**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**FORM      10-QSB**

| x | QUARTERLY                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE OF 1934 |
|---|----------------------------------------------------------------------------------------------|

| o | TRANSITION                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE                ACT |
|---|-----------------------------------------------------------------------------------------------|

**CHINA      CLEAN ENERGY INC.**

| Delaware                                                                                    | 87-0700927                                          |
|---------------------------------------------------------------------------------------------|-----------------------------------------------------|
| (State                or Other Jurisdiction of Incorporationor                Organization) | (I.R.S.                Employer Identification No.) |
|                                                                                        |                                                |
| 17                Candlewood DriveWest                Windsor, New Jersey                   | 08550                                               |
| (Address                of Principal Executive Offices)                                     | (Zip                Code)                           |

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|                   |                                                                                                                                                                    | **Page** |
|------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| Part                I  | FINANCIAL                INFORMATION                                                                                                                                    |     |
| Item                1. | Financial                Statements (Unaudited)                                                                                                                         |          |
|                   | Consolidated                Balance Sheet - March 31, 2007 and December 31, 2006                                                                                        | 1        |
|                   | Consolidated                Statements of Operations and Comprehensive Income for the three-                -month                periods ended March 31, 2007 and 2006 | 2        |
|                   | Consolidated                Statements of Stockholders’ Equity for the three-month period ended March                31, 2007                                     | 3        |
|                   | Consolidated                Statements of Cash Flows for the three-month periods ended March                31, 2007                and 2006                            | 4        |
|                   | Notes                to Consolidated Financial Statements                                                                                                               | 5        |
| Item                2. | Management’s                Discussion and Analysis or Plan of Operation                                                                                          | 12       |
| Item                3. | Controls                and Procedures                                                                                                                                  | 13       |
| Part                II | OTHER                INFORMATION                                                                                                                                        |     |
| Item                2. | Unregistered                Sales of Equity Securities and Use of Proceeds                                                                                              | 14       |
| Item                6. | Exhibits                                                                                                                                                                | 14       |

----

**PART      I**

**FINANCIAL      INFORMATION**

| **Item                1.** | **Financial                Statements.** |
|----------------------------|------------------------------------------|

**CHINA        CLEAN ENERGY INC. AND SUBSIDIARIES**

**Consolidated        Balance Sheets**

**(Expressed        in US Dollars)**

|                                                                                                                                                        |   | March                  31, |       | December                  31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|------------|-------------------------------|--------|
|                                                                                                                                                        |   | 2007                       |       | 2006                          |   |
|                                                                                                                                                        |   | (Unaudited)                |       | (Audited)                     |   |
| **ASSETS**                                                                                                                                             |   |                       |       |                          |   |
| **Current                  Assets**                                                                                                                         |   |                       |       |                          |   |
| Cash                  and cash equivalents                                                                                                             |   | $                          | 897,178    |                          | $      | 2,241,712 |   |
| Accounts                  receivable, net of allowance for doubtful accounts of $249,482                  and                  $228,604, respectively  |   |                       | 2,245,336  |                          |   | 1,962,403 |   |
| Other                  receivable - refundable taxes                                                                                                   |   |                       | 139,331    |                          |   | 24,904 |   |
| Inventories                                                                                                                                            |   |                       | 1,015,498  |                          |   | 941,933 |   |
| Prepaid                  expenses                                                                                                                      |   |                       | 34,908     |                          |   | 37,696 |   |
| **Total                  Current Assets**                                                                                                                   |   |                       | 4,332,251  |                          |   | 5,208,648 |   |
|                                                                                                                                                        |   |                       |       |                          |   |   |   |
| **Property,                  plant and equipment, net**                                                                                                     |   |                       | 4,639,303  |                          |   | 4,692,200 |   |
|                                                                                                                                                        |   |                       |       |                          |   |   |   |
| **Intangible                  assets, net**                                                                                                                 |   |                       | 2,405,159  |                          |   | 2,430,504 |   |
| **Deposits                  paid in connection with**                                                                                                       |   |                       |       |                          |   |   |   |
| **contract                  for purchase of land use rights**                                                                                          |   |                       | 1,921,973  |                          |   | 95,033 |   |
| **Total                  Assets**                                                                                                                           |   | $                          | 13,298,686 |                          | $      | 12,426,385 |   |
|                                                                                                                                                        |   |                       |       |                          |   |   |   |
|                                                                                                                                                        |   |                       |       |                          |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY**                                                                                              |   |                       |       |                          |   |   |   |
| **Current                  Liabilities**                                                                                                                    |   |                       |       |                          |   |   |   |
| Accounts                  payable and accrued liabilities                                                                                              |   | $                          | 633,323    |                          | $      | 386,719 |   |
| Current                  portion of bank indebtedness                                                                                                  |   |                       | 1,153,174  |                          |   | 1,282,462 |   |
| Income                  taxes payable                                                                                                                  |   |                       | -          |                          |   | 117,964 |   |
| Due                  to related parties                                                                                                                |   |                       | -          |                          |   | 6,419 |   |
| **Total                  current liabilities**                                                                                                              |   |                       | 1,786,497  |                          |   | 1,793,564 |   |
|                                                                                                                                                        |   |                       |       |                          |   |   |   |
| **Noncurrent                  portion of bank indebtedness**                                                                                                |   |                       | 371,698    |                          |   | - |   |
| **Total                  Liabilities**                                                                                                                      |   |                       | 2,158,195  |                          |   | 1,793,564 |   |
|                                                                                                                                                        |   |                       |       |                          |   |   |   |
| **Commitments                  and Contingencies**                                                                                                          |   |                       | -          |                          |   | - |   |
| **Stockholders'                  Equity**                                                                                                                   |   |                       |       |                          |   |   |   |
| Common                  stock par value $0.001 per share, authorized                                                                                   |   |                       |       |                          |   |   |   |
|  100,000,000                  shares; issued and outstanding 21,512,269                                                                                |   |                       |       |                          |   |   |   |
|  and                  21,512,269 shares, respectively                                                                                                  |   |                       | 21,512     |                          |   | 21,512 |   |
| Additional                  paid-in capital                                                                                                            |   |                       | 7,034,473  |                          |   | 7,034,473 |   |
| Retained                  earnings                                                                                                                     |   |                       | 3,562,453  |                          |   | 3,161,747 |   |
| Accumulated                  other comprehensive income (loss)                                                                                         |   |                       | 522,053    |                          |   | 415,089 |   |
| **Total                  stockholders' equity**                                                                                                             |   |                       | 11,140,491 |                          |   | 10,632,821 |   |
| **Total                  Liabilities and Stockholders' Equity**                                                                                             |   | $                          | 13,298,686 |                          | $      | 12,426,385 |   |

----

**CHINA        CLEAN ENERGY INC. AND SUBSIDIARIES**

**Consolidated        Statements of Operations and Comprehensive Income**

**(Expressed        in US Dollars)**

|                                                                 |   | Three                  months ended March 31, |       |
|----------------------------------------------------------------------|--------|-----------------------------------------------|------------|
|                                                                 |   | 2007                                          |       | 2006 |   |
|                                                                 |   | (Unaudited)                                   |       | (Unaudited) |   |
|                                                                 |   |                                          |       |   |   |
| **Revenue:**                                                         |   | $                                             |       |   | $ |   |   |
| Net                  sales of products                          |   |                                          | 4,138,366  |   |  | 2,852,910 |   |
| Government                  subsidy                             |   |                                          | -          |   |   | 5,965 |   |
|                                                                 |   |                                          |       |   |   |   |   |
| **Total                  revenue**                                   |   |                                          | 4,138,366  |   |   | 2,858,875 |   |
|                                                                 |   |                                          |       |   |   |   |   |
| **Operating                  Costs and Expenses**                    |   |                                          |       |   |   |   |   |
| Cost                  of goods sold                             |   |                                          | 2,989,949  |   |   | 2,065,204 |   |
| Selling                  and marketing                          |   |                                          | 213,243    |   |   | 82,211 |   |
| General                  and administrative                     |   |                                          | 335,933    |   |   | 50,699 |   |
| Depreciation                  of property, plant and equipment  |   |                                          | 125,844    |   |   | 83,469 |   |
| Amortization                  of intangible assets              |   |                                          | 49,248     |   |   | 85,357 |   |
| Total                  operating costs and expenses                  |   |                                          | 3,714,217  |   |   | 2,366,940 |   |
| **Income                  from Operations**                          |   |                                          | 424,149    |   |   | 491,935 |   |
|                                                                 |   |                                          |       |   |   |   |   |
| **Other                  Income (Expense)**                          |   |                                          |       |   |   |   |   |
| Interest                  income                                |   |                                          | 2,502      |   |   | 2,193 |   |
| Interest                  expense                               |   |                                          | (25,945    | ) |   | (20,873 | ) |
| Total                  Other Income (Expense)                        |   |                                          | (23,443    | ) |   | (18,680 | ) |
| **Income                  before Income Taxes**                      |   |                                          | 400,706    |   |   | 473,255 |   |
| **Income                  Taxes**                                    |   |                                          | -          |   |   | (196,640 | ) |
| **Net                  Income**                                      |   | $                                             | 400,706    |   | $ | 276,615 |   |
| **Other                  Comprehensive Income**                      |   |                                          |       |   |   |   |   |
| Foreign                  currency translation gain (loss)       |   |                                          | 106,964    |   |   | 161,500 |   |
| **Comprehensive                  Income**                            |   | $                                             | 507,670    |   | $ | 438,115 |   |
|                                                                 |   |                                          |       |   |   |   |   |
| **Earnings                  per common share:**                      |   |                                          |       |   |   |   |   |
| Basic                                                           |   | $                                             | 0.02       |   | $ | 0.02 |   |
| Diluted                                                         |   | $                                             | 0.02       |   | $ | 0.02 |   |
|                                                                 |   |                                          |       |   |   |   |   |
|                                                                 |   |                                          |       |   |   |   |   |
| **Weighted                  average number of common shares:**       |   |                                          |       |   |   |   |   |
| Basic                                                           |   |                                          | 21,512,269 |   |   | 15,995,000 |   |
| Diluted                                                         |   |                                          | 21,512,269 |   |   | 15,995,000 |   |

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**CHINA        CLEAN ENERGY INC. AND SUBSIDIARIES**

**Consolidated        Statements of Stockholders' Equity **

**(Expressed        in US Dollars)**

|                                                         |   | Common                      Stock |       | Additional Paid-in |   |          |   | Accumulated                      Other Comprehensive |      |         |   |
|--------------------------------------------------------------|--------|-----------------------------------|------------|-------------------------|--------|---------------|--------|-----------------------------------------------------------|-----------|--------------|--------|
|                                                         |   | Shares                            |       | Amount                  |   |  Capital |   | Retained Earnings                                    |      |  Income |   | Total |   |
|                                                         |   |                              |       |                    |   |          |   |                                                      |      |         |   |   |   |
| Balance                      at December 31, 2006            |   |                              | 21,512,269 |                    | $      | 21,512        |   | $                                                         | 7,034,473 |         | $      | 3,161,747 |   | $ | 415,089 |   | $ | 10,632,821 |   |
| Net                      income for the three months         |   |                              |            |                    |   |               |   |                                                      |           |         |   |  |   |   |  |   |   |  |   |
| ended                      March 31, 2007               |   |                              | -          |                    |   |               |   |                                                      | -         |         |   | 400,706 |   |   | - |   |   | 400,706 |   |
| Foreign                      currency translation adjustment |   |                              | -          |                    |   |               |   |                                                      | -         |         |   | . |   |   | 106,964 |   |   | 106,964 |   |
| Balance                      at March 31, 2007               |   |                              | 21,512,269 |                    | $      | 21,512        |   | $                                                         | 7,034,473 |         | $      | 3,562,453 |   | $ | 522,053 |   | $ | 11,140,491 |   |

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**CHINA        CLEAN ENERGY INC. AND SUBSIDIARIES**

**Consolidated        Statements of Cash Flows**

**(Expressed        in US Dollars)**

|                                                                                                              |   | Three                  months ended March 31, |       |
|-------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|------------|
|                                                                                                              |   | 2007                                          |       | 2006 |   |
|                                                                                                              |   | (Unaudited)                                   |       | (Unaudited) |   |
| **Cash                  Flows from Operating Activities**                                                         |   |                                          |       |   |   |
| Net                  income                                                                                  |   | $                                             | 400,706    |   | $ | 276,615 |   |
| Adjustments                  to reconcile net income to net cash                                             |   |                                          |       |   |   |   |   |
|  provided                  by (used in) operating activities                                                 |   |                                          |       |   |   |   |   |
|  Depreciation                  of property, plant and equipment                                              |   |                                          | 125,844    |   |   | 83,469 |   |
|  Amortization                  of intangible assets                                                          |   |                                          | 49,248     |   |   | 85,357 |   |
| Changes                  in operating assets and liabilities                                                 |   |                                          |       |   |   |   |   |
|  Accounts                  receivable, net                                                                   |   |                                          | (282,933   | ) |   | (678,156 | ) |
|  Other                  receivables                                                                          |   |                                          | (114,427   | ) |   | - |   |
|  Inventory                                                                                                   |   |                                          | (73,565    | ) |   | 45,837 |   |
|  Prepaid                  expenses                                                                           |   |                                          | 2,788      |   |   | - |   |
|  Accounts                  payable and accrued liabilities                                                   |   |                                          | 246,604    |   |   | 79,777 |   |
|  Income                  taxes payable                                                                       |   |                                          | (117,964   | ) |   | (288,970 | ) |
| **Net                  cash provided by (used in) operating activities**                                          |   |                                          | 236,301    |   |   | (396,071 | ) |
| **Cash                  Flows from Investing Activities**                                                         |   |                                          |       |   |   |   |   |
| Property,                  plant and equipment additions                                                     |   |                                          | (26,815    | ) |   | (106,788 | ) |
| Deposits                  paid in connection with contract for purchase of land use                  rights  |   |                                          | (1,826,940 | ) |   | - |   |
| **Net                  cash provided by (used in) investing activities**                                          |   |                                          | (1,853,755 | ) |   | (106,788 | ) |
| **Cash                  Flows from Financing Activities**                                                         |   |                                          |       |   |   |   |   |
| Increase                  (decrease) in bank indebtedness                                                    |   |                                          | 242,410    |   |   | 8,010 |   |
| Increase                  (decrease) in due to related parties                                               |   |                                          | (6,419     | ) |   | 174,238 |   |
| Dividends                  paid                                                                              |   |                                          | -          |   |   | (753,420 | ) |
| **Net                  cash provided by (used in) financing activities**                                          |   |                                          | 235,991    |   |   | (571,172 | ) |
|                                                                                                              |   |                                          |       |   |   |   |   |
| **Effect                  of exchange rate changes on cash and cash                  equivalents**                |   |                                          | 36,929     |   |   | 76,609 |   |
| **Increase                  (decrease) in cash and cash equivalents**                                             |   |                                          | (1,344,534 | ) |   | (997,422 | ) |
|                                                                                                              |   |                                          |       |   |   |   |   |
| **Cash                  and cash equivalents, beginning of period**                                               |   |                                          | 2,241,712  |   |   | 3,175,128 |   |
|                                                                                                              |   |                                          |       |   |   |   |   |
| **Cash                  and cash equivalents, end of period**                                                     |   | $                                             | 897,178    |   | $ | 2,177,706 |   |
|                                                                                                              |   |                                          |       |   |   |   |   |
|                                                                                                              |   |                                          |       |   |   |   |   |
| **Supplemental                  disclosures of cash flow information:**                                           |   |                                          |       |   |   |   |   |
| Interest                  paid                                                                               |   | $                                             | 25,945     |   | $ | 20,873 |   |
| Income                  taxes paid                                                                           |   | $                                             | -          |   | $ | 196,640 |   |

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**CHINA        CLEAN ENERGY INC. AND SUBSIDIARIES**

**NOTE        1 - INTERIM FINANCIAL STATEMENTS**

**NOTE        2 - ORGANIZATION AND BUSINESS**

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**CHINA          CLEAN ENERGY INC. AND SUBSIDIARIES**

**NOTE        3 - INVENTORIES**

|                                                       |   | March                    31, |      | December                    31, |   |
|------------------------------------------------------------|--------|------------------------------|-----------|---------------------------------|--------|
|                                                       |   | 2007                         |      | 2006                            |   |
|                                                       |   | (Unaudited)                  |      | (Audited)                       |   |
| Raw                    materials                           |   | $                            | 629,637   |                            | $      | 430,392 |   |
| Work                    in progress and packaging material |   |                         | 112,207   |                            |   | 24,065 |   |
| Finished                    goods                          |   |                         | 273,654   |                            |   | 487,476 |   |
| Total                    Inventories                       |   | $                            | 1,015,498 |                            | $      | 941,933 |   |

**NOTE        4 - PROPERTY, PLANT AND EQUIPMENT**

|                                             |   | March                    31, |       | December                    31, |   |
|--------------------------------------------------|--------|------------------------------|------------|---------------------------------|--------|
|                                             |   | 2007                         |       | 2006                            |   |
|                                             |   | (Unaudited)                  |       | (Audited)                       |   |
| Buildings                                        |   | $                            | 2,071,366  |                            | $      | 2,051,056 |   |
| Equipment                    and machinery       |   |                         | 4,463,316  |                            |   | 4,419,551 |   |
| Automobiles                                      |   |                         | 36,901     |                            |   | 20,529 |   |
| Office                    equipment              |   |                         | 16,264     |                            |   | 13,848 |   |
| Construction                    in progress      |   |                         | 462,188    |                            |   | 449,346 |   |
| Total                                            |   |                         | 7,050,035  |                            |   | 6,954,330 |   |
| Less                    accumulated depreciation |   |                         | (2,410,732 | )                               |   | (2,262,130 | ) |
| Net                                              |   | $                            | 4,639,303  |                            | $      | 4,692,200 |   |

----

**CHINA          CLEAN ENERGY INC. AND SUBSIDIARIES**

**NOTE        5 - INTANGIBLE ASSETS**

|                                             |   | March                    31, |      | December                    31, |   |
|--------------------------------------------------|--------|------------------------------|-----------|---------------------------------|--------|
|                                             |   | 2007                         |      | 2006                            |   |
|                                             |   | (Unaudited)                  |      | (Audited)                       |   |
| Land                    use rights               |   | $                            | 1,968,315 |                            | $      | 1,949,015 |   |
| Patents                    and licenses          |   |                         | 1,191,542 |                            |   | 1,179,900 |   |
| Total                                            |   |                         | 3,159,857 |                            |   | 3,128,915 |   |
| Less                    accumulated amortization |   |                         | (754,698  | )                               |   | (698,411 | ) |
| Net                                              |   | $                            | 2,405,159 |                            | $      | 2,430,504 |   |

**NOTE        6 - BANK INDEBTEDNESS**

|                                                             |   | March                    31, |       | December                    31, |   |
|------------------------------------------------------------------|--------|------------------------------|------------|---------------------------------|--------|
|                                                             |   | 2007                         |       | 2006                            |   |
|                                                             |   | (Unaudited)                  |       | (Audited)                       |   |
| Due                    bank under revolving credit agreement,    |   |                         |       |                            |   |   |   |
| interest                    at 115% of PRC prime rate,           |   |                         |       |                            |   |   |   |
| secured                    by certain buildings and land         |   |                         |       |                            |   |   |   |
| use                    rights owned by Fujian Zhongde            |   | $                            | 971,383    |                            | $      | 1,282,462 |   |
| Due                    bank, interest at 115% of PRC prime rate, |   |                         |       |                            |   |   |   |
| due                    in monthly installments of principal      |   |                         |       |                            |   |   |   |
| and                    interest of $18,170 through               |   |                         |       |                            |   |   |   |
| January                    2010, secured by certain buildings    |   |                         |       |                            |   |   |   |
| and                    land use rights                           |   |                         | 553,489    |                            |   | - |   |
|                                                             |   |                         |       |                            |   |   |   |
| Total                                                            |   |                         | 1,524,872  |                            |   | 1,282,462 |   |
| Less                    current portion                          |   |                         | (1,153,174 | )                               |   | (1,282,462 | ) |
|                                                             |   |                         |       |                            |   |   |   |
| Noncurrent                    portion of bank indebtedness       |   | $                            | 371,698    |                            | $      | - |   |

**NOTE        7 - PENSION AND EMPLOYMENT LIABILITIES**

**NOTE        8 - RESTRICTED NET ASSETS**

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**CHINA          CLEAN ENERGY INC. AND SUBSIDIARIES**

**NOTE        9 - INCOME TAXES**

|                             |   | Three                    months ended March 31, |   |
|----------------------------------|--------|-------------------------------------------------|--------|
|                             |   | 2007                                            |   | 2006 |   |
|                             |   | (Unaudited)                                     |   | (Unaudited) |   |
| Current:                         |   |                                            |   |   |   |
| PRC                              |   | $                                               | -      |   | $ | 196,640 |   |
| United                    States |   |                                            | -      |   |   | - |   |
| Total                    current |   |                                            | -      |   |   | 196,640 |   |
| Deferred                         |   |                                            | -      |   |   | - |   |
| Total                            |   | $                                               | -      |   | $ | 196,640 |   |

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**CHINA        CLEAN ENERGY INC. AND SUBSIDIARIES**

|                                                 |   | Three                    months ended |     |
|------------------------------------------------------|--------|---------------------------------------|----------|
|                                                 |   | March                    31,          |     |
|                                                 |   | 2007                                  |     | 2006 |   |
|                                                 |   | (Unaudited)                           |     | (Unaudited) |   |
| Expected                    tax at 35%               |   | $                                     | 140,247  |   | $ | 165,639 |   |
| Tax                    effect of unutilized          |   |                                  |     |   |   |   |   |
| losses                    of CCE and CCER            |   |                                  | 98,001   |   |   | - |   |
| Tax                    effect of Fujian Zhongde      |   |                                  |     |   |   |   |   |
| income                    taxed at lower rate        |   |                                  | (238,248 | ) |   | (9,465 | ) |
| Permanent                    differences             |   |                                  | -        |   |   | 40,466 |   |
| Actual                    provision for income taxes |   | $                                     | -        |   | $ | 196,640 |   |

**NOTE        10 - RELATED PARTY TRANSACTIONS**

**NOTE        11 - SEGMENT INFORMATION**

|                                            |   | Three                    months ended March 31, |      |
|-------------------------------------------------|--------|-------------------------------------------------|-----------|
|                                            |   | 2007                                            |      | 2006 |   |
|                                            |   | (Unaudited)                                     |      | (Unaudited) |   |
| Specialty                    chemicals products |   | $                                               | 3,142,855 |   | $ | 2,023,644 |   |
| Biodiesel                    products           |   |                                            | 995,511   |   |   | 829,266 |   |
| Total                                           |   | $                                               | 4,138,366 |   | $ | 2,852,910 |   |

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**CHINA          CLEAN ENERGY INC. AND SUBSIDIARIES**

**NOTE        12 - COMMITMENTS AND CONTINGENCIES**

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**CHINA          CLEAN ENERGY INC. AND SUBSIDIARIES**

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**Item      2. Management’s Discussion and Analysis or Plan of      Operation**

*Revenues.*

*Gross      Profit.*

*Selling      Expenses.*

*General      and Administrative and Other Operating Expenses.*

*Net      Income.*

----

**Liquidity      and Capital Resources**

**Item      3. Controls and Procedures.**

We      carried out an evaluation, under the supervision and with the participation      of      our management, including our chief executive officer and chief financial      officer, of the effectiveness of the design and operation of our disclosure      controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under      the      Securities Exchange Act of 1934, as amended (the “Exchange Act”). Disclosure      controls and procedures include, without limitation, controls and procedures      designed to ensure that information required to be disclosed by an issuer in      the      reports that it files or submits under the Exchange Act is accumulated and      communicated to the issuer’s management, including its principal executive and      principal financial officers, or persons performing similar functions, as      appropriate to allow timely decisions regarding required disclosure. Based      upon      our evaluation, our chief executive officer and chief financial officer      concluded that our disclosure controls and procedures are effective, as of      the      end of the period covered by this Report (March 31, 2007), in ensuring that      material information that we are required to disclose in reports that we file      or      submit under the Exchange Act is recorded, processed, summarized and reported      within the time periods specified in the Securities and Exchange Commission      (“SEC”) rules and forms. There were no changes in our internal control over      financial reporting during the three month period ended March 31, 2007 that      have      materially affected, or are reasonably likely to materially affect, our internal      control over financial reporting.

----

**PART      II**

**OTHER      INFORMATION**

| **Item                2.** | **Unregistered                Sales of Equity Securities and Use of                Proceeds** |
|----------------------------|-----------------------------------------------------------------------------------------------|

| **Item                6.** | **Exhibits** |
|----------------------------|--------------|

| **Exhibit****Number** |   |  **Description**                                                                  |
|-----------------------|--------|----------------------------------------------------------------------------------------|
|                  |   |                                                                                   |
| 31.1*                 |   | Section                302 Certification of Principal Executive Officer                |
| 31.2*                 |   | Section                302 Certification of Principal Financial Officer                |
| 32.1*                 |   | Section                906 Certification of Principal Executive Officer                |
| 32.2*                 |   | Section                906 Certification of Principal Financial                Officer |

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| * | Filed                herewith. |
|---|--------------------------------|

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**SIGNATURES**

|                               |                                                                               |                           |
|------------------------------------|------------------------------------------------------------------------------------|--------------------------------|
| Dated:                May 15, 2007 | By:                                                                      | /s/                Tai-ming Ou |
|                               | Tai-ming                Ou                                                         |
|                               | Chief                Executive Officer(Principal                Executive Officer) |

|                               |                                                                                                                               |                         |
|------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|------------------------------|
| Dated:                May 15, 2007 | By:                                                                                                                      | /s/                Gary Zhao |
|                               | Gary                Zhao                                                                                                           |
|                               | Chief                Financial Officer(Principal                Financial Officer and Principal Accounting                Officer) |

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**EXHIBIT      INDEX**

| **Exhibit****Number** |   |  **Description**                                                                  |
|-----------------------|--------|----------------------------------------------------------------------------------------|
| 31.1*                 |   | Section                302 Certification of Principal Executive Officer                |
| 31.2*                 |   | Section                302 Certification of Principal Financial Officer                |
| 32.1*                 |   | Section                906 Certification of Principal Executive Officer                |
| 32.2*                 |   | Section                906 Certification of Principal Financial                Officer |

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| * | Filed                herewith. |
|---|--------------------------------|

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