Exhibit 10.1

FORBEARANCE AND SETTLEMENT AGREEMENT

          THIS FORBEARANCE AND SETTLEMENT AGREEMENT (the “Agreement”) is made
and entered into effective as of December 29, 2006, between XINHUA CHINA LTD., a
Nevada corporation (the “Company”), CORNELL CAPITAL PARTNERS, L.P. (“Cornell”),
and HIGHGATE HOUSE FUNDS, LTD. (“Highgate”).  Cornell and Highgate are
collectively referred to herein as the “Buyers.” All terms not otherwise defined
herein shall have the meaning ascribed to them in the Securities Purchase
Agreement (as defined below).

          WHEREAS, in connection with the Securities Purchase Agreement among
the Company and the Buyers entered into on November 23, 2005, as amended on
March 23, 2006 (“Securities Purchase Agreement”) the Company has issued to the
Buyers the following convertible debentures (the “Convertible Debentures”),
which, as of December 29, 2006, have outstanding principal and accrued and
unpaid interest stated in table below:

Buyers Name:

Issuance Date of
Debenture:

Outstanding
Principal:

Outstanding
Interest:

Highgate

November 23, 2005

$1,250,000

$27,465.75

Cornell

March 23, 2006

$2,000,000

$30,794.52

          WHEREAS, in connection with the Securities Purchase Agreement, on
November 23, 2005, as amended on March 23, 2006 the Company and the Buyers also
entered in (a) an Investor Registration Rights Agreement (the “Registration
Rights Agreement”), (b) a Security Agreement (the “Security Agreement”), and (c)
along with Pacific Stock Transfer, Irrevocable Transfer Agent Instructions (the
“Transfer Agent Instructions”).  The Convertible Debentures, the Securities
Purchase Agreement, the Registration Rights Agreement, Security Agreement, the
Transfer Agent Instructions, and all other agreements entered into between the
Company and Buyers in connection therewith are collectively referred to herein
as the “Transaction Documents”. 

          WHEREAS, the Company has an opportunity to sell its Beijing Boheng
Investments subsidiary (the “Subsidiary”) for a purchase price which will be
paid to the Company periodically over the course of approximately two years and
which sale of the Subsidiary requires the consent of Cornell and Highgate. 

          WHEREAS, the Company wishes to use the proceeds from the sale of the
Subsidiary as received to repay principal and accrued and unpaid interest due to
the Buyers under the Convertible Debentures under the terms and conditions as
set forth herein.

          WHEREAS, in connection with the Securities Purchase Agreement, on
November 23, 2005, the Company issued to Highagte a warrant (the “Warrant”) to
purchase 1,035,000 shares of the Company’s common stock (the “Warrant Shares”). 

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          WHEREAS, the Company acknowledges that it has failed to obtain
effectiveness of the Registration Statement within 120 days after filing thereof
(the Registration Statement was filed on March 28, 2006), which requires the
Company to pay to the holders of the Convertible Debentures as liquidated
damages and not as a penalty, a cash amount equal to two percent (2%) per month
of the outstanding principal amount of the Convertible Debentures outstanding
starting within three (3) business days from the end of the month in which the
Scheduled Effective Deadline occurred.

          NOW, THEREFORE, in consideration of the mutual promises, conditions
and covenants contained herein and other good and valuable consideration,
receipt of which is hereby acknowledged, the parties hereto agree as follows:

1.       The Company hereby acknowledges, confirms and agrees:

> a.      That amounts owed, together with interest accrued and accruing thereon
> (collectively, the “Obligations”) now or hereafter payable by the Company to
> the Buyers under the Convertible Debentures and the Transaction Documents are
> unconditionally owing by the Company to the Buyers, without offset, setoff,
> defense or counterclaim of any kind, nature or description whatsoever.    b.
> That: (1) each of the Transaction Documents to which it is a party has been
> duly executed and delivered to the Buyers by the Company, and each is in full
> force and effect as of the date hereof, (2) the agreements and obligations of
> the Company contained in such documents and in this Agreement constitute the
> legal, valid and binding obligations of the Company, enforceable against it in
> accordance with their respective terms, and the Company has no valid defense
> to the enforcement of such obligations, (3)  the Buyers are and shall be
> entitled to the rights, remedies and benefits provided for in the Transaction
> Documents and applicable law, without offset, setoff, defense or counterclaim
> of any kind, nature or descriptions whatsoever, and (4) it has no claims,
> actions, cause of action, suits, judgments, and demands whatsoever, in law,
> admiralty or equity, against the Buyers or their affiliates.    c. That the
> Buyers have and shall continue to have valid, enforceable and perfected
> first-priority liens upon and security interests in the Pledged Property (as
> defined in the Transaction Documents) heretofore granted pursuant to the
> Security Agreement, or otherwise granted to or held by the Buyer.    d. That
> as of November 28, 2006, the Company owes to the Buyers liquidated damages
> pursuant to Section 2(c) of the Registration Rights Agreement in an amount
> equal to $260,000 plus an additional $65,000 for each month thereafter
> (collectively, the “Accrued Liquidated Damages”) for failure to have the
> registration statement timely declared effective by the SEC.   

2.       In reliance upon the representations, warranties and covenants of the
Company contained in this Agreement, and subject to the terms and conditions set
forth herein, the Buyers hereby

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waive on a one-time basis only the Accrued Liquidated Damages (subject to
Section 5 below) and further agree to forbear from exercising its rights and
remedies under the Transaction Documents or applicable law in respect of or
arising out of the Company’s failure to timely pay the Accrued Liquidated
Damages, subject to the conditions, amendments and modifications contained
herein for the period (the “Forbearance Period”) commencing on the date hereof
and continuing for so long as the following conditions are met: (i) the Company
strictly complies with the terms of this Agreement and (ii) there is no
occurrence or existence of any event of default, other than those related to the
Accrued Liquidated Damages under the Transaction Documents.

3.       Repayment of the Debenture.  The Company shall pay the Buyers the
Scheduled Payment Amounts (as set forth below) on or prior to the date that is
thirty (30) business days from the date of each Scheduled Payment Date (as set
forth below) towards the repayment of the outstanding principal and interest of
the Convertible Debentures.  Such payments, when received by the Buyers, shall
be applied first towards accrued and unpaid interest on both the Cornell and
Highgate Convertible Debentures and then towards the outstanding principal
beginning with the Cornell Convertible Debenture first and after all amounts
have been repaid on the Cornell Convertible Debenture, then towards the Highgate
Convertible Debenture.  The parties agree that the Redemption Premium (as
defined in the Convertible Debentures) shall not apply on any Scheduled Payment
Amounts paid by the Company in accordance with this Agreement.

Scheduled Payment Date

Scheduled Payment Amount

March 10, 2007

$250,000

June 30, 2007

$375,000

October 31, 2007

$375,000

January 31, 2008

$250,000

July 31, 2008

$625,000

December 31, 2008

Remaining balances on the Convertible Debentures after taking into account all
Scheduled Payments made and all conversion as set forth below.

4.       Conversion of the Debenture.  During the Forbearance Period, during the
time between the Buyer’s receipt of each Scheduled Payment Amount (each a
“Conversion Period”) the Buyers shall convert the Convertible Debentures in
accordance with the terms thereof in an amount equal to at least the amount of
the prior Scheduled Payment Amount (the “Required Conversion Amount”) subject to
the following: (a) for clarification, the Required Conversion Amount shall mean:
(i) that the Buyers shall convert as much of the Convertible Debentures up to at
least the Scheduled Payment Amount as is possible provided that such Conversion
Shares may all be immediately resold by the Buyers under an exemption from
registration; and (ii) any remaining portion of the Required Conversion Amount
with respect to a particular Scheduled Payment Amount which was not converted
due to the inability for resale by the Buyers under an exemption from
registration, the Buyers shall convert such remaining portion of the Required

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Conversion Amount as soon as such Conversion Shares are able to be resold by the
Buyers under an exemption from registration, and (b) in no event shall the
Required Conversion Amount for any particular Conversion Period require the
Buyers to convert into a number of shares which would exceed 30% of the total
volume of the Common Stock according to Bloomberg LP during the thirty trading
days immediately preceding the first day of such Conversion Period.  Counsel to
the Company shall provide a legal opinion for use by the Buyers when resale is
available for such Conversion Shares under Rule 144, in a form reasonably
satisfactory to the Buyers, opining that the allowable amount under Rule 144 of
such Conversion Shares may in fact be sold by the Buyers absent registration. 
In the event that the Buyers convert more than the applicable Required
Conversion Amount in any Conversion Period, the Buyer may allocate the amount
converted above the Required Conversion Amount towards the Required Conversion
Amount during subsequent Conversion Periods.

5.       Liquidated Damages.  The Company and the Buyers agree that during the
Forbearance Period the Buyers shall not attempt to collect any of the Accrued
Liquidated Damages and no additional liquidated damages shall accrue during the
Forbearance Period.  Upon repayment of all the Scheduled Payment Amounts in
accordance with this Agreement, the Buyers shall permanently waive payment of
the Accrued Liquidated Damages.  Immediately upon the termination or expiration
of the Forbearance Period, if all the Scheduled Payment Amounts have not been
paid by the Company, then liquidated damages shall automatically and without any
further action start accruing from the date a Scheduled Payment Amount had not
be paid by the Company and the Buyers’ waiver of the Accrued Liquidated Damages
owing prior to the date of entering into this Agreement shall be null and void
and the Company shall been responsible for paying all the Accrued Liquidated
Damages that were owing to the Buyers prior to entering into this Agreement.

6.       Termination of Forbearance Period.  Upon the termination or expiration
of the Forbearance Period, the agreement of the Buyers to forbear shall
automatically and without further action terminate and be of no force and
effect.

7.       Exercise of the Warrant.   Highgate shall exercise its right to
purchase Warrant Shares pursuant to the Warrant on a cashless basis in an amount
200,000 shares of common stock of the Company in every three month period
beginning on the date hereof.  The Company shall arrange for counsel to the
Company to issue a customary Rule 144 legal opinion to the extent that such
Warrant Shares may be resold in accordance with Rule 144.   

8.       Registration Statement. On the date hereof the Company shall withdraw
the Registration Statement filed on March 28, 2006 with the SEC in connection
with the Convertible Debentures.  During the Forbearance Period, the Company
shall not be required to file or obtain effectiveness of a Registration
Statement.  Within thirty days after the termination or expiration of the
Forbearance Period, if the Convertible Debentures have not been repaid to the
Buyers in full, the Company shall re-file a Registration Statement with the SEC
for the resale of the shares of common stock underlying the Convertible
Debentures and the Warrants.  The Company shall have such Registration Statement
declared effective by the SEC within ninety days of the filing thereof.   

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9.       Consent to any Organizational Change. The Company and the Buyers agree
that during the Forbearance Period the Buyers hereby waive the requirement for
the Company to receive the written consent of each Buyer for any Organizational
Change to be directly or indirectly consummated by the Company.  However, the
Company agrees to advise the Buyers of any Organizational Change prior to it
taking effect.  The Company represents and warrants to the Buyers that it has no
current intentions to effectuate an Organizational Change.  Notwithstanding the
forgoing, the Company covenants that it will not effectuate any stock splits for
at least six months from the date hereof without the consent of the Buyers. 

10.      Termination of Security Shares. The Company and the Buyers agree that
effective immediately upon receipt by the Buyers of the first Scheduled Payment
Amount, the provision for Security Shares as set forth in Section 9 of the
Securities Purchase Agreement and in Section 2 of the Transfer Agent
Instructions shall be terminated and no longer of any force and effect.

11.      The Company represents and warrants that it will not be secured against
the assets of the Subsidiary being sold.  Furthermore, if the Company does
obtain any security interest in the assets of the Subsidiary being sold or in
any other assets to secure the payment obligations of the purchasing party to
the Company, the Company will make arrangements (if it does not occur
automatically pursuant to the Security Agreement) to collaterally assign to the
Buyers any such security interest granted to the Company until payment in full
of the Convertible Debentures. 

12.      The Company shall disclose the contents of this Agreement on a Form 8-K
or such other form as may be applicable within 4 days of the date hereof.  Such
disclosure shall be reviewed by counsel to the Company prior to its filing. 

13.      This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, and all of which shall constitute one and the
same instrument.  This Agreement shall be accepted, effective and binding, for
all purposes, when the parties shall have signed and transmitted to each other,
by telecopier or otherwise, copies of this Agreement.  The terms of this
Agreement supersede the terms of any other verbal agreement existing prior to
the date hereof.  In the event of any litigation arising hereunder, the
prevailing party or parties shall be entitled to recover its or their reasonable
attorneys’ fees and court costs from the other party or parties, including the
costs of bringing such litigation and collecting upon any judgments.  This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, executors, legal representatives, trustees,
successors and assigns.

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          IN WITNESS WHEREOF, the parties have signed and delivered this
Forbearance and Settlement Agreement on the date first set forth above.

XINHUA CHINA LTD

HIGHGATE HOUSE FUNDS, LTD

  

By:       /s/ Xianping Wang                               

By:       /s/ Mark A. Angelo                                          

Name:  Xianping Wang

Name:  Mark A. Angelo

Title:  President and a Director

Title:     Director

  

CORNELL CAPITAL PARTNERS, LP

  

By:      Yorkville Advisors, LLC

Its:      General Partner

  

By:            /s/ Mark A. Angelo                                     

Name:  Mark Angelo

Title:     Portfolio Manager

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