SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                            SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
                                (Amendment No. )

Filed by the Registrant [x]

Filed by a party other than the Registrant  [ ]

Check the appropriate box:

[ ]  Preliminary Proxy Statement
[ ]  Confidential,  for  Use  of the  Commission  Only  (as  permitted  by  Rule
     14a-6(e)(2))
[X]  Definitive Proxy Statement
[ ]  Definitive Additional Materials
[ ]  Soliciting Material Pursuant to ss.240.14a-11(c)
     or ss.240.14a-12

                           DRAGON PHARMACEUTICAL INC.
                           --------------------------
                (Name of Registrant as Specified In Its Charter)

     
               ---------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X]  No fee required

[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

     1)   Title of each class of securities to which transaction applies:
                                                                         -------
     2)   Aggregate number of securities to which transaction applies:
                                                                      ----------
     3)   Per unit  price  or other  underlying  value of  transaction  computed
          pursuant to Exchange  Act Rule 0-11 (set forth the amount on which the
          filing fee is calculated and state how it was determined):
                                                                   -------------
     4)   Proposed maximum aggregate value of transaction: 
                                                           -----------------
     5)   Total fee paid: 
                           ----------------------

[ ]  Fee paid previously with preliminary materials.

[ ]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2)  and identify the filing for which the  offsetting  fee was paid
     previously.  Identify the previous filing by registration statement number,
     or the Form or Schedule  and the date of its filing.  

     1)   Amount Previously Paid:
                                  ------------------------------------
     2)   Form, Schedule or Registration Statement No.:
                                                        --------------
     3)   Filing Party:
                        ----------------------------------------------
     4)   Date Filed:
                      ------------------------------------------------


                           DRAGON PHARMACEUTICAL INC.
                      1055 West Hastings Street, Suite 1900
                           Vancouver, British Columbia
                                 Canada V6E 2E9
                            Telephone (604) 669-8817

To Our Shareholders:

     You are cordially  invited to attend the annual meeting of the shareholders
of Dragon  Pharmaceutical  Inc. to be held at 10:00 a.m.  local time, on Friday,
August 12, 2005 at our principal  executive office located at 1055 West Hastings
Street, Suite 1900, Vancouver, British Columbia V6E 2E9.

     At the meeting, you will be asked to:

     o    elect five  nominees  as members  of the Board of  Directors  to serve
          until their successors are elected and qualified;

     o    approve an amendment to our Certificate of  Incorporation to eliminate
          Article VII which states a specified number of directors;

     o    approve an amendment  to Article II,  Section 1 of our Bylaws to allow
          the Board of Directors to set the number of directors at not less than
          one and not more than eleven directors;

     o    approve the adoption of the 2005 Stock Option Plan; and

     o    approve  the  adjournment  of the  annual  meeting  for any  permitted
          reason,  including, if necessary, to solicit additional proxies in the
          event  that there are not  sufficient  votes at the time of the annual
          meeting to approve the proposals.

     We hope you plan to  attend  the  annual  shareholders'  meeting.  However,
whether or not you plan to attend the meeting in person, in order that we may be
assured  of a quorum we urge you to sign and return  the  enclosed  proxy in the
postage-paid envelope provided as promptly as possible.




                                            /s/ Yanlin Han
                                            ----------------------------
                                            Yanlin Han,
July 13, 2005                               Chairman of the Board


                                       - 2 -


                           DRAGON PHARMACEUTICAL INC.
                      1055 West Hastings Street, Suite 1900
                           Vancouver, British Columbia
                                 Canada V6E 2E9
                            Telephone (604) 669-8817

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                          To Be Held on August 12, 2005

     NOTICE IS HEREBY GIVEN that the annual  meeting of  shareholders  of Dragon
Pharmaceutical Inc. (the "Company"), a Florida corporation,  will be held at our
principal  executive  office located at 1055 West Hastings  Street,  Suite 1900,
Vancouver,  British  Columbia V6E 2E9, on Friday,  August 12, 2005 at 10:00 a.m.
local  time,  for  the  purpose  of  considering  and  acting  on the  following
proposals:

1.   Elect five  nominees  as members of the Board of  Directors  to serve until
     their successors are elected and qualified;

2.   Approve an  amendment  to our  Certificate  of  Incorporation  to eliminate
     Article VII which states a specified number of directors;

3.   Approve an  amendment  to Article II,  Section 1 of the Bylaws to allow the
     Board of  Directors to set the number of directors at not less than one and
     not more than eleven directors;

4.   Adopt the 2005 Stock Option Plan; and

5.   Approve the  adjournment  of the annual  meeting for any permitted  reason,
     including,  if necessary,  to solicit  additional proxies in the event that
     there are not sufficient votes at the time of the annual meeting to approve
     the proposals.

     Only  shareholders of record at the close of business on July 12, 2005, are
entitled  to  receive  notice of and to vote at the  meeting.  Shareholders  are
invited to attend the meeting in person.

     Please sign and date the accompanying  proxy card and return it promptly in
the enclosed postage-paid envelope whether or not you plan to attend the meeting
in person.  If you attend the meeting,  you may vote in person if you wish, even
if you previously have returned your proxy card. The proxy may be revoked at any
time  prior  to its  exercise.  If your  shares  are held in the name of a bank,
broker  or  other  fiduciary,  please  follow  the  instructions  on the  voting
instruction card furnished by the shareholder of record.  Remember, your vote is
important so please act as promptly as possible.

                                         By Order of the Board of Directors

July 13, 2005                            Maggie Deng, Secretary



                                       - 3 -


                           DRAGON PHARMACEUTICAL INC.
                      1055 West Hastings Street, Suite 1900
                           Vancouver, British Columbia
                                 Canada V6E 2E9
                            Telephone (604) 669-8817
                             -----------------------
                                 PROXY STATEMENT
                             -----------------------

     We, Dragon  Pharmaceutical  Inc., (the "Company") are furnishing this proxy
statement  to you in  connection  with our  2005  annual  meeting  to be held on
Friday,  August 12, 2005, at 10:00 a.m.  local time at our  principal  executive
office  located at 1055 West Hastings  Street,  Suite 1900,  Vancouver,  British
Columbia V6E 2E9, and at any adjournment thereof.

     A copy of the  Company's  Annual  Report on Form  10-KSB for the year ended
December 31, 2004, accompanies this Proxy Statement.  These proxy materials were
first mailed to shareholders on or about July 14, 2005.

     At the annual meeting, shareholders will be asked to:

     o    Elect the five  nominees as members of the Board of Directors to serve
          until their successors are elected and qualified;

     o    Approve an amendment to our Certificate of  Incorporation to eliminate
          Article VII which states a specified number of directors;

     o    Approve an amendment  to Article II,  Section 1 of the Bylaws to allow
          the Board of Directors to set the number of directors at not less than
          one and not more than eleven directors;

     o    Adopt the 2005 Stock Option Plan; and

     o    Approve  the  adjournment  of the  annual  meeting  for any  permitted
          reason,  including, if necessary, to solicit additional proxies in the
          event  that there are not  sufficient  votes at the time of the annual
          meeting to approve the proposals.

     The enclosed proxy is solicited on behalf of our board of directors and may
be  revocable  by you at any time before the voting of such proxy.  All properly
executed proxies  delivered  pursuant to this  solicitation will be voted at the
meeting and in accordance with instructions, if any.

     Unless the context  otherwise  requires,  all  references to the "Company,"
"we," "us," and "our" refer to Dragon Pharmaceutical Inc. and its subsidiaries.

                                       - 4 -


                              QUESTIONS AND ANSWERS
                          ABOUT THE MEETING AND VOTING

     The following are some questions that you, as a shareholder of Dragon,  may
have regarding matters being considered at the annual shareholders'  meeting and
the answers to those questions.

What is the purpose of the Annual Meeting?

     The  purpose of the annual  meeting is to allow you to vote on the  matters
outlined in the accompanying Notice of Annual Meeting of Shareholders, including
the election of the directors.

Who is entitled to vote?

     Only  shareholders of record at the close of business on July 12, 2005 (the
Record  Date),  are entitled to vote at the  meeting,  or any  postponements  or
adjournments of the meeting.

What are the Board's recommendations on the proposals?

     The Board  recommends  a vote FOR each of the nominees for director and FOR
Proposals 2, 3, 4 and 5.

How do I vote?

     Sign  and  date  each  proxy  card  you   receive  and  return  it  in  the
postage-prepaid  envelope  enclosed  with  your  proxy  materials.  If you are a
registered  shareholder  and attend the meeting,  you may deliver your completed
proxy card in person.

     If your shares are held by your broker or bank, in "street  name," you will
receive a form from your  broker  or bank  seeking  instructions  as to how your
shares should be voted.  If you do not instruct your broker or bank how to vote,
your broker or bank will vote your shares if it has discretionary  power to vote
on a particular matter.

Who will count the votes?

     Our  Secretary  will count the votes and act as the  inspector of election.
Our  transfer  agent,  Computershare  Trust  Company of  Canada,  will count the
proxies and provide this information at the time of the meeting.

What shares are included on the proxy card(s)?

     The shares on your proxy card(s)  represent  ALL of your shares.  If you do
not return your proxy card(s), your shares will not be voted.

What does it mean if I get more than one proxy card?

     If your shares are registered differently and are in more than one account,
you will  receive  more than one proxy card.  Sign and return all proxy cards to
ensure that all your shares are voted.  We  encourage  you to have all  accounts
registered in the same name and address (whenever possible).  You can accomplish
this by contacting  our transfer  agent,  Computershare  Trust Company of Canada

                                       - 5 -


(604) 661-9400), or, if your shares are held in "street name," by contacting the
broker or bank who holds your shares.

How many shares can vote?

     There were  62,878,004  shares of common stock issued and outstanding as of
the Record  Date.  Every  shareholder  is entitled to one vote for each share of
common stock held.

What is a "quorum"?

     A "quorum" is a majority  of the  outstanding  shares  entitled to vote and
attending the meeting.  They may be presented in person or represented by proxy.
For the purposes of determining a quorum, shares held by brokers or nominees for
which we receive a signed proxy will be treated as present even if the broker or
nominee does not have  discretionary  power to vote on a particular matter or if
instructions  were never  received from the beneficial  owner.  These shares are
called  "broker  non-votes."  Abstentions  will be counted as present for quorum
purposes.

What do I need to do now?

     After you have carefully read this proxy statement,  indicate on your proxy
card how you want your  shares  voted,  then sign and mail the proxy card in the
enclosed  postage-prepaid  return envelope marked "Proxy" as soon as possible so
that your shares may be represented and voted at the meeting.

Can I change my vote after I have mailed my signed proxy card?

     Yes.  There are three ways for you to revoke  your  proxy and  change  your
vote.  First,  you may send a written  notice to our secretary  stating that you
would like to revoke your proxy. Second, you may complete and submit a new proxy
card. Third, you may vote in person at the meeting.

What is required to approve each proposal?

     For the election of the directors, once a quorum has been established,  the
nominees who receive the  plurality  of votes will be elected as our  directors.
Proposals  number 2 and 3 to amend our Certificate of Incorporation to eliminate
Article VII which states a specified  number of directors  and to amend  Article
II, Section 1 of the Bylaws to allow the Board of Directors to set the number of
directors  at not less  than  one and not more  than  eleven  directors  must be
approved by holders owning a majority of our outstanding shares of common stock.
The remaining  proposals 4 and 5 to adopt the 2005 Stock Option Plan and adjourn
the annual meeting for any permitted reason must be approved by the holders of a
majority  of the shares of common  stock who appear in person or by proxy at the
annual meeting and vote on the proposals.

     If a broker  indicates  on its  proxy  that it does not have  discretionary
authority to vote on a particular matter, the affected shares will be treated as
not present and not entitled to vote with  respect to that  matter,  even though
the same  shares  may be  considered  present  for  quorum  purposes  and may be
entitled to vote on other matters.

What happens if I abstain?

     Proxies marked  "abstain" will be counted as shares present for the purpose
of determining  the presence of a quorum,  but for purposes of  determining  the
outcome of a proposal, shares represented by such proxies will not be treated as
affirmative  votes.  To approve  Proposals 2 and 3, the  affirmative  votes 

                                       - 6 -


of a  majority  of the  shares  outstanding  are  required  and,  therefore,  an
abstention  is  equivalent  to a "no" vote.  To approve  Proposals  4 and 5, the
affirmative  votes of a majority of the shares  present and voting at the annual
meeting are required and, therefore, an abstention has no effect.

If my shares are held by a broker, will the broker vote my shares for me?

     Your broker will vote your shares according to the instructions you provide
to your broker about how to vote.  You should  instruct  your broker how to vote
your shares in accordance  with the directions your broker  provides.  If you do
not  instruct  your broker how to vote,  your broker will vote your shares if it
has  discretionary  power to vote on a  particular  matter.  Failure  to provide
instructions to your broker on items that the broker does not have discretionary
power to vote will result in your shares not being voted.

How will we solicit proxies?

     The enclosed  proxy is solicited  on behalf of our board of  directors.  We
will distribute  this proxy statement and solicit votes.  The cost of soliciting
proxies,  which will be conducted by mail, will be borne by us. These costs will
include the expense of preparing  and mailing proxy  solicitation  materials for
the  meeting and  reimbursements  paid to  brokerage  firms and others for their
reasonable out-of-pocket expenses for forwarding proxy solicitation materials to
shareholders.  Proxies may also be  solicited  in person,  by  telephone,  or by
facsimile  by  our  directors,   officers  and  employees   without   additional
compensation.

Whom should I contact with questions or to obtain additional copies of this
proxy statement?

         Dragon Pharmaceutical Inc.
         1055 West Hastings Street, Suite 1900
         Vancouver, British Columbia
         Canada V6E 2E9
         Attention: Secretary
         Telephone: 1-877-388-3784

Stock Ownership of Directors, Executive Officers and Principal Shareholders

     The following table shows the amount of our common stock (symbol:  TSE:DDD;
OTCBB:DRUG; Berlin: DRP) beneficially owned (unless otherwise indicated) by each
shareholder known by us to be the beneficial owner of more than 5% of our common
stock,  by  each of our  executive  officers  and  directors  and the  executive
officers  and  directors  as  a  group.  Except  as  otherwise  indicated,   all
information is as of July 8, 2005.



                                                                               
                                                                  Shares Beneficially Owned(1)
                                                            -----------------------------------
Name & Address of Beneficial Owner                                Number                Percent
----------------------------------                          -----------------       -----------

Yanlin Han
Chief Executive Officer and Director
c/o 1055 Hastings Street, Suite 1900
Vancouver, British Columbia V6E 2E9                             31,151,403               47.8%

Zhanguo Weng
Vice President, China Operation and Director
c/o 1055 Hastings Street, Suite 1900
Vancouver, British Columbia V6E 2E9                              8,900,401               13.7%


                                       - 7 -




                                                                               
                                                                  Shares Beneficially Owned(1)
                                                            -----------------------------------
Name & Address of Beneficial Owner                                Number                Percent
----------------------------------                          -----------------       -----------

Xuemei Liu
Director
c/o 1055 Hastings Street, Suite 1900
Vancouver, British Columbia V6E 2E9                             4,450,200(2)              6.8%

Chow Tai Fook Nominee Limited (4)
DS Family Trust
Li & Fang Enterprises Ltd.
Chang Kuo Lung
Yukon Health Enterprises Limited
Kenny En Kai Ho
Yuang Chen Chu Kuo
Faith Equity Limited
Global Equities Overseas Limited
Goldpac Investments Partners Ltd.
Philip Pak Yiu Yuen
c/o Chow Tai Fook Nominee Limited
      31F New World Tower
      16-18 Queens Road Central, Hong Kong                      7,050,000                10.8%

Alexander Wick,
President and Director                                            975,000 (3)             1.5%

Yiu Kwong Sun,
Director                                                          975,000 (4)(5)          1.5%

Maggie Deng,
Chief Operating Officer                                           200,000 (6)               *

Garry Wong,
Chief Financial Officer                                           220,000 (6)               *

All directors and executive officers as a group (8 persons)    47,072,004 (7)            72.3%

--------------------------------------
*    Represents less than one percent.
(1)  Except as otherwise indicated, we believe that the beneficial owners of the
     common stock listed above, based on information furnished by such owners or
     publicly  available,  have sole investment and voting power with respect to
     such  shares,   subject  to  community   property  laws  where  applicable.
     Beneficial  ownership is  determined  in  accordance  with the rules of the
     Securities  and  Exchange  Commission  and  generally  includes  voting  or
     investment power with respect to securities. Shares of common stock subject
     to options or warrants currently  exercisable,  or exercisable within sixty
     days,  are deemed  outstanding  for  purposes of computing  the  percentage
     ownership of the person holding such option or warrants, but are not deemed
     outstanding for purposes of computing the percentage ownership of any other
     person.
(2)  Includes options to purchase 200,000 shares.
(3)  Includes options to purchase 675,000 shares.
(4)  Based on Chow Tai Fook Nominee Limited's Schedule 13D filed with the SEC on
     October  29,  2003,  which  was  filed as a group.  Although  Chow Tai Fook
     Nominee Limited filed a Schedule 13D with the SEC on October 29, 2003, as a
     group,  such Schedule 13D has never been amended and it is unclear  whether
     or not the Member's agreement is still in effect.
(5)  Includes  275,000  shares of common  stock  subject to options  exercisable
     within sixty days.  Also includes  600,000  shares of common stock owned by
     Yukon Health Enterprise for which Mr. Sun serves as director and officer.
(6)  Represents options exercisable within sixty days.
(7)  Includes options and warrants to acquire  1,645,000 shares of common stock.
     Also includes  shares owned by Yukon Health  Enterprises  Ltd. but does not
     include shares held by other Members of the group disclosed in Note (4).

                                       - 8 -


                        PROPOSAL 1--ELECTION OF DIRECTORS

     Our Certificate of Incorporation  provides the number of Directors shall be
no less than one nor more than five. The Board has fixed the  authorized  number
of  directors  at five.  The term of office  for the  directors  elected at this
meeting  will  expire at the next  annual  meeting  of  shareholders  or until a
director's earlier death, resignation or removal.

     During 2004, the Board of Director consisted of Messrs.  Wick, Sun, Longbin
Liu, Ken Cai and Philip Yuen. In  connection  with the  acquisition  of Oriental
Wave in 2005, and Messrs. Liu, Cai and Yuen did not seek re-election.

     Unless  otherwise  instructed,  the proxy  holders  will  vote the  proxies
received  by them for the five  nominees  named  below.  If any  nominee  of the
Company is unable or  declines  to serve as a director at the time of the annual
meeting,  the proxies  will be voted for any nominee  designated  by the present
Board of  Directors  to fill the  vacancy.  Each  nominee has agreed to serve as
director, if elected.

     The nominees for directors are Mr. Yanlin Han, Mr. Zhanguo Weng, Ms. Xuemei
Liu,  Dr.  Alexander  Wick,  Ph.D,  and Dr. Yiu Kwong Sun,  M.D.  The  following
indicates the age, principal occupation or employment for at least the last five
years and affiliation with the Company, if any, for each nominee as director.

     Mr. Yanlin Han, age 42, is the Chief Executive  Officer and the Chairman of
the Board of Director of Dragon,  positions he assumed in January  2005.  He has
been the Chairman of Oriental  Wave and  responsible  for the overall  strategic
planning  and  direction  of  Oriental  Wave  starting  the date he founded  the
company. Mr. Han has over 20 years of experience in the pharmaceutical  industry
in many positions like material  buyer,  product sales and manager for state-own
companies  in China  and has very  extensive  sales  and  production  management
experience  in China.  He founded  his private  company  named  Shanxi  Tongling
Pharmaceutical  Company in 1994,  which became the vehicle to acquire  state own
pharmaceutical  companies through bankruptcy  process or contractual  management
agreements.  Mr. Han set up a joint  venture with a large Indian  pharmaceutical
company  to  produce   pharmaceutical   intermediates   with  mass  fermentation
technology. Mr. Han also serves as the Vice-President of Shanxi Province Foreign
Investment  Enterprise  Association  and  Vice-President  of Datong  City  Trade
Council. Mr. Han graduated from Shanxi Institute of Economic Management in 1986.
          
     Mr.  Zhanguo Weng, age 50, had been a Director of the Company since January
2005. Mr. Weng is the Vice President,  China Operation, a Director of Dragon and
the Chairman of Oriental Wave,  responsible for the overall daily  operations of
Shanxi  Weiqida.  Mr.  Weng has over 25 years of  experience  in  pharmaceutical
industry including being the General Manager for Shanxi Tongzhen  Pharmaceutical
Co. Ltd.  from August 1997 to January 2002 and  Superintendent  for Datong No. 2
Pharmaceutical  Factory  from June 1992 to August 1997.  He  graduated  from the
Business  Administration  faculty of Shanxi Broadcasting  University in 1986 and
has  also  participated  the  Senior  Program  of MBA  (Pharmaceutical  Line) of
People's University of China for two years.
          
     Ms.  Xuemei Liu, age 36, has been a Director of the Company  since  January
2005. Ms. Liu is currently the Chairman of Tera Science & Technology Development
Co. Ltd.  which  engages in a wide range of  investment  projects in real estate
development,  coal  trading  and media  and  publishing  industry.  Prior to her
present position as Chairman of Tera Science & Technology  Development Co. Ltd.,
Ms. Liu was the vice  general  manager of Beijing  Chemical  Baifeng  Investment
Corporation  Futures  Broker  Company from 1996 to 1999.  Ms. Liu graduated from
Beijing  University  with a  Bachelor  degree  in 1996  and  graduated  from the
Graduate  School of the Chinese  Academy of Social Sciences with a Master degree
in 1998.

                                     - 9 -


     Dr.  Alexander  Wick,  Ph.D.,  age 67, is the  President  and a Director of
Dragon and has been  President  since 2002 and a Director  since 1998.  Dr. Wick
holds a doctorate degree in synthetic  organic  chemistry from the Swiss Federal
Institute  of  Technology  and has  completed  post-doctoral  studies at Harvard
University.  He  has  had  leading  positions  in  the  pharmaceutical  research
departments of F.  Hoffmann-La  Roche in the United States and  Switzerland  and
Synthelabo in France (Director of Chemical Research and Development) for over 25
years in the field of antibiotics,  prostaglandius, vitamins, cardiovascular CNS
and AIDS. In 1995 he created the fine  chemicals  company  Sylachim S.A., a 100%
subsidiary of  Synthelabo,  active in chemical  intermediates  and API's for the
world's largest  pharmaceutical  companies  (turnover of over 100 million Euros)
and was its  President  until its  acquisition  by the  German  conglomerate  mg
Technologies (Dynamit-Nobel GmbH) in 2001.

     Dr. Yiu Kwong Sun,  M.D., age 61, has been a Director of Dragon since 1999.
Dr. Sun graduated  from the University of Hong Kong Faculty of Medicine in 1967.
He is a  Founding  Fellow of the Hong Kong  College of Family  Physicians  and a
Fellow of the Hong Kong  Academy of Medicine.  Since 1995,  he has served as the
Chairman  of the Dr. Sun  Medical  Centre  Limited,  which has been  operating a
network of medical  centers in Hong Kong and China for the past 20 years.  He is
also the  Administration  Partner of United  Medical  Practice,  which manages a
large network of medical facilities  throughout Hong Kong and Macau. Dr. Sun has
been a member of the Dr. Cheng Yu Tung Fellowship Committee of Management of the
University of Hong Kong Faculty of Medicine since 1997.

Recommendation of the Board

     THE BOARD OF  DIRECTORS  RECOMMENDS  SHAREHOLDERS  VOTE "FOR" THE  NOMINEES
LISTED ABOVE.

Information Concerning Board Compensation, Meetings and Committees

Directors are not routinely  compensated for their services.  However, from time
to time, Board members are awarded stock options as determined by the Board. The
exercise  price  of the  options  is  based  on the  fair  market  value  of the
underlying shares of common stock at the time of grant. No director received any
compensation  during 2004. At a directors' meeting held on January 12, 2005, Ms.
Liu, Dr. Sun and Dr. Wick were granted options to purchase 200,000, 200,000, and
400,000  shares  of  common  stock,  respectively,  at  $1.18  per  share  which
represented the closing per share price as of that date.

The Board of Directors  met five times during  fiscal  2004.  Drs.  Wick and Sun
attended  all five  meetings.  Messrs.  Han and Weng and Ms. Liu were  appointed
Directors in 2005.  We do not have a formal policy  regarding the  attendance of
our directors at annual or special  meetings of  shareholders,  but we encourage
directors to attend such meetings. All of our directors attended the last annual
meeting of shareholders.

During 2004, the Company previously had an audit committee that consisted of Mr.
Philip Yuen Pak Yiu and Dr. Yiu Kwong Sun.  During the latter part of 2004,  Mr.
Yuen resigned from the audit committee.  In light of Mr. Yuen's resignation that
left one remaining member,  the audit  committee's  functions are now handled by
the Board of Directors. Because of the Company's current size and limited access
to potential directors,  the Board of Directors does not have an Audit Committee
financial  expert within the meaning of Item 401 of Regulation  S-B. The current
Board intends to establish an audit  committee  consisting  of only  independent
directors  and in which one director will meet the  requirements  of a financial
expert.

The Company does not have a separate Compensation Committee. Those functions are
handled by the entire Board of Directors.
 
                                       - 10 -



Under the Share  Purchase  Agreement with Oriental Wave, we appointed Mr. Yanlin
Han, Mr.  Zhanguo Weng and Ms. Xuemei Liu as directors of the Company on January
12, 2005. Currently,  we do not have a nominating committee of the board and the
board believes it is appropriate not to have such a committee as a result of the
ability of the board, as a whole, to provide similar  functions as to those that
would otherwise be provided by a nominating committee.

All of our directors  participate  in the  consideration  of director  nominees.
Candidates  may  come  to  the  board's  attention  through  current  directors,
management,  shareholders or other persons.  Candidates are evaluated at regular
or special  meetings of the board and may be  considered at any point during the
year.  The  board  may take  such  measures  that it  considers  appropriate  in
connection with its evaluation of a candidate,  including candidate  interviews,
inquiry of the  person  recommending  the  candidate,  engagement  of an outside
search firm to gather  additional  information,  or reliance on the knowledge of
the members of the board or management.

We do not  have a  policy  with  regard  to the  consideration  of any  director
candidates  recommended  by  security  holders.  However,  the board will review
correspondence  and other  communications it receives from security holders and,
therefore,  is of the  view  that it is  appropriate  for us not to have  such a
policy. The board will consider  candidates  recommended by security holders and
will do so upon their receipt of information  that includes the candidates  name
and  qualifications.  The  information  can be delivered to Secretary of Dragon,
1055 West Hastings Street, Suite 1900, Vancouver, British Columbia V6E 2E9.

In accordance with Securities Exchange Commission regulations,  the following is
the Audit  Committee  Report.  Such  report is not  deemed to be filed  with the
Securities Exchange Commission.

     Audit Committee Report
 
     This  section will not be deemed  incorporated  by reference by any general
statement  incorporating by reference this proxy statement into any other filing
under the Securities Act of 1933, as amended,  or the Securities Exchange Act of
1934,  as  amended,  except  to the  extent  we  specifically  incorporate  this
information  by  reference,  and will not  otherwise  be deemed filed under such
Acts.
 
     The audit  committee  oversees the  financial  reporting  process for us on
behalf of the board of directors. In fulfilling its oversight  responsibilities,
the audit committee  reviewed the annual  financial  statements  included in the
annual report filed with the Securities  and Exchange  Commission as well as the
unaudited financial statements filed with our quarterly reports.
 
     In  accordance  with  Statements  on  Accounting  Standards  (SAS) No.  61,
discussions were held with management and the independent auditors regarding the
acceptability and the quality of the accounting  principles used in the reports.
These  discussions  included the clarity of the  disclosures  made therein,  the
underlying  estimates and assumptions used in the financial  reporting,  and the
reasonableness  of the  significant  judgments and management  decisions made in
developing  the  financial  statements.  In addition,  the audit  committee  has
discussed  with the  independent  auditors  their  independence  from us and our
management,  including  the  matters  in the  written  disclosures  required  by
Independence  Standards  Board Standard No. 1.  (Independence  Discussions  with
Audit Committee).

     The audit committee has also met and discussed with our management, and our
independent auditors,  issues related to the overall scope and objectives of the
audits  conducted,  the internal  controls  used by us, and the selection of our
independent  auditors.  In  addition,  the audit  committee  discussed  with 

                                 - 11 -


the independent  auditors,  with and without  management  present,  the specific
results of audit  investigations  and examinations  and the auditor's  judgments
regarding any and all of the above issues.
 
     Pursuant  to  the  reviews  and  discussions  described  above,  the  audit
committee  recommended  to our board of  directors  that the  audited  financial
statements  be included in our annual  report on Form 10-KSB for the fiscal year
ended December 31, 2004, filed with the Securities and Exchange Commission.
 
                  By the Board of Directors
                  Mr. Yanlin Han, Mr. Zhanguo Weng, Dr. Yiu Kwong Sun, M.D.,
                  Dr. Alexander Wick, Ph.D and Ms. Xuemei Liu

     Report on Executive Compensation

     The Board has furnished the following report on Executive Compensation.

     Dragon has  developed and  implemented a  compensation  policy,  plan,  and
program  which  attempts  to  enhance  the  profitability  of  Dragon,  and thus
shareholder  value,  by  aligning  closely  the  financial  interests  of Dragon
executive  officers  with those of its  shareholders.  For Dragon,  earnings per
share growth and return on average shareholders' equity are critical elements in
the establishment of long-term incentive  programs.  The process involved in the
executive compensation determination for fiscal 2004 is summarized below.

     Compensation  for each of the persons named in the  Executive  Compensation
Table consists of stock options.  Other senior executives  compensation consists
of a base salary, an annual bonus, and stock options.

Long-term incentives of stock options.
-------------------------------------

     The Board has approved a Human  Resources  Policy that provides a framework
to determine base salaries and annual  bonuses after a subjective  evaluation of
various  factors,  including  salaries paid to senior  managers with  comparable
qualifications,   experience,   and   responsibilities  at  other  corporations,
individual job performance,  local market conditions,  and the Boards perception
of the overall financial performance of Dragon (particularly operating results),
without  considering  specific  performance  targets or objectives,  and without
assigning  particular  weights to individual  factors.  As to executive officers
other  than  the  Chief  Executive   Officer,   the  Board  also  considers  the
recommendations made by the Chief Executive Officer.

         By the Board of Directors
         Mr. Yanlin Han, Mr. Zhanguo Weng, Dr. Yiu Kwong Sun, M.D., 
         Dr. Alexander Wick, Ph.D and Ms. Xuemei Liu

Executive Officers of Dragon

     The names,  ages and  backgrounds for at least the past five years for each
person who served as an  executive  officer  during the past  fiscal  year is as
follows:

                                     - 12 -



                                                              

       Name               Position                            Age      Period
       ----               --------                           ----      ------
                                   
Yanlin Han                Chairman and Chief Executive        42       January 2005 - present
                          Officer

Dr. Alexander Wick        President                           67       September 2002 - present
                          Director                                     September 1998 - present

Zhanguo Weng              Vice President, China Operations    50       January 2005 - present

Maggie Deng               Chief Operating Officer             38       January 2005 - present

Garry Wong                Chief Financial Officer             34       January 2005 - present

James Harris              Vice President, Marketing and       50       January 2003 - present
                          Sales

Matthew Kavanagh          Secretary, Principal Financial      49       July 2001 - January 2005
                          and Accounting Officer



     Mr. Yanlin Han. See "Election of Directors."

     Dr. Alexander Wick. See "Election of Directors."

     Mr. Zhanguo Weng. See "Election of Directors."

     Ms.  Maggie Deng is the Chief  Operating  Officer of the  Company,  holding
bachelor degree from Tsinghua University in China. Ms. Deng has over 10 years of
experience working in or with public companies as investment  banker,  mainly on
IPOs and secondary  offering for Chinese companies on domestic stock exchange as
well  as  international   ones.  Ms.  Deng  was  the  senior  manager  of  China
International  Capital  Corporation,  a Morgan Stanley joint venture  investment
banking firm in China,  from 1998 to 2001.  Ms. Deng moved to Canada in 2001 and
held a position of  Assistant  to  President  in a start-up  biotech  company in
Vancouver.

     Mr. Garry Wong,  CFA is the Chief  Financial  Officer of the Company  since
January 2005.  Prior to his current  position,  Mr. Wong served as our Executive
Assistant  to  President  and CEO from  February  2002 to January  2005.  Before
joining  the  Company,  Mr.  Wong was a team  member of the Global  Mergers  and
Acquisitions  Group at Nortel  Networks  since  1996.  He managed  and  executed
transactions  consisted  of  acquisitions,   divestitures,  equity  investments,
spin-offs,  public market  listing and joint  ventures,  and occurred in Europe,
North  America,  Asia and the Middle  East.  Mr. Wong is a  Chartered  Financial
Analyst who  received an  International  MBA degree  from York  University  with
double  majors in  Corporate  Finance and Greater  China  studies and a Bachelor
degree in Business Administration from University of Hong Kong. 

     Mr. James Harris is the Vice President Marketing and Sales for the Company.
Mr.  Harris has over 22 years of  experience  within the above  field in several
capacities of increasing responsibility, working with various firms ranging from
large  multinationals to small generic  companies.  Mr. Harris spent eight years
with Amgen most recently as a National Accounts Manager and ten years with Bayer
in various sales and marketing capacities.

     Mr.  Matthew  Kavanagh,  CA  is  the  Director  of  Finance  and  Corporate
Compliance and was the Principal  Accounting and Financial Officer and Secretary
of the Company.  Mr.  Kavanagh  joined  Dragon in July 2001 and brought 18 years
experience as a Chartered  Accountant in both public practice and industry.  For
the past eight years,  Mr. Kavanagh has been the Controller and Senior Financial
Officer for a publicly  listed venture capital  corporation  and, most recently,
for a private international auction and liquidation company.

                                     - 13 -


     The following table sets forth the compensation for fiscal years 2004, 2003
and 2002 for our  President.  No other  officers or  directors  received  annual
compensation in excess of $100,000 during any of the past three years.


                           SUMMARY COMPENSATION TABLE



                                                                                 

                                   Annual Compensation                          Long Term Compensation
                           ------------------------------------  ------------------------------------------------------
                                                                          Awards               Payout
                                                                 -------------------------- ----------
                    Year     Salary   Bonus      Other Annual    Restricted   Securities    LTIP          All Other
                                                 Compensation    Stock        Underlying    Payout      Compensation
                                        ($)          ($)         Award(s)     Options (#)      ($)           ($)
                   --------------------------------------------  -------------------------- ----------------------------
Alexander Wick      2004     $0 (1)     -0-          -0-            -0-           -0-          -0-           -0-
President           2003     $0 (1)     -0-          -0-            -0-         200,000        -0-           -0-
                    2002     $0 (1)     -0-          -0-            -0-           -0-          -0-           -0-


(1)  Dr. Wick was appointed  President in September 2002. He is not paid for his
     services,  but is  reimbursed  for  expenses  he  incurs  in the  course of
     performing  his duties for us. He received  an option to  purchase  200,000
     shares of common stock at $0.68 per share in 2003.

Employment Agreements

     The Company has no employment agreements.  Dr. Wick is not drawing a salary
from the Company.  In April 2003, Dr. Wick received  options to acquire  200,000
shares of common stock at $0.68 per share.  In addition,  in January  2005,  Dr.
Wick  received  option to  purchase  400,000 of Company  shares at $1.18 for his
services as an officer and director.  Further, in January 2005, Ms. Deng and Mr.
Wong each received  option to purchase  200,000  shares of common stock at $1.18
per share.

Equity Compensation Plan Information

     The  shareholders  of the  Company  approved  the share  option plan at the
Annual General Meeting held on December 18, 2001. There are currently  4,500,000
shares  reserved  under the plan.  As of July 8,  2005,  there  were  options to
acquire 3,128,000 shares of common stock outstanding.

     The following  table  provides  aggregate  information as of the end of the
fiscal year ended  December  31,  2004 with  respect to all  compensation  plans
(including individual  compensation  arrangements) under which equity securities
are authorized for issuance.

                                     - 14 -




                                                                                            
----------------------------------- -- ----------------------- -- ---------------------- -- -------------------------
                                                 A                          B                          C
                                       -----------------------    ----------------------    -------------------------
                                                                                              Number of securities
                                                                                            remaining available for
                                         Number of securities                                 future issuance under
                                         to be issued upon          Weighted-average          equity compensation
                                            exercise of             exercise price of           plans (excluding
                                        outstanding options,      outstanding options,       securities reflected in
        Plan Category                       and warrants              and warrants                 column A)
-----------------------------------    -----------------------    ----------------------    -------------------------
Equity compensation plans
approved by security holders                   1,749,000                  $2.36                   2,475,000

Equity compensation plans not
approved by security holders                           0                                                  0
----------------------------------- -- ----------------------- -- ---------------------- -- -------------------------
              Total                            1,749,000                  $2.36                   2,475,000
----------------------------------- -- ----------------------- -- ---------------------- -- -------------------------


Certain Relationships and Related Transactions

     During  the past two  fiscal  years,  we have been a party to  transactions
involving certain of our directors or executive  officers.  See also Notes 6, 8,
9, 13 and 19(a) to our  Financial  Statements  for the year ended  December  31,
2004.

     Dragon has entered into a verbal agreement with a company controlled by Dr.
Ken Cai, one of the Company's former directors. During 2002, we paid $80,000 and
during 2003, we paid $40,000 to Dr. Cai's company.  The agreement was terminated
in June 2003. Dr. Cai's company  provided  oversight and management  services to
Company for its operations in China.

     On October 6, 2000, we entered into an acquisition agreement with Alphatech
Bioengineering  to acquire  its rights and  technology  relating  to  developing
Hepatitis B vaccine  through the  application  of genetic  techniques on hamster
ovary  cells.  Alphatech   Bioengineering's   Hepatitis  B  vaccine  is  in  the
development stage. Alphatech  Bioengineering is jointly owned by Dr. Longbin Liu
and Mr. Philip Yuen,  two of the Company's  former  directors.  On June 5, 2001,
Dragon amended the agreement with Alphatech to allow Dragon to pursue additional
options  for the  Hepatitis  B Vaccine  project.  Under the terms of the amended
agreement,  Dragon would explore  different  options for the Hepatitis B Vaccine
project including, but not limited to, joint venture partnerships,  establishing
a production facility, and selling the project to a third party.

     In the event that Dragon did not find an option  regarding  the Hepatitis B
Vaccine  project  suitable  to Dragon  within  nine  months from the date of the
Amended  Agreement,  Dr. Longbin Liu, one of the principals of Alphatech,  would
repurchase  the  Hepatitis  B Vaccine  project for $4.0  million,  which was the
purchase price that Dragon originally paid to Alphatech,  and assume operational
development.  Dr.  Liu was the  President  and CEO of Dragon at the time of both
transactions.  Dragon  decided not to pursue the project and Dr. Liu demanded to
repurchase  the project on the agreed  terms.  Dr. Liu has paid Dragon  $500,000
with the balance of $3.5 million,  plus  interest  accruing at 6% per annum from
September 2002, due September 5, 2003. Dr. Liu did not pay the remaining balance
of $3.5  million  on the due date of  September  5,  2003.  As a  result  of the
non-payment, Dragon began legal action to collect the money.

                                     - 15 -


     During fiscal year 2000,  Dragon paid $400,000 to Guanzhou Recomgen Biotech
Co. Ltd. ("Guanzhou Recomgen"), a company incorporated in China, for the funding
of its TPA research and development programs with the intention of acquiring the
technology.  Guanzhou  Recomgen is controlled by Dr. Longbin Liu.  Subsequent to
the  year-end,  due to  financial  market and economic  conditions,  the Company
decided not to proceed with the funding and the acquisition.  In accordance with
the agreement,  Guanzhou  Recomgen refunded the $400,000 to Dragon during fiscal
2002.

     We have entered into a Patent Development  Agreement dated January 14, 2002
with Dr.  Longbin Liu and Novagen  whereby we have the first right to select and
acquire one patent  resulting  from the  discover  of a new gene or protein.  In
consideration of the right under the Patent Development  Agreement,  we paid Dr.
Liu and Novagen  $500,000  in the  aggregate  and warrant to purchase  1,000,000
shares of our common stock at an exercise price of $2.50 per share. The $500,000
will be refunded and warrant will be  cancelled if no patent  applications  have
been filed by January 14, 2005.

     The Company has entered into a Project  Development  Agreement with Dr. Liu
dated  January 14, 2002  whereby Dr. Liu has agreed to conduct the  research and
development  of G-CSF and Insulin for Dragon.  Dragon will make  payment for the
development of G-CSF as follows:  (i)$500,000 to be provided at the commencement
of the  research  in the  G-CSF  Project;  (ii)  $500,000  to be  provided  when
cell-line  and related  technology  is  established  and animal  experimentation
commences in the G-CSF Project;  (iii) $300,000 to be provided when a permit for
clinical  trials for G-CSF has been issued by the State Drug  Administration  of
China ("SDA"); (iv) $200,000 to be provided when a new drug license for G-CSF is
issued  to Dragon  by the SDA and  (v)$500,000  to be paid as a bonus if the SDA
issues the new drug license for G-CSF to Dragon before January 14, 2005.

     Dragon will make  payment for the  development  of Insulin as follows:  (i)
$750,000 to be provided by at the  commencement  of the  research in the Insulin
Project;  (ii) $750,000 to be provided when cell-line and related  technology is
established and animal  experimentation  commences in the Insulin Project; (iii)
$300,000 to be provided  when a permit for clinical  trials for Insulin has been
issued by the SDA;  (iv)  $200,000  to be provided  when a new drug  license for
Insulin is issued to Dragon by the SDA and (v) $500,000 to be paid as a bonus if
the SDA issues the new drug  license  for Insulin to Dragon  before  January 14,
2005.

     For both the  G-CSF and  Insulin  Projects:  (i) If Dragon  elects to cease
development  of the project it will forfeit any payments made and lose ownership
of the Project, but it will not be obligated to make any further payments toward
the Project;  and (ii) if an application  for permit for clinical  trials is not
submitted  within three years with respect to the G-CSF Project by or four years
with  respect to the  Insulin  Project or if the SDA  rejects  the  Project  for
technical or scientific  reasons or if  development of the project is terminated
by Dr.  Liu,  then Dr.  Liu will  refund to Dragon  all  amounts  paid,  without
interest or deduction, with respect to the Project within six months.

     During 2002,  Dragon paid a total of  $1,500,000  and $500,000  towards the
Insulin and G-CSF Projects, respectively. Dragon has paid an additional $100,000
to a  company  controlled  by Dr.  Liu  to  produce  Insulin  samples  for  drug
registration purposes. No payments were made by Dragon in 2003 under the Project
Development Agreement.

     On November 2003, we filed a complaint against Dr. Liu, our former Director
and Chairman,  for payment of  $3,500,000,  plus  interest  calculated at 6% per
annum,  due on  September  5,  2003,  pursuant  to the terms of the  Acquisition
Agreement  related to Hepatitis B Vaccine Project entered into by us and Dr. Liu
on October 6, 2000, as amended on June 5, 2001.
 
     On April 4, 2004, we entered into a  comprehensive  settlement with Dr. Liu
and Novagen, a company controlled by Dr. Liu, to settle the amount owed to us by
Dr.  Liu as a  result  of  his  acquisition  of 

                                     - 16 -


the Hepatitis B Project.  The settlement agreement provides that the Hepatitis B
Project and Patent and Project Development agreements dated January 14, 2002, as
amended, have been cancelled. Further, pursuant to the settlement agreement, the
G-CSF,  Insulin and  Hepatitis B Projects,  including  rights of  ownership  and
development obligations would revert to Dr. Liu.

     In  exchange,  Dr. Liu agreed to pay us the  $3,710,000  in  principal  and
interest  owing under the Hepatitis B Project as well as reimburse us $1,330,000
that  had  been  paid  previously  under  the  Patent  and  Project  Development
agreements.  All amounts were due December 31, 2004 and the warrants  granted to
Dr. Liu under the Patent Development agreement were cancelled. Dr. Liu agreed to
provide  2,600,000  common  shares  of the  Company,  to be held in  escrow,  as
security  for the amounts  owing with a condition  of the  agreement  being that
2,200,000 common shares of the Company be placed in escrow by June 30, 2004.

     Dr. Liu did not repay the amounts  owing on December 31, 2004 and forfeited
the  2,231,000  common  shares of the  Company  that were held in escrow  for as
security for the amount owing. These shares,  which were subsequently  cancelled
by the Company,  were valued at $2,606,486 and resulted in the Company realizing
a recovery  of  $2,106,486  of the amount  that had been  written-down  in prior
years.

     Dr. Liu is still  indebted  to the  Company in the amount of  approximately
$2.48 million with this debt accruing interest at the rate of 6% per annum. This
debt is carried on the Company's books at $100.


                       PROPOSAL 2 - AMENDMENT TO DRAGON'S
                    CERTIFICATE OF INCORPORATION TO ELIMINATE
               ARTICLE VII WHICH SPECIFIES THE NUMBER OF DIRECTORS

     The Board of Directors has approved and  recommends  that the  shareholders
approve an amendment to our Certificate of  Incorporation  to remove Article VII
which sets forth the number of directors to be more than one and less than five.
As discussed in Proposal 3, Board is seeking  shareholder  approval to amend the
Company's  Bylaws to set forth the range in number of directors  between one and
eleven with the exact number to be determined  by the Board of Directors  within
this range.

     The primary purpose of this amendment to our  Certificate of  Incorporation
is to allow flexibility when choosing the number of directors for the Company as
set forth in our Bylaws instead of our Certification of Incorporation. This will
allow the Board more  flexibility in choosing the number of directors we feel is
needed to advise the management on the Company's business plan and objectives.

     If this  Proposal  2 is  adopted by the  shareholders,  Article  VII of the
Certificate of Incorporation will be removed and the number of Directors will be
set in accordance with the Company's Bylaws. A copy of Article VII to be deleted
is Attached as Exhibit A.

Recommendation of the Board

     THE BOARD OF  DIRECTORS  RECOMMENDS  THAT THE  SHAREHOLDERS  VOTE "FOR" THE
AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO REMOVE ARTICLE VII WHICH STATES
A SPECIFIED NUMBER OF DIRECTORS.

                      PROPOSAL 3 - AMENDMENT TO THE BYLAWS

     We are  recommending  that a new  provision  of our Bylaws to provide for a
range of the number of  directors  from one to eleven  with the exact  number of
directors is set by the Board.

                                     - 17 -


     As  previously  discussed  in  Proposal  2,  the  primary  purpose  of this
amendment  to our Bylaws is to allow  flexibility  when  choosing  the number of
directors  for  the  Company  as  set  forth  in  our  Bylaws   instead  of  our
Certification  of  Incorporation.  This will allow the Board more flexibility in
choosing the number of directors we feel is needed to advise the  management  on
the Company's  business plan and objectives.  If Proposals 2 and 3 are approved,
it is the  intent of the Board to seek  additional  independent  members  to the
Board.  However,  at this time, we do not have any agreements or  understandings
with any persons to subsequently  serve on the Board of Director.  A copy of the
proposed amendment is attached hereto as Exhibit B.

     If Proposal 2 is not  approved,  but  Proposal 3 is  approved,  we will not
adopt Proposal 3.

Recommendation of the Board

     THE BOARD OF  DIRECTORS  RECOMMENDS  THAT THE  SHAREHOLDERS  VOTE "FOR" THE
AMENDMENT TO THE BYLAWS TO CHANGE THE NUMBER OF DIRECTORS TO BE A MINIMUM OF ONE
(1) DIRECTOR BUT NO MORE THAN ELEVEN (11).

     PROPOSAL 4 - RATIFICATION OF THE APPROVAL OF THE 2005 STOCK OPTION PLAN

     You are being asked to ratify the  approval  of the 2005 Stock  Option Plan
(the  "2005  Plan").  Under the 2005 Plan,  options to acquire up to  15,000,000
shares of common  stock may be granted  to the  Company's  directors,  officers,
employees and  consultants.  The Board of Directors  believes that stock options
are an important  component of our overall  compensation and incentive  strategy
for  employees,  directors,  officers  and  consultants.  We  are  committed  to
broad-based participation in the stock option program by employees at all levels
and by  directors,  officers and  consultants.  We believe that the stock option
program is important in order to maintain our culture,  employee  motivation and
continued success.

Description of the 2005 Plan

     Structure.  The 2005 Plan is a  discretionary  option grant  program  under
which  eligible  individuals  in the  Company's  employ or service as directors,
officers,  or consultants may, at the discretion of the Plan  Administrator,  be
granted options to purchase shares of common stock in the Company. The principal
features of the program are described below.

     Administration.  The Board of Directors,  or if created,  the  Compensation
Committee of the Board of Directors,  will serve as the Plan  Administrator with
respect to the 2005 Plan. The term "Plan  Administrator" as used in this summary
means the Board of Directors and any appointed committee acting within the scope
of its administrative  authority under the 2005 Plan. The Plan Administrator has
the  authority to interpret the 2005 Plan and the rights  underlying  any grants
made subject to the 2005 Plan. Any decision or action of the Plan  Administrator
in connection with the 2005 Plan is final and binding.

     Eligibility. Employees, directors, officers, and consultants in the service
of the Company or any parent or subsidiary  corporation (whether now existing or
subsequently  established)  are  eligible  to  participate  in  the  2005  Plan.
Determinations as to eligibility shall be made by the Plan Administrator.

     Share  Reserve.  The  shares  issuable  under  the  2005  Plan  may be made
available either from the Company's authorized but unissued common stock or from
common stock  reacquired by the Company,  including shares purchased in the open
market.  In addition,  shares subject to any outstanding  options under the 2005
Plan that expire or terminate prior to exercise will be available for subsequent
issuance.

                                     - 18 -


     Terms and Conditions of Option  Grants.  One or more options may be granted
to each  eligible  person.  The  options  granted  under  the 2005  Plan will be
evidenced by an option agreement. The Plan Administrator shall specify the grant
date,  exercise price, terms and conditions for the exercise of the options.  No
option under the 2005 Plan shall  terminate  later than ten years after the date
of grant subject to the following provision.

     Exercise of the Option. Options may be exercised by delivery to the Company
of a written stock option  exercise  agreement  together with payment in full of
the exercise price for the number of shares being purchased.  The exercise price
shall be 100% of the fair market  value of the shares on the date of grant.  The
Plan  Administrator,  may, at its  discretion,  issue options to purchase common
stock at an exercise price less than fair market value.

     Payment for shares purchased  pursuant to the 2005 Plan may be made by cash
or check. The Administrator may allow other forms of payment by (i) surrender of
shares of the Company owned by the optionee  more than six months,  or that were
obtained by the optionee on the open market,  (ii)  cancellation of indebtedness
of the Company to the  Participant,  (iii) through a "same day sale"  commitment
from  the  optionee  and a  broker-dealer  that  is a  member  of  the  National
Association  of  Securities  Dealers  (a "NASD  dealer")  whereby  the  optionee
irrevocably elects to exercise the option and to sell a portion of the shares so
purchased to pay for the exercise price,  and whereby the NASD dealer commits to
forward the exercise price directly to the Company,  (iv) a "margin"  commitment
from the optionee and an NASD dealer whereby the optionee  irrevocably elects to
exercise  his or her option and to pledge  the shares so  purchased  to the NASD
dealer in a margin  account as  security  for a loan from the NASD dealer in the
amount of the exercise price,  and whereby the NASD dealer  irrevocably  commits
upon  receipt of such  shares to forward  the  exercise  price  directly  to the
Company or (vi) "immaculate  cashless  exercise" in which the optionee exercises
by forfeiting the option shares at their exercise price.

     Transferability  of Options.  No option shall be transferable other than by
will or by the laws of descent and distribution,  and during the lifetime of the
optionee,  only the optionee,  his or her guardian or legal  representative  may
exercise an option.  However, the Plan Administrator may provide for transfer of
an option  without  payment of  consideration  to designated  family members and
certain other entities  specified in the 2005 Plan. The terms  applicable to the
assigned portion shall be the same as those in effect for the option immediately
prior to such  assignment.  A request  to  assign an option  may be made only by
delivery to the Company of a written stock option assignment request.

     Termination of Employment.  If optionee's employment is terminated,  vested
stock options may be exercised at any time within three months after the date of
such  termination,  but in no event  after  the  termination  of the  option  as
specified  in the option  agreement.  If an  employee  continues  service to the
Company  after  termination  of  employment,  the employee need not exercise the
option within three months of termination of employment, but may exercise within
three months of termination  of his or her  continuing  service as a consultant,
advisor or work performed in a similar capacity.

     Retirement,  Death or Permanent  Disability.  If an optionee under the 2005
Plan ceases to be an employee of the Company due to retirement, the optionee may
exercise  the option  within the maximum term of the option as it existed on the
date of retirement.  If an optionee becomes  permanently and totally disabled or
dies while  employed by the  Company or its  subsidiary,  vested  options may be
exercised by the optionee,  the optionee's  personal  representative,  or by the
person to whom the  option is  transferred  by will or the laws of  descent  and
distribution,  at any  time  within  one  (1)  year  after  the  termination  of
employment  resulting  from the  disability or death,  but in no event after the
expiration of the option as set forth in the option agreement.

                                     - 19 -


     Suspension or Termination of Options. If the Plan Administrator  reasonably
believes  that  an  optionee  has  committed  an act  of  misconduct,  the  Plan
Administrator  may suspend the optionee's right to exercise any option pending a
final  determination  by  the  Plan  Administrator.  If the  Plan  Administrator
determines an optionee has committed an act of embezzlement,  fraud, dishonesty,
breach of fiduciary  duty; or deliberate  disregard of the Company's  rules;  or
makes an  unauthorized  disclosure of any Company  trade secret or  confidential
information; or engages in any conduct constituting unfair competition,  induces
any of the Company's  customers or contracting parties to breach a contract with
the Company or induces any  principal  for whom the Company  acts as an agent to
terminate such agency  relationship,  neither the optionee nor his or her estate
shall be entitled to exercise any option  whatsoever.  The  determination of the
Plan  Administrator  shall be final and conclusive unless overruled by the Board
of Directors.

General Provisions

     Dissolution,  Liquidation, or Merger and Change of Control. In the event of
an occurrence after which the Company no longer survives as an entity,  the Plan
Administrator  may,  in its  discretion,  cancel  each  outstanding  option upon
payment to the  Participant of adequate  consideration  as specified in the 2005
Plan.  The Plan  Administrator  may also  accelerate  the time within which each
outstanding option may be exercised. After a merger, consolidation,  combination
or reorganization in which the Company is the survivor,  the Plan  Administrator
shall determine any appropriate adjustments to the outstanding options.

     In the event  that a change of control  of the  Company,  as defined in the
2005 Plan, then all outstanding  options shall fully vest  immediately  upon the
Company's public  announcement of such a change.  A change of control  generally
occurs when one transaction or series of transactions results in the issuance of
50% of voting  securities,  the  Company is  acquired  in some form of merger or
consolidation in which the Company does not survive,  or when  substantially all
the assets of the Company are sold.

     The  acceleration  of vesting in the event of a change in the  ownership or
control of the Company may be seen as an  anti-takeover  provision  and may have
the  effect of  discouraging  a merger  proposal,  a  takeover  attempt or other
efforts to gain control of the Company.

     Changes  in  Capitalization.  In the  event  of any  change  is made to the
outstanding shares of common stock by reason of any stock split, stock dividend,
recapitalization,  combination of shares,  exchange of shares or other change in
corporate  structure  effected without the Company's  receipt of  consideration,
appropriate  adjustments  will be made to (i) the maximum number and/or class of
securities  issuable  under the 2005 Plan and (ii) the  number  and/or  class of
securities  and the exercise  price per share in effect  under each  outstanding
option in order to prevent the dilution or enlargement of benefits thereunder.

     Shareholder  Rights.  No  optionee  will have any  shareholder  rights with
respect to the option  shares until such  optionee has  exercised the option and
paid the exercise price for the purchased shares.

     Amendment and  Termination.  The Board may amend,  suspend or terminate the
2005  Plan at any time  and for any  reason,  but no  amendment,  suspension  or
termination  shall be made which would  impair the right of any person under any
outstanding  options without such person's  consent not  unreasonably  withheld.
Further,  the Board of  Directors  may, in its  discretion,  determine  that any
amendment should be effective only if approved by the shareholders  even if such
approval is not expressly required by the 2005 Plan or by law.

                                     - 20 -


     Unless  sooner  terminated  by the Board,  the 2005 Plan will in all events
terminate  on August  11,  2015.  Any  options  outstanding  at the time of such
termination  will  remain  in force in  accordance  with the  provisions  of the
instruments evidencing such grants.

     Other  Provisions.  The option  agreements  may contain  such other  terms,
provisions  and  conditions  not  inconsistent  with  the  2005  Plan  as may be
determined by the Board or the Plan Administrator.

Income Tax Consequences of Options Granted Under the 2005 Plan

     Because we do not intend to issue any options to any United States  citizen
or resident, no United States discussion is included.

Accounting  Treatment

     Awards with an  exercise  or purchase  price per share equal to 100% of the
fair market value of the shares at the time of grant  generally  will not result
in any direct charge to the Company's earnings. However, other provisions in the
2005 Plan, if included in a specific grant, may result in a direct charge to the
Company's  earnings for that grant.  The fair value of those awards that did not
result in a direct  charge to the  Company's  earnings  must be disclosed in the
notes to the Company's financial statements, in the form of pro-forma statements
to those financial statements,  which demonstrates the impact those awards would
have upon the Company's  reported earnings were the value of those awards at the
time of grant  treated  as  compensation  expense.  In  addition,  the number of
outstanding  awards may be a factor in  determining  the Company's  earnings per
share on a diluted basis.

Recommendation of the Board

     THE BOARD OF DIRECTORS RECOMMENDS  SHAREHOLDERS VOTE "FOR" THE RATIFICATION
OF THE APPROVAL OF THE 2005 STOCK OPTION PLAN.

                     RELATIONSHIP WITH INDEPENDENT AUDITORS.

     Moore Stephens Ellis Foster Ltd. served as our independent  accountants for
the years ended December 31, 2004,  and 2003. In May 2005,  Moore Stephens Ellis
Foster Ltd.  merged with Ernst & Young LLP. During the course of the years ended
December 31, 2004, and 2003,  neither Moore Stephens Ellis Foster Ltd. nor Ernst
& Young LLP were engaged by us to provide  non-audit  services.  During the year
ended  December 31, 2004,  and 2003,  the following  fees were paid for services
provided by Moore Stephens Ellis Foster Ltd.
          
     Audit Fees.  The aggregate  fees paid for the annual audit of our financial
statements  included in our Annual Report for the years ended December 31, 2004,
and 2003 and the review of our  quarterly  reports for such  years,  amounted to
approximately $80,000 and $70,000, respectively.
 
     Audit Related  Fees.  For the years ended  December 31, 2004,  and 2003, we
paid $5,000 and $Nil for fees to Moore  Stephens  Ellis  Foster  Ltd.  for other
audit related fees.
 
     Tax Fees.  For the years ended December 31, 2004, and 2003, we paid no fees
to Moore Stephens Ellis Foster Ltd. for tax services.

                                     - 21 -


     All Other Fees. For the years ended December 31, 2004, and 2003, we paid no
fees to Moore Stephens Ellis Foster Ltd. for any non-audit services.

Approval of Audit and Non-Audit Services of Independent Accountants
          
     The full Board of  Directors  serves as the Audit  Committee.  The Board of
Directors  approved  100% of the  fees  paid  to the  principal  accountant  for
audit-related,  tax and  other  fees in the  fiscal  year  2004.  The  Board  of
Directors  pre-approves  all  audit  and  non-audit  services  provided  by  the
independent auditors.  These services may include audit services,  audit-related
services,  tax services and other  services.  The  independent  accountants  and
management  are  required  to  periodically  report  to the  Board of  Directors
regarding the extent of services  provided by the independent  accountants,  and
the fees for the services performed to date. No non-audit services were provided
by our  independent  accountant in 2004. The percentage of hours expended on the
principal  accountant's  engagement to audit the Company's financial  statements
for the most  recent  fiscal  year that were  attributed  to work  performed  by
persons other than the principal accountant's full-time, permanent employees was
0%.

     Representatives  of Ernst & Young LLP (formerly Moore Stephens Ellis Foster
Ltd.) will be present at the Annual Meeting to respond to appropriate  questions
from the  shareholders  and will be given the  opportunity  to make a  statement
should they desire to do so.


                            PROPOSALS OF SHAREHOLDERS

     To be  considered  for  inclusion in Dragon's  Proxy  Statement and form of
proxy for next year's annual meeting, shareholder proposals must be delivered to
the  Secretary of Dragon,  1055 West  Hastings  Street,  Suite 1900,  Vancouver,
British Columbia V6E 2E9, no later than 5:00 p.m. on January 16, 2006.  However,
if the date of next year's annual meeting is set more than 30 days from the date
of this  year's  meeting,  the notice must be  received  by the  Secretary  in a
reasonable time before we mail our proxy statement.  All proposals must meet the
requirements of Rule 14a-8 of the Exchange Act.

     For any proposal  that is not  submitted for inclusion in next year's proxy
statement (as described in the preceding  paragraph) but is instead sought to be
presented directly at next year's annual meeting, SEC rules permit management to
vote proxies in its  discretion  if Dragon (a)  receives  notice of the proposal
before the close of business on July 12, 2005, and advises  shareholders  in the
next year's proxy  statement  about the nature of the matter and how  management
intends to vote on such matter,  or (b) does not receive  notice of the proposal
prior to the close of business on July 12, 2005.

     Notices of intention to present  proposal at the 2005 Annual Meeting should
be  addressed  to Dragon,  1055 West  Hastings  Street,  Suite 1900,  Vancouver,
British  Columbia V6E 2E9,  Attention:  Secretary.  Dragon reserves the right to
reject,  rule out of order, or take other appropriate action with respect to any
proposal that does not comply with these and other applicable requirements.

                          ANNUAL REPORT TO SHAREHOLDERS

     The Annual  Report on Form  10-KSB for the fiscal year ended  December  31,
2004,  including  audited financial  statements,  was mailed to the shareholders
concurrently  with this proxy statement,  but such report is not incorporated in
this proxy  statement  and is not deemed to be a part of the proxy  solicitation
material.  The Form 10-K and all other periodic filings made with the Securities
and   Exchange   Commission   are   available  on  the   Company's   website  at
www.dragonpharma.com.


                                     - 22 -


                       WHERE YOU CAN FIND MORE INFORMATION

     Dragon files annual,  quarterly and current  reports,  proxy statements and
other information with the Securities and Exchange Commission.  You may read and
copy any  reports,  statements  or other  information  that Dragon  files at the
Commission's  public  reference  rooms at 100 F Street,  NE,  Washington,  D.C.,
20549.  Please call the Commission at (800) SEC-0330 for further  information on
the public reference rooms. The Commission also maintains an Internet World Wide
Web  site at  "http://www.sec.gov"  at  which  reports,  proxy  and  information
statements and other information regarding Dragon are available.

                                 OTHER BUSINESS

     Dragon  does not know of any  business  to be  presented  for action at the
meeting  other than those items listed in the notice of the meeting and referred
to  herein.  If any other  matters  properly  come  before  the  meeting  or any
adjournment  thereof, it is intended that the proxies will be voted by the proxy
holders in accordance with their best business judgment.

                                        By Order of the Board of Directors


                                        /s/ Maggie Deng
                                        --------------------------------
                                        Maggie Deng, Secretary

                                     - 23 -


                                    EXHIBIT A

     If Proposal No. 2 is adopted, the following Article VII will be deleted:

                                   ARTICLE VII

     The number of Directors of this  corporation  shall be at least one (1) and
no more than five (5).



                                     - 24 -


                                    EXHIBIT B

     If  Proposal 3 is  adopted,  the  following  Section 1 - NUMBER AND TERM OF
OFFICE, Article II of the Company's Bylaws will adopted.

     "The Board of Directors of the  Corporation  shall consist of not less than
one (1) nor more than  eleven  (11)  directors,  as  determined  by the Board of
Directors of the Corporation. Each director (whenever elected) shall hold office
until his or her successor  shall have been elected and  qualified  unless he or
she shall resign or his or her office shall become vacant by his or her death or
removal. Directors need not be residents of the State of Florida or shareholders
of the Corporation."



                                    - 25 -


ANNUAL MEETING OF SHAREHOLDERS OF

Dragon Pharmaceutical, Inc. (the "Company")

TO BE HELD AT     Suite 1900, 1055 West Hastings Street
                  Vancouver, B.C. V6E 2E9

ON  FRIDAY, AUGUST 12, 2005, AT 10:00 AM

The undersigned  shareholder  ("Registered  Shareholder")  of the Company hereby
appoints,  Mr. Han, a Director of the Company,  or failing  this person,  Maggie
Deng,  Secretary  of the  Company,  as  proxyholder  for  and on  behalf  of the
Registered  Shareholder  with the power of substitution to attend,  act and vote
for and on behalf of the  Registered  Shareholder in respect of all matters that
may properly come before the Annual  Meeting of the Registered  Shareholders  of
the Company and at every  adjournment  thereof,  to the same extent and with the
same powers as if the  undersigned  Registered  Shareholder  were present at the
said Annual Meeting, or any adjournment thereof.

The Registered  Shareholder  hereby  directs the  proxyholder to vote the common
stock of the Company  registered in the name of the  Registered  Shareholder  as
specified herein.

Proposals (For full detail of each item, please see the enclosed Notice of
Meeting and Proxy Statement.)

1.   To elect five  nominees as members of the Board of Directors to serve until
     their successors are elected and qualified. Nominees:

     Yanlin Han   Zhanguo Weng    Xuemei Liu   Alexander Wick   Yiu Kwong Sun

           FOR ALL NOMINEES
     ------
                                         AGAINST             ABSTAIN
                                  ------               ------

     (Instruction:  To withhold  authority to vote for any  individual  nominee,
     strike a line through his name in the list above.)

2.   To approve an amendment to our Certificate of  Incorporation  to eliminated
     Article VII which states a specified number of directors.

                   FOR                     AGAINST             ABSTAIN
            ------                   ------              ------

3.   To approve an amendment to Article II, Section 1 of the Bylaws to allow the
     Board of  Directors to set the number of directors at not less than one and
     not more than eleven directors.

                   FOR                     AGAINST             ABSTAIN
            ------                   ------              ------

4.   To adopt the 2005 Stock Option Plan.

                   FOR                     AGAINST             ABSTAIN
            ------                   ------              ------

5.   To approve the adjournment of the annual meeting for any permitted  reason,
     including,  if necessary,  to solicit  additional proxies in the event that
     there are not sufficient votes at the time of the annual meeting to approve
     the proposals.

                   FOR                     AGAINST             ABSTAIN
            ------                   ------              ------

The undersigned Registered Shareholder hereby revokes any proxy previously given
to attend and vote at said Annual Meeting.

SIGN HERE:                                                                   
           ---------------------------------------------------------------------
Please Print Name:                                                          
                   -------------------------------------------------------------
Date:                                                                    
                   -------------------------------------------------------------
Number of Shares
Represented by Proxy:   
                      ----------------------------------------------------------

THIS PROXY FORM IS NOT VALID UNLESS IT IS SIGNED AND DATED.

SEE IMPORTANT INFORMATION AND INSTRUCTIONS ON REVERSE


                      INSTRUCTIONS FOR COMPLETION OF PROXY

1.   This Proxy is solicited by the Board of Directors of the Company.

2.   This form of proxy  ("Instrument  of  Proxy")  must be  signed by you,  the
     Registered  Shareholder,  or by your  attorney  duly  authorized  by you in
     writing, or, in the case of a corporation,  by a duly authorized officer or
     representative of the corporation; and if executed by an attorney, officer,
     or other duly appointed representative,  the original or a notarial copy of
     the instrument so empowering such person,  or such other  documentation  in
     support  as  shall be  acceptable  to the  Chairman  of the  Meeting,  must
     accompany the Instrument of Proxy.

3.   If this Instrument of Proxy is not dated in the space  provided,  authority
     is hereby given by you, the Registered Shareholder,  for the proxyholder to
     date this  proxy  seven (7)  calendar  days  after the date on which it was
     mailed to you, the Registered Shareholder, by the proxyholder.

4.   A Registered  Shareholder  who wishes to attend the Annual Meeting and vote
     on the proposals in person, may simply register with the scrutineers before
     the Meeting begins.

5.   A Registered Shareholder who is not able to attend the Annual Meeting in
     person but wishes to vote on the proposals, may do so by dating and signing
     the proxy card.

6.   The  securities  represented  by this  Instrument of Proxy will be voted or
     withheld from voting in accordance with the  instructions of the Registered
     Shareholder  on any poll of a proposal  that may be called for and,  if the
     Registered  Shareholder specifies a choice with respect to any matter to be
     acted  upon,  the  securities  will  be  voted  accordingly.  Further,  the
     securities will be voted by the appointed  proxyholder  with respect to any
     amendments or variations of any of the proposals set out on the  Instrument
     of Proxy or matters  which may  properly  come  before  the  Meeting as the
     proxyholder in its sole discretion sees fit.

If a Registered Shareholder has submitted an Instrument of Proxy, the Registered
Shareholder  may still attend the Meeting and may vote in person.  To do so, the
Registered  Shareholder  must record  his/her  attendance  with the  scrutineers
before the commencement of the Meeting and revoke, in writing, the prior votes.

================================================================================
To be represented at the Meeting, this proxy form must be received at the office
of Computershare  Trust Company of Canada by mail or by fax prior to the time of
the Meeting,  or  adjournment  thereof or may be accepted by the Chairman of the
Meeting prior to the commencement of the Meeting. The mailing address is:
================================================================================

                      Computershare Trust Company of Canada
                   Proxy Dept. 100 University Avenue 9th Floor
                             Toronto Ontario M5J 2Y1

================================================================================
Fax: Within North American: 1-866-249-7775 Outside North America: (416) 263-9524
================================================================================