ENGLISH TRANSLATION - XIAN OFFICE TENANCY AGREEMENT


CONTRACT

AGRICULTURAL BANK OF CHINA XIAN BRANCH (hereafter called PARTY A)

EURO TECH (CHINA) LTD (hereafter called PARTY B)

The following agreement has been made between PARTY A and PARTY B for the
purpose of leasing the premises:

1) Period of renting:

      1.    Effective 10/11/97 till 9/11/99.

      2.    Upon expiry date, if PARTY B wants to continue to rent the premises,
            he should approach PARTY A 2 months ahead and renew the contract.
            The rental fee will be adjusted according to the market fluctation.
            However, if PARTY B is not ready to renew the contract, he should
            inform PARTY B two months ahead.

      3.    If PARTY B wants to terminate the contract before expiry date, he
            should notify PARTY A 3 months ahead and the contract will be
            terminated upon return of the premises without damages.

      4.    During the contracted period except by irresistible reasons such as
            natural calamities, PARTY A has no right to terminate the contract
            or prevent PARTY B for using the premises.

2) Price of the premises:

The premises is room 11004, net area is 22 sq m, rental fee is RMBl,800.-plus
electricity and management fee RMB1,200.-

3) Payment method:

      1.    Payment in advance, 10 days after effective of this contract, PARTY
            B has to pay 3 months rental fee to PARTY A.

      2.    PARTY B has to guarantee that the rental fee will be paid on time,
            if delay occurs, within 15 days, a surcharge of 0.3% will be
            imposed, over 15 days, PARTY A has the right to terminate the
            contract, and PARTY B must leave the premises. electricity, water
            supplies and communication channel will be cut off.

4) Responsibilities of both parties:

      1.    PARTY A is responsible for management of the premises (except for
            irresistible reasons); to provide water, electricity, air condition,
            toiletery facilities free of charge. PARTY B is not allowed to
            install cooking stove, heavy penalty will be imposed. Should PARTY B
            want to install
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            additional electricity facility, he need to get approval from PARTY
            A and agree to pay for the extra electricity fee. PARTY B must
            guarantee the no damages inside the premises and compensate for
            damages if any.

      2.    PARTY A will provide PARTY B the following services: the cleansing
            of gate door, escalators, common area. PARTY B should obey the laws
            of the country and the regulations set by PARTY A. PARTY B should
            not conduct illegal businesses inside the premises; should not carry
            exposive, hazardous, polluted goods and animals inside the premises;
            should take fire, crime prevention and other necessary actions to
            protect the security of the premises. PARTY a is not reponsible for
            PARTY B's economic loss.

      3.    Renovation with no effect on the construction of the property and
            approval must be obtained from PARTY B and he is reponsible for all
            expenses in this matter. PARTY A should closely cooperate with PARTY
            B.

      4.    During the contracted period, PARTY B has the right to use the
            premises but cannot transfer the right to other party. Contract
            would be terminated immediately if transfer is found. PARTY B is
            reponsible for the loss incurred.

      5.    Should advertising space is required by PARTY B. he have to pay the
            advertising fee set by PARTY A.

      6.    Telephone set will be connected to the premises by PARTY A but PARTY
            B is reponsible for the telephone fee.

      7.    PARTY A must arrange appropriate parking space.

5) Others:

      1.    Any other matters not mentioned above but agreed by both parties can
            be added as supplement.

      2.    This contract is in one set four copies, each party holds two valid
            copies.

      3.    This contract is valid after signing and terminated upon terms set
            above and settlement of all expenses.


SIGNED BY PARTY A               SIGNED BY PARTY B



4/11/97                         4/11/97