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EXHIBIT 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL
OFFICERPURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael J. Smith, certify that:

|1. | I have reviewed this quarterly report on Form 10-QSB of
      Cathay Merchant Group, Inc.;                                                                                                                                                                                                                                        
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|2. | Based on my knowledge, this report does not contain any
      untrue statement of a material fact or omit to state a material fact
      necessary to make the statements made, in light of the circumstances under
      which such statements were made, not misleading with respect to the period
      covered by this report;
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|3. | Based on my knowledge, the financial statements, and
      other financial information included in this report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      report;                   
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|4. | I am responsible for establishing and maintaining
      disclosure controls and procedures (as defined in Exchange Act Rules
      13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
      defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant
      and have:                      
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|   | a)                                                                                                                                                                                                                                                                                                                                
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|   | b)                                                                                                                                                                                                                                                                                                                                
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|   | c)                                                                                                                                                                                                                                                                                                                                
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|5. | I have disclosed, based on my most recent evaluation of
      internal control over financial reporting, to the registrant's auditors
      and the audit committee of the registrant's board of directors (or persons
      performing the equivalent functions):                                                                
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|   | a)                                                                                                                                                                                                                                                                                                                                
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|   | b)                                                                                                                                                                                                                                                                                                                                

Dated: November 14, 2006

By: /s/ Michael J. SmithMichael J. Smith Chief
Executive Officer andChief Financial Officer

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