================================================================================


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                   ------------------------------------------

                                  FORM 10-QSB/A

                                AMENDMENT NO. 1


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

                  For the quarterly period ended March 31, 2001

                                       OR

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

     For the transition period from __________________ to _____________________.

                        COMMISSION FILE NUMBER 000-28345

                              CHINA BROADBAND CORP.
        (Exact name of small business issuer as specified in its charter)

            NEVADA                                        72-13812
(Jurisdiction of incorporation)             (I.R.S. Employer Identification No.)


                             2080-440-2 AVENUE S.W.,
                                CALGARY, ALBERTA
                                 CANADA T2P 5E9
(Address of principal place of business or intended principal place of business)

                                 (403) 234-8885
                           (Issuer's telephone number)

                                 NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)

         Check  whether  the issuer:  (1) has filed all reports  required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 [ ]

         The number of outstanding common shares, with $0.001 par value, of the
registrant at August 7, 2001 was 19,474,517.

  Transitional Small Business Disclosure Format (check one): Yes [ ]     No [x]


<PAGE>


                              CHINA BROADBAND CORP.

                           INDEX TO THE FORM 10-QSB/A
                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001


                                                                            PAGE

PART I - FINANCIAL INFORMATION .............................................  2

         ITEM 1.  Financial Statements......................................  2

                  China Broadband Corp.

                    Condensed Consolidated Balance Sheet....................  2

                    Condensed Consolidated Statement of Operations..........  3

                    Condensed Consolidated Statement of Stockholders' Equity  4

                    Condensed Consolidated Statement of Cash Flows..........  6

                    Notes to the Condensed Consolidated Financial Statements  7


         ITEM 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of Operations ...................... 12

PART II - OTHER INFORMATION

         ITEM 1.  Legal Proceedings ........................................ 19

         ITEM 2.  Changes in Securities and Use of Proceeds................. 19

         ITEM 3.  Defaults Upon Senior Securities .......................... 19

         ITEM 4.  Submission of Matters to a Vote of Security Holders....... 19

         ITEM 5.  Other Information......................................... 20

         ITEM 6.  Exhibits and Reports on Form 8-K.......................... 20


SIGNATURES.................................................................. 23


                                       i


<PAGE>


                                    PART I

ITEM 1.  FINANCIAL STATEMENTS

CHINA BROADBAND CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED BALANCE SHEET

(EXPRESSED IN UNITED STATES DOLLARS)
--------------------------------------------------------------------------------
                                                      MARCH 31,
                                                        2001        DECEMBER 31,
                                                     (UNAUDITED)        2000
                                                         $               $
                                                     ----------     ------------
         ASSETS
CURRENT
   Cash and cash equivalents                          3,865,181      4,668,128
   Interest and Goods and Services Tax receivable        93,457         64,201
   Prepaid expenses                                      67,119        117,119
                                                     ----------     ----------
                                                      4,025,757      4,849,448

Investment in Shekou joint venture                    2,428,275      2,482,018
Investment in Chengdu joint venture                   1,836,874      1,321,884
Property and equipment, net                             219,159        220,799
Intangible assets:
   Intellectual property (Note 5)                       789,057        819,402
   Shekou joint venture (Note 5)                      2,294,325      2,421,788
   Chengdu joint venture (Note 5)                     4,588,650      4,843,575
   Goodwill (Note 5)                                  1,938,345      2,046,031
                                                     ----------     ----------
                                                     18,120,442     19,004,945
                                                     ==========     ==========

LIABILITIES
CURRENT
   Accounts payable and accrued liabilities             585,851        250,840
   Promissory note (Note 5)                           1,700,000      1,700,000
                                                     ----------     ----------
                                                      2,285,851      1,950,840
                                                     ----------     ----------

CONTINUING OPERATIONS (Note 3)
CONTINGENCIES (Note 6)
COMMITMENTS (Note 7)

STOCKHOLDERS' EQUITY
   Common stock
     $0.001 par value, shares authorized: 50,000,000;    77,936         77,936
     shares issued and outstanding: 19,474,517
   Additional paid-in capital                        21,433,734     20,631,344
   Deferred compensation                               (807,720)       (57,995)
   Accumulated deficit                               (4,869,359)    (3,597,180)
                                                     ----------     ----------
                                                     15,834,591     17,054,105
                                                     ----------     ----------
                                                     18,120,442     19,004,945
                                                     ==========     ==========

See notes to condensed consolidated financial statements.


                                       2


<PAGE>


<TABLE>
<CAPTION>


CHINA BROADBAND CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)

(EXPRESSED IN UNITED STATES DOLLARS)
--------------------------------------------------------------------------------

                                                                           CUMULATIVE PERIOD
                                                           THREE MONTHS      FROM DATE OF
                                                              ENDED            INCEPTION
                                                            MARCH 31,      FEBRUARY 1, 2000
                                                               2001        TO MARCH 31, 2001
                                                                $                 $
                                                           ------------    -----------------
<S>                                                          <C>                <C>

REVENUE
   Technical consulting                                              -            208,333

GENERAL AND ADMINISTRATIVE EXPENSES (including non-cash
compensation of $52,665 and $119,758, respectively)          1,219,849          4,905,247
                                                            ----------     ------------------
                                                            (1,219,849)        (4,696,914)

EQUITY LOSS IN BIG SKY NETWORK CANADA LTD.                           -           (181,471)

EQUITY LOSS IN SHEKOU JOINT VENTURE                           (53,743)           (256,164)

EQUITY LOSS IN CHENGDU JOINT VENTURE                           (55,010)           (98,716)

INTEREST INCOME                                                 56,423            363,906
                                                            ----------     --------------

NET LOSS                                                    (1,272,179)        (4,869,359)
                                                            ==========     ==============

LOSS PER SHARE
   Basic and Diluted                                             (0.07)
                                                            ==========

SHARES USED IN COMPUTATION - BASIC AND DILUTED              19,474,517
                                                            ==========

See notes to condensed consolidated financial statements.

</TABLE>


                                       3


<PAGE>

<TABLE>
<CAPTION>


CHINA BROADBAND CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(EXPRESSED IN UNITED STATES DOLLARS)
--------------------------------------------------------------------------------------------------------------

                                                            Additional                               TOTAL
                                      Common Stock           Paid-in     Deferred   Accumulated  STOCKHOLDERS'
                                  Shares        Amount       Capital   Compensation   Deficit        EQUITY
                                                   $              $         $            $            $
                               ------------- -------------- ---------- ------------ -----------  -------------
<S>                               <C>           <C>         <C>             <C>      <C>            <C>

Balance,                          1,509,850     59,971               -            -           -         59,971
February 1, 2000

Issue of common stock
for the outstanding shares
of China Broadband
(BVI) Corp.                      13,500,000     13,500         696,529            -           -        710,029

Stock issued pursuant to
private placement
agreements at $0.20 per
share                               500,000        500          98,835            -           -         99,335

Stock issued pursuant to
private placement
agreements at $1.00 per
share                             1,530,000      1,530       1,518,289            -           -      1,519,819

Stock issued pursuant to
private placement
agreements at $7.50 per
share                             1,301,667      1,302       9,696,236            -           -      9,697,538

Acquisition of the shares
of Big Sky Network
Canada Ltd.                       1,133,000      1,133       8,496,367            -           -      8,497,500

Issuance of warrants                      -          -          44,472            -           -         44,472

Non-cash compensation                     -          -          15,235            -           -         15,235

Deferred compensation                     -          -          65,381      (65,381)          -              -

Amortization of deferred
compensation                              -          -               -        7,386           -          7,386

Net loss                                  -          -               -            -  (3,597,180)    (3,597,180)
                                 ----------     ------      ----------    ---------  ----------  -------------

Balance,
December  31, 2000               19,474,517     77,936      20,631,344      (57,995) (3,597,180)    17,054,105
                                 ==========     ======      ==========     ========  ==========  =============

Deferred compensation                     -          -         802,390     (802,390)          -              -


                                       4


<PAGE>


Amortization of deferred
compensation                              -          -               -       52,665           -         52,665

Net loss                                  -          -               -            -  (1,272,179)    (1,272,179)
                                 ---------- --------------  ----------     -------- -----------  -------------

Balance,
March 31, 2001 (unaudited)       19,474,517     77,936      21,433,734     (807,720) (4,869,359)    15,834,591
                                 ==========     ======      ==========     ======== ===========  =============


See notes to condensed consolidated financial statements.


</TABLE>


                                       5


<PAGE>


<TABLE>
<CAPTION>


CHINA BROADBAND CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

(EXPRESSED IN UNITED STATES DOLLARS)
-----------------------------------------------------------------------------------------------------------------------------
                                                                                                          CUMULATIVE PERIOD
                                                                                                            FROM DATE OF
                                                                                                              INCEPTION
                                                                               THREE MONTHS ENDED         FEBRUARY 1, 2000
                                                                                 MARCH 31, 2001           TO MARCH 31, 2001
                                                                                       $                        $
                                                                               ------------------         -----------------
<S>                                                                                <C>                       <C>

CASH FLOWS RELATED TO THE
   FOLLOWING ACTIVITIES:

OPERATING
   Net loss                                                                        (1,272,179)               (4,869,359)
   Adjustments for:
     Amortization                                                                     533,679                 1,112,692
     Equity loss in Big Sky Network Canada Ltd.                                             -                   181,471
     Equity loss in Shekou joint venture                                               53,743                   256,164
     Equity loss in Chengdu joint venture                                              55,010                    98,716
     Non-cash stock compensation                                                       52,665                   119,758

   Changes in operating assets and liabilities
     Interest and Goods and Services Tax receivable                                   (29,256)                  (93,457)
     Prepaid expenses                                                                  50,000                   (67,119)
     Accounts payable                                                                 335,011                   (67,947)
                                                                                   ----------                ----------
                                                                                     (221,327)               (3,329,081)
                                                                                   ----------                ----------
FINANCING
   Issue of common stock for cash (net of issuance costs)                                   -                11,816,692
                                                                                   ----------                ----------

INVESTING
   Purchases of property and equipment                                                (11,620)                 (291,012)
    Acquisition of Big Sky Network Canada Ltd. (net of cash acquired)                       -                (2,395,828)
   Investment in Chengdu joint venture                                               (570,000)               (1,935,590)
                                                                                   ----------                ----------
                                                                                     (581,620)               (4,622,430)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS
                                                                                     (802,947)                3,865,181
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
                                                                                    4,668,128                         -
                                                                                   ----------                ----------


CASH AND CASH EQUIVALENTS, END OF PERIOD                                            3,865,181                 3,865,181
                                                                                   ==========                ==========

SUPPLEMENTAL CASH FLOW INFORMATION:
   Cash paid for income taxes                                                               -                         -
                                                                                   ==========                ==========
   Cash paid for interest                                                                   -                         -
                                                                                   ==========                ==========
See notes to condensed consolidated financial statements.


</TABLE>


                                       6


<PAGE>


CHINA BROADBAND CORP.                                                          1
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN UNITED STATES DOLLARS)
--------------------------------------------------------------------------------


1.       BASIS OF PRESENTATION

         The consolidated financial statements include the accounts of China
         Broadband Corp. (the "Corporation") and its wholly-owned subsidiaries.
         All significant intercompany accounts and transactions have been
         eliminated.

         The accompanying unaudited condensed consolidated financial statements
         have been prepared in accordance with generally accepted accounting
         principles for interim financial information and with the instructions
         to Form 10-QSB and Article 10 of Regulation S-X. Accordingly, they do
         not include all of the information and notes required by generally
         accepted accounting principles for annual 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 months ended March 31, 2001
         are not necessarily indicative of the results that may be expected for
         the year ending December 31, 2001. For further information, refer to
         the consolidated financial statements and notes thereto included in the
         Corporation's 2000 Annual Financial Statements herein.

2.       INCORPORATION AND BACKGROUND

         The Corporation was incorporated in Nevada in February 1993 under the
         name "Institute for Counselling, Inc." On April 27, 2000, Institute for
         Counselling, Inc. changed its name to China Broadband Corp. The
         Corporation is a development stage enterprise and is seeking to become
         a leading facilities based provider of equipment and technical services
         to support Internet usage in major urban markets throughout The
         People's Republic of China (the "PRC").

         On April 14, 2000, the Corporation, a public shell company, acquired
         China Broadband (BVI) Corp. ("CBB - BVI") through a reverse
         acquisition, which was accounted for as a recapitalization. This
         recapitalization was effected through the issuance of 13,500,000 common
         shares of the Corporation, constituting approximately 90% of its shares
         outstanding after the acquisition, in exchange for all of the
         outstanding shares of CBB - BVI.

         As a result of the application of the accounting principles governing
         recapitalization, CBB - BVI (incorporated on February 1, 2000) is
         treated as the acquiring or continuing entity for financial accounting
         purposes.

         The recapitalization of CBB - BVI was affected through the issuance of
         stock by CBB - BVI in exchange for the acquisition of the tangible net
         assets of the Corporation at fair value, which approximates the
         Corporation's net assets historical costs. As a result, the
         consolidated financial statements are deemed to be a continuation of
         CBB - BVI's historical financial statements.

     3.  CONTINUING OPERATIONS

         The Corporation's operations may be adversely affected by significant
         political, economic and social uncertainties in the PRC. Although the
         government of the PRC has been pursuing economic reform policies, no
         assurance can be given that it will continue to pursue such policies or
         that such policies may not be significantly altered, especially in the
         event of a change in leadership, social or political disruption or
         unforeseen circumstances affecting the PRC's political, economic and
         social conditions. There is also no guarantee that the pursuit of
         economic reforms by the government of the PRC will be consistent or
         effective.


                                       7


<PAGE>


CHINA BROADBAND CORP.                                                          2
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN UNITED STATES DOLLARS)
--------------------------------------------------------------------------------


     3.  CONTINUING OPERATIONS (CONTINUED)

         The PRC has recently enacted new laws and regulations governing
         Internet access and the provision of online business, economic and
         financial information. Current or proposed laws aimed at limiting the
         use of online services could, depending upon interpretation and
         application, result in significant uncertainty to the Corporation,
         additional costs and technological challenges in order to comply with
         any statutory or regulatory requirements imposed by such legislation.
         Additional legislation and regulations that may be enacted by the
         government of the PRC could have an adverse effect on the Corporation's
         business, financial condition and results of operations.

         The success of the Corporation will depend on the acceptance of
         broadband Internet services, which remains unproven in the PRC. The
         Corporation's Chinese joint venture partners may not be able to attract
         and retain subscribers to their Internet access services to whom the
         Corporation could sell equipment and technical services, or the Chinese
         joint venture partners may face intense competition, which could have
         an adverse effect on the Corporation's business, financial condition
         and results of operations. The Corporation's Shekou Joint Venture's
         ("Shekou JV") services were launched on June 30, 2000. The
         Corporation's Chengdu Joint Venture's ("Chengdu JV") services were
         launched on October 26, 2000 and as of March 31, 2001 it had connected
         a small number of subscribers. The Shekou JV and Chengdu JV are
         currently expanding their subscriber base in the Shekou Industrial Zone
         and Chengdu. Services in Deyang are expected to commence upon receipt
         of approvals required for the establishment of the Deyang joint venture
         and for our Chinese partner to provide Internet access services.

         PRC legal restrictions permit payment of dividends by a Sino-foreign
         joint venture only out of its net income, if any, determined in
         accordance with PRC accounting standards and regulations. Under PRC
         law, a Sino-foreign joint venture will also be required to set aside a
         portion of its net income each year to fund certain reserve funds.
         These reserves are not distributable as cash dividends. If the
         Corporation does not receive distributions from the joint ventures or
         if the joint ventures are not profitable, the Corporation may be unable
         to meet its financial obligations or to continue as a going concern.

         Substantially all of the Corporation's revenues and operating expenses
         of the Corporation's joint ventures in the PRC will be denominated in
         Chinese Renminbi. Such currency is now convertible into foreign
         exchange for "current account" payments, such as the remittance of
         dividends to the Corporation and the purchase of imported equipment.
         However, there can be no assurance such convertibility will continue in
         the future.

         These consolidated financial statements have been prepared on a going
         concern basis. The Corporation's ability to continue as a going concern
         is dependent upon its ability to generate profitable operations in the
         future and to obtain the necessary financing to meet its obligations
         and repay its liabilities arising from normal business operations when
         they come due. The outcome of these matters cannot be predicted with
         any certainty at this time. These consolidated financial statements do
         not include any adjustments to the amounts and classification of assets
         and liabilities that may be necessary should the Corporation be unable
         to continue as a going concern.


                                       8


<PAGE>


CHINA BROADBAND CORP.                                                          3
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN UNITED STATES DOLLARS)
--------------------------------------------------------------------------------

3.       CONTINUING OPERATIONS (CONTINUED)

         Management anticipates that the Corporation currently has sufficient
         working capital to fund the Corporation's plan of operation through the
         quarter ended September 30, 2001. The Corporation's costs to fund its
         plan of operation for the fiscal year ending December 31, 2001 is
         expected to increase (primarily for salaries, travel, office and other
         similar expenses). The working capital is intended to fund the business
         operations of Big Sky Network Canada Ltd. ("BSN"), including funding
         the capital requirements of new and existing joint ventures, funding
         additional technical, management and marketing/sales personnel and
         funding comprehensive joint venture marketing and promotional programs
         to increase market awareness and subscription sales. Management
         believes that additional funding will be required before September 30,
         2001 to fund the implementation of BSN's business of entering into
         joint ventures.

         The consolidated operations of the Corporation requires cash of
         $150,000 to $200,000 per month to operate in the PRC and in Canada. The
         operating cash break even point for the facilities in Shekou and
         Chengdu is estimated by the Corporation to be the equivalent of 3,000
         to 4,000 subscribers at present pricing structures. The Corporation is
         in discussions with various equipment suppliers for vendor financing or
         lease packages for capital equipment. However, failing any new debt or
         equity financing, the Corporation could continue the Shekou and Chengdu
         joint ventures as they are and inaugurate one additional joint venture
         with existing capital and modest growth in the subscriber base. Other
         low cost value added services may be added to the revenue mix with
         minimal capital requirements, primarily by outsourcing to a variety of
         potential partners seeking access to the Chinese market.

4.       ACCOUNTING POLICIES

         PER SHARE INFORMATION

         Basic loss per share ("EPS") excludes dilution and is computed by
         dividing net loss attributable to common stockholders by the weighted
         average of common shares outstanding for the period. Diluted EPS
         reflects the potential dilution that could occur if securities or other
         contracts to issue common stock (warrants to purchase common stock and
         common stock options using the treasury stock method) were exercised or
         converted into common stock. Potential common shares in the diluted EPS
         computation are excluded in net loss periods as their effect would be
         antidilutive.

         NEW ACCOUNTING PRONOUNCEMENTS

           In June 1998, the FASB issued SFAS No. 133, "Accounting for
         Derivative Instruments and Hedging Activities," which was subsequently
         amended by SFAS No. 137 and 138, established accounting and reporting
         standards requiring that every derivative instrument, including certain
         derivative instruments embedded in other contracts, be recorded in the
         balance sheet as either an asset or liability measured at its fair
         value for fiscal quarters of fiscal years beginning after June 15,
         2000. There was no impact on the Corporation's consolidated financial
         position, results of operations or cash flows as a result of adopting
         these statements.

         In December 1999, the staff of the Securities and Exchange Commission
         released Staff Accounting Bulletin 101 ("SAB 101"), "Revenue
         Recognition" to provide guidance on the recognition, presentation and
         disclosure of revenues in financial statements. Management believes
         that the Corporation's revenue recognition policy is in compliance with
         the provisions of SAB 101 and that the adoption of SAB 101 had no
         material effect on the financial position or results of operations of
         the Corporation.


                                       9


<PAGE>


CHINA BROADBAND CORP.                                                          4
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN UNITED STATES DOLLARS)
--------------------------------------------------------------------------------


4.       ACCOUNTING POLICIES

         NEW ACCOUNTING PRONOUNCEMENTS (CONTINUED)

         In March 2000, the FASB issued FASB Interpretation (FIN) No. 44,
         "Accounting for Certain Transactions Involving Stock Compensation." FIN
         44 clarifies the application of Accounting Principles Board Opinion No.
         25 for certain issues relating to stock compensation. FIN 44 is
         effective July 1, 2000, but certain conclusions in it cover specific
         events that occur after either December 15, 1998, or January 12, 2000.
         To the extent that FIN 44 covers events occurring during the period
         after December 15, 1998, or January 12, 2000, but before the effective
         date of July 1, 2000, the effects of applying FIN 44 are recognized on
         a prospective basis from July 1, 2000. The adoption of FIN 44 by the
         Corporation had no material effect on the financial position or results
         of operations of the Corporation.

     5.  ACQUISITION OF BIG SKY NETWORK CANADA LTD.

         On September 29, 2000, the Corporation closed a common stock purchase
         agreement to buy 50,000 common shares of BSN, increasing its ownership
         to 100% of BSN. The acquisition was accounted for as a purchase. The
         purchase price was US $12.7 million, consisting of $2.5 million cash, a
         $1.7 million promissory note and 1,133,000 common shares of the
         Corporation valued at the fair market value of the common shares of
         $8,497,500. The purchase price has been allocated as follows:

                                                 -----------------
                                                        $
                                                 -----------------

        Assets acquired, excluding cash
          Net working capital deficiency              (742,327)
          Investment in Shekou joint venture         2,684,438
          Intellectual property                        849,750
          Chengdu joint venture                      5,098,500
          Shekou joint venture                       2,549,250
          Goodwill                                   2,153,717
                                                 -----------------
                                                    12,593,328

        Cash acquired                                  104,172
                                                 -----------------
        Net assets acquired                         12,697,500
                                                 =================


         The promissory note bears interest at 8% per annum and is payable at
         maturity. The principal is due on September 29, 2001.


                                       10


<PAGE>


CHINA BROADBAND CORP.                                                          5
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(EXPRESSED IN UNITED STATES DOLLARS)
--------------------------------------------------------------------------------

     5.  ACQUISITION OF BIG SKY NETWORK CANADA LTD. (CONTINUED)

         The values ascribed to the acquired intangibles including intellectual
         property, Shekou joint venture and Chengdu joint venture were based on
         an estimation of fair value. The Shekou joint venture and Chengdu joint
         venture intangibles represent government approved contracts to provide
         Internet services in the PRC. The valuation of the assets was performed
         by management. In preparing the valuation management made a number of
         assumptions which included the estimated subscriber base in both Shekou
         and Chengdu, the market value of subscribers based on values assigned
         subscribers in the United States and in Europe, the relationships
         established with the governments in the munciplities the Corporation
         was considering having operations in, the value of the extensive legal
         work in establishing the framework to have operations in China and
         discussions on the value of those operations with various vendors.

     6.  CONTINGENCIES

         On March 29, 2001, The Orbiter Fund Ltd., The Viator Fund Ltd., Lancer
         Offshore Inc. and Lancer Partners Limited Partnership (collectively,
         the "Plaintiffs") filed an action in the Court of Queen's Bench of
         Alberta, Judicial District of Calgary (Action No. 0101-07232), naming
         Matthew Heysel, CEO, and China Broadband Corp. as defendants. The
         action alleges that Mr. Heysel made certain misrepresentations to the
         Plaintiffs in connection with the Plaintiffs' purchase of 500,000
         shares of the Corporation's common stock at $1.00 per share and 866,667
         shares of China Broadband Corp.'s common stock at $7.50 per share. The
         Plaintiffs are seeking, among other things, damages in the amount of
         $7,000,000, an accounting of profits and a preservation order
         preserving the funds obtained from the Plaintiffs.

         The Corporation believes the claims are without merit and intends to
         vigorously defend against the claims.

     7.  COMMITMENTS

             a)   On February 13, 2001, the Corporation announced that it had
                  entered into an agreement with a supplier to purchase
                  equipment and services relating to the Internet services
                  provided by the joint ventures in the PRC. Under the terms of
                  the agreement, the Corporation has the option of purchasing up
                  to $250 million in equipment and services at discounted prices
                  over the five year term.

             b)   On March 8, 2001, BSN entered into a cooperative joint venture
                  agreement with Changsha Guang Da Television Broadcast Network
                  Ltd. ("Changsha Guang Da") to provide Internet technology
                  service in Hunan Province, PRC. The agreement, subject to
                  government approvals, commits Changsha Guang Da to provide
                  exclusive access to its HFC network, facilities and
                  frequencies to allow the joint venture to provide Internet
                  connectivity services to cable TV subscribers of Changsha
                  Guang Da. The contract duration is 18 years. BSN will receive
                  65% of the net revenue during the first five years, 50% for
                  the next five years and 40% thereafter. Under the terms of the
                  agreement BSN is required to invest $18 million of capital and
                  equipment, staged over the life of the joint venture
                  agreement.


                                       11


<PAGE>


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

FORWARD-LOOKING STATEMENTS

         Included in this report are various forward-looking statements, which
can be identified by the use of forward looking terminology such as "may,"
"will," "expect," "anticipate," "estimate," "continue," "believe" or other
similar words. We have made forward-looking statements with respect to the
following, among others: our goals and strategies; our expectations related to
growth of the Internet in China and the performance of our joint ventures; our
joint venture partners' ability to obtain licenses and permits to operate as
Internet service providers in China; our ability to earn sufficient revenues
from our joint ventures; the importance and expected growth of Internet
technology and the demand for Internet services in China; our ability to
continue as a going concern; and our future revenue performance and our future
results of operations. These statements are forward-looking and reflect our
current expectations. They are subject to a number of risks and uncertainties,
including but not limited to, changes in the economic and political environments
in China, changes in technology, changes in the Internet marketplace in China,
competitive factors and other risks described in our annual report on Form
10-KSB filed with the United States Securities and Exchange Commission. In light
of the many risks and uncertainties surrounding China Broadband, China and the
Internet marketplace, you should keep in mind that we cannot guarantee that the
forward-looking statements described in this report will transpire and you
should not place undue reliance on forward looking statements.

SUMMARY FINANCIAL DATA

STATEMENT OF OPERATIONS DATA:

--------------------------------------------------------------------------------
                                                     CUMULATIVE
                                                     PERIOD FROM
                                                     INCEPTION
                                  THREE MONTH        FEBRUARY 1, 2000
                                  PERIOD ENDED       THROUGH
                                  MARCH 31, 2001     MARCH 31, 2001

--------------------------------------------------------------------------------
Net sales                         $        0           $  208,333
--------------------------------------------------------------------------------
Loss from operations              $1,219,849           $4,696,914
--------------------------------------------------------------------------------
Net loss                          $1,272,179           $4,869,359
--------------------------------------------------------------------------------
Basic loss per common share       $    (0.07)
--------------------------------------------------------------------------------
Basic weighted average common
shares outstanding                19,474,517
--------------------------------------------------------------------------------

AS OF MARCH 31, 2001:

--------------------------------------------
Cash and cash equivalents        $ 3,865,181
--------------------------------------------
Working capital                  $ 1,739,906
--------------------------------------------
Total assets                     $18,120,442
--------------------------------------------
Long-term obligations                      -
--------------------------------------------
Total stockholders' equity      $ 15,834,591
--------------------------------------------

         The following discussion and analysis should be read in conjunction
with the financial statements and notes thereto appearing elsewhere in this Form
10-QSB.


OVERVIEW

         We were inactive from the date of our incorporation on February 9, 1993
through December 31, 1997. Through December 31, 1997, no significant capital was
raised and no significant expenses incurred. Our share capital at December 31,
1997 consisted of 100 common shares which was paid in capital of $100. During
our fiscal year ended December 31, 1998, we raised $59,971 in capital by selling
2,319,000 common shares, and incurred start up expenses of $25,095.


                                       12


<PAGE>


         On April 14, 2000, we completed a reverse-split of our common stock on
a .65104 for 1 basis reducing our issued and outstanding share capital to
1,509,850 shares of common stock. All information contained in this report
gives effect to the reverse-split.

         On April 14, 2000, we acquired all of the issued and outstanding shares
of China Broadband (BVI) Corp., in exchange for 13,500,000 shares of our common
stock. Because we had only 1,509,850 (post reverse-split) shares issued and
outstanding on the date of our acquisition, the former shareholders of China
Broadband (BVI) Corp., acquired control over the predecessor company. In
instances like this, accounting principles require that the transaction be
reflected in financial statements as a reverse acquisition. In this case, common
control started immediately after the completion of the acquisition, effectively
April 14, 2000. Consequently, under the principles of reverse acquisition
accounting China Broadband (BVI) Corp. was deemed to be the acquirer and our
consolidated financial statements are presented as a continuation of the
financial position and results from operations of China Broadband (BVI) Corp.

         Following our acquisition of China Broadband (BVI) Corp., SoftNet
Systems Inc. acquired an additional 40,000 common shares of China Broadband
(BVI) Corp.'s subsidiary, Big Sky Network Canada Ltd. at a price of $2 million.
The 40,000 shares of Big Sky Network, when added to 10,000 shares of Big Sky
Network previously acquired by SoftNet for $500,000, increased SoftNet's
ownership in Big Sky Network to 50%. The original $500,000 invested in Big Sky
Network was used for working capital and the further $2.0 million was used to
fund Big Sky Network's Shekou joint venture. On September 29, 2000, we purchased
SoftNet's 50% interest in Big Sky Network through China Broadband (BVI) Corp.,
bringing our indirect ownership interest in Big Sky Network to 100%, for
$12,697,500 in the form of the following consideration:

     o   $2,500,000 in cash;

     o   a promissory note in the principal amount of $1,700,000, due
         September  29, 2001, with interest payable at maturity at the rate of
         8% per annum;

     o  forgiveness of debt owed, if any, as at the closing date of the
        transaction.  No debt was owed as of the closing date; and

     o  1,133,000 shares of our common stock at a deemed value of $7.50 per
        share.

         Subsequent to our acquisition of China Broadband (BVI) Corp., China
Broadband Corp. completed three private placements totaling 3,331,667 shares of
common stock for net proceeds of $11,316,692.

         We, China Broadband Corp., are a development stage company, which means
we are in the process of developing our business. We have incurred losses since
our inception, and we anticipate that we will continue to incur losses in the
foreseeable future. Our auditors have expressed considerable doubt that we will
be able to continue. Management is addressing this concern with a plan of equity
and debt financing and profits from future dividends from our joint ventures.

RESULTS OF OPERATIONS

         The following management's discussion relates to the three month fiscal
period ended March 31, 2001. We began operations on February 1, 2000 (date of
inception) and had no significant activities from February 1, 2000 through March
31, 2000. Management believes that a comparative period discussion of the three
month period ended March 31, 2001 to the period from inception to March 31,
2000, would not be meaningful.

THREE MONTH PERIOD ENDED MARCH 31, 2001

         REVENUES. During the three month period ended March 31, 2001, we earned
no revenues from sales. We earned interest income of $56,423 from cash and
short-term deposits.


                                       13


<PAGE>


         During the three months ended March 31, 2001, the Shekou Joint Venture
received revenues from subscribers of approximately $110,000. The revenue
consists of the sale and rental of cable modems, monthly subscription fees and
maintenance fees. During the three month period ended March 31, 2001, the Shekou
Joint Venture connected approximately 670 subscribers, and as a result, the
Shekou Joint Venture had approximately 1,884 subscribers with Internet
connection. The Shekou Joint Venture had 3,300 subscribers waiting to be
connected as of March 31, 2001. We anticipate that the Shekou Joint Venture will
connect approximately 2,000 additional subscribers during the quarter ended June
30, 2001.

         The Chengdu Joint Venture began commercial operations near the end of
2000, and as of March 31, 2001, had approximately 11 subscribers with Internet
connection. The Chengdu Joint Venture does not currently have any additional
subscribers awaiting connection. The Chengdu Joint Venture did not generate any
material revenues during the quarter ended March 31, 2001.

         Our joint ventures generate revenues by charging a maintenance fee to
the subscriber for use of the equipment that enables their access to the
Internet through their cable television system. The subscriber is also charged a
fee on behalf of the Chinese joint venture partner for Internet access. This fee
is collected by the joint venture and remitted to the Chinese joint venture
partner and is not considered revenue of the joint venture. Under the terms of
the existing joint venture contracts, the net profits of the joint venture will
be distributed to each of the joint venture parties each year after the joint
venture has paid applicable taxes and set aside the reserve, expansion and staff
welfare and bonus funds mandated by the joint venture contract and Chinese law.
These dividends and distributions are paid to Big Sky Network. These payments
may be exchanged into US currency and repatriated under Chinese law and with the
Department of Foreign Trade and Economic Cooperation approval. The payment of
dividends and distributions from our joint ventures are subject to restrictions
under Chinese law. See Risk Factors entitled "Our joint ventures might not
become profitable enough to distribute dividends that we can use for our cash
requirements", "Chinese legal restrictions affect our joint ventures' ability to
distribute dividends to us" and "We may not be able to freely convert Renminbi
into foreign currency, which could limit the ability of our joint ventures in
China to obtain sufficient foreign exchange to satisfy their foreign exchange
requirements or to pay dividends to us". Our operations in China are also
subject to significant legal and operational uncertainties, such as the
potential application of regulations that prohibit foreign investment in the
telecommunications industry in China or that restrict the remittance of foreign
exchange outside of China and the uneven quality and reliability of
telecommunications networks in China.

         EXPENSES: During the three month period ended March 31, 2001, we
incurred general operating expenses of $1,219,849. These expenses included the
following:


                Calgary office                         $154,899
                Beijing office                          240,000
                Professional services                   148,879
                Investor relations                       19,613
                Amortization                            533,681
                Non-cash stock compensation              52,665
                Miscellaneous                            70,112
                                                     ----------
                                                     $1,219,849
                                                     ==========

         Calgary office expenses consist primarily of costs associated with
maintaining our principal business office in North America. These expenses
including hiring costs, consulting expenses related to 1 administrative and 5
management consultants in Canada, rent expense, insurance expenses and general
office expenses. Calgary office expenses are anticipated to remain stable during
the balance of 2001.

         Beijing office expenses consist primarily of costs associated with
maintaining our business operations office in China. These expenses including
hiring costs, accommodations for contract personnel on short-term assignments,
consulting expenses related to 5 non-joint venture management consultants in
China, other consulting fees, rent expense related to our office in Beijing,
travel expenses, insurance expenses and general and other operating costs not
related to the joint ventures. Beijing office expenses are anticipated to
increase during 2001 as we concentrate efforts on assisting our joint ventures
in expanding their subscriber base in Shekou and Chengdu and as our Deyang Joint
Venture commences operation once Chinese regulatory approval is received, which
is anticipated in prior to the end of 2001.


                                       14


<PAGE>


         Professional services consist of expenses for professional fees in the
amount of $94,365 associated with our year-end accounting and audit review and
legal fees in the amount of $22,518 for services related to our Securities and
Exchange Commission filings, legal research related to our business and the
preparation of joint venture related legal documents. In addition, we paid
consulting fees in the amount of $31,996 for consulting services related to
corporate governance. We anticipate that professional fees related to accounting
and review will remain stable for the remainder of 2001; however, we expect our
legal expenses to increase as we defend a legal action filed against us. See
"Legal Proceedings".

         Investor Relations expenses are related to public relations and
investor relations activities. During the quarter ended March 31, 2001, we
entered into an investor relations arrangement with Armour Capital, under which
we agreed to pay a fee of $10,000 per month for investor relations services
beginning September 2000. During the three month period ended March 31, 2001, we
paid Canaccord Capital $15,000 under an investor relations arrangement, which
expired on March 31, 2001.

         Amortization and depreciation expenses resulted primarily from the
acquisition of 50% of Big Sky Network. Non-cash stock compensation related to
550,000 options issued on February 2, 2001 and $10,896 related to the
amortization of Warrants issued in 2000. Miscellaneous expenses include web site
maintenance, office supplies and professional development expenses.

         Overall, we anticipate that expenses will increase during 2001 for the
following reasons:

     o   We intend to continue to negotiate and finalize letters of intent and
         definitive agreements to form joint ventures;

     o   We intend to support our joint ventures' efforts as they begin
         extensive marketing and promotional campaigns to build subscription
         bases in Shekou and Chengdu;

     o   We will incur expenses related to the launch of joint venture services
         in Deyang and other potential areas;

     o   We will incur costs associated with finance raising activities;

     o   We will incur costs related to hiring additional personnel/consultants
         to provide management, technical and support services to our growing
         organization; and

     o   We will incur other costs related to implementing our business plan and
         financing our joint venture obligations.

         LOSSES. During the three-month period ended March 31, 2001, we incurred
a loss from our operations of $1,219,849 and an equity loss of $108,753 related
to the Shekou and Chengdu joint ventures. Our loss for the three-month period
ended March 31, 2001, after interest income of $56,423, was $1,272,179. We
anticipate that we will continue to incur losses for the foreseeable future
until our joint ventures are able to generate profits.

         Since we are in the development stage, all losses accumulated since
inception have been considered as part of our development stage activities.

LIQUIDITY AND CAPITAL RESOURCES

         As of March 31, 2001, we had cash and cash equivalents of $3,865,181
and working capital, including cash and cash equivalents, of $1,739,906. Since
inception, we have financed operations primarily through sales of equity
securities and have raised a total of $11,316,692, net of share issuance costs
of $75,811. On a consolidated basis, our current operating cash expenditures are
expected to be approximately $150,000 to $200,000 per month through March 31,
2002. Our future capital requirements may increase based on a number of factors,
including:


                                       15


<PAGE>


     o   rate of expansion of existing joint ventures,

     o   rate of signing new joint ventures,

     o   capital equipment requirements for new joint ventures,

     o   the level of marketing required to expand our service offerings,

     o   our joint venture partners' ability to lease additional bandwidth as
         our subscriber base expands, and

     o   price competition in our markets.

         Our auditors have expressed considerable doubt that we will be able to
continue as an ongoing business. Our ability to continue as a going concern is
dependent upon our ability to generate profitable operations in the future and
to obtain the necessary financing to meet our obligations and repay our
liabilities arising from normal business operations when they come due. The
outcome of these matters cannot be predicted with any certainty at this time.

         We anticipate that we will be required to raise an additional $6
million to fund our current plan of operation through June 30, 2002. See "Plan
of Operation."

         In addition, on March 8, 2001, Big Sky Network Canada Ltd. entered into
a preliminary agreement to form a joint venture with Changsha Guang Da
Television Broadcast Network Ltd. to provide Internet technology service in
Hunan Province. The term of the contract is 18 years, and Big Sky Network will
receive 65% of the net revenue during the first five years, 50% for the next
five years and 40% thereafter. Under the terms of the agreement, we have
committed to invest $18 million of capital and equipment, staged over the life
of the joint venture agreement. Our initial investment during 2001 is
anticipated to be $1 million, with subsequent investments in amounts to be
determined through our negotiations of the definitive joint venture agreements
with our Chinese joint venture partner. We cannot assure you that the joint
venture will receive government regulatory approval or that sufficient financing
will be available to meet our investment commitment.


                                       16


<PAGE>


         Our principal source of capital has been equity financing from
investors and our founders. We are exploring opportunities for equity financing,
vendor financing, bank credit facilities and export credit agency arrangements.
Meeting our future financing requirements is expected to be dependent on access
to equity capital markets. We may not be able to raise additional equity when
required or on favorable terms that are not dilutive to existing shareholders.

         The growth of our business in China will require capital investments in
China for the foreseeable future. The joint ventures have generated nominal
revenues to date and any future profits will likely be re-invested in additional
joint ventures. At a future date when surplus earnings in the joint ventures
occurs, there can be no assurance that the joint ventures will be able to pay
dividends from China due to restrictions under Chinese law. We estimate that the
operating cash break even point for the facilities in Shekou will require the
equivalent of 3,500 subscribers at present pricing structures. The Chengdu Joint
Venture efforts to obtain paying subscribers has been slower than anticipated,
and we estimate that operating cash break even point for the facilities in
Chengdu will require the equivalent of 4,000 subscribers at present pricing
structures. We cannot assure you that our joint ventures will attract a
sufficient number of subscribers to become commercially profitable or that our
projections will not change as a result of changes in the economic or other
conditions.

         We are in discussions with prospective investors to raise additional
financing through equity and debt financing. We are also negotiating with
equipment suppliers to arrange vendor financing or equipment leasing. We cannot
assure you that any additional financing can be finalized in the near future, if
at all.

         On March 29, 2001, a legal action was filed against us and our Chief
Executive Officer by certain investors, seeking among other things, damages in
the amount of $7,000,000, an accounting of profits and a order which may
prohibit us from expending funds to fund our business. See "Legal Proceedings."
Although we believe the claim is without merit and will vigorously defend
ourselves against the claims, we cannot assure you that the court will not grant
the plaintiffs interim relief, which could affect our ability to fund our plan
of operation. The lawsuit may adversely affect our ability to obtain additional
financing.

SUBSEQUENT EVENTS

         On June 1, 2001, Shanghai Min Hang Cable Television Center forwarded to
Big Sky Network an expression of interest in the two companies working together
to form a joint venture.

         On June 18, 2001, Big Sky Network entered into a Memorandum of
Understanding with Beijing Gehua Cable TV Networks Co., Ltd. to jointly develop
broadband Internet network services. We are to supply equipment, technology,
capital and personnel. Beijing Gehua will supply a network of 10,000 subscribers
as a test group.

         On June 20, 2001, Big Sky Network entered into a Letter of Intent with
Chongqing Branch of Ji Tong Network Communications Co., Ltd. to jointly build
Internet networks. Under the terms of the agreement, we will provide 80 million
RMB (US$ 9.64 million) and technical personnel. The agreement calls for the
project to be deployed in two stages. The first stage consisting of connecting
60,000 households before the end of 2001 and stage two calls for the number of
connected households to be 100,000.

         On July 10, 2001, Big Sky Network entered into a Memorandum of
Understanding with Fujian Provincial Radio and TV Network Co. Ltd. to pursue
negotiations to develop and build a broadband data transmission network jointly.

         On July 27, 2001, China Broadband Corp. and Canaccord International
Ltd. completed a promissory note cancellation transaction, under which the
$1,700,000 Promissory Note we issued to SoftNet was surrendered for cancellation
Canaccord International Ltd. for the following consideration:

     o   A Warrant to purchase 500,000 shares of our common stock at a price of
         $1.00 per share, exerciseable until July 27, 2003. The Warrant has not
         been registered and the Warrant was issued pursuant to an exemption
         from registration under Regulation S promulgated under the Securities
         Act of 1933.

     o   A payment of $115,290.43 representing the accrued interest on the
         Promissory Note to the date to closing at the rate of 8% per annum.

         The Promissory Note, originally issued to SoftNet Systems, Inc. on
September 29, 2000, was acquired by Canaccord International Ltd. in a private
transaction between SoftNet and Canaccord.

         Our ability to deploy Internet connectivity in Changsha, Shanghai and
Beijing will be constrained by our limited capital and human resources. We are
continuing to establish strategic relationships with Chinese partners which will
provide access to their infrastructure and subscriber base. We do not expect
that every letter of intent will result in an actual deployment. Our priorities
will be continuously evaluated to ensure our limited resources result in the
largest possible footprint, readily available government approvals and
significant early cash flow potential from subscribers. The Beijing and Shanghai
relationships, if successfully deployed, will give us significant profile in the
Chinese and Western business communities. We expect modest Internet connectivity
in Beijing, Shanghai and Changsha in the third and fourth quarter, subject to
government approval. We are targeting technology, commercial and manufacturing
sectors initially, to establish base line cash flows. Thereafter, we will expand
in selected residential markets.

OUTLOOK

         Our Shekou and Chengdu joint ventures demonstrated that providing
equipment and technical services to users of broadband Internet services can be
operational with investment of capital, equipment and technical skills. We
believe that the demand for Internet access and services for individuals,
schools and businesses in China will continue to increase. We estimate that our
operational facilities in Shekou and Chengdu can be profitable with a subscriber
base of approximately 3,000 and 4,000 users, respectively. Our third joint
venture in Deyang is expected to receive governmental approval and permits prior
to the end of 2001. Our preliminary agreement to form a joint venture with
Changsha Guang Da, Beijing Gehua, Chongqing and Shanghai Min Hang are also
expected to receive governmental approval and permits prior to the end of 2001.
We believe that our marketing efforts in China will result in increased
opportunities to expand our services to other key cities. Our goal is to enter
into exclusive arrangements in provincial capital cities and other strategic
locations in China


                                       17


<PAGE>


         We estimate that it requires approximately $1 million of capital,
equipment and technical services to commence commercial Internet service in a
new joint venture. Our current capital resources are limited. There can be no
assurance that we will have sufficient financial, technical and human resources
to undertake new joint ventures or maintain the joint ventures currently in
service.

PLAN OF OPERATION

         As of August 7, 2001, our management anticipates that we currently have
sufficient working capital to fund our current operations through the end of
2001.

         ESTIMATED CAPITAL REQUIREMENTS

         To fund our operations for the twelve months ending June 30, 2002,
management estimates we will require additional capital of approximately $6
million. Our current capital and any additional funds raised are intended to
fund the business operations of Big Sky Network, including the following:


                                                             ESTIMATED FINANCIAL
                                                              REQUIREMENTS FOR
                                                              THE TWELVE MONTH
                                                                PERIOD ENDING
                 DESCRIPTION                                    JUNE 30, 2002
                 -----------                                 -------------------
Shekou Joint Venture - Capital Contributions                               $0
Chengdu Joint Venture - Capital Contributions1                        750,000 2
Deyang Joint Venture - Capital Contributions1                       1,000,000 3
Changsha Guang Da Joint Venture - Capital Contributions1            1,000,000 4
Shanghai Min Hang Joint Venture - Capital Contributions1              500,000 5
Beijing Gehua Joint Venture - Capital Contributions 1                 500,000 5
Chongquing Joint Venture - Capital Contributions1                     500,000 6
Technical Consulting Expenditures                                     100,000
Management Consulting Expenditures                                    500,000
Sales and Marketing Expenses                                          600,000
Legal and Professional Expenses                                       200,000
General Administrative Expenses                                       700,000
Capital Raising Expenditures                                          100,000
Overhead Expenses                                                     100,000
Miscellaneous                                                         100,000
                                                                   ----------
TOTAL                                                              $6,650,000
                                                                   ==========

1)  These estimates represent capital investments only and do not represent
    contributions of equipment or technical services. We intend to obtain vendor
    financing for the equipment required for these joint ventures.
2)  Under the terms of the Chengdu joint venture agreement, of the total
    investment of $3,000,000 required over the term of the agreement.
3)  Under the terms of the Deyang joint venture agreement, of the total
    investment of $4,500,000 required over the term of the agreement, we must
    provide $500,000 within 10 days of the joint venture partner obtaining all
    approvals and permits.
4)  The payment terms of our obligation of investing $18,000,000 is to be
    determined through our negotiations of the definitive joint venture
    agreement with our Chinese joint venture partner. We estimate our initial
    contribution will be $1 million in 2001.
5)  The capital investment terms are to be determined through further
    negotiations of joint venture agreements. We estimate our initial capital
    contribution will be $500,000 in 2001.
6)  The payment terms of our obligation of investing 80 million RMB
    (US$9.64 million) is to be determined through negotiations of the definitive
    joint venture agreement. We estimate our initial contribution will be
    $500,000 in 2001.

         The amount and timing of expenditures during the twelve months ending
June 30, 2002 will depend on the success of any contracts we secure, and there
is no assurance we will receive significant revenues or operate profitably. We
anticipate that our current working capital is sufficient to satisfy our cash
requirements through approximately the third quarter of 2001, thereafter we will
require additional financing to continue as a going concern. Current cash
resources are not anticipated to be sufficient to fund the next phase of our
development and management intends to seek additional private equity or debt
financing. There can be no assurances that any such funds will be available, and
if funds are raised, that they will be sufficient to achieve our objective, or
result in commercial success.


                                       18


<PAGE>


         We have entered into an agreement with Nortel Networks to allow us to
purchase up to $250 million of equipment, software and services at special
pricing for our joint ventures.

         We anticipate that we will hire additional technical, administrative
and sales and marketing personnel during the twelve months ending June 30, 2002,
although we have no current plans to do so. We also anticipate that our joint
ventures will hire technical, administrative and sales and marketing personnel
during 2001 to support their operations and to launch their services. We
estimate that each joint venture will hire between 8 and 15 employees during
2001, subject to the joint venture's needs and the development stage of their
business.

         We do not engage in research and development activities.

                                     PART II

ITEM 1.  LEGAL PROCEEDINGS

         On April 18, 2001, we were served with a Statement of Claim which had
been filed on March 29, 2001, in the Court of Queen's Bench of Alberta, Judicial
District of Calgary (Action No. 0101-07232), naming China Broadband Corp. and
Matthew Heysel as defendants. The Orbiter Fund Ltd., The Viator Fund Ltd.,
Lancer Offshore Inc. and Lancer Partners Limited Partnership (collectively, the
"Plaintiffs") allege that Mr. Heysel made certain misrepresentations to the
Plaintiffs in connection with the Plaintiffs' purchase of 500,000 shares of
China Broadband Corp.'s common stock at $1.00 per share and 866,667 shares of
China Broadband Corp.'s common stock at $7.50 per share. The Plaintiffs are
seeking, among other things, damages in the amount of $7,000,000, an accounting
of profits and a preservation order preserving the funds obtained from the
Plaintiffs.

         We believe the claim against ourselves and Mr. Heysel is without merit
and we intend to vigorously defend ourselves against the claim and will seek an
expeditious dismissal of the claim.

         On June 29, 2001, we entered into an Indemnity Agreement with Matthew
Heysel. Under this agreement, we indemnify Mr. Heysel, our Chairman and Chief
Executive Officer, against any and all damages, costs, liabilities, charges and
expenses arising from the current claim against us and Mr. Heysel.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

                  a)       SALES OF UNREGISTERED SECURITIES

                           None.


                                       19


<PAGE>


                  b)       USE OF PROCEEDS FROM SALES OF REGISTERED SECURITIES

                           Not Applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

                  None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matters were submitted to a vote of security holders during the
first quarter of 2001.

         The annual meeting of Shareholders was held on June 29, 2001 at which
the following items were voted upon:

<TABLE>
<CAPTION>


ITEM                                                             FOR             AGAINST        ABSTAIN      NON-VOTE
----                                                                             -------        -------      --------
<S>                                                             <C>              <C>            <C>          <C>

1) Election of members of the Board of Directors
     Ian Aaron                                                  10,738,066       250,000             --           --
     John Brooks                                                10,738,066       250,000             --           --
     Matthew Heysel                                             10,737,966       250,100             --           --
     Richard Hurwitz                                            10,738,066       250,000             --           --
     Thomas Milne                                               10,738,066       250,000             --           --
     Daming Yang                                                10,738,066       250,000             --           --

2) Approve the appointment of Deloitte & Touche LLP             10,988,066             0             --           --

3) Approval and adoption of the China Broadband                 10,367,628       250,200         10,100      360,138
   Corp. 2000 Stock Option Plan

</TABLE>


ITEM 5.  OTHER INFORMATION

         On July 27, 2001, China Broadband Corp. and Canaccord International
Ltd. completed a promissory note cancellation transaction, under which the
$1,700,000 Promissory Note we issued to SoftNet was surrendered for cancellation
Canaccord International Ltd. for the following consideration:

      o  A Warrant to purchase 500,000 shares of our common stock at a price of
         $1.00 per share, exerciseable until July 27, 2003. The Warrant has not
         been registered and the Warrant was issued pursuant to an exemption
         from registration under Regulation S promulgated under the Securities
         Act of 1933.

      o  A payment of $115,290.43 representing the accrued interest on the
         Promissory Note to the date to closing at the rate of 8% per annum.

         The Promissory Note, originally issued to SoftNet Systems, Inc. on
September 29, 2000, was acquired by Canaccord International Ltd. in a private
transaction between SoftNet and Canaccord.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         a) Exhibits.


EXHIBIT NO.                             DESCRIPTION

3.1(1)    Certificate of Incorporation of the Company consisting of the Articles
          of Incorporation filed with the Secretary of the State of Nevada on
          February 9, 1993


                                       20


<PAGE>


3.2(5)    Certificate of Amendment to Articles of Incorporation of Institute For
          Counseling, Inc. filed with the Secretary of the State of Nevada on
          March 22, 2000

3.3(3)    Certificate of Amendment to Articles of Incorporation of Institute For
          Counseling, Inc. filed with the Secretary of the State of Nevada on
          April 14, 2000

3.4(1)    By-Laws of the Company, dated November 9, 1993

3.5(13)   Amended and Restated By-Laws of the Company, dated August 8, 2001

10.1(2)   Purchase Agreement for the Acquisition of China Broadband (BVI) Corp.
          among Institute For Counseling, Inc. and China Broadband (BVI) Corp.

10.2(2)   Cooperative Joint Venture Contract For Shenzhen China Merchants Big
          Sky Network Ltd.

10.3(4)   Common Stock Purchase Agreement dated September 29, 2000, among
          SoftNet Systems, Inc., China Broadband Corp. and Big Sky Network
          Canada Ltd.

10.4(4)   Termination Agreement dated September 29, 2000, among SoftNet Systems,
          Inc., China Broadband Corp., Big Sky Network Canada Ltd. and Matthew
          Heysel, for himself and as attorney-in-fact for Daming Yang, Kai Yang,
          Wei Yang, Jeff Xue, Donghe Xue, Lu Wang, Wallace Nesbitt and Western
          Capital Corp.

10.5(4)   Termination Agreement dated September 29, 2000, among SoftNet Systems,
          Inc., China Broadband Corp., Big Sky Network Canada Ltd., China
          Broadband (BVI) Corp., Matthew Heysel and Daming Yang.

10.6(5)   Cooperative Joint Venture Contract For Sichuan Huayu Big Sky Network
          Ltd. dated July 8, 2000

10.7(5)   Strategic Partnership Agreement Between Chengdu Huayu Information
          Industry Co., Ltd. and Big Sky Network Canada Ltd.

10.8(5)   Cooperative Joint Venture Contract For Deyang Guangshi Big Sky Ltd.
          dated November 25, 2000

10.9(5)   Consulting Agreement MH Financial Management, for the services of
          Matthew Heysel

10.10(5)  China Broadband Stock Option Plan

10.11(5)  Form of Stock Option Agreement

10.12(5)  Form of Restricted Stock Purchase Agreement

10.13(5)  Letter Agreement dated July 25, 2000 by and between China Broadband
          Corp. and Canaccord International Ltd.

10.14(5)  Joint Development Agreement of City-Wide-Area High Speed Broadband and
          Data Transmission Services Networks of China Between Big Sky Network
          Canada Ltd. and Jitong Network Communications Co. Ltd.

10.15(5)  Consulting Agreement Daming Yang

10.16(5)  Consulting Agreement and Precise Details Inc. for the services of
          Thomas Milne

10.17(8)  Agreement to the Establishment of Cooperation Joint Venture between
          Big Sky Network Canada Ltd. and Zhuhai Cable Television Station, dated
          May 27, 1999

10.18(8)  Letter of Intent, dated March 1, 2000, between Big Sky Network Canada
          Ltd. and Dalian Metropolitan Area Network Center

10.19(8)  Letter of Intent, dated November 8, 2000, between Big Sky Network
          Canada Ltd. and Hunan Provincial Television and Broadcast Media Co.
          Ltd.

10.20(8)  Preliminary Agreement to Form a Contractual Joint Venture, dated March
          8, 2001 between Big Sky Network Canada Ltd. and Changsha Guang Da
          Television


                                       21


<PAGE>


10.21(6)  Purchase and License Agreement, dated September 28, 2000, between
          China Broadband Corp. and Nortel Networks Limited

10.22(6)  Amendment, dated January 1, 2001, to the Purchase and License Agree-
          ment between China Broadband Corp. and Nortel Networks Limited

10.23(8)  Consulting Agreement, dated December 22, 2000, between China Broadband
          Corp and Barry L. Mackie

10.24(8)  Consulting Agreement, dated October 1, 2000, between China Broadband
          Corp and Richard Lam

10.25(8)  Consulting Agreement, dated October 1, 2000, between China Broadband
          Corp and Ping Chang Yung

10.26(8)  Consulting Agreement, dated October 1, 2000, between China Broadband
          Corp and YungPC AP

10.27(7)  Common Stock Purchase Agreement dated September 29, 2000, among
          SoftNet Systems, Inc., China Broadband Corp. and Big Sky Network
          Canada Ltd.

10.28(7)  Termination Agreement dated September 29, 2000, among SoftNet Systems,
          Inc., China Broadband Corp., Big Sky Network Canada Ltd. and Matthew
          Heysel, for himself and as attorney-in-fact for Daming Yang, Kai Yang,
          Wei Yang, Jeff Xue, Donghe Xue, Lu Wang, Wallace Nesbitt and Western
          Capital Corp.

10.29(7)  Termination Agreement dated September 29, 2000, among SoftNet Systems,
          Inc., China Broadband Corp., Big Sky Network Canada Ltd., China
          Broadband (BVI) Corp., Matthew Heysel and Daming Yang

10.30(11) Letter of Intent dated June 1, 2001 between Big Sky Network Canada
          Ltd. and Shanghai Min Hang Cable Television Center

10.31(11) Memorandum of Understanding dated June 18, 2001 between Big Sky
          Network Canada Ltd. and Beijing Gehua Cable TV Networks Co., Ltd.

10.32(11) Letter of Intent between Big Sky Network Canada Ltd. and Chong Qing
          Branch of Ji Tong Network Communications Co., Ltd.

10.33(11) Consulting Agreement dated April1, 2001 between China Broadband Corp.
          and Precise Details Inc.

10.34(11) Consulting Agreement dated April 1, 2001 between China Broadband Corp.
          and M.H. Financial

10.35(11) Consulting Agreement dated April 1, 2001 between China Broadband Corp.
          and Daming Yang

10.36(11) Indemnity Agreement dated June 29, 2001 between China Broadband Corp.
          and Matthew Heysel

10.37(12) Memorandum of Understanding between Big Sky Network Canada Ltd. and
          Fujian Provincial Radio and Television Network Co. Ltd. dated July 10,
          2001

10.38(13) Note Cancellation Agreement between China  Broadband Corp. and
          Canaccord International Ltd.

16.1(9)   Change in Auditor Letter of Amisano Hanson

16.2(10)  Change in Auditor Letter of Arthur Anderson LLP

21.1(5)   List of subsidiaries of registrant

(1)      Previously filed on Form 10-SB on December 2, 1999.
(2)      Previously filed on Form 8-K filed on April 28, 2000.
(3)      Previously filed on Form 10-KSB on July 11, 2000.
(4)      Previously filed on Form 8-K filed on September 29, 2000.


                                       22


<PAGE>


(5)      Previously filed on Form S-1 filed on December 6, 2000.
(6)      Previously filed on Form 10-QSB on March 15, 2001, excluding schedules
         and exhibits. Amended to include schedules and exhibits and re-filed on
         Amendment No. 3 to Form S-1. Amended to mark omitted material and
         re-filed on Amendment No. 5 to Form S-1. Certain portions of the
         material have been omitted pursuant to an application for confidential
         treatment which has been filed with the United States Securities and
         Exchange Commission under Rule 406 of the Securities Exchange Act of
         1933, as amended.
(7)      Previously filed on Form 8-K/A on December 12, 2000.
(8)      Previously filed on Form 10-KSB on March 28, 2001.
(9)      Previously filed on Form 8K on August 25, 2000.
(10)     Previously filed on Form 8K on September 26, 2000.
(11)     Previously filed on Form S-1, Amendment No. 3 on July 2, 2001.
(12)     Previously filed on Form S-1, Amendment No. 4 on July 27, 2001.
(13)     Previously filed on Form S-1, Amendment No. 5 on August 10, 2001.


         b) Reports on Form 8-K.

            There were no reports on Form 8-K during the first quarter of 2001.


                                       23

<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 BROADBAND CORP.



Date:  August 10, 2001          By:      /s/ MATTHEW HEYSEL
                                         ------------------
                                         Name:   Matthew Heysel
                                         Title:  Chief Executive Officer
                                         (Principal Executive Officer)


Date:  August 10, 2001          By:      /s/ THOMAS MILNE
                                         ----------------
                                         Name:   Thomas Milne
                                         Title:  Chief Financial Officer
                                         (Principal Accounting Officer)






                                       24


<PAGE>


EXHIBIT INDEX



EXHIBIT NO.                           DESCRIPTION

3.1(1)    Certificate of Incorporation of the Company consisting of the Articles
          of Incorporation filed with the Secretary of the State of Nevada on
          February 9, 1993

3.2(5)    Certificate of Amendment to Articles of Incorporation of Institute For
          Counseling, Inc. filed with the Secretary of the State of Nevada on
          March 22, 2000

3.3(3)    Certificate of Amendment to Articles of Incorporation of Institute For
          Counseling, Inc. filed with the Secretary of the State of Nevada on
          April 14, 2000

3.4(1)    By-Laws of the Company, dated November 9, 1993

3.5(13)   Amended and Restated By-Laws of the Company, dated August 8, 2001

10.1(2)   Purchase Agreement for the Acquisition of China Broadband (BVI) Corp.
          among Institute For Counseling, Inc. and China Broadband (BVI) Corp.

10.2(2)   Cooperative Joint Venture Contract For Shenzhen China Merchants Big
          Sky Network Ltd.

10.3(4)   Common Stock Purchase Agreement dated September 29, 2000, among
          SoftNet Systems, Inc., China Broadband Corp. and Big Sky Network
          Canada Ltd.

10.4(4)   Termination Agreement dated September 29, 2000, among SoftNet Systems,
          Inc., China Broadband Corp., Big Sky Network Canada Ltd. and Matthew
          Heysel, for himself and as attorney-in-fact for Daming Yang, Kai Yang,
          Wei Yang, Jeff Xue, Donghe Xue, Lu Wang, Wallace Nesbitt and Western
          Capital Corp.

10.5(4)   Termination Agreement dated September 29, 2000, among SoftNet Systems,
          Inc., China Broadband Corp., Big Sky Network Canada Ltd., China
          Broadband (BVI) Corp., Matthew Heysel and Daming Yang.

10.6(5)   Cooperative Joint Venture Contract For Sichuan Huayu Big Sky Network
          Ltd. dated July 8, 2000

10.7(5)   Strategic Partnership Agreement Between Chengdu Huayu Information
          Industry Co., Ltd. and Big Sky Network Canada Ltd.

10.8(5)   Cooperative Joint Venture Contract For Deyang Guangshi Big Sky Ltd.
          dated November 25, 2000

10.9(5)   Consulting Agreement MH Financial Management, for the services of
          Matthew Heysel

10.10(5)  China Broadband Stock Option Plan

10.11(5)  Form of Stock Option Agreement

10.12(5)  Form of Restricted Stock Purchase Agreement

10.13(5)  Letter Agreement dated July 25, 2000 by and between China Broadband
          Corp. and Canaccord International Ltd.

10.14(5)  Joint Development Agreement of City-Wide-Area High Speed Broadband and
          Data Transmission Services Networks of China Between Big Sky Network
          Canada Ltd. and Jitong Network Communications Co. Ltd.

10.15(5)  Consulting Agreement Daming Yang

10.16(5)  Consulting Agreement and Precise Details Inc. for the services of
          Thomas Milne

10.17(8)  Agreement to the Establishment of Cooperation Joint Venture between
          Big Sky Network Canada Ltd. and Zhuhai Cable Television Station, dated
          May 27, 1999


                                       25


<PAGE>


10.18(8)  Letter of Intent, dated March 1, 2000, between Big Sky Network Canada
          Ltd. and Dalian Metropolitan Area Network Center

10.19(8)  Letter of Intent, dated November 8, 2000, between Big Sky Network
          Canada Ltd. and Hunan Provincial Television and Broadcast Media Co.
          Ltd.

10.20(8)  Preliminary Agreement to Form a Contractual Joint Venture, dated March
          8, 2001 between Big Sky Network Canada Ltd. and Changsha Guang Da
          Television

10.21(6)  Purchase and License Agreement, dated September 28, 2000, between
          China Broadband Corp. and Nortel Networks Limited

10.22(6)  Amendment, dated January 1, 2001, to the Purchase and License Agree-
          ment between China Broadband Corp. and Nortel Networks Limited

10.23(8)  Consulting Agreement, dated December 22, 2000, between China Broadband
          Corp and Barry L. Mackie

10.24(8)  Consulting Agreement, dated October 1, 2000, between China Broadband
          Corp and Richard Lam

10.25(8)  Consulting Agreement, dated October 1, 2000, between China Broadband
          Corp and Ping Chang Yung

10.26(8)  Consulting Agreement, dated October 1, 2000, between China Broadband
          Corp and YungPC AP

10.27(7)  Common Stock Purchase Agreement dated September 29, 2000, among
          SoftNet Systems, Inc., China Broadband Corp. and Big Sky Network
          Canada Ltd.

10.28(7)  Termination Agreement dated September 29, 2000, among SoftNet Systems,
          Inc., China Broadband Corp., Big Sky Network Canada Ltd. and Matthew
          Heysel, for himself and as attorney-in-fact for Daming Yang, Kai Yang,
          Wei Yang, Jeff Xue, Donghe Xue, Lu Wang, Wallace Nesbitt and Western
          Capital Corp.

10.29(7)  Termination Agreement dated September 29, 2000, among SoftNet Systems,
          Inc., China Broadband Corp., Big Sky Network Canada Ltd., China
          Broadband (BVI) Corp., Matthew Heysel and Daming Yang

10.30(11) Letter of Intent dated June 1, 2001 between Big Sky Network Canada
          Ltd. and Shanghai Min Hang Cable Television Center

10.31(11) Memorandum of Understanding dated June 18, 2001 between Big Sky
          Network Canada Ltd. and Beijing Gehua Cable TV Networks Co., Ltd.

10.32(11) Letter of Intent between Big Sky Network Canada Ltd. and Chong Qing
          Branch of Ji Tong Network Communications Co., Ltd.

10.33(11) Consulting Agreement dated April1, 2001 between China Broadband Corp.
          and Precise Details Inc.

10.34(11) Consulting Agreement dated April 1, 2001 between China Broadband Corp.
          and M.H. Financial

10.35(11) Consulting Agreement dated April 1, 2001 between China Broadband Corp.
          and Daming Yang

10.36(11) Indemnity Agreement dated June 29, 2001 between China Broadband Corp.
          and Matthew Heysel

10.37(12) Memorandum of Understanding between Big Sky Network Canada Ltd. and
          Fujian Provincial Radio and Television Network Co. Ltd. dated July 10,
          2001

10.38(13) Note Cancellation Agreement between China  Broadband Corp. and
          Canaccord International Ltd.


                                       26


<PAGE>


16.1(9)   Change in Auditor Letter of Amisano Hanson

16.2(10)  Change in Auditor Letter of Arthur Anderson LLP

21.1(5)   List of subsidiaries of registrant

(1)      Previously filed on Form 10-SB on December 2, 1999.
(2)      Previously filed on Form 8-K filed on April 28, 2000.
(3)      Previously filed on Form 10-KSB on July 11, 2000.
(4)      Previously filed on Form 8-K filed on September 29, 2000.
(5)      Previously filed on Form S-1 filed on December 6, 2000.
(6)      Previously filed on Form 10-QSB on March 15, 2001, excluding schedules
         and exhibits. Amended to include schedules and exhibits and re-filed on
         Amendment No. 3 to Form S-1. Amended to mark omitted material and
         re-filed on Amendment No. 5 to Form S-1. Certain portions of the
         material have been omitted pursuant to an application for confidential
         treatment which has been filed with the United States Securities and
         Exchange Commission under Rule 406 of the Securities Exchange Act of
         1933, as amended.
(7)      Previously filed on Form 8-K/A on December 12, 2000.
(8)      Previously filed on Form 10-KSB on March 28, 2001.
(9)      Previously filed on Form 8K on August 25, 2000.
(10)     Previously filed on Form 8K on September 26, 2000.
(11)     Previously filed on Form S-1, Amendment No. 3 on July 2, 2001.
(12)     Previously filed on Form S-1, Amendment No. 4 on July 27, 2001.
(13)     Previously filed on Form S-1, Amendment No. 5 on August 10, 2001.


                                       27