UNITED STATES
                       Securities and Exchange Commission
                             WASHINGTON, D.C. 20549

                                    FORM 20-F

(Mark One)

|_|   REGISTRATION  STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                                       OR

|X|   ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
      ACT OF 1934

      For the fiscal year ended December 31, 2005

                                       OR

|_|   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934

                                       OR

|_|   SHELL  COMPANY  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
      EXCHANGE ACT OF 1934

      Date of event requiring this shell company report _______________

      For the transition period from _______________ to _______________

Commission file number 000-30058


                      CHINA INTERNATIONAL ENTERPRISES INC.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


                                 Not Applicable
--------------------------------------------------------------------------------
                 (Translation of Registrant's name into English)


                                     Canada
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                 (Jurisdiction of incorporation or organization)


                     No.5 Floor 6, Block A Skyworth Building
                            Hi-tech Industrial Park
                           Nanshan District, Shenzhen
                               518057, P.R. China
--------------------------------------------------------------------------------
                    (Address of principal executive offices)


                                       1
<PAGE>

Securities registered or to be registered pursuant to Section 12(b) of the Act.

      Title of each class      Name of each exchange on which registered

           None.
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Securities registered or to be registered pursuant to Section 12(g) of the Act.

                                  Common Stock
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                                (Title of Class)

Securities for which there is a reporting  obligation  pursuant to Section 15(d)
of the Act.

                                      None
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                                (Title of Class)

      Indicate the number of outstanding  shares of each of the issuer's classes
of capital or common  stock as of the close of the period  covered by the annual
report.

      There were approximately 688,083,977 shares of common stock outstanding as
of December 31, 2005.  On March 23,  2006,  the Company  effected a 1:32 reverse
split of its  outstanding  common  stock.  There were  approximately  21,502,597
shares of common stock outstanding as of June 7, 2006.

      Indicate by check mark if the registrant is a well-known  seasoned issuer,
as defined in Rule 405 of the Securities Act.

|_| Yes |X| No

      If this report is an annual or transition  report,  indicate by check mark
if the  registrant  is not  required to file  reports  pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934.

|_| Yes |X| No

      Note - Checking the box above will not relieve any registrant  required to
file reports  pursuant to Section 13 or 15(d) of the Securities  Exchange Act of
1934 from their obligations under those Sections.

      Indicate by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

|X| Yes |_| No


                                       2
<PAGE>

      Indicate  by check mark  whether  the  registrant  is a large  accelerated
filer,  an accelerated  filer,  or a  non-accelerated  filer.  See definition of
"accelerated  filer and large  accelerated  filer" in Rule 12b-2 of the Exchange
Act. (Check one):

|_| Large accelerated filer |_| Accelerated filer |X| Non-accelerated filer

      Indicate by check mark which  financial  statement item the registrant has
elected to follow.

|_| Item 17 |X| Item 18

      If this is an annual report, indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act).

|_| Yes |X| No

         (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                          DURING THE PAST FIVE YEARS)

      Indicate by check mark whether the  registrant has filed all documents and
reports  required  to be filed by  Sections  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

|_| Yes |_| No


                                       3
<PAGE>

                                TABLE OF CONTENTS

Introduction


                                     Part I

Item 1.   Identity of Directors, Senior Management and Advisors
Item 2.   Offer Statistics and Expected Timetable
Item 3.   Key Information
Item 4.   Information on the Company
Item 4A.  Unresolved Staff Comments
Item 5.   Operating and Financial Review and Prospects
Item 6.   Directors, Senior Management and Employees
Item 7.   Major Shareholders and Related Party Transactions
Item 8.   Financial Information
Item 9.   The Offer and Listing
Item 10.  Additional Information
Item 11.  Quantitative and Qualitative Disclosures About Market Risk
Item 12.  Description of Other Securities Other Than Equity Securities


                                     Part II

Item 13.  Defaults, Dividend Arrearages and Delinquencies
Item 14.  Material Modifications to the Rights of Security Holders
          and Use of Proceeds
Item 15.  Controls and Procedures
Item 16.  Reserved
Item 16A. Audit Committee Financial Expert
Item 16B. Codes of Ethics
Item 16C. Principle Account Fees and Services
Item 16D. Exemptions from the Listing Standards for Audit Committees
Item 16E. Purchases of Equity Securities by the Issuer and
          Affiliated Purchasers.


                                    Part III

Item 17.  Financial Statements
Item 18.  Financial Statements
Item 19.  Exhibits

Financial Statements                                                         F-1

Signature Page


                                       4
<PAGE>

CAUTIONARY NOTE REGARDING PREDICTIVE STATEMENTS

      Our disclosure and analysis in this annual report contain  statements that
depend upon or refer to future  events or  conditions or that include words such
as "expects,"  "anticipates,"  "intends," "plans,"  "believes,"  "estimates" and
similar  expressions.  Although we believe that these  statements are based upon
reasonable  assumptions,  including  projections  of  orders,  sales,  operating
margins,  earnings,  cash flow, research and development costs, working capital,
capital  expenditures and other  projections,  they are subject to several risks
and uncertainties, and therefore, we can give no assurance that such projections
will be achieved.

      Investors are cautioned  that our  statements are not guarantees of future
performance  and the actual results or developments  may differ  materially from
the expectations expressed.

      As for the statements  that relate to future  financial  results and other
projections, actual results will be different due to the inherent uncertainty of
estimates,  forecasts and projections and may be better or worse than projected.
Given  these  uncertainties,   you  should  not  place  any  reliance  on  these
statements.  These  statements also represent our estimates and assumptions only
as of the date that they were made and we expressly disclaim any duty to provide
updates to them or the estimates and assumptions  associated with them after the
date of this filing to reflect events or changes in  circumstances or changes in
expectations or the occurrence of anticipated events.

      We undertake no obligation to publicly update any predictive  statement in
this annual  report,  whether as a result of new  information,  future events or
otherwise.  You are advised,  however, to consult any additional  disclosures we
make in our other reports to the SEC after we begin to file such  reports.  Also
note that we provide a cautionary  discussion of risks and  uncertainties  under
the caption  "Risk  Factors" in this annual  report.  These are factors  that we
think could cause our actual results to differ materially from expected results.
Other factors besides those listed here could also adversely affect us.

EXCHANGE RATE INFORMATION

      Unless  otherwise  specified,  all  references  in this  document to "U.S.
Dollars",  "Dollars",  "US$" or "$" are to United States dollars; all references
to  "Renminbi" or "RMB" are to Renminbi,  which is the legal tender  currency of
the  People's  Republic of China (the "PRC" or "China").  See section  "Exchange
Control" under "Item 10. Additional  Information" in this annual report for more
details.


                                       5
<PAGE>

                                     PART I

Item 1.   Identity of Directors, Senior Management and Advisors

Not Applicable.

Item 2.   Offer Statistics and Expected Timetable

Not Applicable.

Item 3.   Key Information

3.A. Selected Financial Data

      The following table presents the selected consolidated  financial data for
the Company. You should read the following  information in conjunction with Item
5,  "Operating and Financial  Review and  Prospects."  The summary  statement of
operations  data of the Company for the years ended  December  31, 2004 and 2005
and the  summary  balance  sheet data of the  Company as of December 31 2005 set
forth below are derived from,  and are qualified in their  entirety by reference
to, the audited consolidated financial statements of the Company,  including the
notes thereto,  which are included in this annual report  beginning on page F-1.
Our consolidated  financial  statements are prepared and presented in accordance
with  accounting  principles  generally  accepted in the United States,  or U.S.
GAAP.

--------------------------------------------------------------------------------
                                         Fiscal Year Ended December 31,
                                ---------------------------------------------
                                  2005(3)           2004(2)           2003(1)
--------------------------------------------------------------------------------
Net Revenue                     $1,880,143        $1,373,079        $2,206,757
--------------------------------------------------------------------------------
General &
Administrative Expenses           $638,805          $634,321          $711,718
--------------------------------------------------------------------------------
Income (Loss) from
Operations                         $49,593         $(131,711)         $603,101
--------------------------------------------------------------------------------
Net Income (Loss)                 $170,573           $45,783          $707,653
--------------------------------------------------------------------------------
Comprehensive Income              $214,241           $48,177          $707,653
--------------------------------------------------------------------------------
Net Income (Loss) from
Operations per Share                $0.008            $0.002             $0.03
--------------------------------------------------------------------------------
Working Capital                 $1,530,110        $1,003,306          $779,083
--------------------------------------------------------------------------------
Total Assets                    $2,216,532        $1,963,600        $2,820,574
--------------------------------------------------------------------------------


                                       6
<PAGE>

--------------------------------------------------------------------------------
Net Assets                      $1,891,489        $1,666,972        $1,618,795
--------------------------------------------------------------------------------
Total Liabilities                 $325,043          $296,628        $1,210,779
--------------------------------------------------------------------------------
Shareholder's Equity            $1,891,489        $1,666,972        $1,618,795
--------------------------------------------------------------------------------
Capital Stock                   $1,210,276        $1,200,000        $1,200,000
--------------------------------------------------------------------------------
Number of Shares as
Adjusted to Reflect
Changes in Capital              20,504,401        19,940,000        19,940,000
--------------------------------------------------------------------------------
Dividends Declared
Per Share                              Nil               Nil               Nil
--------------------------------------------------------------------------------
Diluted Net Income
Per Share                           $0.008            $0.002            $0.035
--------------------------------------------------------------------------------

(1)   The  audited  financial  data  presented  here for the  fiscal  year ended
      December 31, 2003 are for Shenzhen Hengtaifeng Technology Co., Ltd., a PRC
      corporation  ("HTF").   Since  the  shareholders  of  China  International
      Enterprises,  Inc. (then known as Moving Bytes Inc. and referred to herein
      as the "Company")  consummated a share  exchange with China  International
      Enterprises Corp.  ("CIEC") on August 19, 2005, the historical  financials
      of CIEC become the Company's  historical  financial data at such time. HTF
      is 100% owned by Heng Xing Technology Group Devleopment Limited.  ("XHT"),
      which  is 100%  owned by CIEC,  which  is in turn  now  owned  100% by the
      Company.
(2)   On February 11, 2004, the Company terminated its Electronic Media Services
      business.
(3)   On August 19, 2005,  the Company  consummated a share  exchange  agreement
      with all the shareholders of CIEC. The only material asset of CIEC is 100%
      of the  capital  stock of XHT  which in turn  owns  100% of the  shares of
      capital  stock  of  HTF.  HTF is  classified  as a  wholly  owned  foreign
      enterprise  under  PRC law by  virtue of its  ownership  by XHT.  HTF is a
      provider of application software and system integration services in China.
      Specifically, HTF develops and produces housing accumulation fund software
      and credit guarantee management software products. It also develops family
      planning and property  management  software  and provides  related  system
      integration services.

3.B. Capitalization and Indebtedness

Not applicable.

3.C. Reasons for the Offer and Use of Proceeds

Not applicable.

3.D. Risk Factors

      In addition to the other  information  in this annual  report,  you should
consider carefully the following factors in evaluating our business.  You should
pay  particular  attention  to the fact that we conduct  our  operations  in the
People's  Republic  of  China  and  are  governed  by  a  legal  and  regulatory
environment  that in some respects  differs  significantly  from the environment
that may prevail in other countries that you may be familiar with. If any of the
following risks actually occur,  our business or results of operations  could be
seriously  harmed.  In that case,  the trading  price of our common  stock could
decline,  and you may lose part or all of your  investment.  The risks described
below are not the only ones we face.  Additional risks not presently known to us
or that we currently deem immaterial may also impair our business operations.


                                       7
<PAGE>

Risks Related to Our Business.

We face competition in our industry.

      We face increasing competition in our industry of developing and marketing
software and providing systems integration and related services.  A large number
of new  software  competitors  enter the  Chinese  software  market  each  year.
Competition is based primarily on price and quality. While we intend to maintain
or  improve  our  competitive  position  through  constant  improvements  in our
products,  services and operational  efficiencies,  we cannot assure you that we
will be able to do so.

We may not be able to effectively control and manage our growth.

      If our business and markets grow and develop,  it will be necessary for us
to finance and manage expansion in an orderly fashion. In addition,  we may face
challenges  in  managing   expanding   product  and  service  offerings  and  in
integrating  acquired  businesses with our own. Such eventualities will increase
demands on our existing management, workforce and facilities. Failure to satisfy
such increased  demands could  interrupt or adversely  affect our operations and
cause  production   backlogs,   longer  product   development  time  frames  and
administrative inefficiencies.

We do not presently  maintain  fire,  theft,  liability or any other  insurance,
which leaves us with  exposure in the event of loss or damage to our  properties
or if claims are filed against us.

      We do not maintain fire, theft,  liability or other insurance of any kind.
We bear the economic  risk with respect to loss of or damage or  destruction  to
our  property  and to the  interruption  of our business as well as liability to
third parties for damage or  destruction  to them or their  property that may be
caused by our personnel or products. Such liability could be substantial and the
occurrence of such loss or liability may have a material  adverse  effect on our
business, financial condition and prospects. While product liability lawsuits in
the PRC are rare  and HTF has  never  experienced  significant  failures  of its
software,  there can be no  assurance  that HTF would not face  liability in the
event of the failure of any of its products.

We depend on large contracts and a concentration  of customers;  loss of any one
of these could substantially decrease our revenues.

      Our revenue is dependent,  in large part, on significant  contracts from a
limited  number of  customers.  During the fiscal year ended  December 31, 2005,
approximately 40% of our sales were to our 10 largest  customers,  approximately
27% of our sales were made to our 5 largest  customers and  approximately 10% of
sales were made to our largest  customer.  During the fiscal year ended December
31,  2004  approximately  47%  of  sales  were  to  our  10  largest  customers,
approximately  30%  of our  sales  were  made  to our 5  largest  customers  and
approximately  7% of sales were made to our largest  customer.  We believe  that
revenue  derived  from  current  and future  large  customers  will  continue to
represent a significant portion of our total revenue.  Our inability to continue
to secure and  maintain a  sufficient  number of large  contracts  would cause a
significant  decrease  in  our  revenues,  which  would  negatively  affect  our
operating results.


                                       8
<PAGE>

Risks Related to Operating Our Business in China

We face the risk that changes in the policies of the PRC government could have a
significant  impact  upon the  business we may be able to conduct in the PRC and
the profitability of such business.

      The PRC's  economy is in a transition  from a planned  economy to a market
oriented economy subject to five-year and annual plans adopted by the government
that set national economic development goals. Policies of the PRC government can
have  significant  effects  on the  economic  conditions  of the  PRC.  The  PRC
government  has confirmed that economic  development  will follow the model of a
market economy.  Under this direction,  we believe that the PRC will continue to
strengthen  its economic and trading  relationships  with foreign  countries and
business development in the PRC will follow market forces. While we believe that
this trend will continue,  there can be no assurance that this will be the case.
A change in policies by the PRC government  could adversely affect our interests
by, among other  factors:  changes in laws,  regulations  or the  interpretation
thereof, confiscatory taxation,  restrictions on currency conversion, imports or
sources  of  supplies,  or  the  expropriation  or  nationalization  of  private
enterprises.  Although the PRC  government  has been  pursuing  economic  reform
policies for more than two decades,  there is no assurance  that the  government
will  continue  to  pursue  such  policies  or  that  such  policies  may not be
significantly altered, especially in the event of a change in leadership, social
or political disruption,  or other circumstances  affecting the PRC's political,
economic and social life.

The PRC laws and  regulations  governing  our current  business  operations  are
sometimes vague and uncertain.  Any changes in such PRC laws and regulations may
have a material and adverse effect on our business.

      There are  substantial  uncertainties  regarding  the  interpretation  and
application of PRC laws and regulations, including, but not limited to, the laws
and  regulations  governing our business,  or the enforcement and performance of
our  arrangements  with  customers in the event of the  imposition  of statutory
liens,  death,   bankruptcy  and  criminal   proceedings.   We  and  any  future
subsidiaries are considered  foreign persons or foreign funded enterprises under
PRC  laws,  and as a  result,  we are  required  to  comply  with  PRC  laws and
regulations.  These laws and  regulations are sometimes vague and may be subject
to future changes, and their official interpretation and enforcement may involve
substantial uncertainty. The effectiveness of newly enacted laws, regulations or
amendments  may  be  delayed,  resulting  in  detrimental  reliance  by  foreign
investors.  New laws and  regulations  that affect  existing and proposed future
businesses may also be applied retroactively.  We cannot predict what effect the
interpretation  of  existing  or new PRC  laws or  regulations  may  have on our
businesses.

Inflation in the PRC could negatively affect our profitability and growth.

      While the PRC economy has experienced  rapid growth,  such growth has been
uneven among various sectors of the economy and in different  geographical areas
of the country. Rapid economic growth can lead to growth in the money supply and
rising inflation. If prices for our products rise at a rate that is insufficient
to  compensate  for the rise in the costs of  supplies,  it may have an  adverse
effect on  profitability.  In order to control  inflation  in the past,  the PRC
government  has  imposed  controls  on bank  credits,  limits on loans for fixed
assets and  restrictions on state bank lending.  Such an austere policy can lead
to a slowing of economic  growth.  In October 2004,  the People's Bank of China,
the PRC's central  bank,  raised  interest  rates for the first time in nearly a
decade  and  indicated  in  a  statement   that  the  measure  was  prompted  by
inflationary  concerns in the Chinese economy.  Repeated rises in interest rates
by the central bank would likely slow economic activity in China which could, in
turn, materially increase our costs and also reduce demand for our products.


                                       9
<PAGE>

Governmental  control  of  currency  conversion  may  affect  the  value of your
investment.

      The PRC government imposes controls on the convertibility of Renminbi into
foreign  currencies and, in certain cases, the remittance of currency out of the
PRC.  We  receive  substantially  all of our  revenues  in  Renminbi,  which  is
currently not a freely  convertible  currency.  Shortages in the availability of
foreign currency may restrict our ability to remit  sufficient  foreign currency
to pay dividends,  or otherwise satisfy foreign currency dominated  obligations.
Under existing PRC foreign  exchange  regulations,  payments of current  account
items,  including profit distributions,  interest payments and expenditures from
the transaction,  can be made in foreign  currencies without prior approval from
the PRC State  Administration  of Foreign  Exchange by  complying  with  certain
procedural  requirements.   However,   approval  from  appropriate  governmental
authorities is required where Renminbi is to be converted into foreign  currency
and remitted out of China to pay capital  expenses such as the repayment of bank
loans denominated in foreign currencies.

      The PRC  government  may also at its  discretion  restrict  access  in the
future to foreign  currencies for current account  transactions.  If the foreign
exchange control system prevents us from obtaining  sufficient  foreign currency
to  satisfy  our  currency  demands,  we may not be able to pay  certain  of our
expenses as they come due.

The  fluctuation  of the  Renminbi  may  materially  and  adversely  affect your
investment.

      The value of the Renminbi against the U.S. dollar and other currencies may
fluctuate and is affected by, among other things, changes in the PRC's political
and economic conditions.  As we rely entirely on revenues earned in the PRC, any
significant  revaluation of the Renminbi may materially and adversely affect our
cash flows, revenues and financial condition. For example, to the extent that we
need to convert U.S.  dollars we receive from an offering of our securities into
Renminbi  for our  operations,  appreciation  of the  Renminbi  against the U.S.
dollar could have a material adverse effect on our business, financial condition
and results of operations. Conversely, if we decide to convert our Renminbi into
U.S.  dollars for the purpose of making  payments  for  dividends  on our common
shares or for other business  purposes and the U.S. dollar  appreciates  against
the  Renminbi,  the U.S.  dollar  equivalent of the Renminbi we convert would be
reduced.  In addition,  the depreciation of significant U.S. dollar  denominated
assets could result in a charge to our income  statement  and a reduction in the
value of these assets.

      On July 21, 2005,  the PRC  government  changed its  decade-old  policy of
pegging the value of the RMB to the U.S. dollar.  Under the new policy,  the RMB
is permitted  to fluctuate  within a narrow and managed band against a basket of
certain  foreign   currencies.   This  change  in  policy  has  resulted  in  an
approximately  3.0%  appreciation of the RMB against the U.S. dollar.  While the
international reaction to the RMB revaluation has generally been positive, there
remains  significant  international  pressure on the PRC  government to adopt an
even more  flexible  currency  policy,  which could result in a further and more
significant appreciation of the RMB against the U.S. dollar.


                                       10
<PAGE>

Recent  PRC  State  Administration  of  Foreign  Exchange  ("SAFE")  Regulations
regarding offshore financing activities by PRC residents have undergone a number
of changes which may increase the administrative  burden we face. The failure by
our  shareholders  who are PRC residents to make any required  applications  and
filings  pursuant  to  such  regulations  may  prevent  us  from  being  able to
distribute  profits and could  expose us and our PRC  resident  shareholders  to
liability under PRC law.

      SAFE, issued a public notice ("October Notice") effective from November 1,
2005, which requires  registration with SAFE by the PRC resident shareholders of
any foreign  holding  company of a PRC  entity.  Without  registration,  the PRC
entity cannot remit any of its profits out of the PRC as dividends or otherwise;
however,  it is  uncertain  how  the  October  Notice  will  be  interpreted  or
implemented regarding specific documentation  requirements for a foreign holding
company formed prior to the effective date of the October Notice, such as in our
case. Our PRC resident shareholders have not registered with SAFE at this stage.
In  addition,  the  October  Notice  requires  that any monies  remitted  to PRC
residents outside of the PRC be returned within 180 days;  however,  there is no
indication  of what the penalty will be for failure to comply or if  shareholder
non-compliance  will be considered to be a violation of the October Notice by us
or otherwise affect us.

      In the event that the proper  procedures  are not followed  under the SAFE
October Notice, we could lose the ability to remit monies outside of the PRC and
would therefore be unable to pay dividends or make other distributions.  Our PRC
resident  shareholders  could be  subject  to fines,  other  sanctions  and even
criminal liabilities under the PRC Foreign Exchange  Administrative  Regulations
promulgated January 29, 1996, as amended.

The  markets  for our  products  could  diminish  or  disappear  if the  Chinese
government were to terminate, scale back or overhaul its programs.

      We  currently  develop  and  market  applications  software  for  industry
sectors, which are under the direct guidance of Chinese national policy. In some
cases,  such as Housing  Accumulation  Funds and Family Planning  software,  our
products are designed either to implement, or specifically for use in connection
with,  government  sponsored and controlled  programs. A change or adjustment of
PRC national policy would likely have a profound impact on both the programs and
the industry sectors associated with them. Were the PRC government to terminate,
scale back or make substantial  alterations to any such program, it could render
our software products  associated with the program useless or of limited utility
and severely  diminish or eliminate  market demand for them. In such event,  our
operating  results would suffer  severely and we would be forced to either alter
our existing products or design and develop new products to replace them.

We face the risk of piracy of our intellectual property; the enforcement of laws
to protect  intellectual  property  rights in the PRC may not be  sufficient  to
protect against such risks.


                                       11
<PAGE>

      For a long  period of time,  piracy has  negatively  affected  Chinese and
foreign software companies doing business in China.  Although the PRC government
has  strengthened  its copyright  laws and increased its efforts to enforce such
laws, we believe that copyright laws and their  enforcement in the PRC are still
in need of improvement.  According to William Lash, U.S. Assistant  Secretary of
Commerce,  "the  total  amount of fines  [for  piracy]  in the  country  in 2003
equaled,  by my  calculation,  1/20th of 1% of the  amount  of damage  caused by
piracy." In order to deter piracy,  we use certain security  measures to protect
our products,  such as imbedding  special  check codes in our software.  We also
deter piracy by frequently upgrading our software products so as to make pirated
versions soon  obsolete.  Finally,  we believe that, by operating in specialized
application software markets with fewer potential customers and competitors than
the  general  software  market,  we also  lessen the risk of piracy to a certain
extent.  We  believe  that  such  markets,  because  of their  smaller  size and
sophisticated  business  and  government  consumers,   are  less  attractive  to
potential  pirates.  Furthermore,  the  requirements  for specialized  technical
knowledge may also make the software more difficult to obtain and replicate.

Because our principal  assets are located  outside of the United States and most
of our directors and officers  reside  outside of the United  States,  it may be
difficult for you to enforce your rights based on U.S.  federal  securities laws
against us and our officers and  directors in the U.S. or to enforce U.S.  court
judgments against us or them in the PRC.

      Three of our four  directors  and  officers  reside  outside of the United
States.  In addition,  HTF, our  operating  subsidiary,  is located in China and
substantially all of its assets are located outside of the United States. It may
therefore be difficult for investors in the United States to enforce their legal
rights based on the civil liability  provisions of the U.S.  Federal  securities
laws  against us in the courts of either the U.S. or the PRC and,  even if civil
judgments are obtained in U.S. courts,  to enforce such judgments in PRC courts.
Further, it is unclear if extradition  treaties now in effect between the United
States and the PRC would permit effective enforcement against us or our officers
and directors of criminal  penalties,  under the U.S. Federal securities laws or
otherwise.

Risks Related to Our Common Stock

Our officers,  directors and affiliates  control us through their  positions and
stock ownership and their interests may differ from those of other stockholders.

      Our officers,  directors and  affiliates  beneficially  own  approximately
59.7% of our common  stock.  Yuanqing Li the  Chairman of our Board of Directors
and our President,  beneficially  owns  approximately  56.6% of our common stock
(including  shares held by his wife). Mr. Li can effectively  control us and his
interests may differ from other stockholders.

We are not likely to pay cash dividends in the foreseeable future.

      We currently intend to retain any future earnings for use in the operation
and expansion of our business. We do not expect to pay any cash dividends in the
foreseeable future but will review this policy as circumstances dictate.

There is currently a limited trading market for our common stock.


                                       12
<PAGE>

      Our common stock is quoted on the over-the-counter ("OTC") Bulletin Board.
However,  our bid and asked  quotations  have not regularly  appeared on the OTC
Bulletin Board for any consistent  period of time.  There is currently a limited
trading  market for our common  stock and our common stock may never be included
for  trading  on any  stock  exchange  or  through  any other  quotation  system
(including,  without limitation,  the NASDQ Stock Market).  You may be unable to
sell your shares due to the absence of a trading market.

Our stock is subject to the  "Penny-Stock"  rules,  which may further  limit the
liquidity of your investment.

      Our common stock is also subject to the "penny stock" rules, which require
delivery  of a schedule  explaining  the penny stock  market and the  associated
risks before any sale. These requirements may further limit your ability to sell
your shares.

Our common stock is subject to price volatility unrelated to our operations.

      The market price of our common stock could fluctuate  substantially due to
a variety of  factors,  including  the  market's  perception  of our  ability to
achieve  our  planned  growth,  quarterly  operating  results of other  software
companies,  trading volume in our common stock, changes in general conditions in
the  economy  and the  financial  markets or other  developments  affecting  our
competitors or us. In addition, the stock market is subject to extreme price and
volume fluctuations.  This volatility has had a significant effect on the market
price of  securities  issued by many  companies  for reasons  unrelated to their
operating  performance  and could have the same effect on our common  stock.  In
particular,  news of international  political developments affecting China could
affect the market  prices of our  securities  more  severely than those of other
companies.

Item 4.   Information on the Company

4.A. History and Development of the Company

      China  International  Enterprises Inc. (the  "Company"),  was incorporated
under the Company Act of British  Columbia,  Canada, on December 23, 1991, under
the name  "Jackpine  Mining Co.  Inc." On July 16, 2000,  the Company  continued
under the Canada Business  Corporations  Act and changed its name to E*Comnetrix
Inc and on July 24, 2002 the Company  changed its name to Moving Bytes Inc..  On
August 19, 2005,  the Company  acquired  9,970,000  shares of common stock,  par
value $0.001 per share, of China  International  Enterprises Corp.  ("CIEC"),  a
Delaware  corporation,  representing 100% of the issued and outstanding  capital
stock of CIEC under a share exchange agreement dated August 15, 2005 (the "Share
Exchange Agreement").  Under the Share Exchange Agreement, the Company agreed to
issue  an  aggregate  of its  638,080,000  shares  of  common  stock to the CIEC
shareholders,  representing  92.87% of the issued and outstanding capital shares
of the Company giving effect to the share exchange.

      On March 23, 2006,  the Company  changed its name from "Moving Bytes Inc."
to "China  International  Enterprises  Inc." and changed its trading symbol from
"MBYTF.OB"  to  "CIETF.OB".  On the same day, the Company  also  effected a 1:32
reverse split of its outstanding common stock.


                                       13
<PAGE>

      CIEC was  incorporated  in Delaware on January  13,  2005.  On January 31,
2005, CIEC entered into a share exchange agreement with the shareholders of Heng
Xing Technology Group Development  Limited, a British Virgin Islands corporation
("XHT"), pursuant to which it acquired 100% of the outstanding stock of XHT from
its three  shareholders.  The only asset of XHT is 100% of the shares of capital
stock of Shenzhen Hengtaifeng Technology Co., Ltd. ("HTF"), a corporation formed
under  the law of the  People's  Republic  of  China  ("PRC")  in  1995.  HTF is
currently  classified  as a wholly  foreign  owned  enterprise  under PRC law by
virtue of its ownership by XHT.

      The  corporate  structure  of the  Company  as of the date of this  annual
report,  as set forth in the following  diagram,  is that CIEC is a wholly owned
subsidiary of the Company and XHT remains a wholly owned  subsidiary of CIEC and
the sole shareholder of HTF.

              China International Enterprises Inc. (the "Company")
                                        |
                 China International Enterprises Corp. ("CIEC")
                                        |
             Heng Xing Technology Group Development Limited ("XHT")
                                        |
  Shenzhen Hengtaifeng Technology Co., Ltd. ("HTF" or the "Operating Company")

      Our U.S. executive offices are located at 100 Wall Street, 15th Floor, New
York, New York 10005 and our telephone number is  212-232-0120.  HTF's principal
offices  are  located  at No.5  Floor 6,  Block A,  Skyworth  Building,  Hi-tech
Industrial Park, Nanshan District,  Shenzhen,  518057, P.R.China.  Shenzhen is a
southern Chinese city which is located near Hong Kong.

4.B. Business Overview

Our Products

      The Company is a holding Company for CIEC,  which is a holding company for
and owns 100% of XHT.  XHT is a holding  company  for, and owns 100% of HTF, the
Operating  Company in China.  HTF is a provider  of  applications  software  and
system integration  services in China.  Specifically,  HTF develops and produces
housing accumulation fund software, credit guarantee management software, family
planning software and property  management  software.  HTF also provides related
system integration  services to customers purchasing its proprietary products at
no additional  charges.  In addition,  HTF markets software products produced by
other  companies  as  a  value-added  reseller;  in  such  cases,  HTF  provides
installation and related systems  integration  services at an additional cost to
the customer.

      Our core product is Housing  Accumulation  Fund software,  which accounted
for 48% of our  revenues in 2005 and 64% of our  revenues  in 2004.  HTF entered
this  market  in 1996  and has  more  than 139  customers  in over 25  provinces
throughout China.

      We have also  developed  and are  marketing  credit  guarantee  management
software.  Since its  development in 2003,  this product has  experienced  rapid
sales  growth.  We believe our product is the first  credit  guarantee  software
available in China.


                                       14
<PAGE>

      We also  developed and commenced  marketing  family  planning  software in
2004.  Such  software  accounted  for 2% of our  revenue  in 2005  and 4% of our
revenues in 2004.

      We have also  developed  property  management  software  at the request of
certain of our Housing Accumulation Fund software and related customers. So far,
sales of property  management software have been sporadic and have not generated
significant  revenues.  We did not sell any property management software in 2004
and 2005.

      We do not charge customers  purchasing our proprietary  software  products
separately for related systems integration services; however we also provide and
charge for such services as a value-added reseller of other companies' products.
Sales of value--added  systems integration  services accounted for approximately
27% in 2005 and 23% of our revenues in 2004, respectively.

The  following  table  presents a breakdown  of the  Company's  products'  total
revenues during the past three years:

--------------------------------------------------------------------------------
                             Percentage of      Percentage of      Percentage of
                             Total Revenue      Total Revenue      Total Revenue
                             in 2005            in 2004            in 2003
--------------------------------------------------------------------------------
Housing Accumulation
Fund software                48%                64%                46%
--------------------------------------------------------------------------------
credit guarantee
management software          23%                 9%                 2%
--------------------------------------------------------------------------------
family planning
software                      2%                 4%                --
--------------------------------------------------------------------------------
property management
software                     --                 --                 24%
--------------------------------------------------------------------------------
systems integration
services                     27%                23%                28%
--------------------------------------------------------------------------------

a)    Housing Accumulation Funds Software

      The system of a public accumulation fund for housing construction in China
was  introduced  in  1991  by  the  PRC  Ministry  of   Construction.   "Housing
Accumulation  Funds" are long-term housing reserve accounts which are maintained
for the benefit of employees and are funded with mandatory contributions by both
the employees and their employers.  The  contributions are deposited in accounts
at  designated  commercial  banks  ("Bank")  and  managed  by  regional  Housing
Accumulation Fund Management Centers  ("Centers"),  which in turn are supervised
by local  governments,  the PRC Ministry of Construction and the PRC Ministry of
Finance (collectively referred to as "Supervisors").

      Although employees own their respective shares of the Housing Accumulation
Funds,  they do not have  any  control  over the  investment  of the  funds.  An
employee  can withdraw  his or her  respective  share of the funds in any of the
following  situations:  to  purchase,  build or renovate a home;  to retire;  if
unable to work; if the employee is relocating  outside of China; if the employee
is repaying  debt  secured by a mortgage;  or if the  employee's  rent exceeds a
designated percentage of his salary.


                                       15
<PAGE>

      The  Housing   Accumulation  Fund  program  was  established  by  the  PRC
Government as a social  welfare  system in an attempt to address the problems of
low employee salaries and insufficient  savings for purchasing  housing.  It was
designed as a stable,  long-term reserve fund for improving housing  conditions.
The PRC Central Government State Council issued "Administrative  Regulations for
Housing  Accumulation  Funds" on March 24, 2002 to promote and more  effectively
manage the system. By the end of March 2006, the regulations had been adopted in
nearly 2,600  counties  across China and the total amount by the PRC  Government
deposited   in  the  system   had   reached   approximately   RMB10379.88billion
(approximately U.S.$1267billion).

      HTF developed its first version of Housing  Accumulation  Fund software in
1996.  By the end of 2005,  HTF had sold a total of over  $7.8  million  of such
software.  HTF currently holds  registered PRC copyrights on this product series
and sells to over 139 customers in over 25 provinces in China.  HTF had $899,975
in revenues for this product  series in the fiscal year ended December 31, 2005,
$1,016,000 in revenues for this product series in the fiscal year ended December
31, 2003, and $885,700 in the fiscal year ended December 31, 2004.

      Our housing  accumulation fund software provides a complete,  computerized
information  management  solution for the  national  Housing  Accumulation  Fund
Management system.  The Housing  Accumulation Fund system involves four types of
users: Housing Accumulation Fund Management Centers,  which are local government
agencies that manage and administer the system; Supervisors, as described above;
designated  commercial banks where the contributed funds are deposited and held;
and the participating  employees and employers,  which include a large number of
government offices, state-owned and private companies, for-profit and non-profit
organizations that contribute to the funds (collectively "Units").

      HTF offers four versions of its Housing  Accumulation  Fund software --- a
"Center version", a "Supervisor version", a "Bank version" and a "Unit version".
Each of these  versions was developed to serve the specific needs of the various
groups of participants,  allowing them to create,  manage and analyze a database
of  information  relating  to Housing  Accumulation  Funds,  including  employee
information,  deposits and withdrawals,  individual  loans,  housing  subsidies,
housing  purchases  and  sales,  property  records  and other  information.  HTF
believes it was the first company to bring Housing Accumulation Fund software to
market, and, to our knowledge, it is still the only company in the industry that
offers multiple, user-specific "versions" of this type of software.

      The four  versions of  software  are  compatible  with each other and with
products sold by other  companies,  allowing data to be migrated and  reconciled
from one user's system to another.

      Thus,  the original  data  recorded by each Unit  (including  personal and
account   information  for  each  employee   participating  in  the  system)  is
automatically  submitted via telephone  modem or through an internet  network to
its regional  Center,  which records the information in the designated  employee
account and automatically  produces relevant documentation for each account. The
documentation  is then  forwarded  to the  designated  bank for the fund,  which
performs clearing and settlement using the Bank version software.


                                       16
<PAGE>

      Supervisors  can use their  version of the  software to retrieve  relevant
data from the Centers and the Banks and receive detailed information  concerning
deposits, withdrawals and loans through the statistical reporting and analytical
functions.

      At the end of each month,  users can run checks through a special "module"
to  reconcile  their  information  with that of the other  users in the  system,
thereby  ensuring the accuracy of data at each point in the system.  Centers can
also use the software to produce  statistical  reports and perform  analysis for
decision-making.

      Our software  replaces the previous system of manual input and handling of
information,  which often produced errors, especially with the dramatic increase
in the number of employees participating in the system, and which we believe was
inefficient.  We believe that by automating many of the recordkeeping  functions
which were  formerly  performed  by hand,  our  software  system  provides  more
scientific,   robust,   and  efficient   management  for  the  national  Housing
Accumulation  Fund system and  standardizes  the flow of  information  among the
various different types of users in the system.

      The design and  operation of any  applications  software  must be based on
certain operating systems and database platforms.  The software structure design
must also meet the needs of clients' current and future  businesses.  We believe
that HTF's Housing  Accumulation Fund software series meets these criteria.  Our
products are compatible with most  international  operating systems and database
platforms,  and  are  designed  to  meet  the  complicated  needs  of  different
customers,   as  described  below.  Certain  characteristics  of  HTF's  housing
accumulation fund software are set forth below:

      o     Operating  system:  supports  Microsoft  Windows and UNIX  operating
            systems
      o     Development platform: Sybase Powerbuilder
      o     Database:   simultaneously   supports  multiple  databases  such  as
            Microsoft SQL Server, Informix, Oracle and Sybase
      o     Software  system  structure:  combines B/S (internet  browser server
            maintained by the internet service provider) and C/S (the local area
            network server maintained by customer)

      HTF's  software  products are designed  with various  different  functions
packaged  in  discrete  modules;  this  modular  design  allows  users to select
individual  functions  according to their  specific  needs when  purchasing  our
software.  We believe that this ability to customize  the  functionality  of our
products  to  meet  the  specific  needs  of our  customers  will  enable  us to
effectively address their changing requirements.

b)    Credit Guarantee Software

      In  2002,  at the  request  of  the  Shenzhen  City  Small-to-Medium-Sized
Enterprises  Credit Guarantee Center,  HTF began to develop its credit guarantee
software.  The  project  was funded by a $36,000  (RMB  300,000)  grant from the
Shenzhen  Science & Technology  Bureau,  which we received in 2003. In September
2003,  HTF  released  its  first  version  of the  software,  "Credit  Guarantee
Management  Information  System,"  which was then  successfully  implemented  in
Shenzhen City  Small-To-Medium-Sized  Enterprises  Credit Guarantee Center.  The
product  generated  approximately  $432,490  of revenue  in 2005,  approximately
$120,000 in revenue in 2004 and approximately $35,000 of revenue in 2003.


                                       17
<PAGE>

      China's Credit Guarantee  System was established by the National  Economic
and Trading Commission in 1999 in order to facilitate the financing of small and
medium-sized  enterprises ("SMEs"),  which have difficulty obtaining bank loans.
The  government-sponsored  Credit  Guarantee  System  supplements  the  existing
commercial  credit guaranty  industry,  which is composed of various  for-profit
commercial  enterprises.  Under the Credit Guarantee  System,  government-funded
local and regional agencies and nonprofit  organizations  provide  guarantees to
enable SMEs to obtain loans.

      HTF's software  provides a means of collecting  and  organizing  data from
SMEs and performs risk management functions,  such as financial analysis, credit
evaluation  and  risk  estimation.  The  software  is  marketed  for use both by
participants  in the  government-sponsored  system  and by  private,  commercial
credit guarantors.

      At present, HTF's credit guarantee software is sold to 32 credit guarantee
organizations in over 17 provinces throughout China.

      We believe that our existing relationships with municipal credit guarantee
organizations  which  purchase  our  software  will  enable us to retain a large
market share for this product even if  competitors  enter the field.  Based upon
statements by the President of China Economics  Technology  Investment Guarantee
Co., Ltd., we estimate that in several years there will be  approximately  5,220
credit guarantee  entities in China.  Assuming an average price of approximately
$12,100, (RMB100,000) per system, we estimate that the potential market for this
product may be up to $63 million (RMB 521,419,500).

      HTF's credit  guarantee  management  software is based on the Microsoft(R)
Visual Studio.net software development  platform and database  technology.  Some
basic specifications of the software are as follows:

      o     Operating system: supports Microsoft Windows(R) operating system but
            can also be operated on IBM and HP UNIX operating systems.
      o     Development platform: Microsoft Visual Studio.net
      o     Database:  capable of supporting various different databases such as
            Microsoft SQL Server, Oracle and Sybase.

      As with our housing  accumulation  fund software,  HTF's credit  guarantee
software is packaged in modules,  allowing users to "customize" their systems by
selecting and  purchasing  particular  functions to meet their needs.  Presently
available  functions for this  software  include  business  flow  control,  risk
management, data analysis, and decision-making features. It also has two general
application  modules:  a document  management  module  and an office  management
module, which provide assistance to customers in their daily operations.

c)    Property Management Software

      HTF has developed  property  management  software and real estate exchange
and  information  management  systems  pursuant to the request of several of its
Housing  Accumulation Fund software customers and related parties.  The software
was originally  developed as "custom"  products and, to date, has been sold only
on an  occasional  basis.  Customers  currently  using our  property  management
software include four government  property  management  bureaus,  one commercial
real estate  developer and one real estate  agent.  We did not sell any property
management software in 2004 and 2005.


                                       18
<PAGE>

      In China all records  related to rights to use real  property are filed at
local and regional  "Real Estate  Exchange  Centers,"  which  maintain  official
databases  of such  information,  Real  Estate  Exchange  Centers are subject to
supervision  by property  management  bureaus  regulated  by the PRC Ministry of
Construction.

      The primary  function  of our  property  management  software is to enable
users  to  access  official   government   property  ownership  and  use  rights
registries.  Users can search for  official  documents  on file and  process and
analyze information relating to property ownership. Although there were no sales
of this product in 2004 and 2005,  we have  continued to update the software and
believe  that it could  potentially  be  marketed  to the  general  real  estate
industry in China.  This would include Real Estate  Exchange  Centers,  property
management bureaus,  commercial property management companies and a large number
of real estate agents.

      We  estimate  that in China  there are over  3,000  Real  Estate  Exchange
Centers,  about 300 property management bureaus,  over 1,000 commercial property
management  companies  and a large  number of real estate  agents.  Based on the
foregoing,  we estimate that the total potential market for property  management
software  and related  systems  integration  services,  which  includes  various
applications  software,  system  software  platforms,  systems  integration  and
software upgrade services, is approximately $145 million (RMB 1.2 billion).

d)    Family Planning Software

      Family  planning  software  is HTF's  newest line of  products.  HTF began
developing this product in 2003 for use by government family planning management
departments,  public  education  organizations  and  nonprofit  family  planning
associations, and recently completed its first sales of the software.

      Family planning is a basic national policy which was officially instituted
by the PRC  government  during the 1970's and  1980's.  The PRC  government  has
committed to building a national network for disseminating population and family
planning  information by 2006. This plan calls for 80% of China's 3,000 counties
to have access to a central  information  system for  child-bearing age women by
the end of 2005.

      HTF's family planning software is designed for use in connection with such
central  information  system. It creates a large-scale,  networked database that
can be accessed by users without  connecting  to the internet and  automatically
switches  between the "online" and  "offline"  status.  The system  combines the
"internet browser server and client local server" structure.

      HTF's  population and family planning  management  software  provides such
functions as data collection,  processing,  statistical reporting, search engine
capabilities, an "early warning" system for monitoring rapid population increase
and system  maintenance.  The system is used by different  levels of  government
family planning  management  departments,  public  education  organizations  and
family  planning  associations.  The system is intended  to automate  the input,
processing and analysis of  information,  thereby  enabling  faster  information
exchange than is currently  possible under the existing manual input system.  In
addition,  by  creating  a central  database  which can be  accessed  by various
organizations  throughout  China, our system will allow for increased sharing of
information  and data  resources,  which we believe will improve the quality and
consistency  of  services  offered  by the  organizations  participating  in the
network and allow such organizations to operate more efficiently.


                                       19
<PAGE>

      Based upon recent population and demographic statistics,  we estimate that
the number of potential  users of the software is over 400,000.  Sales of family
planning  management  software  accounted  for 2% of  revenues in 2005 and 4% of
revenues in 2004.

e)    Systems Integration Services

      In addition to our four proprietary lines of software  products,  HTF also
markets software products produced by other companies as a value-added reseller.
In  such  cases,  HTF  provides  value-added  services,  such  as  installation,
configuration and similar systems integration services, for an additional charge
over the "base" price of the software. HTF currently has agreements with Lenovo,
Inc.  (the largest  information  technology  company in China) and  Microsoft(R)
Corporation pursuant to which we sell value-added systems integration  services.
Sales of such services  accounted for  approximately 27% of revenues in 2005 and
23% of revenues in 2004.

New Products

      In  2005  we  developed  HTF  Housing   Accumulation  Fund  Network  Based
Management  Software.  It was a specifically  designed new Housing  Accumulation
Fund software for the network based management of Housing  Accumulation  Fund in
order to help large and middle sized fund  management  centers  because such new
software has all of the Housing Accumulation Fund business process functions the
centers need under the Housing Accumulation Fund Regulations  promulgated by the
PRC State Counsel in 1999 (as amended in 2002).  We have entered into  contracts
at the aggregate amount of $140,000 for this new software so far.

Principal Markets

The Company currently markets and sells its products in the PRC.

Seasonality of our Business

The development and demand of our software are not related to seasons.

Sources and Availability of Raw Materials

      Our  products   consist   largely  of  intangible   technology  and  data,
accordingly,  our supply needs,  which consist  mostly of data storage media and
packaging  materials,  are  minimal  and  can be  easily  be  satisfied  by many
different vendors.

      We  make  advances  to  certain  of our  suppliers  for our  purchases  of
materials  in order to receive bulk  discounts  and reserve the unit cost of our
supplies at a lower price.  Our  relationship  with our vendors and suppliers is
good,  and we are not aware of any  circumstance  which  would  cause any of our
vendors or suppliers to discontinue doing business with us.


                                       20
<PAGE>

Marketing Strategy

      Our products and services are currently  marketed and sold directly to our
customers primarily through our employee sales force. Our sales  representatives
identify and contact potential  customers by telephone,  brochure mailings,  and
personal meetings. Potential customers are also invited to visit our facilities.
In  addition,   we   participate   in  various   activities   organized  by  the
administrative bureaus to explore new business opportunities.

      The specifics of our marketing strategy are as follows:

      o     Monitor changes in market demand to be able to timely  establish and
            adjust our marketing system and sales network.
      o     Continue to target government and other large,  "strategic"  clients
            through joint design and development efforts.
      o     Develop  strategic  partnerships  with other  well-known,  reputable
            information technology manufacturers.
      o     Promote our products through media, our company website and industry
            exhibitions.

a)    Sales Strategy

      Since our applications software is industry  specialized,  our basic sales
model  principally  focuses on the "direct sale" method,  complemented  by agent
sales. Our main sales technique is to provide  individual clients with targeted,
integrated solution plans for achieving their computerization objectives.

b)    Pricing Strategy

      We currently employ three different pricing strategies:

      Pricing  policy:   for  products  with  the  same  technology  content  as
competitors,  we will  generally  set our price at the same level as or slightly
higher  than that of the  highest-priced  competitor.  It is our  policy  not to
engage in, or precipitate, any price wars with other companies;  however, we may
occasionally  offer lower  prices in order to gain  customers  who we feel would
have an important influence on our long-term development strategy.

      Pricing by the size of  customers:  Usually the larger the  customer,  the
higher the expense for software installation, testing, training and maintenance;
accordingly,  we set  different  levels  of  prices  based  on the  size  of our
customers.  In the case of housing  accumulation fund software,  the size of the
user is directly  related to the number of employees  participating in the fund;
the  larger  the  number of  employees,  the  higher the price we charge for our
software.

      Pricing  by  the  software  module:  Each  module  of our  software  has a
separately  quoted  price.  Customers can choose to purchase  different  modules
according to their needs.

      We do not charge  separately for systems  integration or training services
related to sales of our  products.  We do charge for such services when they are
provided in connection with sales of other companies' products; such charges are
recognized as part of the overall price charged for the products.


                                       21
<PAGE>

c)    Product Strategy

      Our  business  plan  includes  the   following   strategies   for  product
development:

      o     Continuously invest in product research and development: and develop
            new generations of software systems that fit future business models.
      o     Pursue development of a number of different products.
      o     Study  competitors  and their  products and promote  innovation  and
            originality in our product concept and technology.
      o     Develop different versions of our software specifically designed for
            various different groups of users.

d)    Strategic Alliances

      In 2005,  approximately 27% of our revenues were from sales of value-added
services pursuant to our strategic  alliances with other information  technology
companies. In addition, our strategic alliances have provided us with funding to
develop new products, such as our credit guarantee software.

      By developing  strategic  partnerships with other software  companies,  we
believe  that we can broaden and expand the  potential  markets for our products
and enhance their competitive position in the marketplace.

      We currently have the following strategic alliances:

      We are a licensed  "Microsoft(R)  OEM System Builder",  which allows us to
make bundled sales of Microsoft(R)  Windows and SQL Server together with our own
products. As an authorized member of the "Microsoft(R) dealer coalition," we can
also sell other  Microsoft(R)  software  products on a  stand-alone  basis.  Our
housing  accumulation  fund software  received a Windows(R)  Server 2003 product
certification,  which  grants us the right to use the  "Windows(R)2003"  logo in
conjunction with sales of our own products.  We believe that this  significantly
increases the value of our products.

      On August 30, 2003, we signed a PartnerWorld  Agreement with IBM, pursuant
to which we pair the IBM P-server in conjunction  with our Housing  Accumulation
Fund software to create the "IBM-HTF Housing Accumulation Fund System Solution."

      Lenovo Group is China's largest information  technology  manufacturer.  On
March 24, 2003,  HTF entered a  Cooperative  Agreement  with Lenovo and became a
value-added service provider of Lenovo's server storage products.  Together with
Lenovo,  we provide data storage solutions for clients in such market sectors as
government, education, enterprises, finance, telecommunications,  etc. Under the
terms of the agreement,  we are entitled to sell Lenovo's products with Lenovo's
brand as an  independent  sales agent and  bundled  products  which  incorporate
Lenovo's  products.  We  purchase  Lenovo's  products  at up to a 15%  discount,
depending on the quantity  purchased and other factors.  We also provide our own
maintenance services to purchasers of such products.  We believe the partnership
has helped us to grow our systems  integration  revenue,  which reached $631,000
(RMB 5.2 million) in 2003. Our systems integration revenue decreased to $325,800
in 2004, primarily as a result of Lenovo's decision to subdivide HTF's territory
into three districts.  Our systems integration generated  approximately $507,165
of revenue in 2005.


                                       22
<PAGE>

      On November 12, 2002, HTF and Shenzhen  Small-to-Medium-Sized  Enterprises
Credit  Guarantee  Center  signed a  Cooperative  Development  Agreement for the
purpose of developing a Credit Guarantee  Information System for SMEs. Under the
agreement, both parties jointly own the copyright of the cooperative product and
share the post-tax  profits from sales of the product at the rate of 20% for the
Center and 80% for HTF until the  expiration of the  copyright.  The term of the
contract is from August 1, 2003 to December 31, 2052.

      We intend to continue to pursue strategic partnerships with other domestic
and international information technology companies.

Intellectual Property

      All of our products are protected  under the PRC Copyright  Law, which was
enacted by the General  Committee  of the PRC National  People's  Representative
Committee  in  1991,  and  the  PRC  Computer  Software  Protection  Regulations
("Software Regulations") promulgated by the PRC State Counsel in 2001.

      Under the PRC  Copyright  Law, a copyright  protects  both the design of a
software product and the name of the product.  Copyrights are granted for a term
of 50 years from the date of first  publication  or, if there is no publication,
from the date of development.  Publication is not necessary to obtain  copyright
protection in the PRC.

      Under the PRC  Copyright  Law, a copyright  entitles  its owners to obtain
various  injunctions  against  infringers.  These include an injunction  against
further infringement,  an injunction to preserve evidence of infringement and an
injunction  freezing the infringer's  bank accounts.  In addition,  an aggrieved
copyright owner can also seek monetary damages,  either by means of a lawsuit or
through arbitration.  As previously  discussed,  there are many uncertainties in
China's legal system,  and enforcement of intellectual  property rights has been
difficult.  In the event that we are unable to enforce our copyrights,  we might
not be able to obtain one or more of the foregoing forms of relief.

      We have  registered  the following  products with the National  Copyrights
Bureau of the PRC.


Registered Names                           Registered No.       Date of Issuance
--------------------------------------------------------------------------------

1. HOUSING property exchange and           Registered No.       01/15/2001
information management system V2.0         2001SR0147
                                           Soft. No.0007080

2. HOUSING accumulation fund               Registered No.       01/15/2001
management software (Office version) V     2001SR0145
1.0                                        Soft. No.0007078

3. HOUSING accumulation fund               Registered No.       01/31/2001
management center software (C/S            2001SR0222
version) V3.0                              Soft. No.0007155

4. HOUSING Estate Property Management      Registered No.       01/15/2001
Software V2.0                              2001SR0146
                                           Soft. No.0007079


                                       23
<PAGE>

5. HOUSING(R) House Property Application   Registered No.       06/10/2002
Information Management (IC card)           2001SR0138
System (C/S Version) V1.0                  Soft. No.000138

6. HOUSING(R) accumulation fund personal   Registered No.       07/12/2002
loan management system V1.0                2001SR1184
                                           Soft. No.001184

7. HOUSING(R) Record Management V1.0       Registered No.       07/15/2001
                                           2001SR1205
                                           Soft. No.001205

8. HTF OA system V1.0                      Registered No.       01/20/2003
                                           2001SR0464
                                           Soft. No.005555

9. HTF Population& Family-planning         Registered No.       12/09/2003
Management Software V2.0                   2003SR12654
                                           Soft. No.017745

10. CGC Credit Guarantee Management        Registered No.       12/02/2003
Information System (GMIS) V1.0             2001SR12275
                                           Soft. No.017366

11. HOUSING(R) Subsidy Management System   Registered No.       09/01/2003
V3.3                                       2001SR9331
                                           Soft. No.014422

12. Small Loan Credit Guarantee            Registered No.       05/31/2006
Management Software V1.0                   Soft. No.054648

13.HTF Loan Risk Control Software V1.0     Registered No.       05/31/2006
                                           Soft. No.054649

14.Housing Accumulation Fund Management    Registered No.       05/31/2006
Software (Unit Version) V2.0               Soft. No.054650

15. Housing Accumulation Fund Center       Registered No.       05/31/2006
Management Software (Unit Version) V2.0    Soft. No.054651

16. Housing Accumulation Fund Net          Registered No.       05/31/2006
Comprehensive Management Software          Soft. No.054652

      We are the  sole  owner of all of the  above  copyrights,  except  our CGC
Credit Guarantee  Management  Information System,  which we own jointly with the
Shenzhen  Small-to-Medium-Sized  Enterprises Credit Guarantee Center.  Under the
PRC Copyright Law, ownership rights to software vest in the party which develops
the  software  unless  otherwise  agreed  to. In the event  that the two or more
parties  collaborate in developing  software,  then ownership  rights to various
portions of the  software  will vest in the  respective  party  responsible  for
developing such portions or, if the portions are not severable,  then jointly in
all of the parties.  In cases of joint ownership,  rights and licensing fees are
apportioned either pro rata or as otherwise agreed by the parties.

      The  following  software  products  of HFT are  registered  with  Shenzhen
Software  Industry  Association,  which is an  organization  approved by the PRC
Ministry  of  Information.  Registration  with the  Shenzhen  Software  Industry
Association is recognized all over China.

Software Registered Names                                       Registration No.
--------------------------------------------------------------------------------

HOUSING accumulation fund management center software            SZ DGY-2001-0056
(C/S Version) V3.0

HOUSING property exchange and information management            SZ DGY-2001-0058
Software V4.0

HOUSING Accumulation Fund management software (Unit             SZ DGY-2001-0057
version) V1.0


                                       24
<PAGE>

HOUSING Property Management Software V2.0                       SZ DGY-2001-0059

HOUSING accumulation fund management software (Unit             SZ DGY-2003-0156
Version)

HOUSING accumulation fund management center software V          SZ DGY-2003-0157
3.60

HTF Population and Family-planning Management Software          SZ DGY-2003-0523
V2.0

HTF Credit Guarantee Management Software V1.0                   SZ DGY-2003-0582

HTF small loan Credit Guarantee Management Software V1.0        SZ DGY-2004-0242

HTF Housing Accumulation Fund Net Comprehensive                 SZ DGY 2005-0263
Management Software V10.0

HTF loan risk control software V1.0                             SZ DGY 2005-0626

Competition

      The market  for  software  products  is highly  competitive,  with a large
number  of new  companies  entering  the  Chinese  market  each  year.  Although
competition  is largely  on the basis of  technological  innovation,  functional
design and price,  conditions  vary according to the type of software  involved.
Foreign  companies  currently have a clear  advantage over Chinese  companies in
system software;  however, in the field of applications software, where there is
a great  need  for  specialization,  we  believe  that  local  Chinese  software
enterprises have unique advantages.

      The first such advantage  comes from product  localization;  the design of
applications  software  requires an  in-depth  understanding  of local  business
customs,  management systems, culture and traditions. A second advantage enjoyed
by local  Chinese  companies  comes from  service  localization;  because of the
logistical  barriers  involved,  it is more  difficult for foreign  companies to
establish a national service network to support their products within China in a
short time period.

      HTF  develops   industry-specialized   applications  software  and  serves
domestic Chinese customers.  Our software products are, to a large extent, based
on Chinese platforms and interfaces.

      At present,  the domestic  Chinese  applications  software  market is very
fragmented.  There are many identified subsectors,  such as accounting software,
translation  software,  commercial software and Chinese system-based  management
software.  We do not directly compete with companies producing products in other
subsectors.  In addition,  many of our competitors and potential competitors are
small companies with limited resources and undiversified product lines.

      Competition in the Housing Accumulation Fund Software Market

      Because housing  accumulation fund software is a very specialized  market,
there are only a small  number of companies  that compete in this market.  While
our customers are mainly  located in municipal  cities,  our major  competitors'
customers are mostly either in the cities where Housing Accumulation Fund system
is in testing period or the places where such competitor themselves are located.
We believe that we have 50% of the total Housing Accumulation Fund market in the
year of 2005. We believe that our  advantages  are that we can provide a package
solution for Center, Bank and Units in whole.


                                       25
<PAGE>

      Competition in the Credit Guarantee Software Market

      We are not aware of any other  commercial  software  company that offers a
product in direct  competition with our credit guarantee software in China. Some
credit guarantee  centers have begun to use software  platforms similar to ours;
however,  we believe  that such  platforms do not have the  technical  function,
work-flow definition and product flexibility offered by our product.

      Competition in the Family Planning Software Market

      Our closest competition in the family planning software market is Shenzhen
WanGuo  Software,  which developed the  "Pregnant-age  Women Pregnancy  Planning
Information  Management System" in 1998 for customers such as Shenzhen Municipal
Population  Planning  Commission which is part of Shenzhen Municipal  Government
and its subsidiaries. We believe that we have advantage on post-sale services on
the family planning software.

      Another major competitor of ours is Shenzhen MaiKeLong. Their products are
currently  in use  throughout  Guangdong  province  as well  as part of  Beijing
Municipality and Fujian Province. We believe that Shenzhen MaiKeLong is our most
powerful competitor in family planning software.

      There are also a number of companies whose products are marketed only on a
local or regional basis.  These include:  Luzhou HongSheng  Technology,  Guizhou
XinTian PC, Zhengzhou YueTai Software and Hunan JinQiao Software.

      Competition in the Property Management Software Market

      Currently, there are three types of entities in China which are engaged in
the development of property  management  software.  The first category  includes
professional  software  companies,  such as  Huangzhou  Aowei,  HTF and  Chuanda
Software.  The second  category of  entities  currently  involved in  developing
property management software is  non-professional  computer companies.  Although
such companies can develop systems for their customers, they lack the ability to
maintain and update the software  and focus on  marketing  hardware  rather than
software. The third category of property management software developers consists
of  government   Housing   Departments,   which   sometimes   employ  their  own
professionals  to design and  develop  the  software  they use.  In many  cases,
Housing Departments rely upon a single professional for software development and
system maintenance, and therefore are limited by a lack of resources.

Governmental Regulations

      Under  the  Software  Products  Registration   Administrative  Regulations
promulgated  by the PRC Ministry of  Information  Industry (the  "Ministry")  in
2001,  no software  products are permitted to be sold in the PRC unless they are
registered  with the local  authority  designated  by the  Ministry.  All of our
products are registered with the State Economic  Development Bureau and Shenzhen
Information Offices, which are designated by the Ministry.

      In addition, HTF was designated a "National Certified Software Company" in
2002.  Under the regulations  promulgated by the Ministry,  "National  Certified
Software  Company"  status is accorded only to software  companies which own the
intellectual  property  rights to their  products and have at least 50% of their
employees engaged in research and development. While such status is not required
to produce or sell software in the PRC, it entitled us to certain privileges and
benefits. Because HTF is a National Certified Software Company, we have received
research  and  development  grants of  $36,000  (RMB300,000)  from the  Shenzhen
Science and Technology Bureau in 2003 and $60,459 (RMB500,000) from the National
Development  and  Reform  Committee  in 2004 to  develop  our  credit  guarantee
software.


                                       26
<PAGE>

4.C. Organizational Structure

The Company is not part of a group.

The following is a list of the Company's subsidiaries:

--------------------------------------------------------------------------------
                                          Jurisdiction of             Percentage
                                          Incorporation               Ownership
--------------------------------------------------------------------------------
China International
Enterprises Corp. ("CIEC")                U.S.A.                      100%

Heng Xing Technology Group
Development Limited ("XHT")               British Virgin Islands      100%

Shenzhen Hengtaifeng
Technology Co., Ltd.
("HTF" or the "Operating Company")        China                       100%
--------------------------------------------------------------------------------

4.D. Property, Plants and Equipment

      HTF leases  approximately  640 square meters of space for HTF's  executive
offices and operations in Shenzhen, China from Shenzhen Chuangwei-RGB Electronic
Co.,  Ltd.  The  lease is for a term of two  years  from  February  25,  2006 to
February 24, 2008 at the monthly rent  (including  property  management  and air
conditioning maintenance fees) of approximately $4,843 and $5,225 for the twelve
months ended February 24, 2007 and February 24, 2008, respectively. Its previous
lease  was on the same  premise  with the same  landlord  for three  years  from
February  25,  2003 to  February  24,  2006.  The  monthly  rent under the lease
(including  property  management and air  conditioning  maintenance  fees),  was
approximately  $4,398 (RMB  36,400).  We received a  government  rent subsidy of
approximately  $1,544 (RMB 12,780) for monthly rent until  February 2005 for the
Entrance of Software Enterprises into Shenzhen Software Enterprise Zone.

      HTF leases a sales office of  approximately  133 square meters in Beijing,
China from Ms. Ling Chen,  our Chairman,  President and Director,  Mr.  Yuanqing
Li's wife on a year-to-year basis. The current term is from September 1, 2005 to
August 31, 2006 at a monthly rent of  approximately  $867 (including  management
and  air-conditioning  maintenance  fees),  which is at the level of the  market
rent.

      HTF also owns  approximately 170 square meters of office space at Room 202
and 702 of Xu Yuan #27, Unit 4 of Sunny Garden, Dian Chi Rd, Kunming, China. The
property is used as a sales office.  HTF purchased the property for $25,227 (RMB
209,027.73)  on January 15, 2001.  On November 5, 2003 HTF paid  another  $3,560
(RMB29,461)  for the  property  to fill the  shortfall  between  the  commercial
property price and governmental subsidized property price as local real property
policy requires.


                                       27
<PAGE>

      On  December  15,  2003  HTF  entered  into  a  purchase   agreement   for
approximately  600 square  meters of space which was to be used as our executive
offices and for  operations  at Shenzhen  Municipal  Tian'an  Digital  Chuang Ye
Garden  Suite A,  Room  802.  The  property  was  purchased  for  $513,577  (RMB
4,250,724).  In connection  with the purchase,  Mr.  Yuanqing Li obtained a loan
from China Xing Ye Bank,  Shenzhen  Xiang Mi Hu Branch in the amount of $359,129
(RMB  2,970,000)  for HTF and HTF granted a mortgage  on the  property to secure
repayment  of the loan.  The  Company  sold the  property  on April 20, 2005 for
$540,050 (RMB4,463,230).  The mortgage on the property was released prior to the
time of the sale.

Item 4A.  Unresolved Staff Comments

Not applicable.

Item 5.   Operating and Financial Review and Prospects

      The following  discussion and analysis  discusses  trends in the Company's
financial  condition  and results of  operations  for the two fiscal years ended
December  31,  2005 and 2004.  This  discussion  and  analysis of the results of
operations and financial  condition of the Company should be read in conjunction
with  the  audited  financial  statements  and  the  related  notes,  as well as
statements made elsewhere in this Form 20-F. The financial  statements have been
prepared in accordance with U.S. generally accepted accounting principles (GAAP)
and  are  expressed  in  United  States  dollars.  Unless  noted  otherwise  the
presentation  represents the consolidated  financial  results of the Company and
its subsidiaries.

Critical Accounting Policies.

      The  Company's  discussions  and analysis of its  financial  condition and
results of  operations,  including  the  discussion  on  liquidity  and  capital
resources,  are based upon the Company's financial  statements,  which have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United  States.  The  preparation  of these  financial  statements  requires the
Company to make  estimates  and  judgments  that affect the reported  amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets  and  liabilities.  On an  ongoing  basis,  management  re-evaluates  its
estimates and judgments,  particularly those related to the determination of the
impairment of its tangible and  intangible  assets.  Actual results could differ
from  the  estimates.  The  Company  believes  the  following  are the  critical
accounting  policies  used  in the  preparation  of the  consolidated  financial
statements.

      The  consolidated  financial  statements  have been  prepared on the going
concern basis, which assumes that the Company will be able to realize its assets
and discharge its  obligations in the normal course of business.  If the Company
were not to continue as a going concern,  it would likely not be able to realize
on its  assets at values  comparable  to the  carrying  value or the fair  value
estimates  reflected  in  the  balances  set  out  in  the  preparation  of  the
consolidated  financial  statements.  The  Company had  comprehensive  income of
$195,085  and used cash flow in  operating  activities  of $40,648  for the year
ended  December  31,  2005,  and had a cash and  cash  equivalents  position  of
$375,856 and a working  capital  position of $1,510,954 at December 31, 2005. As
of the date of this  report the  Company's  source of  business  operations  and
operating revenue is from its software business.


                                       28
<PAGE>

      The Company  accounts  for stock based  compensation  associated  with the
repricing of employee  stock options in accordance  with the  provisions of FASB
Interpretation  No. 44,  "Accounting  for Certain  Transactions  involving Stock
Compensation" ("FIN 44"). For accounting purposes,  the repricing of outstanding
stock options requires variable  accounting for the new options granted from the
date of  modification.  Variable  accounting  requires that the intrinsic value,
being the excess of the current market price at the end of each reporting period
in excess of the exercise price of the repriced options, be expensed as non-cash
stock based  compensation  expense,  until such time as the repriced options are
exercised,  expire or are  otherwise  forfeited.  Any increase in the  intrinsic
value  of  the  repriced  options  will  decrease  reported  earnings,  and  any
subsequent  decreases in value will increase reported earnings.  The Company has
no repriced employee stock options outstanding at December 31, 2005.

      In December 2004, the Financial Accounting Standards Board ("FASB") issued
FASB  Statement 123  (Revised),  "Share-Based  Payment"  ("FAS 123R").  FAS 123R
requires  all  companies  to  measure  compensation  costs  for all  share-based
payments  (including  employee  stock  options) at fair value and recognize such
costs in the statement of  operations.  FAS 123R is effective for small business
issuers for periods beginning after December 15, 2005. The Company will continue
to account for  stock-based  compensation  using the intrinsic  value method set
forth in  Accounting  Principles  Board  Opinion No. 25,  "Accounting  for Stock
Issued to Employees" ("APB 25") until adoption of FAS 123R on December 15, 2005.
In accordance with APB 25 and related interpretations,  compensation expense for
stock options is generally  recognized in income based on the excess, if any, of
the  quoted  market  price of the stock at the grant  date of the award or other
measurement  date over the amount an employee must pay to acquire the stock. The
compensation  costs related to stock options  recognized by the Company pursuant
to APB 25 were minimal.  As a result,  the  application of the provisions of FAS
123R may have a significant  impact on Operating Income before  Depreciation and
Amortization, Operating Income, net income and earnings per share.

A.    Operating Results

Net Revenue

For the twelve month period ended December 31, 2005 ("YTD 2005") net revenue was
$1,880,143 compared to $1,373,079 for the twelve month period ended December 31,
2004 ("YTD 2004"),  an increase of $507,064 or approximately  36.9%. The primary
reasons  for the  increase  in net  revenue in 2005 were a $312,490  increase in
credit  guarantee  software  and a  $184,265  increase  in  systems  integration
revenue.  Sales of our credit guarantee  software in 2005 increased by $432,490,
or 260%  from  $120,000  in  2004.  Sales  of our  systems  integration  in 2005
increased  by  $5071,65,  or 57% from  $325,800 in 2004.  The increase in Credit
Guarantee software and systems integration revenue in 2005 is due to an increase
in market share and increased demand for the software.


                                       29
<PAGE>

Gross Profit (Revenue less Cost of Goods Sold).

Gross profit for the twelve month  period  ended  December 31,  2005YTD 2005 was
$1,307,779  as compared to $995,403 for the twelve  month period ended  December
31, in YTD 2004,  an increase of $312,376 or  approximately  31.4% from the year
ended  December 31, 2004.  The increase in gross profit was primarily due to the
increase in sales and revenues as mentioned above.

Personnel Expenses

YTD 2005 salaries were $46,443 as compared to $21,580 during YTD 2004.  Increase
in salaries  can be  attributed  to the in hiring of nine  additional  full time
employees and the increased salaries of previous employees.

The Company has no repriced  employee stock options  outstanding at December 31,
2005.  The Company  believes  that  non-cash  compensation  expenses  due to the
repricing of stock options will not have an impact on the  Company's  results of
operations going forward.

Depreciation and Amortization

Depreciation  and  amortization  costs was $60,814 for the twelve  month  period
ended December 31, 2005 as compared to $56,944 for the twelve month period ended
December 31, 2004.

Depreciation and amortization costs remain relatively unchanged year on year.

General and Administrative Expenses

General and administrative costs were $638,805 for the twelve month period ended
December  31, 2005  compared  to  $634,321  for the twelve  month  period  ended
December 31, 2004.General and administrative costs remained relatively unchanged
year on year.

Net Income (Loss) from Operations.

Net income from  continuing  operations  was $49,593 for the twelve month period
ended December 31, 2005 as compared to net loss of $131,711 for the twelve month
period ended December 31, 2004.  The increase in net income from  operations was
primarily due to the increase in sales and revenues as mentioned above.

Net Income and Comprehensive Income.

Net income was $170,573  for the twelve month period ended  December 31, 2005 as
compared to a net income of $45,783 for the twelve month  period ended  December
31,  2004.  Comprehensive  income was $214,241 for the twelve month period ended
December  31,  2005 as compared to $48,177  for the twelve  month  period  ended
December  31,  2004.  The  increase in net income and  comprehensive  income was
primarily due to the increase in sales and revenues mentioned above.

B.    Liquidity and Capital Resources.

Liquidity and Capital Resources - Assets

At December 31, 2005, the Company had a working capital of $1,530,111  including
cash and cash  equivalent  balances  of $375,856  compared to a working  capital
balance of $1,003,306 at December 31, 2004  including  cash and cash  equivalent
balances of $191,165. The increase can be attributed to the increase of $258,777
in cash flow from investing activities and repayment of $122,046 on a bank loan.


                                       30
<PAGE>

Net  accounts  receivable  as of  December  31, 2005 were  $431,218  compared to
$255,290 as of December 31, 2004.  The $175,928 year on year increase is because
that there was a bad debt allowance of $175,928 in 2004 and there was no further
bad debt allowance in 2005.

Inventory  at December 31, 2005 was $437,771 as compared to $312,046 at December
31, 2004 as a result of a $121,357 increase on base or core software materials.

Other receivables  totaled $572,542 at December 31, 2005 as compared to $236,352
as of December 31, 2004. The increase was primarily due to the increase in sales
and revenues as mentioned above.

During 2005 net cash provided by operating activities was $40,648 as compared to
$213,556 in 2004.  This is mainly due to reduction of accounts  receivables  and
other receivables in 2005 as compared to 2004.

Net cash  provided in  investing  activities  accounted  for $258,777 in 2005 as
compared to $150,838 in 2004. This is attributable to the increase in receipt of
cash on  disposal of  properties  in 2005 of $531,644 as compared to $158,399 in
2004.

The  transfer  of funds to the Company in the form of cash  dividends,  loans or
advances are subject to the PRC foreign exchange regulations. The PRC's national
currency,  Renminbi, is not a freely convertible  currency.  Please refer to the
risk factors  "Governmental  control of currency conversion may affect the value
of your  investment";  "The  fluctuation  of the  Renminbi  may  materially  and
adversely affect your investment";  "Recent PRC State  Administration of Foreign
Exchange ("SAFE")  Regulations  regarding offshore  financing  activities by PRC
residents   have   undergone  a  number  of  changes   which  may  increase  the
administrative  burden we face and create  regulatory  uncertainties  that could
adversely affect the implementation of our acquisition strategy.  The failure by
our  shareholders  who are PRC residents to make any required  applications  and
filings  pursuant  to  such  regulations  may  prevent  us  from  being  able to
distribute  profits and could  expose us and our PRC  resident  shareholders  to
liability under PRC law."

Liquidity and Capital Resources - Liabilities

Accounts payable and accrued expenses increased to $140,900 at December 31, 2005
compared to $17,650 at December 31, 2004.  The increase can be attributed to the
$50,000  auditor fees  accrued in 2005 in addition to the  customer  advances of
$66,502 for software engineering projects.

The Company has no long-term debt or other long-term liabilities.


                                       31
<PAGE>

Liquidity and Capital Resources - Capital Stock and Equivalents

The Company has entered into no derivative financial instrument  arrangements as
of December 31, 2005.

The Company  received  $70,000 in funds  through the  issuance of capital  stock
during the year ended  December 31, 2005.  This relates to the offer and sale of
restricted  common stock of the Company.  Under the terms of the Warner  Private
Placement  Agreement  as we defined  under Item 7B of this  annual  report,  the
Company issued  139,246,065 shares of restricted common stock for gross proceeds
of $70,000.

The Company  currently  has no external  sources of liquidity.  However,  in the
Company's  opinion,  it currently has sufficient  working capital sufficient for
the Company's present requirements.

Research and Development Activities

      Most of our products were originally developed according to specifications
supplied by a particular  customer,  who also typically provides funding for the
projects.  If we judge that certain  products have  long-term  market  promotion
value,  we may invest  additional time and our own resources in order to improve
and  commercialize   them.  In  2003,  we  invested  an  aggregate  of  $125,657
(RMB1,040,000) in research and development activities, 65% of which was used for
improving  our  Housing  Accumulation  Fund  software  and  property  management
software  and 35% of  which  was  used  to  develop  our  credit  guarantee  and
family-planning  software.  In addition, we received $525,998 (RMB 4.35 million)
from our clients for research and development. In 2004, we invested an aggregate
of $179,339 (RMB 1,484,300) in research and development activities, 58% of which
was used for the improvement of our credit  guarantee  software and 42% of which
was  used  for the  improvement  of our  housing  accumulation  fund  management
software.  We also received $108,827  (RMB900,000) from our clients for research
and development. As of December 31, 2004, we employed 33 people who were engaged
in research and  development  activities.  In 2005,  we invested an aggregate of
$270,672 (RMB  2,217,787) in research and development  activities,  43% of which
was used for the improvement of our credit  guarantee  software and 57% of which
was  used  for the  improvement  of our  housing  accumulation  fund  management
software. We also received $516,540 (RMB4,232,336) from our clients for research
and development. As of December 31, 2005, we employed 44 people who were engaged
in research and development activities.

Off Balance Sheet Arrangements

The Company has no off balance  sheet  financing  arrangements  that have or are
reasonably likely to have a current or future effect on the Company's  financial
condition,  changes in financial  condition,  revenues or  expenses,  results of
operations,  liquidity,  capital  expenditures  or  capital  resources,  that is
material to investors.


                                       32
<PAGE>

Contractual Obligations

The  following  table sets forth  contractual  obligations  of the Company as of
December 31, 2005.

--------------------------------------------------------------------------------
                              Less Than    One to         Three to     More Than
                              1 year       Three Years    Five Years   5 Years
--------------------------------------------------------------------------------
Long-Term Debt                Nil          Nil            Nil          Nil

Capital Leases                Nil          Nil            Nil          Nil

Operating Leases              $65,052      62,700         Nil          Nil
                                           ------

Purchase Obligations          $83,144      Nil            Nil          Nil

Other Long-Term Liabilities
Reflected on the Company's
Balance Sheet under the GAAP
of the primary financial
statements                    Nil          Nil            Nil          Nil

Total                         $148,196     $62,700
--------------------------------------------------------------------------------

Item 6.   Directors, Senior Management and Employees

6.A. Directors and Senior Management

The following sets forth the names,  business  experience and  function/areas of
expertise of each of our directors and officers:

      Name             Position(s)                     Age

      Yuanqing Li      Chairman,                       37
                       President and Director

      Jianping Wu      Director                        34

      Ming Liu         Director (independent)          31

      John Leo         Director (independent),         41

      Dinghong Shen    Chief Financial Officer         37
                       & Chief Accounting Officer

      Qingbiao Yu      Secretary                       38

      Mr.  Yuanqing Li has been our  Chairman,  President  and a Director  since
August 19, 2005. He has been the Chairman,  President and Director of CIEC since
January 2005,  the Executive  Director of XHT since 2004 and the Chairman of HTF
since  2003.  He has been a director of HTF for more than five years and was the
CEO of HTF from 2000 to 2004.  Mr. Li has also served as the Director of Jiangsu
Qi Hang  Digital  Control  Engine Bed Co.,  Ltd. and Jiangsu  Zhenjiang  Xinzhou
Mechanics Factory,  and as the Executive  Director of Hengtaifeng  International
Holdings Co., Ltd. He graduated  from Shenzhen  University in 1989 and earned an
Executive MBA degree from Zhongshan University in 2003.

      Ms.  Jianping Wu has been one of our Directors since August 19, 2005 and a
Director of CIEC from January 2005 to February 12, 2006.  She has also served as
the CEO of HTF since January 1, 2005. Ms. Wu has served as the Manager of Credit
Guarantee Department of HTF and the Vice President of HTF from 2003 to 2004. She
was the Vice  President of Shenzhen  Municipal Pu Da  Technology  Co.,  Ltd., an
enterprise engaged in the development and sale of office management software and
client source  management  software,  from 2001 to 2003, a member of the Project
Research Staff of Shenzhen Saibo Technology Co., Ltd., an applications  software
company  specializing  in networking  software,  from 2000 to 2001 and the Sales
Manager and Manager of the Market  Department  of Shenzhen Shu Ju Tong  Computer
Network System Co., Ltd. from 1999 to 2000.


                                       33
<PAGE>

      Mr.  Ming  Liu has been  one of our  Directors  since  May  2005.  He is a
business  professional having served with several technology  companies.  During
2004 Mr. Liu was Secretary of Advanced Battery Technologies Inc. (OTCBB:  ABAT).
He had been a director of Advanced Battery Technologies Inc. from September 2004
to October 2005. Prior to this he was Vice President of Heilongjiang  Zhongqiang
Power  Tech.  China from 2002 to 2004 and Vice  President  of  Haerbin  Ridaxing
Science & Tech.  Co.,  Ltd.  China  from 1999 to 2002.  Mr. Liu is  currently  a
Director of Advanced Battery Technologies Inc.

      Mr.  John Leo has been one of our  Directors  since  May  2005.  He is the
founder and President of American Union Securities, Inc. ("AUS"). AUS is an NASD
member firm, which  specializes in identifying  successful  private companies in
China that have the potential to be a successful public company in the US. Prior
to starting AUS Mr. Leo was the founder and managing  member of Venture  Capital
Partners,  LLC ("VCP"),  a private  merchant  banking and  consulting  firm. VCP
provided  various  advisory  services to both late stage  private  companies and
small to mid-sized public companies.  From 1997 through 2001 Mr. Leo worked as a
market maker trading Pink Sheet, OTC BB, and NASDAQ listed securities as well as
IPO's.  Mr.  Leo has an  extensive  background  in  securities  trading  and the
financial transaction  business.  He became a registered  representative in 1987
focusing  on  small to  midsize  companies,  private  placements  and  secondary
offerings.  He has previously worked for several full service investment banking
and brokerage  firms, as well as wholesale and  proprietary  trading firms, as a
principal and as a market maker.

      Ms.  Dinghong  Shen has been our CFO and Chief  Accounting  Officer  since
August 19, 2005 and a CFO and a Director,  CFO and Chief  Accounting  Officer of
CIEC since January 2005. She has been Financial  Manager of HTF since 2003. From
1999 to 2002 she served as the Manager of He Zhong Heng Software Co., Ltd.

      Mr.  Qingbiao  Yu has been our  secretary  since  August 19,  2005 and the
secretary of CIEC since January 2005.  During the past five years, he has worked
for HTF serving as Assistant  Manager of the Technology  Department from June 1,
2001  to  December  31,   2001,   Administrative   Manager  on  Human   Resource
Administration  from January 1, 2002 to December 31, 2002, vice president of HTF
and manager of the HTF IT resource  department  from January 1, 2003 to December
31,  2003;  executive  vice  president of HTF and manager of the HTF IT resource
department  from January 1, 2004 to December 31, 2004 and vice  president of HTF
since  January 1, 2005.  Prior to his joining  HTF, he had worked for Jing Zhong
Daily as Editor and Director for the Computer Center for over 11 years.

      There  is no  family  relationship  between  any  directors  or  executive
officers listed above.


                                       34
<PAGE>

6.B. Compensation

COMPENSATION OF DIRECTORS AND SENIOR MANAGEMENT

      The following table sets forth the amounts of compensation paid to each of
our directors and officers for the fiscal year ended December 31, 2005.

--------------------------------------------------------------------------------
                   Base                                Benefits
Name               Salaries            Bonuses         in Kind        Total
--------------------------------------------------------------------------------
Yuanqing Li        $16,800             0               0              $16,800
--------------------------------------------------------------------------------
Jianping Wu        $11,000             0               0              $11,000
--------------------------------------------------------------------------------
Ming Liu           0                   0               0              0
--------------------------------------------------------------------------------
John Leo           0                   0               0              0
--------------------------------------------------------------------------------
Dinghong Shen      $10,700             0               0              $10,700
--------------------------------------------------------------------------------
Qingbiao Yu        $10,700             0               0              $10,700
--------------------------------------------------------------------------------

      For the year ended  December 31, 2005,  the  aggregate  amount of pension,
medical and non-employment  insurance paid by the Company's  subsidiaries to its
PRC directors and executive officers was approximately $4,666.

6.C. Board Practices

      According to the Company's  bylaws, at each annual meeting of the Company,
all the directors shall retire and the shareholders entitled to vote shall elect
the directors. A retiring director shall be eligible for re-election.  Where the
Company fails to hold an annual  meeting,  the directors then in office shall be
deemed to have been  elected or  appointed as directors on the last day on which
the annual meeting could have been held until the earlier of the time when their
successors  are  appointed or elected or the next annual  meeting.  The board of
directors shall annually or as often as may be required appoint officers.

      Prior to August 19, 2005, the Board of Directors of the Company  consisted
of Messrs.  Ming Liu,  Huakang Zhou and John Leo.  Following  the closing of the
Share Exchange Agreement on August 19, 2005, Mr. Zhou resigned as a director and
resigned from all of his positions at the Company, including without limitation,
President,  Chief Executive Officer and Chief Financial  Officer.  The remaining
directors elected Mr. Yuanqing Li and Ms. Jianping Wu as directors. In addition,
the Board of Directors  appointed  new  executive  officers of the Company.  The
newly  appointed  directors  shall  serve  until  the  next  annual  meeting  of
shareholders or until their earlier death, disability, resignation or removal.

      The  Company  or its  subsidiaries  do not  have  service  contracts  with
directors which providing for benefits upon termination of employment.

      Currently,  the entire board of directors is acting as the Company's Audit
Committee.

6.D. Employees

      As of  December  31,  2005,  we had 85  full-time  employees,  including 8
management   employees,   45  employees  engaged  in  technology   research  and
development,  21 employees  engaged in sales and marketing and 11 administrative
employees.  We have 2 temporary  employees.  All of our employees are located in
China.


                                       35
<PAGE>

Item 7.   Major Shareholders and Related Party Transactions

A.    Major Shareholders

The following is a list of the major  shareholders  of the Company who owns more
than 5% of the Company's  voting  securities as of December 31, 2005 (pre-split)
and June 7, 2006 (post-split):

<TABLE>
<CAPTION>
                                                                                      Percentage of Shares
Name and Address                         Number of Shares       Number of Shares      out of the Total
of Shareholders                          (Pre-split)            (Post-split)          Outstanding Shares
<S>                                      <C>                    <C>                   <C>
Yuanqing Li                              345,600,000            10,800,000            50.2%
Suite 2911-2912, 29th Floor
Two International Finance Centre
No. 8 Finance Street
Central, Hong Kong

Zhenliang Qiu                            172,800,000            5,400,000             25.1%
Building 86-306
Yuanling Xincun
Futian District
Shenzhen, PRC

Ling Chen                                57,600,000             1,800,000             8.4%
5-402 Chiwei Building
South Huaquiang Road
Shenzhen, PRC
</TABLE>

      Under the Share Exchange  closed on August 19, 2005, the Company issued an
aggregate of  638,080,000  shares of its common stock to the CIEC  Shareholders,
representing  92.87% of the issued and outstanding capital shares of the Company
giving effect to the Share Exchange.  As a condition to the closing of the Share
Exchange, Warner Technology & Investment Corp. ("Warner") agreed to surrender to
the Company for cancellation,  a certificate or certificates for an aggregate of
126,446,065  shares of the Company so that Warner  would own  12,800,000  shares
(pre-split) of the Company's common stock after the cancellation.

      The Company's major  shareholders  have the same voting rights as those of
all the other shareholders of the Company.

      As of December 31, 2005,  there were 94 record  shareholders  in the U.S.,
who hold  approximately  13.87% of the  total  outstanding  common  stock of the
Company.

      As of June 7, 2006,  there were 61 record  shareholders  in the U.S.,  who
hold approximately 15.1% of the total outstanding common stock of the Company.


                                       36
<PAGE>

      The  Company  is not  controlled  by any third  party.  To the best of our
knowledge,  there is no arrangement  currently  which will result in a change in
control of the Company.

7.B. Related Party Transactions

      On March 15, 2005, the Company  entered into a Subscription  and Financing
Agreement with Warner  Technology and Investments Corp ("Warner"),  a New Jersey
corporation,  which is one of our shareholders and was a former CIEC shareholder
prior to the Share  Exchange.  Pursuant to the agreement MBI issued  139,246,065
shares of restricted  common stock of the Company for gross  proceeds of $70,000
USD (the "Warner Private Placement"). Proceeds received under the Warner Private
Placement were used to meet general obligations of the Company.

      In connection  with the Share  Exchange  Agreement  dated as of August 15,
2005, HTF entered into a letter agreement  ("Warner Letter  Agreement") dated as
of August 12, 2005 with  Warner  Technology  and  Investment  Corp.,.  Under the
Warner Letter Agreement, Warner agreed to provide certain consulting services to
CIEC and HTF relating to the prior  structuring  and capital  raising efforts of
CIEC ("Prior  Structuring"),  the Share  Exchange,  and the  subsequent  capital
restructuring  of  the  Company   following  the  Share  Exchange   ("Subsequent
Restructuring").  In exchange,  Warner received the sum of $350,000 as a fee and
as an advance non-accountable expense reimbursement for the expenses incurred or
to be incurred in connection with the Prior Structuring,  the Share Exchange and
the Subsequent  Restructuring  (including the change of the name of Moving Bytes
to China  International  Enterprises Inc., a reverse split of our common shares,
and the  election of  designees  of HTF as our  directors  and  officers and the
contemplated  re-domicile  of the Company into a state in the U.S.).  The Warner
Letter Agreement  superseded and rescinded all of the former written  agreements
made between  HTF/CIEC  and Warner  regarding  the Warner's  role in the capital
restructuring and capital raising efforts of HTF/CIEC.

      On August 19, 2005, an Assignment and Assumption Agreement was made by and
among the Company , Warner,  and Mr.  Huakang Zhou  ("Zhou"),  pursuant to which
Warner will accepted the assignment of substantially all of the former assets of
the Company,  and Warner and Zhou jointly and severely assumed all of the duties
and obligations of the Company incurred prior to August 19, 2005.

      On August 15,  2005,  the  Company  entered  into a Loan  Forgiveness  and
Termination  Agreement  with Zhou,  under  which Zhou  forgave  the  outstanding
balance of a loan in the  amount of $10,000  (the  "Loan")  made to the  Company
under a Loan  Agreement,  dated  as of June 13,  2005.  In  connection  with the
forgiveness  of the Loan,  Zhou agreed to waive the right of  conversion  of the
Loan amount into common shares of the Company and terminate the Loan  Agreement,
effective immediately on August 15, 2005.

      In connection with the Share Exchange  Agreement,  HTF also entered into a
letter  agreement,  dated as of August 19, 2005, with American Union  Securities
Inc., a former shareholder of the Company and CIEC (the "AUS Letter Agreement").
The AUS Letter Agreement amended certain  inconsistent  provisions in two former
agreements  between AUS and HTF,  dated as of November  24, 2004 and January 18,
2005,  respectively.  Under these two former  agreements,  AUS agreed to provide
certain  financial and consulting  services to HTF in connection  with the Share
Exchange in exchange for a fee. The AUS Letter  Agreement  changed the amount of
the fee due to AUS to $200,000,  of which  $100,000 had already been paid to AUS
prior to the  Share  Exchange,  and the  remaining  $100,000  was paid  upon the
closing of the Share Exchange.


                                       37
<PAGE>

      Pursuant to a Consulting Agreement ("Warner Consulting Agreement"),  dated
as of December  20,  2005,  by and  between the Company and Warner,  the Company
authorized  for issuance  45,000,000  shares of its no par value common stock to
Zhou as  compensation  for  certain  services  provided to the Company by Zhou's
consulting  firm,  Warner  (the  "Plan").  The Plan has a term of one year  from
December 30, 2005 to December 31, 2006 and may be  terminated  by the Company at
any time and for any reason.  In the event that the Plan is  terminated,  then a
portion of the shares  issuable under the Plan which bears the same ratio to the
total  number of shares  issuable  thereunder  as that portion of the term which
shall  not have  expired  as of the date of  termination  bears to the  original
one-year  term of the Plan  shall be  forfeited.  The Plan may be amended by the
written  agreement of the parties.  The Plan is not subject to any  provision of
the Employee Retirement Income Security Act of 1974.

      HTF leases a sales office of  approximately  133 square meters in Beijing,
China from Ms. Ling Chen,  our Chairman,  President and Director,  Mr. Yuan Qing
Li's wife on a year-to-year basis. The current term is from September 1, 2005 to
August 31, 2006 at a monthly rent of  approximately  $867 (including  management
and  air-conditioning  maintenance  fees),  which is at the level of the  market
rent.

      Except for the Warner Private Placement,  the Warner Letter Agreement, the
Assumption  and  Assignment  Agreement,  the Loan  Forgiveness  and  Termination
Agreement,  the AUS Letter Agreement,  the Warner  Consulting  Agreement and the
lease described  above, the Company has no other related  transactions  with its
shareholders  and current or former  directors or executive  officers during the
fiscal year.

7.C. Interests of Experts and Counsel

Not applicable.

Item 8.   Financial Information

8.A. Consolidated Statements and Other Financial Information

      The Company's consolidated financial statements are stated in U.S. Dollars
(US$) and are  prepared in  accordance  with United  States  Generally  Accepted
Accounting Principles (GAAP).

      The  financial  statements  as  required  under  Item 18 of Form  20-F are
attached hereto and found immediately  following the text of this Annual Report.
The audit  reports of Kabani & Company,  Inc.  are included  herein  immediately
preceding the financial statements.

8.A.7. Legal/Arbitration Proceedings

      The  Directors  and  the  management  of the  Company  do not  know of any
material,  active or pending, legal proceedings against them; nor is the Company
involved as a plaintiff in any material proceeding or pending litigation.


                                       38
<PAGE>

      The  Directors  and the  management  of the  Company  know of no active or
pending  proceedings  against anyone that might  materially  adversely affect an
interest of the Company.

8.A.8. Policy on dividend distributions

      The Company does not have any policy on dividend distributions.

8.B. Significant Changes

      On  March  23,  2006  the  Company   effected  a  name  change  to  "China
International  Enterprises  Inc."  and was  approved  for a new  trading  symbol
"CIETF".  In  addition,  the  Company  announced  a 1:32  reverse  split  of its
outstanding  common  shares.   Both  actions  were  approved  by  the  Company's
shareholders at a meeting held on March 7, 2006.

Item 9.   The Offer and Listing

      There is no offer associated with this Annual Report.

9.A. 4 Trading History

      The Company's common shares were listed for trading on the Vancouver Stock
Exchange  (now known as the TSX Venture  Exchange)  ("VSE") on December 20, 1993
under the symbol "UVT" and were voluntarily delisted from the VSE on January 31,
2000. The Company's  shares began quoting on the NASD Over the Counter  Bulletin
Board ("OTCBB") under the symbol "YDSLF" on September 7, 1999. On June 20, 2000,
in conjunction  with the Company's name change to E*Comnetrix Inc. and change of
corporate  jurisdiction,  the  Company's  shares began  trading under the symbol
"ECNXF".  On July 31, 2002, in  conjunction  with the  Company's  name change to
Moving Bytes Inc. , the Company's shares began trading under the symbol "MBYTF".
On March 23,  2006,  in  conjunction  with the  Company's  name  change to China
International  Enterprises  Inc.,  the Company's  shares began trading under the
symbol "CIETF".

      The following table sets forth the nature of the Company's  trading market
on the OTCBB during the period from  January 1, 2001 to the Company  fiscal year
ended December 31, 2005, and for the period ending May 31, 2006 as quoted by the
OTCBB.

                      NASD OVER-THE-COUNTER BULLETIN BOARD.

     2001                        High (US$)                      Low (US$)
--------------------------------------------------------------------------------
 1st Quarter                       $1.00                           $0.25
 2nd Quarter                       $0.63                           $0.30
 3rd Quarter                       $0.32                           $0.17
 4th Quarter                       $0.20                           $0.06

     2002                        High (US$)                      Low (US$)
--------------------------------------------------------------------------------
 1st Quarter                       $0.19                           $0.08
 2nd Quarter                       $0.42                           $0.13
 3rd Quarter                       $0.33                           $0.14
 4th Quarter                       $0.30                           $0.09


                                       39
<PAGE>

     2003                        High (US$)                      Low (US$)
--------------------------------------------------------------------------------
 1st Quarter                       $0.20                           $0.08
 2nd Quarter                       $0.10                           $0.04
 3rd Quarter                       $0.09                           $0.05
 4th Quarter                       $0.08                           $0.02

     2004                        High (US$)                      Low (US$)
--------------------------------------------------------------------------------
 1st Quarter                       $0.04                           $0.002
 2nd Quarter                       $0.05                           $0.01
 3rd Quarter                       $0.05                           $0.002
 4th Quarter                       $0.03                           $0.002

     2005                        High (US$)                      Low (US$)
--------------------------------------------------------------------------------
 1st Quarter                       $0.04                           $0.002
 2nd Quarter                       $0.18                           $0.041
 3rd Quarter                       $0.13                           $0.025
 4th Quarter                       $0.03                           $0.010

     2006                        High (US$)                      Low (US$)
--------------------------------------------------------------------------------
December 2005                      $0.03                           $0.010
 January 2006                      $0.05                           $0.015
February 2006                      $0.10                           $0.030
March 2006(1)                      $1.68                           $0.037
  April 2006                       $1.44                           $1.030
   May 2006                        $1.51                           $0.750


Notes:

(1)   The  Common  Shares  were  reverse  split on a 1 for 32 basis on March 23,
      2006.

9.C. Markets

      Our common stock is quoted on the OTCBB under the symbol "CIETF".


                                       40
<PAGE>

Item 10.  Additional Information

10.A. Not applicable

10.B. Memorandum and Articles of Association

      The  following is a summary of certain  provisions of our  memorandum  and
articles of association.

      The Company was  incorporated  under the Company Act of British  Columbia,
Canada,  on December 23, 1991, under the name "Jackpine Mining Co. Inc." On July
16, 2000, the Company  continued under the Canada Business  Corporations Act and
changed its name to E*Comnetrix Inc and on July 24, 2002 the Company changed its
name to Moving  Bytes Inc. In March 2006 the  Company  changed its name to China
International Enterprises, Inc. The Company's Corporation Number is 377885-1

      There are no objects or purposes of the Company  found in the  Articles of
Continuance of the Company (the "Articles").

      The authorized  capital of the Company  consists of an unlimited number of
common shares without nominal or par value ("Common Shares"), 10,000,000 Class A
Preferred  Shares,  without  par value  ("Class A  Preferred  Shares")  with the
rights,  limitations  set forth below and 20,000,000  Class B Preferred  Shares,
without par value ("Class B Preferred  Shares" and collectively with the Class A
Preferred Shares, the "Preferred Shares") with the rights, limitations set forth
below:

      The holders of Common Shares are entitled:

(a) to vote at all  meetings  of  shareholders  except  meetings  at which  only
holders of a specified class of shares are entitled to vote;

(b)  subject to the rights and  privileges  attaching  to the Class A  Preferred
Shares and Class B Preferred  Shares,  to receive the remaining  property of the
Company upon dissolution; and

(c)  subject to the rights and  privileges  attaching  to the Class A  Preferred
Shares and Class B Preferred  Shares,  to receive dividends as and when declared
by the board of directors of the Company.

Class A Preferred Shares

      The Class A Preferred  Shares shall have the following  special rights and
restrictions attaching to them:

1.    The  holders of the Class A  Preferred  Shares  shall not be  entitled  to
      receive notice of or attend any meetings of the members of the Company and
      shall  not be  entitled  to vote at any  meetings  of the  members  of the
      Company (except  meetings of the holders of Class A Preferred  Shares as a
      class meeting).

2.    The Class A Preferred Shares shall, with respect to priority in payment of
      dividends,  be  entitled  to  preference  over the  common  shares  of the
      Company.

3.    In the event of the liquidation,  dissolution or winding-up of the Company
      or any other distribution of assets of the Company among its members,  the
      holders of the Class A Preferred  Shares shall be entitled to receive,  in
      preference and priority to the holders of common shares of the Company, on
      a pro rata  basis,  the paid up  capital on the Class A  Preferred  Shares
      together with all dividends (if any) accrued thereon and remaining unpaid.
      Thereafter  the  holders  of the  Class A  Preferred  Shares  shall not be
      entitled  to  share  in any  further  distribution  of the  assets  of the
      Company,  and the assets of the Company shall be distributed on a pro rata
      basis among the holders of the common shares of the Company.


                                       41
<PAGE>

4.    The Class A Preferred  Shares may be converted  into common  shares in the
      capital of the  Company at the option of the holder of a Class A Preferred
      Share on the basis of one Class A Preferred Share for one common share.

5.    The conversion  right on the Class A Preferred  Shares may be exercised by
      notice in writing delivered to the Company  accompanied by the certificate
      or certificates  representing  the Class A Preferred  Shares in respect of
      which the holder thereof desires to exercise such right of conversion. The
      conversion notice shall be signed by the person registered on the books of
      the  Company as the holder of the Class A  Preferred  Shares in respect of
      which such right is being  exercised  or by the holder's  duly  authorized
      attorney,  and the  conversion  notice shall specify the number of Class A
      Preferred Shares which the holder desires to have converted.

6.    Upon the Company receiving a conversion  notice, the Company will instruct
      its transfer agent to issue a certificate to the holder  representing  the
      number of common shares which the Class A Preferred Shares are convertible
      into,  registered  in the name of the  holder  or such  other  name as the
      holder  may direct in  writing,  provided  that the  holder  shall pay any
      applicable  transfer  taxes.  In the event  that less than all the Class A
      Preferred   Shares   represented  by  the  certificate   accompanying  the
      conversion  notice are to be  converted,  the holder  shall be entitled to
      receive, at the expense of the Company, a new certificate representing the
      Class A Preferred Shares which are not to be converted.

7.    The  holders of any Class A  Preferred  Shares at the close of business on
      the record date for any dividends  payable on the Class A Preferred Shares
      shall be  entitled  to  dividends  notwithstanding  that such  shares  are
      converted  into common shares after the record date and before the payment
      date of the dividends.

8.    In the event of any subdivision,  reclassification or change of the common
      shares at any time while the Class A Preferred Shares are outstanding into
      a greater  number or  different  class of shares,  the  holders of Class A
      Preferred  Shares who exercise the conversion  right at any time after the
      subdivision, reclassification or change shall be entitled to an additional
      number  or  different  class of  shares as would  have  resulted  from the
      subdivision,  reclassification  or change if the right of  conversion  had
      been exercised prior to the date of the subdivision,  reclassification  or
      change.

9.    In the event of a consolidation,  reclassification or change of the common
      shares at any time while the Class A Preferred Shares are outstanding into
      a lesser  number or  different  class of  shares,  the  holders of Class A
      Preferred  Shares who exercise the conversion  right at any time after the
      consolidation,  reclassification  or change  shall be entitled to a lesser
      number  or  different  class of  shares as would  have  resulted  from the
      consolidation,  reclassification  or change if the right of conversion had
      been exercised prior to the date of the consolidation, reclassification or
      change.

10.   The Company shall not issue fractional  shares upon any conversion and the
      number of common shares to be issued upon conversion shall be increased to
      the nearest whole number.


                                       42
<PAGE>

11.   All shares  resulting  from a conversion of Class A Preferred  Shares into
      common shares shall be fully paid and non-assessable.

Class B Preferred Shares

      The Class B Preferred  Shares shall have the following  special rights and
restrictions attaching to them:

(a) One or More Series.  The directors may issue Class B Preferred Shares in one
or more Series;

(b) Creation or Deletion of Series.  The directors  may alter by resolution  the
Articles of the Company or, if applicable,  the By-Laws of the Company to fix or
change the number of shares in, and to determine  the  designation,  privileges,
restrictions  and conditions  attaching to the shares of, each series of Class B
Preferred Shares;

(c)  Voting.  The  directors  may confer on the holders of any Series of Class B
Preferred  Shares the right to notice of or to be present or to vote,  either in
person or by prosy, at any general meeting of the shareholders of the Company in
addition  to at any  separate  meeting of the  holders of the Class B  Preferred
Shares, or of the holders of shares of a Series of the Class B Preferred Shares,
as the case may be;

(d)  Dividends.  The special  rights or  restrictions  which the  directors  may
create, define or attach to any Series of Class B Preferred Shares may allow the
directors to declare  dividends  with  respect to the common  shares only or any
series of Class A  Preferred  Shares or with  respect  to any  series of Class B
Preferred  Shares only or with  respect to any  combination  of two or more such
classes or series of classes;

(e) If Series  Entitled  to  Cumulative  Dividend.  Where the Class B  Preferred
Shares  or one or more  series  of Class B  Preferred  Shares  are  entitled  to
cumulative  dividends,  and where cumulative dividends in respect of the Class B
Preferred  Shares or a Series of Class B Preferred  Shares are not paid in full,
the shares of all series of Class B  Preferred  Shares  entitled  to  cumulative
dividends  shall  participate  ratably in respect of  accumulated  dividends  in
accordance  with the  amounts  that would be payable on those  shares if all the
accumulated dividends were paid in full;

(f) All Series of Class B Preferred  shares  Participate  Ratably on Winding Up.
Where amounts  payable on a winding-up are not paid in full or on the occurrence
of any other  event  where the  holders  of the  shares of all Series of Class B
Preferred  Shares are entitled to a return of capita,  but are not paid in full,
the shares of all Series of Class B Preferred Shares shall  participate  ratably
in a return of capital in respect of Class B Preferred Shares in accordance with
the  amounts  that would be  payable on the return of capital if all  amounts so
payable were paid in full;


                                       43
<PAGE>

(g) No Priority. No special rights or restrictions attached to a series of Class
B Preferred  Shares shall confer on the series  priority over another  Series of
Class B Preferred Shares then outstanding respecting:

      (i)   dividends, or

      (ii)  a return of capital:

            A. on winding-up, or

            B. on the  occurrence  of another  event  that  would  result in the
            holders of all series of Class B Preferred  Shares being entitled to
            a return of capital;

(h) Special Rights and  Restrictions of Issued Series.  A directors'  resolution
pursuant to paragraph (b) above must be passed before the issue of shares of the
series to which the  resolution  relates,  and after the issue of shares of that
series the number of shares in, the  designation  of, and the special rights and
restrictions  attached  to that  series  may be added  to,  altered,  varied  or
abrogated  only  pursuant  to the  Canada  Business  Corporations  Act,  and the
directors  shall send to the Director  articles of  amendment in the  prescribed
form; and

(i)  Priority on  Liquidation.  Except as provided  herein,  in the event of the
liquidation, dissolution or winding-up of the Company or any distribution of its
assets for the purpose of winding-up its affairs, after the payment of dividends
declared  but  unpaid,  the  holders of the Class B  Preferred  Shares  shall be
entitled  pari  passu  to  be  paid  such  amount  as  the  special  rights  and
restrictions  attaching to such shares shall  provide,  or in the absence of any
express provision with respect thereto, the amount of capital paid up in respect
thereof  per share for each Class B  Preferred  Share  held by them,  out of the
assets of the Company in  preference  to and with  priority  over any payment or
distribution  of any  capital  asset or monies  among the  holders of any common
shares of the Company  and the  holders of any Class A  Preferred  Shares of the
Company.  The foregoing  provisions  of the Articles  shall apply to all Class B
Preferred  Shares,  except as  expressly  provided  in the  special  rights  and
restrictions  which the directors may create,  define or attach to any Series of
Class B Preferred Shares.

With respect to certain matters concerning directors, the By-laws of the Company
provide as follows (section references are to Section numbers of the By-laws):

(a)

21.1  Conflicts:  A  director  who  is  in  any  way,  directly  or  indirectly,
      interested  in an existing or proposed  contract or  transaction  with the
      Corporation  or who holds any office or possesses  any  property  whereby,
      directly or  indirectly,  a duty or interest  might be created to conflict
      with his duty or  interest  as a  director  shall  declare  the nature and
      extent of his interest in such contract or  transaction or of the conflict
      or potential  conflict  with his duty and  interest as a director,  as the
      case may be, in  accordance  with the  provisions  of the Canada  Business
      Corporations Act (the "Act".

21.2  A director  shall not vote in respect of any such contract or  transaction
      with the  Corporation  in which he is interested and if he shall do so his
      vote shall not be counted,  but he shall be counted in the quorum  present
      at the meeting at which such vote is taken.  Subject to the  provisions of
      the Act, the prohibitions contained in this by-law shall not apply to:

      (a)   any contract or transaction  relating to a loan to the  Corporation,
            the  repayment  of all or part of which a  director  or a  specified
            corporation  or a  specified  firm in which he has an  interest  has
            guaranteed or joined in guaranteeing;
      (b)   any contract or  transaction  made,  or to be made,  with or for the
            benefit  of an  affiliated  corporation  of  which a  director  is a
            director or officer;
      (c)   any contract by a director to subscribe for or underwrite  shares or
            debentures  to be issued by the  Corporation  or a subsidiary of the
            Corporation, or any contract,  arrangement or transaction in which a
            director  is,  directly or  indirectly  interested  if all the other
            directors  are  also,  directly  or  indirectly  interested  in  the
            contract, arrangement or transaction;


                                       44
<PAGE>

      (d)   determining the remuneration of the directors in that capacity;
      (e)   purchasing  and  maintaining  insurance to cover  directors  against
            liability incurred by them as directors; or
      (f)   the indemnification of any director by the Corporation.

These  exceptions  may from time to time be  suspended  or amended to any extent
approved by the  Corporation in general meeting and permitted by the Act, either
generally or in respect of any  particular  contract or  transaction  or for any
particular period.

The  foregoing  provisions  are also set forth in Part 15 of the Articles of the
Company.

(b) There is no requirement  in the By-laws or the Articles for an  "independent
quorum" of directors to be present in order for the directors to be able to vote
compensation to themselves or any members of their body.

(c)

20.1  Borrowing:  Subject to the  provisions  of the Act, the directors may from
      time to time authorize the Corporation to:

      (a)   borrow money on the credit of the Corporation;
      (b)   issue, resell, sell or pledge debt obligations of the Corporation;
      (c)   subject to section 44 of the Act give a  guarantee  on behalf of the
            Corporation to secure performance of an obligation of any person;
      (d)   mortgage, charge, hypothecate, pledge or otherwise create a security
            interest  on all or  any  property  of  the  Corporation,  owned  or
            subsequently  acquired to secure any obligation of the  Corporation;
            and
      (e)   give financial assistance to any person, directly or indirectly,  by
            way of loan, guarantee, the provision of security or otherwise.

20.2  The  directors may make any bonds,  debentures  or other debt  obligations
      issued by the Corporation by their terms assignable free from any equities
      between the  Corporation  and the person to whom they may be issued or any
      other  person  who  lawfully  acquires  them by  assignment,  purchase  or
      otherwise.

20.3  The directors  may  authorize the issue of any bonds,  debentures or other
      debt  obligations of the  Corporation at a discount,  premium or otherwise
      and  with  special  or  other  rights  or  privileges  as  to  redemption,
      surrender,  drawings,  allotment  of or  conversion  into or exchange  for
      shares,  attending and voting at general  meetings of the  Corporation and
      otherwise as the directors may determine at or before the time of issue.

(d) There is no  provision  in the  Articles  or By-laws for the  retirement  or
non-retirement of directors pursuant to any age limit requirement.

(e) There is no  requirement  in the  Articles or By-laws for a director to hold
any Shares in order to be qualified to be elected or to act as a director.

There are no provisions in the Articles or By-laws  requiring the  disclosure of
shareholder ownership above any threshold.

There are no limitations  under the laws of Canada or in the Articles or By-laws
of the Company on the rights of foreigners  to hold or vote Shares,  except that
the Investment Canada Act (Canada) (the "Investment Act") may require review and
approval by the Minister of Industry  (Canada) of an "acquisition of control" of
the Company by a "non-Canadian".


                                       45
<PAGE>

There are no  provisions  in the  Articles or By-laws of the Company  that would
have an effect of delaying,  deferring or  preventing a change of control of the
Company.

The  By-laws of the  Company  contain,  among other  provisions,  the  following
provisions regarding the manner in which stockholder meetings may be convoked:

      9.1   Annual  Meeting:  Subject  to the Act,  the  annual  meeting  of the
            shareholders shall be held on such day in each year and at such time
            as the  directors  may by  resolution  determine at any place within
            Canada or, if all the shareholders  entitled to vote at such meeting
            so agree, outside Canada.

--------------------------------------------------------------------------------

      9.2   Special  Meetings:  Special  meetings  of  the  shareholders  may be
            convened by order of the board of directors at any date and time and
            at any place within Canada or, if all the  shareholders  entitled to
            vote at such meeting so agree, outside Canada.

      9.3   Notice: A notice stating the day, hour and place of meeting shall be
            given by serving  such notice on such persons as are entitled by law
            or under this by-law to receive such notice from the  Corporation in
            the manner  specified  in  paragraph  15.1 of this by-law or in such
            manner  as may  be  prescribed  by  the  directors,  not  less  than
            twenty-one  days or more than fifty days (in each case  exclusive of
            the day on which the notice is  delivered or sent and of the day for
            which notice is given)  before the day of the  meeting.  Notice of a
            meeting at which special  business is to be transacted  shall state:
            (a) the nature of that business in  sufficient  detail to permit the
            shareholder to form a reasoned judgment thereon; and (b) the text of
            any special  resolution  to be submitted  to the meeting.  Except as
            otherwise  provided  by the Act,  where any  special  business  at a
            general meeting includes considering, approving, ratifying, adopting
            or authorizing  any document or the execution  thereof or the giving
            of effect  thereto,  the notice  convening the meeting  shall,  with
            respect to such document,  be sufficient if it states that a copy of
            the  document  or  proposed  document  is or will be  available  for
            inspection  by  shareholders  at the  registered  office or  records
            office of the  Corporation or at some other place  designated in the
            notice  during usual  business  hours up to the date of such general
            meeting.

      9.4   Waiver of Notice:  A  shareholder  and any other person  entitled to
            attend a meeting of  shareholders  may in any manner waive notice or
            reduce  the  period  of  notice of a  meeting  of  shareholders  and
            attendance  of any such  person at a meeting of  shareholders  shall
            constitute  a waiver of  notice of the  meeting  except  where  such
            person attends a meeting for the express purpose of objecting to the
            transaction  of any  business on the grounds that the meeting is not
            lawfully called.

      9.5   Omission of Notice:  The  accidental  omission to give notice of any
            meeting  or any  irregularity  in the  notice of any  meeting or the
            non-receipt  of any  notice  by  any  shareholder  or  shareholders,
            director or  directors or the auditor of the  Corporation  shall not
            invalidate any  resolution  passed or any  proceedings  taken at any
            meeting of shareholders.

      9.6   Votes:  Subject to the Act, every question  submitted to any meeting
            of shareholders  shall be decided in the first instance by a show of
            hands unless (before or on the declaration of the result of the show
            of hands) a poll is directed by the  Chairman  or a  shareholder  or
            proxyholder  entitled to vote at the  meeting has  demanded a ballot
            and in the case of an equality of votes the  chairman of the meeting
            shall on a show of hands or on a  ballot  have a second  or  casting
            vote in addition  to the vote or votes to which he may be  otherwise
            entitled as a member or proxyholder  and this provision  shall apply
            notwithstanding  the Chairman is interested in the subject matter of
            the resolution.

      9.7   Declaration:  At  any  meeting,  unless  a  ballot  is  demanded,  a
            declaration  by the chairman of the meeting  that a  resolution  has
            been carried or carried  unanimously or by a particular  majority or
            lost or not carried by a  particular  majority  shall be  conclusive
            evidence of the fact.


                                       46
<PAGE>

10.C. Material Contracts

      We have not entered into any material contracts other than in the ordinary
course of business and other than those described in Item 4, "Information on the
Company" or elsewhere in this Annual Report on Form 20-F.

10. D. Exchange Controls

      The PRC government imposes controls on the convertibility of Renminbi into
foreign  currencies and, in certain cases, the remittance of currency out of the
PRC.  We  receive  substantially  all of our  revenues  in  Renminbi,  which  is
currently not a freely  convertible  currency.  Shortages in the availability of
foreign currency may restrict our ability to remit  sufficient  foreign currency
to pay dividends,  or otherwise satisfy foreign currency dominated  obligations.
Under existing PRC foreign  exchange  regulations,  payments of current  account
items,  including profit distributions,  interest payments and expenditures from
the transaction,  can be made in foreign  currencies without prior approval from
the PRC State  Administration  of Foreign  Exchange by  complying  with  certain
procedural  requirements.   However,   approval  from  appropriate  governmental
authorities is required where Renminbi is to be converted into foreign  currency
and remitted out of China to pay capital  expenses such as the repayment of bank
loans denominated in foreign currencies.

      The PRC  government  may also at its  discretion  restrict  access  in the
future to foreign  currencies for current account  transactions.  If the foreign
exchange control system prevents us from obtaining  sufficient  foreign currency
to  satisfy  our  currency  demands,  we may not be able to pay  certain  of our
expenses as they come due.

      The value of the Renminbi against the U.S. dollar and other currencies may
fluctuate and is affected by, among other things, changes in the PRC's political
and  economic  conditions.  On July 21,  2005,  the PRC  government  changed its
decade-old policy of pegging the value of the RMB to the U.S. dollar.  Under the
new policy,  the RMB is permitted to fluctuate  within a narrow and managed band
against  a basket of  certain  foreign  currencies.  This  change in policy  has
resulted  in an  approximately  3.0%  appreciation  of the RMB  against the U.S.
dollar.  While the  international  reaction to the RMB revaluation has generally
been  positive,  there  remains  significant  international  pressure on the PRC
government to adopt an even more flexible currency policy, which could result in
a further and more significant appreciation of the RMB against the U.S. dollar.

      In addition,  State  Administration  of Foreign  Exchange  issued a public
notice  ("October  Notice")  effective  from  November 1, 2005,  which  requires
registration  with SAFE by the PRC resident  shareholders of any foreign holding
company of a PRC entity.  Without registration,  the PRC entity cannot remit any
of its  profits  out of  the  PRC as  dividends  or  otherwise;  however,  it is
uncertain how the October Notice will be  interpreted  or implemented  regarding
specific  documentation  requirements for a foreign holding company formed prior
to the effective date of the October  Notice,  such as in our case. In addition,
the October Notice requires that any monies remitted to PRC residents outside of
the PRC be returned within 180 days; however, there is no indication of what the
penalty will be for failure to comply or if shareholder  non-compliance  will be
considered to be a violation of the October Notice by us or otherwise affect us.


                                       47
<PAGE>

10. E. Taxation

Canadian Federal Income Tax Considerations

      The following is a brief summary of some of the principal Canadian federal
income tax consequences generally applicable to a holder of common shares of the
Company (a "U.S. holder") who deals at arm's length with the Company,  holds the
shares as  capital  property  and who,  for the  purposes  of the Income Tax Act
(Canada) (the "Act") and the  Canada-United  States Income Tax  Convention  (the
"Treaty"), is at all relevant times resident in the United States, is not and is
not deemed to be  resident  in Canada and does not use or hold and is not deemed
to use or hold the shares in carrying on a business  in Canada.  Special  rules,
which are not discussed  below,  may apply to a U.S.  holder which is an insurer
that carries on business in Canada and elsewhere.  Limited  liability  companies
(LLCs)  that are not taxed as  corporations  pursuant to the  provisions  of the
Internal  Revenue  Code of 1986,  as amended,  do not qualify as resident in the
United States for purposes of the Treaty.

      This  summary is of a general  nature  only and is not,  and should not be
interpreted  as,  legal or tax  advice  to any  particular  U.S.  holder  and no
representation  is made with respect to the Canadian income tax  consequences to
any particular  person.  Accordingly,  U.S. holders are advised to consult their
own tax advisors with respect to their particular circumstances.

      Under  the Act  and the  Treaty,  a U.S.  holder  of  common  shares  will
generally be subject to a 15%  withholding  tax on dividends paid or credited or
deemed by the Act to have been paid or credited on such shares.  The withholding
tax rate is 5% where the U.S. holder is a corporation that  beneficially owns at
least 10% of the voting  shares of the Company and the  dividends  may be exempt
from  such  withholding  in the case of some  U.S.  holders  such as  qualifying
pension funds and charities.

      In general,  a U.S.  holder will not be subject to Canadian  income tax on
capital gains arising on the  disposition  of shares of the Company  unless at a
time that the  Company's  shares are listed on the TSX or the NYSE unless (i) at
any time in the 60-month period  immediately  preceding the disposition,  25% or
more of the shares of any class or series of the  capital  stock of the  Company
was owned by the U.S. holder,  persons with whom the U.S. holder did not deal at
arm's  length  or the U.S.  holder  and such  persons  and (ii) the value of the
common shares of the Company at the time of the disposition  derives principally
from real  property  (as  defined in the Treaty)  situated  in Canada.  For this
purpose,  the Treaty defines real property  situated in Canada to include rights
to explore for or exploit mineral deposits and other natural resources  situated
in Canada,  rights to amounts  computed by  reference  to the amount or value of
production  from such  resources,  certain  other  rights in  respect of natural
resources  situated  in Canada  and shares of a  corporation  the value of whose
shares is derived principally from real property situated in Canada.

United States Federal Income Tax Considerations

      The  following is a brief summary of some of the  principal  U.S.  federal
income tax  consequences to a holder of common shares of the Company,  who deals
at arm's length with the Company,  holds the shares as capital property and who,
for the purposes of the Internal  Revenue Code of 1986,  as amended (the "Code")
and the Treaty,  is at all relevant times a U.S  Stockholder (as defined below),
is not and is not deemed to be  resident  in Canada and does not use or hold and
is not deemed to use or hold the shares in carrying on a business in Canada.


                                       48
<PAGE>

      As used  herein,  the term  "U.S.  Stockholder"  means a holder  of common
shares of the Company who (for United States federal  income tax purposes):  (a)
is  a  citizen  or  resident  of  the  United  States;  (b)  is  a  corporation,
partnership,  or other  entity  created or organized in or under the laws of the
United  States or of any  political  subdivision  thereof;  (c) is an estate the
income of which is subject to United States federal income  taxation  regardless
of its source;  or (d) is a trust subject to both the primary  supervision  of a
U.S.  court  and the  control  of one or  more  U.S.  persons  with  respect  to
substantial trust decisions.

      Special  rules,  which  are  not  discussed  below,  may  apply  to a U.S.
Stockholder that is an insurer that carries on business in Canada and elsewhere.
Limited  liability  companies  (LLCs) do not  qualify as  resident in the United
States for purposes of the Treaty.

      These  summaries do not describe United States federal estate and gift tax
considerations,   nor  do  they   describe   regional,   state   and  local  tax
considerations  within the United States. The following summaries do not purport
to be a comprehensive description of all of the possible tax considerations that
may be relevant to a decision to purchase, hold or dispose of the common shares.
In particular,  these summaries only deal with a holder who will hold the common
shares as a capital asset and who does not own,  directly or indirectly,  10% or
more of our voting shares or of any of our direct or indirect subsidiaries. This
summary  does not  address all of the tax  consequences  that may be relevant to
holders in light of their particular circumstances, including but not limited to
application  of  alternative  minimum tax or rules  applicable  to  taxpayers in
special  circumstances.  Special rules may apply,  for  instance,  to tax-exempt
entities,  banks, insurance companies, S corporations,  dealers in securities or
currencies,  persons who will hold common  shares as a position in a "straddle",
hedge,  constructive  sale, or "conversion  transaction"  for U.S. tax purposes,
persons who have a "functional  currency" other than the U.S. dollar, or persons
subject  to  U.S.  taxation  as  expatriates.   Furthermore,  in  general,  this
discussion does not address the tax consequences  applicable to holders that are
treated as partnerships or other  pass-through  entities for U.S. federal income
tax purposes.

      This  summary is of a general  nature  only and is not,  and should not be
interpreted  as, legal or tax advice to any particular  U.S.  Stockholder and no
representation  is made with respect to the U.S. income tax  consequences to any
particular person.  Accordingly,  U.S. Stockholders are advised to consult their
own tax advisors with respect to their particular circumstances.

Dividends

      For United States  federal  income tax  purposes,  the gross amount of all
distributions,  if any, paid with respect to the common shares out of current or
accumulated earnings and profits ("E&P") to a U.S. Stockholder generally will be
treated as foreign source dividend  income to such holder,  even though the U.S.
Stockholder  generally  receives only 85% of that amount (after giving effect to
the  Canadian  withholding  tax  as  reduced  by  the  Treaty).   United  States
corporations  that hold the common shares  generally will not be entitled to the
dividends  received  deduction  that applies to dividends  received  from United
States  corporations.  To the  extent a  distribution  exceeds  E&P,  it will be
treated  first as a return of capital  to the  extent of the U.S.  Stockholder's
adjusted basis and then as gain from the sale of a capital asset.


                                       49
<PAGE>

      In the case of a U.S. Stockholder that is an individual,  estate or trust,
gains from the sale of a capital  asset held for longer than  twelve  months are
taxable at a maximum  federal  income tax rate of 15%, while gains from the sale
of a capital  asset that does not meet such  holding  period are  taxable at the
rates  applicable  to ordinary  income.  Dividends  paid prior to 2009 to a U.S.
Stockholder that is an individual, estate or trust generally are also subject to
the 15% maximum rate. Special rules may apply,  however, to cause such dividends
to be taxable at the higher rates  applicable to ordinary  income.  For example,
the reduced  tax rates are not  available  with  respect to a dividend on shares
where the U.S.  Stockholder  does not continuously own such shares for more than
60 days during the 120-day period beginning 60 days before the ex-dividend date.
In addition,  the reduced tax rates are not available  with respect to dividends
received from a foreign  corporation that was a foreign  investment  company,  a
passive foreign  investment  company,  or a foreign  personal holding company in
either the taxable year of the  distribution or the preceding  taxable year. The
reduced  tax rates  generally  are  available  only with  respect  to  dividends
received from U.S.  corporations,  and from non-U.S.  corporations  (a) that are
eligible for the benefits of a  comprehensive  income tax treaty with the United
States that the U.S. Treasury Department  determines to be satisfactory and that
contains  an  exchange  of  information  program,  or (b) whose stock is readily
tradable on an established  securities  market in the United States.  Many other
complex  and special  rules may apply as a condition  to, or as a result of, the
application of the reduced tax rate on dividends. Moreover, the applicability of
the reduced tax rate on dividends received from non-U.S. corporations is subject
to change.  The United States tax authorities  have announced their intention to
promulgate rules that would permit U.S.  Stockholders to rely on  certifications
from issuers to establish the  applicability  of the reduced  dividend tax rate.
U.S. Stockholders are advised to consult their own tax advisors.

      For United States federal income tax purposes,  the amount of any dividend
paid in Canadian  dollars will be the United States dollar value of the Canadian
dollar at the exchange rate in effect on the date of receipt, whether or not the
Canadian  dollar is converted into United States  dollars at that time.  Gain or
loss recognized by a U.S.  Stockholder on a sale or exchange of Canadian dollars
will be United States source ordinary income or loss.

      The  withholding tax imposed by Canada  generally is a creditable  foreign
tax  for  United  States  federal  income  tax  purposes.  Therefore,  the  U.S.
Stockholder  generally  will be  entitled  to include  the amount  withheld as a
foreign tax paid in  computing a foreign tax credit (or in computing a deduction
for foreign  income taxes paid,  if the holder does not elect to use the foreign
tax credit  provisions  of the  Code).  The Code,  however,  imposes a number of
limitations on the use of foreign tax credits, based on the particular facts and
circumstances  of each  taxpayer.  Investors  should  consult their tax advisors
regarding the availability of the foreign tax credit.

Capital Gains

      Subject to the  discussion  below under the  heading  "-- Passive  Foreign
Investment  Company   Considerations",   gain  or  loss  recognized  by  a  U.S.
Stockholder  on the sale or  other  disposition  of the  common  shares  will be
subject to United States federal  income  taxation as capital gain or loss in an
amount equal to the difference between such U.S. Stockholder's adjusted basis in
the common shares and the amount realized upon its disposition.

      Gain on the sale of  common  shares  held for more than one year by a U.S.
Stockholder that is an individual,  estate or trust will be taxable at a maximum
rate of 15%. A reduced rate does not apply to capital  gains  realized by a U.S.
Stockholder that is a corporation.  Capital losses are generally deductible only
against  capital  gains  and not  against  ordinary  income.  In the  case of an
individual, however, unused capital losses in excess of capital gains may offset
up to $3,000 annually of ordinary income.


                                       50
<PAGE>

      Capital gain or loss recognized by a U.S. Stockholder on the sale or other
disposition of common shares will generally be sourced in the United States.

Passive Foreign Investment Company Considerations

      The Company will be classified  as a passive  foreign  investment  company
("PFIC") for United States federal income tax purposes if either (i) 75% or more
of its gross income is passive  income or (ii) on average for the taxable  year,
50% or more of its assets (by value)  produce or are held for the  production of
passive income.  Based on projections of the Company's income and assets and the
manner in which the Company intends to manage its business,  the Company expects
that the Company will not be a PFIC.  However,  there can be no  assurance  that
this will actually be the case. In reaching the conclusion that the Company does
not expect to be a PFIC,  the Company  has valued its assets  based on the price
per share of the common  shares.  For purposes of applying the PFIC rules to the
Company, such a valuation method results in the attribution of substantial value
to the  Company's  intangible  assets,  including  goodwill and other  potential
resource  related assets that are  considered  neither to produce nor to be held
for the production of passive income for purposes of the PFIC rules. The Company
believes  that this is a  reasonable  method of valuing our  non-passive  assets
based on the legislative history of the PFIC provisions.

      If the Company were to be classified as a PFIC, the consequences to a U.S.
Stockholder  will  depend in part on  whether  the U.S.  Stockholder  has made a
"Mark-to-Market  Election" or a "QEF Election"  with respect to the Company.  If
the Company is a PFIC during a U.S.  Stockholder's  holding  period and the U.S.
Stockholder does not make a Mark-to-Market  Election or a QEF Election, the U.S.
Stockholder  will  generally be required to pay a special  United States tax, in
lieu of the U.S. tax that would otherwise  apply,  if such U.S.  Stockholder (a)
realizes  a gain on  disposition  of common  shares or (b)  receives  an "excess
distribution" from the Company on common shares.

      If  a  U.S.  Stockholder  makes  a  Mark-to-Market   Election,   the  U.S.
Stockholder  would not be  subject  to the  special  tax.  Instead,  it would be
required  to include in its  income the excess of the fair  market  value of the
common  shares as of the close of each taxable year over the U.S.  Stockholder's
adjusted basis therein. If the U.S.  Stockholder's  adjusted basis in the common
shares is greater  than the fair  market  value of the  common  shares as of the
close of the taxable year, the U.S. Stockholder may deduct such excess, but only
up to the aggregate amount of ordinary income previously included as a result of
the Mark-to-Market  Election,  reduced by any previous deduction taken. The U.S.
Stockholder's  adjusted  basis in its common  shares  will be  increased  by the
amount of income or  reduced  by the  amount of  deductions  resulting  from the
Mark-to-Market Election.

      If a U.S. Stockholder makes a QEF Election, the U.S. Stockholder would not
be subject to the special tax. Instead, it would be currently taxable on its pro
rata share of our ordinary earnings and net capital gain (at ordinary income and
capital  gains  rates,  respectively)  for each taxable year that the Company is
classified as a PFIC, even if no dividend distributions were received.


                                       51
<PAGE>

      If for any year the Company determines that it is properly classified as a
PFIC,  it will  comply  with all  reporting  requirements  necessary  for a U.S.
Stockholder to make a QEF Election and will,  promptly following the end of such
year and each year thereafter for which the Company is properly  classified as a
PFIC, provide to U.S. Stockholders the information required by the QEF Election.

      Under  current  U.S.  law,  if the  Company is a PFIC in any year,  a U.S.
Stockholder  must file an annual  return on IRS Form 8621,  which  describes the
income  received (or deemed to be received  pursuant to a QEF Election) from the
Company,  any gain realized on a disposition  of common shares and certain other
information.

United States Information Reporting and Backup Withholding

      Dividend payments on common shares and proceeds from the sale, exchange or
redemption of the common shares may be subject to  information  reporting to the
Internal Revenue Services ("IRS") and possible U.S. backup  withholding at a 28%
rate. Backup  withholding will not apply,  however,  to a holder who furnishes a
correct  taxpayer  identification  number or  certificate  of foreign status and
makes any other required  certification  or who is otherwise  exempt from backup
withholding.  Persons  required to establish their exempt status  generally must
provide such certification on IRS Form W-9 (Request for Taxpayer  Identification
Number and  Certification)  in the case of U.S.  persons  and on IRS Form W-8BEN
(Certificate of Foreign Status) in the case of non-U.S. persons.

      Amounts withheld as backup  withholding may be credited against a holder's
U.S.  federal  income  tax  liability,  and a holder  may obtain a refund of any
excess  amounts  withheld  under the  backup  withholding  rules by  filing  the
appropriate   claim  for  refund  with  the  IRS  and  furnishing  any  required
information.  U.S.  Stockholders should consult their tax advisors regarding the
application of the information reporting and backup withholding rules.

10. H Documents on Display

      The   Company  is  subject  to  certain  of  the   information   reporting
requirements of the Exchange Act. The Company, as a "foreign private issuer", is
exempt from the rules and  regulations  under the Exchange Act  prescribing  the
furnishing  and content of proxy  statements,  and the  officers,  directors and
principal  shareholders  of the  Company  are  exempt  from  the  reporting  and
"short-swing" profit recovery provisions contained in Section 16 of the Exchange
Act,  with  respect  to their  purchase  and sale of the  Company's  shares.  In
addition,  the Company is not required to file reports and financial  statements
with the SEC as frequently or as promptly as U.S. companies whose securities are
registered under the Exchange Act.  However,  the Company does file with the SEC
an annual  report  on Form 20-F  containing  consolidated  financial  statements
audited by an independent accounting firm.

      You may read and copy any document  the Company  files with the SEC at its
public reference facilities at 100 F Street, N.E.,  Washington,  D.C. 20549. You
may also obtain copies of the  documents at  prescribed  rates by writing to the
Public  Reference  Section of the SEC at 100 F Street,  N.E.,  Washington,  D.C.
20549.  The SEC also  maintains  a web site  that  contains  reports,  proxy and
information  statements and other  information  regarding  registrants that file
electronically with the SEC. The address of this web site is http://www.sec.gov.
Please call the SEC at 1-800-SEC-0330  for further  information on the operation
of the public reference facilities.


                                       52
<PAGE>

10. I Subsidiary Information

Please refer to Item 4.C. of this Annual Report.

Item 11.  Quantitative and Qualitative Disclosure about Market Risk

We are not subject to material market risk  exposures,  except for risks related
to inflation and foreign currency exchange rates.

Inflation Risk

While the PRC economy has experienced rapid growth,  such growth has been uneven
among various sectors of the economy and in different  geographical areas of the
country. Rapid economic growth can lead to growth in the money supply and rising
inflation.  If prices for our products  rise at a rate that is  insufficient  to
compensate for the rise in the costs of supplies,  it may have an adverse effect
on profitability.  In order to control inflation in the past, the PRC government
has  imposed  controls  on bank  credits,  limits on loans for fixed  assets and
restrictions on state bank lending. Such an austere policy can lead to a slowing
of economic  growth.  In October  2004,  the People's  Bank of China,  the PRC's
central bank,  raised  interest  rates for the first time in nearly a decade and
indicated in a statement that the measure was prompted by inflationary  concerns
in the Chinese  economy.  Repeated  rises in interest  rates by the central bank
would likely slow economic  activity in China which could,  in turn,  materially
increase our costs and also reduce demand for our products.

Foreign Currency Risk

The  Company's  business is conducted  primarily in Renminbi,  which is also our
functional  and  reporting  currency.  The  Renminbi is not a fully  convertible
currency.  From  1994 to July  20,  2005,  the  official  exchange  rate for the
conversion of Renminbi to U.S. dollars was generally  stable.  On July 21, 2005,
the PRC government  introduced a managed floating  exchange rate system to allow
the value of the Renminbi to fluctuate  within a regulated  band based on market
supply and demand and by reference to a basket of  currencies.  On the same day,
the value of the Renminbi  appreciated  by 2% against the U.S.  dollar.  The PRC
government has since made and in the future may make further  adjustments to the
exchange rate system.  Fluctuations  in exchange rates may adversely  affect the
value, translated or converted into United States dollars, of our net assets and
earnings.

Item 12.  Description of Securities Other than Equity Securities

Not applicable.


                                       53
<PAGE>

                                     PART II

Item 13.  Defaults, Dividend Arrearages and Delinquencies

None.

Item 14.  Material  Modifications  to the Rights of Security  Holders and Use of
          Proceeds

None.

Item 15.  Controls and Procedures.

(a)   Disclosure Controls and Procedures.

      We maintain disclosure controls and procedures that are designed to ensure
that  information  required to be disclosed in our reports under the  Securities
Exchange Act of 1934  ("Exchange  Act") is recorded,  processed,  summarized and
reported  within the time  periods  specified  in the  Securities  and  Exchange
Commission's  rules and forms,  and that such  information  is  accumulated  and
communicated  to our  management to allow timely  decisions  regarding  required
disclosure.  Management  necessarily applied its judgment in assessing the costs
and benefits of such  controls  and  procedures,  which,  by their  nature,  can
provide only reasonable assurance regarding management's control objectives.

      Under the supervision and with the participation of management,  including
our chief  executive  officer and chief  financial  officer,  we  evaluated  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 Exchange Act,
as of December 31, 2005. Based on this evaluation,  our chief executive  officer
and our chief  financial  officer  concluded  that,  as of the end of the period
covered by this report,  our disclosure  controls and procedures  were effective
and adequately designed to ensure that the information  required to be disclosed
by us in the reports we submit under the  Exchange  Act is recorded,  processed,
summarized  and  reported  within the time periods  specified in the  applicable
rules and forms and that such  information was  accumulated and  communicated to
our chief  executive  officer  and chief  financial  officer,  in a manner  that
allowed for timely decisions regarding required disclosure.

(b) & (c) Not Applicable

(d)   Changes in Internal Control over Financial Reporting

      During the period ended  December  31,  2005,  there has been no change in
internal control over financial  reporting that has materially  affected,  or is
reasonably  likely to  materially  affect our internal  control  over  financial
reporting.

      Our management,  including the chief executive officer and chief financial
officer,  do not expect that its disclosure  controls or internal  controls will
prevent all error and all fraud. A control system,  no matter how well conceived
and operated,  can provide only  reasonable,  not absolute,  assurance  that the
objectives of the control  system are met. In addition,  the design of a control
system  must  reflect  the fact that  there are  resource  constraints,  and the
benefits of controls must be considered relative to their costs.  Because of the
inherent  limitations  in all control  systems,  no  evaluation  of controls can
provide  absolute  assurance that all control issues and instances of fraud,  if
any, within a company have been detected. These inherent limitations include the
realities that judgments in  decision-making  can be faulty, and that breakdowns
can occur because of simple errors or mistakes.


                                       54
<PAGE>

      Additionally,  controls can be circumvented by the individual acts of some
persons,  by collusion of two or more people or by management's  override of the
control.  The design of any systems 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 all  potential
future  conditions.  Over time, control may become inadequate because of changes
in conditions,  or the degree of compliance  with the policies or procedures may
deteriorate.  Because of these inherent limitations in a cost-effective  control
system, misstatements due to error or fraud may occur and not be detected.

Item 16.  Reserved

Item 16A. Audit Committee Financial Expert

      The whole board serves as Audit  Committee  of the  Company.  Our board of
directors has determined that John Leo is the audit committee  financial  expert
as defined in Item 16A(b) of Form 20-F.

Item 16B. Codes of Ethics

      We have not yet adopted a Code of Ethics for our  executive  officers.  We
intend to adopt a Code of Ethics  applying to such  persons  during  fiscal year
2006.

Item 16C. Principal Accountant Fees and Services.

      The  following  tables  set forth  the fees  billed to us for the last two
fiscal years by our accountants:

Audit and Non-Audit Fees Paid to Kabani & Company, Inc.

                              Fiscal Year Ended       Fiscal Year Ended
                              December 31, 2005       December 31, 2004

Audit Fees                    $30,000                 $25,000
Audit-Related Fees            $0.00                   $0.00
Tax Fees                      $0.00                   $0.00
All Other Fees                $0.00                   $0.00


Audit and Non-Audit Fees Paid to Bagell, Josephs, Levine & Company, LLC:

                              Fiscal Year Ended       Fiscal Year Ended
                              December 31, 2005       December 31, 2004

Audit Fees                    $3,500                  $0.00
Audit-Related Fees            $0.00                   $0.00
Tax Fees                      $0.00                   $0.00
All Other Fees                $0.00                   $0.00


                                       55
<PAGE>

      We do not currently have an audit  committee of the Board of Directors and
the full Board of  Directors  did not pass on  whether  any  non-audit  services
impacted  our  auditor's  independence.  We currently do not have any policy for
approval of audit and permitted  non-audit services by our independent  auditor.
We plan to  appoint  an audit  committee  of our  Board of  Directors  and adopt
procedures for approval of audit and non-audit services.

Item 16D. Exemptions from the Listing Standards for Audit Committees.

Not applicable.

Item 16E. Purchases  of  Equity  Securities  by  the  Issuer  and  Affiliated
          Purchasers.

None.


                                    PART III

Item 17.  Financial Statements.

      We have responded to Item 18 in lieu of this item.

Item 18.  Financial Statements.

      The  financial  statements  required  by this item are found at the end of
this annual report, beginning on page F-1.

Item 19.  Exhibits.

1.1      The Articles of Amendment and its prior charter documents;

1.2      By-laws (1)

4.1.     Consulting Agreement, dated as of December 20, 2005, by and between the
         Company and Warner (2)

4.2      Share Exchange Agreement, dated as of August 15, 2005, by and among the
         Company , CIEC, XHT, all of the shareholders of CIEC, and Guzov Ofsink,
         LLC, as escrow agent (3)

4.3      Allocation  Agreement,  dated as of August 12, 2005, by and among CIEC,
         Warner, Zhou and AUS (3)

4.4      Letter  Agreement,  dated as of August 12, 2005, by and between HTF and
         Warner (3)

4.5      Assignment  and Assumption  Agreement,  dated as of August 18, 2005, by
         and among the Company , Warner and Zhou (3)


                                       56
<PAGE>

4.6      Loan  Forgiveness  and  Termination  Agreement,  dated as of August 15,
         2005, by and between Zhou and the Company (3)

4.7      Letter  Agreement,  dated as of August 19, 2005, by and between HFT and
         American Union Securities Inc. (3)

4.8      Share Exchange Agreement, dated as of January 31, 2005 among CIEC, XHT,
         Li Yuan Qing, Chen Ling and Qiu Zhen Liang. (4)

4.9      Cooperation  Agreement  for Lenovo  Products and its  Business  Terms ,
         dated March 24, 2004, by and between  Lenovo  (Shenzhen)  Co., Ltd. and
         HTF (4)

4.10     Cooperation Agreement of Service Channel with Lenovo (Master Agreement)
         and  Commercial  Articles  dated March 31,  2005 by and between  Lenovo
         (Shenzhen) Co., Ltd, and HTF (5)

8        List of Subsidiaries*

12.1     Certifications  of the  principal  executive  officer  required by Rule
         13a-14(a)   or  Rule   15d-14(a),   pursuant  to  Section  302  of  the
         Sarbanes-Oxley Act of 2002.*

12.2     Certifications  of the  principal  financial  officer  required by Rule
         13a-14(a)   or  Rule   15d-14(a),   pursuant  to  Section  302  of  the
         Sarbanes-Oxley Act of 2002.*

13.1     Certifications  of the  principal  executive  officer and the principal
         financial  officer  required by Rule  13a-14(b) or Rule  15d-14(b)  and
         Section 1350 of Chapter 63 of Title 18 of the United  States  Code,  as
         adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

Notes:

*     Filed herewith

(1)   Incorporated  by reference to exhibits from our Current Report on Form 8-K
      filed with the SEC on March 21, 2005
(2)   Incorporated by reference to Exhibit 99.1 from our Registration  Statement
      on Form S-8 filed with the Securities and Exchange  Commission (the "SEC")
      on December 31, 2005
(3)   Incorporated  by reference to exhibits from our Current Report on Form 8-K
      filed with the SEC on August 19, 2005
(4)   Incorporated  by reference to the exhibit  filed with CIEC's  Registration
      Statement on Form SB-2 filed with the SEC on February 28, 2005
(5)   Incorporated  by reference to the exhibit  filed with  Amendment  No. 1 to
      CIEC's  Registration  Statement on Form SB-2 filed with the SEC on May 27,
      2005


                                       57
<PAGE>

                                   SIGNATURES

      The registrant  hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized  the  undersigned
to sign this annual report on its behalf.

                                     China International Enterprises Inc.
                                     (Registrant)

                                     /s/ Yuanqing Li
                                     ------------------------------------
                                     By:    Yuanqing Li
                                     Title: Chairman of the Board of
                                            Directors, President and Director

                                     /s/ Dinghong Shen
                                     ------------------------------------
                                     By:    Dinghong Shen
                                     Title: Chief Financial Officer and
                                            Chief Accounting Officer

Date: June 16, 2006


                                       58
<PAGE>

              CHINA INTERNATIONAL ENTERPRISES INC. AND SUBSIDIARIES
                 INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005

                                                                          Page

Report of Independent Registered Public Accounting firm ..............    F-1

Financial Statements

      Consolidated Balance Sheet .....................................    F-2

      Consolidated Statements of Operations

      For the Years Ended December 31, 2005 and 2004 .................    F-3

      Statements of Stockholders' Equity

      For the Years Ended December 31, 2005 and 2004 .................    F-4

      Consolidated Statements of Cash Flows

      For the Years Ended December 31, 2005 and 2004 .................    F-5

      Notes to the Financial Statements ..............................  F-6-F-17


                                       59
<PAGE>

                     [LETTERHEAD OF KABANI & COMPANY, INC.]

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
China International Enterprises Inc. (formerly, Moving Bytes Inc.)

We  have  audited  the   accompanying   consolidated   balance  sheet  of  China
International  Enterprises Inc. (a Canadian Business Corporation) and subsidiary
as of December 31, 2005 and the related  consolidated  statements of operations,
stockholders'  equity,  and cash flows for the years ended December 31, 2005 and
2004. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

We conducted our audits of these  statements in accordance with the standards of
the Public Company Accounting  Oversight Board (United States).  Those standards
require that we plan and perform the audit to obtain reasonable  assurance about
whether the financial  statements  are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements.  An audit also includes  assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated  financial position of China
International  Enterprises  Inc. and subsidiary as of December 31, 2005, and the
results of its  consolidated  operations  and its cash flows for the years ended
December 31, 2005 and 2004 in conformity  with accounting  principles  generally
accepted in the United States of America.


/s/ Kabani & Company, Inc.

CERTIFIED PUBLIC ACCOUNTANTS
Los Angeles, California
March 3, 2006


                                      F-1
<PAGE>

              CHINA INTERNATIONAL ENTERPRISES INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2005

<TABLE>
<S>                                                                 <C>
                                     ASSETS

CURRENT ASSETS:
      Cash & cash equivalents                                       $      375,856
      Accounts receivable, net                                             431,218
      Inventory                                                            437,771
      Other receivable                                                     572,542
      Advances to suppliers                                                 35,562
      Prepaid expense                                                        2,204
                                                                    --------------
            Total current assets                                         1,855,153

PROPERTY AND EQUIPMENT, NET                                                353,680

DEPOSITS                                                                     7,698
                                                                    --------------
      TOTAL ASSETS                                                  $    2,216,532
                                                                    ==============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
      Accounts payable & accrued expense                            $      140,900
      Tax payable                                                           31,631
      Payroll payable                                                       46,443
      Unearned revenue                                                     102,048
      Welfare payable                                                        4,020
                                                                    --------------
            Total current liabilities                                      325,043

STOCKHOLDERS' EQUITY:
      Preferred stock, (Class A; authorized shares
        10,000,000, no par value, outstanding none;
        Class B, authorized shares 20,000,000,
        no par value; outstanding none)                                         --
      Capital stock (no par value; unlimited authorized;
        21,502,624 shares issued and outstanding)                        1,210,276
      Accumulated other comprehensive income
      Statutory reserve                                                     41,529
      Accumulated other comprehensive income                                54,489
      Retained Earnings                                                    585,196
                                                                    --------------
            Total stockholders' equity                                   1,891,489
                                                                    --------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    $    2,216,532
                                                                    ==============
</TABLE>

   The accompanying notes form an integral part of these financial statements


                                       F-2
<PAGE>

              CHINA INTERNATIONAL ENTERPRISES INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

<TABLE>
<CAPTION>
                                                         Years Ended December 31,
                                                         2005              2004
                                                    --------------    --------------
<S>                                                 <C>               <C>
Net Revenue                                         $    1,880,143    $    1,373,079

Cost of net revenue                                        572,364           377,676
                                                    --------------    --------------

Gross profit                                             1,307,779           995,403

Operating expenses
      Selling expenses                                     348,709           313,192
      General and administrative expenses                  638,805           634,321
      Research & development                               270,672           179,601
                                                    --------------    --------------
            Total operating expenses                     1,258,186         1,127,114
                                                    --------------    --------------
Income (loss) from operations                               49,593          (131,711)

Non-operating income:
      Interest expense                                      (5,934)          (26,192)
      Interest income                                       13,794             1,207
      Gain on sale of property                               7,935             7,289
      Technology subsidy                                    15,222            60,500
      Value added tax refund                                90,681            92,065
      Other income                                              --            49,941
      Other expense                                           (717)           (7,316)
                                                    --------------    --------------
            Total non-operating income                     120,980           177,494
                                                    --------------    --------------
Net income (loss)                                          170,573            45,783

Foreign currency translation gain                           43,668             2,394
                                                    --------------    --------------
Comprehensive Income                                $      214,241    $       48,177
                                                    ==============    ==============

Basic weighted average shares outstanding               20,502,649        19,940,000
                                                    ==============    ==============

Basic and diluted net income per share              $        0.008    $        0.002
                                                    ==============    ==============

Diluted weighted average shares outstanding             20,504,401        19,940,000
                                                    ==============    ==============

Basic and diluted net income per share              $        0.008    $        0.002
                                                    ==============    ==============
</TABLE>

   The accompanying notes form an integral part of these financial statements


                                       F-3
<PAGE>

              CHINA INTERNATIONAL ENTERPRISES INC. AND SUBSIDIARIES
                        STATEMENT OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

<TABLE>
<CAPTION>
                                                                         Accumulative
                                              Common                         Other                       Retained          Total
                                               stock                     Comprehensive    Statutory      Earnings      stockholders'
                                              shares         Amount          Gain          Reserve       (deficit)        equity
                                           ------------   ------------   ------------   ------------   ------------    ------------
<S>                                        <C>            <C>            <C>            <C>            <C>             <C>
Balance January 1, 2003                      19,940,000   $  1,200,000   $      8,427   $         --   $    410,368    $  1,618,795
Net income for the year ended
  December 31, 2004                                  --             --             --             --         45,783          45,783
Allocation of statutory reserve                      --             --             --          6,867         (6,867)             --
Cumulative translation adjustment                    --             --          2,394             --             --           2,394
                                           ------------   ------------   ------------   ------------   ------------    ------------
Balance December 31, 2004                    19,940,000      1,200,000         10,821          6,867        449,284       1,666,972
Recapitalization on reverse acquisition       1,531,374             --             --             --             --              --
                                           ------------   ------------   ------------   ------------   ------------    ------------
Balance after recapitalization               21,471,374      1,200,000         10,821          6,867        449,284       1,666,972
Stock issuance for service rendered              31,250         10,000             --             --             --          10,000
Stock option vested                                  --            276             --             --             --             276
Cumulative translation adjustment                    --             --         43,668             --             --          43,668
Net Income for the year ended
  December 31, 2005                                  --             --             --             --        170,573         170,573
Statutory reserve                                    --             --             --         34,662        (34,662)             --
                                           ------------   ------------   ------------   ------------   ------------    ------------
Balance December 31, 2005                    21,502,624   $  1,210,276   $     54,489   $     41,529   $    585,196    $  1,891,489
                                           ============   ============   ============   ============   ============    ============
</TABLE>

   The accompanying notes form an integral part of these financial statements


                                       F-4
<PAGE>

              CHINA INTERNATIONAL ENTERPRISES INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

<TABLE>
<CAPTION>
                                                                   2005           2004
                                                               ------------    ------------
<S>                                                            <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net income                                               $    170,573    $     45,783
      Adjustments to reconcile net income to net cash
        provided in operating activities:
            Depreciation and amortization                            60,814          56,944
            Bad debt expense                                             --         170,323
            Gain on sale of property                                 (7,935)         (7,289)
            Stock issued for consulting services                     10,000              --
            Stock option expenses                                       276              --
            (Increase) / decrease in assets:                             --
                       Accounts receivable                         (167,224)         49,686
                       Inventory                                   (116,431)         17,515
                       Other receivable                            (325,520)        (41,320)
                       Deposits                                       1,814          (1,370)
                       Advances to suppliers                        271,043          23,256
                       Prepaid expense                                 (522)          4,418
            Increase / (decrease) in current liabilities:                --
                       Accounts payable                             121,734         (66,820)
                       Customer deposits                             51,711          18,327
                       Payroll payable                               23,978          (1,843)
                       Welfare payroll                               (6,862)        (55,444)
                       Tax payable                                  (46,802)          1,390
                                                               ------------    ------------
      Net cash provided in operating activities                      40,648         213,556
                                                               ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES
            Receipt of cash on disposal of property                 531,644         158,399
            Acquisition of property & equipment                     (98,604)         (7,561)
            Additions to Intangible assets                         (174,263)             --
            Proceeds from disposal of property                           --              --
                                                               ------------    ------------
      Net cash provided in investing activities                     258,777         150,838
                                                               ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
            Proceeds from loan-officers                                  --         199,620
            Proceeds from loans                                          --          46,807
            Payment on loan receivable                                   --              --
            Proceeds from note payable                                   --         109,812
            Payments on note payable                               (122,046)       (910,573)
            Stock issued for cash                                        --              --
                                                               ------------    ------------
      Net cash used by in financing activities                     (122,046)       (554,334)
                                                               ------------    ------------

Effect of exchange rate changes on cash and cash equivalents          7,312           2,394

NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS                  184,691        (187,546)

CASH & CASH EQUIVALENTS, BEGINNING BALANCE                          191,165         378,711
                                                               ------------    ------------

CASH & CASH EQUIVALENTS, ENDING BALANCE                        $    375,856    $    191,165
                                                               ============    ============
</TABLE>

   The accompanying notes form an integral part of these financial statements


                                       F-5
<PAGE>

                      CHINA INTERNATIONAL ENTERPRISES INC.
                         (Formerly, Moving Bytes, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


1.    ORGANIZATION AND DESCRIPTION OF BUSINESS

China  International  Enterprises  Inc.,  formerly,  Moving Bytes Inc.  ("Moving
Bytes,  Inc." or "the  Company")  was  incorporated  under the  Canada  Business
Corporations  Act on December  23, 1991.  On August 19, 2005,  Moving Bytes Inc.
acquired  9,970,000 shares of common stock, par value $0.001 per share, of China
International  Enterprise  Corp.  (CIEC),  representing  100% of the  issued and
outstanding  capital stock of CIEC under a share exchange agreement dated August
15, 2005.  Moving Byte, Inc. was  incorporated  under the Company Act of British
Columbia, Canada. Under the Share Exchange Agreement the Company agreed to issue
an aggregate of  638,080,000  Shares of common stock of Moving Bytes to the CIEC
shareholders,  representing  92.87% of the issued and outstanding capital shares
of Moving Bytes giving effect to the Share Exchange.

The  exchange of shares with Moving  Bytes has been  accounted  for as a reverse
acquisition  under the purchase method of accounting  since the  shareholders of
CIEC  obtained  control  of Moving  Bytes.  Accordingly,  the  merger of the two
companies  has been  recorded  as a  recapitalization  of CIEC,  with CIEC being
treated as the continuing entity. The financial statements of legal acquiree are
not significant; therefore, no pro forma financial information is submitted.

CIEC owns 100% of the issued and outstanding  shares of common stock,  par value
$1.00 per share, of HXTG. HXTG owns 100% of the issued and outstanding shares of
Shenzhen  Hengtaifeng  Technology Co., Ltd. ("HTF" or the "Operating  Company"),
and a company organized under the laws of People's Republic of China ("PRC"). On
December 14, 2004, CIEC entered in to an agreement with all the  shareholders of
HXTG to acquire all of the  outstanding  stock of HXTG. The acquisition has been
recorded  as a  recapitalization  of  HXTG,  with  HXTG  being  treated  as  the
continuing entity.

Heng Xing Technology Group Development  Limited (the "HXTG") is a British Virgin
Islands Corporation,  incorporated on May 28, 2004. The company is authorized to
issue  50,000  shares  of  common  stock  of $1  par  value.  The  company  is a
non-operative  holding  company of  Shenzhen  Hengtaifeng  Technology  Co.  Ltd.
("HTF").  On December  14, 2004,  HXTG  entered in to an agreement  with all the
shareholders of HTF to acquire all of the outstanding stock of HTF.

HTF was founded in High & New Technology  Industry Zone in the city of Shenzhen,
Guangding  Province of People's  Republic of China on July 1995,  under the name
Shenzhen  Guangba Trade  Development  Co., Ltd. The Company  amended its name to
Shenzhen  Hengtaifeng  Technology  Co.  Ltd.  on May 12,  2000.  The  Company is
primarily  engaged in developing and distributing  software and hardware systems
on housing fund, guarantee information  management,  and home plan management in
the People's Republic of China.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.


                                       F-6
<PAGE>

                      CHINA INTERNATIONAL ENTERPRISES INC.
                         (Formerly, Moving Bytes, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Principles of consolidation

The  accompanying  consolidated  financial  statements  include the  accounts of
Moving  Bytes  and its  wholly  owned  subsidiary,  CIEC  and its  wholly  owned
subsidiary,  HXTG and its  wholly  owned  subsidiary,  HTF  (collectively,  "the
Company").  All significant  inter-company  accounts and transactions  have been
eliminated  in  consolidation.  The  historical  results  for the  period  ended
September 30, 2005 include  Moving Bytes (from the  acquisition  date) and CIEC,
HXTG and HTF (for full period) while the historical results for the period ended
September 30, 2004 includes only HTF.

Cash and cash equivalents

Cash  and cash  equivalents  include  cash in hand  and  cash in time  deposits,
certificates  of deposit and all highly  liquid debt  instruments  with original
maturities of three months or less.

Accounts receivable

The  Company  maintains   reserves  for  potential  credit  losses  on  accounts
receivable.  Management  reviews  the  composition  of accounts  receivable  and
analyzes  historical  bad  debts,  customer   concentrations,   customer  credit
worthiness,  current economic trends and changes in customer payment patterns to
evaluate the adequacy of these  reserves.  Reserves are recorded  primarily on a
specific identification basis. Allowance for doubtful debts amounted to $188,197
as at December 31, 2005.

Advances to suppliers

The Company advances to certain vendors for purchase of its material in order to
receive bulk discount and reserve the unit cost of the  merchandise at a bargain
rate.  Once the  inventory is received by the  Company,  the advance is adjusted
against the purchased  price.  The advances to suppliers  amounted to $35,562 at
December 31, 2005.

Inventories

Inventories   comprised  of  software   Compact   disk,   Computer   server  and
macro-storage equipment. Inventories are valued at the lower of cost (determined
on a weighted  average  basis) or market.  The  Management  compares the cost of
inventories  with the market  value and  allowance  is made for writing down the
inventories  to their market value,  if lower.  Inventories  are typically  sold
through distributors.

Property & Equipment

Property and  equipment are stated at cost.  Expenditures  for  maintenance  and
repairs are charged to earnings as incurred; additions, renewals and betterments
are capitalized.  When property and equipment are retired or otherwise  disposed
of,  the  related  cost  and  accumulated  depreciation  are  removed  from  the
respective   accounts,   and  any  gain  or  loss  is  included  in  operations.
Depreciation  of property  and  equipment  is provided  using the  straight-line
method  for  substantially  all  assets  with  estimated  lives of: 39 years for
building, 5 or 7 years for machinery and equipments, and 7 years for vehicles.

On May 21, 2005, the Company sold a building,  for $540,051 with a book value of
$516,365.  The  Company  recorded  a gain of $5,432  net of  $18,254  of selling
expense.  During the year ended  December 31,  2005,  the company has a total of
gain on sale of property $7,935.


                                       F-7
<PAGE>

                      CHINA INTERNATIONAL ENTERPRISES INC.
                         (Formerly, Moving Bytes, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Software development costs

The  Company  capitalizes   certain  computer  software   development  costs  in
accordance with SFAS No. 86,  "Accounting for the Costs of Computer  Software to
be Sold, Leased, or Otherwise  Marketed." Costs incurred  internally to create a
computer  software  product or to develop an enhancement to an existing  product
are charged to expense when incurred as research and  development  expense until
technological feasibility for the respective product is established. Thereafter,
all  software  development  costs are  capitalized  and reported at the lower of
unamortized cost or net realizable value. Capitalization ceases when the product
or enhancement is available for general release to customers.

The Company makes on-going  evaluations of the recoverability of its capitalized
software  projects by comparing the amount  capitalized  for each product to the
estimated net realizable value of the product. If such evaluations indicate that
the unamortized  software development costs exceed the net realizable value, the
Company writes off the amount which the unamortized  software  development costs
exceed  net  realizable  value.  Capitalized  and  purchased  computer  software
development  costs are being  amortized  ratably based on the projected  revenue
associated  with the  related  software or on a  straight-line  basis over three
years, whichever method results in a higher level of amortization.

Long-lived assets

Effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards  No. 144,  "Accounting  for the  Impairment  or Disposal of Long-Lived
Assets" ("SFAS 144"), which addresses financial accounting and reporting for the
impairment  or  disposal  of  long-lived  assets and  supersedes  SFAS No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," and the accounting and reporting  provisions of APB Opinion No.
30,  "Reporting  the  Results of  Operations  for a  Disposal  of a Segment of a
Business." The Company  periodically  evaluates the carrying value of long-lived
assets  to be held and used in  accordance  with  SFAS  144.  SFAS 144  requires
impairment  losses to be recorded on long-lived  assets used in operations  when
indicators of impairment are present and the  undiscounted  cash flows estimated
to be generated by those assets are less than the assets' carrying  amounts.  In
that  event,  a loss is  recognized  based on the  amount by which the  carrying
amount  exceeds  the  fair  market  value  of the  long-lived  assets.  Loss  on
long-lived  assets to be disposed of is determined in a similar  manner,  except
that fair  market  values are  reduced  for the cost of  disposal.  Based on its
review,  the Company  believes  that,  as of December  31,  2005,  there were no
significant impairments of its long-lived assets.

Fair value of financial instruments

Statement of financial accounting standard No. 107, Disclosures about fair value
of financial  instruments,  requires that the Company  disclose  estimated  fair
values of financial instruments. The carrying amounts reported in the statements
of financial position for current assets and current  liabilities  qualifying as
financial instruments are a reasonable estimate of fair value.

Revenue recognition

The  Company's  revenue  recognition  policies  are  in  compliance  with  Staff
accounting  bulletin  (SAB)  104.  Sales  revenue is  recognized  at the date of
shipment to customers or services has been  rendered  when a formal  arrangement
exists, the price is fixed or determinable,  the delivery is completed, no other
significant  obligations of the Company exist and  collectibility  is reasonably
assured.  Payments  received  before all of the  relevant  criteria  for revenue
recognition are satisfied are recorded as unearned revenue.


                                       F-8
<PAGE>

                      CHINA INTERNATIONAL ENTERPRISES INC.
                         (Formerly, Moving Bytes, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


License Revenue.  The Company  recognizes  revenue from license contracts when a
non-cancelable,  non-contingent  license agreement has been signed, the software
product  has  been  delivered,   no  uncertainties   exist  surrounding  product
acceptance, fees from the agreement are fixed and determinable and collection is
probable.  Any revenues from software  arrangements  with multiple  elements are
allocated to each element of the  arrangement  based on the relative fair values
using specific  objective  evidence as defined in the SOPs. If no such objective
evidence  exists,  revenues from the  arrangements  are not recognized until the
entire arrangement is completed and accepted by the customer. Once the amount of
the revenue for each element is determined,  the Company recognizes  revenues as
each element is completed and accepted by the customer.  For  arrangements  that
require significant  production,  modification or customization of software, the
entire  arrangement is accounted for by the percentage of completion  method, in
conformity with Accounting Research Bulletin ("ARB") No. 45 and SOP 81-1.

Services Revenue. Revenue from consulting services is recognized as the services
are  performed  for  time-and-materials  contracts  and contract  accounting  is
utilized  for  fixed-price  contracts.  Revenue from  training  and  development
services is recognized as the services are performed.  Revenue from  maintenance
agreements is  recognized  ratably over the term of the  maintenance  agreement,
which in most instances is one year. Payment for software  maintenance  received
in advance is recorded on the balance sheet as deferred revenue. The maintenance
revenue was insignificant during years ended December 31, 2005 and 2004.

Advertising costs

The Company expenses the cost of advertising as incurred or, as appropriate, the
first time the advertising  takes place.  Advertising  costs for the years ended
December 31, 2005 and 2004 were $366 and $87,615, respectively.

Research and development costs

Research  and  development  costs are  charged to  operations  as  incurred  and
amounted to $270,672 and $179,601 in 2005 and 2004, respectively.

Stock-based compensation

In October  1995,  the FASB  issued SFAS No. 123,  "Accounting  for  Stock-Based
Compensation".  SFAS No. 123 prescribes  accounting and reporting  standards for
all stock-based compensation plans, including employee stock options, restricted
stock, employee stock purchase plans and stock appreciation rights. SFAS No. 123
requires compensation expense to be recorded (i) using the new fair value method
or (ii) using the existing accounting rules prescribed by Accounting  Principles
Board Opinion No. 25,  "Accounting  for stock issued to employees"  (APB 25) and
related interpretations with proforma disclosure of what net income and earnings
per share would have been had the Company adopted the new fair value method. The
Company  uses the method  prescribed  by SFAS  No.123.  On March 11,  2005,  the
Company  entered into an incentive  stock  agreement by which the Company grants
345,000 incentive stock options to a director of the Company.  These options are
fully  vested  and  exercisable  proportionally  on or  before  the close of the
business on March 11, 2006. The company has recorded $276 stock option  expenses
in the current year financial statements.

Income taxes

The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires
the  recognition of deferred tax assets and  liabilities for the expected future
tax  consequences of events that have been included in the financial  statements
or tax returns. Under this method,  deferred income taxes are recognized for the
tax consequences in future years of differences  between the tax bases of assets
and liabilities and their financial  reporting  amounts at each period end based
on enacted tax laws and statutory  tax rates  applicable to the periods in which
the differences are expected to affect taxable income.  Valuation allowances are
established,  when  necessary,  to reduce  deferred  tax  assets  to the  amount
expected to be realized.


                                       F-9
<PAGE>

                      CHINA INTERNATIONAL ENTERPRISES INC.
                         (Formerly, Moving Bytes, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


According to the  Provisional  Regulations of the People's  Republic of China on
Income Tax,  the Document of  Reductions  and  Exemptions  of Income Tax for the
Company has been  approved  by the  Shenzhen  local tax  bureau,  the Company is
exempted  from income tax in 2003 and 2004.  The Company  will also have half of
its  income  taxes  exempt  from  2005 to  2007.  According  to the  Provisional
Regulations of the People's  Republic of China on Income Tax, the taxable income
for the year ended December 31, 2006 is negative, so no income tax is required.

Foreign currency transactions and comprehensive income (loss)

Accounting principles generally require that recognized revenue, expenses, gains
and losses be included  in net  income.  Certain  statements,  however,  require
entities to report specific changes in assets and  liabilities,  such as gain or
loss on foreign  currency  translation,  as a separate  component  of the equity
section of the balance sheet. Such items,  along with net income, are components
of comprehensive income. The functional currency of HTF is Chinese Renminbi. The
unit of  Renminbi  is in Yuan.  Cumulative  translation  adjustment  amount  and
translation  adjustment  gain  amounted to $43,668 and $2,394 for the year ended
December 31, 2005 and 2004.  Accumulated other comprehensive  income amounted to
$54,489 as of December 31, 2005.

Basic and diluted net loss per share

Net loss per share is calculated  in accordance  with the Statement of financial
accounting  standards No. 128 (SFAS No. 128), "Earnings per share". SFAS No. 128
superseded  Accounting  Principles  Board  Opinion  No.15 (APB 15). Net loss per
share for all periods  presented  has been  restated to reflect the  adoption of
SFAS No. 128. Basic net loss per share is based upon the weighted average number
of  common  shares  outstanding.  Diluted  net  loss  per  share is based on the
assumption that all dilutive convertible shares and stock options were converted
or exercised.  Dilution is computed by applying the treasury stock method. Under
this method,  options and warrants are assumed to be exercised at the  beginning
of the period (or at the time of issuance,  if later),  and as if funds obtained
thereby were used to purchase  common  stock at the average  market price during
the period.

Statement of cash flows

In  accordance  with  Statement  of  Financial   Accounting  Standards  No.  95,
"Statement  of  Cash  Flows,"  cash  flows  from  the  Company's  operations  is
calculated  based upon the local  currencies.  As a result,  amounts  related to
assets  and  liabilities  reported  on the  statement  of cash  flows  will  not
necessarily  agree with  changes in the  corresponding  balances  on the balance
sheet.

Segment Reporting

Statement of Financial  Accounting  Standards No. 131 ("SFAS 131"),  "Disclosure
About  Segments of an Enterprise  and Related  Information"  requires use of the
"management approach" model for segment reporting. The management approach model
is based on the way a company's management organizes segments within the company
for making operating  decisions and assessing  performance.  Reportable segments
are based on products  and  services,  geography,  legal  structure,  management
structure, or any other manner in which management disaggregates a company. SFAS
131  has no  effect  on  the  Company's  consolidated  financial  statements  as
substantially  all of the  Company's  operations  are  conducted in one industry
segment.


                                      F-10
<PAGE>

                      CHINA INTERNATIONAL ENTERPRISES INC.
                         (Formerly, Moving Bytes, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Recent Pronouncements

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections."  This  statement  applies to all  voluntary  changes in accounting
principle and requires  retrospective  application to prior  periods'  financial
statements   of  changes  in   accounting   principle,   unless  this  would  be
impracticable.  This statement also makes a distinction  between  "retrospective
application"  of an  accounting  principle  and the  "restatement"  of financial
statements to reflect the  correction of an error.  This  statement is effective
for accounting  changes and corrections of errors made in fiscal years beginning
after December 15, 2005.

In February  2006,  FASB issued SFAS No.  155,  "Accounting  for Certain  Hybrid
Financial  Instruments".  SFAS  No.  155  amends  SFAS No 133,  "Accounting  for
Derivative  Instruments and Hedging  Activities",  and SFAF No. 140, "Accounting
for  Transfers  and  Servicing  of  Financial  Assets  and   Extinguishments  of
Liabilities".  SFAS No. 155,  permits  fair value  remeasurement  for any hybrid
financial  instrument that contains an embedded  derivative that otherwise would
require  bifurcation,  clarifies which  interest-only  strips and principal-only
strips are not  subject  to the  requirements  of SFAS No.  133,  establishes  a
requirement  to evaluate  interest in securitized  financial  assets to identify
interests  that  are  freestanding  derivatives  or that  are  hybrid  financial
instruments that contain an embedded derivative requiring bifurcation, clarifies
that concentrations of credit risk in the form of subordination are not embedded
derivatives,  and  amends  SFAS No.  140 to  eliminate  the  prohibition  on the
qualifying special-purpose entity from holding a derivative financial instrument
that pertains to a beneficial  interest other than another derivative  financial
instrument.  This statement is effective for all financial  instruments acquired
or issued  after the  beginning of the  Company's  first fiscal year that begins
after September 15, 2006.

In December 2004, the FASB issued FASB Statement No. 123R, "Share-Based Payment,
an Amendment of FASB Statement No. 123" ("FAS No. 123R").  FAS No. 123R requires
companies to recognize in the statement of operations the grant- date fair value
of stock options and other equity-based  compensation  issued to employees.  FAS
No. 123R is effective beginning in the Company's first quarter of fiscal 2006.

In June 2005,  the EITF reached  consensus on Issue No.  05-6,  determining  the
Amortization Period for Leasehold Improvements ("EITF 05-6.") EITF 05-6 provides
guidance on  determining  the  amortization  period for  leasehold  improvements
acquired in a business  combination or acquired  subsequent to lease  inception.
The guidance in EITF 05-6 will be applied  prospectively  and is  effective  for
periods  beginning  after June 29,  2005.  EITF 05-6 is not  expected  to have a
material effect on its consolidated financial position or results of operations.

In March 2006 FASB  issued  SFAS 156  `Accounting  for  Servicing  of  Financial
Assets' this Statement  amends FASB Statement No. 140,  Accounting for Transfers
and  Servicing of Financial  Assets and  Extinguishments  of  Liabilities,  with
respect  to the  accounting  for  separately  recognized  servicing  assets  and
servicing liabilities. This Statement:

      1.    Requires  an entity to  recognize  a  servicing  asset or  servicing
            liability  each  time it  undertakes  an  obligation  to  service  a
            financial asset by entering into a servicing contract.
      2.    Requires all separately  recognized  servicing  assets and servicing
            liabilities to be initially measured at fair value, if practicable.
      3.    Permits an entity to choose  `Amortization  method'  or `Fair  value
            measurement   method'  for  each  class  of  separately   recognized
            servicing assets and servicing liabilities.
      4.    At its  initial  adoption,  permits a one-time  reclassification  of
            available-for-sale securities to trading securities by entities with
            recognized  servicing  rights,  without  calling  into  question the
            treatment of other  available-for-sale  securities  under  Statement
            115, provided that the available-for-sale  securities are identified
            in some manner as  offsetting  the  entity's  exposure to changes in
            fair  value of  servicing  assets or  servicing  liabilities  that a
            servicer elects to subsequently measure at fair value.


                                      F-11
<PAGE>

                      CHINA INTERNATIONAL ENTERPRISES INC.
                         (Formerly, Moving Bytes, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


      5.    Requires  separate  presentation  of servicing  assets and servicing
            liabilities  subsequently measured at fair value in the statement of
            financial  position and  additional  disclosures  for all separately
            recognized servicing assets and servicing liabilities.

3.    INVENTORIES

Inventories as of December 31, 2005 consist of the following:

            Raw and packing materials                   $    252,298
            Finished goods                                   149,691
            Work in process                                   35,782
                                                        ------------

            Total                                       $    437,771
                                                        ============

4.    PROPERTY AND EQUIPMENT

Net property and equipment as of December 31, 2005 as follows:

            Building & improvement                      $     35,148
            Machinery & equipment                            195,417
            Vehicles                                          72,501
            Furniture and fixture                             23,807
            Software                                         267,230
                                                        ------------

                                                             594,103
      Less: Accumulated depreciation
        & amortization                                      (240,423)
                                                        ------------

                                                        $    353,680
                                                        ============

Depreciation  expenses  for the  years  ended  December  31,  2005 and 2004 were
$60,814 and $56,944, respectively.

5.    OTHER RECEIVABLE

Other receivable as of December 31, 2005 consists of the following:

            Loan receivable                             $    478,781
            Subsidy receivable                                29,475
            Travel advances to employees                      45,049
            Travel advances to officers                       19,239
                                                        ------------

            Total                                       $    572,542
                                                        ============


                                      F-12
<PAGE>

                      CHINA INTERNATIONAL ENTERPRISES INC.
                         (Formerly, Moving Bytes, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


The Company has a subsidy receivable from the local government amounting $29,475
for enhancement of the Company's technology.

Travel advances to employees and officers are interest free, unsecured,  and due
on demand.

Loan receivable  includes  $433,695 loan to an outside party. The loan starts on
May 23, 2005 and will be due on May 23, 2006.  Interest rate is 6.138%. The loan
is  unsecured.  Interest  receivable  of  $13,310  has been  accrued to the loan
receivable. The rest of the loan receivable is all interest free, due on demand,
and unsecured.

6.    INCOME TAX

The Company is  governed by the Income Tax Laws of the PRC.  Pursuant to the PRC
Income Tax Laws,  the  Enterprise  Income Tax ("EIT") is at a statutory  rate of
33%,  which is  comprises  of 30%  national  income tax and 3% local income tax.
According to the  Provisional  Regulations of the People's  Republic of China on
Income Tax,  the Document of  Reductions  and  Exemptions  of Income Tax for the
Company has been  approved  by the  Shenzhen  local tax  bureau,  the Company is
exempted  from  income  tax in 2003 and 2004.  The  Company  qualified  as a new
technology enterprise and under PRC Income Tax Laws, the Company is subject to a
preferential tax rate of 15%. The Company is approved to have 7.5% tax rate from
2005 to 2007. According to the Provisional  Regulations of the People's Republic
of China on Income Tax, the taxable  income for the year ended December 31, 2006
is negative, so no income tax is required.

Operation  in the  United  States of  America  has  incurred  operating  loss of
approximately  $60,000 and operation in the PRC has incurred  operating  loss of
approximately  $77,000 as of  December  31,  2005 for income tax  purposes.  The
Company  believes  that it is more likely than not that these  operating  losses
will not be  utilized  in the  future  and  hence the  Company  has  recorded  a
valuation  allowance  of 100% for the  deferred  assets as of December 31, 2005.
Components of deferred tax assets at December 31, 2005 are as follows:

US net operating losses            $   20,400
PRC net operating losses               11,550
PRC deductible expenses                21,150
                                   ----------
Valuation Allowance                   -53,100
                                   ----------

                                   $       --
                                   ==========


                                      F-13
<PAGE>

                      CHINA INTERNATIONAL ENTERPRISES INC.
                         (Formerly, Moving Bytes, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


12/31/2005           U.S.        State         PRC         Total
                  ---------    -----------------------------------
Current           $       0    $       0    $       0    $       0
Deferred                 --           --           --           --
                  ---------    -----------------------------------
  Total           $       0    $       0    $       0    $       0
                  =========    ===================================

12/31/2004           U.S.        State         PRC         Total
                  ---------    -----------------------------------
Current           $       0    $       0    $       0    $       0
Deferred                 --           --           --           --
                  ---------    -----------------------------------
  Total           $       0    $       0    $       0    $       0
                  =========    ===================================

Reconciliation of the differences  between the statutory U.S. Federal income tax
rate and the effective rate is as follows:

                                          12/31/2005      12/31/2004
                                          ----------      ----------
US statutory tax rate                             34%             34%
Foreign non taxable income                       -68%            -68%
Valuation allowance                               34%             34%
                                          ----------      ----------
Effective rate                                     0%              0%
                                          ----------      ----------

7.    SUPPLEMENTAL DISCLOSURE OF CASH FLOWS

The Company  prepares its statements of cash flows using the indirect  method as
defined under the Financial Accounting Standard No. 95.

The Company  paid  interest of $5,934 and $0 during the year ended  December 31,
2005 and 2004.  The  Company  did not pay  income  tax  during  the years  ended
December 31, 2005 and 2004.

8.    EMPLOYEE WELFARE PLAN

The Company has  established  its own employee  welfare plan in accordance  with
Chinese law and regulations.  The Company makes annual pre-tax  contributions of
14% of all  employees'  salaries for the year ended December 31, 2004. The total
expense for the above plan  amounted to $41,290 for the year ended  December 31,
2004.

HTF is classified as a wholly-owned  foreign  enterprise under PRC law by virtue
of its  ownership  by  HXTG.  HTF  has  changed  its  employee  welfare  plan in
accordance  with Chinese law and  regulations  and does not make annual  pre-tax
contributions of 14% of all employees' salaries for the years ended December 31,
2005. The Company has recorded welfare  expenses as incurred.  The total welfare
expense amounted to $49,993 for the year ended December 31, 2005.

9.    STATUTORY RESERVE

In accordance with the Chinese Company Law, the company has allocated 10% of its
annual net  income,  amounting  to $17,057  and $4,578 as  statutory  reserve on
December 31, 2005 and 2004, respectively.


                                      F-14
<PAGE>

                      CHINA INTERNATIONAL ENTERPRISES INC.
                         (Formerly, Moving Bytes, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


10.   STATUTORY COMMON WELFARE FUND

As  stipulated by the Company Law of the People's  Republic of China (PRC),  net
income after taxation can only be distributed as dividends  after  appropriation
has been made for the following:

Making up cumulative prior years' losses, if any;

      (i)   Allocations  to the "Statutory  surplus  reserve" of at least 10% of
            income  after tax,  as  determined  under PRC  accounting  rules and
            regulations,  until  the  fund  amounts  to  50%  of  the  Company's
            registered capital;

      (ii)  Allocations  of 5-10% of income after tax, as  determined  under PRC
            accounting rules and regulations, to the Company's "Statutory common
            welfare  fund",  which is  established  for the purpose of providing
            employee  facilities and other collective  benefits to the Company's
            employees; and

      (iii) Allocations to the discretionary surplus reserve, if approved in the
            shareholders' general meeting.

The  Company  established  a reserve  for the annual  contribution  of 5% of net
income to the  welfare  fund.  The  amount  included  in the  statutory  reserve
amounted  to $8,529 and $2,289 for the years ended  December  31, 2005 and 2004,
respectively.

11.   SHAREHOLDERS' EQUITY

The company issued 1,000,000 shares for services  rendered during the year ended
December 31, 2005 valued at $10,000 to an officer of a major  shareholder of the
Company.

12.   MAJOR CUSTOMERS AND VENDORS

Major customers and vendors represent those who accounted for 10% or over of the
Company's total net revenue or purchase, respectively.

One major customer  accounted for 10% of the revenue for the year ended December
31, 2005.  The Company did not have a major customer for the year ended December
31, 2004.

One major vendor  provided  31% of the  Company's  purchases  for the year ended
December 31, 2005. One major vendor provided 30% of the Company's  purchases for
the year ended  December  31,  2004.  The Company did not have a payable to this
vendor on December 31, 2005.

The Company  extends credit to its customers  based upon its assessment of their
credit worthiness and generally does not require collateral.

13.   OTHER INCOME

Value  added tax (VAT)  refund-  The  Company  received an amount of $90,681 and
$92,065 as Value added tax refund from the state  government  for the year ended
December 31, 2005 and 2004, respectively. The value added tax refund is given by
the government to support software industry.

Technical  subsidy - The Company  received subsidy income of $15,222 and $60,500
from  local   government  for  the  year  ended  December  31,  2005  and  2004,
respectively.  This income is given by the government to support local high-tech
enterprises.


                                      F-15
<PAGE>

                      CHINA INTERNATIONAL ENTERPRISES INC.
                         (Formerly, Moving Bytes, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


14.   COMMITMENT AND CONTINGENCIES

HTF leases  approximately  640 square  meters of space it uses for its executive
offices and operations in Shenzhen, China from Shenzhen Chuangwei-RGB Electronic
Co.,  Ltd.  The lease is for a term of three  years from  February  25,  2003 to
February 24, 2006 at a monthly rent of approximately  $4,400 (including property
management and area condition  maintenance  fees). The lease is renewable for an
indefinite  period of time upon one month's  prior  notice.  HTF receives a rent
subsidy of  approximately  $1,546 per month  from Mar.  1, 2003 to Feb 28,  2005
under  the  Agreement  for the  Entrance  of  Software  into  Shenzhen  Software
Enterprise Zone dated June 10, 2003.

HTF has continued to leases approximately 640 square meters of space it uses for
its  executive   offices  and  operations  in  Shenzhen,   China  from  Shenzhen
Chuangwei-RGB  Electronic  Co.,  Ltd.  The lease is for a term of two years from
February 25, 2006 to February 24, 2008. The monthly rent expenses are $4,843 and
$5,225 for the twelve  months  ended  February  24, 2007 and 2006,  respectively
(including property management and area condition maintenance fees).

HTF  leases a sales  office of in  Beijing,  China on a year to year  base.  The
current  term is from  September 1, 2005 to August 31, 2006 at a monthly rent of
$867.

Future lease  commitment for the twelve month periods ended December 31, 2006 is
as follows:

                  2006                              $   65,052
                  2007                                  62,700
                                                    ----------

                  Total                             $  127,752
                                                    ==========

15.   CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS

The Company's operations are carried out in the PRC. Accordingly,  the Company's
business, financial condition and results of operations may be influenced by the
political,  economic and legal environments in the PRC, and by the general state
of the PRC's economy.

The Company's  operations in the PRC are subject to specific  considerations and
significant  risks not typically  associated with companies in the North America
and Western  Europe.  These include risks  associated  with,  among others,  the
political,  economic and legal environments and foreign currency  exchange.  The
Company's results may be adversely affected by changes in governmental  policies
with  respect  to laws and  regulations,  anti-inflationary  measures,  currency
conversion and remittance abroad, and rates and methods of taxation, among other
things.

The Company does not maintain fire, theft or liability insurance. The Company is
exposed  to various  risks of loss  related  to torts;  theft of,  damage to and
destruction of assets; error and omissions and natural disasters.

16.   ACQUISTION

Moving Bytes Inc.  entered into a Share Exchange  Agreement,  dated as of August
15, 2005 to effectuate a share  exchange with all of the  shareholders  of China
International  Enterprise Corp.  (CIEC). The Share Exchange Agreement was closed
on August 19, 2005.


                                      F-16
<PAGE>

                      CHINA INTERNATIONAL ENTERPRISES INC.
                         (Formerly, Moving Bytes, Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Under the Share Exchange Agreement, Moving Bytes agreed to issue an aggregate of
638,080,000  shares of common  stock of Moving  Bytes to the CIEC  Shareholders,
representing 92.87% of the issued and outstanding capital shares of Moving Bytes
giving effect to the Share Exchange.  As a condition to the closing of the Share
Exchange, Warner - a major shareholder of Moving Bytes, also agreed to surrender
to Moving Bytes for cancellation, a certificate or certificates for an aggregate
of 126,446,065 shares of Moving Bytes so that Warner would own 12,800,000 shares
of Moving Bytes after the  cancellation.  As  conditions  to the  obligation  of
Moving Bytes to close the Share Exchange Agreement,  this Current Report on Form
8-K to report the entering  into the Share  Exchange  Agreement  was required to
have been  filed and Warner is to be paid a $350,000  fee as  reimbursement  for
legal,  accounting and other  expenses.  As disclosed in Note 1, the exchange of
shares with Moving Bytes has been accounted for as a reverse  acquisition  under
the  purchase  method of  accounting  since the  shareholders  of CIEC  obtained
control of Moving Bytes.

As  a  part  of  the  acquisition   agreement,   Moving  Bytes  sold,  assigned,
transferred, conveyed and delivered to Warner all of Moving Bytes' rights, title
and interests  whatsoever  in and to all of the Assets.  Warner also jointly and
severally   assumed  and  agreed  to  timely  pay  or  discharge  Moving  Bytes'
obligations with respect to all of the liabilities of Moving Bytes , of any kind
or nature  existing  as of the date of the  acquisition.  Warner  also agreed to
indemnify  and hold  Moving  Bytes and its  directors,  officers,  shareholders,
affiliates  and   subsidiaries   harmless  from  any  liability  or  claims  for
performance or non-performance by Warner of such duties and obligations.

In connection with the Share Exchange Agreement,  HTF also entered into a letter
agreement, dated as of August 19, 2005, with American Union Securities,  Inc., a
former shareholder of Moving Bytes and CIEC (the "AUS Letter Agreement").  Under
the agreement,  AUS agreed to provide certain financial and consulting  services
to HFT in connection  with the Share  Exchange in exchange for a fee.  amounting
$200,000,  of which  $100,000  had  already  been paid to AUS prior to the Share
Exchange,  and the  remaining  $100,000  was paid upon the  Closing of the Share
Exchange.

17.   SUBSEQUENT EVENT

On Mar 23, 2006, the Company changed its name from Moving Bytes,  Inc. to "China
International   Enterprises   Inc."  and  changed   its   trading   symbol  from
OTCBB:MBYTF.OB  to OTC BB:CIEFS.OB.  In addition,  the Company  announced a 1:32
reverse split of its  outstanding  common shares.  Both actions were approved by
the Company's shareholders at a meeting held on March 7, 2006.


                                      F-17