U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-KSB

                            ANNUAL REPORT PURSUANT TO

                             SECTION 13 OR 15(d) OF

                       THE SECURITIES EXCHANGE ACT OF 1934
                                 (FEE REQUIRED)

                   For the fiscal year ended December 31, 2004

                        Commission file number: 000-30802

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

                             China Ventures Limited
                 (Name of Small Business Issuer in its Charter)


             Cayman Islands                                      N/A
     -------------------------------                ----------------------------
     (State or Other Jurisdiction of                (IRS Employer Identification
      Incorporation or Organization)                          Number)


     999 Brickell Avenue, Suite 600                         Miami, FL  33131
----------------------------------------                    ----------------
(Address of Principal Executive Offices)                     (Zip Code)


                                 (305) 810-2898
                            -------------------------
                            Issuer's Telephone Number

        Securities to be registered pursuant to Section 12(b) of the Act:

     Title of Each Class                        Name of Each Exchange on
     to be So Registered                   Which Each Class is to be Registered
     -------------------                   ------------------------------------
           NONE                                          NONE

Securities to be registered pursuant to Section 12(g) of the Act:

Common Stock $.001 par value
----------------------------
     (Title of Class)

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] [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation SB is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this form 10-KSB. (X).

The issuer's revenues for its most recent fiscal year were $0.

The aggregate market value of the voting stock held by non-affiliates was
approximately $0 as of December 31, 2004.The stock was not traded as of December
31, 2004.

The number of shares of common stock outstanding as of December 31, 2004 was
247,500.

<PAGE>

                             China Ventures, Limited
                                   Form 10-KSB

                                TABLE OF CONTENTS

                                     PART I


ITEM 1.        Description of Business                                        3
ITEM 2.        Description of Property                                        4
ITEM 3.        Legal Proceedings                                              4
ITEM 4.        Submission of Matters to a Vote of Security Holders            4

                                     PART II

ITEM 5.        Market for Common Equity And related Stockholder Matters       4
ITEM 6.        Management's Discussion and Analysis Or Plan of Operation      4
ITEM 7.        Financial Statements                                           5

                                    PART III

ITEM 9.        Directors, Executive Officers, Promoters And Control Persons;
                    Compliance with Section 16 (a) of the Exchange Act        5
ITEM 8.        Changes in and disagreements with Accountants on Accounting
                    and Financial Disclosure                                  5
ITEm 8A.       Controls and procedures                                        5
ITEM 10.       Executive Compensation                                         6
ITEM 11.       Security Ownership of Certain Beneficial Owners and
                  Management                                                  6
ITEM 12.       Certain Relationships and Related Transactions                 6
ITEM 13.       Exhibits                                                       6
ITEM 14.       Principal Accountant's Fees and Services                       6

                                        2
<PAGE>

                                     PART I

ITEM 1.  BUSINESS.

GENERAL

Management has made its best effort to write China Venture's form 10-KSB report
in plain, easy-to-understand English. The Company attempts to outline both the
meaning and scope of strategies currently employed at China Ventures. Although
compelling, the other information contained in this report is important and
necessary in order to gain a thorough understanding of our business, markets,
customers and competition. Accordingly, please read our entire form 10-KSB
report prior to making an investment in China Ventures, as these are complicated
technologies and solutions that involve risk and uncertainties. Reference to
"we", "us", "our", "the Company" or "China Ventures" means China Ventures
Limited.

When used in this report, the words "anticipate", "believe", "estimate", "will",
"may", "intend" and "expect" and similar expressions identify forward-looking
statements. Forward-looking statements in this report include, but are not
limited to, those relating to the general expansion of our business. Although we
believe that our plans, intentions and expectations reflected in these
forward-looking statements are reasonable, we can give no assurance that these
plans, intentions or expectations will be achieved.

Actual results, performance or achievements could differ materially from those
contemplated, expressed or implied by the forward-looking statements contained
in this report. Important factors that could cause actual results to differ
materially from our forward-looking statements are set forth in this report,
including under the heading contained in Item 6, "Management's Discussion and
Analysis or Plan of Operations". These factors are not intended to represent a
complete list of the general or specific factors that may affect us.

BUSINESS

China Ventures was incorporated in the Cayman Islands in December 1999. We are
not an operating company and do not have significant assets or conduct
significant business. Our registered office is located at One Capital Place,
Fourth Floor, P.O. Box 847, Grand Cayman, Cayman Islands, British West Indies.
We currently use office space located at 999 Brickell Avenue, Suite 600, Miami,
Florida, as our principal executive office. The telephone number at our
principal executive office is (305) 810-2898. We currently have no employees. As
of the date of this report, we have not commenced active business operations. We
intend to commence active operations during the next fiscal year, but there can
be no assurance that we will be able to commence such active operations. The
commencement of active operations is contingent upon the closing on one or more
acquisitions which we anticipate considering during the upcoming fiscal year. As
of the date of this report, no definitive agreements have been reached with any
business entity and no target industry has been identified.

Competition

Numerous companies located in South Florida and throughout the United States
will compete vigorously with us for target acquisition candidates. Venture
capital companies as well as established corporations and entities, most of
which have greater resources than we do will vie for such acquisition
candidates.

                                        3
<PAGE>

Regulatory Matters

We do not yet know what business we will enter as this is dependent on which
target acquisition we determine to purchase; however all industries have
generally become increasingly regulated in recent years. We are likely to be
subject to the various States, Federal. and local laws, rules, regulations and
acts once it commences active business operations.

ITEM 2.  DESCRIPTION OF PROPERTY

We currently occupy space for our headquarters in the office of James Chow, our
Director and Secretary and do so without a lease and with no obligation to pay
rent; the space occupied is minimal and its fair value is not considered
material. It is anticipated that upon the closing of a business combination, we
will enter into a lease or purchase property from which we will operate.

ITEM 3.  LEGAL PROCEEDINGS

No legal proceedings are pending or known to be threatened against us.

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

In the final quarter of the year, no matters were submitted to a vote of
security holders.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's shares of common stock were not traded during the fiscal year
ended December 31, 2004. We do not anticipate the commencement of a market for
our securities until, and unless, a business combination is consummated. As
such, there is no guarantee that our common stock will commence trading or that
any trading will be active.

On December 31, 2004, the approximate number of record holders of the common
stock of the Company was 26

To date, we have not paid any dividends on our common stock and we do not expect
to pay any dividends in the foreseeable future.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

Plan of Operations

As previously disclosed, we had no revenues in any fiscal years. During the
upcoming fiscal year, we intend to actively pursue a business combination
through either a merger, a reverse merger, or an acquisition. Since we have no
assets, we will probably issue additional stock if it is able to consummate a
business combination. Until such time as a business combination is consummated,
we expect to incur only minor expenses, such as audit fees, and as such we
should be able to meet our cash requirements for the forthcoming fiscal year.
The required expenses will be met by additional capital contributions.

                                        4

<PAGE>

As of December 31, 2004 we had only one employee, our Secretary and a director
of the Company, James Chow. If a business combination is consummated, we
anticipate hiring a staff to accommodate such business.

ITEM 7.  FINANCIAL STATEMENTS

Reference is made to the financial statements attached hereto, commencing on
page F-1, which are incorporated by reference.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None

ITEM 8A. CONTROLS AND PROCEDURES

     a)  Evaluation of Disclosure Controls and Procedures. The term "disclosure
         controls and procedures" is defined in Rule 13a - 15(e) of the
         Securities Exchange Act of 1934, or the Exchange Act. This term refers
         to the controls and procedures of a company that are designed to ensure
         that information required to be disclosed by a company in the reports
         that it files under the Exchange Act is recorded, processed, summarized
         and reported within required time periods. Our Secretary and Principal
         Financial and Accounting Officer have concluded, based on their
         evaluation as of December 31, 2004, that our disclosure controls and
         procedures are effective for recording, processing, summarizing and
         timely reporting the information we are required to disclose in our
         reports filed under the Exchange Act.

     b)  Changes in Internal Control Over Financial Reporting. There have been
         no changes in our internal control over financial reporting during the
         year ended December 31, 2004 that have materially affected, or are
         reasonably likely to materially affect, our internal control over
         financial reporting.

                                    PART III

ITEM 9.  DIRECTORS, AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The names, ages and terms of office of directors and executive officers of China
Ventures are set forth in the following table:

NAME                   AGE             POSITIONS                DIRECTOR SINCE
----------------       ---             -------------------      --------------
James N. L. Chow        47             Director; President      December 1999


James N.L. Chow      Mr. Chow, a citizen of Hong Kong, has been President of
                     Inter-Global Investments, Inc. since March 1997. During
                     that time, he has provided investment banking consulting
                     services for various companies in the United States. Prior
                     thereto, from August 1996 to March 1997, he was Regional
                     Financial Controller for Miramar Hotel & Investment Co.,
                     Ltd. in Hong Kong. From September 1993 to August 1996, Mr.
                     Chow was Financial Controller for Miramar Hotel Management
                     Group in The People's Republic of China.

In March 2003 Mr. Hong Yang, former President and Director of the Company,
resigned his positions and transferred all his shares to Mr. James N L Chow, the
current President.

Each director is elected by holders of a majority of the ordinary shares to
serve for a term of one year and until his successor is elected and qualified,
which is generally at the annual meeting of shareholders. Officers serve at the
will of the board, subject to possible future employment agreements which would
establish term, salary, benefits and other conditions of employment. No
employment agreements are currently contemplated.

                                        5
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

There was no executive compensation in 2004 and 2003

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The number of ordinary shares of China Ventures' owned by our directors and
officers and by each person who owns legally and beneficially more than five
percent of China Ventures' issued and outstanding ordinary shares on December
31, 2004, the address of each such person and the percentage of the ordinary
shares represented by such shares is set forth in the following table. Unless
otherwise indicated all ownership is both legal and beneficial.

Name and Address                    Amount and Nature             Percent of
of Beneficial Owner                 of Beneficial Owner             Class
-------------------                 -------------------             -----

James N. L. Chow                           245,000                  97.03%
52 Hoi Pong Road, Central
Lei Yue Mun, Kowloon, HK

All Executive Officers and
Directors as a Group                       245,000                  97.03%

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Ricardo Bajandas, a partner in the law firm De La Pena, Villanueva & Bajandas,
LLP, is a shareholder of China Ventures and acted as legal counsel from December
1999 until April 2000 in connection with the formation of China Ventures and
related matters. Through April 2000, we incurred approximately $19,700 in legal
fees and expenses to Mr. Bajandas in connection with preparation and filings
with the SEC.

ITEM 13. EXHIBITS

Exhibits:

(3)      Registrant's Articles of Incorporation and by-laws are incorporated by
         reference to the Registrant's previous filing with the Commission.

(4)      Form of Registrant's Common Stock Certificate is incorporated by
         reference to the Registrant's previous filing with the Commission.

ITEM 14. PRINCIPAL ACCOUNTANT'S FEES AND SERVICES

The following table sets forth fees billed to the Company by the Company's
independent auditors for the years ended December 31, 2004 and December 31,2003
for (i)services rendered for the audit of the Company's annual financial
statements, (ii) services rendered that are reasonably related to the
performance of the audit of the Company's financial statements that are not
reported as Audit Fees, and (iii) services rendered in connection with tax
preparation, compliance, advice and assistance. The Company's sole officer and
director pre-approved all services rendered by the Company's independent
auditors.

Principal Accountant Fees and Services

For the fiscal year ended
December 31, 2004
December 31, 2003
Audit fees
           $4,250
           $4,000
Audit - related fees
                0
                0
Tax Fees
                0
                0
      Total Fees
           $4,250
           $4,000

(31.1)   CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT
         TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(32.1)   CERTIFICATION BY PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER PURSUANT TO
         SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Financial Statements

Independent Auditor's Reports

Balance Sheet dated as of December 31, 2004

Statements of Operations for the fiscal years ended December 31, 2004 and 2003
and from December 10, 1999 (inception date) to December 31, 2004

Statements of Stockholders' Deficiency for the fiscal years ended December 31,
2004 and 2003 and from December 10, 1999 (inception date) to December 31, 2004

Statement of Cash Flows for the fiscal years ended December 31, 2004 and 2003
and From December 10, 1999 (inception date) to December 31, 2004

Notes to Financial Statements

                                       6
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Form 10 to be signed on its behalf by the
undersigned thereunto duly authorized.

                                                     CHINA VENTURES LIMITED



Dated: March 23, 2005                             BY: /s/ James N. L. Chow
       --------------                                 --------------------------
                                                      James N.L. Chow, Secretary

                                       7

<PAGE>

                             CHINA VENTURES LIMITED
                              FINANCIAL STATEMENTS

                                                                         PAGE

Independent Auditor's Report                                              F-1

Balance Sheet                                                             F-2

Statements of Operations                                                  F-3

Statements of Stockholders' Deficiency                                    F-4

Statements of Cash Flows                                                  F-5

Notes to Financial Statements                                          F-6, F-10

<PAGE>

                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders of
China Ventures Limited
George Town
Grand Cayman Island, BWI

We have audited the accompanying balance sheet of China Ventures Limited (A
Development Stage Company) as of December 31, 2004 and the related statements of
operations, stockholders' deficiency and cash flows for each of the years in the
two-year period ended December 31, 2004. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of China Ventures Limited (A
Development Stage Company)as of December 31, 2004 and the results of its
operations and its cash flows for each of the years in the two-year period ended
December 31, 2004 in conformity with accounting principles generally accepted in
the United States of America..


BERENFELD, SPRITZER, SHECHTER & SHEER, CPA'S
Sunrise, Florida
March 30, 2005

                                       F-1

<PAGE>

                             CHINA VENTURES LIMITED
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                                DECEMBER 31, 2004

ASSETS

CURRENT ASSETS
     Cash                                                              $     26
                                                                       --------
          TOTAL CURRENT ASSETS                                         $     26
                                                                       ========

LIABILITIES AND STOCKHOLDER'S DEFICIENCY

CURRENT LIABILITIES

     Due to related party                                              $  8,000
                                                                       --------
          TOTAL CURRENT LIABILITIES                                       8,000
                                                                       --------

STOCKHOLDERS' DEFICIENCY
     Common stock, par value $.001 per share; 50,000,000 shares
          authorized and 252,550 shares issued                              252

     Less treasury stock, 5,050 shares                                       (5)

     Additional paid in capital                                          57,285

     Subscription receivable                                               (250)

     Deficit accumulated during the development stage                   (65,256)
                                                                       --------

          TOTAL STOCKHOLDERS' DEFICIT                                    (7,974)
                                                                       --------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                            $     26
                                                                       ========

                        See notes to financial statements

                                       F-2

<PAGE>

                             CHINA VENTURES LIMITED
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS

                                          FOR THE      FOR THE     CUMMULATIVE
                                          YR ENDED     YR ENDED       DURING
                                         12/31/04      12/31/03     DEV. STAGE
                                         --------      --------      --------

REVENUE                                        --            --            --

COSTS AND EXPENSES:

GENERAL AND ADMINISTRATIVE
 EXPENSES                                $  8,146      $  6,862      $ 65,256
                                         --------      --------      --------

       NET LOSS                          $ (8,146)     $ (6,862)     $(65,256)
                                         ========      ========      ========

BASIC AND DILUTED NET LOSS PER SHARE
                                         $  (0.03)     $  (0.03)
                                         ========      ========


SHARES USED IN THE CALCULATION OF
   BASIC AND DILUTED NET LOSS PER
   SHARE                                  249,604       249,604

                        See notes to financial statements

                                       F-3
<PAGE>

                             CHINA VENTURES LIMITED
                          (A DEVELOPMENT STAGE COMPANY)
                STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
<TABLE>
<CAPTION>
                                                                                                Deficit
                                     Common Stock                    Additional   Stock       Accumulated
                                   ------------------    Treasury     Paid-In  Subscription   During the
                                   Shares      Amount      Stock      Capital   Receivable    Dev. Stage   Total
                                   --------    ------    --------    ---------- ----------     ---------  --------
<S>                                 <C>        <C>             <C>    <C>         <C>         <C>        <C>
Inception (12/10/99 to 12/31/99)
Issuance of Common Stock
  ($.001 per share)                 250,050    $    250          --          --   ($   250)         --          --

Sale of Common Stock
  ($6 per share)                      2,500    $      2          --    $ 14,998         --          --    $ 15,000

Net Loss                                 --          --          --          --         --    ($20,928)   ($20,928)
                                   --------    --------    --------    --------   --------    --------    --------

Balance 12/31/99                    252,550         252          --      14,998       (250)    (20,928)     (5,928)

Year Ended 12/31/00:

Additional Capital Contribution          --          --          --      14,925         --          --      14,925

Treasury stock as of 5/1/00              --          --          (5)         --         --          --          (5)

Net Loss                                 --          --          --          --         --     (16,881)    (16,881)
                                   --------    --------    --------    --------   --------    --------    --------

Balance 12/31/00                    252,550         252          (5)     29,923       (250)    (37,809)     (7,889)

Year Ended 12/31/01:

Additional Capital Contribution          --          --          --       6,410         --          --       6,410

Net Loss                                 --          --          --          --         --      (6,504)     (6,504)
                                   --------    --------    --------    --------   --------    --------    --------

Balance 12/31/01                    252,550         252          (5)     36,333       (250)    (44,313)     (7,983)

Year Ended 12/31/02:

Additional Capital Contribution          --          --          --       5,952         --          --       5,952

Net Loss                                 --          --          --          --         --      (5,936)     (5,936)
                                   --------    --------    --------    --------   --------    --------    --------

Balance 12/31/02                    252,550         252          (5)     42,285       (250)    (50,249)     (7,967)

Year Ended 12/31/03:
Additional Capital Contribution          --          --          --       7,080         --          --       7,080

Net Loss                                 --          --          --          --         --      (6,861)     (6,861)
                                   --------    --------    --------    --------   --------    --------    --------
Balance 12/31/03                    252,550         252          (5)     49,365       (250)    (57,110)     (7,748)

Additional Capital Contribution          --          --          --       7,920         --          --       7,920
Net Loss                                 --          --          --          --         --      (8,146)     (8,146)

                                   --------    --------    --------    --------   --------    --------    --------
Balance 12/31/04                    252,550         252          (5)   $ 57,285   $   (250)   ($65,256)   ($ 7,974)
                                   ========    ========    ========    ========   ========    ========    ========
</TABLE>
                        See notes to financial statements

                                       F-4
<PAGE>

                             CHINA VENTURES LIMITED
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                           CUMULATIVE
                                                         YEAR ENDED        YEAR ENDED        DURING
                                                          12/31/04          12/31/03       DEV. STAGE
                                                          -------           -------         --------
<S>                                                       <C>               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

NET LOSS                                                  $(8,146)          $(6,861)        $(65,256)
                                                          -------           -------         --------
Adjustments to reconcile net loss to
    Net cash used by operating activities:                     --                --               --

          Net cash used by operating activities            (8,146)           (6,861)         (65,256)
                                                          -------           -------          -------
CASH FLOWS FROM FINANCING ACTIVITIES:

     Borrowing from related party                              --                --            8,000
     Proceeds from sale of common stock                        --                --           15,000
     Acquisition of treasury stock                             --                --               (5)
     Additional Capital contribution                        7,920             7,080           42,287
                                                          -------           -------         --------

          Net cash provided by financing activities         7,920             7,080           65,229
                                                          -------           -------         --------

NET INCREASE (DECREASE) IN CASH                              (226)              219               27
CASH, beginning of period                                     252                33                0
                                                          -------           -------         --------

CASH, end of period                                       $    26              $252         $     27
                                                          =======           =======         ========
</TABLE>

                        See notes to financial statements

                                       F-5

<PAGE>

                             CHINA VENTURES LIMITED
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

China Ventures Limited (we) was incorporated in the Cayman Islands on December
10, 1999 for the purpose of facilitating a Chinese private company to become a
reporting public company whose securities are qualified for trading in the
United States secondary market. We have the intention of attempting to locate
and negotiate with a target business entity, initially from the People's
Republic of China (PRC), to effect a merger or some other business combination,
in exchange for the opportunity to acquire ownership interest in a publicly
registered company without incurring the cost and time required to conduct an
initial public offering. If this initial attempt fails, we do not expect to
restrict our search to any specific business, industry or geographical location.
As of December 31, 2004, we are in the development stage and have not started
operations; accordingly these financial statements are prepared in accordance
with SFAS 7, "Accounting and Reporting by Development Stage Enterprises" as
issued by the Financial Accounting Standards Board.

ACCOUNTING METHOD

We present our financial statements under the accrual basis of accounting, under
which method revenues are recognized when earned rather than when received, and
expenses are recognized when incurred rather than when paid.

EARNINGS PER SHARE

Primary and fully diluted loss per share is computed based on weighted average
common shares outstanding during the period.

INCOME TAXES

The Company is incorporated in the Cayman Islands and is, therefore, not subject
to income taxes.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

RECENT ACCOUNTING PRONOUNCEMENTS

FASB No. 149, "Amendment of Statement No. 133 on Derivative Instruments and
Hedging Activities"

In April 2003, the FASB issued Statement No. 149, "Amendment of Statement No.
133 on Derivative Instruments and Hedging Activities". This statement amends and
clarifies financial accounting and reporting

                                       F-6

<PAGE>

for derivative instruments, including certain derivative instruments embedded in
other contracts and for hedging activities under Statement No. 133, "Accounting
for Derivatives Instruments and Hedging Activities." The provisions of this
statement are effective for all derivatives and hedging activities entered into
after June 30, 2003. SFAS No. 149 did not have a material effect on the
Company's financial position, results of operations or cash flows.

FASB No. 150 "Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equity"

In May 2003, the FASB issued SFAS No. 150 "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity". SFAS No. 150
establishes standards on the classification and measurement of certain
instruments with characteristics of both liabilities and equity. The provisions
of SFAS No. 150 are effective for financial instruments entered into or modified
after May 31, 2002 and to all other instruments that exist as of the beginning
of the first interim financial reporting period beginning after June 15, 2003.
SFAS No. 150 did not have a material effect on the Company's financial position,
results of operations or cash flows.

EITF 03-11, "Reporting Gains and Losses on Derivative Instruments That are
Subject to FASB Statement No. 133, Accounting for Derivative Instruments and
Hedging Activities, and Not Held for Trading Purposes".

In August 2003, the EITF reached a consensus that all gains and losses (realized
and unrealized) on derivative instruments within the scope of SFAS 133 should be
shown net in the income statement, whether or not settled physically, if the
derivative instruments are held for trading purposes. However, the EITF
recognized that there may be contracts within the scope of SFAS 133 considered
not held for trading purposes that warrant further consideration as to the
appropriate income statement classification of the gains and losses. In EITF
03-11, the EITF clarified certain criteria to use in determining whether gains
and losses related to non-trading derivative instruments should be shown net in
the income statement. The adoption of EITF 03-11 did not have a material effect
on the Company's financial position, results of operations or cash flows.

On December 2004, the FASB issued SFAS No. 123R, "Accounting for Stock-Based
Compensation". This statement is a revision to SFAS No. 123, "Accounting for
Stock-Based Compensation" and supersedes APB Opinion No.25, "Accounting for
Stock Issued to Employees". This statement requires a public entity to measure
the cost of employee services received in exchange for an award of equity
instruments based on the grant-date fair value of the award (with limited
exceptions). That cost will be recognized over the period during which an
employee is required to provide service, the requisite service period (usually
the vesting period). The grant-date fair value of employee share options and
similar instruments will be estimated using option-pricing models.

In addition, a public entity is required to measure the cost of employee
services received in exchange for an award of liability instruments based on its
current value. The fair value of that award will be re-measured subsequently at
each reporting date through the settlement date. Changes in fair value during
the requisite service period will be recognized as compensation cost over the
period.

                                      F-7
<PAGE>

For public entities that file as small business issuers, this statement is
effective as of the beginning of the first interim or annual reporting period
that begins after December 15, 2005.

At the required effective date, all public entities that used the fair value
method for either recognition or disclosure under Statement 123 are required to
apply this statement using a modified version of prospective application. Under
that transition method, compensation cost is recognized on or after the required
effective date for the portion of outstanding awards for which the requisite
service has not yet been rendered, based on the grant-date fair value of those
awards calculated under Statement 123 for either recognition or pro-forma
disclosures. For periods before the required effective date, those entities may
elect to apply the modified version of retrospective application under which
financial statements for prior periods are adjusted on a basis consistent with
the pro forma disclosures required for those periods by Statement 123. The
Company does not expect SFAS No. 123R to have a material effect on its financial
statements.

NOTE B - GOING CONCERN

As shown in the accompanying financial statements, we are in the development
stage, have yet to generate operating revenues and will require a significant
amount of capital to commence our planned principal operations. As reflected in
the accompanying financial statements, we have incurred accumulated losses since
inception of $65,256 and have raised an insignificant amount of capital. As
such, there is no assurance that we will be successful in our efforts to raise
the necessary capital to commence our planned principal operations.

We have indicated that our principal operation is to engage in a merger or
acquisition with an unidentified company or companies and may issue "penny
stock" securities as defined in the Securities and Exchange Act of 1934. We will
require a significant amount of capital to commence our planned principal
operations. Accordingly, our ability to continue as a going concern is dependent
upon our ability to secure an adequate amount of capital to finance our planned
principal operations.

Our plans include a merger and a subsequent public offering of our common stock;
however there is no assurance that we will be successful in our efforts to raise
capital or to obtain a business combination.

These conditions raise substantial doubt about our ability to continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of these uncertainties.

                                       F-8
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NOTE C - RELATED PARTY TRANSACTIONS

A stockholder of the Company acted as legal counsel during 1999. Legal fees and
incorporation costs for the year ended December 31, 1999 in the amount of
$11,678 were payable to a law firm in which this stockholder is a partner.

During the year ended December 31, 1999, the Company borrowed $8,000, due on
demand, from an entity related through common ownership. This amount is
uncollateralized and non-interest bearing.

NOTE D - RECENT SALES OF UNREGISTERED SECURITIES

In December 1999 China Ventures issued and sold 2,500 ordinary shares to 25
individuals for aggregate consideration of $15,000. China Ventures did not sell
these ordinary shares in reliance on any exception from the United States
federal securities laws as all purchasers were residents of the Republic of
China.

On December 16, 1999, in connection with the formulation of China Ventures, Mr.
Hong Yang (who later transferred his shares to Mr. James Chow) received 123,750
ordinary shares, Mr. James Chow received 121,250 ordinary shares and Mr. Ricardo
Bajandas received 5,050 ordinary shares. Each of Mr. Yang, Mr. Chow, and Mr.
Bajandas paid par value as consideration for the shares issued in connection
with the formulation of China Ventures. Mr. Yang and Mr. Chow are residents of
China. Mr. Bajandas is a resident of the United States. Accordingly, no
exception was required for the issuance of ordinary shares to Mr. Yang or Mr.
Chow. Mr. Bajandas purchased his ordinary shares of China Ventures in reliance
on Rule 4(2) promulgated under the Securities Act. In May 2000, in connection
with the termination of Mr. Bajandas' engagement with China Ventures, Mr.
Bajandas agreed to transfer his ordinary shares to China Ventures.

In March 2003 Mr. Hong transferred all his shares (123,750) to Mr. James Chow,
who now holds 245,000 shares.

NOTE E - TRANSACTIONS WITH STATE-OWNED ENTITIES

A significant portion of our future transactions may be undertaken, directly or
indirectly, with State-owned enterprises in the PRC and on such commercial terms
as determined between the relevant PRC State-owned enterprises and us.

NOTE F - FOREIGN CURRENCY EXCHANGE

A significant portion of the business of our future PRC Subsidiaries may be
undertaken in Renmin (RMB), the national currency of the PRC, which is not
freely convertible into the US$ or other foreign currencies.

NOTE G - CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS

If a merger, alliance or some other business combination is successful, our
operating assets and primary source of income and cash flow are expected to be
our interests in our subsidiaries in the PRC. The value of our interests in
these subsidiaries may be adversely affected by significant political, economic
and social uncertainties in the PRC. Although the PRC government has been
pursuing economic reform policies for many years, no assurance can be given that
the PRC government 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

                                       F-9
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the PRC's political, economic and social conditions. There is also no guarantee
that the PRC government's pursuit of economic reforms will be consistent or
effective.

                                      F-10