Audit Committee Charter

Audit Committee Charter of the Harbin Electric Board of Directors Approved by the Board of Directors and effective as of February 17, 2006 Charter This Charter governs the operations of the Audit Committee (the “Committee”) of the Board of Directors of Harbin Electric Incorporated (“Harbin Electric”). The Committee shall review and reassess the Charter at least annually and obtain the approval of the Board of Directors of any changes. From time to time, this Charter shall be amended, published, distributed, filed, and/or reported as deemed appropriate by Harbin Electric’s Board, to the extent applicable to the Committee, as may be required by applicable laws or rules of various regulatory agencies, such as the listing standards promulgated by the NASDAQ Stock Exchange. All Committee members shall be financially literate possessing the ability to read and understand the fundamental of financial statements, and at least one member shall be an “audit committee financial expert,” as defined by the Securities and Exchange Commission (“SEC”) regulations. Purpose and Authority The Committee shall provide assistance to the Board of Directors in fulfilling its oversight responsibility to the shareholders, potential shareholders, the investment community, and others relating to: • the integrity of the Harbin Electric’s financial statements; • the financial reporting process; • the systems of internal accounting and financial controls; • the ...