U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB


|X|     QUARTERLY  REPORT  UNDER  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT  OF  1934
For the quarterly period ended June 30, 2003

|_|     TRANSITION  REPORT  UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT  OF  1934
For the transition period from ____________ to ___________

                        Commission File Number 000-30173

                      HUAYANG INTERNATIONAL HOLDINGS, INC.
        (Exact name of small business issuer as specified in its charter)

              Nevada                                     58-1667944
-----------------------------------        -------------------------------------
  (State or other Jurisdiction of                     (I.R.S. Employer
          Incorporation)                             Identification No.)


                  386 Qingnian Avenue, Shenyang, China 110004
                    (Address of principal executive offices)

                  Issuer's telephone number: (86)(24) 2318-0688

The  number  of shares of common stock, par value $0.02, outstanding on June 30,
2003,  was  7,700,807.

Transitional Small Business Disclosure Format (Check one): Yes |_| No |X|


<PAGE>
                      HUAYANG INTERNATIONAL HOLDINGS, INC.

                                   FORM 10-QSB

                                      INDEX

                                                                         Page
                                                                         ----
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

        Consolidated Balance Sheets                                         1

        Consolidated Statements of Operations and Comprehensive loss        2

        Consolidated Statements of Cash Flows                               3

        Notes to Consolidated Financial Statements                        4-5

Item 2. Management's Discussion and Analysis or Plan of Operation        6-10

Item 3. Controls and Procedures                                            10

PART II - OTHER INFORMATION

Item 1. Legal Proceedings                                                  11

Item 2. Changes in Securities                                              11

Item 3. Defaults Upon Senior Securities                                    11

Item 4. Submission of Matters to a Vote of Security Holders                11

Item 5. Other Information                                                  11

Item 6. Exhibits and Reports on Form 8-K                                   11

SIGNATURES                                                                 12

EXHIBITS                                                                17-18


<PAGE>
<TABLE>
<CAPTION>
              HUAYANG INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    AS OF JUNE 30, 2003 AND DECEMBER 31, 2002
                             (UNITED STATES DOLLARS)

                                                     June 30,     December 31,
                                                       2003           2002
                                                   (Unaudited)     (Audited)
                                                   ------------  --------------
<S>                                                <C>           <C>
ASSETS
Assets:
 Real estate rental property, net of accumulated
  depreciation of $1,247,106 at June 30, 2003 and
  1,069,896 at December 31, 2002                   $16,473,823   $  16,651,031
 Real estate held for development and sale           3,777,727       3,777,727
 Cash                                                  120,614             110
 Due from related company, net of allowance for
  doubtful accounts of 9,171,084                     3,706,122       4,016,398
 Property and equipment, net                         1,281,103       1,294,663
 Other assets                                          154,352          31,747
                                                   ------------  --------------

 Total assets                                      $25,513,741   $  25,771,676
                                                   ============  ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
 Accounts payable and accrued liabilities          $   669,741   $     593,865
 Bank loans                                          3,289,157       3,289,157
 Due to related companies                            1,760,769       1,760,769
 Other taxes payable                                 3,458,064       3,548,716
                                                   ------------  --------------

 Total liabilities                                   9,177,731       9,192,507
                                                   ------------  --------------

Minority interest                                      741,343         749,501
                                                   ------------  --------------

Shareholders' equity:
 Common stock, par value $0.02 per share,
  authorized 50,000,000 shares; issued and
  outstanding 7,700,807 shares                         154,016         154,016
 Paid-in capital                                    18,342,291      18,342,291
 Accumulated deficit                                (2,874,260)     (2,639,259)
 Accumulated other comprehensive loss                  (27,380)        (27,380)
                                                   ------------  --------------

 Total shareholders' equity                         15,594,667      15,829,668
                                                   ------------  --------------

 Total liabilities and shareholders' equity        $25,513,741   $  25,771,676
                                                   ============  ==============
</TABLE>

         The accompanying notes are an integral part of this statement.


                                        1
<PAGE>
<TABLE>
<CAPTION>
                     HUAYANG INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF OPERATIONS AND
                                 COMPREHENSIVE LOSS (UNAUDITED)
                FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
                                    (UNITED STATES DOLLARS)

                                            Three months ended June 30,     Six months ended June 30,
                                                2003         2002              2003         2002
                                                           Restated                       Restated
                                             -----------  -----------       -----------  -----------
<S>                                          <C>          <C>               <C>          <C>
Revenues
  Real estate sales                          $        -   $  396,382        $        -   $  396,382
  Real estate rental income                     144,877      539,421           291,098    1,074,639
                                             -----------  -----------       -----------  -----------

  Total revenues                                144,877      935,803           291,098    1,471,021
                                             -----------  -----------       -----------  -----------
Costs and expenses
  Cost of real estate sold                            -      308,670                 -      308,670
  Real estate operating expenses                129,023       49,631           214,365      167,957
  Depreciation expense                          102,132      148,038           193,444      356,281
  Interest expense                               63,547      240,372           125,725      566,691
  Other operating expenses                          723            -               723            -
                                             -----------  -----------       -----------  -----------

  Total costs and expenses                      295,425      746,711           534,257    1,399,599
                                             -----------  -----------       -----------  -----------

Income (Loss) before income taxes              (150,548)     189,092          (243,159)      71,422
Income taxes                                          -            -                 -            -
                                             -----------  -----------       -----------  -----------

Income (Loss) before minority interest         (150,548)     189,092          (243,159)      71,422
Minority interest                                 5,527      (18,619)            8,158       (8,896)
                                             -----------  -----------       -----------  -----------

Income (Loss) from continuing operations       (145,021)     170,473          (235,001)      62,526
Discontinued operations:
  Loss from investment in affiliates, net
    of interest income                                -     (313,312)                -     (519,686)
                                             -----------  -----------       -----------  -----------

Loss before extraordinary item                 (145,021)    (142,839)         (235,001)    (457,160)
Extraordinary item - gain on debt
  extinguishments, net of income tax effect           -      415,483                 -      415,483
                                             -----------  -----------       -----------  -----------

Net income (loss)                              (145,021)     272,644          (235,001)     (41,677)
Other comprehensive income (loss)
  Foreign currency translation                        -       (1,949)                -        1,949
                                             -----------  -----------       -----------  -----------

Comprehensive income (loss)                  $ (145,021)  $  270,695        $ (235,001)  $  (39,728)
                                             ===========  ===========       ===========  ===========
Weighted average shares outstanding:
  Basic and diluted                           7,700,807    7,500,807         7,700,807    7,500,807
                                             ===========  ===========       ===========  ===========
Basic and diluted income (loss) per share:
  Income (loss) from continuing operations   $    (0.02)  $     0.02        $    (0.03)  $     0.01
  Discontinued operations                             -        (0.04)                -        (0.07)
  Extraordinary item                                  -         0.06                 -         0.05
                                             -----------  -----------       -----------  -----------

  Net income (loss)                          $    (0.02)  $     0.04        $    (0.03)  $    (0.01)
                                             ===========  ===========       ===========  ===========
</TABLE>

         The accompanying notes are an integral part of this statement.


                                        2
<PAGE>
<TABLE>
<CAPTION>
                 HUAYANG INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                    FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
                                (UNITED STATES DOLLARS)

                                                                             Restated
                                                                  2003         2002
                                                               ----------  ------------
<S>                                                            <C>         <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net loss                                                       $(235,001)  $   (41,677)
Adjustments to reconcile net income to net cash provided by
  operating activities:
  Gain on sales of real estate                                         -       (87,712)
  Net cash proceeds from sales of real estate                          -       396,382
  Real estate development costs                                        -      (962,648)
  Depreciation                                                   193,444       356,281
  Loss from investment in affiliates                                   -       821,778
  Net gain on debt extinguishments                                     -      (415,483)
  Decrease in investment in affiliates due to foreign currency
    translation effect                                                 -           647
  Other comprehensive loss on foreign currency translation             -        (1,949)
  Minority interest expense (income)                              (8,158)        8,896
Changes in operating assets and liabilities:
  Decrease in due from related parties                           310,276             -
  Increase in other assets                                      (122,605)       (9,473)
  Increase in accounts payable and accrued liabilities            75,876       921,194
  Increase in deferred interest income                                 -        75,522
  Decrease in other tax payable                                  (90,652)            -
                                                               ----------  ------------

  Net cash provided by operating activities                      123,180     1,061,758
                                                               ----------  ------------

CASH FLOW FROM INVESTING ACTIVITIES
  Purchase of equipment                                           (2,676)      (29,793)
                                                               ----------  ------------

  Net cash used by investing activities                           (2,676)      (29,793)
                                                               ----------  ------------

CASH FLOW FROM FINANCING ACTIVITIES
  Change in bank loan due to foreign currency translation              -          (834)
  Repayments to related companies                                      -    (1,030,961)
                                                               ----------  ------------

  Net cash used by financing activities                                -    (1,031,795)
                                                               ----------  ------------

NET INCREASE IN CASH                                             120,504           170

CASH, BEGINNING OF PERIOD                                            110           253
                                                               ----------  ------------

CASH, END OF PERIOD                                            $ 120,614   $       423
                                                               ==========  ============

SUPPLEMENTAL CASH FLOW INFORMATION
  Interest paid                                                $ 125,725   $         -
                                                               ==========  ============
  Income taxes paid                                            $       -   $         -
                                                               ==========  ============
</TABLE>

         The accompanying notes are an integral part of this statement.


                                        3
<PAGE>
              HUAYANG INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

1.   Reporting entity

     The  financial  statements  of  Huayang  International  Holdings,  Inc. and
     Subsidiary  (HIHI)  (the  "Company")  reflect  the activities and financial
     transactions  of  its  subsidiary  Shenyang  Haitong  House  Properties
     Development  Ltd.  (HAITONG). HIHI has a 95% ownership interest in HAITONG.
     HIHI  also  has  a  less  than  majority  ownership interest in three other
     companies,  Shenyang  Lido  Hotel  Company  Limited,  formerly  Changyang
     International Hotel (Shenyang) Co. Ltd. (HOTEL), Shenyang Lido Park Company
     Limited, formerly Changyuan (Shenyang) Park Ltd. (GARAGE) and Shenyang Lido
     Business  Company  Limited,  formerly Changhua (Shenyang) Business Co. Ltd.
     (BUSINESS CENTER), collectively referred to as HOTEL GROUP. The HOTEL GROUP
     was  disposed  of  in  the  third  quarter  of  2002.

     HIHI  is  incorporated  under the laws of the State of Nevada in the United
     States.  HAITONG,  HOTEL, GARAGE and BUSINESS CENTER are incorporated under
     the  laws  of  the  People's  Republic  of  China  (PRC).

2.   Condensed financial statements and footnotes

     The  interim  consolidated  financial statements presented herein have been
     prepared  by the Company and include the unaudited accounts of HIHI and its
     subsidiary HAITONG. All significant inter-company accounts and transactions
     have  been  eliminated  in  the  consolidation.

     These  condensed financial statements have been prepared in accordance with
     generally  accepted accounting principles for interim financial information
     and  the  instructions to Form 10-QSB and Article 310(b) of Regulation S-B.
     Certain information and footnote disclosures normally included in financial
     statements  presented  in  accordance  with  generally  accepted accounting
     principles  have  been  condensed  or  omitted.  The  Company  believes the
     disclosures  made  are  adequate  to  make  the  information  presented not
     misleading.  The condensed consolidated financial statements should be read
     in conjunction with the Company's consolidated financial statements for the
     year  ended  December  31,  2002  and notes thereto included in HIHI's Form
     10-KSB.

     In  the  opinion  of  management,  the  unaudited  condensed  consolidated
     financial  statements  reflect  all  adjustments (which include only normal
     recurring  adjustments)  necessary to present fairly the financial position
     of the Company as of June 30, 2003, the results of operations for the three
     months  and  six months ended June 30, 2003 and 2002, respectively. Interim
     results  are not necessarily indicative of full year performance because of
     the  impact  of  seasonal  and  short-term  variations.


                                        4
<PAGE>
     Certain  2002  amounts  have  been restated for comparison purposes and for
     correction  of an accounting error. See Note 4 and the notes to HIHI's Form
     10-KSB  for  December  31,  2002.

3.   Segment reporting

     The  Company  is  currently  engaged  in  only  one  business  segment. The
     Company's  net  investment in and the operating results of its various real
     estate  activities  may  be  derived  directly  from  the  accompanying
     consolidated  financial  statements.

4.   Prior period adjustment

     The  accompanying  financial statements for the three months and six months
     ended  June 30, 2002 have been restated to correct overstatements of income
     tax  expense.  See  HIHI's 10-KSB for the year ended December 31, 2002. The
     effect  of  the  prior  period  accounting  errors relating to income taxes
     resulted  in  the  following  changes as of June 30, 2002 and for the three
     months  and  six  months  then  ended:

<TABLE>
<CAPTION>
                                         As previously
                                           reported       As restated
<S>                                     <C>              <C>
Balance Sheet:
  Deferred tax assets                   $      705,502   $          -
  Other taxes payable                   $    3,117,376   $    717,192
  Deferred tax payable                  $      878,922   $          -
  Retained earnings                     $    3,186,670   $  6,143,952

Statement of Operations for the Three
  Months ended June 30, 2002:
  Income taxes                          $      (94,153)  $          -
  Net income                            $      178,491   $    272,644
Statement of Operations for the Six
  Months ended June 30, 2002:
  Income taxes                          $     (235,354)  $          -
  Net loss                              $     (277,031)  $    (41,677)
</TABLE>


5.   Going concern

     The  Company is dependent on the management company to collect revenues and
     to  make  payments  on  a timely basis. As of June 30, 2003, the management
     company  currently  owed  the Company $12,877,206, against which $9,171,084
     has  been  provided  as  an allowance for doubtful accounts. The management
     company is a related party and is controlled by the majority shareholder of
     the  Company.  Should  the  management  company  continue  to  fail  to pay
     obligations as they fall due, it could impair the ability of the Company to
     continue  as  a  going  concern.  Management  of  the  Company believe that
     sufficient  funding  will  be  available  to  meet  operating  needs of the
     Company.


                                        5
<PAGE>
       Item 2.  Management's Discussion and Analysis or Plan of Operation


FORWARD-LOOKING STATEMENTS

     The  following  discussion  of  the  financial  condition  and  results  of
operations  should  be  read  in  conjunction  with  our  consolidated financial
statements  and  related  notes  thereto.  The  following  discussion  contains
forward-looking  statements. Huayang International Holdings, Inc. is referred to
herein  as  "the Company", "we" or "our." The words or phrases "would be," "will
allow,"  "intends to," "will likely result," "are expected to," "will continue,"
"is  anticipated," "estimate," "project," or similar expressions are intended to
identify  "forward-looking statements". Such statements include those concerning
our  expected  financial  performance,  our  corporate  strategy and operational
plans.  Actual  results  could  differ  materially  from  those projected in the
forward-looking  statements  as a result of a number of risks and uncertainties,
including:  (a)  our  attempt to enter into the technology sector and whether we
can successfully incorporate such business into our operations; (b) our low cash
balances  which  may impede our ability to grow our business and compete against
our  competitors  and  other  liquidity  related  risks  discussed  below  under
"Liquidity  and  Capital  Resources";  (c)  any economic, political, regulatory,
legal  and  social  conditions in China that may negatively affect our business;
and  (d)  our  dependence  upon funding from related companies.  Statements made
herein  are  as  of  the  date  of  the  filing  of  this period report with the
Securities  and  Exchange  Commission  and  should  not be relied upon as of any
subsequent  date.  Unless  otherwise  required  by  applicable  law,  we  do not
undertake,  and  we  specifically  disclaim  any  obligation,  to  update  any
forward-looking  statements  to reflect occurrences, developments, unanticipated
events  or  circumstances  after  the  date  of  such  statements.

SECOND QUARTER OVERVIEW

     During  the  second  quarter of 2003, the Company continued its business to
sell  and  lease its real estate properties in the Huayang International Mansion
("Mansion"). The Company conducts its real estate business primarily through its
95%  owned  subsidiary  Shenyang  Haitong House Properties Development Co., Ltd.
("Haitong").

RESULTS OF OPERATIONS - Three months ended June 30, 2003

Revenues

     Revenues for the three months ended June 30, 2003 were $144,877, down 84.5%
from $935,803 for the three months ended June 30, 2002.  During the three months
ended  June  30,  2003,  the  Company  had  no real estate sales, as compared to
$396,382  of  real  estate  sales  for the three months ended June 30, 2002.  In
addition,  real  estate  rental  income decreased by 73.1% from $539,421 for the
three months ended June 30, 2002 to $144,877 for the three months ended June 30,
2003.  This  drop  was primarily due to decreasing annual rent per square meter,
and  the  fact  that  the  Company sold part of its real estate during the three
months  ended  June  30, 2002, which resulted in a decrease in the total area of
real  estate  available  for  leasing  in  2003.


                                        6
<PAGE>
Costs and Expenses

     Total  costs  and  expenses  in  the  three months ended June 30, 2003 were
$295,425, which was 60.4% lower than $746,711 of total costs and expenses in the
three months ended June 30, 2002.  One of the reasons for this decrease was that
no real estate was sold in the three months ended June 30, 2003 and therefore no
cost  was  incurred  thereon, as compared to $308,670 for the three months ended
June  30,  2002.

     For  the three months ended June 30, 2003, depreciation expenses dropped by
31.0%  to $102,132 from $148,038 for the same period of 2002 because part of the
real  estate were disposed of in 2002. In addition, interest expenses dropped by
73.6%  to $63,547 for the three months ended June 30, 2003 from $240,372 for the
same  period  of  2002, which was a direct result of reduced bank loans.  On the
other  hand, real estate operating expenses increased by 160.0% to $129,023 from
$49,631  in the same period of 2002 because the Company refurbished the lobby of
its  real  estate  in  2003,  which  caused  an  increase  in  repair  expenses.

Net Loss

     For  the  three  months  ended  June  30,  2003,  net  loss from continuing
operations  was  $145,021,  as  compared  to  the  net  income  from  continuing
operations  of  $170,473  for  the  three  months  ended June 30, 2002.  This is
primarily  due  to  the  significant  decreases  in real estate rental income as
discussed  above.

     The  Company's  net  loss  for  the  three  months  ended June 30, 2003 was
$145,021,  as  compared to the net income of $272,644 for the three months ended
June 30, 2002, which included an extraordinary item of $415,483 from the gain on
debt  extinguishments  and  a loss of $313,312 from the discontinued Hotel Group
operations.  Net  loss  per  share,  basic  and diluted, was $0.02 for the three
months  ended  June 30, 2003, as compared to a net income per share of $0.04 for
the  same  period  in  2002.

RESULTS OF OPERATIONS - Six months ended June 30, 2003

Revenues

     Revenues  for  the six months ended June 30, 2003 were $291,098, down 80.2%
from  $1,471,021  for the six months ended June 30, 2002.  During the six months
ended  June  30,  2003,  the  Company  had  no real estate sales, as compared to
$396,382  of  real  estate  sales  for  the  six months ended June 30, 2002.  In
addition,  real  estate rental income decreased by 72.9% from $1,074,639 for the
six  months  ended  June  30, 2002 to $291,098 for the six months ended June 30,
2003.  This  drop  was primarily due to decreasing annual rent per square meter,
and the fact that the Company sold part of its real estate during the six months
ended  June  30,  2002,  which  resulted in a decrease in the total area of real
estate  available  for  leasing  in  2003.


                                        7
<PAGE>
Costs and Expenses

     Total  costs  and  expenses  for  the  six  months ended June 30, 2003 were
$534,257,  which was 61.8% lower than $1,399,599 of total costs and expenses for
the  six  months  ended June 30, 2002.  One of the reasons for this decrease was
that no real estate was sold in the six months ended June 30, 2003 and therefore
no cost was incurred thereon, as compared to $308,670 for the three months ended
June  30,  2002.

     For  the  six  months ended June 30, 2003, depreciation expenses dropped by
45.7%  to $193,444 from $356,281 for the same period of 2002 because part of the
real  estate were disposed of in 2002. In addition, interest expenses dropped by
77.8%  to  $125,725 for the six months ended June 30, 2003 from $566,691 for the
same  period  of  2002, which was a direct result of reduced bank loans.  On the
other  hand,  real estate operating expenses increased by 27.6% to $214,365 from
$167,957 in the same period of 2002 because the Company refurbished the lobby of
its  real  estate  in  2003,  which  caused  an  increase  in  repair  expenses.

Net Loss

     For the six months ended June 30, 2003, net loss from continuing operations
was  $235,001,  as  compared  to  the  net  income from continuing operations of
$62,526  for  the  six months ended June 30, 2002.  This is primarily due to the
significant  decreases  in  real  estate  rental  income  as  discussed  above.

     The Company's net loss for the six months ended June 30, 2003 was $235,001,
as  compared  to the net loss of $41,677 for the six months ended June 30, 2002,
which  included  an  extraordinary  item  of  $415,483  from  the  gain  on debt
extinguishments  and  a  loss  of  $519,686  from  the  discontinued Hotel Group
operations.  Net loss per share, basic and diluted, was $0.03 for the six months
ended  June  30, 2003, as compared to a net loss per share of $0.01 for the same
period  in  2002.

LIQUIDITY AND CAPITAL RESOURCES

     Our  liquidity  consists  of  cash,  receivables,  real  estate  held  for
development  and  sale and receipts from rental activities. As of June 30, 2003,
our  cash  balance  was  $120,614. Our past operations were supported by related
companies which from time to time lent funds to us. However, such financing from
related  companies  may  not  always  be  available, and the Company may need to
secure  further  financing  to  support its operations. Future cash needs may be
financed  by  a  combination  of  cash flows from rental and leasing operations,
future  advances  under  bank  loans, and if needed, other alternative financing
arrangements,  which  may  or  may  not  be  available  to  us.

     We do not have any material commitments for capital expenditures as of June
30, 2003.

     Our projection of future cash requirements is affected by numerous factors,
including but not limited to, changes in customer receipts, real estate industry
trends,  operating  cost  fluctuations,  and  unplanned  capital  spending.


                                        8
<PAGE>
     As  of  June  30,  2003, we had total bank debt of $3,289,157. We also owed
$1,760,769  to  related  parties.  Our  indebtedness  poses substantial risks to
holders  of  our  Common  Stock,  including  the risks such as (i) a substantial
portion  of  our  cash  flow from operations will be dedicated to the payment of
interest  on  such indebtedness, (ii) our indebtedness may impede our ability to
obtain  financing  in  the  future for working capital, capital expenditures and
general  corporate  purposes  and  (iii)  our  debt  position  may leave us more
vulnerable  to  economic  downturns  and  may  limit  our  ability  to withstand
competitive  pressures.  If  we are unable to generate sufficient cash flow from
operations  in  the  future  to  service  our indebtedness and to meet our other
commitments,  we  will  be  required  to adopt one or more alternatives, such as
refinancing  or  restructuring  our  indebtedness,  selling  material  assets or
operations,  or seeking to raise additional debt or equity capital. There can be
no  assurance that any of these actions could be effected on satisfactory terms,
that  they  would  enable  us to continue to satisfy our capital requirements or
that they would be permitted by the terms of existing or future debt agreements.

     All  of  our  bank debt is secured by properties in the Mansion. As of June
30,  2003,  our  lenders  held  an  aggregate of $3,289,157 of liens against the
Mansion  as security for bank loans of the same amount. If we are unable to meet
the  terms  of  our  bank loans, resulting in default under such bank loans, the
lenders  may  elect  to  declare  all  amounts outstanding under the loans to be
immediately  due  and  payable  and foreclose on the Mansion, which would have a
material  adverse  effect  on  us.

     The  Company is dependent on the management company to collect revenues and
to make payments on a timely basis.  As of June 30, 2003, the management company
currently  owed  the  Company  $3,706,122,  plus  $9,171,084  against  which  an
allowance for doubtful accounts has been fully provided.  The management company
is a related party and is controlled by the majority shareholder of the Company.
Should  the  management company continue to fail to pay obligations as they come
due,  it could impair the ability of the Company to continue as a going concern.

EFFECT OF FLUCTUATIONS IN FOREIGN EXCHANGE RATES

     We  operate  in  the  People's  Republic  of  China, maintain our financial
control  center in Shenyang, PRC, and record most of our operating activities in
Renminbi  ("RMB"),  the  Chinese  currency. The exchange rate between RMB and US
Dollars  has  been  relatively  stable for the last few years. We do not believe
that  fluctuations  in the foreign exchange rates will have a material effect on
our  financial  statements.  The  RMB  exchange rates, however, are fixed by the
government of the PRC, and a change in the exchange rate by the PRC could have a
material  adverse  effect  on  our  financial  statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Market  risk  represents  the  risk  of  change  in the value of short term
investments  and  financial  instruments  caused  by  fluctuations in investment
prices,  interest  rates  and  foreign  currency  exchange  rates.


                                        9
<PAGE>
      The  Company operates in the People's Republic of China, and is exposed to
foreign  exchange  rate fluctuations related to the translation of the financial
results  of  our  operations in China into U.S. dollars during consolidation. As
exchange  rates vary, these results, when translated, may vary from expectations
and  adversely  impact  overall  expected  profitability.

     The  effect  of  foreign  exchange rate fluctuations on the Company for the
second quarter ended June 30, 2003 was immaterial.

     The  Company  has  not entered into any derivative financial instruments to
manage  interest  rate  risk  or  for  speculative  purpose and is not currently
evaluating the future use of such financial instruments.

     The  Company  does not hold cash equivalents or marketable securities as of
June 30, 2003 and has no plans to do so within the next twelve months.


                        Item 3.  Controls and Procedures

     Within  the  90-day  period  prior  to  the  filing date of this report, an
evaluation was conducted under the supervision and with the participation of the
Company's  management, including the Chief Executive Officer and Chief Financial
Officer,  of  the  effectiveness  of  the design and operation of our disclosure
controls and procedures. Based upon that evaluation, the Chief Executive Officer
and  Chief  Financial  Officer  have  concluded that our disclosure controls and
procedures are effective to ensure that all material information relating to the
Company,  including  our  consolidated  subsidiaries,  is  made  known  to  them
particularly  during the period when our periodic reports are being prepared. It
should  be noted that the design of any system of controls is based in part upon
certain  assumptions  about the likelihood of future events, and there can be no
assurance  that  any design will succeed in achieving its stated goals under the
potential  future  conditions,  regardless  of  how  remote.

     Subsequent  to  the  date of this evaluation there have been no significant
changes  in  our  internal controls or in other factors that could significantly
affect  our  internal  controls, including any corrective actions with regard to
significant  deficiencies  and  material  weaknesses.


                                       10
<PAGE>
                           PART II - OTHER INFORMATION

                           Item 1.  Legal Proceedings

     We are not a party to, nor are any of our respective properties the subject
of, any material pending legal or arbitration proceeding.

                         Item 2.  Changes in Securities

None.

                    Item 3.  Defaults Upon Senior Securities

None.

           Item 4. Submission of Matters to a Vote of Security Holders

None.

                            Item 5. Other information

None.

                    Item 6. Exhibits and Reports on Form 8-K

(a)     Exhibits

Exhibit
Number                    Document Description
-------                   --------------------

31.1      Chief  Executive Officer pursuant - Section 906 Certification pursuant
          to  the  Sarbanes-Oxley  Act.

31.2      Chief Financial Officer pursuant - Section 906 Certification  pursuant
          to  the  Sarbanes-Oxley  Act.

32.1      Chief  Executive Officer pursuant - Section 906 Certification pursuant
          to  the  Sarbanes-Oxley  Act.

32.2      Chief Financial Officer pursuant - Section 906 Certification  pursuant
          to  the  Sarbanes-Oxley  Act.

(b)  Reports on Form 8-K

     During  the six months ended June 30, 2003, the Company filed the following
reports  on  Form  8-K:

(1)  On  March  6,  2003,  the Company also filed a report on Form 8-K regarding
Item 4 - Changes in Registrant's Certifying Accountant relating to the dismissal
of  Moore  Stephens  Wurth  Frazer  and  Torber LLP as the Company's independent
auditors  and  the  engagement  of  Thomas  Leger  &  Co,  LLP  as the Company's
independent  auditors.

(2)  On  March  21,  2003, the Company also filed a report on amended Form 8-K/A
regarding Item 4 - Changes in Registrant's Certifying Accountant relating to the
dismissal


                                       11
<PAGE>
of  Moore  Stephens  Wurth  Frazer  and  Torber LLP as the Company's independent
auditors  and  the  engagement  of  Thomas  Leger  &  Co,  LLP  as the Company's
independent  auditors.

(3)  On  April  11,  2003, the Company filed a report on Form 8-K regarding Item
2  -Acquisition or Disposal of Assets - and Item 5 - Other Events and Regulation
FD  Disclosure  relating  to the rescinding of the acquisition of Jiahe Medicine
Group  and  a  related  press  release.

                                   SIGNATURES

     In  accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                            Huayang International Holdings, Inc.


                                            /s/ Gao Wanjun
                                            ----------------------------------
                                            Name: Gao Wanjun
                                            Title:  Chairman, President and
                                            Chief Executive Officer

                                            Date: August 13, 2003


                                            /s/ Wang Yufei
                                            ----------------------------------
                                            Name: Wang Yufei
                                            Title:  Secretary, Chief Financial
                                            Officer and Director

                                            Date: August 13, 2003


                                  EXHIBIT INDEX

Exhibit
Number                    Document Description
-------                   --------------------

31.1      Chief  Executive Officer pursuant - Section 906 Certification pursuant
          to  the  Sarbanes-Oxley  Act.

31.2      Chief Financial Officer pursuant - Section 906 Certification  pursuant
          to  the  Sarbanes-Oxley  Act.

32.1      Chief  Executive Officer pursuant - Section 906 Certification pursuant
          to  the  Sarbanes-Oxley  Act.

32.2      Chief Financial Officer pursuant - Section 906 Certification  pursuant
          to  the  Sarbanes-Oxley  Act.


                                       12
<PAGE>