**Loan      Contract**

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**Loan      Contract **

| Borrower:                                | Fuwei                  Films (Shandong) Co., Ltd.                    |
|------------------------------------------|----------------------------------------------------------------------|
| Legal                  Representative:   | Xiaoan                  He                                           |
| Legal                  Address:          | Hi-Tech                    Development Zone, Dong Ming Road, Weifang |
| Correspondence                  Address: | Same                  as above                                       |
|                                     |                                                                 |
| Lender:                                  | Weifang                  Branch, Bank of Communication               |
| Responsible                  Person:     | Kongrui                  Jiang                                       |
| Correspondence                  Address: | 358                  Dong Fang, Dong Street, Weifang                 |

***Both      parties agree to the following terms***

| **1** | **Loan** |
|-------|----------|

| 1.1 | Currency:                Renminbi (RMB) |
|-----|-----------------------------------------|

| 1.2 | Amount:                52,590,000 |
|-----|-----------------------------------|

| 1.3 | The                proceeds of the Loan under this Contract shall be used for industrial                working capital. |
|-----|--------------------------------------------------------------------------------------------------------------------------|

| 1.4 | Loan                Period: Commencing from January 15, 2007, to January 15,                2008. |
|-----|---------------------------------------------------------------------------------------------------|

| **2** | **Interest                Rate and Computation of                Interest** |
|-------|-----------------------------------------------------------------------------|

| 2.1 | Interest                rate: 6.732% (√ annually monthly). |
|-----|------------------------------------------------------------------|

| 2.2 | Computation                of Interest |
|-----|----------------------------------------|

| 2.2.1 | Normal                interest = interest rate under this Contract X proceeds of the Loan                X                number of days of use. Number of days of use is calculated from the                drawing date to the maturity date. |
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| 2.2.2 | The                penalty interest of the overdue loan and appropriated loan is calculated                based on the amount and the actual number of days overdue or appropriated.                If the currency of the loan is Renminbi (RMB), the overdue penalty                interest rate is equal to the loan interest rate set forth in this                Contract plus 50% of such loan’s interest rate, and the appropriated                penalty interest rate is equal to the loan interest rate set forth                in this                Contract plus 100% of such loan interest rate. If the currency of                the loan                is a foreign currency, the aforesaid penalty interest rates are equal                to                the loan interest rate set forth in this Contract plus 20% of such                loan                interest rate. |
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| 2.3 | The                loan under this Contract uses the second (2nd)                method mentioned below for payment of interest. On the maturity date,                the                interest shall be paid together with the principal. The date of payment                of                interest is the date of the settlement of                interest: |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1. | Interest                settlement on the 20th                day of the last month of each quarter;                or |
|--------|----|------------------------------------------------------------------------------------------------------------------------|

|   | 2. | Interest                settlement on the 20th                day of each month. |
|--------|----|----------------------------------------------------------------------------------|

| **3** | **Granting                and Repayment of Loan** |
|-------|---------------------------------------------------|

| 3.1 | Borrower                shall start the related procedure three (3) business days prior to                drawing                the proceeds of the Loan in accordance with the following loan drawing                schedule: (N/A) |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 3.2 | Unless                all of the following conditions are satisfied, Lender has the right                to                refuse to grant the Loan: |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1. | Borrower                has already completed the statutory procedures including obtaining                related                permit, approval and registration from the government and such permit,                approval and registration remain in full force and                effect. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | The                guarantee contract (if any) under this Contract has come into effect                and                remains in full force and effect. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | The                financial condition of the Borrower does not have any substantial                adverse                changes; and |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | 4. | Borrower                is not in breach of this Contract. |
|--------|----|------------------------------------------------------------|

| 3.3 | The                actual drawing date and drawing amount shall be in accordance with                the                promissory note. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------|

| 3.4 | Borrower                shall not repay the Loan prior to the scheduled date without having                a                written consent from Lender. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| **4** | **Representation                and Guarantee of the                Borrower** |
|-------|--------------------------------------------------------------------------------|

| 4.1 | Borrower                is an independent entity and has the necessary contractual capacity                to                perform this Contract and will be liable for its non-performance                of its                obligations hereunder. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.2 | The                execution and performance of this Contract is the true intention                of the                Borrower, and the Borrower has all necessary consents, approvals                and                authorizations to perform its obligations. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.3 | All                the documents, reports, data and information provided by the Borrower                to                the Lender during the execution and performance of this Contract                are true,                accurate, complete and in full effect, and Borrower has not withheld                any                information which may affect the evaluation of its financial status                and                repayment ability. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| **5** | **Rights                and Obligations of Lender** |
|-------|-----------------------------------------------------|

| 5.1 | Lender                has the right to be repaid the principal, receive interest (including                compound, overdue and appropriated penalty interest) and the necessary                expenses from the Borrower in accordance with this Contract. Lender                has                the right to exercise any other rights under the relevant laws and                regulations or stipulated in this Contract. |
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| 5.2 | Except                as otherwise specified under this contract, Lender shall keep all                the                financial and operation data and information confidential unless                compelled                by requirements of applicable laws and regulations. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **6** | **Rights                and Obligations of                Borrower** |
|-------|----------------------------------------------------------------------|

| 6.1 | Borrower                shall repay the Loan under this Contract and pay the interest hereunder                in                accordance with the date, amount, currency set forth in this Contract. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.2 | Borrower                shall not use the proceeds of the Loan for any usage not stipulated                in                this Contract. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

| 6.3 | Borrower                shall be liable for the expenses under this Contract, including but                not                limited to, expenses for notary service, authentication, evaluation                and                registration. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.4 | Borrower                shall comply with the operation procedure and the general practice                of the                Lender and loan application, including but not limited to, facilitating                Lender’s examination and supervision on Borrower’s operation status, and                providing all the financial statements, or any other data and information                requested by Lender, and shall guarantee that such documents, data                and                information are true, complete and accurate. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.5 | If                any one of the following events occurs, Borrower shall notify the                Lender                within thirty (30) days and shall not commence such activities unless                the                Loan and interest under this Contract are repaid completely, or a                repayment schedule and guarantee are approved and accepted by the                Lender.                These are as follows: |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1. | Selling,                donating, renting, lending, assigning, mortgaging, pledging or disposing                of all or substantial part of its                assets. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | 2. | Any                substantial changes in organization or structure of the Borrower,                including but not limited to, its operation, subcontracting, lease,                affiliation, company restructuring, joint-stock, merger (consolidation),                equity joint-venture (non-equity), spin-off, incorporation of subsidiary,                asset assignment, reduction of registered capital, etc. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6.6 | Borrower                shall notify the Lender within seven (7) days of occurrence of any                of the                following events: |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1. | Amendment                of the Articles of Association, change of Borrower’s name, change of legal                representative , change of domicile, change of address, and change                in the                scope of its business. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | Borrower                or Guarantor’s (if any) intention to file for                bankruptcy. |
|--------|----|--------------------------------------------------------------------------------------------------------|

|   | 3. | Borrower’s                involvement in any major litigation or arbitration, or any lien or                encumbrance is imposed on its                assets. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4. | Borrower’s                guarantee to any other third party, which will have an adverse effect                on                its financial status and ability to perform its obligations under                this                Contract. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5. | Borrower                enters into a contract which will have a material adverse effect                on its                operation and financial status. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6. | Borrower                or Guarantor (if any) stops its operation, its business terminates                or its                business license is revoked. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7. | Borrower’s                legal representative or senior management has committed a criminal                offence. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------|

|   | 8. | Borrower                faces substantial hardship in managing its business or any other                event                which will have an adverse effect on the financial status or ability                of                the Borrower to repay the Loan. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 6.7 | Any                changes to the form of collateral under this Contract that may have                adverse effect on Lender’s right shall be made upon Lender’s consent. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **7** | **Maturity                Repayment of the Loan before the Maturity                Date** |
|-------|-------------------------------------------------------------------------------------------|

| 7.1 | In                the event of the occurrence of any of the following events, Lender                has the                right to suspend the drawing of the proceeds of the Loan and require                repayment of the principal of the Loan partially or completely before                the                maturity date and demand that the Borrower repay the principal of                the Loan                and pay the interest hereunder. These are as                follows: |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1. | Borrower’s                representations and warranties in Section 4 are not true; |
|--------|----|-------------------------------------------------------------------------------------------|

|   | 2. | Borrower                is in breach of this Contract; |
|--------|----|--------------------------------------------------------|

|   | 3. | The                events set forth in Section 6.6 have occurred and Lender believes                that                such event will have a material adverse effect on its rights as a                creditor; or |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4. | Borrower                has delayed its performance or is in breach of other contracts entered                into between Borrower and Lender, and has not provided the Lender                with any                remedy upon notification by Lender. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **8** | **Breach                of Contract** |
|-------|---------------------------------------|

| 8.1 | In                the event that Borrower fails to repay the principal or interest                in full                in a timely fashion, or to use the proceeds of the Loan as set forth                in                this Contract, Lender has the right to use the overdue penalty interest                rate and appropriate penalty interest rate to calculate the                interest. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8.2 | In                the event that Borrower fails to repay the principal or interest                in full                in a timely fashion, Borrower shall be liable for the Lender’s expenses in                exercising its creditor’s rights, including litigation cost (arbitration                fee), costs of preservation of asset, costs of publication, enforcement                costs, legal fees, travel and other expenses. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 8.3 | In                the event that Borrower avoids Lender’s supervision, fails to repay the                principal or the interest of the Loan or avoids the repayment                intentionally, Lender has the right to inform relevant government                authority and to publish the payment notification in the news                media. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**9**
**Withdrawal      Instruction**

| 9.1 | In                the event that Borrower is overdue in payment in respect of principal,                interest, penalty interest, compound interest or other expenses,                Lender is                authorized to withdraw the money from any other bank accounts of                Borrower                with Bank of Communication to setoff the said outstanding payment. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.2 | After                the aforesaid withdrawal, Lender shall inform the Borrower of such                account                number, loan contract reference number, promissory note reference                number,                amount of withdrawal, and the outstanding Loan amount. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.3 | If                the amount of withdrawal is not sufficient to setoff the aforesaid                payment, the overdue expenses shall be settled first. If the principal                and                interest are overdue for less than ninety (90) days, the remaining                balance                shall be first used to settle the overdue interest, penalty interest                and                compound interest, then shall be used to settle the overdue principal.                In                the event that the overdue payment or interest is overdue for more                than                ninety (90) days, the remaining balance shall be used to settle the                overdue principal, then shall be used to settle the overdue interest,                penalty interest or compound interest. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.4 | If                the currency of the aforesaid withdrawal amount is different from                the                currency of the Loan, the exchange rate determined by Bank of                Communication on the date of withdrawal shall be used for the currency                conversion calculation. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **10** | **Dispute                Resolution** |
|--------|---------------------------------------|

| 10.1 | Any                dispute arising from or in connection with this Contract shall be                resolved                by the first method listed below: |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1. | File                a lawsuit to the competent court in the place where Lender is located;                or |
|--------|----|--------------------------------------------------------------------------------------------------------------|

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|   | 2. | Submit                the disputes to _____________________ arbitration committee for                arbitration in accordance with the currently effective arbitration                rules                of such committee. The arbitral award is final and is legally binding                upon                both Parties. |
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| **11** | **Miscellaneous** |
|--------|-------------------|

| 11.1 | This                Contract comes into effect upon both Parties’ execution of this                contract. |
|------|--------------------------------------------------------------------------------------------------------------------|

| 11.2 | This                Contract is executed in five (5) counterparts. Each of the Parties                and                Guarantor shall keep one counterpart. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

**IN      WITNESS WHEREOF**

| January                  15, 2007                              | January                  15, 2007                            |
|----------------------------------------------------------------|--------------------------------------------------------------|
|                                                           |                                                         |
| **Borrower                  (seal):**                          | **Lender                  (seal):**                          |
| ** **                                                     | ** **                                                   |
| **Legal                  Representative or Authorized Person** | **Responsible                  Person or Authorized Person** |
| ** **                                                     | ** **                                                   |
| **Xiaoan                  He**                                 | **Bank                  of Communication**                   |
| ** **                                                     | ** **                                                   |
| **(signature                  or seal)**                       | **(signature                  or seal)**                     |

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