U. S. Securities and Exchange Commission Washington, D. C. 20549  FORM 10-Q  [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2008  [   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____  Commission File No. 0-25707  SMOOTH GLOBAL (CHINA) HOLDINGS, INC.(Name of Small Business Issuer in its Charter)Nevada91-1948355(State of Other Jurisdiction of
incorporation or organization)(I.R.S.  Employer
Identification No.)  Room 618, +17 Anyuan Road, Chaoyang District, Beijing, P.R.  China    100029 (Address of Principal Executive Offices)86-10-6498-7788(Issuers Telephone Number)  Indicate  by check mark  whether the  Registrant  (1) has filed all reports required to be filed by Sections 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check One) Large accelerated filer _ Accelerated filer _ Non-accelerated filer _ Small reporting company X  Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [    ]   No [X]  APPLICABLE ONLY TO CORPORATE ISSUERS:  Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date: August 18, 2008 Common Stock: 38,381,375 shares    1     SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIESF/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSJune 30,December 31,20082007(unaudited)ASSETSCurrent Assets:Cash and cash equivalents$54,034$521,016Accounts receivable, net (Note 5)95,374209,948Prepaid expense (Note 6)700,122370,632Purchased calling card-403Total current assets849,5301,101,999Property, Plant, and Equipment, net (Note 7)250,657281,482Investment in Joint Venture106,835-Contract Security Deposit (Note 8)88,76883,400Total Assets$1,295,790$1,466,881LIABILITIES AND STOCKHOLDERS' EQUITYCurrent Liabilities:Accrued expenses (Note 9)23,17659,548Taxes payable92399Deferred revenue7,7511,079Due to officers (Note 10)3,492-Total Current Liabilities34,51161,026Commitments and Contingencies (Note 14)--Stockholders' Equity:Common stock, $0.001 par value,200,000,000 shares authorized;38,381,375 shares issued and outstandingas of June 30, 2008 and December 31, 200738,38138,381Additional paid-in capital799,255799,255Unamortized contractual services costs(75,533)(261,213)Statutory reserves236,875236,875Retained earnings86,303501,476Accumulated other comprehensive income175,99891,081Stockholders' Equity1,261,2791,405,855Total Liabilities and Stockholders' Equity$1,295,790$1,466,881   2      SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIESF/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOMEFor the Three Months EndedFor the Six Months EndedJune 30,June 30,2008200720082007(unaudited)(unaudited)(unaudited)(unaudited)Revenues(a) QTC VoIP call time       distribution$1,166$-$4,143$-(b) GRT public telephone       service2,38925,4327,53345,287(c) GRT network solution-9,847-22,329(d) GRT VoIP call time      distribution10,886-99,836-(e) GRT sales of call       forwarding cards11,607208,15412,669305,655(f)  Franchise Fees-GRT-85,382-85,382Total Revenue26,048328,815124,181458,653Costs of Revenue(a) QTC VoIP call time       distribution6,750-15,007-(b) GRT public telephone       service5,04633,22013,43276,656(c) GRT network solution----(d) GRT VoIP call time       distribution10,756-84,834-(e) GRT sales of call       forwarding cards5,37195,3686,947140,298(f)  Franchise Fees-GRT----Total Costs of Revenue27,923128,588120,220216,954Gross Profit(1,875)200,2273,961241,699QTC Supplemental Income (Note 13)36,761-36,761-Operating ExpensesCompensation to CEO--44,538-Payroll and employee benefit11,9004,76824,8958,365Depreciation expenses21,2713,54940,5976,975Office expenses7,6855,25014,6387,519Repair and maintenance64,3975246,104Professional fees26,071-30,071-Consultant fees111,085-259,967-Travel and entertainment19,2542,41139,90811,979Other general and       administrative expenses1,2652,8401,0383,385Total Operating Expenses198,53723,215456,17644,327Income (Loss) from Operation(163,651)177,012(415,454)197,372Other IncomeInterest income844928174Commission on sales of art----Total other income844928174Income (Loss) before provisionfor Income Tax(163,567)177,061(415,173)197,446Provision for Income Tax----Net Income(163,567)177,061(415,173)197,446   3     Other Comprehensive Income (Loss)Effects of Foreign Currency Conversion22,8855,93184,9187,012Comprehensive Income (Loss)$(140,682)$182,992$(330,255)$204,458Basic and fully diluted earnings (loss) per share$(0.00)$0.01$(0.01)$0.01Weighted average shares outstanding38,381,37533,000,00038,381,37533,000,000    4     SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIESF/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFor the Six Months EndedJune 30,20082007(unaudited)(unaudited)Operating ActivitiesNet income (loss)$(415,173)$197,446Adjustments to reconcile net income (loss) tonet cash provided (used) by operating activities:Depreciation40,5976,975Deferred consultant compensation185,680-Changes in operating assets and liabilities:(Increase)/Decrease in accounts receivable116,964(11,297)(Increase)/Decrease in purchased SIM cards403(100,724)(Increase)/Decrease in prepaid expenses(329,490)(50,828)(Increase)/Decrease in contract security deposit-(78,720)Increase/(Decrease) in accounts payable and accrued expenses(35,271)(34,104)Increase/(Decrease) in deferred revenue6,672-Increase/(Decrease) in taxes payable(307)-Net cash provided (used) by operating activities(429,925)(71,252)Investing ActivitiesInvestment in subsidiary(106,835)-Purchase of fixed assets(5,082)(8,707)Net cash (used) by investing activities(111,917)(8,707)Financing ActivitiesProceeds from capital contribution-96,717Loans from shareholders-2,620Net cash provided (used) by financing activities-99,337Increase (decrease) in cash(541,842)19,378Effects of exchange rates on cash74,8607,428Cash at beginning of the period521,01642,985Cash at end of the period$54,034$69,791Supplemental Disclosures of Cash Flow Information:Cash paid (received) during year for:Interest$-$-Income taxes$-$-     5  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Note 1-BASIS OF PRESENTATION The consolidated financial statements of Smooth Global (China) Holdings, Inc. and subsidiaries (the "Company"), included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission.  Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the financial statements and notes thereto included in the audited financial statements of the Company as included in the Company's Form 10-KSB for the year ended December 31, 2007.  Note 2-ORGANIZATION AND OPERATIONS  Organization and Business Background The Bralorne Mining Company ("Bralorne") was incorporated under the laws of the State of Nevada on December 2, 1998 with authorized common stock of 200,000,000 shares at $0.001 par value.  Currently, the Company principally engages in the business to provide telecommunication services in the People's Republic of China ("PRC'), through its wholly-owned subsidiaries, Gold Profit (Asia) Group Limited ("Gold Profit") and Smooth Global Services Limited ("Smooth Global").  On July 31, 2007, Bralorne changes its name to Smooth Global (China) Holdings, Inc. ("Smooth Global (China)" or the "Company"). On November 2, 2006, Bralorne entered into a Share Exchange Agreement (the Agreement") with the sole shareholder of Gold Profit to exchange 1,333,334 shares (40,000,000 shares prior to reverse stock split on July 31, 2007) of common stock of Bralorne for 100% of the outstanding stock of Gold Profit.  Upon the execution of the Agreement, Gold Profit became a wholly-owned subsidiary of Bralorne. Gold Profit was incorporated as a limited liability company in the British Virgin Islands (BVI) under the BVI Business Companies Act on July 28, 2006, for the purpose of seeking and consummating a merger or acquisition with a business entity organized as a private corporation, partnership, or sole proprietorship as defined by Statement of Financial Accounting Standards (SFAS) No. 7 Accounting and Reporting by Development Stage Enterprises. On September 8, 2006, Gold Profit entered into a Share Purchase Agreement with all the shareholders of Beijing Quan Tong Chang Information Service Limited a/k/a Beijing Smooth Global Information Services Ltd. (QTC') to acquire 100% of QTC's registered capital for RMB500,000 (equivalent to US$60,386).  Upon completion of this transaction, QTC became a wholly-owned subsidiary of Gold Profit. Under the Company Law of PRC, QTC was incorporated in Beijing City, PRC on August 2, 2003 with a registered capital of RMB500,000 (equivalent to US$60,386).  QTC is engaged in the business of providing telecommunication services in PRC.   6  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Note 2-ORGANIZATION AND OPERATIONS (continued)  Organization and Business Background (continued) On October 24, 2007 Smooth Global (China) completed the acquisition of all the registered capital stock of Smooth Global.  In exchange for the capital stock of Smooth Global, Smooth Global (China) issued 33,000,000 shares of its common stock to the prior owners of Smooth Global.  The prior registered owners were Christina Nelson and Shannon Lee Alsop.  They held the shares, however, as nominees for nine residents of PRC.  Accordingly, upon closing of the acquisition, Ms. Nelson and Ms. Alsop assigned the 33,000,000 shares to those nine beneficiaries.  20,000,000 of the shares were assigned to Ms. Zheng Shuying.  Ms. Zheng is the Chief Executive Officer of Smooth Global (China).  Also, Smooth Global became a wholly-owned subsidiary of Smooth Global (China) upon completion of the acquisition. Smooth Global was incorporated on January 25, 2006 in the British Virgin Island ("BVI") under the BVI Business Companies Act, 2004, as a BVI Business Company.  The Company was formed for the purpose of seeking and consummating a merger or acquisition with a business entity organized as a private corporation, partnership, or sole proprietorship as defined by Statement of Financial Accounting Standards (SFAS) No. 7. On June 28, 2007, Smooth Global established a wholly owned subsidiary, Smooth Global (Beijing) Telecom Science Limited ("Beijing Telecom") in the Beijing City, PRC.  Beijing Telecom was incorporated under the Company Law of PRC as a limited liability company with registered capital of $100,000.  Beijing Telecom was formed for the purpose of seeking and consummating a merger or acquisition with a business entity organized in PRC and engaged in the business of providing telecommunication services. On September 20, 2007, Ms. Yianfang Jin and Ms. Yianxia Wang (collectively the "Trustees"), both of whom are citizens of PRC and totally own a 100% equity ownership interest in Beijing GRT Information Services Limited ( "GRT" ),  executed Trust and Indemnity Agreements ("Agreements") with Beijing Telecom, pursuant to which the Trustees assigned to Beijing Telecom all of the beneficial interest in the Trustee's equity ownership interest in GRT.  The Agreements provided for effective control of GRT to be transferred to Beijing Telecom at September 20, 2007. Through the Agreements described in the preceding paragraph Beijing Telecom is deemed a 100% beneficiary of GRT resulting in GRT being deemed a subsidiary of Beijing Telecom under the requirements of Financial Interpretation 46 (Revised) "Consolidation of Variable Interest Entities" issued by the Financial Accounting Standards Board ("FASB").   Accordingly, the consolidated financial statements of Smooth Global and its wholly owned subsidiary, Beijing Telecom, will be prepared by including the financial statements of GRT through September 20, 2007 and thereafter.    7  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Note 2-ORGANIZATION AND OPERATIONS (continued)  Organization and Business Background (continued) GRT and QTC are the two of these affiliated companies that are engaged in business operations.  Smooth Global (China), Gold Profit, Smooth Global, and Beijing Telecom are all holding companies, whose business is to hold an equity ownership interest in QTC and a beneficial interest in GRT.   All these affiliated companies are hereafter referred to as the "Company", whose structure is outlined as following:  Smooth Global (China)100% Equity Ownership InterestGold ProfitSmooth Global(BVI Company)(BVI Company)100% Equity Ownership Interest100% Equity Ownership InterestQTCBeijing Telecom(PRC Company)(PRC Company)100% Beneficial InterestGRT(PRC Company)   Reverse Merger Accounting The merger of Smooth Global (China) with Smooth Global results in a capital transaction accounted for as a reverse merger.  The transaction was treated for accounting purposes as a recapitalization of the accounting acquirer (Smooth Global) and a reorganization of the accounting acquiree (Smooth Global (China)). Accordingly, the historical consolidated financial statements presented prior to the merger are the historical consolidated financial statements of Smooth Global, which includes Smooth Global's wholly-owned subsidiary, Beijing Telecom, and its variable interest entity, GRT.  The consolidated financial statements presented post to the merger are the consolidated financial statements of Smooth Global (China) and its subsidiaries and variable interest entity, which include GRT, and QTC from the acquisition date, October 24, 2007.  8  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Note 2-ORGANIZATION AND OPERATIONS (continued)  Business Operation (a) QTC VoIP Call Time Distribution QTC telecommunication services mainly focus on call time distribution.  It provides enterprise phone users and public phone users with access to China Netcom (Shaoxing) Corporation Limited (CNSX) and China Netcom (Guangdong) Corporation Limited (CNGD) network via phones connected to QTC's telecommunication server.  Both CNSX and CNGD are subsidiaries of China Netcom (Group) Company Limited, one of the largest telecommunications carriers in PRC. QTC signed non-exclusive distribution agreement with CNSX and CNGD to distribute their Voice Over Internet Protocol (VoIP) call time in the PRC. (b)  GRT Public Telephone Service GRT provides public phone users with access to China United Telecommunications (Beijing) Corporation Limited (CUBJ) network via paid phones installed in outlets located in universities, convenience shops and street corners.  These outlets are managed but not necessary owned by GRT. CUBJ is a subsidiary of China United Telecommunications Corporation Limited ("CUTC"), one of the largest telecommunications carriers in PRC. GRT signed non-exclusive distribution agreement with CUBJ to distribute its traditional fixed line call time in Beijing City, PRC. (c) GRT Network Solution GRT provides computer networking and telephone solutions to its customers, mainly the commercial buildings located in PRC, including design and implementation of network system, and purchasing and installation of hardware and software. (d) GRT VoIP Call Time Distribution Beginning from January 2008, GRT also provides VoIP service as QTC does.  GRT signed non-exclusive distribution agreement with CNSX and China Netcom (Shanghai) Corporation Limited (CNSH)  to distribute their VoIP call time. (e) GRT International Call Forwarding Service GRT provides China mobile phone users with international call forwarding service, which resembles the function of international roaming services.  GRT provides subscribers with SIM cards of the destination country or region with predefined call forwarding time.  The subscribers forward their mobile phone calls to a specified GRT number and instruct GRT to further forward the calls to a telephone number in their destination country or region.  This enables the mobile phone user to receive local calls for a competitive tariff rate when they are traveling abroad.    9  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Note 3-Control by Principal Stockholders The chief executive officer owns beneficially and in the aggregate, the majority of the voting power of the Company. Accordingly, the chief executive officer has the ability to control the approval of most corporate actions, including approving significant expenses, increasing the authorized capital stock and the dissolution, merger or sale of the Company's assets.  Note 4-SIGNIFICANT ACCOUNTING POLICIES  Basis of Consolidation The consolidated financial statements include the accounts of the Company and all its majority-owned subsidiaries which require consolidation.  Inter-company transactions have been eliminated in consolidation. The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP").  This basis of accounting differs from that used in the statutory accounts of the Company, which are prepared in accordance with the "Accounting Principles of China " ("PRC GAAP").  Certain accounting principles, which are stipulated by US GAAP, are not applicable in the PRC GAAP.  The difference between PRC GAAP accounts of the Company and its US GAAP financial statements is immaterial. Use of Estimates The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. In preparing these financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates. Revenue Recognition The Company recognizes its revenues net of sales taxes and sales-related taxes. In accordance with the SECs Staff Accounting Bulletin No. 104, Revenue Recognition , the Company recognizes revenue when persuasive evidence of an arrangement exists, transfer of title and the risks and rewards of ownership have occurred or services have been rendered and accepted, the selling price is fixed or determinable and collectability is reasonably assured.       10  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Note 4-SIGNIFICANT ACCOUNTING POLICIES (continued)  Revenue Recognition (continued) (a) QTC VoIP Call Time Distribution QTC contracted with CNSX and CNGD for the distribution of their VoIP call time. VoIP call time distribution revenue is generally recognized when the end user makes a call through the phone connected to QTC's telecommunication server. Pursuant to the contracts with CNSX and CNGD, QTC pays tariff to the telecommunication carriers in advance and connects its telecommunication server to the carriers' network.  Then, QTC distributes the VoIP call time to its customers who connect their phones to QTCs server.   The customers also pay tariff to QTC in advance.  Monthly, the telecommunication carriers bill QTC for the VoIP call time that it distributes.  In turn, QTC bills its customers for the VoIP call time which the customers consume, based on the records provided by its own server. (b)  GRT Public Telephone Service GRT sets up outlets through CUBJ's network to provide public telephone service to end users.  GRT buys call time from CUBJ in advance and then distribute to end users via these outlets.  GRT recognizes revenue when the tariff is collected after an end user places a telephone call.  GRT records revenue from outlets after netting outlets' operating expenses since such expenses are instable. Pursuant to the distribution agreement with CUBJ, GRT is entitled to refund a certain percentage of call time cost and the percentage varies based on the volume of call time which GRT distributes monthly.  GRT records these refunds as revenue because GRT has to issue sales invoices to CUBJ for the refunds.  GRT generally received these refunds one month behind. ( c ) GRT Network Solution GRT provides network solution to enterprise customers, including design and implementation of internet and telephone network.  The contracts are accounted for as one unit of accounting as the criteria for separation are not met, and revenue for billed amounts is recognized when customers acceptance is obtained provided that no significant obligations remain. (d) GRT VoIP Call Time Distribution GRT contracted with CNSX and CNSH for the distribution of their VoIP call time. Similar to QTC, GRT VoIP call time distribution revenue is generally recognized when the end user makes a call through the phone connected to GRT's telecommunication server.     11  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Note 4-SIGNIFICANT ACCOUNTING POLICIES (continued)  (e) International Call Forwarding Service GRT purchases a foreign SIM card and then attaches it with a specified phone number, which GRT bought from China Netcom (Shanghai) Corporation Limited (CNSH).   When a mobile phone call is forwarded to that particular phone number, GRT will further forward the call to the related SIM card, via the network of either CNSH or China Netcom (Shaoxing) Corporation Limited ("CNSX").  GRT signed non-exclusive agreements with CNSH and CNSX to forward phone calls via their network. GRT sells SIM cards either directly to end users or via its franchised distributors, who signed non-exclusive Distribution Agreements with GRT to distribute its SIM cards. (1)   When GRT sells SIM cards directly to end users, it recognizes revenue when the SIM cards are expired as indicated in the description printed on the envelop containing the SIM card. (2)   When GRT sells SIM cards to its franchised distributors, it recognizes revenue when the SIM cards are delivered to the distributors and the payments have been received, at which time Management believes the sales transactions have been completed pursuant to the Distribution Agreements. (f) Franchise Fees from Franchised Distributers GRT recognizes revenue from franchise fees and training fees when the Management believes that all material services and conditions applicable to the sale have been substantially performed pursuant to the Distribution Agreements.  The Management believes that substantial performance under FASB 45, Accounting for Franchise Fee Revenue, is indicated by: (1) absence of intent to refund cash received; (2) performance of substantially all initial services; and (3) nonexistence of other material conditions related to performance. Revenue that GRT recognized from franchise fees and training fees was $0 and $85,382 for the six months ended June 30, 2008 and 2007             12  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    Note 4-SIGNIFICANT ACCOUNTING POLICIES (continued)  Cost of Revenue (a) QTC VoIP Call Time Distribution Costs of VoIP call time distribution principally include the costs of VoIP call time purchased from CNSX and CNGD. (b)  GRT Public Telephone Service Costs of public telephone service mainly include costs to buy call time from CUBJ. ( c ) GRT Network Solution Costs of network solution principally include materials and equipment particularly purchased for the projects, and the labor that GRT assigns to the projects.  Because these employees also work on the maintenance function in the day-to-day operation and it is difficult to distinguish their working hours between network projects and maintenance function, and the amount is immaterial, these labor costs are included in the general and administrative expenses. (d) GRT VoIP Call Time Distribution Costs of VoIP call time distribution principally include the costs of VoIP call time purchased from CNSX and CNSH. (e) International Call Forwarding Service Costs of international call forwarding services principally include the costs to purchase SIM cards, the costs of telephone number, and the call forwarding fees charged by the telecommunication carriers. (f) Franchise Fees from Franchised Distributers Costs of franchise fees principally include the costs to prepare the distribution agreements, which amount is immaterial and included in the general and administrative expenses.             13  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Note 4-SIGNIFICANT ACCOUNTING POLICIES (continued)  Cash and Cash Equivalents Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.  Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Managements best estimate of the amount of probable credit losses in the Companys existing accounts receivable. The Company determines the allowance based on historical write-off experience. The Company reviews its allowance for doubtful accounts on a regular basis. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis by industry. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.  If actual collections experience changes, revisions to the allowance may be required.  Concentrations of Credit Risk Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains its cash and cash equivalents with high-quality institutions. While deposits held with banks are not insurance in PRC, these deposits generally may be redeemed upon demand and therefore bear minimal risk.  Fair Value of Financial Instruments The carrying value of the Companys financial instruments, which include cash and cash equivalents, accounts receivables and payables, and amounts due from/to shareholders, approximate fair value due to the short maturities of those instruments.  Impairment of Long-life Assets Long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.  14  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Note 4-SIGNIFICANT ACCOUNTING POLICIES (continued)  Property and Equipment Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any.  Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values: DepreciableResidualLifeValueNetwork and computer equipment5 years4%Office equipment and furniture5 years4%Leasehold Improvements5 years (Lease duration)0%
 Expenditure for maintenance and repairs is expended as incurred.  Investment in Joint Venture The Company executed an agreement with Xinjiang Jinzhonghua Telecommunication Services Co., Inc., pursuant to which each party agrees to invest $106,835 totaling $213,670 (RMB 1,468,304) to establish a joint-venture to sell and manufacture wireless network extension equipment.  The establishment of the join venture is currently undergoing.  Research and Development Costs Research and development costs are expensed when incurred.  Research and development costs were immaterial for the six months ended June 30, 2008 and 2007, respectively.  Advertising Costs The Company expenses advertising costs as incurred in accordance with the American Institute of Certified Public Accountants (AICPA) Statement of Position 93-7, Reporting for Advertising Costs. Advertising expenses were immaterial for the six months ended June 30, 2008 and 2007, respectively.         15  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Note 4-SIGNIFICANT ACCOUNTING POLICIES (continued)  Foreign Currencies Translation The functional currency of the Company is Renminbi (RMB). Transactions denominated in currencies other than RMB are translated into RMB at the exchange rates quoted by the Peoples Bank of China (PBOC) prevailing at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into RMB using the applicable exchange rates quoted by the PBOC at the balance sheet dates. Exchange differences are included in the statements of changes in shareholders' equity.  Gain and losses resulting from foreign currency transactions are included in operations. The Companys financial statements are translated into the reporting currency, the United States Dollar (US$), using exchange rates in effect at each year end for assets and liabilities and average exchange rates during each reporting year for the consolidated statements of operations. Contributed capital accounts are translated using the historical rate of exchange when capital is injected.  Translation adjustments resulting from translation of these consolidated financial statements are reflected as accumulated other comprehensive income in the shareholders equity. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss) in the consolidated statement of changes in shareholders equity and amounted to 175,998  as of June 30, 2008, and $91,081 as of December 31, 2007.  The balance sheet amounts with the exception of equity at June 30, 2008 were translated at 6,87  RMB to $1.00 USD as compared to 7.31 RMB at December 31, 2007. The equity accounts were stated at their historical rate.  The average translation rates applied to income statement accounts for the six months ended June 30, 2008 and 2007 were 7.07 RMB and 7.73 RMB, respectively.  Statement of Cash Flows In accordance with SFAS No. 95, Statement of Cash Flows, cash flows from the Companys operations is calculated based upon the functional currency.  As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet.  Segment Reporting SFAS No. 131 Disclosures about Segments of an Enterprise and Related Information establishes standards for reporting information about operating segments on a basis consistent with the Companys internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. The Company operates in five principal business segments.    16  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Note 4-SIGNIFICANT ACCOUNTING POLICIES (continued)  Related Parties For the purposes of these financial statements, parties are considered to be related to the Company if the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.  Statutory Reserves Pursuant to the applicable laws in PRC, PRC entities are required to make appropriations to three non-distributable reserve funds, the statutory surplus reserve, statutory public welfare fund, and discretionary surplus reserve, based on after-tax net earnings as determined in accordance with the PRC GAAP, after offsetting any prior years losses. Appropriation to the statutory surplus reserve should be at least 10% of the after-tax net earnings until the reserve is equal to 50% of the Company's registered capital.  Appropriation to the statutory public welfare fund is 5% to 10% of the after-tax net earnings.  The statutory public welfare fund is established for the purpose of providing employee facilities and other collective benefits to the employees and is non-distributable other than in liquidation.  No appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The Company makes appropriations to these three reserve funds at the fiscal year end pursuit to PRC GAAP.  Accordingly, the Company made no appropriations for the six months ended June 30, 2008 and 2007, respectively.  Income Taxes The Company accounts for income taxes in interim periods as required by Accounting Principles Board Opinion No. 28 "Interim Financial Reporting" and as interpreted by FASB Interpretation No. 18, "Accounting for Income Taxes in Interim Periods".  The Company has determined an estimated annual effect tax rate.  The rate will be revised, if necessary, as of the end of each successive interim period during the Company's fiscal year to its best current estimate. The estimated annual effective tax rate is applied to the year-to-date ordinary income (or loss) at the end of the interim period.        17  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Note 4-SIGNIFICANT ACCOUNTING POLICIES (continued)  Comprehensive Income Statement of Financial Accounting Standards (SFAS) No. 130, Reporting Comprehensive Income, establishes standards for reporting and display of comprehensive income, its components and accumulated balances.  Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying statement of changes in shareholders' equity consists of changes in unrealized gains and losses on foreign currency translation.  This comprehensive income is not included in the computation of income tax expense or benefit.  Earnings (Loss) Per Share The Company reports earnings per share in accordance with the provisions of SFAS No. 128, Earnings Per Share. SFAS No. 128 requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share.  Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period.  Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.  There are no potentially dilutive securities outstanding (options and warrants) for the six years ended June 30, 2008 and 2007, respectively.  Recent Accounting Pronouncements In June 2008, the Financial Accounting Standards Board (FASB) issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (FSP EITF 03-6-1). FSP EITF 03-6-1 concludes that unvested share-based payment awards that contain rights to receive non-forfeitable dividends or dividend equivalents are participating securities, and thus, should be included in the two-class method of computing earnings per share (EPS). FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008, and interim periods within those years. Early application of EITF 03-6-1 is prohibited. It also requires that all prior-period EPS data be adjusted retrospectively. We have not yet determined the effect, if any, of the adoption of this statement on our financial condition or results of operations. In April 2008, the FASB issued Staff Position FAS 142-3, Determination of the Useful Life of Intangible Assets (FSP FAS 142-3) which amends the factors an entity should consider in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FAS No. 142, Goodwill and Other Intangible Assets (FAS No. 142). FSP FAS 142-3 applies to intangible assets that are acquired individually  18  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Recent Accounting Pronouncements (Continued) or with a group of assets and intangible assets acquired in both business combinations and asset acquisitions. It removes a provision under FAS No. 142, requiring an entity to consider whether a contractual renewal or extension clause can be accomplished without substantial cost or material modifications of the existing terms and conditions associated with the asset. Instead, FSP FAS 142-3 requires that an entity consider its own experience in renewing similar arrangements. An entity would consider market participant assumptions regarding renewal if no such relevant experience exists. FSP FAS 142-3 is effective for year ends beginning after December 15, 2008 with early adoption prohibited. We have not yet determined the effect, if any, of the adoption of this statement on our financial condition or results of operations. In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Hedging Instruments and Hedging Activities  an amendment of FASB Statement No. 133 (SFAS 161). SFAS 161, which is effective January 1, 2009, requires enhanced qualitative and quantitative disclosures with respect to derivatives and hedging activities.  The Management does not expect that the adoption of SFAS No. 161 would have a material effect on the Companys financial position and results of operations. In December 2007, the FASB issued Statements of Financial Accounting Standards No. 141 (revised 2007), Business Combinations (SFAS 141R) and No. 160, Noncontrolling Interests in Consolidated Financial Statements  an amendment to ARB No. 51 (SFAS 160).  Both SFAS 141R and SFAS 160 are to be adopted effective January 1, 2009.  SFAS 141R requires the application of several new or modified accounting concepts that, due to their complexity, could introduce a degree of volatility in periods subsequent to a material business combination.  SFAS 141R requires that all business combinations result in assets and liabilities acquired being recorded at their fair value, with limited exceptions.  Other areas related to business combinations that will require changes from current GAAP include:  contingent consideration, acquisition costs, contingencies, restructuring costs, in process research and development and income taxes, among others.  SFAS 160 will primarily impact the presentation of minority or noncontrolling interests within the Balance Sheet and Statement of Operations as well as the accounting for transactions with noncontrolling interest holders. Management does not expect that the adoption of SFAS No. 141 (revised 2007) and SFAS No. 160 would have a material effect on the Companys financial position and results of operations.         19  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   Note 5-ACCOUNTS RECEIVABLE  Accounts receivable consists of the following: June 30,December 31,20082007(unaudited)GRT-Franchise fees receivable$91,679$204,399Other accounts receivable3,6955,549less: Allowance for bad debt--Accounts  receivable, net$215,323$209,948 The majority of the Companys sales are on open account terms and in accordance with terms specified in the contracts governing the relevant transactions. The Company evaluates the need of an allowance for doubtful accounts based on specifically identified amounts that management believes to be uncollectible. If actual collections experience changes, revisions to the allowance may be required. Based upon the aforementioned criteria, management has determined that no provision for uncollectible accounts is required as of June 30, 2008 and December 31, 2007.  Note 6-PREPAID EXPENSES  Prepaid expenses consists of the following: June 30,December 31,20082007(unaudited)Prepaid travel expenses$-$19,141Advance to telecommunication carriers66,0929,685Advance to purchase SIM cards101,86695,706Advance to purchase equipment301,231246,100Advance to a consultant50,933-Advance to an investor relation Firm180,000-$700,122$370,632   Note 7-PROPERTY AND EQUIPMENT, NET  20  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   The following is a summary of property, plant and equipment-at cost, less accumulated depreciation: June 30,December 31,20082007(unaudited)Network and computer equipment$127,540$119,828Office equipment and furniture101,61190,688Leasehold Improvements323,771304,192552,922514,708Less: Accumulated depreciation(302,265)(233,226)Total$250,657$281,482  Depreciation expense charged to operations was $40,597 and $6,975 for the three months ended March 31, 2008 and 2007, respectively.  Note 8-CONTRACT SECURITY DEPOSIT  Contract security deposit consists of the following: June 30,December 31,20082007(unaudited)Security deposit for GRT'spublic phone distribution contract with CUBJ$1,455$1,367Security deposit for GRT and Beijing Telecom'Trust and Indemnity Agreement with Ms. Yianfang Jin  *87,31382,033$87,108$83,400  *On September 20, 2007, Ms. Yianfang Jin who owns a 98% equity ownership interest in GRT executed a Trust and Indemnity Agreements, pursuant to which Ms. Jin assigned to Beijing Telecom all of the beneficial interest in her equity ownership interest in GRT, as more fully disclosed in Note 1.  21  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    Note 9-ACCRUED EXPENSES  Accrued expenses consists of the following: June 30,December 31,20082007(unaudited)Employee benefit payable *$19,176$16,786Accrued professional fees4,00042,762$23,176$59,548
 Employee benefit payable was mainly carried forward from QTC.  Note 10-RELATED PARTIES TRANSACTIONS  Compensation to Ms. Zheng Shuying, CEO The Company paid $44,538 in cash to Ms. Zheng Shuying, CEO, as compensation for the six months ended June 30, 2008.  The Company did not pay compensation to Ms. Zheng for the six months ended June 30, 2007. GRT Lease GRT rents office premise at the market rate from Mr. Guoqing Xu, President of QTC.  The lease is non-cancelable and will expire in June 2010.  Rent expense amounted to $3,393 and $1,552 for the six months ended June 30, 2008 and 2007, respectively.  As of June 30, 2008, there was an outstanding balance of $3,492 due to Mr. Xu. QTC Lease QTC rents office premise at the market rate from Ms. Shuying Zheng, CEO.  The lease is non-cancelable and will expire in June 2010.  Rent expense amounted to $8,483 for the six months ended June 30, 2008.  Due to officers consists of the following: June 30,December 31,20082007(unaudited)GRT Office rent due to Mr. Guoqing Xu$3,492$-QTC Office rent due to Ms. Shuying Zhen--$3,492$-
  22  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    
   Note 11-SEGMENT REPORTING  QTC Operation QTC operates in one reportable business segment for the six months ended June 30, 2008.  Summarized information follows: For the six months ended June 30, 2008 REVENUEQTC VoIP Call Time Distribution$4,143COST OF SALESQTC VoIP Call Time Distribution$15,007GROSS PROFITSQTC VoIP Call Time Distribution$(10,864)TOTAL ASSETSQTC VoIP Call Time Distribution$243,276 GRT Operation For the six months ended June 30, 2008 and 2007, GRT operates in four reportable business segments that are determined based upon differences in products and services. GRT does not allocate any operating expenses or assets to its four business segments as management does not use this information to measure the performance of the operating segments. Certain costs of revenues are shared between business segments.  Also, no measures of assets by segment are reported and used by the chief operating decision maker. Hence, GRT has not made disclosure of total assets by reportable segments.  Summarized information by business segment for the six months ended June 30, 2008 and 2007 is as follows: For the Six Months EndedJune 30,20082007REVENUEGRT public telephone service$7,533$45,287GRT network solution-22,329GRT VoIP call time distribution99,836-GRT sales of call forwarding cards12,669305,655GRT Franchise fees-85,382  23  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    COST OF SALESGRT public telephone service$13,432$76,656GRT network solution--GRT VoIP call time distribution84,834-GRT sales of call forwarding cards6,947140,298GRT Franchise fees--GROSS PROFITSGRT public telephone service$(5,899)$(31,369)GRT network solution-22,329GRT VoIP call time distribution15,002-GRT sales of call forwarding cards5,722165,357GRT Franchise fees-85,382TOTAL ASSETS OF GRT$821,142$344,733  Note 12-CONCENTRATIONS AND RISKS  (a) Major Suppliers All of QTC's VoIP call time distribution revenue for the six months ended June 30, 2008 is derived from distribution of VoIP call time purchased from CNSX and CNGD.  If the strategic relationship with either CNSX or CNGD is terminated or scaled-back, or if CNSX and CNGD alter the co-operative arrangements, QTCs VoIP call time distribution revenue might be adversely affected. GRT signed non-exclusive agreements with CNSH and CNSX to facilitate the international call forwarding business and to distribute VoIP call time purchased from such carriers.  If the strategic relationship with either CNSH and CNSX is terminated or scaled-back, or if CNSH and CNSX alter the co-operative arrangements, GRTs revenue from international call forwarding service and VoIP call time distribution might be adversely affected. (b) Fluctuation in Revenue from Call Forwarding Service GRT derives revenue from sales of call forwarding cards and relevant franchise fees from franchised distributors.  The market for our call forwarding service is those Chinese residents who travel abroad for business or personal reasons.   The demand for call forwarding cards is not stable, as it is high in busy travel seasons, and low in less busy  24  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   travel seasons.  Accordingly, GRT's revenue from call forwarding service fluctuates time by time.  Note 13-QTC SUPPLEMENTAL INCOME  During 2006 and 2005, QTC entered a non-exclusive distribution contract with China Netcom (Beijing) Corporation Limited (CNBJ) to distribute its traditional fixed line call times.  The tariff was initially collected from end users to CNBJ, who in turn would pay QTC according to the percentage sharing as mentioned in the distribution agreement.  In January 2007, CNBJ notified the Company to terminate the distribution contract.  Based on the review of the implementation of the distribution contract, CNBJ agreed to pay a supplemental payment of $36,761 (RMB 260,000) to QTC.  QTC received this payment in June 2008.   Note 14-COMMITMENTS AND CONTINGENCIES  PRC's political and economic system The Company faces a number of risks and challenges not typically associated with companies in North America and Western Europe, since its assets exist solely in the PRC, and its revenues are derived from its operations therein.  The PRC is a developing country with an early stage market economic system, overshadowed by the state.  Its political and economic systems are very different from the more developed countries and are in a state of change.  The PRC also faces many social, economic and political challenges that may produce major shocks and instabilities and even crises, in both its domestic arena and in its relationships with other countries, including the United States.  Such shocks, instabilities and crises may in turn significantly and negatively affect the Company's performance. Governmental control of currency conversion The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of the PRC. The Company receives all of its revenues in Renminbi, which is currently not a freely convertible currency. Shortages in the availability of foreign currency may restrict the Companys ability to remit sufficient foreign currency to satisfy foreign currency denominated obligations.  Under existing PRC 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 PRC State Administration of Foreign Exchange by complying with certain procedural requirements. However, approval from appropriate governmental authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of bank loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign  25  SMOOTH GLOBAL (CHINA) HOLDINGS, INC. AND SUBSIDIARIES F/K/A THE BRALORNE MINING COMPANY AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS   currencies for current account transactions. If the foreign exchange control system prevents the Company from obtaining sufficient foreign currency to satisfy its currency demands, the Company may not be able to pay certain of its expenses as they come due.   26    ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations On October 24, 2007 we acquired beneficial ownership of Beijing GRT Information Services Limited (Beijing GRT).  Because we issued approximately 86% of our equity in exchange for ownership of Beijing GRT and because the assets of Beijing GRT substantially exceeded our assets before the acquisition, we have classified the acquisition as a reverse merger for accounting purposes.  For that reason, our Consolidated Statements of Operations and Other Comprehensive Income for the three and six month periods ending June 30, 2008 and 2007 include the financial results of Beijing GRT during those two periods, but include the financial results of our other subsidiary, Beijing Quan Tong Chang Information Service Limited (Beijing QTC) only for the first six months of 2008.  Beijing QTC had been primarily involved in the business of operating public payphones, but also generated revenue by marketing internet phone systems.  We chose to replace Beijing QTC as the focus of our operations because we saw that business waning.  As expected, in the first six months of 2008 we realized only $4,143 in revenue from Beijing QTC and only $7,533 from public telephone services.  The primary reasons for the reduction were: Ø The tariffs on mobile phone calls in China have fallen by approximately 80% in the past two years.  As a result, the use of cell phones has increased dramatically, with a concomitant slackening of demand for our payphone services.  When we initiated our business, the average cell phone tariff was five times the tariff on a call from our payphones.  Now the difference is insignificant. Ø In January 2007 China Netcom (Beijing) Corporation Limited cancelled the contract under which we distributed its fixed line call times.  This contract had generated $57,329 in revenue for us in the first nine months of 2006. The acquisition of Beijing GRT returned the Company to profitability in 2007.  During 2007 we recorded $1,922,748 in revenue, most of which was attributable to the international call forwarding business of Beijing GRT:  $1,196,996 from our sale of SIM cards and an additional $527,753 in fees paid by our franchisees.  Despite the success of our international call forwarding business in 2007, during the first six months of 2007 a hiatus occurred in that business.  We realized only $12,669 in revenue from the sale of call forwarding cards, and no revenue from the sale of franchises.  The reasons for the near-elimination of call forwarding revenue in the first half of 2008 were two: Ø In this initial stage of our call forwarding business, we are focusing our efforts on the vacation travel market.  The residents of China are most likely to vacation during one of the long holidays.  During the first six months of the year, however, the only long holiday is Chinese New Year.  While this is an especially long holiday, it is one during which Chinese people customarily return to their family homes.  So there is little foreign vacation travel during these six months.  For this reason, we curtailed our marketing efforts during the first half of the year.   24    Ø In an effort to rapidly develop a market presence, we provided our sales agents particularly large discounts on sales of SIM cards at the end of 2007.  This resulted in large stocks remaining in the inventories of our agents going into 2008.  For that reason, almost none of our sales agents placed orders during the first six months of 2008. We expect our international call forwarding business to revitalize in the near term, and expect that by year-end it will represent the largest portion of our business. Because our international call forwarding business became dormant during the six months ended June 30, 2008, most of our revenue arose from another of our telecommunications services:  VoIP call time distribution.  GRT entered this business in January 2008 by contracting with China Netcom (Shaoxing) Corporation Limited and with China Netcom (Shanghai) Corporation Limited.  Those two carries sell us usage units on their VoIP systems, which we in turn sell to customers who link to the systems through our servers.  The sale of VoIP time yielded $103,979 in revenue during the first six months of 2008, when we first entered the market.  We expect this portion of our business to expand considerably in the future.  Because of the hiatus in our call forwarding business, our operating expenses were significantly greater than our revenue in the three and six month periods ended June 30, 2008.  The primary components of operating expenses were (1) employee compensation, $69,433, most of which was paid to our Chief Executive Officer, and (2) consulting fees of $259,967.  The consulting fees resulted from four contracts that we entered in August and September 2007 with consultants who are assisting us in rebuilding our companys business.  To compensate these individuals we issued them shares of our common stock, which had a market value of $404,800.  We are expensing that amount over the lives of the four contracts, which range from nine months to two years.  Because the largest contract will be fully amortized over a nine month term, these contracts added approximately $36,000 per month to our expenses through the second quarter of this year, but will amortize at a lower rate for the remainder of the two year terms. We incurred a net loss of $415,173 for the six months ended June 30, 2008, compared to net income of $197,446 in the six months ended June 30, 2007.  Similarly, we realized a net loss of $163,567 in the three months ended June 30, 2008, compared to net income of $177,061 in the second quarter of 2007.  The losses will provide us a future tax benefit.  However, because there is no certainty that we will realize taxable income in the future, we did no record any deferred tax benefit as a result of the loss.  Our business operates primarily in Chinese Renminbi, but we report our results in our SEC filings in U.S. Dollars.  The conversion of our accounts from RMB to Dollars results in translation adjustments, which are reported as a middle step between net income and comprehensive income.  The net income is added to the retained earnings on our balance sheet; while the translation adjustment is added to a line item on our balance sheet labeled accumulated other comprehensive income, since it is more reflective of changes in the relative values of U.S. and Chinese currencies than of the success of our business.  In the first six months of 2008, the effect of converting our financial results to Dollars was to add $84,918 to our comprehensive income.      25    Liquidity and Capital Resources  We reduced our cash position by $541,842 during the first six months of 2008.  The primary reason for the reduction was our operating loss.  In addition, however, we increased our prepaid expenses by $329,490  this expense primarily representing prepayments for investor relations and other consulting services.  Establishing our several telecommunications businesses in the public consciousness will cost money.  At June 30, 2008 we had only $54,034 in cash on our balance sheet.  Our plan, however, is to expand our operations by opening an additional 18 sales offices throughout China, and hiring 100 additional sales personnel to staff the offices.  We estimate that the start-up expense associated with each new office will be $30,000 to $50,000.  Therefore, fulfillment of our goal of 20 sales offices will depend on our ability to obtain financing.  We have little on our balance sheet that could be pledged as collateral for debt.  For that reason, our ability to finance growth will necessarily involve the sale of our equity.  Our ability to sell equity at an acceptable price is not assured, and to date we have no commitments for funding.  So we will continue to explore opportunities for financing.  The cash flow from our business is sufficient to indefinitely sustain our operations as they are currently configured.  But in order to take full advantage of our market opportunity, we will require additional funds. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.  Risk Factors that May Affect Future Results  You should carefully consider the risks described below before buying our common stock.  If any of the risks described below actually occurs, that event could cause the trading price of our common stock to decline, and you could lose all or part of your investment.  Implementation of our international call forwarding business will require substantial additional capital, which may result in dilution of our existing shareholders. In order to fully implement its business plan, Beijing GRT will require a substantial amount of additional capital.  It is likely that, in order to obtain that capital, Beijing GRT will be forced to issue a large portion of its equity.  That financing, if it occurs, will reduce the portion of our equity held by our existing shareholders, and may reduce the value of their shares, if the sale of equity occurs at prices lower than the current market price.  On the other hand, if we are unable to obtain the necessary capital, the business will fail.  Our international call forwarding business is new and untested, so it may fail. Our business plan relies on the success of the international call forwarding business operated by Beijing GRT.  This is a relatively new business for Beijing GRT  it commenced operations in February 2007 - and international call forwarding is, in fact, a new business in China.   26    Because we have limited historical results to consider, there may be factors we have not considered or do not foresee that may cause the business to fail.  If a major carrier undertook to compete against us in the international call forwarding business, our resources might not be sufficient to compete effectively. There are low barriers to entry into the international call forwarding business.  We have no patents on the technology, nor are there significant trade secrets to give us a privileged position in the market.  Our success in this new business will depend on our marketing acumen, our good relations with the major telephone carriers, and the quality of the service we provide.  If a major telecommunications carrier or other highly capitalized business entered the market, our resources might not permit us to compete effectively against the competitors ability to devote vast capital and human resources to the project of accumulating the relationships that will be key to success in this business.  If the major carriers reduce their roaming charges, we will lose the key competitive advantage of our international call forwarding service. For most subscribers to a mobile phone service, the default position when they travel is to use their carriers roaming services  primarily because it requires no planning or effort.  Our business will succeed only if we persuade mobile phone users that the substantial cost advantage of our service over the carriers roaming services warrants the users investment of time and attention to subscribing and establishing the necessary call connections.  If the mobile phone carriers reduce their roaming charges in the future, our competitive advantage will be proportionately reduced.  Our business will fail if the major carriers reduce their roaming charges to a point where our price advantage becomes insignificant to the average traveler.  A recession in China could significantly hinder our growth. The success of our international call forwarding services will depend on continuation and expansion of recent trends in travel by the people of China.  Those travel habits depend, in turn, on recent growth in business activity and disposable income in China.  If there is a downturn in business activity in China, it will reduce the market for our services.  Many financial commentators expect a recession to occur in China in the near future.  The occurrence of a recession could significantly hinder our efforts to implement our business plan.  Our business and growth will suffer if we are unable to hire and retain key personnel that are in high demand. Our future success depends on our ability to attract and retain highly skilled marketing personnel and technicians.  Qualified individuals are in high demand in China, and there are insufficient experienced personnel to fill the demand.  Therefore we may not be able to successfully attract or retain the personnel we need to succeed.  We may have difficulty establishing adequate management and financial controls in China. The Peoples Republic of China has only recently begun to adopt the management and financial reporting concepts and practices that investors in the United States are familiar with.  We   27    may have difficulty in hiring and retaining employees in China who have the experience necessary to implement the kind of management and financial controls that are expected of a United States public company.  If we cannot establish such controls, we may experience difficulty in collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet U.S. standards.  Government regulation may hinder our ability to function efficiently. The national, provincial and local governments in the Peoples Republic of China are highly bureaucratized.  The day-to-day operations of our business require frequent interaction with representatives of the Chinese government institutions.  The effort to obtain the registrations, licenses and permits necessary to carry out our business activities can be daunting.  Significant delays can result from the need to obtain governmental approval of our activities.  These delays can have an adverse effect on the profitability of our operations.  In addition, compliance with regulatory requirements applicable to telecommunications services may increase the cost of our operations, which would adversely affect our profitability.  Capital outflow policies in China may hamper our ability to pay dividends to shareholders in the United States. The Peoples Republic of China has adopted currency and capital transfer regulations. These regulations require that we comply with complex regulations for the movement of capital. Although Chinese governmental policies were introduced in 1996 to allow the convertibility of RMB into foreign currency for current account items, conversion of RMB into foreign exchange for capital items, such as foreign direct investment, loans or securities, requires the approval of the State Administration of Foreign Exchange. We may be unable to obtain all of the required conversion approvals for our operations, and Chinese regulatory authorities may impose greater restrictions on the convertibility of the RMB in the future. Because most of our future revenues will be in RMB, any inability to obtain the requisite approvals or any future restrictions on currency exchanges will limit our ability to pay dividends to our shareholders.  Currency fluctuations may adversely affect our operating results. Beijing GRT generates revenues and incurs expenses and liabilities in Renminbi, the currency of the Peoples Republic of China.  However, as a subsidiary of Smooth Global (China) Holdings, it will report its financial results in the United States in U.S. Dollars.  As a result, our financial results will be subject to the effects of exchange rate fluctuations between these currencies.  From time to time, the government of China may take action to stimulate the Chinese economy that will have the effect of reducing the value of Renminbi.  In addition, international currency markets may cause significant adjustments to occur in the value of the Renminbi.  Any such events that result in a devaluation of the Renminbi versus the U.S. Dollar will have an adverse effect on our reported results.  We have not entered into agreements or purchased instruments to hedge our exchange rate risks.  We have limited business insurance coverage. The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products, and do not, to our knowledge, offer   28    business liability insurance. As a result, we do not have any business liability insurance coverage for our operations. Moreover, while business disruption insurance is available, we have determined that the risks of disruption and cost of the insurance are such that we do not require it at this time. Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources.  Smooth Global (China) Holdings is not likely to hold annual shareholder meetings in the next few years. Management does not expect to hold annual meetings of shareholders in the next few years, due to the expense involved.  The current members of the Board of Directors were appointed to that position by the previous directors.  If other directors are added to the Board in the future, it is likely that the current directors will appoint them.  As a result, the shareholders of Smooth Global (China) Holdings will have no effective means of exercising control over the operations of Smooth Global (China) Holdings.  Your ability to bring an action against us or against our directors, or to enforce a judgment against us or them, will be limited because we conduct all of our operations in China and because all  of our management resides outside of the United States. We conduct all of our operations in China through our wholly-owned subsidiary. All of our directors and officers reside in China and all of the assets of those Chinese residents are located outside of the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the United States and of China may render you unable to enforce a judgment against our assets or the assets of our directors.  ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Not applicable.  ITEM 4. CONTROLS AND PROCEDURES  Evaluation of Disclosure Controls and Procedures.  Our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2008.  Pursuant to Rule13a-15(e) promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, disclosure controls and procedures means controls and other procedures that are designed to insure that information required to be disclosed by Smooth Global (China) Holdings in the reports that it files with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time limits specified in the Commissions rules.  Disclosure controls and procedures include, without limitation, controls and procedures designed to insure that information Smooth Global (China) Holdings is required to disclose in the reports it files with the Commission is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer as appropriate to   29    allow timely decisions regarding required disclosure.  Based on her evaluation, our Chief Executive Officer and Chief Financial Officer concluded that Smooth Global (China) Holdings system of disclosure controls and procedures was effective as of June 30, 2008 for the purposes described in this paragraph.  Changes in Internal Controls.  There was no change in internal controls over financial reporting (as defined in Rule 13a-15(f) promulgated under the Securities Exchange Act or 1934) identified in connection with the evaluation described in the preceding paragraph that occurred during Smooth Global (China) Holdings second fiscal quarter that has materially affected or is reasonably likely to materially affect Smooth Global (China) Holdings internal control over financial reporting.  PART II   -   OTHER INFORMATION Item 6. Exhibits  31 Rule 13a-14(a) Certification 32 Rule 13a-14(b) Certification  SIGNATURES  Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the Registrant  has duly  caused  this  Report  to be  signed  on its  behalf by the undersigned thereunto duly authorized.   SMOOTH GLOBAL (CHINA) HOLDINGS, INC.  Date: August 18, 2008 By:  /s/ Zheng Shuying  Zheng Shuying, Chief Executive Officer and Chief Financial Officer    30