Our leading medical device research and development infrastructure in China includes a research and development team of more than 1000 engineers. Around 55% of them hold Masters or Doctorate degrees.

To enhance our leading market position, we have made and will continue to make significant investments in research and development. In fact, we invest approximately 10% of net revenues every year in research and development activities even as net revenues continue to experience strong growth.

We believe our current research and development spending, as a percentage of net revenues, is comparable to many of our larger global competitors and greater than many of our China-based competitors. Since 1992, we have launched more than 60 new products across our three primary business segments, most of which have a CE mark and 13 of which have received FDA clearance. For example, in 2003, we launched our BS-300 biochemistry analyzer, the first product in the field whose intellectual property in China is owned entirely by a Chinese company. Also, we introduced our first five-part hematology analyzer, our first color Doppler ultrasound imaging system, our high-end Beneview line of patient monitoring devices, and our first anesthesia machines in 2006, which expanded our offerings into higher growth product categories.

In addition to developing new products, our research and development team and our manufacturing department work closely together to optimize manufacturing processes and develop commercially viable products. They incorporate regular feedback from our sales and marketing personnel, enabling us to timely and cost-effectively introduce products tailored to end-user needs. Furthermore, our China-based research and development and manufacturing operations provide us with a distinct competitive advantage in international markets by enabling us to leverage low-cost technical expertise, labor, raw materials and facilities.