SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549








FORM
      10-QSB





[X]
      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE


ACT
      OF
      1934





For
      the
      quarterly period ended June 30, 2007





[
      ]
      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
      SECURITIES


EXCHANGE
      ACT OF 1934








For
                the transition period from__________to__________.Commission
                File No. 0-27929ETERNAL
                TECHNOLOGIES GROUP, INC.
              (Exact
                name of registrant as specified in its charter)Nevada
              (State
                or other jurisdiction of
              incorporation
                or organization)
            62-1655508
              (IRS
                Employer Identification No.)Sect.
                D, 5/F, Block A. Innotech Tower,
              235
                Nanjing Rd. Heping District, Tianjin 300052
              (Address
                of principal executive offices)011-86-22-2721-7020
              (Issuer's
                telephone number)





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 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. YES X NO _





As
      of
      July 31, 2007, 47,073,579 shares of Common Stock of the issuer were
      outstanding.



















1










**TABLE
                OF CONTENTS****ETERNAL
                TECHNOLOGIES GROUP, INC.****Part
                I. Financial Information**Item
                1. Consolidated Financial StatementsConsolidated
                Balance Sheets at June 30, 2007 (Unaudited ) and
            3December
                31, 2006Unaudited
                Consolidated Statements of Operations for the three and
                sixMonths
                ended June 30, 2007 and 2006
            4Unaudited
                Consolidated Statements of Cash Flows for the six months
                endedJune
                30, 2007 and 2006
            5Notes
                to the Unaudited Consolidated Financial Statements
            6Item
                2. Management's Discussion and Analysis or Plan of
                OperationsItem
                3. Controls and Procedures
            13**Part
                II. Other Information**Item
                1. Legal Proceedings
            14Item
                2. Unregistered Sales of Equity Securities and Use of Proceeds
            14Item
                3. Defaults Upon Senior Securities
            14Item
                4. Submission of Matters to a Vote of Security Holders
            14Item
                5. Other Information
            14Item
                6. Exhibits
            14Signatures
            14











2








Item
      1.  Consolidated
      Financial Statements


**ETERNAL
                TECHNOLOGIES GROUP, INC.****UNAUDITED
                CONSOLIDATED CONDENSED BALANCE SHEETS****June
                30, 2007 and December 31, 2006****(Amounts
                in United States Dollars)****June
                30,**
            
            **December
                31,****2007**
            
            **2006****ASSETS**
            
            ****Current
                assets:Cash
                and cash equivalents
            
            $
            26,223,055
            
            $
            16,024,123Short-term
                investments
            
            
            15,738,117
            
            
            15,350,176Accounts
                receivable
            
            
            5,313,627
            
            
            6,790,534Inventories
            
            
            63,185
            
            
            5,358,213Prepayments
                and deposits
            
            
            6,217
            
            
            200,705Total
                current assets
            
            
            47,344,201
            
            
            43,723,751Advances
                to distributors
            
            
            1,075,438
            
            
            1,048,929Property
                and equipment, net of accumulated depreciationof
                $4,816,318 and $3,943,592 at June 30, 2007 andDecember
                31, 2006, respectively
            
            
            6,720,059
            
            
            6,882,175Land
                use rights, net of accumulated amortizationof
                $1,824,808 and $1,647,961 at June 30, 2007 andDecember
                31, 2006, respectively
            
            
            4,706,510
            
            
            4,722,362Intangible
                assets
            
            
            1,652,502
            
            
            1,688,520Long-term
                investment
            
            
            4,048,130
            
            
            -Total
                assets
            
            $
            65,546,840
            
            $
            58,065,737**LIABILITIES
                AND STOCKHOLDERS' EQUITY**Current
                liabilities:Notes
                Payable and convertible debt
            
            $
            443,366
            
            $
            443,366Accounts
                payable and accrued liabilities
            
            
            1,177,100
            
            
            532,037Amounts
                due to related parties
            
            
            215,130
            
            
            216,175Payable
                due to Income Taxes
            
            
            143,315
            
            
            229,680Derivative
                financial instrument liability
            
            
            339,663
            
            
            438,356Total
                current liabilities
            
            
            2,318,574
            
            
            1,859,614Stockholders'
                equity:Preferred
                shares - $0.001 par value, 5,000,000authorized,
                none issued or outstanding
            
            
            -
            
            
            -Common
                shares - $0.001 par value; 95,000,000authorized;
                47,073,579 shares issued andoutstanding
            
            
            47,073
            
            
            43,566Additional
                paid - in capital
            
            
            17,232,327
            
            
            14,931,218Subscription
                receivable
            
            
            -
            
            
            (10,176
            )Retained
                earnings
            
            
            41,229,491
            
            
            38,097,409Accumulated
                other comprehensive income
            
            
            4,719,375
            
            
            3,144,106Total
                stockholders' equity
            
            
            63,228,266
            
            
            56,206,123Total
                liabilities and stockholders' equity
            
            $
            65,546,840
            
            $
            58,065,737The
                accompanying notes are an integral part of these unaudited consolidated
                financial statements









3





**ETERNAL
                TECHNOLOGIES GROUP, INC.****UNAUDITED
                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS****For
                the Three and Six Months Ended June 30, 2007 and
                2006****(Amounts
                in United States Dollars)****Three
                Months Ended June 30,**
            
            **Six
                Months Ended June 30,****2007**
            
            **2006**
            
            **2007**
            
            **2006**Revenue:
            
            
            
            $$
            
            
            
            $$Agricultural
                and genetics sales
            
            
            9,214,703
            
            
            8,912,038
            
            
            14,923,370
            
            
            12,522,328Medical
                device sales and services
            
            
            1,719,093
            
            
            1,458,099
            
            
            3,216,075
            
            
            2,064,168Land
                lease
            
            
            150,213
            
            
            -
            
            
            449,049
            
            
            -Total
                revenue
            
            
            11,084,009
            
            
            10,370,137
            
            
            18,588,494
            
            
            14,586,496Cost
                of sales and servicesAgricultural
                and genetics sales
            
            
            7,002,928
            
            
            6,945,868
            
            
            12,186,174
            
            
            9,460,525Medical
                device sales and services
            
            
            501,611
            
            
            648,711
            
            
            1,033,985
            
            
            923,743Land
                lease
            
            
            67,034
            
            
            63,982
            
            
            133,359
            
            
            128,229Total
                cost of sales and services
            
            
            7,571,573
            
            
            7,658,561
            
            
            13,353,518
            
            
            10,512,497Gross
                profit
            
            
            3,512,436
            
            
            2,711,576
            
            
            5,234,976
            
            
            4,073,999Depreciation
                Expense
            
            
            210,755
            
            
            202,058
            
            
            419,168
            
            
            402,757Selling,
                general and administrativeexpenses
            
            
            1,417,163
            
            
            913,881
            
            
            2,085,940
            
            
            1,314,530Income
                from operations
            
            
            1,884,518
            
            
            1,595,637
            
            
            2,729,868
            
            
            2,356,712Other
                income (expense)Interest
                income
            
            
            53,662
            
            
            48,109
            
            
            103,530
            
            
            88,837Loss
                on Sales of Assets
            
            
            -
            
            
            -
            
            
            (849
            )
            
            -Investment
                Income
            
            
            97,541
            
            
            -
            
            
            543,338
            
            
            -Change
                in value of derivativefinancial
                instruments
            
            
            769
            
            
            117,435
            
            
            (38,111
            )
            
            (104,214
            )Other
                income (expense), net
            
            
            151,972
            
            
            165,544
            
            
            607,908
            
            
            (15,377
            )Income
                before provision forincome
                taxes
            
            
            2,036,490
            
            
            1,761,181
            
            
            3,337,776
            
            
            2,341,335Provision
                for income taxes
            
            
            117,149
            
            
            102,481
            
            
            205,694
            
            
            141,836Net
                income
            
            $
            1,919,341
            
            $
            1,658,700
            
            $
            3,132,082
            
            $
            2,199,499Net
                income per common sharebasic
                and diluted
            
            $
            0.04
            
            $
            0.04
            
            $
            0.07
            
            $
            0.05Weighted
                average number ofcommon
                shares outstanding,basic
                and diluted
            
            
            47,073,579
            
            
            40,567,300
            
            
            47,073,579
            
            
            40,321,041








4





**ETERNAL
                TECHNOLOGIES GROUP, INC.****UNAUDITED
                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS****For
                the Six Months Ended June 30, 2007 and 2006****(Amounts
                in United States Dollars)****2007**
            
            **2006**Cash
                flows from operating activitiesNet
                income
            
            
            
            
            $
            3,132,082
            
            $
            2,199,499Adjustments
                to reconcile net income to net cashprovided
                by operating activities:Depreciation
                and amortization
            
            
            
            
            
            552,527
            
            
            530,986Change
                in value of derivative financial instruments
            
            
            
            
            
            (98,693
            )
            
            104,214Changes
                in operating assets and liabilities:Inventories
            
            
            
            
            
            5,430,445
            
            
            20,553Fixed
                Assets
            
            
            
            
            
            (10,212
            )
            
            -Accounts
                receivable
            
            
            
            
            
            1,752,930
            
            
            6,234,810Prepayments
                and deposits
            
            
            
            
            
            199,560
            
            
            (374,874
            )Accounts
                payable and accrued expenses
            
            
            
            
            
            539,447
            
            
            69,152Account
                payable to related parties
            
            
            
            
            
            -
            
            
            (141,619
            )Net
                cash provided by operating activities
            
            
            
            
            
            11,498,086
            
            
            8,642,721Cash
                flows from investing activities:Long
                Term Investment
            
            
            
            
            
            (4,018,919
            )
            
            (249,796
            )Net
                cash provided by investing activities
            
            
            
            
            
            (4,018,919
            )
            
            (249,796
            )Cash
                flows from financing activities:Capital
                contributed
            
            
            
            
            
            2,304,615
            
            
            -Common
                Stock Receivable
            
            
            
            
            
            10,176
            
            
            -Net
                cash provided by financing activities
            
            
            
            
            
            2,314,791
            
            
            -Effect
                of exchange rate changes on cash
            
            
            
            
            
            404,974
            
            
            568,729Net
                increase (decrease) in cash and cash equivalents
            
            
            
            
            
            10,198,932
            
            
            8,961,654Cash
                and cash equivalents, beginning of period
            
            
            
            
            
            16,024,123
            
            
            18,224,488Cash
                and cash equivalents, end of period
            
            
            
            
            $
            26,223,055
            
            $
            27,186,142Supplemental
                disclosure of cash flow information:Interest
                Paid
            
            
            
            
            $
            -
            
            $
            -Tax
                paid
            
            
            
            
            
            205,694
            
            
            26,518The
                accompanying notes are an integral part of these unaudited consolidated
                financial statements





5





**ETERNAL
      TECHNOLOGIES GROUP INC. AND SUBSIDIARIES**


**NOTES
      TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**





**1.** **Background
      and Critical Accounting Policies**





Pursuant
      to an exchange agreement, Eternal Technologies Group, Inc., ("Company") formerly
      known as Waterford Sterling Corporation, completed its acquisition of 100%
      interest of Eternal Group Limited and Subsidiaries on December 12, 2002. The
      Company has treated the transaction as a reverse merger for accounting purposes.
      Following the acquisition, the former shareholders of Eternal Technology Group
      Limited, a British Virgin Islands limited liability company, now owns
      approximately 85% of the issued and outstanding common shares of Eternal
      Technologies Group Inc.





Eternal
      Phoenix Company Limited was incorporated in the British Virgin Islands with
      limited liability on March 3, 2000. Pursuant to a resolution passed on June
      17,
      2000 Eternal Phoenix Company Limited changed its name to ETERNAL TECHNOLOGY
      GROUP LTD., ("Eternal"). Eternal is a holding company for investments in
      operating companies.





Eternal
      acquired 100% of Willsley Company Limited ("Willsley"), a company incorporated
      in the British Virgin Island with limited liability on May 16, 2000. Willsley's
      principal activity is investments and owns 100% interest in Inner Mongolia
      Aershan Agriculture & Husbandry Technology Co., Ltd
      ("Aershan").





Aershan
      was incorporated in the People's Republic of China ("the PRC") with limited
      liability on July 11, 2000 and its principal activities are to run a breeding
      center, transplant embryos, and to propagate quality meat sheep and other
      livestock breeds in Inner Mongolia.





E-Sea
      Biomedical Engineering Co. International Ltd. was incorporated on October 20,
      2004 under the laws of the British Virgin Islands. (E-Sea) E-Sea owns all of
      the
      issued and outstanding stock of E-Sea Shenzhen which owns a Chinese patent
      for
      dialysis technology and produces and markets a series of instruments for
      detecting breast disease specifically breast cancer by applying its image
      processing technology. E-Sea was acquired as of the close of business on
      September 30, 2005.





Inventory





Livestock
      inventories that are purchased for embryo transplanting, resale, or meat
      processing are recorded at historical cost. Estimated costs of raised livestock
      prior to use for embryo transplanting, sale, or meat processing are accumulated
      and capitalized as inventory at the balance sheet date. Embryo inventories
      are
      recorded at historical cost. Inventories are measured at lower of cost and
      net
      realizable value using the first-in first-out ("FIFO") or weighted average
      cost
      formulas. The Company reviews its inventory quarterly to identify slow moving,
      obsolete or otherwise impaired inventory. The identification process includes
      historical performance of the inventory, current operational plans for the
      inventory, as well as industry and customer specific trends. If actual results
      differ from management expectations with respect to the selling of inventories
      at amounts equal to or greater than their carrying amounts, an adjustment to
      inventories would be made.





Land
      lease rights and amortization





Land
      lease rights in Mainland China were stated at the amount of the prepayment
      less
      accumulated amortization. Amortization of land lease rights was calculated
      on
      the straight-line basis over the term of the lease of approximately 25 years.
      The land lease rights with respect to the Company's farm were originally
      purchased from the Chinese government for $6,000,000 and such rights extend
      through 2025. The farm is located in Wulagai Development Area in Inner
      Mongolia.





Foreign
      currency translation





The
      Company's reporting currency is the US$. The Company maintains no material
      accounts in currency of the United States of America. All of the subsidiaries
      maintain their books and accounts in the People's Republic of China currency,
      which is called Renminbi ("RMB"). Translation of the balance sheet amounts
      from
      RMB into US$ has been made at the single rate of exchange on June 30, 2007
      and
      December 31, 2006 of 7.63 and 7.82 RMB/US$, respectively. The income statement
      has been translated at the average rate of exchange in effect during the year
      of
      7.73 RMB/US$ and 7.98 RMB/US$ for the years ended December 31, 2006,
      respectively. No representation is made as to whether the RMB amounts could
      have
      been, or could be, converted into US$ at that rate on June 30, 2007 or December
      31, 2006 or at any other date.






6





The
      quotation of the exchange rates does not imply free convertibility of RMB to
      other foreign currencies. All foreign exchange transactions continue to take
      place either through the Bank of China or other banks authorized to buy and
      sell
      foreign currencies at the exchange rates quoted by the People's Bank of China.
      Approval of foreign currency payments by the Bank of China or other institutions
      requires submitting a payment application form together with invoices, shipping
      documents and signed contracts.





On
      July
      21, 2005, China effectively revalued its currency by removing its "peg" against
      the U.S. dollar at 8.3:1 and measuring it against a basket of currencies of
      which the U.S. dollar is only one.





Revenue
      recognition





In
      accordance with Staff Accounting Bulletin No. 104 (SAB 104), revenue from the
      sale of livestock, embryos, and raw materials is recognized when persuasive
      evidence of an arrangement exists; the price to the buyer is fixed or
      determinable; the merchandise is delivered to the customer and title passes;
      and
      collectibility is reasonably assured.





Stock-based
      compensation





Stock
      compensation expense for stock granted to non-employees has been determined
      in
      accordance with Statement of Financial Accounting Standards No. 123, "Accounting
      for Stock-Based Compensation" ("SFAS 123") and the Emerging Task Force consensus
      in Issue No. 96-18, "Accounting for Equity Instruments that are Issued to Other
      than Employees for Acquiring, or in conjunction with Selling Goods or Services
      ("EITF 96-18"), as the fair value of the consideration received or the fair
      value of the equity instruments issued, whichever is more reliably
      measured.





Stock
      compensation expense for stock granted to employees has been determined in
      accordance with SFAS 123.





Use
      of
      estimates





The
      preparation of consolidated financial statements requires management to make
      estimates and assumptions that affect the amounts reported in the consolidated
      financial statements and accompanying notes. Actual results could differ from
      those estimates.





Recent
      accounting pronouncements





In
      November 2004, FASB issued SFAS No. 151, "Inventory Costs - An Amendment of
      ARB
      No. 43, Chapter 4" (SFAS No. 151). SFAS No. 151 amends the guidance in ARB
      No.
      43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal
      amounts of idle facility expense, handling costs, and wasted material
      (spoilage). Among other provisions, the new rule requires that items such as
      idle facility expense, excessive spoilage, double freight, and rehandling costs
      be recognized as current-period charges regardless of whether they meet the
      criterion of "so abnormal" as stated in ARB No. 43. SFAS No. 151 is effective
      for fiscal years beginning after June 15, 2005 and is required to be adopted
      by
      the Company in the first quarter of fiscal 2006, beginning on January 1, 2006.
      The Company is currently evaluating the effect that the adoption of SFAS No.
      151
      will have on its consolidated financial position, results of operations and
      cash
      flows but do not expect SFAS No. 151 to have a material impact





**2.** **Condensed
      Financial Statements and Footnotes**





The
      interim consolidated financial statements presented herein have been prepared
      by
      the Company and include the unaudited accounts of the Company and its
      subsidiaries. All significant inter-company accounts and


transactions
      have been eliminated in the consolidation.





These
      condensed financial statements have been prepared in accordance with generally
      accepted accounting principles for interim financial information and the
      instructions to Form 10-QSB and Item 310 (b) Regulation S-B. Certain information
      and footnote disclosures normally included in financial statements presented
      in
      accordance with generally accepted accounting principles have been condensed
      or
      omitted. The Company believes the disclosures made are adequate to make the
      information presented not misleading. The condensed consolidated financial
      statements should be read in conjunction with the Company's consolidated
      financial statements for the year ended December 31, 2006 and notes thereto
      included in the Company's Form 10-KSB.






7





In
      the
      opinion of management, the unaudited consolidated condensed financial statements
      reflect all adjustments (which include only normal recurring adjustments)
      necessary to present fairly the financial position of the Company as of June
      30,
      2007, the results of operations for the three and six months ended June 30,
      2007
      and 2006, respectively. Interim results are not necessarily indicative of full
      year performance because of the impact of seasonal and short-term
      variations.





**3.** **Cash
      and Cash Equivalents**





At
      June
      30, 2007, the Company maintains bank accounts in the PRC of approximately
      $26,223,055.





**4.** **Notes
      Payable**





The
      Company's promissory notes payable are in default at June 30, 2007 and the
      holder of the notes has filed suit for payment of the notes. The case was tried
      in May 2007. However, no decision has yet been rendered by the
      Court.





**5.**  **Income
      Taxes**





The
      companies operate in several jurisdictions and may be subject to taxation in
      those jurisdictions.





It
      is
      management's intention to reinvest all the income attributable to the Company
      earned by its operations outside of the United States of America. Accordingly,
      no United States corporate taxes have been provided in these consolidated
      financial statements. The Company has a U.S. net operating loss carry forward
      of
      approximately $2,087,859 expire in years between 2022 and 2025. However a
      valuation allowance has been provided as management does not expect the tax
      benefits to be realized. No other significant deferred assets or liabilities
      existed at December 31, 2006. The Company's net operating loss carry forwards
      may be subject to annual limitations, which could reduce or defer the
      utilization of the losses as a result of an ownership change as defined in
      section 382 of the Internal Revenue Code.





Under
      current law of the British Virgin Islands (BVI), any dividends and capital
      gains
      arising from the Company's investments are not subject to income tax in the
      British Virgin Islands.





Companies
      with operations in the Peoples Republic of China may be subject to taxes for
      income therein. The Income Tax Law of the Peoples Republic of China for
      Enterprises with Foreign Investment and Foreign Enterprises provide certain
      exemptions from taxation. Under current PRC law, Aershan is exempt from taxation
      as Aershan's operations currently benefit from a tax holiday. The tax holiday,
      granted by Xilingol League, which is the local government, and the central
      PRC
      government, commenced on the incorporation of Inner Mongolia Aershan Agriculture
      and Husbandry Technology Co., Ltd., in July 2000. The Company has benefited
      from
      this holiday since inception and anticipates that the holiday will extend
      through July 2008.





The
      tax
      holiday resulted in tax savings that account for substantially the entire
      difference between the income tax provision that would be expected using United
      States federal statutory tax rates and the tax provision of zero for the three
      and six months ended June 30, 2007. The tax provision for the corresponding
      period of the current year were $117,149 and $ 205,694 respectively, all from
      the business activities of E-Sea.





**6.** **Contingencies**





In
      conjunction with certain subscription agreements entered into during 2003,
      the
      Company has agreed to register the shares issued under a Form SB-2 registration
      statement. There were penalties for not timely meeting filing and effectiveness
      deadlines, and the Company received claims related to these penalties. On May
      24, 2005 the Company issued convertible notes, allowing for conversion of the
      penalty to the Company’s common stock, to the holders of the subscription
      agreements who accepted settlement. One subscription agreement holder elected
      to
      not accept a convertible note and is pursuing legal action as discussed in
      Part
      II, Item 1.






8





The
      Company's operations are conducted 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 economy.





The
      Company's operations in the PRC are subject to special considerations and
      significant risks not typically associated with companies in 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 the political and
      social conditions in the PRC, and 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.





**7.**  **Related
      Party Transactions**





During
      the three and six months ended the Company engaged in various transactions
      with
      related parties as follows:





**Three
                Months Ended**
            
            **Six
                Months Ended****June
                30,**
            
            **June
                30,**
            
            **June
                30,**
            
            **June
                30,****2007**
            
            **2006**
            
            **2007**
            
            **2006**Common
                stock sold by officers/ directorsdirectors
                with proceeds contributedto
                the company for payment ofoperating
                expenses
            
            $
            -
            
            
            
            
            $
            
            
            $





**8.
      Non-Cash Investing and Financing**





During
      the three and six months ended the Company engaged in various transactions
      with
      related parties as follows:





Three
                Months Ended June 30
            
            Six
                Months Ended June 302007
            
            2006
            
            2007
            
            2006Common
                Stock issued to convert debt
            
            $
            -
            
            $
            52,262
            
            
            
            
            $
            $
                419,335Common
                Stock issued for acquisition of Investment
            
            $
            -
            
            $
            -
            
            $
            1,903,811
            
            $
            -Common
                Stock issued upon exercise of warrants
            
            $
            -
            
            $
            -
            
            $
            136,804
            
            $
            -Compensatory
                common stock issuances
            
            $
            -
            
            $
            -
            
            $
            264,000
            
            $
            -








Item
      2.
      Management’s Discussion and Analysis or Plan of Operation




The
      Company’s business is seasonal. Accordingly, the results of operations for the
      three and six month periods ended June 30, 2007 are not indicative of the
      results for any other quarter, period or for the fiscal year.





The
      following is derived from, and should be read in conjunction with, our unaudited
      condensed consolidated financial statements, and related notes, as of and for
      the three and six months ended June 30, 2007 and 2006.





**Three
      Months Ended June 30, 2007 Compared to Three months Ended June 30,
      2006**





**Revenues
      -**


Revenues
      for the three months ended June 30, 2007 increased by $713,872 or 7% to
      $11,084,009 from $10,370,137 for the corresponding period of the prior year.
      The
      following table indicates the changes in sales by category for the two
      periods.


9








Three
                months ended June 30Source
                of Revenue
            
            2007
            
            2006
            
            DifferenceCattle
                Embryo Transfers
            
            $
            4,499,894
            
            $
            5,222,576
            
            $
            (722,682
            )Embryo
            
            
            0
            
            
            1,346,155
            
            
            (1,346,155
            )Mutton
            
            
            4,714,809
            
            
            2,343,307
            
            
            2,371,502Land
                Lease
            
            
            150,213
            
            
            -
            
            
            150,213E-Sea
            
            
            1,719,093
            
            
            1,458,099
            
            
            260,994Totals
            
            $
            11,084,009
            
            $
            10,370,137
            
            $
            713,872




**Cost
      of Sales and Services**





Cost
      of
      sales and services for the three months ended June 30, 2007 decreased $86,988
      or
      1% to $7,571,573 from $7,658,561 for the corresponding period of the prior
      year.
      The following table indicates the changes in cost of sales and services for
      the
      two periods:





Source
                of Cost of
            
            Three
                Months Ended June 30,
            
            
            
            2007Sales
                and Services
            
            2007
            
            2006
            
            Difference
            
            Profit
                MarginCattle
                Embryo Transfer
            
            
            3,221,326
            
            
            3,829,769
            
            
            (608,443
            )
            
            40
            %Land
                lease expense
            
            
            67,034
            
            
            63,982
            
            
            3,052
            
            
            124
            %Feeding
                fee
            
            
            50,332
            
            
            -
            
            
            50,332
            
            
            -100
            %Embryo
            
            
            -
            
            
            1,233,975
            
            
            (1,233,975
            )
            
            0
            %Mutton
            
            
            3,731,270
            
            
            1,882,124
            
            
            1,849,146
            
            
            26
            %E-Sea
            
            
            501,611
            
            
            648,711
            
            
            (147,100
            )
            
            242
            %Totals
            
            
            7,571,573
            
            
            7,658,561
            
            
            (86,988
            )
            
            46
            %





**Depreciation
      and Amortization -**





Depreciation
      and amortization expenses decreased by $55,285 or 20.8% to $210,755 from
      $266,040 for the corresponding period of the prior year. This decrease is
      attributable to the classification of the land lease depreciation of $67,034
      being reclassified to cost of goods sold in the current period. Without this
      reclassification, depreciation would have increased by $11,749, principally
      because of the change in currency valuation.





**Selling
      and Administrative Expenses -**





Selling
      and administrative expenses increased by $503,282 or 55% to $1,417,163 from
      $913,881 for the corresponding period of the prior year. The following table
      indicates the changes in selling, general and administrative expenses by
      category for the two periods:





Three
                Months Ended June 30,Category
            
            2007
            
            2006
            
            DifferenceMarketing
                Expense
            
            $
            30,000
            
            
            
            
            $
            30,000Office
                charges
            
            
            15,446
            
            $
            13,505
            
            
            1,941Salaries
            
            
            363,259
            
            
            242,805
            
            
            120,454Distributor
                Commissions
            
            
            105,344
            
            
            72,917
            
            
            32,427Travel
            
            
            8,953
            
            
            25,189
            
            
            (16,236
            )Consulting
                fees
            
            
            0
            
            
            24,929
            
            
            (24,929
            )Entertainment
            
            
            7,169
            
            
            3,750
            
            
            3,419Legal
                & Professional
            
            
            174,932
            
            
            288,405
            
            
            (113,473
            )Rent
            
            
            20,377
            
            
            24,880
            
            
            (4,503
            )Telephone
            
            
            1,332
            
            
            1,809
            
            
            (477
            )Penalty
                Expense
            
            
            -
            
            
            154,760
            
            
            (154,760
            )Research
                & Development
            
            
            130,055
            
            
            -
            
            
            130,055Miscellaneous
            
            
            296
            
            
            932
            
            
            (636
            )US
                Office Expense
            
            
            60,000
            
            
            60,000
            
            
            -Litigation
                Accrual
            
            
            500,000
            
            
            -
            
            
            500,000$
            1,417,163
            
            $
            913,881
            
            $
            503,282








10


**Other
      Income (Expense)**





For
      the
      three months ended June 30, 2007 the company experienced an increase in interest
      income of $5,553 or 11.5% to $53,662 from $48,109 for the corresponding period
      of the prior year. The increase is attributable to an increase in balances
      on
      deposit and higher interest rates.





For
      the
      three months ended June 30, 2007, the company had investment income of $97,541
      from the company’s Turtle Farm investment. There was no investment income for
      the corresponding period of 2006.





For
      the
      three months ended June 30, 2007 the company had a change in the value of
      derivative instruments of $769. For the three months ended June 30, 2006 the
      company had a positive change in the value of derivative instruments of
      $117,435.





**Income
      Taxes**





As
      a
      result of the foregoing, the company’s other income decreased by $13,572 to
      $151,972 from $165,544 for the corresponding period of 2006.





For
      the
      three months ended June 30, 2007, the Company provided taxes on its income
      from
      its E-Sea operations of $117,149. This compares to a tax provision of $102,481
      for the corresponding period of the prior year. The remainder of the Company's
      income is from agricultural activities which benefits from a tax holiday.





As
      a
      result of the foregoing, the company had net income of $1,919,341 or $.04 per
      share for the three months ended June 30, 2007 compared to net income of
      $1,658,700 or $.04 per share for the corresponding period of the prior
      year.





**Six
      Months Ended June 30, 2007 As Compared to Six Months Ended June 30,
      2006**





**Revenues-**





Revenues
      for the six months ended June 30, 2007 increased by $4,001,998 or 27.4% to
      $18,588,494 from
      $14,586,496 for the corresponding period of the prior year. The following table
      indicates the changes in sales by category for the two periods:




Six
                Months ended June 30Source
                of Revenue
            
            2007
            
            2006
            
            DifferenceLamb
                meat
            
            $
            1,734,155
            
            $
            3,616,013
            
            $
            (1,881,858
            )Cattle
                Embryo Transfers
            
            
            4,476,073
            
            
            5,224,374
            
            
            (748,301
            )Embryo
            
            
            4,023,291
            
            
            1,343,411
            
            
            2,679,880Mutton
            
            
            4,689,851
            
            
            2,338,530
            
            
            2,351,321E-Sea
            
            
            3,216,075
            
            
            2,064,168
            
            
            1,151,907Land
                Lease
            
            
            449,049
            
            
            -
            
            
            449,049Total
            
            $
            18,588,494
            
            $
            14,586,496
            
            $
            4,001,998,





**Cost
      of Sales** **and
      Services**





Cost
      of
      sales and services for the six months ended June 30, 2007 increased by
      $2,969,250 or 28.6% to $13,353,518 from $10,384,268 for the
      corresponding period of the prior year. The following table indicates the
      changes in cost of sales and services by category for the two periods:





Six
                Months Ended June 30,Source
                of Cost of Sales & Services
            
            2007
            
            2006
            
            Difference
            
            2007
                Gross Profit MarginLamb
                meat
            
            $
            1,211,645
            
            $
            2,537,553
            
            $
            (1,325,908
            )
            
            43
            %Cattle
                Embryo Transfer
            
            
            3,204,273
            
            
            3,813,228
            
            
            (608,955
            )
            
            40
            %Embryo
            
            
            3,958,609
            
            
            1,231,460
            
            
            2,727,149
            
            
            2
            %Mutton
            
            
            3,711,518
            
            
            1,878,284
            
            
            1,833,234
            
            
            26
            %Feeding
                fee
            
            
            100,129
            
            
            -
            
            
            100,129
            
            
            -100
            %E-Sea
            
            
            1,033,985
            
            
            923,743
            
            
            110,242
            
            
            211
            %Land
                Lease
            
            
            133,359
            
            
            128,229
            
            
            5,130
            
            
            236
            %Total
            
            $
            13,353,518
            
            $
            10,512,497
            
            $
            2,841,021
            
            
            39
            %










11




**Depreciation
      and Amortization**  -





Depreciation
      and amortization expenses decreased by $111,818 or 21.1% to $419,168 from
      $530,986 for the corresponding period of the prior year. This decrease is
      attributable to depreciation of $133,359 being reclassified to cost of goods
      sold in the current period. Without the reclassification deprecation would
      have
      increased by $21,541 principally because of the change in currency
      valuation.





**Selling,
      General and Administrative Expenses** -




Selling,
      General and Administrative expenses increased by $771,410 or 59% to $2,085,940
      from $1,314,530 for the corresponding period of the prior year. The following
      table indicates the changes in Selling, General and Administrative Expenses
      by
      category for the two periods.





Six
                Months Ended June 30,Category
            
            2007
            
            2006
            
            DifferenceOffice
                changes
            
            $
            51,443
            
            $
            40,542
            
            $
            10,901Salaries
            
            
            722,673
            
            
            484,620
            
            
            238,053Commissions
                to distributors
            
            
            197,930
            
            
            93,292
            
            
            104,638Travel
            
            
            19,274
            
            
            30,175
            
            
            (10,901
            )Consulting
                Fee
            
            
            -
            
            
            24,878
            
            
            (24,878
            )Entertainment
            
            
            49,387
            
            
            8,801
            
            
            40,586Legal
                & Professional
            
            
            277,404
            
            
            367,840
            
            
            (90,436
            )Rent
            
            
            45,196
            
            
            45,180
            
            
            16Telephone
            
            
            2,810
            
            
            3,298
            
            
            (488
            )Research
                & Development
            
            
            129,366
            
            
            -
            
            
            129,366Miscellaneous
            
            
            457
            
            
            1,144
            
            
            (687
            )Penalty
                Expense
            
            
            -
            
            
            154,760
            
            
            (154,760
            )Marketing
                Expense
            
            
            30,000
            
            
            -
            
            
            30,000US
                Office Expense
            
            
            60,000
            
            
            60,000
            
            
            -Litigation
                Reserve
            
            
            500,000
            
            
            -
            
            
            500,000Totals
            
            $
            2,085,940
            
            $
            1,314,530
            
            $
            771,410





**Other
      Income (Expense)**





For
      the
      six months ended June 30, 2007 the company experienced an increase in other
      income of $623,285. This resulted from an increase in interest income of $14,693
      an increase in investment income of $543,338 and a reduction in the impact
      of
      the charges in value of our derivative financial instruments of $66,103 which
      was partially offset by a loss on the sale of assets of $849.





**Income
      Taxes**





The
      Company provided taxes on its income from the E-Sea operations of $205,694
      for
      the six-month ended June 30, 2007. This compares with a provision for income
      taxes for the prior year period of $141,836.





As
      a
      result of the foregoing, the Company had net income of $3,132,082 or $.07 per
      share for the six months
      ended June 30, 2007 compared to net income of $2,199,499 or $.05 per share
      for
      the corresponding
      period of the prior year.





**Liquidity
      and Capital Resources**





As
      of
      June 30, 2007, the Company had cash and cash equivalents of
      $26,223,055 and working capital of
      $45,025,627. This compares with cash and cash equivalents of $16,024,123 and
      working capital of $41,864,137
      as of December 31, 2006.





Cash
      provided by operating activities totaled $11,498,086 for the six months ended
      June 30, 2007. This
      compares with cash provided by operating activities of $8,642,721 for the
      corresponding period of
      the
      prior year. This increase resulted from an increase in
      net
      income of $932,582 a change in the current accounts of $2,254,361 and an
      increase in depreciation and amortization of $21,541 which was partially offset
      by negative change in the value of the derivative financial instruments of
      $202,907.






12





Cash
      used
      in investing activities was $4,018,919 during the six months ended June 30,2007
      compared to $249,796
      for the six months ended June 30, 2006. All of the cash used in investing
      activities during the six
      months ended June 30, 2007 was for the purchase of a long-term
      investment.





Cash
      provided from financing activities for the six months ended June 30, 2007,
      totaled $2,314,791, 2,304,615 from the issuance of common stock and $10,176
      from
      the collection of a common stock receivable. There were no financing activities
      for the six months ended June 30, 2006.





At
      June
      30, 2007, the Company listed notes payable of $443,366. These notes are
      currently the subject of litigation where the Company is challenging their
      validity. (See legal proceedings, supra).





The
      Company has a cash and bank balances of $26,223,055 and short term liquid
      investments of $15,738,117 which is more than sufficient to cover its PRC
      operations. However, if the Company
      is to
      expand
      outside the PRC, as it anticipates doing, or pay its non-PRC obligation, it
      will
      have to sell
      additional shares of its stock or borrow funds from third parties. Unless it
      is
      able to either borrow
      funds or sell additional shares, it will have insufficient resources to carry
      out is business objectives
      outside the PRC for the next twelve (12) months.





**Item
      3.** **Controls
      and Procedures**





We
      strive
      to maintain disclosure controls and procedures that are designed to ensure
      that
      information required to be disclosed in our Exchange Act reports is recorded,
      processed, summarized and reported within the time periods specified in the
      SEC's rules and forms, and that such information is accumulated and communicated
      to our management, including our chief executive officer and chief financial
      officer, as appropriate, to allow for timely decisions regarding required
      disclosure. In designing and evaluating the disclosure controls and procedures,
      management recognizes that any controls and procedures, no matter how well
      designated and operated, can provide only reasonable assurance of achieving
      the
      desired control objectives and management necessarily is required to apply
      its
      judgment in evaluating the cost-benefit relationship of possible controls.





Our
      independent registered public accounting firm, Ham Langston & Brezina,
      L.L.P. ("HLB") conducted an audit of our financial statements for 2006 and
      2005.
      In connection with the issuance of its report to the Board of Directors, HLB
      reported two material weaknesses under standards established by the Public
      Company Accounting Oversight Board regarding some elements of our system of
      internal controls. They noted the following specific material
      deficiencies.





(i)
      We
      lacked the required expertise needed to properly account for non-routine
      transactions, (such as the acquisition of other businesses and preparation
      of
      its required financial statement disclosure in accordance with U.S. GAAP. and
      SEC rules and regulations.





(ii)
      Accounting for derivative instruments under FASB 133





To
      address the weaknesses, we have hired an independent accounting firm to assist
      with accounting for derivatives and will seek outside accounting assistance
      on
      any further acquisition .





Other
      than the foregoing initiatives, there were no significant changes in our
      internal controls or to our knowledge, in other factors that could significantly
      affect such internal controls subsequent to the date of their
      evaluation.








As
      required by SEC rule 13a-15(b) we conducted an evaluation, under the supervision
      and with the participation of our management, including our Chief Executive
      Officer, President and Vice President of Finance, the effectiveness of the
      design and operation of our disclosure controls and procedures. Based upon
      that
      evaluation, the Chief Executive Officer, President and Vice President of Finance
      concluded that our disclosure controls and procedures are effective in timely
      alerting them to material information relating to us (including our
      subsidiaries) required to be included in our periodic SEC filings.








While
      we
      have taken or are in the process of taking the foregoing steps in order to
      address the adequacy of our disclosure controls and procedures, and, in
      addition, to develop and implement a formal set of internal controls and
      procedures for financial reporting in accordance with SEC's proposed rules
      to
      adopt the internal control report requirements included in Section 404 of the
      Sarbanes-Oxley Act of 2002, the efficiency of the steps we have taken to date
      and the steps we are still in the process of completing is subject to continued
      management review supported by confirmation and testing by our internal and
      external auditors. As a result, it is likely that additional changes will be
      made to our internal controls.








13














**PART
      II. OTHER INFORMATION**





**Item
      1. Legal Proceedings.**





As
      of May
      16, 2006, we were a party to two legal proceedings. The proceedings involve
      a
      lawsuit brought by Western Securities Corporation seeking payment of $500,942
      on
      two outstanding promissory notes, one to Market Management, Inc. and one to
      Thomas L. Tedrow plus accrued interest since July 11, 2004, attorney's fees,
      cost of collection and other court costs. This cause of action was initially
      filed in Federal District Court in the Eastern District of Louisiana. The
      Company filed a Motion to Dismiss for lack of personal jurisdiction or
      alternatively a Motion to Dismiss for lack of venue.





In
      October 2006, the Court granted the Company's motion for a change of venue
      and
      the case was moved to the Southern District Court of Texas in Houston, Texas.
      The case was tried in May, 2007. However, the court has not yet rendered its
      decision.





On
      February 14, 2006, the second cause of action involves one of the convertible
      promissory notes owned by Bristol Investments Limited in the State Court in
      New
      York dismissed for the third time a cause of action, filed by Bristol
      Investments Limited against the Company, On March 30, 2006 without stating
      a new
      cause of action, Bristol Investments Limited re-filed the same cause of action
      against the Company. This case is currently pending.





As
      of
      August 15, 2007, there are no other causes of action pending against the
      Company.





**Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds.**





During
      the three month period ended June 30, 2007 there were no sales of equity
      securities.





**Item.
      3. Defaults Upon Senior Securities**





None





**Item
      4. Submissions of Matters to a Vote of Security Holders**





None





**Item
      5. Other Information**





None





**Item
      6. Exhibits**





**EXHIBIT
                NO.**
            **IDENTIFICATION
                OF EXHIBIT**31.1
            
            Certification
                Pursuant to 18 U.S.C Section 1350, as adopted Pursuant to Section
                302 of
                the Sarbanes-Oxley Act of 200231.2
            
            Certification
                Pursuant to 18 U.S.C Section 1350, as adopted Pursuant to Section
                302 of
                the Sarbanes-Oxley Act of 200232.1
            
            Certification
                Pursuant to 18 U.S.C Section 1350, as adopted Pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 200232.2
            
            Certification
                Pursuant to 18 U.S.C Section 1350, as adopted Pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002





**Signature**





Pursuant
      to the requirement of the Securities Exchange Act of 1934, the registrant has
      duly caused this report
      to
      be signed on its behalf by the undersigned thereunto authorized.





**ETERNAL
              TECHNOLOGIES GROUP, INC.**Date: August
              13, 2007
            By:
            /s/ Jiansheng
              WeiChief
              Executive Officer


Date: August
              13, 2007
            By:
            /s/ Zheng
              ShenChief
              Financial Officer


















14


**CERTIFICATIONS**


**EXHIBIT
      31.1**





**CERTIFICATION
      BY JIANSHENG WEI PURSUANT TO SECURITIES EXCHANGE ACT RULE
      13A-14(A)**





I,
      Jiansheng Wei, certify that:


1.  I
      have
      reviewed this quarterly report on Form 10-QSB of Eternal Technologies Group,
      Inc.;





2.  Based
      on
      my knowledge, this report does not contain any untrue statement of a material
      fact or omit to state a material fact necessary to make the statements made,
      in
      light of the circumstances under which such statements were made, not misleading
      with respect to the period covered by this report;





3.  Based
      on
      my knowledge, the financial statements, and other financial information included
      in this report, fairly present in all material respects the financial condition,
      results of operations and cash flows of the registrant as of, and for, the
      periods presented in this report;





4.  The
      registrant's other certifying officers and I are responsible for establishing
      and maintaining disclosure controls and procedures (as defined in Exchange
      Act
      Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
      (as
      defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
      have:





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





(b)
            Designed
                such internal control over financial reporting, or caused such internal
                control over financial reporting to be designed under our supervision,
                to
                provide reasonable assurance regarding the reliability of financial
                reporting and the preparation of financial statements for external
                purposes in accordance with generally accepted accounting
                principles;





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





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





5.  The
      registrant's other certifying officers and I have disclosed, based on our most
      recent evaluation of internal control over financial reporting, to the
      registrant's auditors and the audit committee of the registrant's board of
      directors (or persons performing the equivalent functions):





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





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







Date:
      August 13, 2007





/s/
      JIANSHENG WEI


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


Jiansheng
      Wei


Chief
      Executive Officer








15











**EXHIBIT
      31.2**





**CERTIFICATION**


**BY
      ZHENG SHEN PURSUANT TO SECURITIES EXCHANGE ACT RULE
      13A-14(A)**





I,
      Zheng
      Shen, certify that:





1.  I
      have
      reviewed this quarterly report on Form 10-QSB of Eternal Technologies Group,
      Inc.;





2.  Based
      on
      my knowledge, this report does not contain any untrue statement of a material
      fact or omit to state a material fact necessary to make the statements made,
      in
      light of the circumstances under which such statements were made, not misleading
      with respect to the period covered by this report;





3.  Based
      on
      my knowledge, the financial statements, and other financial information included
      in this report, fairly present in all material respects the financial condition,
      results of operations and cash flows of the registrant as of, and for, the
      periods presented in this report;





4.  The
      registrant's other certifying officers and I are responsible for establishing
      and maintaining disclosure controls and procedures (as defined in Exchange
      Act
      Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
      (as
      defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
      have:





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





(b)
            Designed
                such internal control over financial reporting, or caused such internal
                control over financial reporting to be designed under our supervision,
                to
                provide reasonable assurance regarding the reliability of financial
                reporting and the preparation of financial statements for external
                purposes in accordance with generally accepted accounting
                principles;





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





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





5.  The
      registrant's other certifying officers and I have disclosed, based on our most
      recent evaluation of internal control over financial reporting, to the
      registrant's auditors and the audit committee of the registrant's board of
      directors (or persons performing the equivalent functions):





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





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





Date:
      August 13, 2007





/s/
      ZHENG
      SHEN


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


Zheng
      Shen


Chief
      Financial Officer








16








****        **EXHIBIT
      32.1**





**CERTIFICATION
      OF PERIODIC FINANCIAL REPORT PURSUANT TO 18 U.S.C. SECTION
      1350**




For
      purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002, the undersigned, Jiansheng Wei, the chief executive
      officer of Eternal Technologies Group, Inc. (the "Company"), hereby certifies
      that, to his knowledge:




(i)  the
      Quarterly Report on Form 10-QSB of the Company for the quarterly period ended
      June 30, 2007, as filed with the Securities and Exchange Commission on the
      date
      hereof (the "Report") fully complies with the requirements of section 13(a)
      or
      15(d) of the Securities Exchange Act of 1934; and




(ii)  the
      information contained in the Report fairly presents, in all material respects,
      the financial condition and results of operations of the Company.




Date:
      August 13, 2007





/s/
      JIANSHENG WEI


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


Jiansheng
      Wei


Chief
      Executive Officer


17


**EXHIBIT
      32.2**





**CERTIFICATION
      OF PERIODIC FINANCIAL REPORT PURSUANT TO 18 U.S.C. SECTION
      1350**




For
      purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002, the undersigned, Zheng Shen, the chief financial
      officer of Eternal Technologies Group, Inc. (the "Company"), hereby certifies
      that, to his knowledge:




(i)  the
      Quarterly Report on Form 10-QSB of the Company for the quarterly period ended
      June 30, 2007, as filed with the Securities and Exchange Commission on the
      date
      hereof (the "Report") fully complies with the requirements of section 13(a)
      or
      15(d) of the Securities Exchange Act of 1934; and




(ii)  the
      information contained in the Report fairly presents, in all material respects,
      the financial condition and results of operations of the Company.




Date:
      August 13, 2007





/s/
      Zheng
      Shen


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


Zheng
      Shen


Chief
      Financial Officer