UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB

(Mark One)

|X|   Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
      of 1934

      For the quarterly period ended September 30, 2006

|_|   Transition report under Section 13 or 15(d) of the Exchange Act

      For the transition period from _____________ to _____________

                        Commission File Number 000-51432

                  Chardan South China Acquisition Corporation

       _________________________________________________________________
       (Exact Name of Small Business Issuer as Specified in Its Charter)

            Delaware                                     20-2479786
            --------                                     ----------
(State or other Jurisdiction of                      (I.R.S. Employer
 Incorporation or Organization)                     Identification No.)

             625 Broadway, Suite 1111, San Diego, California 92101
                    (Address of Principal Executive Office)

                                 (619) 795-4627
                (Issuer's Telephone Number, Including Area Code)

      Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes |X| No |_|

      Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes |X| No |_|

      As of November 1, 2006, 7,000,000 shares of common stock, par value $.0001
per share, were issued and outstanding.

      Transitional Small Business Disclosure Format (check one): Yes |_| No |X|

<PAGE>

Part I:  Financial Information:

  Item 1 - Financial Statements (Unaudited):

  Balance Sheet.........................................................    3

  Statements of Operations..............................................    4

  Statement of Stockholders' Equity.....................................    5

  Statement of Cash Flows...............................................    6

  Notes to Financial Statements.........................................    7

  Item 2 - Management's Discussion and Analysis or Plan of Operation....    8

  Item 3 - Controls and Procedures .....................................    9

Part II.  Other Information

  Item 6 - Exhibits.....................................................    9

Signatures..............................................................   10


                                        2

<PAGE>

                   Chardan South China Acquisition Corporation
                          (A Development Stage Company)
                            Condensed Balance Sheets

<TABLE>
<CAPTION>
                                                                     September     December
                                                                      30, 2006     31, 2005
                                                                    -----------   -----------
                                                                    (Unaudited)
<S>                                                                 <C>           <C>
                                ASSETS

Current assets:
  Cash and cash equivalents                                         $   272,094   $   912,964
  Investments held in trust                                          31,035,547    30,260,861
  Deferred tax asset                                                    255,054       119,967
  Prepaid expenses and other                                              8,444        48,333
                                                                    -----------   -----------
Total Assets                                                        $31,571,139   $31,342,125
                                                                    ===========   ===========
                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued expenses                             $    75,206   $    53,253
  Income taxes payable                                                  176,038       165,556
  Deferred interest                                                     244,254        86,395
                                                                    -----------   -----------
Total current liabilities                                               495,498       305,204
                                                                    -----------   -----------

Commitments

Common stock subject to possible conversion
  1,149,425 shares at conversion value                                5,964,017     5,964,017
                                                                    -----------   -----------
Stockholders' equity:
  Preferred stock, $.0001 par value, 1,000,000
    shares authorized, none issued                                           --            --
  Common stock, $.0001 par value: 20,000,000 shares
    authorized, 7,000,000 shares issued and outstanding
    (includes 1,149,425 shares subject to possible conversion)              700           700
  Additional paid-in capital                                         25,003,435    25,003,435
  Earnings accumulated during the development stage                     107,489        68,769
                                                                    -----------   -----------
Total stockholders' equity                                           25,111,624    25,072,904
                                                                    -----------   -----------
Total Liabilities and Stockholders' Equity                          $31,571,139   $31,342,125
                                                                    ===========   ===========
</TABLE>

          See the accompanying notes to condensed financial statements


                                        3

<PAGE>

                   Chardan South China Acquisition Corporation
                          (A Development Stage Company)
                       Condensed Statements of Operations

<TABLE>
<CAPTION>
                                                                                             From             From
                                                 Three         Three         Nine       March 10, 2005   March 10, 2005
                                                 Months        Months        Months      (Inception)       (Inception)
                                                 Ended         Ended         Ended          Through         Through
                                               September     September     September       September        September
                                                30, 2006      30, 2005      30, 2006       30, 2005         30, 2006
                                              -----------   -----------   -----------   --------------   --------------
                                              (Unaudited)   (Unaudited)   (Unaudited)    (Unaudited)       (Unaudited)
<S>                                            <C>           <C>           <C>            <C>              <C>
Costs and Expenses
  Admin and office support                         22,500        15,000        67,500         15,000          105,000
  Consulting                                           --            --        66,700             --           66,700
  Insurance                                        14,277        10,740        49,277         10,740           78,444
  Professional fees                                10,612         4,335        43,729          5,275           78,204
  State franchise tax                               5,937        13,788        18,612         13,788           42,112
  Travel                                          104,323        27,195       263,190         27,195          341,034
  Other operating costs                             8,128         2,950        19,007          3,080           50,076
                                               ----------    ----------    ----------     ----------       ----------
Total costs and expenses                          165,777        74,008       528,015         75,078          761,570
                                               ----------    ----------    ----------     ----------       ----------
Operating loss                                   (165,777)      (74,008)     (528,015)       (75,078)        (761,570)
Other income:
  Interest income                                 203,668       114,559       623,130        114,559          971,043
                                               ----------    ----------    ----------     ----------       ----------
Net income before income tax provision             37,891        40,551        95,115         39,481          209,473
  Income tax provision                            (12,110)      (15,750)      (56,395)       (15,750)        (101,984)
                                               ----------    ----------    ----------     ----------       ----------
Net income                                     $   25,781    $   24,801    $   38,720     $   23,731       $  107,489
                                               ==========    ==========    ==========     ==========       ==========
Earnings per share - basic and diluted               0.00          0.01          0.01           0.01             0.02
Weighted average shares outstanding - basic
  and diluted                                   7,000,000     4,442,935     7,000,000      2,682,927        5,544,815
</TABLE>

          See the accompanying notes to condensed financial statements


                                        4

<PAGE>

                   Chardan South China Acquisition Corporation
                          (A Development Stage Company)
                  Condemsed Statements of Stockholders' Equity
           From March 10, 2005 (Inception) through September 30, 2006
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                     Earnings
                                                                     Common         Additional      accumulated      Stockholders'
                                                              ------------------    Paid - In       during the          Equity
                                                                Shares    Amount     Capital     development stage     (Deficit)
                                                              ---------   ------   -----------   -----------------   -------------
<S>                                                           <C>          <C>     <C>                <C>             <C>
Issuance of common shares to initial
  shareholders on March 10, 2005 at $0.02 per share           1,250,000    $125    $    24,875        $     --        $    25,000
Sale of 5,750,000 units, net of underwriters'
  discount and offering expenses (includes 1,149,425
  shares subject to possible conversion)                      5,750,000     575     30,942,477              --         30,943,052
Proceeds subject to possible conversion of 1,149,425 shares          --      --     (5,964,017)             --         (5,964,017)
Proceeds from issuance of an underwriter's option                    --      --            100              --                100
Income for the year ended December 31, 2005                          --      --             --          68,769             68,769
                                                              ---------    ----    -----------        --------        -----------
Balance at December 31, 2005                                  7,000,000     700     25,003,435          68,769         25,072,904
Unaudited:
Income for the nine months ended September 30, 2006                  --      --             --          38,720             38,720
                                                              ---------    ----    -----------        --------        -----------
Balance at September 30, 2006                                 7,000,000    $700    $25,003,435        $107,489        $25,111,624
                                                              =========    ====    ===========        ========        ===========
</TABLE>

           See the accomanying notes to condensed financial statements


                                        5

<PAGE>

                   Chardan South China Acquisition Corporation
                          (A Development Stage Company)
                        Condensed Statement of Cash Flows

<TABLE>
<CAPTION>
                                                                                   From                 From
                                                              Nine            March 10, 2005       March 10, 2005
                                                             Months            (Inception)          (Inception)
                                                             Ended               Through              Through
                                                       September 30, 2006   September 30, 2005   September 30, 2006
                                                       ------------------   ------------------   ------------------
                                                           (Unaudited)          (Unaudited)          (Unaudited)
<S>                                                         <C>                <C>                  <C>
Cash Flows from Operating Activities:

Net income (loss)                                           $  38,720          $     23,731         $    107,489
Adjustments to reconcile net loss to net cash
used in operating activities:
  Amortization of discounts and interest earned on
    securities held in trust                                 (774,686)             (140,588)          (1,200,547)
Changes in operating Assets and Liabilities:

  Prepaid expenses and other current assets                    39,889              (101,515)              (8,444)
  Deferred tax asset                                         (135,087)                   --             (264,415)
  Accounts payable and accrued expenses                        21,953                56,587               75,206
  Income taxes payable                                         10,482                    --              185,399
  Deferred interest                                           157,859                28,103              244,254
                                                            ---------          ------------         ------------
Net cash used by operating activities                        (640,870)             (133,682)            (861,058)
                                                            ---------          ------------         ------------

Cash Flows from Investing Activities:

  Purchases of investments held in trust                           --           (29,835,000)         (29,835,000)
                                                            ---------          ------------         ------------
Net cash provided (used) by investing activities                   --           (29,835,000)         (29,835,000)
                                                            ---------          ------------         ------------

Cash Flows from Financing Activities

  Proceeds from related party loans                                --                    --                   --
  Proceeds from issuance of common stock                           --            34,525,000           34,525,000
  Proceeds from issuance of option                                 --                   100                  100
  Payment of costs associated with public offering                 --            (3,556,948)          (3,556,948)
                                                            ---------          ------------         ------------
Net cash provided by financing activities                          --            30,968,152           30,968,152
                                                            ---------          ------------         ------------

Net increase (decrease) in cash and cash equivalents         (640,870)              999,470              272,094
Cash and cash equivalents, beginning of the period            912,964                    --                   --
                                                            ---------          ------------         ------------
Cash and cash equivalents, end of the period                $ 272,094          $    999,470         $    272,094
                                                            =========          ============         ============
</TABLE>

        See the accompanying notes to condensed financial statements


                                        6

<PAGE>

                  CHARDAN SOUTH CHINA ACQUISITION CORPORATION
                         (A DEVELOPMENT STAGE COMPANY)
                       NOTES TO THE FINANCIAL STATEMENTS
                 FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2006

1. SUMMARY OF ORGANIZATION AND BASIS OF PRESENTATION

      Business and Organization - Chardan South China Acquisitions Corp.
(Chardan South) was incorporated in Delaware on March 10, 2005 as a blank check
company whose objective is to acquire an operating business that has its primary
operating facilities in the Peoples Republic of China in any city or province
south of the Yangtze River.

      Effective July 14, 2005, the Company's Board of Directors and Initial
Stockholders authorized an amendment to the Company's Certificate of
Incorporation to change the Company's name from Chardan China Acquisition Corp.
III to Chardan South China Acquisition Corporation.

      In August 2005, Chardan South commenced its efforts to locate a company
with which to effect a business combination. After signing a definitive
agreement for the acquisition of a target business, such transaction will be
submitted for stockholder approval. In the event that stockholders owning 20% or
more of the outstanding stock excluding, for this purpose, those persons who
were stockholders prior to the Offering, vote against the Business Combination
and exercise their conversion rights described below, the Business Combination
will not be consummated. All of the Company's stockholders prior to the Initial
Public Offering, including all of the officers and directors of the Company
("Initial Stockholders"), have agreed to vote their 1,250,000 founding shares of
common stock in accordance with the vote of the majority in interest of all
other stockholders of the Company ("Public Stockholders") with respect to the
Business Combination. After consummation of the Business Combination, all of
these voting safeguards will no longer be applicable. With respect to a Business
Combination which is approved and consummated, any Public Stockholder who voted
against the Business Combination may demand that the Company convert his shares.
The per share conversion price will equal the amount in the Trust Fund as of the
record date for determination of stockholders entitled to vote on the Business
Combination divided by the number of shares of common stock held by Public
Stockholders at the consummation of the Offering. Accordingly, Public
Stockholders holding 19.99% of the aggregate number of shares owned by all
Public Stockholders may seek conversion of their shares in the event of a
Business Combination.

      Such Public Stockholders are entitled to receive their per share interest
in the Trust Fund computed without regard to the shares held by Initial
Stockholders. Accordingly, a portion of the net proceeds from the offering
(19.99% of the amount originally held in the Trust Fund) has been classified as
common stock subject to possible conversion in the accompanying balance sheet
and 19.99% of the related interest earned on the investments held in the Trust
Fund has been recorded as deferred interest.

      The accompanying unaudited condensed financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include
all of the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating
results for the three-month and nine-month periods ended September 30, 2006 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2006. For further information, refer to the consolidated
financial statements and footnotes thereto for the year ended December 31, 2005,
included in Form 10-KSB filed with the Securities and Exchange Commission. The
condensed balance sheet at December 31, 2005 has been derived from the audited
financial statements.

      Reclassifications - Certain reclassifications have been made in the prior
period financial statements for presentation purposes to conform to the current
presentation.

2. RELATED PARTY TRANSACTIONS

      Commencing on August 2, 2005 and ending upon the acquisition of a target
business, the Company incurs an administrative fee of $7,500 per month from
Chardan Capital, LLC, a company managed and partially owned by the Company's
Chairman of the Board. The fee includes the provision of office space and
certain office and secretarial services. The statements of operations for the
three and nine month periods ended September 30, 2006 include $22,500 and
$67,500 of such fees, respectively.


                                        7

<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

      The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements and footnotes thereto contained in this
report.

Forward Looking Statements

      The statements discussed in this Report include forward looking statements
that involve risks and uncertainties detailed from time to time in the Company's
reports filed with the Securities and Exchange Commission. Please refer to our
Annual Report on Form 10-KSB for a discussion of the risks related to our
business.

      We were formed on March 10, 2005, to serve as a vehicle to effect a
merger, capital stock exchange, asset acquisition or other similar business
combination with an operating business that has its primary operating facilities
located in the People's Republic of China in any city or province south of the
Yangtze River, including but not limited to Shanghai, Zhejiang, Anhui and
Shichuan. We intend to utilize cash derived from the proceeds of our recently
completed public offering, our capital stock, debt or a combination of cash,
capital stock and debt, in effecting a business combination.

      We consummated our initial public offering on August 10, 2005. All
activity from March 10, 2005 through August 10, 2005 related to our formation
and our initial public offering.

      The net income for the three months ended September 30, 2006 consisted
primarily of interest income on the trust fund investments in the amount of
$203,668, offset by $104,322 of travel expenses, $22,500 for a monthly
administrative services agreement, $14,277 for directors and officers liability
insurance, state franchise taxes of $5,938, $10,612 for professional fees,
$8,128 for other operating costs and an income tax provision of $12,110.

      The net income of $38,720 for the nine-month period ending September 30,
2006 resulted primarily from interest income of $623,130, offset by expenses of
$528,015, consisting primarily of $263,190 of travel expenses, $67,500 for a
monthly administrative services agreement, $49,277 for directors and officers
liability insurance, state franchise taxes of $18,612, $43,729 for professional
fees and $19,007 for other operating costs, along with an income tax provision
of $56,395.

      As we were incorporated only on March 10, 2005 and began our efforts to
locate and negotiate with a target for a Business Combination only after our
initial public offering, which occurred in the third quarter of 2005, no
comparison is provided for either the three-month or the nine-month periods
ending September 30, 2005 and September 30, 2006, as such comparison would
provide no information of value in understanding the financial condition of our
business.

      We have recently become aware that the staff of the SEC has raised
questions about the application of various accounting rules and guidance,
including EITF 00-19, to offerings by special purpose acquisition companies,
such as our company, which involve warrants and purchase options. If the SEC
staff ultimately concludes that application of these provisions requires a
different treatment of certain aspects of our financial statements, we may be
required to restate our financial statements, including reflecting as a
liability on our balance sheet our obligation to maintain an effective
registration statement with respect to the offer and sale of shares issuable
upon exercise of our outstanding warrants and purchase options.

      We consummated our initial public offering on August 10, 2005. On August
17, 2005, we consummated the closing of an additional 750,000 units that were
subject to the over-allotment option. Gross proceeds from our initial public
offering were $34,500,000. We paid a total of $3,035,000 in underwriting
discounts and commissions, and approximately $521,948 was or will be paid for
costs and expenses related to the offering. After deducting the underwriting
discounts and commissions and the offering expenses, the total net proceeds to
us from the offering were approximately $30,943,052, of which $29,835,000 was
deposited into the trust account (or approximately $5.19 per share sold in the
offering). The remaining proceeds are available to be used by us to provide for
business, legal and accounting due diligence on prospective acquisitions, tax
payments and continuing general and administrative expenses.

      We intend to use substantially all of the net proceeds of this offering to
acquire a target business, including identifying and evaluating prospective
acquisition candidates, selecting the target business, and structuring,
negotiating and consummating the business combination. Upon consummation of a
business combination, the proceeds remaining in the trust fund, if any, as well
as any other unexpended net proceeds of our offering, will be used to finance
the operations of the target business.


                                        8

<PAGE>

      We believe we will have sufficient available funds outside of the trust
fund to operate through August 10, 2007, assuming that a business combination is
not consummated prior to that date. However, should we require additional
operating capital to effect a business combination, we will likely obtain it
through borrowing, some or all of which may be borrowing from our officers and
directors.

      We may need to raise additional funds through a private offering of debt
or equity securities if such funds are required to consummate a business
combination that is presented to us. We would only consummate such a financing
simultaneously with the consummation of a business combination.

ITEM 3. CONTROLS AND PROCEDURES.

     An  evaluation  of  the  effectiveness  of  our  disclosure   controls  and
procedures as of September 30, 2006 was made under the  supervision and with the
participation of our management,  including our chief executive  officer and our
chief  financial  officer.  Based on that  evaluation,  they  concluded that our
disclosure  controls and  procedures  are  effective as of the end of the period
covered by this report to ensure that information required to be disclosed by us
in reports that we file or submit under the  Securities  Exchange Act of 1934 is
recorded,  processed,  summarized and reported within the time periods specified
in Securities and Exchange  Commission rules and forms. During the most recently
completed fiscal quarter,  there has been no significant  change in our internal
control over financial reporting that has materially affected,  or is reasonably
likely to materially affect, our internal control over financial reporting.

                                    PART II.

                               OTHER INFORMATION

ITEM 6: EXHIBITS

     (a) Exhibits:

          31.1 - Section 302 Certification by CEO

          31.2 - Section 302 Certification by CFO

          32.1 - Section 906 Certification by CEO

          32.2 - Section 906 Certification by CFO


                                        9

<PAGE>

                                   SIGNATURES

      In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                     CHARDAN SOUTH CHINA ACQUISITION CORPORATION

Dated: November 20, 2006


                                     /s/ Kerry Propper
                                     -------------------------------------------
                                     Kerry Propper
                                     Chief Executive Officer and Secretary
                                       (Principal Executive Officer)


                                     /s/ Dr. Richard D. Propper
                                     -------------------------------------------
                                     Dr. Richard D. Propper
                                     Chief Financial Officer (Principal
                                       Accounting and Financial Officer)


                                       10