SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[X]      Quarterly report pursuant to section 13 or 15(d) of the Securities
         Exchange Act of 1934

         For the quarter period ended June 30, 2004
                                      -------------

[ ]      Transition report pursuant to section 13 or 15(d) of the
         Securities Exchange Act of 1934

         For the transition period from ___________ to _____________

                        CHINA RESOURCES DEVELOPMENT, INC.
               (Exact Name of registrant as Specified in Charter)



         Nevada                         0-26046                  87-0263643
(State or other Jurisdiction     (Commission File Number)     (IRS Employer
      of incorporation)                                      Identification No.)

                     Room 2105, West Tower, Shun Tak Centre,
                  200 Connaught Road C., Sheung Wan, Hong Kong
                          Telephone: 011-852-2810-7205
                        (Address and telephone number of
                          principal executive offices)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such requirements
for the past 90 days.

                           Yes [X] No[ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 1,247,823 shares of common
stock, $0.001 par value, as of August 13, 2004.

<PAGE>

FORWARD-LOOKING STATEMENTS

         This report contains statements that constitute forward-looking
statements. Those statements appear in a number of places in this report and
include, without limitation, statements regarding the intent, belief and current
expectations of the Company, its directors or its officers with respect to the
Company's policies regarding investments, dispositions, financings, conflicts of
interest and other matters; and trends affecting the Company's financial
condition or results of operations. Any such forward-looking statement is not a
guarantee of future performance and involves risks and uncertainties, and actual
results may differ materially from those in the forward-looking statement as a
result of various factors. The accompanying information contained in this
report, including without limitation the information set forth above and the
information set forth under the heading, "Management's Discussion and Analysis
or Plan of Operation," identifies important factors that could cause such
differences. With respect to any such forward-looking statement that includes a
statement of its underlying assumptions or bases, the Company cautions that,
while it believes such assumptions or bases to be reasonable and has formed them
in good faith, assumed facts or bases almost always vary from actual results,
and the differences between assumed facts or bases and actual results can be
material depending on the circumstances. When, in any forward-looking statement,
the Company, or its management, expresses an expectation or belief as to future
results, that expectation or belief is expressed in good faith and is believed
to have a reasonable basis, but there can be no assurance that the stated
expectation or belief will result or be achieved or accomplished.


                                       2
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

               CHINA RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES

               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
                     COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
        FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
             (Amounts in thousands, except share and per share data)
<TABLE>
<CAPTION>
                                     Three Months Ended June 30,              Six Months Ended June 30,
                                 -----------------------------------     -----------------------------------
                                    2004         2003         2004         2004         2003         2004
                                 ---------     -------     ---------     ---------     -------     ---------
                                    RMB          RMB          US$          RMB          RMB          US$
<S>                              <C>           <C>         <C>           <C>           <C>         <C>
NET SALES                              225          --            27           642         444            77

COST OF SALES                         (144)         --           (17)         (375)       (444)          (45)
                                 ---------     -------     ---------     ---------     -------     ---------
GROSS PROFIT                            81          --            10           267          --            32

DEPRECIATION                           (64)        (34)           (8)         (122)        (68)          (15)

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES           (1,734)     (6,863)         (209)       (3,417)     (8,798)         (413)


INTEREST INCOME                         --          88            --            31         259             4

OTHER INCOME, NET                    2,842         125           343         3,218          69           389
                                 ---------     -------     ---------     ---------     -------     ---------
INCOME/(LOSS) FROM
 CONTINUING OPERATIONS               1,125      (6,684)          136           (23)     (8,538)           (3)

DISCONTINUED OPERATIONS
Loss from operations of
  discontinued supermarket
  segment and
  Xubu operations                       --        (425)           --            --      (1,008)           --
                                 ---------     -------     ---------     ---------     -------     ---------
NET INCOME/(LOSS)                    1,125      (7,109)          136           (23)     (9,546)           (3)
                                 ---------     -------     ---------     ---------     -------     ---------
Other comprehensive loss:
 Foreign currency translation
   adjustments                          --          --            --            (4)         --            --
                                 ---------     -------     ---------     ---------     -------     ---------
COMPREHENSIVE INCOME/(LOSS)          1,125      (7,109)          136           (27)     (9,546)           (3)
                                 =========     =======     =========     =========     =======     =========
INCOME/(LOSS) PER SHARE:
 basic and diluted
  Continuing operations               0.98       (7.98)         0.12         (0.02)     (10.19)           --
  Discontinued operations               --       (0.51)           --            --       (1.20)           --
                                 ---------     -------     ---------     ---------     -------     ---------
                                      0.98       (8.49)         0.12         (0.02)     (11.39)           --
                                 =========     =======     =========     =========     =======     =========

WEIGHTED AVERAGE NUMBER
 OF SHARES OUTSTANDING           1,143,823     837,823     1,143,823     1,143,823     837,823     1,143,823
                                 =========     =======     =========     =========     =======     =========
</TABLE>

See notes to condensed consolidated financial statements.

                                       3
<PAGE>
              CHINA RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    AS OF JUNE 30, 2004 AND DECEMBER 31, 2003
             (Amounts in thousands, except share and per share data)
<TABLE>
<CAPTION>
                                                             June 30,       December 31,          June 30,
                                                                 2004               2003              2004
                                                                  RMB                RMB               US$
                                                  Notes   (Unaudited)             (Note)       (Unaudited)
<S>                                                 <C>      <C>                <C>                <C>
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                                    10,834             10,472             1,308
  Trading securities                                               54                598                 7
  Trade receivables                                               164                722                20
  Other receivables, deposits and prepayments                     315                182                38
  Short term loans receivable                                     689              1,060                83
  Assets held for sale                              3              --              2,088                --
                                                             --------           --------           -------
TOTAL CURRENT ASSETS                                           12,056             15,122             1,456
PROPERTY AND EQUIPMENT                              4           1,249              1,266               151
INVESTMENTS                                                    44,000             44,000             5,314
GOODWILL                                                        6,296              6,296               760
                                                             --------           --------           -------
TOTAL ASSETS                                                   63,601             66,684             7,681
                                                             ========           ========           =======

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable                                                 59                467                 7
  Other payables and accrued liabilities            5           1,818              2,641               219
  Amount due to an officer                                        629              1,603                76
  Current portion of capital lease                                177                151                21
  Amounts due to related companies                                296                296                36
  Liabilities related to assets held for sale       3              --                857                --
                                                             --------           --------           -------
TOTAL CURRENT LIABILITIES                                       2,979              6,015               359
Capital lease, net of current portion                             301                321                37
                                                             --------           --------           -------
TOTAL LIABILITIES                                               3,280              6,336               396
                                                             --------           --------           -------

SHAREHOLDERS' EQUITY
  Preferred stock, authorized -
    10,000,000 shares
      Series B preferred stock, US$0.001 par value:
        Authorized - 320,000 shares
        Issued and outstanding - 320,000 shares
          in 2004 and 2003                                          3                  3                --
  Common stock, US$0.001 par value:
   Authorized - 200,000,000 shares
   Issued and outstanding - 1,143,823 shares
     in 2004 and 2003                                               9                  9                 1
Additional paid-in capital                                    181,681            181,681            21,942
Reserves                                                       28,028             28,028             3,385
Accumulated deficit                                          (149,552)          (149,529)          (18,062)
Accumulated other comprehensive income                            152                156                19
                                                             --------           --------           -------
TOTAL SHAREHOLDERS' EQUITY                                     60,321             60,348             7,285
                                                             --------           --------           -------

TOTAL LIABILITIES AND SHAREHOLDERS'
  EQUITY                                                       63,601             66,684             7,681
                                                             ========           ========           =======
</TABLE>

Note: The balance sheet at December 31, 2003 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements.

See notes to condensed consolidated financial statements.

                                       4
<PAGE>
               CHINA RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                 FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                           Six months ended June 30,
                                                        -------------------------------
                                                          2004        2003        2004
                                                         ------      ------       -----
                                                          RMB         RMB         US$
<S>                                                      <C>         <C>          <C>
Net cash (used in)/provided by operating activities      (2,136)      4,249        (258)
                                                         ------      ------       -----
INVESTING ACTIVITIES
  Purchases of property and equipment                       (21)       (402)         (3)
  Proceeds from disposal of property and equipment           --         151          --
  Repayment of principal of capital leases                  (78)        (98)         (9)
  Repayment of short term loans from third parties        2,597          --         314
                                                         ------      ------       -----
Net cash provided by/(used in) investing activities       2,498        (349)        302
                                                         ------      ------       -----

Net cash used in discontinued operations                     --      (1,468)         --
                                                         ------      ------       -----

NET INCREASE IN CASH AND CASH
   EQUIVALENTS                                              362       2,432          44

Cash and cash equivalents, at beginning of period        10,472       2,238       1,264
                                                         ------      ------       -----
Cash and cash equivalents, at end of period              10,834       4,670       1,308
                                                         ======      ======       =====

Non-cash investing activities:
  Property and equipment acquired by capital lease           84         637          10
                                                         ======      ======       =====
</TABLE>

See notes to condensed consolidated financial statements.

                                       5
<PAGE>
               CHINA RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                  (Amounts in thousands, except per share data)

1.       BASIS OF PRESENTATION

         The accompanying unaudited condensed consolidated financial statements
         have been prepared in accordance with accounting principles generally
         accepted in the United States of America 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 of America for complete financial statements. In the
         opinion of management, all adjustments (consisting of normal recurring
         accruals) considered necessary for a fair presentation have been
         included. Operating results for the three-month and six-month periods
         ended June 30, 2004, are not necessarily indicative of the results that
         may be expected for the year ending December 31, 2004.

         The balance sheet at December 31, 2003 has been derived from the
         audited financial statements at that date but does not include all of
         the information and footnotes required by accounting principles
         generally accepted in the United States of America for complete
         financial statements. For further information, refer to the
         consolidated financial statements and footnotes thereto included in the
         Company's annual report on Form 10-KSB for the year ended December 31,
         2003.

         For the convenience of the reader, amounts in Renminbi ("RMB") have
         been translated into United States dollars ("US$") at the rate of
         US$1.00 = RMB8.28 quoted by the People's Bank of China as at June 30,
         2004. No representation is made that the RMB amounts could have been,
         or could be, converted into US$ at that rate.

         Certain comparative amounts have been reclassified to conform with the
         current period classifications.

2.       STOCK BASED COMPENSATION

         On May 19, 2004, the Company granted options to certain employees and
         officers to purchase an aggregate of 104,000 shares for RMB47.03
         (US$5.68) per share, which was the market price at the grant date. On
         July 8, 2004, options to purchase 104,000 shares of the Company's
         Common Stock for RMB47.03 (US$5.68) per share were exercised, and the
         Company issued 104,000 shares for RMB4,891 (US$591).

         The Company applies APB Opinion No. 25, "Accounting for Stock Issued to
         Employees," and related Interpretations in accounting for its
         stock-based employee compensation plans. Accordingly, no compensation
         expense has been recognized for options granted to employees at fair
         market value. The following table illustrates the effect on net
         income/(loss) and income/(loss) per share if the Company had applied
         the fair value recognition provisions of FASB Statement No. 123,
         Accounting for Stock-Based Compensation to its stock-based employee
         plans.

                                       6
<PAGE>
                                                   Three Months    Six Months
                                                      Ended June 30, 2004
                                                   --------------------------
                                                       RMB             RMB

         Net income/(loss), as reported               1,125            (23)
         Deduct: Total stock-based employee
          compensation expense determined
          under fair value based method                (946)          (946)
                                                      -----          -----

         Pro forma net income/(loss)                    179           (969)
                                                      =====          =====

         Earnings/(loss) per share:
            Basic and diluted - as reported            0.98          (0.02)
                                                      =====          =====

            Basic and diluted - pro forma              0.16          (0.85)
                                                      =====          =====

         The fair value for these options was estimated at the date of grant
         using the Black-Scholes option pricing model with the following
         assumptions: risk-free interest rate of 0.96%; no dividend yield;
         volatility factor of the expected market price of the Company's common
         stock of 109.10%; and the life of the options of 2 months.

3.       DISPOSITION OF ASSETS

         On February 10, 2004, the Registrant's wholly-owned subsidiary, Hainan
         Cihui Industrial Co. Ltd. ("HARC"), disposed of its 100% equity
         interest in Shenzhen Xubu Investment Co. Ltd. ("Xubu") to an
         unaffiliated third party for total consideration of RMB17,256
         (US$2,084) (the "Purchase Consideration"). The Purchase Consideration
         was offset by capital in the amount of RMB16,026 (US$1,935) that had
         been withdrawn from Xubu by HARC. The net Purchase Consideration of
         RMB1,231 (US$149) was received by the Company on May 5, 2004. The
         assets and liabilities of Xubu have been classified as held for sale as
         of December 31, 2003 and consisted of fixed assets of RMB1,102
         (US$133), cash of RMB812 (US$98), other receivables of RMB174 (US$21)
         and other payables of RMB857 (US$103). The results of operations of
         Xubu have been retroactively restated as discontinued operations.
         Revenues from discontinued Xubu operations were nil for the three
         months and six months ended June 30, 2004 and 2003. Losses before
         income taxes from discontinued operations were nil and RMB1,008
         (US$122) for the six months ended June 30, 2004 and 2003, respectively.
         Losses before income taxes from discontinued operations were nil and
         RMB425 (US$51) for the three months ended June 30, 2004 and 2003,
         respectively.

4.       PROPERTY AND EQUIPMENT

                                                     June 30,     December 31,
                                                         2004             2003
                                                     --------     ------------
                                                          RMB              RMB

         At cost:
           Buildings                                      509              509
           Machinery, equipment and motor vehicles      1,155            1,050
                                                        -----            -----
                                                        1,664            1,559

         Accumulated depreciation                        (415)            (293)
                                                        -----            -----
                                                        1,249            1,266
                                                        =====            =====

         As at June 30, 2004, property and equipment included two leased motor
         vehicles with cost and accumulated depreciation of RMB1,064 (US$129)
         and RMB298 (US$36), respectively.

                                       7
<PAGE>

5.       OTHER PAYABLES AND ACCRUED LIABILITIES

                                   June 30,   December 31,
                                       2004           2003
                                   --------   ------------
                                        RMB            RMB

         Other payables               1,259          1,668
         Accrued liabilities            559            973
                                      -----          -----
                                      1,818          2,641
                                      =====          =====

6.       TRADING SECURITIES

         Included in other income/(expenses) for the six months ended June 30,
         2004 and 2003 are unrealized gains on trading securities of nil and
         RMB798 (US$96), respectively. Included in other income/(expenses) for
         the three months ended June 30, 2004 and 2003 are unrealized gains on
         trading securities of nil and RMB949 (US$115), respectively.

                                       8
<PAGE>

7. SEGMENT FINANCIAL INFORMATION
<TABLE>
<CAPTION>
                                                    Three months ended      Six months ended
                                                              June 30,              June 30,
                                                     -----------------      ----------------
                                                       2004       2003      2004        2003
                                                        RMB        RMB       RMB         RMB
<S>                                                   <C>       <C>          <C>      <C>
         Net sales:
            Advertising:
              Net sales to unaffiliated customers       225         --       642          --
            Copper:
              Net sales to unaffiliated customers        --         --        --         444
                                                      -----     ------      ----      ------
         Total consolidated net sales                   225         --       642         444
                                                      =====     ======      ====      ======

         Segment profit:
            Advertising                                   1         --       155          --
            Copper                                       --         --        --          --
                                                      -----     ------      ----      ------
         Total segment profit                             1         --       155          --

         Reconciling items:
            Corporate expenses                        1,124     (6,772)     (209)     (8,797)
            Interest income                              --         88        31         259
                                                      -----     ------      ----      ------
         Total consolidated profit/(loss) from
            continuing operations                     1,125     (6,684)      (23)     (8,538)
                                                      =====     ======      ====      ======
</TABLE>

<TABLE>
<CAPTION>
                                                                 June 30,       December 31,
                                                                     2004               2003
                                                                 --------       ------------
                                                                      RMB                RMB
<S>                                                                <C>                <C>
         Segment assets:
            Advertising                                               399                779
            Copper                                                    727                942
                                                                   ------             ------
         Total segment assets                                       1,126              1,721

         Reconciling items:
            Corporate assets                                       18,475             20,963
            Investments                                            44,000             44,000
                                                                   ------             ------
         Total consolidated assets                                 63,601             66,684
                                                                   ======             ======
</TABLE>

                                       9
<PAGE>

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

         NET SALES AND GROSS PROFIT

         Sales for the six months ended June 30, 2003 represented trading of
copper of RMB444,000 (US$54,000) with zero gross profit margin. There was no
sales of copper in the second quarter of 2003. Sales for the three months and
six months ended June 30 2004 represented revenues from advertising and public
relations services of RMB225,000 (US$27,000) and RMB642,000 (US$77,000),
respectively, with gross profit of RMB81,000 (US$10,000) and RMB267,000
(US$32,000), respectively. Net sales from supermarket operations included in
discontinued operations totaled RMB1,889,000 (US$228,000) and RMB3,647,000
(US$440,000) for the three months and six months ended June 30, 2003. Profit
from discontinued supermarket operations was reported net of income tax expense,
if any.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         Selling, general and administrative expenses decreased by RMB5,381,000
(US$650,000) or 61% to RMB3,417,000 (US$413,000) for the first half of 2004 from
RMB8,798,000 (US$1,063,000) for the first half of 2003. The decrease was
primarily attributable to the write off of VAT receivables of RMB3,126,000
(US$378,000) and the provision made on loan receivable from an unaffiliated
third party of RMB2,684,000 (US$324,000) in 2003.

         Selling, general and administrative expenses decreased by RMB5,129,000
(US$619,000) or 75% to RMB1,734,000 (US$209,000) for the second quarter of 2004
from RMB6,863,000 (US$829,000) for the second quarter of 2003. The decrease was
primarily attributable to the write off of VAT receivables of RMB2,737,000
(US$331,000) and the provision made on loan receivable from an unaffiliated
third party of RMB2,684,000 (US$324,000) in the second quarter of 2003.

         INTEREST INCOME, NET

         Interest income decreased by RMB228,000 (US$28,000) or 88% to RMB31,000
(US$4,000) for the first half of 2004 from RMB259,000 (US$31,000) for the first
half of 2003. The decrease was primarily due to the decrease in short term loans
to unaffiliated third parties.

         Interest income was RMB88,000 (US$11,000) for the second quarter of
2003 compared to nil for the second quarter of 2004. The Company did not provide
for the interest income for the second quarter of 2004 because the Company is
currently negotiating the repayment terms with the debtor and the interest may
be reduced.

         OTHER (EXPENSE)/INCOME, NET

         Other income, net for the first half of 2003 primarily consisted of a
net gain on trading of marketable securities of RMB38,000 (US$5,000) and gain on
disposal of fixed assets of RMB25,000 (US$3,000). Other income, net for the
first half of 2004 primarily consisted of a net gain on trading of marketable
securities of RMB376,000 (US$46,000) and recovery of a short term loan
receivable of RMB2,226,000 (US$269,000) which had been provided for in 2003,
together with related interest and costs of RMB614,000 (US$74,000).

         Other income, net for the second quarter of 2003 primarily consisted of
a net gain on trading of marketable securities of RMB97,000 (US$12,000) and gain
on disposal of fixed assets of RMB25,000 (US$3,000), respectively. Other income,
net for the second quarter of 2004 primarily consisted of the recovery of a
short term loan receivable of RMB2,226,000 (US$269,000) which had been provided
for in 2003, together with related interest and costs of RMB614,000 (US$74,000).

         INCOME TAXES

         It is management's intention to reinvest all income attributable to the
Company earned by its operations outside the US. Accordingly, no US corporation
income taxes are included in these consolidated financial statements.

                                       10
<PAGE>

         Under the current laws of the BVI, dividends and capital gains arising
from the Company's investments in the BVI are not subject to income taxes and no
withholding tax is imposed on payments of dividends to the Company.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's primary liquidity needs are to fund operating expenses
and to expand business operations. The Company has financed its working capital
requirements primarily through internally generated cash.

         Net cash used in operating activities for the six months ended June 30,
2004 was approximately RMB2,136,000 (US$258,000), as compared to net cash
provided by operating activities of RMB4,249,000 (US$513,000) for the
corresponding period in 2003. Net cash inflows/outflows from the Company's
operating activities are attributable to the Company's net loss and changes in
operating assets and liabilities. Net cash provided by investing activities for
the six months ended June 30, 2004 was primarily attributable to repayments of
short term loans from third parties.

         The following summarizes the Company's financial condition and
liquidity at the dates indicated:

                                    June 30, 2004           December 31, 2003
                                    -------------           -----------------
                                              RMB                         RMB
Current ratio                                4.0x                        2.5x
Working capital                         9,077,000                   9,107,000
Ratio of long-term debt to
   total shareholders' equity               0.05x                       0.05x

         The Company has the following contractual obligations and commercial
commitments as at June 30, 2004:

                                   Total            < 1 year          2-5 years
                                   -----            --------          ---------
                                     RMB                 RMB                RMB
Operating leases                  44,000              44,000                  -
Capital lease                    478,000             177,000            301,000

         Except as disclosed above, there have been no other significant changes
in financial condition and liquidity since the fiscal year ended December 31,
2003. The Company believes that internally generated funds will be sufficient to
satisfy its anticipated working capital needs for at least the next twelve
months.

OFF BALANCE SHEET ARRANGEMENTS

         The Company has no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
investors.

FACTORS RELATING TO FORWARD-LOOKING STATEMENTS

         Factors that could cause our actual results of operations to differ
materially from those contained in forward looking statements include the
following:

RISKS ASSOCIATED WITH FOREIGN OPERATIONS

o    Our principal subsidiaries operate in the People's Republic of China, and
     are, by law, subject to administrative review by various national,
     provincial and local agencies of the Chinese government - governmental
     oversight and/or changes to existing rules and regulations could adversely
     affect our results of operations.

                                       11
<PAGE>

o    The Company's operations and financial results could be adversely affected
     by economic conditions and changes in the policies of the PRC government,
     such as changes in laws and regulations (or the interpretation thereof),
     including measures which may be introduced to regulate or stimulate the
     rate of economic growth. There can be no assurance that these measures will
     be successful.

o    The PRC does not have a comprehensive system of laws and enforcement of
     existing laws may be uncertain and sporadic, and the implementation and
     interpretation thereof inconsistent. Even where adequate law exists in the
     PRC, it may be difficult to obtain swift and equitable enforcement of such
     law, or to obtain enforcement of a judgment by a court of another
     jurisdiction. Decided legal cases are without binding legal effect,
     although judges are often guided by prior decisions. The interpretation of
     PRC laws may be subject to policy changes reflecting domestic political
     changes, and new laws, changes to existing laws and the pre-emption of
     local regulations by national laws may adversely affect foreign investors.
     The activities of the Company's subsidiaries in China are subject to PRC
     regulations governing PRC companies. In particular, the realization of the
     Company's future plans in China will also be subject to PRC government
     approvals.

o    The Company's revenues and expenses are mainly denominated in HK$ and US$.
     The Company and its subsidiaries do not have material market risk with
     respect to currency fluctuation as HK$ is linked to US$. As the reporting
     currency of the Company's consolidated financial statements is in RMB,
     translation differences may arise on consolidation. The Company may also
     suffer exchange loss when it converts RMB to other currencies, such as the
     Hong Kong Dollar or United States Dollar.

o    The Company's interest income is sensitive to changes in the general level
     of HK$ and US$ interest rates. In this regard, changes in HK$ and US$
     interest rates affect the interest earned on the Company's cash
     equivalents. At June 30, 2004, the Company's cash equivalents are primarily
     HK$ or US$ deposits with financial institutions, bearing market interest
     rates without fixed term.

o    While we are a Nevada corporation, our officers and directors are
     non-residents of the United States, our assets are located in the PRC and
     our operations are conducted in the PRC. As a result, it may not be
     possible to effect service of process on such persons in the United States,
     and it may be difficult to enforce any judgments rendered against us or
     them.

General Risks of Operations

o    Unless we are able to reduce expenses, increase our profit margins and/or
     acquire profitable operations, we will likely continue to incur losses and
     investors in our shares may be unable to recoup their investment.

o    We intend to investigate and evaluate potential business opportunities,
     including acquisition candidates; however, we may be unable to acquire
     business operations that prove to be profitable; we will continue to incur
     administrative and professional expenses in connection with our evaluation
     and acquisition of business operations, without corresponding revenues from
     those operations prior to acquisition.

o    At June 30 2004, the Company had short-term investments in trading
     securities in the Hong Kong stock market with a total market value of
     RMB54,000 (US$7,000). These investments expose the Company to market risks
     that may cause the future value of these investments to be lower than the
     original cost of such investments.

o    The market for our Common Stock is not active and the limited trading
     volume in our shares could result in substantial market volatility in the
     price for our shares.

o    We do not intend to pay dividends for the foreseeable future - we intend to
     reinvest earnings from operations, if any, back into our operations. The
     payment of dividends is subject to numerous restrictions imposed under PRC
     law.

                                       12
<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

         On August 13, 2004, the Company's management concluded its evaluation
of the effectiveness of the design and operation of the Company's disclosure
controls and procedures. Disclosure controls and procedures are controls and
procedures designed to reasonably assure that information required to be
disclosed in our reports filed under the Securities Exchange Act of 1934, such
as this Annual Report, is recorded, processed, summarized and reported within
the time periods prescribed by SEC rules and regulations, and to reasonably
assure that such information is accumulated and communicated to our management,
including the Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.

         The Company's management, including the Chief Executive Officer and
Chief Financial Officer, does not expect that our disclosure controls and
procedures will prevent all error and all fraud. A control system, no matter how
well designed and operated, can provide only reasonable, not absolute, assurance
that the control system's objectives will be met. Further, the design of a
control system must reflect the fact that there are resource constraints, and
the benefits of controls must be considered relative to their costs. Because of
the inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, have been detected. These inherent limitations include the realities that
judgments in decision-making can be faulty, and that breakdowns can occur
because of simple error or mistake. The design of any system of controls is
based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions.

         As of the evaluation date, the Company's Chief Executive Officer and
its Chief Financial Officer concluded that the Company maintains disclosure
controls and procedures that are effective in providing reasonable assurance
that information required to be disclosed in the Company's reports under the
Exchange Act is recorded, processed, summarized and reported within the time
periods prescribed by SEC rules and regulations, and that such information is
accumulated and communicated to the Company's management, including its Chief
Executive Officer and its Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure.

         There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect these controls
subsequent to the evaluation date.

                                       13
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS:

         On June 17, 2003, Billion Luck Company Limited, initiated a lawsuit in
the High Court of the Hong Kong Special Administrative Region, Court of First
Instance (the "High Court"), under the caption "Billion Luck Company Limited and
Lee Kwong Yin." Billion Luck sought to recover approximately RMB2,667,000
(US$322,085), plus interest at the rate of 10% from May 27, 2003, arising out of
the defendant's default under a loan agreement and related promissory note in
favor of Billion Luck. The defendant failed to file a defense to the action and
Billion Luck sought a judgment by default. On August 12, 2003, the High Court
adjudged that the defendant pay to Billion Luck approximately US$322,085 due to
the defendant's default under the loan agreement and promissory note. On
November 12, 2003, a bankruptcy petition against Lee Kwong Yin was filed with
the High Court based on his failure to satisfy a Statutory Demand served upon
him on August 27, 2003. On March 1, 2004, the High Court ordered that a
bankruptcy order be granted against Lee Kwong Yin. On June 28, 2004, the Company
received RMB2,840,000 (US$342,995) from a third party who settled the debts due
and owing by Lee Kwong Yin in full.

ITEM 2.  CHANGES IN SECURITIES:

         On May 19, 2004, the Company granted options to certain employees and
officers to purchase an aggregate of 104,000 shares at an exercise price of
RMB47.03 (US$5.68) per share. On July 8, 2004, options to purchase 104,000
shares of the Company's Common Stock for RMB47.03 (US$5.68) per share were
exercised and the Company issued 104,000 shares for RMB4,891,000 (US$591,000).
The options and shares were issued under the Company's 1995 Stock Option Plan
(as to 24,000 shares) and its 2004 Equity Compensation Plan (as to 80,000
shares). Each recipient (a) had a preexisting business relationship with the
Company, (b) had access to business and financial information about the Company,
and (c) represented that he or she was acquiring the shares for investment
purposes and not with a view towards distribution or resale except in compliance
with applicable law. In addition, the shares issued upon exercise of the options
contained a legend restricting their transferability absent registration under
the Securities Act of 1933, as amended (the "Act") or the availability of an
applicable exemption from registration. The foregoing transactions were exempt
from the registration requirements of the Act by reason of Section 4(2) thereof.

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 ON FORM 8-K:

         31.1       CEO Certification Pursuant to Section 302 of the
                    Sarbanes-Oxley Act of 2002.

         31.2       CFO Certification Pursuant to Section 302 of the
                    Sarbanes-Oxley Act of 2002.

         32.1       CEO Certification Pursuant to Section 906 of the
                    Sarbanes-Oxley Act of 2002.

         32.2       CFO Certification Pursuant to Section 906 of the
                    Sarbanes-Oxley Act of 2002.

         During the three months ended June 30, 2004, the Company filed no
current report on Form 8-K.

                                       14
<PAGE>
                                   SIGNATURES


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


                                      CHINA RESOURCES DEVELOPMENT, INC.





August 16, 2004                       By:/s/ Ching Lung Po
                                         --------------------------------------
                                         Ching Lung Po, Chief Executive Officer



                                      By:/s/ Tam Cheuk Ho
                                         -------------------------------------
                                         Tam Cheuk Ho, Chief Financial Officer

                                       15