2,436,105.
This  represents  a 271.11%  increase  over the  December  31,  2006  balance of
$656,441.  During the six months ended June 30, 2007,  the proceeds from sale of
common stock and warrants increased by approximately $3,797,183. (Figure 2)






                                       16
<PAGE>





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



                                                   For the six      For the six
                                                   months ended     months ended
                                                     June 30,         June 30,
                                                       2007             2006
                                                  -------------   ------------
Cash Flows from Operating Activities:
Net income .....................................   $ 5,700,177    $ 3,401,606
Depreciation and amortization ..................       201,540        193,065
Changes in assets and liabilities:
Trade accounts receivable ......................    (4,074,259)    (3,348,145)
Other receivables ..............................      (337,438)       (97,112)
Advances to suppliers ..........................    (2,079,529)       161,868
Inventory ......................................    (1,828,719)      (945,068)
Deferred tax assets ............................          --           24,387
Deferred offering costs ........................        60,062           --
Trade accounts payable .........................       341,285        526,675
Accrued expenses ...............................        57,740         84,810
Accrued taxes payable ..........................        (2,715)      (122,285)
Other payables .................................       (75,127)          --
Advances from customers ........................        33,704         17,670
                                                   -----------    -----------
Net Cash Used in Operating Activities ..........    (2,003,279)      (102,529)
                                                   -----------    -----------

Cash Flows from Investing Activities:
Purchase of property and equipment .............       (25,931)      (144,790)
Purchase of intangible assets ..................          --           (2,477)
                                                   -----------    -----------
Net Cash (Used) by Investing Activities ........       (25,931)      (147,267)
                                                   -----------    -----------

Cash Flows from Financing Activities:
Proceeds from sale of common stock and warrants      3,797,183           --
Proceeds from short term notes payable .........          --           31,653
                                                   -----------    -----------
Net Cash Proceeds from Financing Activities ....     3,797,183         31,653
                                                   -----------    -----------

Effect of Exchange Rate Changes on Cash ........        11,691        (47,853)
                                                   -----------    -----------
Net Change in Cash .............................     1,779,664       (265,996)
Cash and Cash Equivalents at Beginning of Period       656,441        461,220
                                                   -----------    -----------
Cash and Cash Equivalents at End of Period .....   $ 2,436,105    $   195,224
                                                   -----------    -----------


Net cash used in operating  activities  was  $2,003,279 for the six months ended
June 30, 2007,  nearly  twenty times more than the $102,529  used for the period
ended at June 30,  2006.  This large  decrease  was due to the increase in trade
account receivable,  inventory and advance to suppliers.  The collection term of
trade account receivable was long relatively in Chinese medicine  industry.  The
Company had to pay in cash to purchase raw materials for  production to meet the
large  amount of sales in the  coming  half  year.  Net cash  used in  investing
activities,  for purchase of property and equipment  decreased to $25,931 at the
end of June 2007.  Net cash  proceeds  for  financing  activities  increased  to
$3,797,183  as of June 30, 2007.  The increase was primarily due to the proceeds
from sale of common stock and warrants.

On February 1, 2007, the Company  completed an offering of units priced at $1.70
per unit  consisting  of one share of  Company  common  stock  and a warrant  to
purchase  one-half of a share of Company  common  stock at an exercise  price of
$2.38 per share.  The Company received gross proceeds in the aggregate amount of
$4,259,900.  The net proceeds,  after deduction of related offering  expenses of
$462,717  amounted to  $3,797,183.  The Company issued an aggregate of 2,505,882
shares of common stock and issued  three-year  warrants to purchase an aggregate






                                       17
<PAGE>

of 1,252,941  shares of Company's common stock to 17 accredited  investors.  The
proceeds  were  allocated  to the  warrants  based  upon  their  fair  value  or
$2,010,219,  and the  balance of the  proceeds  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 4.80%,  expected  dividend yield of 0%, expected  volatility of
124.39% and an expected life of 3 years.

The common  shares and the shares  underlying  the  warrants  have  registration
rights and,  accordingly a registration  statement was filed with the Securities
Exchange Commission on March 30, 2007 within the 60 day period prescribed by the
registration rights agreement. The registration statement was declared effective
on May 4, 2007.


VI. Off-Balance Sheet Arrangements

There were no off-balance sheet arrangements in the Company.


VII. Commitments

At  June  30,  2007,  the  Company  had  no  material  commitments  for  capital
expenditures other than for those  expenditures  incurred in the ordinary course
of business.


VIII. Recently Enacted Accounting Pronouncements

On January 1, 2006, we adopted SFAS No. 151,  Inventory  Costs - An Amendment of
ARB No. 43,  Chapter 4 (SFAS 151).  SFAS 151 amends the  guidance in ARB No. 43,
Chapter 4, Inventory Pricing,  to clarify the accounting for abnormal amounts of
idle facility expense,  freight, handling costs, and wasted material (spoilage).
Among other  provisions,  the new rule requires that items such as idle facility
expense, excessive spoilage, double freight, and re-handling costs be recognized
as current-period charges.  Additionally,  SFAS 151 requires that the allocation
of fixed  production  overhead to the costs of conversion be based on the normal
capacity of the production facilities.  The effects of adoption of SFAS 151 were
not material.

On January 1, 2006, we adopted SFAS No. 123 (revised 2004),  Share-Based Payment
(SFAS  123R),   which  revises  SFAS  No.  123,   Accounting   for   Stock-Based
Compensation.  SFAS 123R also superseded APB 25,  Accounting for Stock Issued to
Employees,  and amends SFAS No. 95,  Statement  of Cash Flows.  Under SFAS 123R,
share-based  payments  to  employees,  including  the fair  value of  grants  of
employee  stock options,  are  recognized in the income  statement at their fair
value, generally over the option vesting period. The effects of adoption of SFAS
123R were not material.

In  December  2004,  the FASB issued SFAS No.  153,  Exchanges  of  Non-monetary
Assets--An  Amendment  of  APB  Opinion  No.  29,  Accounting  for  Non-monetary
Transactions  (SFAS 153).  SFAS 153  eliminated  the  exception  from fair value
measurement for non-monetary exchanges of similar productive assets in paragraph
21(b) of APB Opinion  No. 29,  Accounting  for  Non-monetary  Transactions,  and
replaced  it  with an  exception  for  exchanges  that  do not  have  commercial
substance.  SFAS 153  specifies  that a  non-monetary  exchange  has  commercial






                                       18
<PAGE>

substance  if the  future  cash  flows of the  entity  are  expected  to  change
significantly  as a result of the exchange.  The effects of adoption of SFAS 153
were not material.

In June  2005,  the FASB  issued  SFAS No.  154,  Accounting  Changes  and Error
Corrections,  a replacement of APB Opinion No. 20, Accounting Changes,  and FASB
No. 3, Reporting Accounting Changes in Interim Financial  Statements.  Statement
154 applies to all voluntary  changes in accounting  principle,  and changes the
requirements  for  accounting  for  and  reporting  of a  change  in  accounting
principle.  Statement 154 requires  retrospective  application to prior periods'
financial  statements of a voluntary change in accounting principle unless it is
impracticable.  It is effective for accounting changes and corrections of errors
made in fiscal years beginning after December 15, 2005.  Earlier  application is
permitted for  accounting  changes and  corrections  of errors made occurring in
fiscal years  beginning  after June 1, 2005. The effects of adoption of SFAS 154
were not material.

In June 2005, the FASB Emerging  Issues Task Force (EITF) reached a consensus on
Issue No.05-6,  determining the Amortization Period for Leasehold  Improvements.
The  guidance  requires  that  leasehold  improvements  acquired  in a  business
combination  or purchased  subsequent  to the  inception of a lease be amortized
over the  lesser  of the  useful  life of the  assets  or a term  that  includes
renewals that are reasonably assured at the date of the business  combination or
purchase.  The guidance is effective for periods  beginning after June 29, 2005.
The effects of adoption of EITF No. 05-6 were not material.

In February  2006,  the FASB issued SFAS No. 155,  accounting for Certain Hybrid
Financial  Instruments -- an amendment of FASB  Statements No. 133 and 140 (SFAS
155).  SFAS 155 amends SFAS No. 133,  Accounting for Derivative  Instruments and
Hedging  Activities  and SFAS No.140,  Accounting for Transfers and Servicing of
Financial   Assets   and    Extinguishments   of   Liabilities,    and   related
interpretations.  SFAS155  permits  fair  value  remeasurement  for  any  hybrid
financial  instrument that contains an embedded  derivative that otherwise would
require bifurcation and clarifies which interest-only  strips and principal-only
strips are not subject to  recognition as  liabilities.  SFAS 155 eliminates the
prohibition  on a  qualifying  special-purpose  entity from holding a derivative
financial  instrument that pertains to a beneficial  interest other than another
derivative financial  instrument.  SFAS 155 is effective for the Company for all
financial  instruments  acquired or issued beginning January 1, 2007. The impact
of  adoption  of  this  statement  on  the  Company's   consolidated   financial
statements, if any, has not yet been determined.

In March  2006,  the FASB  issued  SFAS No. 156,  Accounting  for  Servicing  of
Financial  Assets - an amendment of FASB Statement No. 140 (SFAS 140).  SFAS 156
amends SFAS 140 Accounting  for Transfers and Servicing of Financial  Assets and
Extinguishments of Liabilities and related interpretations. SFAS 156 requires an
entity to  recognize  a  servicing  asset or  servicing  liability  each time it
undertakes  an  obligation  to service a financial  asset.  It also requires all
separately recognized servicing assets and servicing liabilities to be initially
measured at fair value, if practicable. SFAS 156 permits an entity to use either
the amortization  method or the fair value measurement  method for each class of
separately  recognized servicing assets and servicing  liabilities.  SFAS 156 is
effective for the Company as of January 1, 2007.  The impact of adoption of this
statement on our  consolidated  financial  statements,  if any, has not yet been
determined.

IX. Conclusion






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The  overall  performance  during  the  six  months  ended  June  30,  2007  was
outstanding.  As a public company in the pharmaceutical  industry, we focused 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 to the market.


Item 3 - Controls and Procedures

As required by Rule 13a-15 under the Exchange  Act,  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  disclosure  controls
and  procedures.  This evaluation was carried out under the supervision and with
the participation of the Company's management, including the Company's President
and  Chief  Executive  Officer  and Chief  Financial  Officer.  Based  upon that
evaluation,  the  Company's  President  and Chief  Executive  Officer  and Chief
Financial  Officer  concluded  that  the  Company's   disclosure   controls  and
procedures  are  effective.  There  have  been  no  significant  changes  in the
Company's  internal  controls or in other  factors,  which  could  significantly
affect  internal  controls  subsequent  to the date the Company  carried out its
evaluation.

Disclosure  controls and procedures are controls and other  procedures  that are
designed to ensure that information  required to be disclosed in Company reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported,  within the time  periods  specified  in the  Securities  and Exchange
Commission's  rules and  forms.  Disclosure  controls  and  procedures  include,
without limitation,  controls and procedures designed to ensure that information
required to be  disclosed  in Company  reports  filed under the  Exchange Act is
accumulated  and  communicated  to  management,  including the  Company's  Chief
Executive and Chief Financial Officer as appropriate,  to allow timely decisions
regarding required disclosure.


                           PART II. OTHER INFORMATION

Item 1 Legal Proceedings

From time to time, the company may become involved in various lawsuits and legal
proceedings which arise in the ordinary course of business.  However, litigation
is subject to inherent  uncertainties,  and an adverse  result in these or other
matters may arise from time to time that may harm our  business.  The company is
currently  not aware of any such legal  proceeding  or claims  that the  company
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

None.

Item 3 - Defaults upon Senior Securities

Not Applicable.







                                       20
<PAGE>

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.

          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.







                                       21
<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 10, 2007                          By: /s/ Zhilin Li
                                                -----------------------
                                                Zhilin Li
                                                Chief Executive Officer,
                                                President and Director


Dated: August 10, 2007                          By: /s/ Xinhua Wu
                                                ---------------------
                                                Xinhua Wu
                                                Chief Financial Officer,
                                                and Director








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