UNITED STATES SECURITIES AND
EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K x
     Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934for the fiscal year ended December 31, 2009, or ̈
     Transition report pursuant to section 13 or 15(d) of the Securities Exchange act of 1934for the transition period from        to  Commission File No.
0-23015 GREAT CHINA
INTERNATIONAL HOLDINGS, INC. (Exact name of small business issuer as specified in its
charter) Nevada
     
     87-0450232(State or Other Jurisdiction of
Incorporation or Organization)
     
     (IRS Employer Identification No.) C Site 25-26F Presidential Building, No. 69 Heping North Street Heping District, Shenyang 110003, Peoples Republic of China (Address of Principal Executive Offices) Registrants Telephone Number: 0086-24-22813888 ____________ Securities registered under Section 12(b) of the Act: None Securities registered under Section 12(g) of the Act: Common Stock, Par Value $0.001 ____________ Indicate by check mark if registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities   Act.   Yes  ̈   Nox Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
    Yes  ̈   Nox Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
     15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that
     the registrant was required to file such reports), and (2) has been subject to such filing requirements for
     the past 90 days.   Yes x   No ̈ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
     contained herein, and will not 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-K or any amendment to this Form
     10-K.   ̈  x Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
     non-accelerated filer, or a smaller reporting company.   ̈  Large accelerated filer   ̈  Accelerated filer
        ̈  Non-accelerated filer  x  Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange
     Act).   ̈   Nox The aggregate market value of voting stock held by non-affiliates on June 30, 2009, based on the average bid and
asked prices on that day was $818,213.  As of March 31, 2010, the Registrant
had outstanding 11,759,966 shares of common stock, par value $0.001. Documents incorporated by reference: None.




CAUTIONARY STATEMENT ON FORWARD-LOOKING
STATEMENTS This annual report on Form 10-K may contain certain forward-looking statements as such term is defined
by the Securities and Exchange Commission in its rules, regulations and releases, which represent the
Companys expectations or beliefs, including but not limited to, statements concerning the Companys
operations, economic performance, financial condition, growth and acquisition strategies, investments,
and future operational plans.  For this purpose, any statements contained herein that are not statements
of historical fact may be deemed to be forward-looking statements.  Without limiting the generality of
the foregoing, words such as may, will, expect, believe, anticipate, intent, could,
estimate, might, plan, predict or continue or the negative or other variations thereof or
comparable terminology are intended to identify forward-looking statements.  This information may
involve known and unknown risks, uncertainties and other factors which may cause our actual results,
performance or achievements to be materially different from the future results, performance or
achievements expressed or implied by any forward-looking statements. This annual report contains forward-looking statements, many assuming that the Company resolves its
outstanding debt obligations and is able to continue as a going concern, including statements regarding,
among other things, (a) negotiating settlement of our outstanding debt obligations, (b) our plans for
developing or participating in the development of real estate projects, (c) our opportunities for
participating in new real estate projects, (d) our growth strategies, (e) anticipated trends in our
industry, (f) our future financing plans, (g) our anticipated need for working capital, (h) the impact
of governmental regulation of the real estate industry in China, and (i) the availability of labor and
materials for project development.  These statements may be found under Item 1. Business, Item 2.
Properties and Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations, as well as in this annual report generally.  Actual events or results may differ materially
from those discussed in forward-looking statements as a result of various factors, including, without
limitation, the matters described in this annual report generally.  In light of these risks and uncertainties, there can be no assurance that the
forward-looking statements contained in this annual report will in fact occur. Given these risks and uncertainties, readers are cautioned not to place undue reliance on our
forward-looking statements. 2




TABLE OF CONTENTS ITEM NUMBER AND CAPTION
     
     Page Part I1.
     Business
     41A.
     Risk Factors
     61B.
     Unresolved Staff Comments
     62.
     Properties
     63.
     Legal Proceedings
     84.
     [Reserved]
     8Part II5.
     Market for Registrants Common Equity, Related Stockholder Matters
     8and Issuer Purchases of Equity Securities6.
     Selected Financial Data
     97.
     Managements Discussion and Analysis of Financial Condition and Results of Operations
     97A.
     Quantitative and Qualitative Disclosures About Market Risk
     128.
     Financial Statements and Supplementary Data
     129.
     Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
     129A(T).
     Controls and Procedures
     129B.
     Other Information
     13Part III10.
     Directors, Executive Officers and Corporate Governance
     1311.
     Executive Compensation
     1512.
     Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
     1513.
     Certain Relationships and Related Transactions, and Director Independence
     1614.
     Principal Accountant Fees and Services
     1715.
     Exhibits and Financial Statement Schedules
        18  3




PART I ITEM 1. BUSINESS General Great China
International Holdings, Inc. (the Company, we, or Great China Holdings), through
its various indirect subsidiaries, has engaged in commercial and residential real estate
investment, development, sales and management in the city of Shenyang, Liaoning Province,
in the Peoples Republic of China (PRC). Amounts for 2009 expressed in U.S. dollars are
based on a conversion rate of $1.00 for 6.83 Renminbi (RMB) at December 31, 2009, and
amounts expressed in U.S. dollars for prior periods are based on conversion rates then in
effect. The Company is currently
focused primarily on real estate leasing, management, and consulting activities in the city of
Shenyang.  There are no development projects underway at this time and no development projects
were implemented during 2009.  As a result of these circumstances, the Company focused on leasing,
property management and consulting work.  For the year ended December 31, 2009, revenue from rental
income and management fees constituted 72% of total revenue from operations, with the remaining
revenue derived primarily from sales of properties.  For the year ended December 31, 2008, revenue
from rental income and management fees constituted 62% of total revenue from operations, and sales
of properties constituted 38% of total revenue.  The Companys current lack of real estate
development projects has prompted this shift of focus to the leasing, management and consulting area. History Effective July 5,
2005, the Company completed the acquisition of Silverstrand International Holdings
Limited (Silverstrand), a Hong Kong limited liability company, by issuing 10,102,333
shares of its common voting stock to the former stockholders of Silverstrand in exchange
for all of the capital stock of Silverstrand.  For financial reporting purposes the
acquisition was treated as a recapitalization of Silverstrand.  On September 15, 2005,
the Company changed its name to Great China International Holdings, Inc. from Red Horse
Entertainment Corporation, which was incorporated in the state of Nevada on
December 4, 1987. Silverstrand
was incorporated on September 30, 2004 in Hong Kong Special Administrative Region, PRC,
and is the holding company of Shenyang Maryland International Industry Company Limited,
formerly: Shenyang Malilan Audio Equipment Company, Limited (Shenyang Maryland).
Shenyang Maryland was originally registered as a limited liability Sino-foreign joint
investment enterprise on December 15, 1989, in Shenyang, Liaoning Province, PRC. In
October 2004, Silverstrand acquired all of the registered equity of Shenyang Maryland,
and this transfer and the reclassification of Shenyang Maryland as a wholly
foreign-owned enterprise (WFOE) was approved in November 2004 by the Liaoning
Provincial Bureau of Foreign Trade and Economic Cooperation. This approval was
subsequently registered, and a business registration certificate (No. 111103721 (1-1))
was issued to Shenyang Maryland as a WFOE in April 2005 by the Shenyang Municipal
Administration of Industry and Commerce. The original business licenses for Shenyang Maryland described our business scope as real estate development, sales, leasing, and property management.  In January of 2010, the Company modified the business scope to real estate leasing, property management, and consulting. Leasing and Management Services Our leasing and management services were conducted in 2009 primarily with respect to real estate projects we developed in prior years.  The following is a description of those projects. 
     President Building comprises three blocks of commercial buildings, including two commercial towers,
situated in Shenyang City, Heping North Street, which is the financial district of Shenyang.  While the
original intention was to sell the office space, management subsequently decided to retain the majority
of the property for leasing and management revenue.  The buildings maintain a high occupancy rate with tenants that
are primarily international companies, 20 of which are Fortune 500 companies.  Great China Holdings
head office is situated on the 25th and 26th Floors of President Building.
     When the President Building was built, it was one of the few commercial buildings in Shenyang which was positioned as premium commercial building. Over the years, a number of commercial buildings were built to fulfill an increasing demand. The President Building maintains its competitiveness mainly with its strong location at the financial center of Shenyang. Tenants satisfaction is closely monitored and maintained through surveys and regular networking meetings.  Though minor renovations are ongoing in the Building, we anticipate no major renovations in the near future.  The aggregate occupancy rate for the two towers at the end of 2008 and 2009 was 98.4% and 98.3%, respectively, ranked among the highest in Shenyang.  The tenants as a whole are engaged in a variety of businesses, including real estate, foreign trade, investment, insurance, e-commerce, media, advertisement, and heath care. 4




Prior Development Projects 
     Chenglong Garden, situated in Shenyang Huang Gu District, comprises 12 blocks of modern apartments consisting of 865 residential apartments, a number of retail shops and ancillary facilities including basement car parking facilities and parks.  As of December 31, 2009, 859 units had been sold, and 6 residential units and approximately 3,198 square meters of commercial space remained available for sale and lease.
     Qiyun New Village is situated along the Nanyun Riverside and consists of 347 residential units, 341 of which were
             sold as of December 31, 2009.
     Peacock Garden is situated in Shenyang City, Heping North Street, is in the commercial district of
              Shenyang and is comprised of 197 low-density residential apartments, 196 of which had been sold as of
              December 31, 2009.
     The Maryland Building consists of 12,858 square meters, of which 11,310 have been sold and the remaining 1,548 square meters are held for leasing purposes. City of Shenyang Shenyang is a city of
approximately 7.4 million people in Liaoning Province, located in northeastern China
(Manchuria), approximately 435 miles northwest of Beijing. The largest city in northeast China, Shenyang is the economic,
cultural, transportation and trade center of the region, there being eight
industrial cities within a 150-kilometer radius of Shenyang. Shenyangs Taoxian
International Airport is the largest airport in northeast China, and the city also has
developed railway and expressway networks.  Shenyang is comprised of the following
districts: (i) Heping District, better known as Downtown; (ii) Shen He District, just
east of Downtown; (iii) Huang Gu District, situated directly north of Downtown; (iv) Da
Dong District, located northeast of Downtown; (v) Tie Xi District; (vi) Yu Hong District;
(vii) Dong Ling District; (viii) Su Jia Tun District; (ix) Hun ANan New District; and (x)
Shen Bei New District Shenyang is rich in industrial resources. Manufactures include heavy machinery, tractors, motor vehicles, cables, machine tools (Shenyang has one of the largest machine-tool plants in China), transformers, textiles, chemicals, paper products, medicines, and cement. Copper, zinc, and lead are also smelted in the city. Shenyang is also the seat of Liaoning University, Northeastern University, China Medical University, Shenyang Conservatory of Music, and numerous other specialized institutes. In 2009, the GDP in Shenyang increased by 14.1%, which is 5.4% higher than the national GDP. Shenyang has
experienced rapid renovation in urbanization since the PRC Central Government launched
the Developing the North East Policy in 2003, and priority was given to Shenyang in the
Policy. Shenyang urbanization has led to rapid and steady development in both residential
construction and consumption, indicating the likelihood that the Shenyang real estate
market will continue to develop and expand. Various Shenyang governmental policies aimed
at implementing law and regulations and developing a business law framework have
attracted both domestic and overseas investors to invest in Shenyang. In 2009, consumer spending in Shenyang reached RMB 178 billion, an increase of 18% over the prior year.  We believe this indicates Shenyang is a growing urban area with a consumer base that can sustain robust residential and commercial real estate development, sales, leasing and management.  Though the current global economic slowdown has had an impact on China and Shenyang, we believe Shenyang will continue to develop at a pace faster than that of the national average. Employees The Company currently has 148 employees, 17 of whom are engaged in administration activities, and 131 of whom are engaged in property management activities. 5




Further Information and Reports We are required to
file with the Securities and Exchange Commission annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports of certain events on Form 8-K, and proxy and
information statements disseminated to stockholders in connection with meeting of
stockholders and other stockholder actions.  Copies of these and any other materials we
file with the Commission may be inspected without charge at the public reference
facilities maintained by the Commission in Room 1580  100 F Street, N.E., Washington,
D.C. 20549.  Copies of all or any part of our filings may be obtained from the Public
Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549, upon payment
of the prescribed fees.  The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330.  The Companys filings with the
Commission are also available through its web site at http://www.sec.gov. ITEM 1A.     RISK FACTORS Disclosure under this item is not required of a smaller reporting company. ITEM 1B.     UNRESOLVED STAFF COMMENTS None. ITEM 2.     PROPERTIES General As of December 31,
2009, the Company, through Shenyang Maryland, had five real estate projects located in
the city of Shenyang in which it was either selling and/or leasing units or space. Lease and Management Services President Building comprises three blocks of commercial buildings, including two commercial towers,
           situated in Shenyang City, Heping North Street, which is the financial district of Shenyang.  While
           the original intention was to sell a majority of the office buildings, management subsequently decided
           to retain most of the properties for leasing purposes.  The buildings maintain a high occupancy rate
           with tenants that are primarily international companies, 20 of which are Fortune 500 companies.  Great
           China Holdings head office is situated on the 25th and 26th Floors of President Building. Prior Development Projects   
     Chenglong Garden, situated in Shenyang Huang Gu District, comprises 12 blocks of modern apartments consisting of 865 residential apartments, a number of retail shops and ancillary facilities including basement car parking facilities and parks.  As of December 31, 2009, 859 units had been sold, and 6 residential units and approximately 3198 square meters of commercial space remained available for sale and lease.   
     Qiyun New Village is situated along the Nanyun Riverside and consists of 347 residential units, 341 of
           which had been sold as of December 31, 2009.   
     Peacock Garden is situated in Shenyang City, Heping North Street, is in the commercial district of
           Shenyang and is comprised of 197 low-density residential apartments, 196 of which had been sold as of
           December 31, 2009.   
     The Maryland Building consists of 12,858 square meters, of which 11,310 have been sold and other
           remaining 1,548 square meters are held for leasing purposes. PresidentBuilding
     PeacockGarden
     ChenglongGarden
     MarylandBuilding
     QiyunNew VillageConstruction date
        .................................................
      June 1999
     April 1999
     June 2000
     June 1997
     April 1996Construction completion date
        ..............................
        Dec 2002
     Nov 2000
     Oct 2002
     Nov 1998
     Nov 1997Permission for pre-sale/sales
        ..............................
        Feb 2001
     April 1999
     June 2001
     Dec 1997
     July 1997Date of first sales
        .................................................
             May 1999
     May 1999
     Sept 2001
     Nov 1997
     May 1997 6




The following table
set forth information about the Companys various projects: Sales Revenue Mix 2009
     2008%
     $
     %
     $Properties sales:Qiyun New Village
        ......................................................................................
   7.1
        
 
     614,120
        
 
     7.6
        
 
     739,619Peacock Garden
      ............................................................................................
      
0.9
        
 
     81,331
        
 
     1.1
        
 
     105,069Chenglong Garden Phases I & II
        ..................................................................
             
        20.2
        
 
     
        1,746,308
        
 
     
        29.2
        
 
     
        2,834,35628.2
        
 
     
        2,441,759
        
 
     
        37.9
        
 
     
        3,697,044Rental income
        
        
        50.7
        
 
     
        4,404,149
        
 
     
        43.3
        
 
     
        4,194,139Building management income:President Building Management Center
        ......................................................
         
        21.1
        
 
     1,828,777
        
 
     18.8
        
 
     1,817,037100.0
        
 
     
        8,674,685
        
 
     
        100.0
        
 
     
        9,690,220 The President Building The Companys
President Building, which was completed in 2002, consists of three blocks of commercial
towers, each built according to international construction standards, situated in
Shenyang City, Heping North Street in the financial district of Shenyang. The project
occupies an area of 8,126 square meters on a total construction area of 77,000 square
meters, and represents an investment by the Company of RMB 582 million (approximately
US$71.8 million). While the Companys original intention was to sell a majority of the
office buildings, management subsequently decided to retain most of the properties for
leasing purposes.  The buildings maintain a high occupancy rate with tenants who are
mostly international companies, 20 of which are Fortune 500 companies. The Companys head
office is situated on the 25th and 26th Floors of President Building. In June 2007, Shenyang
Maryland closed funding under a loan agreement with Shenyang City Commercial Bank (Holdings) Co.,
Ltd. (Zhongshan Branch) (the Bank) whereby the Bank agreed to loan RMB 40,000,000, or
approximately US$5,486,968, to Shenyang Maryland for use in connection with renovation of the
President Building, repurchase of assets from the Industrial and Commercial Bank of China and
other purposes. The principal amount of the loan bore interest at 8.775% before September 15, 2007
and 9.711% thereafter, with the rate reconfirmed on October 21, 2008 at 9.477%. and 8.774% on June
12 2009. The principal amount of the loan, none of which has been repaid, along with any accrued
interest, was due on June 12, 2009, but was extended by the Bank to June 12, 2010. In addition to
this loan, the Company also owes approximately US$13,448,700, to the bank, as a result of financing
transactions that occurred prior to 2007.   This additional loan is due October 13, 2010. The
principal amount of the loan bore interest at 10.395% in 2008 and is still currently at 10.395%.
The loan agreements provide that Shenyang Maryland must notify the Bank of certain material
changes in its business that may occur during the term of the loan agreements, provide for
penalties in the event of various events of default, and also provide that the amount of the
loans are secured by a pledge of property owned by Shenyang Maryland, including part of the
President Building, as security for payment of the loans. The total area of the President Building owned by the Company is 61,448.74 square meters, and the mortgaged area is 33,423.95 square meters. The realty tax for the President Building is 12% of the total rental income, and the total realty tax for the year 2009 was RMB 3,085,272 (approximately US$ 451,684). The mortgage details for the President Building are as follows: Lender(bank)

     Amount of loanRMB:000s)

     Guaranty(President Building)

     MortgagedAreaBlock A, 1st-2nd floor (axle 1-7)
     
     2930.63Block A, 8th-9th floor
     
     2195.72Block A, 11th-14th floor
     
     4380.76Commercial Bank of China Zhongshan Branch
     
     131,800
     
     Block A, 17th-26th floor
     
     4380.76Block A, 3rd-4th floor, (axle 7-11)
     
     5309.63Block C, 13th-19th floor
     
     7682.01Total mortgaged area
     
     
     
     
     
     33,423.95 7




Chenglong Garden Chenglong Garden,
 Shenyang Huanggu District, comprises 12 blocks of modern apartments
consisting of 865 residential apartments, a number of retail shops and ancillary
facilities including basement car parking facilities and parks. The project is situated
near Beiling Park, schools and Hymall and Megamart. Approximately 98.9% of the area
comprising Chenglong Garden had been sold as of December 31, 2009. Qiyun New Village Qiyun New Village is situated along the Nanyun Riverside and consists of 347 residential units. Qiyun New Village was introduced to the real estate market in 1999. The Company introduced a Five-year Trial Accommodation Program (the Program) to attract potential buyers when initial sales at the project did not meet expectations. Under the Program, property buyers were required to pay a 10% refundable deposit based on the sale price of the property or $7,325 (RMB 50,000) and another 20%, based on the sale price of the property which is non-refundable, over 5 years by monthly installments, totaling 30% throughout the trial period. The remaining 70% of the consideration is due and payable immediately after the trial period when the property buyers exercise their option whether or not to complete the purchase. If the buyer chooses not to buy the property, the 10% refundable deposit or $7,325 (RMB 50,000) is refunded to the buyer (less any unpaid rental due) and monthly installments received over the 5-year trial period are recognized as rental income in the year in which they arose. As of December 31, 2009 and December 31, 2008, $532,833 and $668,305 worth of properties held for sale in Qiyun New Village were occupied by individuals who agreed to buy the properties without having fully paid the purchase consideration. As a result, $87,894 and $299,731 was included in advance from buyers for this Program as of December 31, 2009 and December 31, 2008. The Maryland Building The Maryland Building
is 12,858 square meters in size of which 11,310 square meters have been sold and other
remaining 1,548 square meters are held for leasing purposes. ITEM 3.     LEGAL
PROCEEDINGS The Company is the
subject of certain legal matters that it considers incidental to its business activities.
It is the opinion of management that the ultimate disposition of these matters will not
have a material impact on the financial position, liquidity or results of operations of
the Company. ITEM 4.     [Reserved] PART II ITEM 5.
     MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY             SECURITIES Market Information The common stock of
Great China Holdings trades in the over-the-counter market under the symbol 8




GCIH.  The
following table sets forth for the respective periods indicated the prices of the common
stock in the over-the-counter market, as reported and summarized on the OTC Bulletin
Board. Such prices are based on inter-dealer bid and ask prices, without markup,
markdown, commissions, or adjustments and may not represent actual transactions. Calendar Quarter Ended
     
     High Bid ($)
     
     Low Bid ($)March 31, 2008....................................................................................................
     
     1.20
     
     0.51June 30, 2008.......................................................................................................
     
     1.50
     
     1.02September 30, 2008.............................................................................................
     
     1.07
     
     0.70December 31, 2008.............................................................................................
     
     0.75
     
     0.27March 31, 2009...................................................................................................
     
     0.40
     
     0.25June 30, 2009......................................................................................................
     
     0.75
     
     0.35September 30, 2009............................................................................................
     
     0.75
     
     0.41December 31, 2009.............................................................................................
     
     0.35
     
     0.35 Dividends We did not make any
distributions to shareholders in 2009 or 2008.  Our present intention is to retain any
earnings for use in our business activities, so it is not expected that any dividends on
the common stock will be declared and paid in the foreseeable future. Security Holders At March 15, 2010,
there were approximately 157 holders of record of our common stock. Equity Compensation Plans As of December 31, 2009, no  equity securities of the Company were authorized for issuance under any Company compensation plan. Repurchases of common stock There were no
repurchases of equity securities by Great China Holdings in the fourth quarter of
2009. ITEM 6.     SELECTED
FINANCIAL DATA Disclosure under this item is not required of a smaller reporting company. ITEM 7.      MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following
discussion should be read in conjunction with our consolidated financial statements
presented at the end of this report.  Unless otherwise indicated, references in this
discussion to we, ourand us are to the Great China
International Holdings, Inc and its subsidiaries. Executive Summary Great China International
Holdings Inc., through its various subsidiaries, is or has been engaged in commercial and
residential real estate leasing, management, consulting, investment, development and sales.
We conduct all our operation in the People's Republic of China through our direct and indirect
wholly owned subsidiaries; Shenyang Maryland International Industry Company Limited and
Silverstrand International Holdings Company Limited.  9




Results of Operations Comparison of operations for 2009 with 2008: The Company recognized a net loss of $2,091,999 for 2009, compared to a net income $1,074,531for 2008, representing a decrease of $3,166,530 or 294.69%.  Factors that contributed to this decrease are discussed below. Sales revenues decreased by $1,015,536 or 10.48% to $8,674,684 for 2009 compared to $9,690,220 for 2008, mostly as a result of a decrease in real estate sales revenue by $1,237,285 or 33.63%.  The decrease in real estate sales revenue was expected because the inventory of building units available for sale in the Companys projects has steadily declined as units were sold in prior periods.  Revenue from rental and management activity increased by $221,749 or 3.69% for 2009 compared to 2008 as a result of the Companys focus on this rental and management activity during the economic downturn in 2009. Cost of revenues is comprised primarily of depreciation expense of rental properties and cost of properties sold.  Depreciation expense of rental properties increased by $127,055 or 4.64% to $2,867,781 for 2009 compared to $2,740,726 for 2008.  This was primarily attributable to addition of renal properties towards the end of 2008.  Cost of properties sold decreased by $ 949,631 or 22.81% to $3,404,835 for 2009 compared to $4,354,467 for 2008. This was primarily attributable to the decrease of real estate sales discussed above. Selling expenses increased by $169,330 or 183.16% to $261,778 for 2009 compared to $92,448 for 2008.  The main reason for this increase is that the Company  increased advertising expense to improve building rentals and sales. General and administrative expenses increased by $503,495 or 13.40% to $4,261,847 for 2009 compared to $3,758,351 for 2008.  The main reason for this increase is that the Company reserves for potential credit losses on other accounts receivable that were not guaranteed or secured. Depreciation expense decreased  by
$63,989 or 26.24% to $179,900 for 2009 compared to $243,889 for 2008, because certain fixed assets reached the end of their useful life. Land leveling income decreased by $901,374 or 29.1% for 2009 compared to $3,097,374 for 2008. Gain on interest expense waived decreased by $1,006,722 or 100% compared to same period of 2008, because there was no interest waiver settlement transaction in 2009. The other income decreased by $706,861 or 88.33% compared to $800,273 for 2008, this change mainly because  there was a demolition compensation in 2008 and there is no such compensation in 2009. Cash Flow Discussion Net cash flows provided by operating activities for 2009 and 2008 were $2,066,478 and $11,155,995, respectively, a decrease of 81.48%.  Less cash was generated from operations in 2009 primarily as a result of the much lower revenue from sales and dispositions of real estate and real estate investments as compared to 2008. Net cash flows used in investing activities for 2009 was $330,110 compared to $51,742 of net cash provided by investing activities for 2008.  The investing activity change was primarily due to the purchases of property and equipment related to our leasing and management services in the amount of $365,246 for 2009. Net cash flows used in financing activities for 2009 was $0 compared to $(13,261,157) for 2008.  The Company used cash in 2008 to make loan repayments in 2008.  No loan repayments were made in 2009. Liquidity and Capital Resources Current liabilities exceeded
current assets by $26,189,297 as of December 31, 2009. The working capital deficit is a result of
short term loans in the total amount of $19,308,700, which represents bank borrowings secured by
certain of the Companys real estate assets that have a due dated in June and October 2010.
It has become common practice in the PRC for banks and companies to renegotiate loan extensions on
an annual basis.  Lending banks customarily work out with borrowers loan extensions or
restructurings annually within the administrative guidelines of the government.  The Company has no
reason to believe this practice will not continue so long as the banking customs in the PRC remain
unchanged, there are no significant changes in governmental regulation of the practice, the
security for the Companys loans retains adequate value, and the Company acts responsibly in 10




addressing reduction of interest and principal balances when it has liquidity.  There is no
assurance, however, that the practice of annual extensions will continue indefinitely, so
management expects it will continue to seek opportunities to reduce its bank indebtedness in
future periods. Contractual Obligations The following table is
a summary of Great China Internationals contractual obligations as of December 31, 2009: Total

     Less thanone year

     1-3 Years

     ThereafterShort-Term Debt
     
     
     $
        19,308,700
        

     $
        19,308,700
        

     $
        --
        

     $
        --Long-Term Debt
     --
        

     --
        

     --
        

     --Amounts due to related parties
     --
        
     --
        
     --
        
     --Construction commitments
        
        
     
        --
        
     --
        
     --
        
     --Total Contractual Cash Obligations
     $19,308,700
        
     $19,308,700
        
     $--
        
     $-- Recent accounting pronouncements In June 2009, the FASB issued ASC 105 (previously SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (GAAP) - a replacement of FASB Statement No. 162), which will become the source of authoritative accounting principles generally accepted in the United States recognized by the FASB to be applied to nongovernmental entities. The Codification is effective in the third quarter of 2009, and accordingly, the Quarterly Report on Form 10-Q for the quarter ending September 30, 2009 and all subsequent public filings will reference the Codification as the sole source of authoritative literature. The Company does not believe that this will have a material effect on its consolidated financial statements. In June 2009, the FASB issued ASC 855 (previously SFAS No. 165, Subsequent Events), which establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before the financial statements are issued or available to be issued. It is effective for interim and annual periods ending after June 15, 2009. There was no material impact upon the adoption of this standard on the Companys consolidated financial statements. In June 2009, the FASB issued ASC 860 (previously SFAS No. 166, Accounting for Transfers of Financial Assets) , which requires additional information regarding transfers of financial assets, including securitization transactions, and where companies have continuing exposure to the risks related to transferred financial assets. SFAS 166 eliminates the concept of a qualifying special-purpose entity, changes the requirements for derecognizing financial assets, and requires additional disclosures. SFAS 166 is effective for fiscal years beginning after November 15, 2009. The Company does not believe this pronouncement will impact its financial statements. In June 2009, the FASB issued ASC 810 (previously SFAS No. 167) for determining whether to consolidate a variable interest entity. These amended standards eliminate a mandatory quantitative approach to determine whether a variable interest gives the entity a controlling financial interest in a variable interest entity in favor of a qualitatively focused analysis, and require an ongoing reassessment of whether an entity is the primary beneficiary. These amended standards are effective for us beginning in the first quarter of fiscal year 2010 and we are currently evaluating the impact that adoption will have on our consolidated financial statements. In September 2009 the New FASB Accounting Standards Update 2009-08 issued in Earnings Per Share (amendments to Section 260-10-S99). This update includes technical corrections to Topic 260-10-S99 Earnings Per Share, based on EITF Topic D-53, Computation of Earnings Per Share for a Period that includes redemption or an induced conversion of a portion of a class of preferred stock and EITF Topic D-42, The effect of the calculation of Earnings Per Share for the redemption or induced conversion of preferred stock. The Company does not expect the implementation of this statement to have an impact on its results or financial position. 11




In October 2009, the FASB issued an amendment to the accounting standards related to certain revenue arrangements that include software elements. This standard clarifies the existing accounting guidance such that tangible products that contain both software and non-software components that function together to deliver the products essential functionality, shall be excluded from the scope of the software revenue recognition accounting standards. Accordingly, sales of these products may fall within the scope of other revenue recognition standards or may now be within the scope of this standard and may require an allocation of the arrangement consideration for each element of the arrangement. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011. In January 2010, the FASB issued an amendment to ASC 505, Equity, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend. This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis. The adoption of this standard is not expected to have a significant impact on the Companys consolidated financial statements. In January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial statements. Reclassifications - Certain amounts in the 2008 financial statements have been reclassified to conform to the 2009 presentation.  These reclassifications had on effect on previously reported results of operations or retained earnings. ITEM 7A.     QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Disclosure under this item is not required of a smaller reporting company. ITEM 8.     FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA Great
China Holdings financial statements appear at the end of this report beginning
with the Index to Financial Statements on page F-1, following page 20. ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE None. ITEM 9A(T).     CONTROLS
AND PROCEDURES Disclosure Controls and Procedures We maintain disclosure
controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act) that are
designed to ensure that information that would be required to be disclosed in Exchange
Act reports is recorded, processed, summarized and reported within the time period
specified in the SEC rules and forms, and that such information is accumulated and
communicated to our management, including to the Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure. As required by 12




Rule 13a-15 under the Exchange Act, under the supervision and
with the participation of our management, including our Chief Executive Officer and our
Chief Financial Officer, we evaluated the effectiveness of the design and operation of
our disclosure controls and procedures as of December 31, 2009. Based on that evaluation,
our management concluded that our disclosure controls and procedures were effective as of
December 31, 2009. Managements Annual Report on Internal Control Over Financial Reporting Our management is responsible
for establishing and maintaining adequate internal control over financial reporting for the company
in accordance with as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal
control over financial reporting is designed to provide reasonable assurance regarding the (i)
effectiveness and efficiency of operations, (ii) reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles, and (iii) compliance with applicable laws and regulations. Our
internal controls framework is based on the criteria set forth in the Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Due to inherent
limitations, internal control over financial reporting may not prevent or detect
misstatements.  Projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies and procedures may deteriorate. In 2007, the Company utilized outside consultants to assist us in performing a top-down risk assessment,
documenting in detail the existing controls and creating certain new controls  to assist us in
performing a top-down risk assessment, documenting in detail the existing controls and creating certain
new controls. This action was not an indication of any significant deficiencies or material weaknesses
of internal controls, but part of the Companys ongoing strategy regarding improvement of operational
efficiency and effectiveness.  During 2009, management continued to utilize the documentation and
framework of our controls to test and assess effectiveness. As a result of this review, management
believes that our internal controls over financial reporting are effective. Attestation Report This annual report
does not include an attestation report of the Companys registered public accounting firm
regarding internal control over financial reporting.  Managements report was not subject
to attestation by the Companys registered public accounting firm pursuant to temporary
rules of the Securities and Exchange Commission that permit the Company to provide only
managements report in this annual report. Changes in Internal
Controls There have been no
changes in the Companys internal control over financial reporting during the three-month period
ended December 31, 2009 that have materially affected, or are reasonably likely to
materially affect, the Companys internal controls over financial reporting. ITEM 9B.      OTHER
INFORMATION None. PART III ITEM 10.     DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Directors and officers Set forth in the table
below are the names, ages and positions of our current directors and executive officers.
 None of our directors or executive officers has any family relationship to any other
director or executive officer. Name
     Age
     Position
     SinceJiang Peng
     46
     Chairman of the Board of Directors
     2008Sun Dongqing
     39
     Director and Chief Financial Officer
     2008Duan Jing Shi
     58
     Director
     2005Raymond Reed Baker
     33
     Director
     2008 All executive officers are elected by the board and hold office until their successors
are duly elected and qualified.  Each director is elected by the stockholders and serves until
resignation or election of a successor by the stockholders. 13




Biographies The following is
information on the business experience of each of the new officers. Jiang Peng was
appointed as a director and as Chairman of the Board in May 2008.  Prior to this
appointment, he had served in the previous five years as Chairman as General Manager of
Shenyang Maryland, a subsidiary of Great China Holidngs, where he played a key role in
the development of several of our large real estate projects, including Chenglong Garden,
Qiyun New Village and the President Building.  Jiang Peng is the brother of our largest
shareholder, Frank Jiang, and was formerly a Director of the Company from July 2005 to
July 2006. Sun Dongqing has
served as a Director and as Chief Financial Officer since May 2008.  She graduated from
Northeast University in 1991 with a major in Accounting and began her career in 1992 with
the Companys affiliate, Maryland International Industry Co., Ltd. During the period
2003-2004, she was Chief Accountant of Shenyang Maryland International Industry Co.,
Ltd., real estate development branch, responsible for cost accounting, control, tax
inspection and coordination with Shenyang Marylands subsidiaries. From 2005 until her
appointment as our Chief Financial Officer, she was Financial Manager of Shenyang
Maryland International Industry Co., Ltd. and President Building Management Centre, in
charge of the affairs involving, among other things, domestic industry and commerce,
taxation, and foreign exchange. Duan Jing Shi has
served as a Director of Silverstrand International and its subsidiary, Shenyang Maryland
International Industry, since January 2002, and has the responsibility for real estate
property development.  Prior to his appointment as Director, he served as President of
Shenyang Normal University. Raymond Reed Baker is
a Non-Managing Director and joined GCIH in 2008.  He also serves as a Managing Director
for The One World Investment Group and has lived in China since 2004.  He began his
career with PricewaterhouseCoopers LLP, serving in the Transition Services practice, where he
specialized in financial due diligence and internal control.  Mr. Baker is a Certified Public Accountant in
the state of Pennsylvania, has a B.S. in Accounting from The Pennsylvania State
University and a Masters of Business Administration from Hong Kong University. Audit Committee;
Financial Expert The Board of directors has not established an audit committee, so the entire Board of Directors performs the functions associated with an audit committee, including, evaluating financial reporting matters, monitoring
internal controls, compliance with internal financial polices, and engaging the registered
independent accounting firm to audit the financial statements of Great China Holdings.  None of
our directors are independent under the definition set forth in Rule 5605(a)(2)  of the NASDAQ
Listing Rules.  The Board of Directors has determined that Sun Dongqing is an audit
committee financial expert within the meaning of Item 407(d)(5) of Regulation S-K. Director Nominations The Board of Directors
has not made any changes to the procedures by which security holders may recommend nominees
to our Board of Directors. Code of Ethics Great China Holdings has adopted a Code of Ethics applicable to its Chief Executive Officer and Chief
Financial Officer, a copy of which will be provided to any person, free of charge, upon request.  A
request for a copy of the Code of Ethics should be in writing and sent to Ms. Lang Lang, Great China
International Holdings, Inc., C Site 25-26F President Building, No. 69 Heping North Street, Heping
District, Shenyang 110003, The Peoples Republic of China. Compliance with Section
16(a) of the Exchange Act Section 16(a) of the Securities Exchange Act of 1934 requires executive officers and directors,
and persons who beneficially own more than 10% of Great China Holdings common stock, to file initial
reports of ownership and reports of changes in ownership with the Securities and Exchange Commission.
Executive officers, directors and greater than 10% beneficial owners are required by Securities and
Exchange Commission regulations to furnish 14




Great China Holdings with copies of all Section 16(a) forms
they file. Based solely on Great China Holdings review of copies of such reports and representations
from Great China Holdings executive officers and directors, and greater than ten-percent beneficial
owners, Great China Holdings believes that its executive officers and directors complied with all
Section 16(a) filing requirements during the fiscal year ended December 31, 2009. ITEM 11.      EXECUTIVE
COMPENSATION Summary Compensation
Table Name and Principal Position
     Year
     Salary($)
     All OtherCompensation($)
     Total($)Jiang Peng (1)
     2009
     117,200
     --
          117,200Chairman of the Board
     2008
     87,823
     --

     87,823Sun Dongqing (2)
     2009
     10,548
     --
          10,5482008
     9,481
     --
          9,481 (1)     Jiang Peng was appointed Chairman of the Board in May 2008, and has served since that time as our principal executive officer. (2)     Sun Dongqing was appointed as a director and as our Chief Financial Officer in May 2008. Discussion of Summary
Compensation Table For his service as
Chairman of the Board, Mr. Jiang is paid a monthly salary of 66,667 RMB (approximately
US$9,767) in 2009. We have entered into a standard form employment agreement with Sun Dongqing, which provides for an initial term of two years and pursuant to which the Company agreed to pay her a base salary of 6,000 RMB (approximately US$879) per month in 2009. Outstanding Equity
Awards There are no outstanding equity awards held by our named executive officers at December 31, 2009. Director Compensation
Table The following table
summarizes the compensation paid to our directors who are not executive officers for the
year ended December 31, 2009. Name
  Fees Earned orPaid in Cash ($)
  All OtherCompensation($)
  Total($)Duan Jing Shi (1)
   -0-
   -0-
   -0-Raymond Reed Baker (2)
   17,575,
   -0-
   17,575 (1)       Duan Jing Shi does not receive monthly director fees. (2)       Raymond Reed Baker
 receives a monthly fee of RMB 10,000 (approximately US $1,465). ITEM 12.      SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth as of March 31, 2009, the number and percentage of the outstanding shares
of common stock which, according to the information supplied to Great China International, were
beneficially owned by (i) each person who is currently a director, (ii) 15




each executive officer,
(iii) all current directors and executive officers as a group, and (iv) each person who, to our
knowledge, is the beneficial owner of more than 5% of the outstanding common stock.  The address of each
person listed is C Site 25-26F President Building, No. 69 Heping North Street, Heping District, Shenyang
110003, Peoples Republic of China. Name and Address
     Number ofShares
     Percent ofClassFrank JiangC Site 25-26F President BuildingNo. 69 Heping North Street, Heping DistrictShenyang 110003, Peoples Republic of China
     8,245,447(1)
     70.1Jiang PengC Site 25-26F President BuildingNo. 69 Heping North Street, Heping DistrictShenyang 110003, Peoples Republic of China
     1,085,745(2)
     9.23Duan Jing ShiC Site 25-26F President BuildingNo. 69 Heping North Street, Heping DistrictShenyang 110003, Peoples Republic of China
     91,024
     0.77Sun DongqingC Site 25-26F President BuildingNo. 69 Heping North Street, Heping DistrictShenyang 110003, Peoples Republic of China
     -0-
     -0-Raymond Reed BakerC Site 25-26F President BuildingNo. 69 Heping North Street, Heping DistrictShenyang 110003, Peoples Republic of China
     -0-
     -0-All executive officers and directors as a group (4 persons)
     9,422,216
     80.1 (1)   Includes 67,000
shares held indirectly by Frank Jiangs wife. (2)  Includes 30,000 shares held indirectly by Jiang Pengs wife. ITEM 13.      CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE On December 31, 2009, we entered into a Subscription Agreement with Jiang Peng for the sale and purchase of 3,565,714 shares of common stock at a price of $0.35 per share, or a total of $1,247,999.90.  Mr. Jiang was required to complete payment for the shares and close the transaction on or before February 28, 2010.  At the time of the transaction Mr. Jiang was an officer, director and holder of more than 5% of our outstanding common stock.  These relationships were fully disclosed to the board of directors at the time the transaction was approved.  Further, the last sale price for the common stock on December 30, 2009, was $0.35, and the closing bid price was $0.35.  Mr. Jiang advised us that he would not complete the purchase of shares contemplated by the Subscription Agreement, and requested cancellation of the Subscription Agreement and related obligation.  On February 24, 2010, the board of directors approved cancellation of the Subscription Agreement. Director Independence None of our Directors are independent under the definition set forth in Rule 5605(a)(2) of the NASDAQ Listing Rules. Great China
International has not adopted any policy regarding review of transactions with related
persons beyond what is provided for in the Nevada Revised Statutes pertaining to
corporations.  The statutes provide that no contract or transaction between Great China
International and one or more of its directors or officers, or between Great China
International and any other corporation, firm, association, or 16




other organization in
which one or more of its directors or officers are directors or officers or are
financially interested, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of the Board
of Directors or committee that authorizes or approves the contract or transaction, or
because their votes are counted for such purpose, provided that: 
     the material facts as to his, her, or their relationship or interest and as to the contract or
            transaction are disclosed or are known to the Board of Directors or the committee and noted in the
            minutes, and the Board of Directors or committee, in good faith, authorizes the contract or
            transaction in good faith by the affirmative vote of a majority of disinterested directors, even
            though the disinterested directors are less than a quorum;
     the material facts as to his, her, or their relationship or interest and as to the contract or
            transaction are disclosed or are known to the shareholders entitled to vote thereon, and the contract
            or transaction is specifically approved or ratified in good faith by the majority of shares entitled
            to vote, counting the votes of the common or interested directors or officers; or
     the contract or transaction is fair as to Great China International as of the time it is authorized or
            approved.  ITEM 14.      PRINCIPAL
ACCOUNTANT FEES AND SERVICES Great China
Holdings paid or accrued the following fees in each of the prior two fiscal years to
its principal accountant: Year endedDecember 31,2009
        
     Year endedDecember 3120081. Audit fees
     US$
        84,284
        

     $
        54,3652. Audit-related fees
     3,853
        

     6,5383. Tax fees
     -0-
        

     -0-4. All other fees

     
        -0-
        

     
        -0-Totals

     $
        88,137
        

     $
        60,903 Great China
Holdings has no formal audit committee. However, as defined in Sarbanes-Oxley Act of
2002, the entire Board of Directors is Great China Holdingss de facto audit
committee. In discharging its
oversight responsibility as to the audit process, the Board obtained from the independent
auditors a formal written statement describing all relationships between the auditors and
Great China Holdings that might bear on the auditors independence as required by
Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees.  The Board discussed with the auditors any relationships that may impact
their objectivity and independence, including fees for non-audit services, and satisfied
itself as to the auditors independence.  The Board also discussed with management, the
internal auditors, if any, and Great China Holdingss independent auditors the
quality and adequacy of Great China Holdingss internal controls. The Board reviewed
with the independent auditors their management letter on internal controls, if one was
issued by Great China Holdingss auditors. The Board discussed
and reviewed with the independent auditors all matters required to be discussed by
auditing standards generally accepted in the United States of America, including those
described in Statement on Auditing Standards No. 61, as amended, Communication with
Audit Committees. The Board reviewed the
audited consolidated financial statements of Great China Holdings as of and for the
years ended December 31, 2009, 2008, 2007 and 2006, with management and the independent
auditors.  Management has the sole ultimate responsibility for the preparation of Great
China Holdingss financial statements and the independent auditors have the
responsibility for their examination of those statements. 17




Based on the
above-mentioned review and discussions with the independent auditors and management, the
Board of Directors approved Great China Holdingss audited financial statements and
recommended that they be included in its Annual Report on Form 10-K for the year ended
December 31, 2009, for filing with the Securities and Exchange Commission. ITEM 15.      EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES The following
documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K: Exhibit No.

     Title of Document3.1

     Articles of Incorporation (1)3.2

     Articles of Amendment effective September 15, 2005 (2)3.3

     Bylaws (1)10.1
        
     Loan Agreement dated June 18, 2007 between Shenyang Maryland International Industry Co., Ltd. and Shenyang City Commercial Bank (Holdings) Co., Ltd, Zhongshan Branch (2)10.2
     
     Loan Pledge Agreement dated June 18, 2007 between Shenyang Maryland International Industry Co., Ltd. and Shenyang City Commercial Bank (Holdings) Co., Ltd, Zhongshan Branch (2)10.3
     
     Employment Agreement executed on May 22, 2008 between Great China International Holdings, Inc. and Dongqing Sun (3)14.1
        
     Code of Ethics (2)21.1
        
     List of Subsidiaries (2)31.1
        
     Certification of Chief Executive Officer31.2
        
     Certification of Chief Financial Officer32.1
        
     Certifications of Chief Executive Officer and Chief Financial Officer  (1)
     These exhibits are incorporated herein by this reference to our registration statement on Form 10-SB,
      filed with the Securities and Exchange Commission on August 21, 1997.(2)
     This exhibit is incorporated herein by this reference to the Companys Current Report on Form 8-K filed with the Securities and Exchange Commission on June 25, 2007.(3)
     This exhibit is incorporated herein by this reference to the Companys Current Report on Form 8-K filed with the Securities and Exchange Commission on May 29, 2008. 18




SIGNATURES In
accordance with SEction 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its
behalf by the undersigned thereunto duly authorized. GREAT CHINA INTERNATIONAL HOLDINGS, INC. Date: April 15, 2010
        
     By:
     
     /s/ Jiang PengJiang Peng, Chairman of the Board(Principal Executive Officer)   Date: April 15, 2010
     
     By:
     
     /s/ Sun DongqingSun Donqing, Chief Financial Officer(Principal Financial and Accounting Officer) In accordance with the
Exchange Act, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated. Date: April 15, 2010
     
     By:
     
     /s/ Jiang PengJiang Peng, Director    Date: April 15, 2010
     
     By:
     
     /s/ Duan Jing ShiDuan Jing Shi, Director    Date: April 15, 2010
     
     By:
     
     /s/ Sun DongqingSun Dongqing, Director    Date: April 15, 2010
     
     By:
     
     /s/ Raymond Reed BakerRaymond Reed Baker, Director 19




INDEX TO FINANCIAL STATEMENTS Consolidated Financial Statements Great China International Holdings, Inc. PageReport of Independent
Registered Public Accounting
Firm
   F-2Consolidated Balance
Sheet
   F-3Consolidated Statements
of
Operations
   F-4Consolidated Statements
of Stockholders Equity
   F-5Consolidated Statements
of Cash
Flows
   F-6Notes to the
Consolidated Financial
Statements
   F-7 F-1




Report of Independent Registered Public Accounting Firm Board of Directors and Stockholders of 
Great China International Holding, Inc. and subsidiaries, We have audited the accompanying consolidated balance sheets of Great China International Holdings, Inc. and subsidiaries, as of December 31, 2009 and December 31, 2008, and the related consolidated statements of operation, stockholders equity, and cash flows for the years ended December 31, 2009 and 2008. These consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated 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 consolidated 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 consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Great China International Holdings, Inc. and subsidiaries, as of December 31, 2009 and 2008, and the related consolidated results of their operations and cash flows for the years ended December 31, 2009 and 2008, in conformity with accounting principals generally accepted in the United States of America. /s/ Kabani & Company, Inc.
Los Angeles, California April 15, 2010 F-2




GREAT CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                                            CONSOLIDATED BALANCE SHEETS
                                      AS OF DECEMBER 31, 2009 AND 2008 December 31,2009
     
        
     December 31, 2008ASSETSCurrent assets:Cash and cash equivalents

     $9,933,271
        

     $8,214,381Accounts receivable, net

     117,487
        

     222,735Other receivable, net

     217,085
        

     676,938Properties held for resale

     2,060,146
        

     
        3,148,280Total current assets

     12,327,989
        

     12,262,333Property and equipment, net

     1,590,183
        

     1,416,605Rental property, net

     49,802,284
        

     52,726,826Total assets

     $63,720,456
        

     $66,405,764LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Bank loans

     $19,308,700
        

     $19,317,925Accounts payable

     4,170,922
        

     4,249,300Accrued expenses

     163,147
        

     155,147Other payable

     1,863,809
        

     1,694,545Payable to disposed subsidiaries

     769,337
        

     768,287Commission payable

     1,784,105
        

     1,784,080Advances from buyers

     1,392,027
        

     1,997,262Taxes payable

     9,065,238
        

     9,107,260Total current liabilities

     38,517,285
        

     39,073,806Stockholder equity:Common stock,  $.001 par value 50,000,000 sharesauthorized, 11,759,966 issued and outstandingas of December 31, 2009 and 2008

     11,760
        

     11,760Additional paid in capital

     4,566,156
        

     4,566,156Statutory reserve

     
        638,128
        

     
        638,128Accumulated other comprehensive income

     2,251,110
        

     2,287,898Retained earnings

     
        17,736,017
        

     
        19,828,016Total stockholder equity

     25,203,171
        

     27,331,958Total liabilities and stockholder equity

     $63,720,456
        

     $66,405,764 The accompanying notes are integral part of these consolidated
financial statements. F-3




GREAT CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 DECEMBER 312009
      
     2008RevenuesReal estate sales

     $
        2,441,759
        

     $3,679,044Rental income
      
        4,404,149
        

     
        4,194,139Management fee income
      
        1,828,776
        

     
        1,817,037Total revenues

     
        8,674,684
        

     
        9,690,220Cost of revenues

     
        6,272,616
        

     
        7,095,193Gross profit

     2,402,068
        

     2,595,028Operation expensesSelling expenses

     
        261,778
        

     
        92,448General and administrative expenses

     
        4,261,847
        

     
        3,758,352Depreciation and amortization

     
        179,900
        

     
        243,889Total operation expenses

     
        4,703,525
        

     
        4,094,689Loss from operations

     
        (2,301,457
        )

     
        (1,499,661
        )Other income (expense)Land leveling income

     
        2,196,000
        

     
        3,097,374Gain on settlement of debt

     
        --
        

     1,036,076Gain on interest expense waived

     --
        

     1,006,722Other income, net

     93,412
        

     800,273Interest and finance costs

     (2,079,954
        )

     (2,628,464
        )Total other income

     209,458
        

     3,311,981Income (loss) before income taxes

     (2,091,999
        )

     1,812,319Provision for income taxes

     0
        

     401,038Income (loss) from continuing operations
	      (2,091,999
        )

     1,411,282Discontinued operationsLoss from entity held for discontinuance

     --
        

     (336,751
        )Income (loss) from discontinued operations

     --
        

     (336,751
        )Net income (loss)

     $(2,091,999
        )

     $1,074,531Other comprehensive income (loss):Foreign currency translation adjustment

     (36,788
        )

     819,352Net Comprehensive income (loss)

     $(2,128,787
        )

     $1,893,882Net income (loss) per share from continuing operationsBasic

     $(0.18
        )

     $0.12Diluted

     $(0.18
        )

     $0.12Net income (loss) per share from discontinued operationsBasic

     $0.00
        

     $(0.03
        )Diluted

     $0.00
        

     $(0.03
        )Net income (loss) per shareBasic

     $(0.18
        )

     $0.09Diluted

     $(0.18
        )

     $0.09Weighted average number of shares outstandingBasic

     11,759,966
        

     11,759,966Diluted

     11,759,966
        

     11,759,966 The accompanying notes are integral part of
these consolidated financial statements. F-4




GREAT CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                                            CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY 
                                      FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 Accumulated
     
     
     
     RetainedAdditional
     
     Other
     
     
     
     Earnings
     
     TotalCommon Stock
     
     Paid in
     
     Comprehensive
     
     Statutory
     
     (Accumulated
     
     StockholdersShares
     
     Amount
     
     Capital
     
     Income
     
     Reserve
     
     Deficit)
     
     EquityBalance, December 31, 2007
     
     
     
        11,759,966
        
       
     
        11,760
        
    
     
        4,562,855
        

     
        1,468,546
        

     
        638,128
        

     
        18,753,485
        

     
        25,434,773Stock option to non-employee director
        
        
     
        --
        
     
     --
        

     3,301
        

     --
        

     --
        

     --
        

     3,301Net income for the year ended December 31, 2008
	 
     --
        
     
     --
        

     --
        

     --
        

     --
        

     1,074,531
        

     1,074,531Foreign currency translation adjustment
	 
     --
        
     
     --
        

     --
        

     819,353
        

     --
        

     --
        

     819,353Balance, December 31, 2008
     
	 11,759,966
        
    
     $11,760
        

     $4,566,156
        

     $2,287,898
        

     $638,128
        

     $19,828,016
        

     $27,331,958Stock option to non-employee director
	 
     
	 --
        
     
     --
        

     --
        

     --
        

     --
        

     --
        

     
        --Net income for the year ended December 31, 2009
	 
     --
        
     
     --
        

     --
        

     --
        

     --
        

     (2,091,999
        )

     (2,091,999
        )Foreign currency translation adjustment
        
        
     --
        
     
     --
        

     --
        

     (36,788
        )

     --
        

     --
        

     (36,788
        )Balance, Dec. 31, 2009
     11,759,966
        
     
     $11,760
        

     $4,566,156
        

     $2,251,110
        

     $638,128
        

     $17,736,017
        

     $25,203,171 The accompanying notes are integral part of
these consolidated financial statements. F-5




GREAT CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                          FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 December 312009

     2008Cash flows from operating activities:Net income (loss) from continuing operations

     $(2,091,999
        )

     $1,411,282Adjustments to reconcile net income (loss) to operating activities -net cash provided by operating activitiesDepreciation and amortization

     3,047,681
        

     2,930,856Gain on interest expense waived

     --
        

     (1,006,722
        )Gain on settlement of debt

     --
        

     (1,036,076
        )Provision (recovery) for doubtful accounts

     57,941
        

     132,303Non-cash stock compensation expense

     --
        

     3,301(Increase)/decrease in current assets:Accounts receivable and other receivables

     568,073
        

     31,150,808Advances to suppliers

     (61,730
        )

     --Properties held for resale

     1,087,097
        

     1,959,066Increase/(decrease) in current liabilities:Accounts payable and accrued expenses

     100,140
        

     (24,183,977
        )Advances from buyers

     (603,869
        )

     (172,907
        )Income and other taxes payable

     (36,857
        )

     304,812Net cash provided by operating activities from operations

     2,066,478
        

     11,492,746Net cash used in operating activities from discontinued operations

     --
        

     (336,751
        )Net cash provided by operating activities

     $2,066,478
        

     $11,155,995Cash flows from investing activities:Construction in progress

     35,136
        

     (34,543
        )Purchases of property & equipment

     (365,246
        )

     86,286Net cash provided by/(used in) investing activities from continuing operations

     (330,110
        )

     51,742Net cash used in investing activities from discontinued operations

     --
        

     --Net cash provided by/(used in) investing activities

     $(330,110
        )

     $51,742Cash flows from financing activities:Loan repayments

     --
        

     (13,261,157
        )Net cash used in financing activities from continuing operations

     --
        

     (13,261,157
        )Net cash used in financing activities from discontinued operations

     --
        

     --Net cash used in financing activities

     $--
        

     $(13,261,157
        )Effect of exchange differences

     $(17,479
        )

     $223,222Net increase (decrease) in cash and cash equivalents

     $1,718,890
        

     $(1,830,198
        )Cash and cash equivalents, beginning of period

     $
        8,214,381
        

     $
        10,044,579Cash and cash equivalents, end of period

     $9,933,271
        

     $8,214,381Supplemental disclosures of cash flow information:Interest paid

     $2,086,802
        

     $3,943,418Income taxes

     $95,795
        

     $401,038Supplemental disclosures of non-cash investing and
	 financing activitiesTransfer of properties held for sale to property & equipment

     $--
        

     $-- The accompanying notes are integral part of these consolidated
financial statements. F-6




GREAT
CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO  CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2009 AND 2008 1.
Description
of business Nature of organization Great
 China  International  Holdings,  Inc.,  (the  Company) was  incorporated  in the
State of Nevada on      December  4, 1987,  under the name of Quantus  Capital,  Inc.,
 and in 1992,  it changed its name to Red Horse   Entertainment  Corporation. Effective July 5, 2005, the Company completed the acquisition of Silverstrand International Holdings Limited (Silverstrand), a Hong Kong limited liability company, by issuing 10,102,333 shares of its common voting stock to the former stockholders of Silverstrand in exchange for all of the capital stock of Silverstrand.  For financial reporting purposes the acquisition was treated as a recapitalization of Silverstrand.  On September 15, 2005, the Company changed its name to Great China International Holdings, Inc. from Red Horse Entertainment Corporation. Silverstrand was incorporated on September 30, 2004 in Hong Kong Special Administrative Region, PRC, and is the holding company of Shenyang Maryland International Industry Company Limited, formerly Shenyang Malilan Audio Equipment Company, Limited (Shenyang Maryland).  Shenyang Maryland was originally registered as a limited liability Sino-foreign joint investment enterprise on December 15, 1989, in Shenyang, Liaoning Province, PRC.  In October 2004, Silverstrand acquired all of the registered equity of Shenyang Maryland, and this transfer and the reclassification of Shenyang Maryland as a wholly foreign-owned enterprise (WFOE) was approved in November 2004 by the Liaoning Provincial Bureau of Foreign Trade and Economic Cooperation.  This approval was subsequently registered, and a business registration certificate (No. 111103721 (1-1)) was issued to Shenyang Maryland as a WFOE in April 2005 by the Shenyang Municipal Administration of Industry and Commerce.  The original business licenses for Shenyang Maryland described our business scope as real estate development, sales, leasing, and property management.  In January of 2010, the Company modified the business scope to real estate leasing, property management, and consulting. The Company, through
its various subsidiaries, has engaged in commercial and residential real estate leasing, management, consulting,
investment, development and sales in the city of Shenyang, Lianing Province, in the People Republic of China
 (PRC). 2.
Summary
of significant accounting policies Foreign Currency -The
 accompanying  consolidated  financial  statements  have  been  prepared  in  conformity
 with  accounting      principles  generally  accepted in the United  States of America.
 The  Companys  functional  currency is the      Chinese Renminbi (RMB);  however the
accompanying  consolidated  financial statements have been translated and      presented
in United States Dollars ($) on the basis set forth below. The following table sets forth various information concerning exchange rates between the Renminbi and the U.S. dollar for the periods indicated. The source of these rates is the Federal Reserve Bank of New York. Average
  
  High
  
  Low
  
  Period-end(RMB per U.S. $1.00)2005(1)
   8.1472
  
   8.2765
  
   8.0702
  
   8.07092006(1)
   7.9723
  
   8.0702
  
   7.8041
  
   7.80412007(1)
   7.6038
  
   7.7881
  
   7.2946
  
   7.29462008(1)
   6.9623
  
   7.2941
  
   6.7480
  
   6.85422009(1)
   6.8311
  
   6.8368
  
   6.8242
  
   6.8270 (1)	Annual averages are calculated by averaging the rates on the last business day of each month during the relevant period. F-7




GREAT
CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO  CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2009 AND 2008 Principles
of Consolidation  The accompanying consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiaries. All
significant inter-company transactions and balances within the Company are
eliminated in consolidation. Allowance
for Doubtful Accounts - The Company maintains reserves for potential credit losses
on accounts receivable. Management reviews the composition of accounts receivable
and other receivable and analyzes historical bad debts, customer concentrations,
customer credit worthiness, current economic trends and changes in customer
payment patterns to evaluate the adequacy of these reserves. As of December 31,
2009 and 2008, the Company reserved $7,238,597 and $5,664,081
respectively, for other receivable bad debt, and $312,009 and $253,268, respectively, for accounts receivable bad debt. Real Estate Held for Development or Sale  The Company capitalizes as real estate held for development or sale, the
direct construction and development costs, property taxes, interest incurred
on costs related to land under development and other related costs (i.e.
engineering, surveying, landscaping, etc.) until the property reaches its
intended use. As of December 31, 2009 and December 31, 2008, real estate held for development or sale
amounted to $2,060,146 and $3,148,280, respectively. Properties
held for rental  Properties include buildings held for rental and land use
rights, which are being depreciated over the estimated useful lives of the
related assets. Depreciation is computed on the straight-line basis over 20-26
years. As of December 31, 2009 and 2008, net property held for rental amounted to $49,480,553
and $ 52,726,826 respectively. Accumulated depreciation of rental properties amounted to $15,383,654 and $12,515,874
respectively as of  December 31, 2009 and 2008. Impairment of properties for sale or rental  The Company reviews its properties in real estate held for development or sale and properties held for rental whenever events or changes in circumstances indicate that the carrying value of its properties may not be recoverable in accordance with ASC 360. Impairment for financial reporting purposes is deemed to have occurred when estimated undiscounted operating income is less than the carrying value of the related investment.  To the extent that a deemed impairment has occurred, the excess of carrying value of the property over its estimated fair value is charged against earnings.  Management has not identified indicators of impairment during the years ended December 31, 2009 and 2008. Property
and equipment  Property and equipment is being depreciated over the estimated
useful lives of the related assets. Depreciation is computed on the straight-line
basis over useful lives as follows: Buildings
     
     8-26 yearsEquipment
     
     5 yearsAutomobile
     
     5 yearsOffice furniture and fixtures
     
     5 years As of December 31, 2009 and 2008, Property, Plant & Equipment consist of the following: December 31, 2009

     December 31, 2008Building
     
     
     $
        1,454,159
        
        
     $
        1,058,160Automobile
     1,078,811
        
        
     1,079,326Office equipment & Furniture
     442,466
        

     484,471$2,975,436
        

     2,621,957Accumulated depreciation
     (1,385,253
        )

     (1,205,352
        )Property and equipment, net
     $1,590,183
        

     $1,416,605 F-8




GREAT
CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO  CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2009 AND 2008 Depreciation
expense for the years ended  December 31, 2009 and 2008 totaled $179,900 and
     $243,889 respectively. Repairs
and maintenance costs are normally charged to the statement of and comprehensive income in the year in
which they      are incurred. In situations where it can be clearly demonstrated that the
expenditure has resulted in an      increase in the future economic benefits expected to
be obtained from the use of the asset, the expenditure      is capitalized as an
additional cost of the asset. Property
and equipment are evaluated  annually for any impairment in value.  Where the
 recoverable  amount of      any property and equipment is determined to have declined
below its carrying  amount,  the carrying  amount is      reduced to reflect the decline
in value.  There were no property and equipment  impairments  recognized during  2009 and 2008. As
of December 31, 2009 fixed assets  and rental property totaling  $27,654,359  have been pledged as  securities
 to various banks in      respect of borrowings totaling $19,308,700. Construction-in-progress Properties currently under development are accounted for as
construction-in-progress. Construction-in-progress is recorded at acquisition
cost, including land rights cost, development expenditure, professional fees
and the interest expenses capitalized during the course of construction for the
purpose of financing the project. Upon completion and readiness for use of the project,
the cost of construction-in-progress is to be transferred to properties held for
sale. Construction-In-Progress
 is valued at the lower of cost or market value.  Management  evaluates the market value of
     its  properties  on a  quarterly  basis by  comparing  selling  prices of its
 properties  with those of other      equivalent  properties in the vicinity  offered by
other developers  reduced by anticipated  selling costs and      associated taxes. In the
case of construction in progress,  management takes into  consideration the estimated
     cost to complete the project when making the lower of cost or market calculation. As
of December 31, 2009 and December 31,  2008, the Company had $0 and $35,177 construction-in-progress
balance, respectively. Revenue Recognition Real estate sales Real
estate sales are reported in  accordance  with the  provisions of ASC 360, Accounting
 for Sales of      Real  Estate.  Revenue from the sales of  development  properties
 is recognized by the  full accrual method when the sale is
consummated.  A sale is not considered  consummated until (1) the parties      are bound
by the terms of a contract,  (2) all consideration has been exchanged,  (3) any permanent
 financing      of which the seller is  responsible  has been  arranged,  (4) all
 conditions  precedent  to closing have been      performed,  (5) the seller does not
have substantial  continuing  involvement  with the property,  and (6) the      usual
risks and rewards of ownership have been  transferred to the buyer.  Sales  transactions
not meeting all      the  conditions of the full accrual  method are accounted for using
the deposit  method of  accounting.  Under      the deposit method,  all costs are
capitalized as incurred,  and payments received from the buyer are recorded      as a
deposit  liability. Real
Estate Capitalization and Cost Allocation Real
estate held for  development  or sale is stated at cost or estimated net realizable
 value,  whichever is      lower. Costs include land and land improvements,  direct
 construction costs and development costs,  including      predevelopment  costs,
 interest on  indebtedness,  real estate taxes,  insurance,  construction  overhead and
     indirect  project costs.  Selling and  advertising  costs are expensed as incurred.
 Total  estimated costs of      multi-unit developments are allocated to individual units
based upon specific identification methods. F-9




GREAT
CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO  CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2009 AND 2008 If
the real estate is  determined  to be  impaired,  it will be written  down to its fair
market  value.  Real      estate held for  development  or sale costs  include the cost
of land use rights,  land  development  and home      construction  costs,  engineering
 costs,  insurance costs,  wages, real estate taxes, and interest related to
     development  and  construction.  All costs are  accumulated by specific  projects
and allocated to residential      and commercial  units within the respective  projects.
 The Company leases the land for the  residential  unit      sites under land use rights
with  various  terms from the  government  of the PRC. The Company  evaluates  the
     carrying  value for  impairment  based on the  undiscounted  future cash flows of
the assets.  Write-downs  of      inventory  deemed  impaired would be recorded as
adjustments to the cost basis.  No  depreciation  is provided      for construction in
progress. Rental income and management fee income The Company recognizes the rental income on the straight-line basis over the terms of the tenancy agreements.
The management fee, including the service fee mainly for property management, maintenance and repair, and security, is recognized quarterly over the terms of the tenancy agreements. Capitalization
of Interest In
 accordance  with ASC 835,  interest  incurred  during  construction  is  capitalized  to
 construction  in      progress.  All other  interest is  expensed as  incurred.
 During the year ended December 31, 2009, the Company did not have any such interest to capitalize. Other
income Other
income consists of land leveling  income,  which was a one-time  service  performed at the request of our customers,
  and gain on  settlement of debt.  These  revenues
were  recognized  as the services were performed and the settled amount has
been paid in accordance with the terms of the agreement. Foreign
currencies - The Companys principal country of operations is in The Peoples Republic
of China. The financial position and results of operations of the Company
are determined using the local currency (Renminbi or Yuan) as the functional
currency. The results of operations denominated in foreign currency are translated
at the average rate of exchange during the reporting period. Assets
and  liabilities of the Company have been  translated at year- end exchange  rates,
 while revenues and      expenses  have been  translated at average  exchange  rates in
effect  during the year.  Resulting  cumulative      translation  adjustments have been
recorded as other  comprehensive  income (loss) as a separate  component of
     stockholders equity. Earnings
Per Share  Basic earnings per share is computed by dividing net income by the
weighted-average number of common shares outstanding during the period. Diluted
earnings per share is computed by dividing net income by the weighted-average number
of common shares and dilutive potential common shares outstanding during the period. As
of December 31, 2009 and 2008,  there were no outstanding  securities or other contracts to
issue common stock,      such as options,  warrants or conversion  rights,  which would
have a dilutive effect on earnings per share as      the effect of options outstanding at
that time was anti- dilutive. F-10




GREAT
CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO  CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2009 AND 2008 Fair
value of financial instruments  The carrying amounts of certain financial instruments,
including cash, accounts receivable, commercial notes receivable, other
receivables, accounts payable, commercial notes payable, accrued expenses, and
other payables approximate their fair values as at December 31, 2009 and December
31,2008, because of the relatively short-term maturity of these instruments. Use
of estimates  The preparation of financial statements in accordance with
 accounting principles generally accepted in the United States of America requires management to make estimates and
assumptions that affect reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. Concentrations
of business and credit risk  Financial instruments that potentially subject the
Company to concentrations of credit risk are cash and cash equivalents, accounts receivable and other
receivables arising from its normal business activities. The Company places
its cash and cash equivalents in what it believes to be credit-worthy financial institutions. The
Company has a diversified customer base, most of which are in China. The
Company controls credit risk related to accounts  receivable  through credit approvals,
 credit limits and      monitoring  procedures.  The Company  routinely  assesses the
financial  strength of its customers  and, based      upon factors surrounding the credit
risk,  establishes an allowance,  if required,  for uncollectible accounts      and, as a
consequence,  believes that its accounts  receivable  credit risk exposure  beyond such
allowance is      limited. Recent
accounting pronouncements  In June 2009, the FASB issued ASC 105 (previously SFAS No. 168, The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (GAAP) -
a replacement of FASB Statement No. 162), which will become the source of authoritative
accounting principles generally accepted in the United States recognized by the FASB to be applied
to nongovernmental entities. The Codification is effective in the third quarter of 2009, and
accordingly, the Quarterly Report on Form 10-Q for the quarter ending September 30, 2009 and all
subsequent public filings will reference the Codification as the sole source of authoritative
literature. The Company does not believe that this will have a material effect on its consolidated
financial statements. In June 2009, the FASB issued ASC 855 (previously SFAS No. 165, Subsequent Events), which establishes general standards of accounting
for and disclosures of events that occur after the balance sheet date but before the financial
statements are issued or available to be issued. It is effective for interim and annual periods
ending after June 15, 2009. There was no material impact upon the adoption of this standard on the
Companys consolidated financial statements. In June 2009,
the FASB issued ASC 860 (previously SFAS No. 166, Accounting for Transfers of Financial Assets) , which
requires additional information regarding transfers of financial assets, including
securitization transactions, and where companies have continuing exposure to the risks related to
transferred financial assets. SFAS 166 eliminates the concept of a qualifying special-purpose
entity, changes the requirements for derecognizing financial assets, and requires additional
disclosures. SFAS 166 is effective for fiscal years beginning after November 15, 2009. The Company
does not believe this pronouncement will impact its financial statements. In June 2009,
the FASB issued ASC 810 (previously SFAS No. 167) for determining whether to consolidate a
variable interest entity. These amended standards eliminate a mandatory quantitative approach to
determine whether a variable interest gives the entity a controlling financial interest in a
variable interest entity in favor of a qualitatively focused analysis, and require an ongoing
reassessment of whether an entity is the primary beneficiary. These amended standards are effective
for us beginning in the first quarter of fiscal year 2010 and we are currently evaluating the impact
that adoption will have on our consolidated financial statements. F-11




GREAT
CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO  CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2009 AND 2008 In September 2009 the New FASB Accounting Standards Update 2009-08 issued in Earnings Per Share (amendments to Section 260-10-S99). This update includes technical corrections to Topic 260-10-S99 Earnings Per Share, based on EITF Topic D-53,
Computation of Earnings Per Share for a Period that includes redemption or an induced conversion of a portion of a class of preferred stock and EITF Topic D-42, The effect of the calculation of Earnings Per Share for the redemption or induced conversion of preferred stock. The Company does not expect the implementation of this statement to have an impact on its results or financial position. In October 2009, the FASB issued an amendment to the accounting standards related to certain revenue arrangements that include software elements. This standard clarifies the existing accounting guidance such that tangible products that contain both software and non-software components that function together to deliver the products essential functionality, shall be excluded from the scope of the software revenue recognition accounting standards. Accordingly, sales of these products may fall within the scope of other revenue recognition standards or may now be within the scope of this standard and may require an allocation of the arrangement consideration for each element of the arrangement. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011. In January 2010, the FASB issued an amendment to ASC 505, Equity, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend. This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis. The adoption of this standard is not expected to have a significant impact on the Companys consolidated financial statements. In January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial statements. Reclassifications Certain amounts in the 2008 financial statements may have been reclassified to conform
to the 2009 presentation. These reclassifications had no effect on previously
reported results of operations or retained earnings. 3.
Real estate held for development or sale  Real estate held for development or sal at December 31, 2009 and December 31, 2008 by project are as follows: December 31, 2009
        
     December 31, 2008Qiyun New Village
          $
        610,096
        

     $
        854,183Peacock Garden
	 85,936
        

     176,180Chenglong Garden
     861,345
        

     1,456,666President Building
     218,724
        

     218,829Maryland Building
     268,447
        

     268,575Others
     15,598
        

     173,847Total
     $2,060,146
        

     $3,148,280 F-12




GREAT
CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO  CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2009 AND 2008 The
Company  introduced a Five-year Trial  Accommodation  Program (the Program) to attract
 potential buyers      when initial sales at the project did not meet expectations.
 Under the Program,  property buyers were required      to pay a 10%  refundable  deposit
 based on the sale price of the property or $7,325  (RMB50,000)  and another      20%,
based on the sale price of the property which is  non-refundable,  over 5 years by
monthly  installments,      totaling 30%  throughout  the trial period.  The remaining
70% of the  consideration  shall be due and payable      immediately  after the trial
period when the property  buyers exercise their option whether or not to complete
     the  purchase.  If the buyer  chooses  not to buy the  property,  the 10%
 refundable  deposit or $7,325  (RMB50,000) will be refunded to the buyers (less
any unpaid  rental due) and monthly  installments  received  over      the 5-year trial
period will have been recognized as rental income in the year in which they arose. As
of December 31, 2009 and December 31, 2008,  $532,833 and $668,305 respectively worth of properties  held
for sale in Qiyun      New Village  were  occupied by  individuals  who agreed to buy the
 properties  without  having fully paid the      purchase consideration.  $87,894 and
$299,731 was included in advance from buyers for this Program as of December 31, 2009 and
December 31, 2008 respectively. 4.
Accrued expenses Accrued expenses consisted of the following as of December 31, 2009 and December 31, 2008: December 31, 2009

     December 31, 2008Payroll and welfare payable
     $97,898
        

     $97,367Interest and other accrued expenses
      65,249
        

     57,780Total
     $163,147
        

     $155,147 5.
Tax payables Tax payables consist
of the following as of December 31, 2009 and December 31, 2008: December 31, 2009
        
     December 31, 2008Income tax payable
     $
        6,169,230
        
        
     $
        5,857,279Business tax
     633,292
        

     1,021,519Land VAT payable
     2,199,205
        

     2,204,240Other levies
     63,511
        

     24,222Total
     $9,065,238
        

     $9,107,260 6.
Payable to disposed subsidiary The Company has a payable to a disposed subsidiary, Loyal Best Property Development Limited, amounting to $10,494,449 as of December 31, 2007. Subsequently, the Company paid $9,725,112 to Loyal Best during 2008 and had a balance due as of December 31, 2009 and 2008 in the amount of $769,337 and $768,287 respectively. 7.
Short-term loans Short-term loans as of December 31, 2009 and December 31, 2008
consist of the following: Nature
     Due on
     Interest per Annum
	 
	 December 31, 2009Bank loan
     10-13-2010
     10.395%
	 
     
        13,448,700Bank loan
     6-12-2010
         8.775%
		 
         
        5,860,000Total
      
        
		
       $
        19,308,700 F-13




GREAT
CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO  CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2009 AND 2008 Nature
     Due on
     Interest per Annum
     December 31, 2008Bank loan
     10-13-2009
     10.395%
	  
     
        13,455,125Bank loan
        6-12-2009

        9.477%
        
     
        5,862,800Total
      
     
	 
     $
        19,317,925 The
above loans are secured by rental properties the Company owns. As
of December 31, 2009 and 2008,  the  Company  incurred  interest  and finance costs  amounting to
 $2,079,954  and  $2,628,464, respectively. On
June 22, 2006 the Company  entered into a settlement  agreement  with a bank with respect
to  $8,230,453 of      past due  notes.  In  accordance  with the  settlement  agreement,
 $1,228,163  of loan  interest  accrued  as of      December 31, 2007 may be waived if the
Company repays the loan principle per the  installments  schedule.  The      Company is
 required  to pay back the loan  principal  in a three step  installments  in which the
entire bank      loan will be paid off on September 20, 2008. The
Company paid three installments on time per the schedule of settlement agreement.  The outstanding
interest of the loan for the said loan was partially waived by the bank in the amount of $1,006,722
based on the settlement agreement and the Company paid off the rest of the amount to the bank as of
December 31, 2008. The $1,006,722 of waived interest expense was recognized as other income
as of June 30, 2008. 8.
Statutory
Reserve As stipulated by the Company Law of the Peoples Republic of China (PRC), net income after taxation can only be distributed as dividends after appropriation has been made for the following: i.
   Making up cumulative prior years losses, if any;ii.
   Allocations to the Statutory Surplus Reserve of at least 10% of income after tax, as determined under PRC accounting rules and regulations, until the fund amounts to 50% of the Companys registered capital;iii.
   Allocations of 5% to 10% of income after tax, as determined under PRC accounting rules and regulations, to the Companys Statutory Common Welfare Fund, which is established for the purpose of providing employee facilities and other collective benefits to the Companys employees; and statutory common welfare fund is no longer required per the new cooperation law executed in 2006.iv.
   Allocations to the discretionary surplus reserve, if approved in the stockholders general meeting. The Company accrued $0 during 2009 and 2008. 9.
Stock Options On
January 31, 2008,  the Company  issued a  non-incentive  stock option for 10,000 shares
to a  non-employee       director  with an  exercise  price of $0.65.  The option was fully vested on the date granted and
was scheduled to expire in January 2009.  The holder of the option surrendered the option for
cancellation on January 31, 2009, when he resigned as a director. Risk-free interest rate
     6.00%Expected life of the options
     2 yearExpected volatility
     121.79%Expected dividend yield
     0% F-14




GREAT
CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO  CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2009 AND 2008 On
January 31, 2007,  the Company  issued a  non-incentive  stock option for 10,000 shares
to a  non-employee director  with an  exercise  price of $4.65.  The options  were vested when granted, were
exercisable over a term of two years, and expired on January 31, 2009, without being exercised. Risk-free interest rate
     8.25%Expected life of the options
     2 yearExpected volatility
     83.76%Expected dividend yield
     0% No options to purchase
the Companys common stock were outstanding at December 31, 2009. A summary of option
activity as of December 31, 2009, and changes during the period then ended is presented
     below: SharesOutstanding on December 31, 2007
	 10,000Granted
	 10,000Exercised
	 --Outstanding on December 31, 2008
	 20,000Granted
	 --Exercised
	 --Forfeited or expired
	 20,000Outstanding on December 31, 2009
	 --Exercisable on December 31, 2009
	 --  10.
Disposal of subsidiaries and discontinuance of subsidiaries Shenyang Xinchao Property Company Limited (Xinchao) and Shenyang Yindu Property Company Limited
(Yindu) were registered in August 2005 in Shenyang, Liaoning Province, in the PRC 2016.
  Xinchao and Yindu were formed and capitalized as indirect subsidiaries of the Company to acquire
  and develop a certain tract of property located in the Heping District of Shenyang with an
  area of almost 500,000 square meters known as the Xita Project.  Following transfer of the land
  use rights to the tract, the local government decided to pursue an alternative development plan
  for the area and negotiated for reacquisition of the land use rights from Xinchao and Yindu.
  Heping District refunded the purchase price for the land use rights paid by Xinchao and
  reimbursed the development costs incurred by Xinchao.  The Company decided to discontinue Xinchao
  and Yindu in October 2008.  As of December 15, 2008, the operations of Xinchao and Yindu were
  discontinued.  As of December 31, 2009, 70% of the assets and liabilities were transferred to
  Shenyang Maryland International and the other 30% of the assets and the liabilities were
  transferred to Silverstrand. 11.
Income
Tax The
Company is registered in the State of Nevada and has  operations in primarily  three tax
 jurisdictions       the Peoples  Republic of China,  Hong Kong and the United  States.
 For  operation in the US, the Company has      incurred net  accumulated  operating
 losses for income tax  purposes.  The Company  believes  that it is more      likely
than not that these net  accumulated  operating  losses will not be utilized in the
future.  Therefore,      the Company has provided  full  valuation  allowance  for the
 deferred tax assets  arising from the losses at      these locations as of December 31,
2009. Accordingly, the Company has no net deferred tax assets. F-15




GREAT
CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO  CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2009 AND 2008 The
provision for income taxes from continuing operations on income consists of the following
for the years ended December 31, 2009 and 2008: Years Ended December 312009
     2008US current income tax expense (benefit)Federal
     $
     --
	 $
     --State
     $
     --
	 $
     --HK current income tax expense
     
     --
	 
     --PRC current income tax expense (benefit)
     $
     0
	 $
     401,038Total provision for income tax
     $
     0
	 $
     401,038 The following is a
reconciliation of the provision for income taxes at the U.S. federal income tax rate to
     the income taxes reflected in the Statement of Operations:  Years Ended December 312009
     2008Tax expense (credit) at statutory rate - federal
     35%
     35%State tax expense net of federal tax
     0%
     0%Changes in valuation allowance
     (35%)
     (35%)Foreign income tax - HK
     17.5%
     17.5%Valuation allowance
     (17.5%)
     (17.5%)Foreign income tax benefit - PRC
     25%
     25%Tax expense at effective tax rate
     25%
     25% United States of
America As
of December 31, 2009,  the Company in the United States had  approximately  $585,540 in net
operating loss carry      forwards  available to offset future  taxable  income.  Federal
net operating  losses can generally be carried    forward 20 years.  The deferred tax
assets for the United States  entities at December 31, 2009 consists mainly of      net
operating loss carry  forwards and were fully  reserved as the management  believes it is
more likely than      not that these assets will not be realized in the future. The
following table sets forth the significant components of the net deferred tax assets for
operation in the US as of December 31, 2009 and December 31, 2008. As of December 312009
     2008Net operation loss carry forward
     $
     (585,540)
	 $
     (470,800)Total deferred tax assets
     
     204,939
	 
     164,780Less: valuation allowance
     
     (204,939)
	 
     (164,780)Net deferred tax assets
     
     --
	 
     --Change in valuation allowance
     $
     (40,159)
	 $
     (43,669) F-16




GREAT
CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO  CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2009 AND 2008 Hong Kong As
of December 31, 2009,  the Company in Hong Kong had  approximately  $139,387  in net
operating  loss carry      forwards  available to offset future taxable  income.  There
is no time limit for the losses to carry forward.      The deferred tax assets for the
Hong Kong  entities at December 31, 2009  consists  mainly of net  operating  loss      carry
 forwards  and were fully  reserved  as the  the management  believes  it is more likely than
not that these      assets will not be realized in the future. The
following table sets forth the significant components of the net deferred tax assets for
operation in      Hong Kong as of December 31, 2009 and December 31, 2008. As of December 312009
     2008Net operation loss carry forward
     $
     (139,387)
	 $
     (124,276)Total deferred tax assets
     
     24,392
	 
     21,748Less: valuation allowance
     
     (24,392)
	 
     (21,748)Net deferred tax assets
     
     --
	 
     --Change in valuation allowance
     $
     (2,644)
	 $
     (21,748) Peoples
Republic of China (PRC) Pursuant to the PRC Income
Tax Laws, the Companys subsidiary is generally subject to Enterprise Income Taxes (EIT) at a statutory rate of 25%
since January 1, 2008.  The Companys applicable EIT rate under new EIT law is 25% which was approved by local Tax department. As
of December 31, 2009 and December 31, 2008,  the Companys PRC  subsidiary had net operating
loss carry forwards      which can be carried  forward 5 years to offset future  taxable
 income.  The deferred tax assets for Shenyang      Maryland on December 31, 2009  consist  mainly of net  operating  loss carry  forwards and they      were fully
 reserved as the  management  believes  they are more likely than not that these assets
will not be      realized in the future. The
following table sets forth the significant components of the net deferred tax assets for
operation in PRC as of December 31, 2009 and December 31, 2008. As of December 312009
     2008Net operation loss carry forward
     $
     (4,891,502)
	 $
     (2,919,384)Total deferred tax assets
     
     1,222,875
	 
     858,978Less: valuation allowance
     
     (1,222,875)
	 
     (858,978)Net deferred tax assets
     
     --
	 
     --Change in valuation allowance
     $
     (363,897)
	 $
     (151,600) Aggregate net deferred tax
assets The
following table sets forth the significant components of the aggregate net deferred tax
assets      of the Company as of December 31, 2009 and December 31, 2008: As of December 312009
     2008AggregateTotal deferred tax assets
     
     1,452,206
	 
     1,045,506Less: valuation allowance
     
     (1,452,206)
	 
     (1,045,506)Net deferred tax assets
     
     --
	 
     --Change in valuation allowance
     $
     (406,700)
	 $
     (207,023) F-17




GREAT
CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO  CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2009 AND 2008 12.
Segment
Information ASC 280
requires use of the management  approach#&148; model for segment  reporting.      The  management  approach
 model is based on the way a  companys  management  organizes  segments  within the
     company for making operating  decisions and assessing  performance.  Reportable
segments are based on products      and services,  geography,  legal  structure,
 management  structure,  or any other manner in which  management      disaggregates the Company. During
the years ended December 31, 2009 and December 31, 2008, the Company is organized into two
main business segments: (1) Property for sale, and (2) Rental income and Income of management
fee of commercial buildings. The following table presents a summary of operating
information and certain year-end balance sheet information as of December 31, 2009 and 2008: F-18




GREAT
CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES NOTES TO  CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2009 AND 2008 12-31-2009
               
     12-31-2008Revenues from unaffiliated customers:Selling of properties
        
        
     $2,441,759
        
     
     $3,679,044Rental income & Management fee
     6,232,925
        
     
     6,011,176Consolidated
     $8,674,684
        
     
     $9,690,220Operating income (loss):Selling of properties
     $(359,039
        )
     
     $(85,684
        )Rental income & Management fee
     648,793
        
     
     (44,090
        )Corporation (1)
     (2,591,211
        )
     
     (1,369,887
        )Consolidated
     $(2,301,457
        )
     
     $(1,499,661
        )Net income (loss) before taxes:Selling of properties
     $(2,526,168
        )
     
     $(2,070,360
        )Rental income & Management fee
     649,142
        
     
     (44,330
        )Corporation (1)
     (214,973
        )
     
     3,927,009Consolidated
     $(2,091,999
        )
     
     $1,812,319Identifiable assets:Selling of properties
     $2,665,781
        
     
     $6,685,110Rental & Management fee
     52,083,220
        
     
     51,278,231Corporation (1)
     8,971,455
        
     
     8,442,423Consolidated
     $63,720,456
        
     
     $66,405,764Depreciation and amortization:Selling of properties
     $--
        
     
     $--Rental & management fee
     179,900
        
     
     243,889Corporation (1)
     --
        
     
     4,544Consolidated
     $179,900
        
     
     $248,433Capital expenditures:Selling of properties
     $--
        
     
     $--Rental & management fee
     318,319
        
     
     75,949Corporation (1)
     (318,319
        )
     
     (128,640
        )Consolidated
     $0
        
     
     $(52,691
        ) (1).
Unallocated loss from Operating income (loss) and Net income before provision for income taxes are
primarily related to general corporate expenses. 13.
Subsequent event As of
January 18, 2010, the name of  Shenyang Maryland International Industry Company Limited,
real estate subsidiary company, changed to Maryland International Industry Company Limited,
a consulting subsidiary company.  This change does not affect the assets or liabilities of the
Company. F-19