Update -- With Photo: High Efficiency Linear Motor Propulsion System for Metro Train Developed by Harbin Electric Successfully Tested

Harbin Electric, Inc. ("Harbin Electric" or the "Company", Nasdaq: HRBN), a leading developer and manufacturer of a wide array of electric motors in the People's Republic of China, today announced that its self-developed high efficiency linear motor (LM) propulsion system powering China's first domestically developed and manufactured LM driving metro train was successfully tested and validated at Changchun Railway Vehicles Co. Ltd. ("CRC"), Changchun, China. This break-through for China is the result of more than two years of joint efforts between Harbin Electric, the Institute of Electrical Engineering of Chinese Academy of Sciences ("IEECAS") and CRC.

One of the core engineering systems used in this new metro train -- the high efficiency LM propulsion system based on the advanced linear induction motor technology -- is developed and manufactured by Harbin Electric.

A ceremony was held on December 22, 2009 in Changchun to celebrate this accomplishment with the guests taking a test ride on the train. China Central Television ("CCTV") and other media reported and celebrated this important technological achievement, which is part of China's efforts to develop its own advanced technology in many sectors of its fast growing economy. CCTV stressed that "the successful development of this LM driving metro train ranks China as the third country in the world after Canada and Japan to master the LM technology for a scaled production of LM driving transit system. Harbin Electric -- working jointly with IEECAS and CRC -- took only two years to successfully master the new technology."

Compared to the traditional rotary motor propelled metro transit system widely in use in the world, the LM driving metro train provides higher performance efficiency with lower energy consumption. It can negotiate steep grades and cope with tight curves and corners, lower maintenance cost, provide a safer ride under severe whether conditions such as rain and snow, and is quieter and more comfortable. It is environmental friendly and contributes to making cities greener. Additionally, due to the simplicity of the LM propulsion system, the vehicle body is more compact, reducing the cross section of underground tunnels by about 40% and accelerating construction of the tracks, thus providing significant cost savings.

"We are extremely proud of our successful participation in China's development of a technologically advanced urban metro transit industry. The first 'made-in-China" LM metro train relies on our proprietary technology and has met international standards, with significant lower production costs than similar foreign products. With the success of this trial production, I believe that Chinese enterprises have entered into the high-end LM driving metro transit market and possess the skills and strength necessary to compete with world-class metro rail car manufacturers," said Mr. Tianfu Yang, Chairman and CEO of Harbin Electric.

Mr. Yang continued, "With the inherent technological and economical advantages, LM propulsion technology has become more popular than ever for the construction of metro transit systems. Many cities around the world are now turning to this mass transit technology instead of more conventional rotary motor propelled metro systems. China is accelerating the build up of its urban mass transportation infrastructure with the launch of the high speed LM driving metro train system in response to the need for rapid, efficient and cost-effective urban transportation. According to People's Daily, China has approved plans to build subways in 22 cities for a total investment of RMB 882 billion (~US$129 billion). Eleven cities in China currently have subways covering a total of 835.5 km. In the next five years, China will have another 89 subways totaling 2,500 km for an investment of RMB 993 billion (~US$145 billion). Guangzhou's metro line 4 and 5 have adopted the LM propelled train and so did the Beijing Capital International Airport Link. However these metro lines currently rely on equipment provided by foreign manufacturers. These made-in-China core technologies including LM propulsion technology are expected to reduce cost to about half of the cost of imported trains and will create substantial economic and social benefits throughout the country."

Mr. Yang concluded, "The next step for this project is to produce a four-car train set for the Beijing Capital International Airport Link according to the specific technical requirements for this transit system. We expect that it will take a few months to deliver the first four-car train set. Once the test run for the first four-car train is complete and all technical parameters are satisfactory, we will scale up production to supply the LM propulsion system to CRC and meet the demand for the Beijing Capital International Airport Link. We are confident that 2010 will be another solid year for Harbin Electric, a year that further capitalizes on our vision and business diversification and generates increased shareholder value."

About Harbin Electric, Inc.

Harbin Electric, headquartered in Harbin, China, is a leading developer and manufacturer of a wide array of electric motors with a focus on innovative, customized and value-added products. Its major product lines include industrial rotary motors, linear motors, and specialty micro-motors. The Company's products are purchased by a broad range of domestic and international customers, including those involved in energy industry, factory automation, food processing, packaging, transportation, automobile, medical devices, machinery and tool manufacturing, chemical, petrochemical, as well as in the metallurgical and mining industries. With a recent acquisition of industrial rotary motor business, the Company operates four manufacturing facilities in China located in Xi'an, Weihai, Harbin and Shanghai.

As China continues to grow its industrial base, Harbin Electric aspires to be a leader in the industrialization and technology transformation of the Chinese manufacturing sector.

Safe Harbor Statement

The actual results of Harbin Electric, Inc. could differ materially from those described in this press release. Detailed information regarding factors that may cause actual results to differ materially from the results expressed or implied by statements in this press release may be found in the Company's periodic filings with the U.S. Securities and Exchange Commission, including the factors described in the section entitled "Risk Factors" in its annual report on Form 10-K for the year ended December 31, 2008. The Company does not undertake any obligation to update forward-looking statements contained in the press release. This press release contains forward-looking information about the Company that is intended to be covered by the safe harbor for forward- looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may, "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology, and include discussions of strategy, and statements about industry trends and the Company's future performance, operations and products.

For investor and media inquiries, please contact:

In China
Harbin Electric, Inc.
Tel: +86-451-8611-6757

In the U.S.
Christy Shue
Harbin Electric, Inc.
Executive VP, Finance & Investor Relations
Tel: +1-631-312-8612

Kathy Li
Christensen Investor Relations
Tel: +1-212-618-1978