UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549


_______________




FORM
10-Q


_______________




x
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For
the quarterly period ended June 30, 2009




o
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the transition period from
______to______.




CHINA
GROWTH DEVELOPMENT, INC.


(Exact
name of registrant as specified in Charter)




DELAWARE
              
              333-109458
              
              13-4204191(State
      or other jurisdiction of
                incorporation
      or organization)
              
              (Commission
      File No.)
              
              (IRS
      Employee Identification No.)





927 Canada Court City of
Industry, CA  91748


(Address
of Principal Executive Offices)


_______________




(626)
581-9098


(Issuer
Telephone number)


_______________




(Former
Name or Former Address if Changed Since Last Report)




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
(or for such shorter period that the issuer was required to file such reports),
and (2)has been subject to such filing requirements for the past 90
days.


Yes o   
No x




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


Yes o No o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company filer.
 See definition of “accelerated filer” and “large accelerated filer”
in Rule 12b-2 of the Exchange Act (Check one):




Large
Accelerated Filer o    Accelerated
Filer o     Non-Accelerated
Filer o     Smaller
Reporting Company x





Indicate
by check mark whether the registrant is a shell company as defined in Rule 12b-2
of the Exchange Act.


Yes o   No
x





State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of August 13, 2009:  34,970,007 shares of Common Stock.











CHINA
GROWTH DEVELOPMENT, INC.





FORM
10-Q


June
30, 2009


INDEX




PART
I-- FINANCIAL INFORMATION





Item
      1.
            Financial
      StatementsItem
      2.
            Management’s
      Discussion and Analysis of Financial ConditionItem
      3
            Quantitative
      and Qualitative Disclosures About Market RiskItem
      4T.
            Control
      and Procedures




PART
II-- OTHER INFORMATION




Item
      1
            Legal
      ProceedingsItem
      1A
            Risk
      FactorsItem
      2.
            Unregistered
      Sales of Equity Securities and Use of ProceedsItem
      3.
            Defaults
      Upon Senior SecuritiesItem
      4.
            Submission
      of Matters to a Vote of Security HoldersItem
      5.
            Other
      InformationItem
      6.
            Exhibits
      and Reports on Form 8-K




SIGNATURE













Item
1. Financial Information




CHINA
      GROWTH DEVELOPMENT, INC. AND SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETSJune
      30,
                                                2009
                                              
                                              
                                              December
      31,
                                                2008(Unaudited)
                                              
                                              
                                              (Audited)AssetsCurrent
      AssetsCash
      and cash equivalents
                                              
                                              $
                                              1,707,156
                                              
                                              
                                              $
                                              1,543,816Other
      receivables, net of allowance for doubtful accounts $0 and
      $4,397
                                              
                                              
                                              565,707
                                              
                                              
                                              
                                              657,911Loan
      to related parties
                                              
                                              
                                              3,366,075
                                              
                                              
                                              
                                              2,647,049Prepaid
      expenses
                                              
                                              
                                              -
                                              
                                              
                                              
                                              47,188Advances
      to suppliers - related party
                                              
                                              
                                              11,725,810
                                              
                                              
                                              
                                              11,741,966Assets
      from discontinued operations
                                              
                                              
                                              -
                                              
                                              
                                              
                                              46,280Total
      Current Assets
                                              
                                              
                                              17,364,748
                                              
                                              
                                              
                                              16,684,210Fixed
      assets, net
                                              
                                              
                                              70,834,335
                                              
                                              
                                              
                                              69,523,011Deferred
      tax assets
                                              
                                              
                                              359,762
                                              
                                              
                                              
                                              360,258Intangible
      assets, net
                                              
                                              
                                              9,188,508
                                              
                                              
                                              
                                              9,309,481Total
      Assets
                                              
                                              $
                                              97,747,354
                                              
                                              
                                              $
                                              95,876,960Liabilities and EquityCurrent
      LiabilitiesAccounts
      payable and accrued expenses
                                              
                                              $
                                              77,607
                                              
                                              
                                              $
                                              622,589Loans
      payable
                                              
                                              
                                              4,446,246
                                              
                                              
                                              
                                              4,075,344Due
      to related parties
                                              
                                              
                                              1,053,880
                                              
                                              
                                              
                                              146,574Construction
      payable
                                              
                                              
                                              3,467,241
                                              
                                              
                                              
                                              2,714,705Income
      tax payable
                                              
                                              
                                              2,461,570
                                              
                                              
                                              
                                              1,643,045Other
      payable
                                              
                                              
                                              1,718,247
                                              
                                              
                                              
                                              695,417Deferred
      revenue - current
                                              
                                              
                                              7,633,068
                                              
                                              
                                              
                                              8,233,393Liabilities
      from discontinued operations
                                              
                                              
                                              -
                                              
                                              
                                              
                                              75,634Total
      Current Liabilities
                                              
                                              
                                              20,857,860
                                              
                                              
                                              
                                              18,206,701Long-term
      debt
                                              
                                              
                                              47,693
                                              
                                              
                                              
                                              -Deferred
      revenue - non-current
                                              
                                              
                                              32,242,257
                                              
                                              
                                              
                                              35,299,821Total
      Liabilities
                                              
                                              
                                              53,147,810
                                              
                                              
                                              
                                              53,506,521EquityPreferred
      stock - $.0001 par value; 10,000 shares authorized, 0
    sharesissued
      and outstanding
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Common
      stock - $.0001 par value; 200,000,000 shares authorized,34,970,007
      and 34,970,007 shares issued and outstanding
                                              
                                              
                                              3,497
                                              
                                              
                                              
                                              3,497Additional
      paid-in capital
                                              
                                              
                                              7,277,990
                                              
                                              
                                              
                                              7,277,990Other
      comprehensive income
                                              
                                              
                                              3,061,379
                                              
                                              
                                              
                                              2,813,503Retained
      earnings
                                              
                                              
                                              17,820,097
                                              
                                              
                                              
                                              16,354,185Total
      Stockholders' Equity
                                              
                                              
                                              28,162,963
                                              
                                              
                                              
                                              26,449,174Noncontrolling
      interest
                                              
                                              
                                              16,436,581
                                              
                                              
                                              
                                              15,921,264Total
      Equity
                                              
                                              
                                              44,599,544
                                              
                                              
                                              
                                              42,370,438Total
      Liabilities and Equity
                                              
                                              $
                                              97,747,354
                                              
                                              
                                              $
                                              95,876,960
  The
accompanying notes are an integral part of these consolidated financial
statements.
  -1-
    CHINA GROWTH DEVELOPMENT, INC. AND
      SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF OPERATIONS(UNAUDITED)For
      The Three Months
                          
                          
                          For
      The Six MonthsEnded
      June 30,
                          
                          
                          Ended
      June 30,2009
                          
                          
                          2008
                          
                          
                          2009
                          
                          
                          2008Net
      revenue
                          
                          $
                          4,184,977
                          
                          
                          $
                          3,738,624
                          
                          
                          $
                          7,929,961
                          
                          
                          $
                          7,407,703General,
      selling and administrative expensesDepreciation
      expense
                          
                          
                          567,777
                          
                          
                          
                          535,773
                          
                          
                          
                          1,187,339
                          
                          
                          
                          1,071,545Other
      general, selling and administrative expenses
                          
                          
                          1,730,509
                          
                          
                          
                          2,048,985
                          
                          
                          
                          3,820,623
                          
                          
                          
                          3,304,660Total
      general, selling and administrative expenses
                          
                          
                          2,298,287
                          
                          
                          
                          2,584,758
                          
                          
                          
                          5,007,962
                          
                          
                          
                          4,376,205Operating
      income
                          
                          
                          1,886,691
                          
                          
                          
                          1,153,866
                          
                          
                          
                          2,921,999
                          
                          
                          
                          3,031,498Non-operating
      income (expenses)Interest
      income
                          
                          
                          1,401
                          
                          
                          
                          1,494
                          
                          
                          
                          3,214
                          
                          
                          
                          3,466Interest
      expense
                          
                          
                          (59,013
                          )
                          
                          
                          (72,679
                          )
                          
                          
                          (174,521
                          )
                          
                          
                          (176,561
                          )Other
      income (expenses)
                          
                          
                          282,379
                          
                          
                          
                          (80,982
                          )
                          
                          
                          (70,753
                          )
                          
                          
                          (101,548
                          )Total
      non-operating income (expenses)
                          
                          
                          224,767
                          
                          
                          
                          (152,167
                          )
                          
                          
                          (242,060
                          )
                          
                          
                          (274,643
                          )Income
      from continuing operations, before tax
                          
                          
                          2,111,457
                          
                          
                          
                          1,001,699
                          
                          
                          
                          2,679,939
                          
                          
                          
                          2,756,855Income
      tax expense
                          
                          
                          447,793
                          
                          
                          
                          22,534
                          
                          
                          
                          586,854
                          
                          
                          
                          43,069Income
      from continuing operations, net of tax
                          
                          
                          1,663,664
                          
                          
                          
                          979,165
                          
                          
                          
                          2,093,085
                          
                          
                          
                          2,713,786Gain
      on disposal of discontinued operations
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          25,974
                          
                          
                          
                          -Net
      income
                          
                          
                          1,663,664
                          
                          
                          
                          979,165
                          
                          
                          
                          2,119,059
                          
                          
                          
                          2,713,786Net
      income attributable to the noncontrolling interest
                          
                          
                          629,352
                          
                          
                          
                          370,411
                          
                          
                          
                          823,200
                          
                          
                          
                          1,054,236Net
      income attributable to the common stockholders
                          
                          $
                          1,034,313
                          
                          
                          $
                          608,754
                          
                          
                          $
                          1,295,859
                          
                          
                          $
                          1,659,550Earnings
      per share - basic and diluted:Income
      from continuing operations attributable to common
    stockholders
                          
                          $
                          0.03
                          
                          
                          $
                          0.02
                          
                          
                          $
                          0.04
                          
                          
                          $
                          0.05Discontinued
      operations attributable to common stockholders
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Net
      income attributable to common stockholders
                          
                          $
                          0.03
                          
                          
                          $
                          0.02
                          
                          
                          $
                          0.04
                          
                          
                          $
                          0.05Weighted
      average shares outstanding, basic and diluted
                          
                          
                          34,970,007
                          
                          
                          
                          32,562,612
                          
                          
                          
                          34,970,007
                          
                          
                          
                          32,031,306Amounts
      attributable to common stockholders:Income
      from continuing operations, net of tax
                          
                          $
                          1,034,313
                          
                          
                          $
                          608,754
                          
                          
                          $
                          1,269,885
                          
                          
                          $
                          1,659,550Gain
      on disposal of discontinued operations
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          25,974
                          
                          
                          
                          -Net
      income
                          
                          $
                          1,034,313
                          
                          
                          $
                          608,754
                          
                          
                          $
                          1,295,859
                          
                          
                          $
                          1,659,550
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  -2-
    CHINA
      GROWTH DEVELOPMENT, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF CASH FLOWS(UNAUDITED)For
      The Six Months Ended
                                  June
      30,2009
                                
                                
                                2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      income
                                
                                $
                                1,295,859
                                
                                
                                $
                                1,659,550Adjustments
      to reconcile net income to net cashprovided
      by operating activities:Depreciation
      & amortization
                                
                                
                                1,295,577
                                
                                
                                
                                1,182,313Minority
      interest
                                
                                
                                823,200
                                
                                
                                
                                1,054,236Warrants
      issued for compensation
                                
                                
                                -
                                
                                
                                
                                191,138Warrants
      issued in reverse acquisition
                                
                                
                                -
                                
                                
                                
                                689,347Gain
      on disposal of discontinued operations
                                
                                
                                (25,974
                                )
                                
                                
                                -Decrease
      (increase) in current assets:Accounts
      receivable
                                
                                
                                -
                                
                                
                                
                                8,883Inventories
                                
                                
                                -
                                
                                
                                
                                17,683Other
      receivable
                                
                                
                                91,362
                                
                                
                                
                                (29,653
                                )Interest
      receivable from related parties
                                
                                
                                -
                                
                                
                                
                                563Advances
      to suppliers - related party
                                
                                
                                -
                                
                                
                                
                                (74,853
                                )Prepaid
      expenses
                                
                                
                                47,155
                                
                                
                                
                                30,369Increase
      (decrease) in liabilities:Construction
      payable
                                
                                
                                (1,167,052
                                )
                                
                                
                                (765,553
                                )Other
      payable
                                
                                
                                1,024,492
                                
                                
                                
                                (62,080
                                )Tax
      payable
                                
                                
                                825,440
                                
                                
                                
                                25,605Accrued
      expense
                                
                                
                                (374,564
                                )
                                
                                
                                (206,256
                                )Deferred
      revenue
                                
                                
                                (3,600,468
                                )
                                
                                
                                (4,440,735
                                )Net
      cash provided by (used in) operating activities
                                
                                
                                230,939
                                
                                
                                
                                (719,443
                                )CASH
      FLOWS FROM INVESTING ACTIVITIESCash
      surrendered in disposal of discontinued operations
                                
                                
                                (3,380
                                )
                                
                                
                                -Cash
      acquired on reverse acquisition
                                
                                
                                -
                                
                                
                                
                                3,742Advances
      to related parties
                                
                                
                                (723,166
                                )
                                
                                
                                (53,086
                                )Acquisition
      of property & equipment
                                
                                
                                (671,445
                                )
                                
                                
                                (229,055
                                )Proceeds
      from loan receivables from employees
                                
                                
                                -
                                
                                
                                
                                9,216Net
      cash used in investing activities
                                
                                
                                (1,397,990
                                )
                                
                                
                                (269,183
                                )CASH
      FLOWS FROM FINANCING ACTIVITIESNet
      proceeds from loans from related parties
                                
                                
                                908,132
                                
                                
                                
                                394,383Net
      proceeds from short-term loans from others
                                
                                
                                424,495
                                
                                
                                
                                369,320Net
      cash provided by financing activities
                                
                                
                                1,332,627
                                
                                
                                
                                763,703EFFECT
      OF EXCHANGE RATE CHANGE ON CASH AND CASH EQUIVALENTS
                                
                                
                                (2,236
                                )
                                
                                
                                67,800NET
      INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS
                                
                                
                                163,340
                                
                                
                                
                                (157,123
                                )CASH
      & CASH EQUIVALENTS, BEGINNING BALANCE
                                
                                
                                1,543,816
                                
                                
                                
                                1,184,621CASH
      & CASH EQUIVALENTS, ENDING BALANCE
                                
                                $
                                1,707,156
                                
                                
                                $
                                1,027,498SUPPLEMENTAL
      DISCLOSURES:Interest
      paid
                                
                                $
                                174,521
                                
                                
                                $
                                172,617Income
      tax paid
                                
                                $
                                1,465
                                
                                
                                $
                                -
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
   -3-
   NOTE
      1.
              ORGANIZATION
      AND BASIS OF PRESENTATION
 
 China
Growth Development, Inc. (“CGDI”, or “the Company”), formerly known as Teeka Tan
Products, Inc., is a Delaware corporation that was initially engaged in the
business of marketing and retailing a broad line of high quality value-priced
sun care products in Florida through its wholly owned subsidiary, Teeka Tan,
Inc.  CGDI was incorporated under the laws of the State of Delaware in
April 2002, under the name IHealth, Inc.  In December 2005, Ihealth,
Inc. changed its name to Teeka Tan Products, Inc.  On December 13,
2007, Teeka Tan Products, Inc. changed its name to China Growth Development,
Inc.
 
 On May 7,
2008, the reverse acquisition between CGDI and Taiyuan Rongan Business Trading
Company, Limited (“TRBT”), a company incorporated under the laws of the People’s
Republic of China (“PRC) was effected pursuant to the Stock for Stock Equivalent
Exchange Agreement and Plan entered into by CGDI and TRBT on November 12,
2007.  All of TRBT’s existing capital contributors assigned 80% of
their capital contributions in TRBT to CGDI in exchange for an aggregate of
31,500,000 shares of CGDI’s common stock and common stock purchase warrants to
purchase an aggregate of 1,400,000 shares of CGDI’s common stock at an exercise
price of $0.50 per share.  Upon the effectiveness of the reverse
acquisition, TRBT has been in the process of preparing documents required by the
various divisions of the Chinese government for approval or validation of the
transaction.
 
 TRBT was
incorporated in Taiyuan City, Shanxi Province, China in December 2005 under the
laws of the PRC.  TRBT is engaged in the business of building and
operation of commercial real estates in China.  TRBT holds 76.1% of
the issued and outstanding capital contributions of five subsidiaries organized
in China that owns and operates shopping malls.
 
 The five
subsidiaries of TRBT, including Yudu Minpin Shopping Mall (“Yudu”), Xicheng
Shopping Mall (“Xicheng”, also known as Taiyuan Clothing City), Jingpin Clothing
City (“Jingpin”), Longma Shopping Mall (“Longma”), and Xindongcheng Clothing
Distribution Mall (“Xindongcheng”) were owned initially by Taiyuan Clothing City
Group (“TCCG”), the predecessor company of TRBT, prior to May,
2003.  During the year 2003, these five shopping malls were acquired
by individuals and incorporated as five separate business
entities.  In January, 2005, TCCG reacquired 51% ownership of each of
five shopping malls from the individual shareholders and increased its
ownerships to 76.1%.
 
 In
December 2005, TRBT, which is related to Taiyuan Clothing City Group (“TCCG”)
through common ownership, was incorporated.  In December 2005, TRBT
acquired all the shares owned by TCCG for the five shopping
malls.  All five shopping malls are located in Taiyuan City, Shanxi
Province, China.  TRBT leases each shopping mall booth to commercial
tenants conducting business in retail, wholesale and distribution of clothes,
shoes, cosmetics, beddings, etc.
 
 The
accompanying unaudited interim consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission and generally accepted accounting principles for interim financial
reporting.  Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements.  In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for fair
presentation have been included.  Operating results for the six-month
period ended June 30, 2009 are not necessarily indicative of the results that
may be expected for the year ended December 31, 2009.
   -4-
  
 NOTE
      2.
              SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
 
 Basis
of consolidation
 
 Under
accounting principles generally accepted in the United States, the share
exchange is considered to be a capital transaction in substance, rather than a
business combination.  That is, the share exchange is equivalent to
the issuance of stock by CGDI for the net monetary assets of TRBT, accompanied
by a recapitalization, and is accounted for as a change in capital
structure.  Accordingly, the accounting for the share exchange will be
identical to that resulting from a reverse acquisition, except no goodwill will
be recorded.  Under reverse takeover accounting, the post reverse
acquisition comparative historical financial statements of the legal acquirer,
CGDI, are those of the legal acquiree which are considered to be the accounting
acquirer, TRBT.  Shares and per share amounts stated have been
adjusted to reflect the merger.
 
 Based
upon the circumstance that TRBT is considered to have acquired CGDI in the
reverse acquisition effective May 7, 2008, and that its capital contributors
currently have voting control of CGDI, the accompanying financial statements and
related disclosures in the notes to financial statements present the financial
position as of December 31, 2008 and 2007, and the operations for the years then
ended, of TRBT and its subsidiaries under the name of CGDI.  The
reverse acquisition has been recorded as a recapitalization of CGDI, with the
consolidated net assets of TRBT and its subsidiaries, and net assets CGDI
brought forward at their historical bases.  The costs associated with
the reverse acquisition have been expensed as incurred.
 
 Intercompany
accounts and transactions have been eliminated in
consolidation.  Certain data in the financial statements of the prior
period has been reclassified to conform to the current period
presentation.
 
 Revenue
recognition and deferred revenue
 
 The
Company's revenue recognition policies are in compliance with Staff Accounting
Bulletin (SAB) 104.  Revenue is recognized when services are rendered
to customers when a formal arrangement exists, the price is fixed or
determinable, the delivery is completed, no other significant obligations of the
Company exist and collectability is reasonably assured.  The Company
recognizes revenue net of an allowance for estimated returns, at the time the
merchandise is sold or services performed.  The allowance for sales
returns is estimated based on the Company’s historical
experience.  Sales taxes are presented on a net basis (excluded from
revenues and costs).  If the Company had any merchandise on
consignment, the related sales from merchandise on consignment would be recorded
when the retailer sold such merchandise.  Payments received before all
of the relevant criteria for revenue recognition are satisfied are recorded as
deferred revenue.
 
 The
Company has two major sources of revenue from its shopping mall leasing
business, including rental revenue and management services
revenue.  Rent covering the entire leasing period is generally
collected up front from the tenants upon signing the lease agreements, and
recorded as deferred revenue.  Rental revenue is then recognized over
the respective lease term, generally on a monthly basis.  Deferred
revenue is classified as current and non-current based on the length of
maturities.  In addition to rental revenue, the Company charges
management services fee from its tenants based on the size of the leasing
unit.  Such management services fee is generally collected once a
month, or once every two to three months at certain locations.  Fees
collected in advance to the months of services being performed will be deferred
and recognized as income in the later period being earned.
 
 As of
June 30, 2009 and December 31, 2008, current deferred revenue was $7,633,068 and
$8,233,393, whereas non-current deferred revenue was $32,242,257 and
$35,299,821, respectively.
 
  -5-
   Shipping
and handling costs
 
 Amounts
billed to customers in sales transactions related to shipping and handling
represent revenues earned for the goods provided and are included in
sales.  Costs of shipping and handling are included in the cost of
goods sold.
 
 Use
of estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
 
 Cash
and cash equivalents
 
 Cash and
cash equivalents include cash on hand and cash in time deposits, certificates of
deposit and all highly liquid debt instruments with original maturities of three
months or less.
 
 Accounts
receivable
 
 We
maintain allowances for doubtful accounts for estimated losses resulting from
the inability of our customers to make required payments.  If the
financial condition of customers were to deteriorate, resulting in an impairment
of their ability to make payments, additional allowances may be
required.
 
 Inventories
 
 The
Company's inventories consist of purchased finished goods, labels and bottles.
Inventories are stated at lower of cost or market.  Cost is determined
on the first-in, first-out basis.
 
 Provision
for slow moving and obsolete inventory
 
 We write
down our inventory for estimated unmarketable inventory or obsolescence equal to
the difference between the cost of inventory and the estimated market value
based on assumptions about future demand and market conditions.  If
actual market conditions are less favorable than those projected by management,
additional inventory write-downs may be required.
 
 Property
and equipment
 
 Machinery
and equipment are stated at cost. Expenditures for maintenance and repairs are
charged to earnings as incurred; additions, renewals and betterments are
capitalized.  When property and equipment are retired or otherwise
disposed of, the related cost and accumulated depreciation are removed from the
respective accounts, and any gain or loss is included in
operations.  Depreciation of automobiles is provided using the
straight-line method over 5 to 20 years.  Depreciation of furniture is
provided using the straight-line method over 5 to 10
years.  Depreciation of machinery and equipments is provided using the
straight-line method over 3 to 30 years.  Depreciation of building is
provided using the straight-line method over 30 to 40 years.
 
  -6-
   Impairment
of long-lived assets
 
 Effective
January 1, 2002, the Company adopted Statement of Financial Accounting Standards
No.  144,  "Accounting for the Impairment or Disposal of
Long-Lived Assets" ("SFAS 144"), which addresses financial accounting and
reporting for the
impairment  or  disposal  of  long-lived  assets  and  supersedes  SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be  Disposed Of," and the accounting and reporting
provisions of APB Opinion No. 30,  "Reporting
the  Results  of  Operations  for  a
Disposal of a Segment of a Business."  The Company periodically
evaluates the carrying value of long-lived assets to be held and used in
accordance with SFAS 144.  SFAS 144 requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amounts.  In
that  event,  a  loss  is  recognized  based
on the amount by which the carrying
amount  exceeds  the  fair  market  value  of  the  long-lived  assets.  Loss
on long-lived assets to be disposed of is determined in a similar manner, except
that fair market values are reduced for the cost of disposal.  Based
on its review, the Company believes that as of June 30, 2009 and December 31,
2008, there was no significant impairment of its long-lived assets.
 
 Intangible
assets
 
 SFAS No.
142, “Goodwill and Other Intangible Assets”, requires an initial impairment
assessment involving a comparison of the fair value of trademarks, patents and
other intangible assets to current value.  Intangible assets
determined to have finite lives are amortized over their useful
lives.  The Company tests intangible assets for impairment at least
annually, or more frequently if events or circumstances indicate that an asset
might be impaired.  An impairment loss shall be recognized if the
carrying amount of an intangible asset is not recoverable and its carrying
amount exceeds its fair value.  After an impairment loss is
recognized, the adjusted carrying amount of the intangible asset shall be its
new accounting basis.  Subsequent reversal of a previously recognized
impairment loss is prohibited.
 
 For the
year ended December, 31 2008, the Company performed an annual impairment test of
intangible assets.  The Company considered both the income and market
approaches in determining the implied fair value of the intangible
assets.  While future estimated operating results and cash flows are
considered, the Company eventually employed the market approach which required
appraisal reports from third-party appraisers or comparable market
data.  As a result of this analysis, the Company concluded that the
carrying amounts of intangible assets exceeded their appraised fair values and
recorded an impairment charge of approximately $1,441,032 for the year ended
December 31, 2008.  Based on its review, the Company believes that as
of June 30, 2009, there was no further impairment of its intangible
assets.
 
 Fair
value of financial instruments
 
 Statement
of Financial Accounting Standard No. 107, “Disclosures about Fair Value of
Financial Instruments”, requires that the Company disclose estimated fair values
of financial instruments. The carrying amounts reported in the statements of
financial position for current assets and current liabilities qualifying as
financial instruments are a reasonable estimate of fair value.
 
 Earnings
per share
 
 The
Company has adopted SFAS No. 128, "Earnings per Share."  Earnings per
common share are computed by dividing income available to common shareholders by
the weighted average number of common shares outstanding during the
period.  As of June 30, 2009 and December 31, 2008 the Company had
common stock warrants that would have converted into 1,930,000 shares of common
stock, respectively.  The terms of the stock warrants allow the shares
to be converted at a conversion price ranging from $0.50 to $7.00 per share,
which was above the average closing price of the Company’s stock during the six
months ended June 30, 2009.  As such, it is more likely that the
warrants would not be converted, which had no dilutive effect to the earnings
per share.
 
  -7-
   Stock-based
compensation
 
 Effective
January 1, 2006 The Company adopted SFAS No. 123R "Share-Based Payment" ("SFAS
123R"), a revision to SFAS No. 123 "Accounting for Stock-Based Compensation"
("SFAS 123").  Prior to the adoption of SFAS 123R, the Company
accounted for stock options in accordance with APB Opinion No. 25 "Accounting
for Stock Issued to Employees" (the intrinsic value method), and accordingly,
recognized no compensation expense for stock option grants.
 
 Under the
modified prospective approach, the provisions of SFAS 123R apply to new awards
and to awards that were outstanding on January 1, 2006 that are subsequently
modified, repurchased pr cancelled.  Under the modified prospective
approach, compensation cost recognized in the year ended December 31, 2006
includes compensation cost for all share-based payments granted prior to, but
not yet vested as of January 1, 2006, based on the grant-date fair value
estimated in accordance with the original provisions of SFAS 123, and the
compensation costs for all share-based payments granted subsequent to January
31, 2006, based on the grant-date fair value estimated in accordance with the
provisions of SFAS 123R.  Prior periods were not restated to reflect
the impact of adopting the new standard.
 
 Income
taxes
 
 The
Company utilizes SFAS No. 109 (“SFAS 109”), "Accounting for Income Taxes," which
requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial
statements or tax returns.  Under this method, deferred income taxes
are recognized for the tax consequences in future years of differences between
the tax bases of assets and liabilities and their financial reporting amounts at
each period end based on enacted tax laws and statutory tax rates applicable to
the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax
assets to the amount expected to be realized.
 
 The
Company adopted the provisions of FASB Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes” (“FIN 48”), effective January 1,
2007.  FIN 48 was issued to clarify the requirements of SFAS 109
relating to the recognition of income tax benefits.  FIN 48 provides a
two-step approach to recognizing and measuring tax benefits when the benefits’
realization is uncertain.  The first step is to determine whether the
benefit is to be recognized; the second step is to determine the amount to be
recognized:
 
 §
              Income
      tax benefits should be recognized when, based on the technical merits of a
      tax position, the entity believes that if a dispute arose with the taxing
      authority and were taken to a court of last resort, it is more likely than
      not (i.e. a probability of greater than 50 percent) that the tax position
      would be sustained as filed; and
 §
              If
      a position is determined to be more likely than not of being sustained,
      the reporting enterprise should recognize the largest amount of tax
      benefit that is greater than 50 percent likely of being realized upon
      ultimate settlement with the taxing
authority.
 
 As a
result of the implementation of FIN 48, the Company made a comprehensive review
of its portfolio of tax positions in accordance with recognition standards
established by FIN 48.  The Company recognized no material adjustments
to liabilities or stockholders’ equity in lieu of the
implementation.  The adoption of FIN 48 did not have a material impact
on the Company’s financial statements.
   -8-
   Segment
reporting
  Statement
of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure about
Segments of an Enterprise and Related Information" requires use of the
"management approach" model for segment reporting.  The management
approach model is based on the way a company's management organizes segments
within the company for making operating decisions and assessing
performance.  Reportable segments are based on products and services,
geography, legal structure, management structure, or any other manner in which
management disaggregates a company.
  Foreign
currency translation and comprehensive income
 
 The
Company accounts for foreign currency translation pursuant to SFAS No. 52,
"Foreign Currency Translation" ("SFAS 52").  The functional currency
of the Company’s shopping mall unit leasing business in China (TRBT) is the
Chinese Yuan Renminbi (CNY).  TRBT’s financial statements were
maintained and presented in CNY, which were translated into U.S. Dollars (USD)
in accordance with SFAS 52.  Under SFAS 52, all assets and liabilities
are translated at the current exchange rate at the end of each fiscal period,
stockholders’ equity are translated at the historical rates, and income
statement items are translated at the average exchange rates prevailing
throughout the respective periods.  Gains or losses on financial
statement translation from foreign currency are recorded as separate components
in the equity section of the balance sheet, under other comprehensive income in
accordance with SFAS No. 130, “Reporting Comprehensive Income”.
 
 Statement
of cash flows
 
 In
accordance with Statement of Financial Accounting Standards No. 95, “Statement
of Cash Flows,” cash flows from the Company’s operations are calculated based
upon the local currencies.  As a result, amounts related to assets and
liabilities reported on the statement of cash flows will not necessarily agree
with changes in the corresponding balances on the balance sheet.
 
 Recent
pronouncements
 
 In
September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
No. 157 (“SFAS 157”), “Fair Value Measurements”, which is effective for
fiscal years beginning after November 15, 2007 with earlier adoption encouraged.
 SFAS 157 defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles, and expands disclosures
about fair value measurements.  In February 2008, the FASB issued FASB
Staff Position FAS 157-2, Effective Date of FASB Statement No. 157 which delayed
the effective date of SFAS 157 for all non-financial assets and
liabilities, except those that are recognized or disclosed at fair value in the
financial statements on a recurring basis, until January 1, 2009.  The
Company has not yet determined the impact the implementation of SFAS 157 will
have on the Company’s non-financial assets and liabilities which are not
recognized or disclosed on a recurring basis.  However, the Company does
not anticipate that the full adoption of SFAS 157 will significantly impact
their consolidated financial statements.
 
 In
February 2007, FASB issued SFAS No. 159 (“SFAS 159”), “The Fair Value Option for
Financial Assets and Financial Liabilities”.  This Statement permits
entities to choose, at specified election dates, to measure eligible financial
assets and liabilities at fair value that are not otherwise required to be
measured at fair value.  The objective of SFAS 159 is to improve
financial reporting by providing entities with the opportunity to mitigate
volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions.  The Company adopted SFAS 159 on January 1, 2008, but the
implementation of SFAS 159 did not have a significant impact on the
Company's financial position or results of operations.
   -9-
  
 In
December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business
Combinations” (“SFAS 141R).  SFAS 141R changes how a reporting
enterprise accounts for the acquisition of a business.  SFAS 141R
establishes principles and requirements for how an acquirer recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any noncontrolling interest in the acquiree and the
goodwill acquired. SFAS 141R also establishes disclosure requirements to enable
the evaluation of the nature and financial effects of the business
combination. SFAS 141R is effective for fiscal years beginning on or after
December 15, 2008 and early adoption and retrospective application is
prohibited.  The impact of adopting SFAS 141R will depend on the
nature and terms of future acquisitions.
 
 In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements”, which is an amendment of Accounting Research
Bulletin (“ARB”) No. 51.  This statement clarifies that a
noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements.  This statement changes the way the consolidated
income statement is presented, thus requiring consolidated net income to be
reported at amounts that include the amounts attributable to both parent and the
noncontrolling interest.  This statement is effective for the fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2008.  The adoption of SFAS 160 has changed the financial
statement presentation regarding non-controlling interests, but does not have
significant impact on the Company's consolidated financial position, results of
operations or cash flows.
 
 In May
2008, FASB issued SFAS No. 162 (“SFAS 162”), “The Hierarchy of Generally
Accepted Accounting Principles”.  This Standard identifies the sources
of accounting principles and the framework for selecting the principles to be
used in the preparation of financial statements of nongovernmental entities
that are presented in conformity with generally accepted accounting
principles.  SFAS 162 directs the hierarchy to the entity, rather than
the independent auditors, as the entity is responsible for selecting accounting
principles for financial statements that are presented in conformity with
generally accepted accounting principles.  The Standard is effective 60
days following SEC approval of the Public Company Accounting Oversight
Board amendments to remove the hierarchy of generally accepted
accounting principles from the auditing standards.  The Company
does not believe this pronouncement will impact its financial
statements.
 
 In April
2008, the FASB issued FASB Staff Position (FSP) FAS 142-3, “Determination of the
Useful Life of Intangible Assets”, which amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under FASB Statement No. 142,
“Goodwill and Other Intangible Assets”.  This Staff Position is effective
for financial statements issued for fiscal years beginning after December
15, 2008, and interim periods within those fiscal years.  Early adoption is
prohibited.  Application of this FSP is not expected to have a
significant impact on the financial statements.
 
 In May
2008, the FASB issued FASB Staff Position (FSP) APB 14-1, “Accounting for
Convertible Debt That May Be Settled in Cash upon Conversion (Including
Partial Cash Settlement)” ("FSP 14-1").  FSP 14-1 will be effective for
financial statements issued for fiscal years beginning after December 15,
2008.  The FSP includes guidance that convertible debt instruments that may
be settled in cash upon conversion should be separated between the
liability and equity components, with each component being accounted for in a
manner that will reflect the entity's nonconvertible debt borrowing rate
when interest costs are recognized in subsequent periods.  FSP 14-1 is not
currently applicable to the Company since the Company does not have
convertible debt.
   -10-
  
 In June
2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted
in Share-Based Payment Transactions are Participating Securities”. This FSP
provides that unvested share-based payment awards that contain nonforfeitable
rights to dividends or dividend equivalents (whether paid or unpaid) are
participating securities and shall be included in the computation of earnings
per share pursuant to the two-class method.  The Company does not
currently have any share-based awards that would qualify as participating
securities.  Therefore, application of this FSP is not expected to
have an effect on the Company's financial reporting.
 
 NOTE
      3.
              REVERSE
      ACQUISITION
 
 On May 7,
2008, CGDI completed the acquisition of TRBT pursuant to the Stock for Stock
Equivalent Exchange Agreement and Plan (the “Exchange Agreement”) among CGDI,
TRBT, and each of the equity owners of TRBT (“TRBT
Shareholders”).  Pursuant to the Exchange Agreement, CGDI issued
31,500,000 shares of its common stock, representing 97.3% of CGDI's issued and
outstanding common stock immediately following the acquisition and 1,400,000
warrants exercisable at the rate of one warrant for one common share at a price
of $0.5 per share, in exchange of 80% equity interest in TRBT.
 
 As TRBT
Shareholders have become the majority shareholder of the consolidated entity
comprising CGDI and TRBT, the acquisition has been accounted for as a reverse
acquisition using the purchase method of accounting, where CGDI (the legal
acquirer) is deemed to be the accounting acquiree and TRBT (the legal acquiree)
to be the accounting acquirer.  However, the acquisition is also
considered to be a capital transaction in substance as TRBT (a private operating
company) has been merged into CGDI (a public corporation with nominal
non-monetary net assets) with the shareholders of CGDI, the former public
corporation continuing only as passive investors.  Hence, the cost of
the acquisition has been measured at the carrying value of the net assets of
CGDI with no goodwill or other intangible being recorded in accordance with the
accounting interpretation and guidance issued by the SEC staff.  The
results of CGDI have been consolidated from the date of the
acquisition.
 
 NOTE
      4.
              ADVANCES
      TO SUPPLIER – RELATED PARTY
 
 Advances
to supplier amounted to $11,725,810 and $11,741,966 as of June 30, 2009 and
December 31, 2008, respectively.  The advances mainly included
payments made to fund a building construction through Jingpin Clothing
City.  The building construction was completed in 2008 and operated
under the name “Bin Bin Clothing Square”, which is owned and operated by the
general manager of Jingpin Clothing City.  On December 31, 2008,
Jingpin Clothing City agreed to covert the outstanding balance of advances to
supplier into a business loan to Bin Bin Clothing Square with principal amount
up to $11,757,990.  The loan will expire in one year, bearing no
interest, and is secured by the land and building where Bin Bin Clothing Square
is located and operated at.
 
 NOTE
      5.
              PROPERTY
      AND EQUIPMENT
 
 At June
30, 2009 and December 31, 2008, the following were the details of the property
and equipment:
  June
      30,
                      
                      
                      December
      31,2009
                      
                      
                      2008Automobiles
                      
                      $
                      1,348,585
                      
                      
                      $
                      1,252,142Machinery
      & equipment
                      
                      
                      4,349,694
                      
                      
                      
                      4,330,214Building
                      
                      
                      75,871,476
                      
                      
                      
                      66,548,574Construction
      in progress
                      
                      
                      1,988,728
                      
                      
                      
                      8,963,826Less:  Accumulated
      depreciation
                      
                      
                      (12,724,148
                      )
                      
                      
                      (11,571,745
                      )Net
                      
                      $
                      70,834,335
                      
                      
                      $
                      69,523,011
   -11-
  
 Depreciation
expense for the three months ended June 30, 2009 and 2008 was $567,777 and
$535,773, respectively.  Depreciation expense for the six months ended
June 30, 2009 and 2008 was $1,187,339 and $1,071,545, respectively.
 
 NOTE
      6.
              INTANGIBLE
      ASSETS
 
 The
Company’s five shopping mall subsidiaries under TRBT are located in Taiyuan
City, Shanxi Province, People’s Republic of China.  At November, 2005,
the five subsidiaries acquired the right to use the land from the Haozhuang
Village government.  Per the People's Republic of China's governmental
regulations, the Government owns all land. The Company has recognized the
amounts paid for the acquisition of rights to use land as intangible asset and
amortizing over a period of 36 to 50 years.
 
 Net
intangible assets at June 30, 2009 and December 31, 2008 were as
follows:
  June
      30,
                    
                    
                    December
      31,2009
                    
                    
                    2008Rights
      to use land
                    
                    $
                    11,485,162
                    
                    
                    $
                    11,500,986Less:
      Accumulated amortization
                    
                    
                    (857,604
                    )
                    
                    
                    (750,473
                    )10,627,558
                    
                    
                    
                    10,750,513Less:
      Impairment charges
                    
                    
                    (1,439,050)
                    
                    
                    
                    (1,441,032
                    )Net
      intangible assets
                    
                    $
                    9,188,508
                    
                    
                    $
                    9,309,481
  Amortization
expense for the Company’s intangible assets for the three months ended June 30,
2009 and 2008 was $54,135 and $55,401, respectively.  Amortization
expense for the six months ended June 30, 2009 and 2008 was $108,238 and
110,768.
 
 Amortization
expense for the Company’s intangible assets over the next five years is
estimated to be:
  June
      30,2010
                    
                    $
                    216,4772011
                    
                    
                    216,4772012
                    
                    
                    216,4772013
                    
                    
                    216,4772014
      and thereafter
                    
                    
                    8,322,600$
                    9,188,508
  
 NOTE
      7.
              CONSTRUCTION
      PAYABLE
 
 As of
June 30, 2009 and December 31, 2008, construction payable amounted to $3,467,241
and $2,714,705, respectively.  The Company’s construction payable
consists primarily of amounts payable for the construction of shopping
mall.
   -12-
  
 NOTE
      8.
              LOANS
      PAYABLE
 
 As of
June 30, 2009 and December 31, 2008 loans payable consists the
following:
  June
      30, 2009
                      
                      
                      December
      31, 2008Amount
                      
                      
                      Annual
      Interest Rate
                      
                      
                      Amount
                      
                      
                      Annual
      Interest RateShort-term:Outside
      parties
                      
                      $
                      4,007,130
                      
                      
                      
                      0%-8.37
                      %
                      
                      $
                      3,231,934
                      
                      
                      
                      0%-8.37
                      %Banks
                      
                      
                      439,117
                      
                      
                      
                      13.05
                      %
                      
                      
                      843,410
                      
                      
                      
                      1.05%-13.05
                      %Related
      parties
                      
                      
                      1,053,880
                      
                      
                      
                      0%-1.50
                      %
                      
                      
                      146,574
                      
                      
                      
                      1.50
                      %Total
                      
                      $
                      5,500,126
                      
                      
                      
                      
                      
                      
                      $
                      4,221,918Long-term:
                      
                      $
                      47,693
                      
                      
                      
                      5.31
                      %
                      
                      $
                      -
 
 Loans
payable include the following items:
 
 Loans
payables to outside parties amounted to $4,007,130 and $3,231,934 at June 30,
2009 and December 31, 2008, respectively.  These loans are due to
unrelated parties with various expiration dates within one year, unsecured, and
with annual interest rates of 0% - 8.37%.
 
 Loans
payable to related parties amounted to $1,053,880 and $146,574 at June 30, 2009
and December 31, 2008, respectively.  These loans were payable to
related parties due within one year, unsecured, with an annual interest rate of
0%-1.5%.
 
 Loans
payable to banks amounted to $439,117 and $843,410 at June 30, 2009 and December
31, 2008, respectively.  These loans were due within one year,
unsecured, bearing annual interest rates of 1.05-13.05%.
 
 Long-term
debt amounted to $47,693 and $0 as of June 30, 2009 and December 31,
2008.  The loan was unsecured and due in January 2011.
 
 NOTE
      9.
              EQUITY
      TRANSACTIONS
 
 COMMON
STOCK AND WARRANTS
 
 On May 7,
2008, the Company completed the reverse acquisition of TRBT pursuant to the
Stock for Stock Equivalent Exchange Agreement and Plan (the “Exchange
Agreement”) among CGDI, TRBT, and each of the equity owners of TRBT (“TRBT
Shareholders”).  Pursuant to the Exchange Agreement, CGDI issued
31,500,000 shares of its common stock, representing 97.3% of CGDI's issued and
outstanding common stock immediately following the acquisition and 1,400,000
warrants exercisable at the rate of one warrant for one common share at a price
of $0.5 per share, in exchange of 80% equity interest in TRBT.  The
fair value of the warrants was estimated on the grant date using the
Black-Scholes option pricing model as required under SFAS 123 and EITF-96-18
with the following weighted average assumptions: expected dividend yield 0%,
volatility 157.56%, risk-free interest rate of 1.57%, and expected warrant life
of twelve months. The Company fair valued these warrants at
$689,347.
   -13-
 
 In May
2008, in consideration for services provided, the Company issued to Mirador
Consulting 500,000 warrants exercisable at the rate of one warrant for one share
of its common stock at a price of $1.00 per share expiring on November 5,
2008.  The fair value of the warrants was estimated on the grant date
using the Black-Scholes option pricing model as required under SFAS 123 and
EITF-96-18 with the following weighted average assumptions: expected dividend
yield 0%, volatility 157.56%, risk-free interest rate of 1.57%, and expected
warrant life of twelve months. The Company fair valued these warrants at
$191,138.
 
 In June
2008, the Company issued 2,590,934 shares of common stock for the settlement of
the $200,000 convertible debenture previously issued on August 24, 2004 with
interest accrued at 10% per annum amounting to $91,767.
 
 NOTE
      10.
              RELATED
      PARTY TRANSACTIONS
 
 The
parties primarily refer to the original individual shareholders of TRBT and
corporate entities related through one common shareholder, Mr. Aizhong An, CEO
and Chairman of the Company, who is also a majority shareholder in those related
corporate entities.
 
 Loan to related
parties
 
 Total
loan to related parties amounted to $3,366,075 and $2,647,049 as of June 30,
2009 and December 31, 2008, respectively, which included the
following:
 
 Loans to
related parties amounted to $3,209,923 and $2,490,682 as of June 30, 2009 and
December 31, 2008, respectively.
 
 Notes
receivable from related party amounted to $156,152 and $156,367 as of June 30,
2009 and December 31, 2008, respectively.  Interest receivable
associated with the notes and amounted to $9,780 and $8,153 as of June 30, 2009
and December 31, 2008, respectively.
 
 Due to related
parties
 
 Loans
from related parties amounted to $1,053,880 and $146,574 as of June 30, 2009 and
December 31, 2008, respectively.  Interest rates ranged from 0% to
1.05% per annum.  All loans mature within one year.
 
 Management Fee
Expense
 
 For the
six months ended June 30, 2009 and 2008, management fee allocated from Taiyuan
Clothing City Group, a related party of TRBT through common ownership, amounted
to $476,933 and $0, respectively.
 
 NOTE
      11.
              DISCONTINUED
      OPERATIONS
 
 During
the third quarter of 2008, the Company planned to exit the business of marketing
and retailing sun care products operated at Teeka Tan, Inc. in
Florida.  On September 1, 2008, the Board of Directors of the Company
decided and approved a resolution to discontinue such operations of the sun care
product business.  The Company intends to dispose all assets and
settle all liabilities of the discontinued operation in the next twelve-month
period.
 
 On March
18, 2009, the Company entered into an Agreement of Assumption and Release with
Brian S. John and Richard S. Miller, two former officers of the Company, to
transfer all assets of Teeka Tan, Inc. to these two individuals, who have agreed
to assume all liabilities relating to Teeka Tan, Inc., including, but not
necessarily limited to, all amounts payable by the Company with respect to Teeka
Tan, Inc. or all obligations, whether past, present or future of the Company
with respect to Teeka Tan, Inc.  A Bill of Sale was also signed on
March 18, 2009 between the Company and the two individuals, and executed on the
same day.
    -14-
 
 The
following gain on disposal of discontinued operations was recognized based on
the assets transferred to and the liabilities assumed by the two
individuals:
  Cash
      surrendered
                      
                      $
                      3,380Current
      assets
                      
                      
                      43,247Fixed
      assets, net
                      
                      
                      3,033Current
      liabilities
                      
                      
                      (75,634
                      )Gain
      on disposal of discontinued operations
                      
                      $
                      (25,974
                      )
  NOTE
      12.
              INCOME
      TAXES
 
 The
Company is registered in the State of Delaware and has operations in primarily
two tax jurisdictions - the PRC and the United States.  For certain
operations in the U.S., the Company has incurred net accumulated operating
losses for income tax purposes.  The Company believes that it is more
likely than not that these net accumulated operating losses will not be utilized
in the future.  Therefore, the Company has provided full valuation
allowance for the deferred tax assets arising from the losses at these locations
as of June 30, 2009 and December 31, 2008.  Accordingly, the Company
has no net deferred tax assets on the U.S. operations.
 
 United States of
America
 
 The
Company has significant income tax net operating losses (“NOL”) carried forward
from prior years.  Due to the change in ownership of more than fifty
percent, the amount of NOL which may be used in any one year will be subject to
a restriction under section 382 of the Internal Revenue Code.  Due to
the uncertainty of the realizability of the related deferred tax assets, a
reserve equal to the amount of deferred income taxes has been established at
June 30, 2009 and December 31, 2008. The Company has provided 100% valuation
allowance to the deferred tax assets as of June 30, 2009 and December 31,
2008.
 
 People’s Republic of China
(PRC)
 
 Under the
Enterprise Income Tax (“EIT”) of the PRC, prior to 2007, Chinese enterprises are
generally subject to an income tax at an effective rate of 33% (30% statutory
income taxes plus 3% local income taxes) on income reported in the statutory
financial statements after appropriate tax adjustments, unless the enterprise is
located in a specially designated region for which more favorable effective tax
rates are applicable.    Beginning January 1, 2008, the new
EIT law has replaced the existing laws for Domestic Enterprises (“DEs”) and
Foreign Invested Enterprises (“FIEs”).  The new standard EIT rate of
25% will replace the 33% rate previously applicable to both DES and
FIEs.  The two year tax exemption, six year 50% tax reduction and tax
holiday for production-oriented FIEs will be eliminated.  The Company
is currently evaluating the effect of the new EIT law on its financial
position.
 
 The
provision for income taxes from continuing operations on income consists of the
following for the six months ended June 30, 2009 and 2008:
   -15-
  
 2009
                      
                      
                      2008Income
      tax expense – current
                      
                      $
                      586,854
                      
                      
                      $
                      43,069Income
      tax expense – deferred
                      
                      
                      -
                      
                      
                      
                      -Total
      income tax expense
                      
                      $
                      586,854
                      
                      
                      $
                      43,069
 
 The
following is a reconciliation of the statutory tax rate to the effective tax
rate for the three months ended June 30, 2009 and 2008:
 
 2009
                              
                              
                              2008U.S.
      Federal tax at statutory rate
                              
                              
                              34.0
                              %
                              
                              
                              -U.S.
      State tax net of federal taxes
                              
                              
                              8.7
                              %
                              
                              
                              -Valuation
      allowance
                              
                              
                              (42.7
                              %)
                              
                              
                              -Foreign
      income tax – PRC
                              
                              
                              25
                              %
                              
                              
                              33
                              %Net
      effect of non-taxable income/non-deductible expenses
                              
                              
                              (3.1
                              %)
                              
                              
                              (31.44
                              %)Effective
      tax rate
                              
                              
                              21.90
                              %
                              
                              
                              1.56
                              %
 
 Deferred
taxes
 
 The tax
effect of temporary differences that give rise to the Company’s deferred tax
asset as of June 30, 2009 and December 31, 2008 are as follows:
 
 June
      30,
                      2009
                    
                    
                    December
      31, 2008Deferred
      tax asset – non-currentImpairment
      loss on intangible assets
                    
                    $
                    359,762
                    
                    
                    $
                    360,258Valuation
      allowance
                    
                    
                    
                    
                    
                    
                    -Net
      deferred tax asset
                    
                    $
                    359,762
                    
                    
                    $
                    360,258




-16-






ITEM
2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS





Caution Regarding
Forward-Looking Information





Certain
statements contained herein, including, without limitation, statements
containing the words “believes”, “anticipates”, “expects” and words of similar
import, constitute forward-looking statements. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause
the actual results, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements.





Such
factors include, among others, the following: international, national and local
general economic and market conditions: demographic changes; the ability of the
Company to sustain, manage or forecast its growth; the ability of the Company to
successfully make and integrate acquisitions; raw material costs and
availability; new product development and introduction; existing government
regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; the loss of significant customers
or suppliers; fluctuations and difficulty in forecasting operating results;
changes in business strategy or development plans; business disruptions; the
ability to attract and retain qualified personnel; the ability to protect
technology; and other factors referenced in this and previous
filings.





Given
these uncertainties, readers of this prospectus and investors are cautioned not
to place undue reliance on such forward-looking statements.





Overview





The
following discussion is an overview of the important factors that management
focuses on in evaluating our businesses, financial condition and operating
performance and should be read in conjunction with the financial statements
included in this Current Report on Form 8-K.  This discussion contains
forward-looking statements that involve risks and
uncertainties.  Actual results could differ materially from those
anticipated in these forward looking statements as a result of any number of
factors, including those set forth under the section entitled “Risk Factors” and
elsewhere in this Current Report on Form 8-K.





Our
Business





TRBT
operates six (6) shopping malls all located in the Chaoyang Street
area in the city of Taiyuan, Shanxi Province, China.





Principal
Factors Affecting our Financial Performance





We
believe that the following factors affect our financial
performance:




·
            Ability
      to successfully acquire new shopping malls and increase foot traffic to
      these locations;





·
            Continue
      to attract consumers to our shopping malls;
and





·
            Attract
      profitable retailers to lease space in our shopping malls;
    and





·
            Continue
      to keep a low debt to asset ratio.





In
addition, the following “global” factor will have an affect on our financial
performance:




·
            Growth
      of the Economy in China





China’s
economy has experience significant growth over the past few years and Chinese
consumers have been continuing to spend money at a record breaking pace with no
signs of a slowdown and TRBT expects this trend to continue.




Results of
Operations





The
following tables set forth key components of our results of operations for the
periods indicated, in dollars, and key components of our revenue for the period
indicated, in dollars.






-17-






For
      The Three Months Ended June 30,2009
                              
                              
                              2008
                              
                              
                              2009
      vs. 2008Net
      revenue
                              
                              $
                              4,184,977
                              
                              
                              $
                              3,738,624
                              
                              
                              $
                              446,353
                              
                              
                              
                              12
                              %General,
      selling and administrative expensesDepreciation
      expense
                              
                              
                              567,777
                              
                              
                              
                              535,773
                              
                              
                              
                              32,004
                              
                              
                              
                              6
                              %Other
      general, selling and administrative expenses
                              
                              
                              1,730,509
                              
                              
                              
                              2,048,985
                              
                              
                              
                              (318,476
                              )
                              
                              
                              -16
                              %Total
      general, selling and administrative expenses
                              
                              
                              2,298,287
                              
                              
                              
                              2,584,758
                              
                              
                              
                              (286,471
                              )
                              
                              
                              -11
                              %Operating
      income
                              
                              
                              1,886,691
                              
                              
                              
                              1,153,866
                              
                              
                              
                              732,825
                              
                              
                              
                              64
                              %Non-operating
      income (expenses)Interest
      income
                              
                              
                              1,401
                              
                              
                              
                              1,494
                              
                              
                              
                              (93
                              )
                              
                              
                              -6
                              %Interest
      expense
                              
                              
                              (59,013
                              )
                              
                              
                              (72,679
                              )
                              
                              
                              13,666
                              
                              
                              
                              -19
                              %Other
      income (expense)
                              
                              
                              282,379
                              
                              
                              
                              (80,982
                              )
                              
                              
                              363,361
                              
                              
                              
                              -449
                              %Total
      non-operating income (expenses)
                              
                              
                              224,767
                              
                              
                              
                              (152,167
                              )
                              
                              
                              376,934
                              
                              
                              
                              -248
                              %Income
      from continuing operations, before tax
                              
                              
                              2,111,457
                              
                              
                              
                              1,001,699
                              
                              
                              
                              1,109,758
                              
                              
                              
                              111
                              %Income
      tax expense
                              
                              
                              447,793
                              
                              
                              
                              22,534
                              
                              
                              
                              425,259
                              
                              
                              
                              1887
                              %Income
      from continuing operations, net of tax
                              
                              
                              1,663,664
                              
                              
                              
                              979,165
                              
                              
                              
                              684,499
                              
                              
                              
                              70
                              %Gain
      on disposal of discontinued operations
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Net
      income
                              
                              
                              1,663,664
                              
                              
                              
                              979,165
                              
                              
                              
                              684,499
                              
                              
                              
                              70
                              %Net
      income attributable to the noncontrolling interest
                              
                              
                              629,352
                              
                              
                              
                              370,411
                              
                              
                              
                              258,941
                              
                              
                              
                              70
                              %Net
      income attributable to the common stockholders
                              
                              $
                              1,034,313
                              
                              
                              $
                              608,754
                              
                              
                              $
                              425,558
                              
                              
                              
                              70
                              %





Net
Revenue:





Net
revenue increased by $446,353 from $3.74 million for the quarter ended June 30,
2008 to $4.18 million for the quarter ended June 30, 2009, a 12%
increase.  The increase was mainly due to the expansion of Longma
Shopping Mall being completed and starting to operate.  The associated
deferred revenue collected previously from commercial tenants started to
amortize and recognize over the leasing period.  Management service
income collected from the new commercial tenants also increased revenue. 
In addition, management also increased the management service income per square
meter at several clothing mall booths at Xicheng Shopping Mall.  Those
increases were partially offset by decrease in rental income at Jingpin Shopping
Mall and Xicheng Shopping Mall, primarily affected by the economy
downturn.





General, selling and administrative
expenses:





Total
general, selling and administrative expenses decreased by $286,471 from $2.58
million for the quarter ended June 30, 2008 to $2.30 million for the quarter
ended June 30, 2009, an 11% decrease.  The higher expense for the
quarter ended June 30, 2008 was mainly due to a one-time charge of $880,485
incurred in the closing of the reverse acquisition, including the issuance of
1,400,000 warrants fair valued at $689,347, and 500,000 warrants fair valued at
$191,138.  Excluding the one-time charges, total general, selling and
administrative expenses decreased by $562,009.  The decreases were
primarily incurred in electricity expense and heating expense.  The
higher amounts in those expenses in 2008 were driven by two major construction
projects for Xicheng Shopping Mall Phase II and the Longma
expansion.  The increase was partially offset by the $32,004 increase
in depreciation expense resulting from the expansion of the Company’s operating
facilities.






-18-






Income from continuing
operations:





We
observed an increase in income from continuing operations by $1.1 million, from
$1.0 million for the quarter ended June 30, 2008 to $2.1 million for the quarter
ended June 30, 2009, a 111% increase.  Such increase was mainly
attributable to increases in net revenue as stated above, as well as higher
other income incurred during the current quarter.  Other income
increased by $363,361 from ($80,982) for the quarter ended June 30, 2008 to
$282,379 for the quarter ended June 30, 2009.  The increase was mainly
resulted from reversing the donations made to Hao Zhuang Village
during the first quarter of 2009 for construction of a community entertainment
and cultural center, given that Hao Zhuang Village has agreed to pay
back such donation.





Income tax
expense:





Income
tax expense increased by $447,793 from $22,534 for the quarter ended June 30,
2008 to $447,793 for the quarter ended June 30, 2009.  The increase
was mainly due to change in the effective tax rate to our operations in PRC,
increasing from 2.25% for the second quarter of 2008 to 21.20% for the current
quarter, due to the lack of favorable tax policy granted by local governments to
the Company.


Net
income attributable to the noncontrolling interest





Net
Income attributable to the noncontrolling interest was $370,411 for the
quarter ended June 30, 2008 and $629,352 for the quarter ended June 30, 2009, an
increase of $258,941 or 70%.  TRBT owns 76.1% of each of its five
subsidiaries in China, leaving 23.9% noncontrolling
interest.  Pursuant to the reverse merger in May 2008, CGDI owns 80%
of TRBT which added an additional 20% of noncontrolling interest out of the
76.1% ownership over TRBT’s five subsidiaries.  Such ownership
structure has not changed since then.  The increase was substantially
in line with the increase in net earnings during the current
quarter.





Net
income attributable to the common stockholders





Net
income attributable to the common stockholders was $1,034,313 for the quarter
ended June 30, 2009, compared to $608,754 for the quarter ended June 30, 2008,
an increase of $425,558 or 70%.  The higher net income for the current
quarter was attributable to the increased net revenue and other income as
described above.






-19-







For
      The Six Months Ended June 30,2009
                              
                              
                              2008
                              
                              
                              2009
      vs. 2008Net
      revenue
                              
                              $
                              7,929,961
                              
                              
                              $
                              7,407,703
                              
                              
                              $
                              522,258
                              
                              
                              
                              7
                              %General,
      selling and administrative expensesDepreciation
      expense
                              
                              
                              1,187,339
                              
                              
                              
                              1,071,545
                              
                              
                              
                              115,794
                              
                              
                              
                              11
                              %Other
      general, selling and administrative expenses
                              
                              
                              3,820,623
                              
                              
                              
                              3,304,660
                              
                              
                              
                              515,963
                              
                              
                              
                              16
                              %Total
      general, selling and administrative expenses
                              
                              
                              5,007,962
                              
                              
                              
                              4,376,205
                              
                              
                              
                              631,757
                              
                              
                              
                              14
                              %Operating
      income
                              
                              
                              2,921,999
                              
                              
                              
                              3,031,498
                              
                              
                              
                              (109,499
                              )
                              
                              
                              -4
                              %Non-operating
      income (expenses)Interest
      income
                              
                              
                              3,214
                              
                              
                              
                              3,466
                              
                              
                              
                              (252
                              )
                              
                              
                              -7
                              %Interest
      expense
                              
                              
                              (174,521
                              )
                              
                              
                              (176,561
                              )
                              
                              
                              2,040
                              
                              
                              
                              -1
                              %Other
      expense
                              
                              
                              (70,753
                              )
                              
                              
                              (101,548
                              )
                              
                              
                              30,795
                              
                              
                              
                              -30
                              %Total
      non-operating expenses
                              
                              
                              (242,060
                              )
                              
                              
                              (274,643
                              )
                              
                              
                              32,583
                              
                              
                              
                              -12
                              %Income
      from continuing operations, before tax
                              
                              
                              2,679,939
                              
                              
                              
                              2,756,855
                              
                              
                              
                              (76,916
                              )
                              
                              
                              -3
                              %Income
      tax expense
                              
                              
                              586,854
                              
                              
                              
                              43,069
                              
                              
                              
                              543,785
                              
                              
                              
                              1263
                              %Income
      from continuing operations, net of tax
                              
                              
                              2,093,085
                              
                              
                              
                              2,713,786
                              
                              
                              
                              (620,701
                              )
                              
                              
                              -23
                              %Gain
      on disposal of discontinued operations
                              
                              
                              25,974
                              
                              
                              
                              -
                              
                              
                              
                              25,974
                              
                              
                              
                              100
                              %Net
      income
                              
                              
                              2,119,059
                              
                              
                              
                              2,713,786
                              
                              
                              
                              (594,727
                              )
                              
                              
                              -22
                              %Net
      income attributable to the noncontrolling interest
                              
                              
                              823,200
                              
                              
                              
                              1,054,236
                              
                              
                              
                              (231,036
                              )
                              
                              
                              -22
                              %Net
      income attributable to the common stockholders
                              
                              $
                              1,295,859
                              
                              
                              $
                              1,659,550
                              
                              
                              $
                              (363,691
                              )
                              
                              
                              -22
                              %





Net
Revenue:





Net
revenue increased by $552,258 from $7.41 million for the six months ended June
30, 2008 to $7.93 million for the six months ended June 30, 2009, a 7%
increase.  The increase was mainly due to the expansion of Longma
Shopping Mall being completed and starting to operate.  The associated
deferred revenue collected previously from commercial tenants started to
amortize and recognize over the leasing period.  Management service
income collected from the new commercial tenants also increased
revenue.  In addition, management also increased the management
service income per square meter at several clothing mall booths at Xicheng
Shopping Mall.  Those increases were partially offset by decrease in
rental income at Jingpin Shopping Mall and Xicheng Shopping Mall, primarily
affected by the economy downturn.





General, selling and administrative
expenses:





Total
general, selling and administrative expenses increased by $631,757 from $4.38
million for the six months ended June 30, 2008 to $5.01 million for the six
months ended June 30, 2009, a 14% increase.  The increase was
primarily driven by increases in management fee expense, salaries and wages,
maintenance and repair expense, and depreciation expense.  Management
fee expense increased to $476,933 for the period from $13,968 same quarter prior
year.  Such fee was allocated from and paid to Taiyuan Clothing City
Group, a related party through common ownership of TRBT, for general management
services provided to all affiliated companies.  Increase in salaries
and wages was mainly due to headcounts increased to support the expanded
operations of the Company.  Depreciation expense increased by $115,794
compared to the current period of the prior year.  The increase was
also triggered by the expansion of the Company’s operating
facilities.  The above increases were partially offset by decrease in
electricity expense and heating expense.  The higher amounts in those
expenses in 2008 were driven by two major construction projects for Xicheng
Shopping Mall Phase II and the Longma expansion.






-20-






Income from continuing
operations:





We
observed a decrease in income from continuing operations by $76,916, from $2.76
million for the six months ended June 30, 2008 to $2.68 million for the six
months ended June 30, 2009, a 3% decrease.  Such decrease was
primarily attributable to increases in general, selling and administrative
expenses as discussed previously.





Income tax
expense:





Income
tax expense increased by $543,785 from $43,069 for the six months ended June 30,
2008 to $586,854 for the six months ended June 30, 2009.  The increase
was mainly due to change in the effective tax rate to our operations in PRC,
increasing from 1.56% for the second quarter of 2008 to 21.90% for the current
quarter, due to the lack of favorable tax policy granted by local governments to
the Company.





Net
income attributable to the noncontrolling interest





Net
Income attributable to the noncontrolling interest was $1.05 million for
the six months ended June 30, 2008 and $823,200 for the six months ended June
30, 2009, a decrease of $231,036 or 22%.  TRBT owns 76.1% of each of
its five subsidiaries in China, leaving 23.9% noncontrolling
interest.  Pursuant to the reverse merger in May 2008, CGDI owns 80%
of TRBT which added an additional 20% of noncontrolling interest out of the
76.1% ownership over TRBT’s five subsidiaries.  Such ownership
structure has not changed since then.  The decrease was substantially
in line with the decrease in net earnings during the current period, which was
triggered by higher income tax expense accrued.





Net
income attributable to the common stockholders





Net
income attributable to the common stockholders was $1.30 million for the six
months ended June 30, 2009, compared to $1.66 million for the six months ended
June 30, 2008, a decrease of $363,691 or 22%.  The lower net income
for the current period was attributable to the increased income tax expense
accrued as described above.




LIQUIDITY
AND CAPITAL RESOURCES





The
Company currently generates its cash flow through operations which it believes
will be sufficient to sustain current level operations for at least the next
twelve months.  In 2009, we intend to continue to work to expand our
presence in the commercial real estate market, including the acquisition of
another shopping mall.





To the
extent we are successful in growing our business, identifying potential
acquisition targets and negotiating the terms of such acquisition, and the
purchase price includes a cash component, we plan to use our working capital and
the proceeds of any financing to finance such acquisition costs. Our opinion
concerning our liquidity is based on current information. If this information
proves to be inaccurate, or if circumstances change, we may not be able to meet
our liquidity needs.





2009 –
2010 Outlook





Over the
course of the next few years, we intend to grow and expand our commercial real
estate business.  We expect to acquire an additional 2 shopping
centers within the next three years.  These acquisitions will be
financed either through revenues of the Company or by financings and sales of
the Company’s stock or other securities.  In addition, TRBT expects to
complete the acquisition of development rights to 3,000 square metric units of
prime commercial land.





PLAN
OF OPERATIONS


Critical
Accounting Policies





Our
financial statements and related public financial information are based on the
application of accounting principles generally accepted in the United States
(“GAAP”). GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities, revenue and expense amounts reported. These estimates can
also affect supplemental information contained in our external disclosures
including information regarding contingencies, risk and financial condition. We
believe our use if estimates and underlying accounting assumptions adhere to
GAAP and are consistently and conservatively applied. We base our estimates on
historical experience and on various other assumptions that we believe to
be reasonable under the circumstances. Actual results may differ materially from
these estimates under different assumptions or conditions. We continue to
monitor significant estimates made during the preparation of our financial
statements.






-21-




Our
significant accounting policies are summarized in Note 1 of our financial
statements. While all these significant accounting policies impact its financial
condition and results of operations, we view certain of these policies as
critical. Policies determined to be critical are those policies that have the
most significant impact on our financial statements and require management to
use a greater degree of judgment and estimates. Actual results may differ
from those estimates. Our management believes that given current facts and
circumstances, it is unlikely that applying any other reasonable judgments or
estimate methodologies would cause effect on our results of operations,
financial position or liquidity for the periods presented in this
report.




Recent Accounting
Pronouncements




In
September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
No. 157 (“SFAS 157”), “Fair Value Measurements”, which is effective for fiscal
years beginning after November 15, 2007 with earlier adoption
encouraged.  SFAS 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands
disclosures about fair value measurements.  In February 2008, the FASB
issued FASB Staff Position FAS 157-2, Effective Date of FASB Statement No. 157
which delayed the effective date of SFAS 157 for all non-financial assets and
liabilities, except those that are recognized or disclosed at fair value in the
financial statements on a recurring basis, until January 1, 2009.  The
Company has not yet determined the impact the implementation of SFAS 157 will
have on the Company’s non-financial assets and liabilities which are not
recognized or disclosed on a recurring basis.  However, the Company
does not anticipate that the full adoption of SFAS 157 will significantly impact
their consolidated financial statements.





In
February 2007, FASB issued SFAS No. 159 (“SFAS 159”), “The Fair Value Option for
Financial Assets and Financial Liabilities”.  This Statement permits
entities to choose, at specified election dates, to measure eligible financial
assets and liabilities at fair value that are not otherwise required to be
measured at fair value.  The objective of SFAS 159 is to improve
financial reporting by providing entities with the opportunity to mitigate
volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions.  The Company adopted SFAS 159 on January 1, 2008, but
the implementation of SFAS 159 did not have a significant impact on the
Company's financial position or results of operations.





In
December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business
Combinations” (“SFAS 141R).  SFAS 141R changes how a reporting
enterprise accounts for the acquisition of a business.  SFAS 141R
establishes principles and requirements for how an acquirer recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any noncontrolling interest in the acquiree and the
goodwill acquired. SFAS 141R also establishes disclosure requirements to enable
the evaluation of the nature and financial effects of the business combination.
SFAS 141R is effective for fiscal years beginning on or after December 15, 2008
and early adoption and retrospective application is prohibited.  The
impact of adopting SFAS 141R will depend on the nature and terms of future
acquisitions.





In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements”, which is an amendment of Accounting Research
Bulletin (“ARB”) No. 51.  This statement clarifies that a
noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements.  This statement changes the way the consolidated
income statement is presented, thus requiring consolidated net income to be
reported at amounts that include the amounts attributable to both parent and the
noncontrolling interest.  This statement is effective for the fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2008.  The adoption of SFAS 160 has changed the financial
statement presentation regarding non-controlling interests, but does not have
significant impact on the Company's consolidated financial position, results of
operations or cash flows.





In May
2008, FASB issued SFAS No. 162 (“SFAS 162”), “The Hierarchy of Generally
Accepted Accounting Principles”.  This Standard identifies the sources
of accounting principles and the framework for selecting the principles to be
used in the preparation of financial statements of nongovernmental entities
that are presented in conformity with generally accepted accounting
principles.  SFAS 162 directs the hierarchy to the entity, rather than
the independent auditors, as the entity is responsible for selecting accounting
principles for financial statements that are presented in conformity with
generally accepted accounting principles.  The Standard is effective
60 days following SEC approval of the Public Company Accounting Oversight Board
amendments to remove the hierarchy of generally accepted accounting
principles from the auditing standards.  The Company does not believe
this pronouncement will impact its financial statements.





In April
2008, the FASB issued FASB Staff Position (FSP) FAS 142-3, “Determination of the
Useful Life of Intangible Assets”, which amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under FASB Statement No. 142,
“Goodwill and Other Intangible Assets”.  This Staff Position is
effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those fiscal
years.  Early adoption is prohibited.  Application of this
FSP is not expected to have a significant impact on the financial
statements.






-22-






In May
2008, the FASB issued FASB Staff Position (FSP) APB 14-1, “Accounting for
Convertible Debt That May Be Settled in Cash upon Conversion (Including Partial
Cash Settlement)” ("FSP 14-1").  FSP 14-1 will be effective for
financial statements issued for fiscal years beginning after December 15,
2008.  The FSP includes guidance that convertible debt instruments
that may be settled in cash upon conversion should be separated between the
liability and equity components, with each component being accounted for in a
manner that will reflect the entity's nonconvertible debt borrowing rate when
interest costs are recognized in subsequent periods.  FSP 14-1 is not
currently applicable to the Company since the Company does not have convertible
debt.





In June
2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted
in Share-Based Payment Transactions are Participating
Securities”.  This FSP provides that unvested share-based payment
awards that contain nonforfeitable rights to dividends or dividend
equivalents (whether paid or unpaid) are participating securities and shall
be included in the computation of earnings per share pursuant to the two-class
method.  The Company does not currently have any share-based awards
that would qualify as participating securities.  Therefore,
application of this FSP is not expected to have an effect on the Company's
financial reporting.





Off-Balance Sheet
Arrangements




We do not
have any off-balance sheet arrangements, financings, or other relationships with
unconsolidated entities or other persons, also known as “special purpose
entities” (SPEs).




Item
3. Quantitative and Qualitative Disclosures About Market Risk





Not
required for Smaller Reporting Companies.




Item
4T.  Controls and Procedures





a)
  Evaluation of
Disclosure Controls. Pursuant to Rule 13a-15(b) under the Securities
Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation,
with the participation of the Company’s management, including the Company’s
Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the
Company’s principal financial and accounting officer), of the effectiveness of
the Company’s disclosure controls and procedures (as defined under Rule
13a-15(e) under the Exchange Act) as of the end of the period covered by
this report. Based upon that evaluation, the Company’s CEO and CFO concluded
that the Company’s disclosure controls and procedures are effective to ensure
that information required to be disclosed by the Company in the reports that the
Company files or submits under the Exchange Act, is recorded, processed,
summarized and reported, within the time periods specified in the SEC’s rules
and forms, and that such information is accumulated and communicated to the
Company’s management, including the Company’s CEO and CFO, as appropriate, to
allow timely decisions regarding required disclosure.





(b)
  Changes in
internal control over financial reporting. There have been no changes in
our internal control over financial reporting that occurred during the last
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.









-23-






PART
II - OTHER INFORMATION




Item
1. Legal Proceedings.




We are
currently not involved in any litigation that we believe could have a material
adverse effect on our financial condition or results of operations. There is no
action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body
pending or, to the knowledge of the executive officers of our company or any of
our subsidiaries, threatened against or affecting our company, our common stock,
any of our subsidiaries or of our companies or our subsidiaries’ officers or
directors in their capacities as such, in which an adverse decision could have a
material adverse effect.




Item
1A. Risk Factors.




None.





Item
2. Unregistered Sales of Equity Securities and Use of Proceeds




None.





Item
3. Defaults Upon Senior Securities.




None.




Item
4. Submission of Matters to a Vote of Security Holders.




None.




Item
5. Other Information.




None




Item
6. Exhibits and Reports of Form 8-K.




(a)         Exhibits




31.1 Certifications pursuant to Section 302 of Sarbanes Oxley Act of
2002




32.1 Certifications pursuant to Section 906 of Sarbanes Oxley Act of
2002




(b)         Reports
of Form 8-K




None.







-24-







SIGNATURES




Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.




CHINA
      GROWTH DEVELOPMENT, INC.Date:
      August 13, 2009
            By:
            /s/ Aizhong
      AnAizhong
      An
              Chief
      Executive Officer
























-25-