UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON
D.C. 20549
 
 FORM
10-K/A
 Amendment
No. 1
  R
              ANNUAL REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
fiscal year ended: December 31, 2009
 
 OR
 
 £
              TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 COMMISSION
FILE NUMBER: 333-126900
 
 CHINA
CLEAN ENERGY INC.
  (Exact
name of Registrant as specified in its charter)
 
 Delaware
              87-0700927(State
      or other jurisdiction of incorporation)
              (I.R.S.
      Employer Identification Number)Jiangyin Industrial
      Zone, Jiangyin Town
                Fuqing
      City, Fujian Province
                People’s
      Republic of China
              350309(Address
      of principal executive office)
              (Zip
      Code)
 
 Registrant’s
telephone number, including area code: (347) 235-0258
  Securities
registered pursuant to Section 12(b) of the Exchange
Act:  None
 
 Securities
registered pursuant to Section 12(g) of the Exchange Act: Common Stock, $0.001
par value
 ________________
 
 Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes £  No
R
 
 Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes £  No
R
 
 Indicate
by check 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 R No £
 
 Indicate
by check whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post
such filed). Yes £ 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. R
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See definition of “large accelerated filer,” “accelerated
filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.
 
 Large
accelerated filer £  Accelerated
filer £  Non-accelerated
filer  £ Smaller
reporting company R
 
 Indicate
by check mark whether the registrant is a shell company (as defined by Rule
12b-2 of the Exchange Act). Yes £  No
R
 
 The
aggregate market value of the voting and non-voting stock held by non-affiliates
of the registrant as of the last business day of the registrant’s most recently
completed second fiscal quarter, based on the average bid and asked price of
such common equity on the OTC Bulletin Board on such date was approximately
$6,186459.
 
 Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock as of the latest practicable date.
 
 Class
              
              Outstanding
      at March 30, 2010Common
      Stock, $0.001 par value
              
              31,512,269
 
 Documents
incorporated by reference:
 
 None
  
 
  EXPLANATORY
NOTE
  This
Amendment No. 1 on Form 10-K/A (this “Amendment”) amends the Annual Report on
Form 10-K of China Clean Energy Inc. (the “Company”) for the year ended December
31, 2009, previously filed with the Securities and Exchange Commission on March
31, 2010 (the “Original Filing”). This Amendment is being filed to amend Item 1A
“Risk Factors” in order to delete a risk factor pertaining to “penny
stock.”  The Company’s common stock is not, and during the past three
years has not been, “penny stock” as that term is defined in Rule 3a51-1 under
the Securities Exchange Act of 1934, as amended.  In addition, we
are deleting
duplicates of certain risk factors that were inadvertently included twice. We
are including as exhibits to this Amendment the certifications required
under Section 302 of the Sarbanes-Oxley Act of 2002.  Because no
financial statements are contained within this Amendment, we are not including
certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.  Except as set forth in this explanatory note, no other changes
are made to the Original Filing.
  
  PART I
 
 Item
      1A.
              Risk
      Factors
  There are
numerous and varied risks, known and unknown, that may prevent us from achieving
our goals. You should carefully consider the risks described below and the other
information included in this Annual Report, including our financial statements
and related notes. Our business, financial condition and results of operations
could be harmed by any of the following risks. If any of the events or
circumstances described below were to occur, our business, financial condition
and results of operations could be materially adversely affected. As a result,
the trading price of our common stock could decline, and investors could lose
part or all of their investment.
  Risks Related to Our
Business
  We have a limited
history of producing biodiesel, which makes it difficult to evaluate our
business.
  Currently,
we have only two manufacturing facilities, which began producing biodiesel in
2005 and 2010, respectively. We began selling biodiesel in December 2005
and suspended production for 8 months in 2008. Our limited operating history as
a manufacturer and distributor of biodiesel makes it difficult for prospective
investors to evaluate our business. Therefore, our proposed operations are
subject to all of the risks inherent in the initial expenses, challenges,
complications and delays frequently encountered in connection with the formation
of any new business, as well as those risks that are specific to the biodiesel
industry. Investors should evaluate us in light of the problems and
uncertainties frequently encountered by companies attempting to develop markets
for new products, services, and technologies. Despite best efforts, we may never
overcome these obstacles to financial success.
  Our
business is speculative and dependent upon the implementation of our business
plan, as well as our ability to enter into agreements with third parties for the
provision of necessary feedstock sources and the sale and distribution of our
biodiesel on terms that will be commercially viable for us. There can be no
assurance that our efforts will be successful or result in revenue or profit.
There is no assurance that we will earn significant revenues or that investors
will not lose their entire investment.
  Our
results of operations, financial position and business outlook will be highly
dependent on commodity prices, which are subject to significant volatility and
uncertainty, and the availability of supplies, so our results could fluctuate
substantially.
  Our
results are substantially dependent on commodity prices, especially prices for
feedstock, specialty chemicals, biodiesel, petroleum diesel and materials used
in the construction of our proposed refineries. As a result of the volatility of
the prices for these items, our results may fluctuate substantially and we may
experience periods of declining prices for our products and increasing costs for
our raw materials, which could result in operating losses. Although we may
attempt to offset a portion of the effects of fluctuations in prices by entering
into forward contracts to supply biodiesel or purchase feedstock or other items
or by engaging in transactions involving exchange-traded futures contracts, the
amount and duration of these hedging and other risk mitigation activities may
vary substantially over time and these activities also involve substantial
risks.
  The price
of feedstock is influenced by market demand, weather conditions, animal
processing and rendering plant decisions and factors affecting crop yields,
farmer planting decisions and general economic, market and regulatory factors.
These factors include government policies and subsidies with respect to
agriculture and international trade, and global and local demand and supply as
well as foreign currency exchange rates compared to Renminbi, which may affect
our specialty chemical exports and some feedstock imports. The significance and
relative effect of these factors on the price of feedstock is difficult to
predict. Any event that tends to negatively affect the supply of feedstock, such
as increased demand, foreign exchange rate fluctuation, adverse weather or crop
disease, could increase feedstock prices and potentially harm our business. In
addition, we may also have difficulty, from time to time, in physically sourcing
feedstock on economical terms due to supply shortages. Such a shortage could
require us to suspend operations until feedstock is available at economical
terms, which would have a material adverse effect on our business, results of
operations and financial position. The price we pay for feedstock at a facility
could increase if an additional multi-feedstock biodiesel production facility is
built in the same general vicinity or if alternative uses are found for lower
cost feedstock.
  1
  Biodiesel
is a commodity whose price is determined based on the price of petroleum diesel,
governmental price controls, world demand, supply and other factors, all of
which are beyond our control. World prices for crude oil and biodiesel have
fluctuated widely in recent years. We expect that prices will continue to
fluctuate in the future. Price fluctuations will have a significant impact upon
our revenue, the return on our investment in biodiesel refineries and on our
general financial condition. Moreover, in the event the price of our feedstock
increases at a time when the price of biodiesel decreases, remains stagnant or
fails to increase accordingly, it could render the production of biodiesel
unprofitable. Price fluctuations for biodiesel may also impact the investment
market, and our ability to raise investor capital. Any future decreases in the
prices of biodiesel or petroleum diesel fuel may have a material adverse effect
on our financial condition and future results of operations.
  We
may be unable to obtain the additional capital required to implement our
business plan, which will negatively impact our ability to grow our
business.
  We expect
that current capital and other existing resources will be sufficient only to
provide a limited amount of working capital. On their own, the revenue from
operations is not currently sufficient to fully fund operations and planned
growth. Currently, we have sufficient working capital to operate for the first
half of 2010 at 50% of total capacity. We expect that we will require
approximately an additional $10,000,000 of working capital to continue to expand
our business beyond the initial phase.  If we are unable to obtain
required additional financing, we may be forced to restrain our growth plans or
cut back existing operations.
  Future
construction and operation of biodiesel and specialty chemical refineries,
capital expenditures to build and operate our refineries, hiring qualified
management and key employees, complying with licensing, registration and other
requirements, maintaining compliance with applicable laws, production and
marketing activities, administrative requirements, such as salaries, insurance
expenses and general overhead expenses, legal compliance costs and accounting
expenses will all require a substantial amount of additional capital and cash
flow.
  We will
be required to pursue sources of additional capital through various means,
including joint venture projects, debt financing, equity financing or other
means. There is no assurance that we will be successful in locating a suitable
financing transaction in a timely fashion or at all. In addition, there is no
assurance that we will be successful in obtaining the capital we require by any
other means. Future financings through equity investments are likely to be
dilutive to the existing stockholders, as we issue additional shares of common
stock to investors in future financing transactions. Also, the terms of
securities we issue in future capital transactions may be more favorable for our
new investors. Newly issued securities may include preferences, superior voting
rights, the issuance of warrants or other derivative securities, and the
issuances of incentive awards under equity employee incentive plans, which may
have additional dilutive effects. Further, we may incur substantial costs in
pursuing future capital and/or financing, including investment banking fees,
legal fees, accounting fees, securities law compliance fees, printing and
distribution expenses and other costs. We may also be required to recognize
non-cash expenses in connection with certain securities we may issue, such as
convertible notes and warrants, which will adversely impact our financial
condition.
  Our
ability to obtain needed financing may be impaired by such factors as the
capital markets, both generally and specifically in the biodiesel and specialty
chemicals industries, the fact that we are a new enterprise without a proven
operating history, the location of our production facilities in the People’s
Republic of China, and the price of biodiesel, oil and specialty chemicals on
the commodities market, which will impact the amount of available asset-based
financing. Furthermore, if petroleum, biodiesel or specialty chemicals’ prices
on the commodities markets decrease, then our revenues will likely decrease and
decreased revenues may increase our requirements for capital. Some of the
contractual arrangements governing our operations may require us to maintain
minimum capital, and we may lose our contract rights if we do not have the
required minimum capital. If the amount of capital we are able to raise from
financing activities, together with our revenues from operations, is not
sufficient to satisfy our capital needs, even to the extent that we reduce our
operations accordingly, we may be required to cease operations.
  2
  Our
reliance upon a limited number of feedstock suppliers may hinder our ability to
be profitable.
  Four
feedstock suppliers collectively provide us with approximately 43.22% of our
feedstock and our two largest suppliers, Fujian Zhongmin Chemical Co., Ltd.
and  Xinjiang Guansheng Technology Co., Ltd., each supplied
approximately 16.81% and 11.53% of our feedstock, respectively, in 2009. Should
any of these suppliers terminate their supply relationships with us, sell to
other buyers, or enter into the biodiesel manufacturing business in competition
with us, we may be unable to procure sufficient feedstock to satisfy demand for
our end products. Moreover, there is presently a finite number of feedstock
suppliers within the People’s Republic of China. Thus, as demand for biodiesel
products continues to increase, feedstock supplies will likely decrease, causing
the price of feedstock to increase proportionally. If we are unable to obtain
adequate quantities of feedstock at economically viable prices, our business
could become unprofitable and investors could suffer a loss with respect to
their investment in us.
  Price
declines in petro-based diesel due to alternative energy discoveries or enhanced
supply of oil could negatively impact demand for our biodiesel.
  Our
biodiesel product is currently sold in the People’s Republic of China as a
substitute to petro-based diesel. As a result, demand for our biodiesel could be
negatively impacted should the Chinese government lower the retail prices of
fuel, including diesel, due to the discovery of new oil fields or energy
technology inventions.
  Strategic
relationships upon which we may rely are subject to change, leading to
uncertainty and a negative impact on our business.
  Our
ability to identify and enter into commercial arrangements with feedstock
suppliers, construction contractors, equipment fabricators and customers will
depend on developing and maintaining close working relationships with industry
participants. Our success in this area will also depend on our ability to select
and evaluate suitable projects, as well as to consummate transactions in a
highly competitive environment. These realities are subject to change and may
impair our ability to grow.
  To
develop our business, we will use the business relationships of management in
order to form strategic relationships. These relationships may take the form of
joint ventures with other private parties or local government bodies,
contractual arrangements with other companies, including those that supply
feedstock that we will use in our business, or minority investments from third
parties. There can be no assurances that we will be able to establish these
strategic relationships, or, if established, that the relationships will be
maintained, particularly if members of the management team leave us. In
addition, the dynamics of our relationships with strategic partners may require
us to incur expenses or undertake activities we would not otherwise be inclined
to incur or undertake in order to fulfill our obligations to these partners or
maintain these relationships. If we do not successfully establish or maintain
strategic relationships, our business may be negatively impacted.
  A
large portion of our sales is concentrated in a few major customers; loss of any
of those customers would have a material adverse impact on our
revenues.
  Our top
five customers accounted for approximately 31.21% of our sales in 2009 and
25.88% of our sales in 2008. Our two largest customers accounted for more than
18.44% of sales in 2009 and for more than 11.71% of sales in 2008. If not
replaced, the loss of any of these customers could significantly reduce our
revenues and adversely affect the value of an investment in us.
  We
are dependent on others for sales of a significant portion of our products,
which may place us at a competitive disadvantage and reduce
profitability.
  We have a
small sales force of our own to market our biodiesel and specialty chemical
products. As such, we expect to contract with third parties to market and
distribute some of our specialty chemical products. We have no definitive
agreements at this time. As a result, we will be somewhat dependent on whomever
we contract with to market our biodiesel and specialty chemical products. There
is no assurance that we will be able to enter into contracts with any specialty
chemical products brokers or distributors on acceptable terms. If any of our
distributors breaches its contract with us or does not have the ability, for
financial or other reasons, to market all of the specialty chemicals products we
produce, we will not have any other readily available means to sell our
products. Our lack of a sufficient sales force and reliance on third parties to
sell and market our products may place us at a competitive disadvantage. Our
failure to sell all of our biodiesel or specialty chemical products may result
in less income from sales.
  3
  The
success of our business depends upon the continuing contributions of our Chief
Executive Officer and other key personnel and our ability to attract other
employees to expand our business.
  We rely
heavily on the services of Tai-ming Ou, our Chief Executive Officer, as well as
several other senior management personnel. Loss of the services of any of such
individuals would adversely impact our operations. In addition, we believe that
our technical personnel represent a significant asset and provide us with a
competitive advantage over many of our competitors. We believe that our future
success will depend upon our ability to retain these key employees and our
ability to attract and retain other skilled financial, engineering, technical
and managerial personnel. For example, we presently do not have any directors or
officers, other than William Chen, our Chief Financial Officer, who have
experience with preparing disclosure mandated by U.S. securities laws and we
will be required to engage such persons, and independent directors, in order to
satisfy the initial listing standards of the major exchanges on which we may
seek to list our common stock. In addition, if we fail to engage qualified
personnel, we may be unable to meet our responsibilities as a public reporting
company under the rules and regulations of the Securities and Exchange
Commission. We do not currently maintain any “key man” life insurance with
respect to any of such individuals.
  We
plan to grow very rapidly, which will place strains on management and other
resources.
  We plan
to grow rapidly and significantly expand our operations. This growth will place
a significant strain on management systems and resources. We will not be able to
implement our business strategy in a rapidly evolving market without an
effective planning and management process, and, to date, we have not implemented
sophisticated managerial, operational and financial systems and controls. We are
required to manage multiple relationships with various strategic partners,
technology licensors, users, advertisers and other third parties. These
requirements will be strained in the event of rapid growth or in the number of
third party relationships, and our systems, procedures or controls may not be
adequate to support our operations and management may be unable to manage growth
effectively. To manage our expected growth, we will be required to significantly
improve or replace existing managerial, financial and operational systems,
procedures and controls, and to expand, train and manage our growing employee
base. We will be required to expand our finance, administrative and operations
staff. We may be unable to complete in a timely manner the improvements to our
systems, procedures and controls necessary to support future operations,
management may be unable to hire, train, retain, motivate and manage required
personnel and management may be unable to successfully identify, manage and
exploit existing and potential market opportunities.
  Increases
in our energy expenses will negatively impact operating results and financial
condition.
  Our
biodiesel and specialty chemical production costs will be dependent on the costs
of the energy sources used to run our refineries. These costs are subject to
fluctuations and variations in different locales in which we intend to operate,
and we may not be able to predict or control these costs. If these costs exceed
our expectations, this may adversely affect our results of
operations.
  We
may be unable to locate suitable properties and obtain the development rights
needed to build and expand our business.
  Our
business plan focuses on designing, building and operating specialty chemical
and biodiesel production facilities for our own account. Although we were able
to successfully enter into an agreement to purchase land use rights in Jiang
Yin, People’s Republic of China to construct our second specialty chemical and
biodiesel production facility for our own account, our ability to acquire
quality and reliable properties and facilities in the future may be
unpredictable and we may be required to delay construction of our facilities,
which will create unanticipated costs and delays. In the event that we are not
successful in identifying and obtaining development rights on suitable
properties for building and operating specialty chemical and biodiesel
production facilities, our future prospects for profitability will likely be
substantially limited, and our financial condition and resulting operations may
be adversely affected.
  4
  The
production, sale and distribution of biodiesel are dependent on the sufficiency
of necessary infrastructure which may not occur on a timely basis, if at all,
and our operations could be adversely affected by infrastructure
disruptions.
  Substantial
development of infrastructure will be required by persons and entities outside
our control for our operations, and the biodiesel industry generally, to grow.
Areas requiring expansion include, but are not limited to:
  ·
              adequate
      highway or rail capacity, including sufficient numbers of dedicated tanker
      trucks or cars;·
              sufficient
      storage facilities for feedstock and biodiesel;·
              increases
      in truck fleets capable of transporting biodiesel within localized
      markets; and·
              expansion
      of independent filling stations.
  Substantial
investments required for these infrastructure changes and expansions may not be
made or they may not be made on a timely basis. Any delay or failure in making
the changes to or expansion of infrastructure could hurt the demand or prices
for our products, impede our delivery of products, impose additional costs on us
or otherwise have a material adverse effect on our results of operations or
financial position. Our business is dependent on the continuing availability of
infrastructure and any infrastructure disruptions could have a material adverse
effect on our business.
  Our
commercial success will depend in part on our ability to obtain and maintain
protection of our intellectual property.
  Our
success will depend in part on our ability to maintain or obtain and enforce
patent and other intellectual property protection for our technologies and to
preserve our trade secrets, and to operate without infringing upon the
proprietary rights of third parties. We have obtained or developed rights to one
patent and one patent application in the People’s Republic of China, and may, in
the future, seek rights from third parties to other patent applications or
patented technology. Significant aspects of our technology are currently
protected as trade secrets, for which we intend to file patent applications when
appropriate. There can be no assurance that a patent will issue from the patent
application filed or that the scope of any claims granted in any patent will
provide us with proprietary protection or a competitive advantage. We cannot be
certain that the creators of our technology were the first inventors of
inventions covered by our patent and patent application or that they were the
first to file. Accordingly, there can be no assurance that our patent and patent
application are valid or will afford us with protection against competitors with
similar technology. The failure to obtain or maintain patent or other
intellectual property protection on the technologies underlying our biodiesel
refining and specialty chemical manufacturing processes may have a material
adverse effect on our competitive position and business prospects. It is also
possible that our technologies may infringe on patents or other intellectual
property rights owned by others. We may have to alter our products or processes,
pay licensing fees, defend an infringement action or challenge the validity of
the patents in court, or cease activities altogether because of patent rights of
third parties, thereby causing additional unexpected costs and delays to us.
There can be no assurance that a license will be available to us, if at all,
upon terms and conditions acceptable to us or that we will prevail in any
intellectual property litigation. Intellectual property litigation is costly and
time consuming, and there can be no assurance that we will have sufficient
resources to pursue such litigation. If we do not obtain a license under such
intellectual property rights, are found liable for infringement or are not able
to have such patents declared invalid, we may be liable for significant money
damages and may encounter significant delays in bringing products and services
to market.
  We
face significant competition, which may negatively impact our future
growth.
  We face
competition from other producers of biodiesel with respect to the procurement of
feedstock, obtaining suitable properties for the construction of biodiesel
refineries and selling biodiesel and related products. Such competition could be
intense thus driving up the cost of feedstock and driving down the price for our
products. Competition will likely increase as prices of energy on the
commodities market, including petroleum and biodiesel, rise, as they have in
recent years. Additionally, new companies are constantly entering the market,
thus increasing the competition. Increased competition could also have a
negative impact on our ability to obtain additional capital from investors.
Larger foreign owned and domestic companies that have been engaged in this
business for substantially longer periods of time may have access to greater
resources. These companies may have greater success in the recruitment and
retention of qualified employees, as well as in conducting their own refining
and fuel marketing operations, which may give them a competitive advantage. In
addition, actual or potential competitors may be strengthened through the
acquisition of additional assets and interests. If we are unable to compete
effectively or adequately respond to competitive pressures, this may materially
adversely affect our results of operation and financial condition.
  5
  Our
business is subject to local legal, political, and economic factors that are
beyond our control.
  We
believe that the current political environment for construction of biodiesel and
specialty chemical facilities is sufficiently supportive to enable us to plan
and implement our operations. However, there are risks that conditions will
change in an adverse manner. These risks include, but are not limited to, laws
or policies affecting mandates or incentives to promote the use of biodiesel,
environmental issues, land use, air emissions, water use, zoning, workplace
safety, restrictions imposed on the biodiesel and specialty chemicals industry
such as restrictions on production, substantial changes in product quality
standards, restrictions on feedstock supply, price controls and export controls.
Any changes in biodiesel and specialty chemicals, financial incentives,
investment regulations, policies or a shift in political attitudes are beyond
our control and may adversely affect our business and future financial
results.
 
 Our
business will suffer if we cannot obtain or maintain necessary permits or
licenses.
  Our
operations require licenses, permits and in some cases renewals of these
licenses and permits from various governmental authorities within the People’s
Republic of China. We believe that we either hold or will be able to obtain all
necessary licenses and permits to carry on the activities that we contemplate,
and that we will be able to obtain the licenses and permits necessary for our
future biodiesel and specialty chemical operations. However, our ability to
obtain, sustain, or renew such licenses and permits on acceptable terms are
subject to change, as, among other things, the regulations and policies of
applicable governmental authorities may change. Our inability to obtain, loss
of, or denial of, extension as to any of these licenses or permits may have a
material adverse effect on our operations and financial condition.
  Penalties
we may incur could impair our business.
  Failure
to comply with government regulations could subject us to civil and criminal
penalties, require us to forfeit property rights and may affect the value of our
assets. We may also be required to take corrective actions, including, but not
limited to, installing additional equipment, which could require us to make
substantial capital expenditures. We could also be required to indemnify our
employees in connection with any expenses or liabilities that they may incur
individually in connection with regulatory action against them. These could
result in a material adverse effect on our prospects, business, financial
condition and our results of operation.
  6
  We
are subject to financial reporting and other requirements for which our
accounting, internal audit and other management systems and resources may not be
adequately prepared.
  We are
subject to reporting and other obligations under the Securities Exchange Act of
1934, as amended (the “Exchange Act”). Under these rules, among other things, we
must evaluate the effectiveness of our internal controls over financial
reporting. These reporting and other obligations place significant demands on
our management, administrative, operational, internal audit and accounting
resources. We anticipate that as our business grows we will need to upgrade our
systems; implement additional financial and management controls, reporting
systems and procedures; implement an internal audit function; and hire
additional accounting, internal audit and finance staff. If we are unable to
accomplish these objectives in a timely and effective fashion, our ability to
comply with our financial reporting requirements and other rules that apply to
reporting companies could be impaired. Any failure to maintain effective
internal controls could have a material adverse effect on our business,
operating results and stock price.
  Our
operations are susceptible to interruption from natural disasters.
  Our
operations are located in Fujian Province of the People’s Republic of China.
Historically, this region has suffered damage from typhoons or other natural
disasters. Should any of these natural events occur, it would likely slow down
development of our new production facility and construction plans, thus
adversely impacting current operations and future growth plans.
 
 7
  Risks
Related to Doing Business in the People’s Republic of China
  We
face the risk that changes in the policies of the government of the People’s
Republic of China could have a significant impact upon our business and
profitability.
  The
economy of the People’s Republic of China is in a transition from a planned
economy to a market oriented economy subject to five-year and annual plans
adopted by the government that set national economic development goals. Policies
of the People’s Republic of China can have significant effects on the economic
conditions of the People’s Republic of China. The government of the People’s
Republic of China has confirmed that economic development will follow the model
of a market economy. Under this direction, we believe that the People’s Republic
of China will continue to strengthen its economic and trading relationships with
foreign countries and business development in the People’s Republic of China
will follow market forces. While we believe that this trend will continue, there
can be no assurance that this will be the case. A change in policies by the
government of the People’s Republic of China could adversely affect our
interests by, among other factors:
  ·
              changes
      in laws,·
              imposition
      of new regulations or the interpretations of such
    regulations,·
              confiscatory
      taxation,·
              restrictions
      on currency conversion, imports or sources of supplies,
  or·
              the
      expropriation or nationalization of private
  enterprises.
  Although
the government of the People’s Republic of China has been pursuing economic
reform policies for more than two decades, there is no assurance that the
government will continue to pursue such policies or that such policies may not
be significantly altered, especially in the event of a change in leadership,
social or political disruption, or other circumstances affecting political,
economic and social life in the People’s Republic of China.
  The
laws and regulations of the People’s Republic of China governing our current
business operations are sometimes vague and uncertain. Any changes in these laws
and regulations may have a material and adverse effect on our
business.
  There are
substantial uncertainties regarding the interpretation and application of laws
and regulations of the People’s Republic of China, including but not limited to,
the laws and regulations governing our business, or the enforcement and
performance of our arrangements with customers in the event of the imposition of
statutory liens, death, bankruptcy and criminal proceedings. We are considered a
foreign person or foreign funded enterprise under the laws of the People’s
Republic of China, and, as such, we are required to comply with the laws and
regulations of the People’s Republic of China. These laws and regulations are
sometimes vague and may be subject to future changes, and their official
interpretation and enforcement may involve substantial uncertainty. The
effectiveness of newly enacted laws, regulations or amendments may be delayed,
resulting in detrimental reliance by foreign investors. New laws and regulations
that affect existing and proposed future businesses may also be applied
retroactively. We cannot predict what effect the interpretation of existing or
new laws or regulations of the People’s Republic of China may have on our
businesses.
  A
slowdown or other adverse developments in the economy of the People’s Republic
of China may materially and adversely affect our customers, demand for our
products and our business.
  Much of
our operations are conducted in the People’s Republic of China. In the fiscal
year 2009, approximately 56.96% of our revenue was generated from sales in the
People’s Republic of China. Although the economy of the People’s Republic of
China has grown significantly in recent years, we cannot assure investors that
such growth will continue. The renewable energy and specialty chemicals
industries in the People’s Republic of China are relatively new and growing, and
we therefore do not know how sensitive they are to a slowdown in economic growth
or other adverse changes in the economy of the People’s Republic of China. A
slowdown in overall economic growth, an economic downturn or recession or other
adverse economic developments in the People’s Republic of China could materially
reduce the demand for our products and materially and adversely affect our
business.
  8
  Inflation
in the People’s Republic of China could negatively affect our profitability and
growth.
  While the
People’s Republic of China economy has experienced rapid growth, such growth has
been uneven among various sectors of the economy and in different geographical
areas of the country. Rapid economic growth can lead to growth in the money
supply and rising inflation. If prices for our products rise at a rate that is
insufficient to compensate for the rise in the costs of supplies, it may have an
adverse effect on profitability. In order to control inflation in the past, the
People’s Republic of China has imposed controls on bank credits, limits on loans
for fixed assets and restrictions on state bank lending. Such an austere policy
can lead to a slowing of economic growth. On October 28, 2004, the People’s
Bank of China, the People’s Republic of China’s central bank, raised interest
rates for the first time in nearly a decade and indicated in a statement that
the measure was prompted by inflationary concerns. Repeated rises in interest
rates by the central bank would likely slow economic activity in the People’s
Republic of China, which could, in turn, materially increase our costs and also
reduce demand for our products.
  Governmental
control of currency conversion may affect the value of an investment in
us.
  The
government of the People’s Republic of China imposes controls on the
convertibility of Renminbi into foreign currencies and, in certain cases, the
remittance of currency out of the People’s Republic of China. In 2009,
approximately  56.96% of our revenues was received in Renminbi, which
is currently not a freely convertible currency. Shortages in the availability of
foreign currency may restrict our ability to remit sufficient foreign currency
to pay dividends, or otherwise satisfy foreign currency dominated obligations.
Under existing People’s Republic of China foreign exchange regulations, payments
of current account items, including profit distributions, interest payments and
expenditures from the transaction, can be made in foreign currencies without
prior approval from the People’s Republic of China State Administration of
Foreign Exchange by complying with certain procedural requirements. However,
approval from appropriate governmental authorities is required whenever Renminbi
is to be converted into foreign currency and remitted out of the People’s
Republic of China to pay capital expenses, such as the repayment of bank loans
denominated in foreign currencies.
  The
People’s Republic of China may also at its discretion restrict access in the
future to foreign currencies for current account transactions. If the foreign
exchange control system prevents us from obtaining sufficient foreign currency
to satisfy our currency demands, we may not be able to pay certain of our
expenses as they come due.
  The
fluctuation of the Renminbi may materially and adversely affect investments in
us.
  The value
of the Renminbi against the U.S. dollar and other currencies may fluctuate and
is affected by, among other things, changes in the political and economic
climate of the People’s Republic of China. As part of our business relies on
revenues earned in the People’s Republic of China, any significant revaluation
of the Renminbi may materially and adversely affect our cash flows, revenues and
financial condition. For example, to the extent that we need to convert U.S.
dollars we receive from an offering of our securities into Renminbi for our
operations, appreciation of the Renminbi against the U.S. dollar could have a
material adverse effect on our business, financial condition and results of
operations. Conversely, if we decide to convert our Renminbi into U.S. dollars
for the purpose of making payments for dividends on our common stock or for
other business purposes and the U.S. dollar appreciates against the Renminbi,
the U.S. dollar equivalent of the Renminbi that we convert would be reduced. In
addition, the depreciation of significant U.S. dollar denominated assets could
result in a charge to our income statement and a reduction in the value of these
assets.
  On
July 21, 2005, the People’s Republic of China changed its decade-old policy
of pegging the value of the Renminbi to the U.S. dollar. Under the new policy,
the Renminbi is permitted to fluctuate within a narrow and managed band against
a basket of certain foreign currencies. This change in policy has resulted in
approximately no appreciation of the Renminbi against the U.S. dollar as of
December 31, 2009. While the international reaction to the Renminbi
revaluation has generally been positive, pressure remains on the People’s
Republic of China to adopt an even more flexible currency policy, which could
result in a further and more significant appreciation of the Renminbi against
the U.S. dollar.  The Ministry of Commerce has expressed that it would
continue to pursue a course of “stability” with respect to fluctuation of the
Renminbi in 2010.
  9
  Recent
People’s Republic of China State Administration of Foreign Exchange (“SAFE”)
Regulations regarding offshore financing activities by residents of the People’s
Republic of China have undergone a number of changes that may increase the
administrative burden we face. The failure by our stockholders who are residents
of the People’s Republic of China to make any required applications and filings
pursuant to such regulations may prevent us from being able to distribute
profits and could expose us and our People’s Republic of China resident
stockholders to liability under the laws of the People’s Republic of
China.
  SAFE
issued a public notice (the “October Notice”) effective November 1,
2005 that requires registration with SAFE by the People’s Republic of China
resident stockholders of any foreign holding company of a People’s Republic of
China entity. Without registration, the People’s Republic of China entity cannot
remit any of its profits out of the People’s Republic of China as dividends or
otherwise. However, it is uncertain how the October Notice will be
interpreted or implemented regarding specific documentation requirements for a
foreign holding company formed prior to the effective date of the
October Notice, such as in our case. While our local counsel has advised us
that only the People’s Republic of China resident stockholders who receive the
ownership of the foreign holding company in exchange for ownership in the
People’s Republic of China operating company are subject to the
October Notice, there can be no assurance that SAFE will not require our
other People’s Republic of China resident stockholders to make disclosure. In
addition, the October Notice requires that any monies remitted to residents
of the People’s Republic of China outside of the People’s Republic of China be
returned within 180 days. However, there is no indication of what the penalty
will be for failure to comply or if stockholder non-compliance will be
considered to be a violation of the October Notice by us or otherwise
affect us.
  In the
event that the proper procedures are not followed under the SAFE
October Notice, we could lose the ability to remit monies outside of the
People’s Republic of China and would therefore be unable to pay dividends or
make other distributions. Our People’s Republic of China resident stockholders
could be subject to fines, other sanctions and even criminal liabilities under
the People’s Republic of China Foreign Exchange Administrative Regulations
promulgated January 29, 1996, as amended.
  Our
current tax status is uncertain, exposing us to potential
liability.
  Pursuant
to the relevant laws and regulations in the People’s Republic of China, Fujian
Zhongde Technology Co., Ltd., as a wholly-owned foreign enterprise (“WOFE”) in
the People’s Republic of China, is entitled to 50% relief from the People’s
Republic of China enterprise income tax in each of 2008, 2009 and 2010. However,
since our new subsidiary, Fujian Zhongde Energy Co., Ltd., is a newly registered
WOFE, it is subject to the regular corporate income tax rate of
25%.
  Further,
there can be no assurance that the central government will not audit our
previous tax returns and payments and require that we pay additional taxes and
penalties in the future that could materially and adversely affect our business
and financial condition.
  Any
recurrence of severe acute respiratory syndrome, or SARS, or another widespread
public health problem, could adversely affect our operations.
  A renewed
outbreak of SARS or another widespread public health problem in the People’s
Republic of China, where much of our revenue is derived, could have an adverse
effect on our operations. Our operations may be impacted by a number of
health-related factors, including quarantines or closures of some of our offices
that would adversely disrupt our operations. Any of the foregoing events or
other unforeseen consequences of public health problems could adversely affect
our operations.
  Because
our principal assets are located outside of the U.S. and all of our directors
and officers, except for William Chen, reside outside of the U.S., it may be
difficult for investors to enforce their rights based on U.S. federal securities
laws against us and our officers and directors in the U.S. or to enforce a U.S.
court judgment against us or them in the People’s Republic of
China.
  All of
our directors and officers, except for William Chen, reside outside of the U.S.
In addition, Fujian Zhongde Technology Co., Ltd. and Fujian Zhongde Energy Co.,
Ltd., our operating subsidiaries, are located in the People’s Republic of China
and substantially all of their assets are located outside of the U.S. It may
therefore be difficult or impossible for investors in the U.S. to enforce their
legal rights based on the civil liability provisions of the U.S. federal
securities laws against us in the courts of either the U.S. or the People’s
Republic of China and, even if civil judgments are obtained in U.S. courts, to
enforce such judgments in the People’s Republic of China courts. Further, it is
unclear if extradition treaties now in effect between the U.S. and the People’s
Republic of China would permit effective enforcement against us or our officers
and directors of criminal penalties, under the U.S. federal securities laws or
otherwise.
  10
  We
may have difficulty establishing adequate management, legal and financial
controls in the People’s Republic of China.
  The
People’s Republic of China historically has not adopted a western style of
management and financial reporting concepts and practices, as well as in modern
banking, computer and other control systems. We may have difficulty in hiring
and retaining a sufficient number of qualified employees to work in the People’s
Republic of China. As a result of these factors, we may experience difficulty in
establishing management, legal and financial controls, collecting financial data
and preparing financial statements, books of account and corporate records and
instituting business practices that meet western standards.
  Risks
Relating to Our Organization
  Our
executive officers beneficially own a substantial percentage of our
outstanding common stock, which gives them significant influence over certain
major decisions on which our stockholders may vote, which may discourage an
acquisition of us.
  Tai-ming
Ou, our Chief Executive Officer, beneficially owns, in the aggregate,
approximately 23.62% of our outstanding common stock and our directors and
executive officers as a group collectively own approximately 26.31% of our
outstanding shares. The interests of management may differ from the interests of
other stockholders. As a result, our executive management will have the right
and ability to exert significant influence over all corporate actions requiring
stockholder approval, irrespective of how our other stockholders may vote,
including the following actions:
  ·
              electing
      or defeating the election of directors;·
              amending
      or preventing amendment of our Certificate of Incorporation or
      By-laws;·
              effecting
      or preventing a merger, sale of assets or other corporate transaction;
      and·
              the
      outcome of any other matter submitted to the stockholders for
      vote.
  Our
management’s stock ownership may discourage a potential acquirer from seeking to
acquire shares of our common stock or otherwise attempting to obtain control of
us, which in turn could reduce our stock price or prevent our stockholders from
realizing a premium over our stock price.
  Because
we became public by means of a reverse merger, we may not be able to attract the
attention of major brokerage firms.
  There may
be risks associated with us becoming public through a reverse merger.
Specifically, securities analysts of major brokerage firms may not provide
coverage of us because there is no incentive to brokerage firms to recommend the
purchase of our common stock. No assurance can be given that brokerage firms
will, in the future, want to conduct any secondary offerings on our
behalf.
  Risks
Relating to Our Common Stock
  Our
stock price may be volatile, so investors could lose their
investment.
  The
market price of our common stock is likely to be highly volatile and could
fluctuate widely in price in response to various factors, many of which are
beyond our control, including the following:
  11
  ·
              technological
      innovations or new products and services by us or our
      competitors;·
              additions
      or departures of key personnel;·
              limited
      “public float” in the hands of a small number of persons whose sales or
      lack of sales could result in positive or negative pricing pressure on the
      market price for the common stock;·
              sales
      of the common stock;·
              our
      ability to execute our business plan;·
              operating
      results that fall below expectations;·
              industry
      developments;·
              economic
      and other external factors; and·
              period-to-period
      fluctuations in our financial
results.
  In
addition, the securities markets have from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies. These market fluctuations may also materially and
adversely affect the market price of our common stock.
  There
may be a limited market for our securities and we may fail to qualify for a
listing on a national securities exchange such as the NASDAQ Stock Market or the
NYSE Amex Equities.
  Although
we plan on applying for listing of our common stock on a national stock exchange
such as the NASDAQ Stock Market or the NYSE Amex Equities once we meet the
qualifications, there can be no assurance that our initial listing application
will be granted, when the required listing criteria will be met or when, or if,
our application will be granted. Thereafter, there can be no assurance that
trading of our common stock on such a market will be sustained or desirable. In
the event that our common stock fails to qualify for initial or continued
inclusion, our common stock could thereafter only be quoted on the OTC Bulletin
Board or in what are commonly referred to as the “pink sheets.” Under such
circumstances, a stockholder may find it more difficult to dispose of, or to
obtain accurate quotations, for our common stock, and our common stock would
become substantially less attractive to certain purchasers, such as financial
institutions, hedge funds, and large investors.
  Furthermore,
for companies whose securities are quoted on the OTC Bulletin Board, it is more
difficult to obtain coverage for significant news events because major wire
services generally do not publish press releases about such companies, and to
obtain needed capital.
  Provisions
of our Certificate of Incorporation and Delaware law could deter a change of
control, which could discourage or delay offers to acquire us.
  Provisions
of our Certificate of Incorporation and Delaware law may make it more difficult
for someone to acquire control of us or for our stockholders to remove existing
management, and might discourage a third party from offering to acquire us, even
if a change in control or in management would be beneficial to stockholders. For
example, our Certificate of Incorporation allows us to issue shares of preferred
stock without any vote or further action by stockholders.
  Our
Certificate of Incorporation authorizes the board to create new series of
preferred stock without further approval by stockholders, which could adversely
affect the rights of the holders of common stock.
  Pursuant
to our Certificate of Incorporation, our Board of Directors has the authority to
fix and determine the relative rights and preferences of our preferred stock.
The Board of Directors also has the authority to issue preferred stock without
further stockholder approval. As a result, the Board of Directors could
authorize the issuance of a series of preferred stock that grants holders a
liquidation preference, the right to receive dividend payments before dividends
are distributed to the holders of common stock and the right to have their
shares redeemed by us, together with a premium, prior to the any redemption of
our common stock. In addition, our Board of Directors could authorize the
issuance of a series of preferred stock that has greater voting power than the
common stock or that is convertible into common stock, which could decrease the
relative voting power of our common stock or result in dilution to our existing
stockholders.
  12
  Volatility
in our common stock price may subject us to securities litigation.
  The
market for our common stock is characterized by significant price volatility
when compared to seasoned issuers. We expect that our share price will continue
to be more volatile than a seasoned issuer for the indefinite future. In the
past, plaintiffs have often initiated securities class action litigation against
a company following periods of volatility in the market price of its securities.
We may, in the future, be the target of similar litigation. Securities
litigation could result in substantial costs and liabilities and could divert
management’s attention and resources.
  The
elimination of monetary liability against our directors under Delaware law and
the existence of indemnification rights to our directors may result in
substantial expenditures by us and may discourage lawsuits against our
directors.
  Our
Certificate of Incorporation provides that, to the fullest extent that the
General Corporation Law of the State of Delaware permits, none of our directors
shall be personally liable to either us or our stockholders for any breach in
his or her fiduciary duties as a director. This provision creates an
indemnification obligation by us that could ultimately cause us to incur
substantial expenditures to cover the cost of settlement or damage awards
against our directors. This provision and resultant costs may also discourage us
from bringing a lawsuit against directors for breaches of their fiduciary duties
and may similarly discourage the filing of derivative litigation by our
stockholders against our directors even though such actions, if successful,
might otherwise benefit us and our stockholders.
  13
  SIGNATURES
  In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
  Dated:
April 14, 2010
  CHINA
      CLEAN ENERGY INC./s/
      Tai-ming
      OuTai-ming
      OuPresident
      and Chief Executive Officer andChairman
      of the Board of Directors(Principal
      Executive Officer)
  14
  Index
to Exhibits
 
 Exhibit
      No.
              
              Description3.1
              
              Composite
      Certificate of Incorporation of China Clean Energy Inc. (incorporated by
      reference to Exhibit 3.1 to the Registration Statement on
      Form SB-2 of China Clean Energy Inc. filed with the Securities and
      Exchange Commission on February 1, 2008)3.2
              
              Bylaws
      of China Clean Energy Inc. (incorporated by reference to Exhibit 3.3
      to the Current Report on Form 8-K of China Clean Energy Inc. filed
      with the Securities and Exchange Commission on October 30,
      2006)10.1
              
              Amended
      and Restated Consulting Agreement, dated January 18, 2007, between
      Fujian Zhongde Technology Co., Ltd. and Allstar Capital Inc. (incorporated
      by reference to Exhibit 10.6 to the Registration Statement on
      Form SB-2 filed with the Securities and Exchange Commission on
      January 22, 2007)10.2
              
              Engagement
      Letter, dated September 19, 2006 between China Clean Energy
      Resources, Ltd. and Westminster Securities Corporation (incorporated by
      reference to Exhibit 10.7 to the Registration Statement on
      Form SB-2 filed with the Securities and Exchange Commission on
      January 22, 2007)10.3
              
              Land
      Investment Agreement, dated December 25, 2006 between Fujian Zhongde
      Technology Co., Ltd and Fuzhou City Jiangyin Industry District Management
      Committee (incorporated by reference to Exhibit 10.11 to the
      Registration Statement on Form SB-2 filed with the Securities and
      Exchange Commission on January 22, 2007)10.4
              
              Supplier
      Agreement, dated March 5, 2007 between China Clean Energy Inc. and
      Fujian Quanzhou Zhong Yuan Long Chemistry Industry Co., Ltd. (incorporated
      by reference to Exhibit 10.13 of Amendment No. 2 to the Registration
      Statement on form SB-2 of China Clean Energy Inc. filed with the
      Securities and Exchange Commission on May 25,
2007)10.5
              
              Supplier
      Agreement, dated March 5, 2007 between China Clean Energy, Inc. and
      Xinjiang Guansheng Technology Chemistry Co., Ltd. (incorporated by
      reference to Exhibit 10.15 to Amendment No. 2 to the Registration
      Statement on form SB-2 of China Clean Energy Inc. filed with the
      Securities and Exchange Commission on May 25,
2007)10.6
              
              Supplier
      Agreement, dated March 6, 2007 between China Clean Energy, Inc. and
      Meiweike (Shaxian) Linchan Chemistry Co., Ltd. (incorporated by reference
      to Exhibit 10.14 to Amendment No. 2 to the Registration Statement on
      form SB-2 of China Clean Energy Inc. filed with the Securities and
      Exchange Commission on May 25, 2007)10.7
              
              Form of
      Securities Purchase Agreement, dated January 9, 2008 (incorporated by
      reference to Exhibit 10.1 to the Current Report on Form 8-K of
      China Clean Energy Inc. filed with the Securities and Exchange Commission
      on January 10, 2008).10.8
              
              Form of
      Registration Rights Agreement, dated January 9, 2008 (incorporated by
      reference to Exhibit 10.2 to the Current Report on Form 8-K of
      China Clean Energy Inc. filed with the Securities and Exchange Commission
      on January 10, 2008)10.9
              
              Form of
      Class A Common Stock Purchase Warrant (incorporated by reference to
      Exhibit 10.3 to the Current Report on Form 8-K of China Clean
      Energy Inc. filed with the Securities and Exchange Commission on
      January 10, 2008)
 
 10.10
              
              Form of
      Lock-up Letter Agreement (incorporated by reference to Exhibit 10.4
      to the Current Report on Form 8-K of China Clean Energy Inc. filed
      with the Securities and Exchange Commission on January 10,
      2008)
  15
  Exhibit
      No.
              
              Description10.11
              
              2008
      Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to
      the Current Report on Form 8-K of China Clean Energy Inc. filed with
      the Securities and Exchange Commission on January 10,
      2008)10.12
              
              Form of
      2008 Incentive Stock Option Agreement (incorporated by reference to
      Exhibit 10.6 to the Current Report on Form 8-K of China Clean
      Energy Inc. filed with the Securities and Exchange Commission on
      January 10, 2008)10.13
              
              Form of
      2008 Non-Qualified Stock Option Agreement (incorporated by reference to
      Exhibit 10.7 to the Current Report on Form 8-K of China Clean
      Energy Inc. filed with the Securities and Exchange Commission on
      January 10, 2008)10.14
              
              Employment
      Agreement, dated January 9, 2008 between China Clean Energy Inc. and
      Tai-ming Ou (incorporated by reference to Exhibit 10.8 to the Current
      Report on Form 8-K of China Clean Energy Inc. filed with the
      Securities and Exchange Commission on January 10,
    2008)10.15
              
              Employment
      Agreement, dated January 9, 2008, between China Clean Energy Inc. and
      Ri-wen Xue (incorporated by reference to Exhibit 10.10 to the Current
      Report on Form 8-K of China Clean Energy Inc. filed with the
      Securities and Exchange Commission on January 10,
    2008)10.16
              
              Employment
      Agreement, dated January 9, 2008, between China Clean Energy Inc. and
      Yun He (incorporated by reference to Exhibit 10.11 to the Current
      Report on Form 8-K of China Clean Energy Inc. filed with the
      Securities and Exchange Commission on January 10,
    2008)10.17
              
              Loan
      Agreement, dated April 14, 2009 between Fujian Zhongde Technology Co.,
      Ltd. and Fuzhou City Commercial Bank Co., Ltd., Longtian Branch
      (incorporated by reference to Exhibit 10.13 to Post-Effective
      Amendment No. 1 to the Registration Statement on Form S-1 of China Clean
      Energy Inc. filed with the Securities and Exchange Commission on
      May 1, 2009)10.18
              
              Bank
      Draft and Acceptance Limit Agreement, dated April 14, 2009 between Fujian
      Zhongde Technology Co., Ltd. and Fuzhou City Commercial Bank Co., Ltd.,
      Longtian Branch  (incorporated by reference to Exhibit 10.14 to
      Post-Effective Amendment No. 1 to the Registration Statement on Form S-1
      of China Clean Energy Inc. filed with the Securities and Exchange
      Commission on May 1, 2009)10.19
              
              Loan
      Agreement, dated February 24, 2010 between Fujian Zhongde Energy Co., Ltd.
      and Fujian Haixia Bank Co., Ltd. Longtian Branch (incorporated by
      reference to Exhibit 10.1 to the Current Report on Form 8-K of China
      Clean Energy Inc. filed with the Securities and Exchange Commission on
      March 12, 2010)14.1
              
              Code
      of Ethics (incorporated by reference to Exhibit 14.1 to the Annual
      Report on Form 10-KSB of China Clean Energy Inc. filed with the
      Securities and Exchange Commission on March 11,
  2008)21.1
              
              List
      of Subsidiaries (incorporated by reference to Exhibit 21.1 to the
      Registration Statement on Form SB-2 of China Clean Energy Inc. filed
      with the Securities and Exchange Commission on February 1,
      2008)31.1**
              
              Section 302
      Certification of Principal Executive Officer31.2**
              
              Section 302
      Certification of Principal Financial Officer32.1*
              
              Section 906
      Certification of Principal Executive Officer32.2*
              
              Section 906
      Certification of Principal Financial
Officer
 ______________
 *               Previously
filed as an exhibit to the original Annual Report on Form 10-K of China Clean
Energy Inc. filed with the Securities and Exchange Commission on March 31,
2010.
 
 **             Filed
herewith.
   16