China Medical Technologies, Inc, a leading China-based medical device company that develops, manufactures and markets advanced in-vitro diagnostic products, announced that the company has completed the previously announced sale of its High Intensity Focused Ultrasound tumour therapy system business (HIFU Business) to Chengxuan International Ltd (Chengxuan), a major shareholder of the company.

The company stated the reasons for the sale of the HIFU Business in the press release dated December 18, 2008 which included the conditions in the global financial markets, more stringent regulatory requirements on therapeutic equipment from the State Food and Drug Administration in China (SFDA) and the significant capital investments required to obtain US and EU regulatory approvals for the HIFU equipment. The company wishes to elaborate the above reasons below.

As previously disclosed, the company's HIFU registration certificate renewal application has been under review by the SFDA for some time. The long review process was initially due to the administrative delays. In November 2008, the SFDA required the company to provide new clinical trial data for each approved indication for the renewal assessment which was not required in the previous renewal process for therapeutic medical equipment.

The company expects the new requirements from the SFDA to prolong the renewal process. In addition, the SFDA may require the submission of new clinical trial data for all approved indications within a time limit which is not feasible for the company because the clinical trial data for certain indications may not be readily available. As a result, the company may only be able to submit completed clinical trial data for certain approved indications for the renewal requirements. If that happens, the scope of the renewed registration certificate may be narrower than the previously approved scope which will likely have an adverse effect on the sales of the HIFU equipment.

As the company has completed the sale of the HIFU Business, the company becomes a pure advanced IVD company. The company expects to use the proceeds from the sale of the HIFU Business to support the further development of the fast growing molecular diagnostic businesses and strives to become the leading molecular diagnostic company in China.

For the convenience of readers, certain RMB amounts have been translated into US dollars at the rate of RMB6.8254 to US$1.00, the noon buying rate in New York City for cable transfers of RMB per US dollar as certified for customs purposes by the Federal Reserve Bank of New York, as of Friday, November 28, 2008.