14.	Land Use Rights and Construction in Progress

The Company considers the fact that, in the PRC, there is no land ownership but rather land use right and it is more appropriate to allocate land use rights under a separate category and amortize land use rights based on 50 years of the land use rights, or the term of the lease. Land use rights, net, are approximately $43,042,000 and $40,844,000 at June 30, 2011 and December 31, 2010, respectively.

During the second quarter of 2007, TDR entered into an agreement with the Development and Construction Administration Committee of Harbin Song Bei New Development District to purchase land use rights for 50 years for the development of a new corporate headquarters with a biotech engineering lab. In fiscal 2010, the Company completed construction of its new corporate headquarters and began occupancy. The corporate headquarters was constructed at an aggregate cost of approximately $13.0 million.

On December 21, 2010, TDR entered into an agreement with Heilongjiang Tang Wang He Forest Bureau that gives the Company the right to grow and harvest herbs, among other plants, on approximately 74,000 acres of forest land in the Xiao Xing'an Mountain region, for a term of 30 years. As part of the transaction, the Company paid upfront approximately $36.0 million (RMB 240 million) in cash. The Company believes this arrangement provides its TCM business with a hedge against fluctuations in raw material prices.

In June 2011, the Company acquired the land use rights for 30 years to approximately 49 additional acres of land in Tang Wang He to use for the trial planting of herbs, at a purchase price of approximately $2.0 million. The trial planting of some herbs commenced in June 2011.