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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.;

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;

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;

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 13(a)-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this
report is being prepared;

(b) Evaluated the effectiveness of the
registrants disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation;
and

(c) Disclosed in this report any change
in the registrants internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrants internal control
over financial reporting; and

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):

(a) All significant deficiencies and
material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the
registrant's ability to record, process, summarize and report financial
information; and

(b) Any fraud, whether or not material,
that involves management or other employees who have a significant role in the
registrant's internal control over financial reporting.

Dated: November 14, 2007

| | By: | /s/
      Michael J. Smith                
| | --- | ------------------------------------------
| |     | Michael J. Smith                          
| |     | Chief Executive Officer and               
| |     | Chief Financial Officer                   
| |     | (Principal Executive Officer, Principal   
| |     | Financial Officer and Principal Accounting
| |     | Officer)                                  

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