**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-QSB**





(Mark
      One)





x
            **Quarterly
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934.**




**For
      the quarter ended March 31, 2007**





**o**
            **Transition
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934.**




For
      the
      transition period from ________ to __________




Commission
      File Number: 000-30790





**CHINA
      YINGXIA INTERNATIONAL, INC.**


(Exact
      name of small business issuer as specified in its charter)




**Florida**
            **65-0664961**(State
                or other jurisdiction of incorporation or organization)
            (IRS
                Employee Identification No.)





**Harbin
                Yingxia Industrial Co., Ltd, No.300, Xidazhi Street Nangang, Harbin
                Heilongjiang F4 150001**(Address
                of principal executive offices)





**86
                451 86310948**(Issuer’s
                telephone number)





**c/o
                American Union Securities 100 Wall Street 15th Floor New York, NY
                10005**(Address
                of principal agent offices)





**(212)
                232-0120**(Agent’s
                telephone number)





(Former
      name, former address and former fiscal year, if changed since last
      report)




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
            Noo







Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).




Yes
            o
            Nox








The
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of May 14, 2007 is 33,608,857 shares of common stock.


1


**CHINA
      YINGXIA INTERNATIONAL** **,
      INC.**


**FORM
      10-QSB**





**TABLE
      OF CONTENTS**










**PART
                I - FINANCIAL INFORMATION**
            2Item
                1. Financial Statements
            3Item
                2. Management’s Discussion and Analysis or Plan of
                Operation
            4Item
                3. Controls and Procedures
            5**PART
                II - OTHER INFORMATION**
            6Item
                1. Legal Proceedings
            6Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            6Item
                3. Defaults Upon Senior Securities
            6Item
                4. Submission of Matters to a Vote of Security Holders
            6Item
                5. Other Information
            6Item
                6. Exhibits
            6**SIGNATURES**
            7






2


*Except
      as otherwise required by the context, all references in this report to "we",
      "us”, "our", “CYXI”,*  *“China* *Yingxia”
      or "Company" refer to the consolidated operations of China Yingxia
      International, Inc., a Florida corporation, and its wholly owned
      subsidiaries.*





**PART
      I - FINANCIAL INFORMATION**


**Item
        1.   **Financial
        Statements.****
  **CHINA
          YINGXIA INTERNATIONAL, INC.**
 **CONDENSED
          CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
          31, 2007 AND 2006**
 **(UNAUDITED)**
  3
 
 
 
 
 
  **CHINA
          YINGXIA INTERNATIONAL, INC.**
 **INDEX
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
          31, 2007 AND 2006**
 **(UNAUDITED)**
 
 
 **TABLE
          OF CONTENTS**
   **Page(s)**Condensed
                      Consolidated Balance Sheet as of March 31, 2007(Unaudited)
                  F-2Condensed
                      Consolidated Statements of Income (Loss) for the Three MonthsEnded
                      March 31, 2007 and 2006 (Unaudited)
                  F-3Condensed
                      Consolidated Statements of Cash Flows for the Three MonthsEnded
                      March 31, 2007 and 2006 (Unaudited)
                  F-4Notes
                      to Condensed Consolidated Financial Statements (Unaudited)
                  F-5
                      - F-11
 
 
 
 F-1
  **CHINA
            YINGXIA INTERNATIONAL, INC.**
  **CONDENSED
            CONSOLIDATED BALANCE SHEET (UNAUDITED)**
 **MARCH
            31, 2007**
 **ASSETS**Current
                      assets:Cash
                      and cash equivalents
                  
                  $
                  955,671Accounts
                      receivable
                  
                  
                  1,464Inventory
                  
                  
                  1,290,152Other
                      receivables
                  
                  
                  648,906Advances
                      to suppliers
                  
                  
                  611,737Loans
                      to related party
                  
                  
                  2,499,553Total
                      Current Assets
                  
                  
                  6,007,483Property
                      and equipment, net of accumulated depreciationof
                      $2,572,653
                  
                  
                  15,174,193Land
                      use right, net
                  
                  
                  392,659Total
                      Assets
                  
                  $
                  21,574,335**LIABILITIES
                      AND STOCKHOLDERS' EQUITY**Current
                      liabilities:Accounts
                      payable
                  
                  $
                  1,007,017Unearned
                      revenue
                  
                  
                  1,295Taxes
                      payable
                  
                  
                  34,857Accrued
                      expenses and other payables
                  
                  
                  558,042Total
                      Current Liabilities
                  
                  
                  1,601,211Total
                      Liabilities
                  
                  
                  1,601,211Stockholders'
                      EquityPreferred
                      stock, $0.001 par value, 10,000,000 shares authorized; - 0
                      -
                      sharesoutstanding
                      at March 31, 2007
                  
                  
                  -Common
                      stock, $0.001 par value, 100,000,000 shares
                      authorized;33,608,857
                      shares outstanding at March 31, 2007
                  
                  
                  33,609Additional
                      paid in capital
                  
                  
                  7,324,378Accumulated
                      other comprehensive income
                  
                  
                  1,132,987Statutory
                      reserves
                  
                  
                  901,463Retained
                      earnings
                  
                  
                  10,580,687Total
                      Shareholders' Equity
                  
                  
                  19,973,124Total
                      Liabilities and Stockholders' Equity
                  
                  $
                  21,574,335
  The
            accompanying notes are an  integral part of the condensed consolidated
            statements


F-2




**CHINA
        YINGXIA INTERNATIONAL, INC.**


**CONDENSED
        CONSOLIDATED STATEMENTS OF INCOME (LOSS)**


**(UNAUDITED)**


**For
                Three-Months Ended****March
                31,****2007**
            
            **2006**Sales
            
            $
            1,657,891
            
            $
            178,898Cost
                of Sales
            
            
            790,106
            
            
            186,738Gross
                Profit (Loss)
            
            
            867,785
            
            
            (7,840
            )Operating
                ExpensesSelling,
                general and administrative
            
            
            316,603
            
            
            106,063Operating
                income (loss)
            
            
            551,182
            
            
            (113,903
            )Other 
                (Expenses)
            
            
            (43
            )
            
            (28
            )Income
                (Loss) Before Income Taxes
            
            
            551,139
            
            
            (113,931
            )Provision
                for Income Taxes
            
            
            -
            
            
            -Net
                Income (Loss)
            
            $
            551,139
            
            $
            (113,931
            )Basic
                and diluted  income (loss) per common share
            
            $
            0.016
            
            $
            (0.003
            )Basic
                and diluted  weighted average common shares
                outstanding
            
            
            33,608,857
            
            
            45,188,044




The
        accompanying notes are an  integral part of the condensed consolidated
        statements








F-3




**CHINA
        YINGXIA INTERNATIONAL, INC.**




**CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS** **For
          the three months ended March 31, 2007 and 2006**





**2007**
            
            **2006****(Unaudited)**
            
            
            **(Unaudited)**Cash
                Flows From Operating Activities:Net
                income (loss)
            
            $
            551,139
            
            $
            (113,931
            )Adjustments
                to reconcile net income (loss) to net cashprovided
                by operating
                activities:Depreciation
                and amortization
            
            
            166,442
            
            
            123,232Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            (151
            )
            
            48,527Inventory
            
            
            (178,050
            )
            
            (38,690
            )Other
                receivable
            
            
            (302,131
            )
            
            (458,004
            )Advances
                to suppliers
            
            
            (166,483
            )
            
            (901,566
            )Prepaid
                expenses
            
            
            95,479
            
            
            4,022Accounts
                payable
            
            
            657,518
            
            
            (183,627
            )Unearned
                revenue
            
            
            1,295
            
            
            -Taxes
                payable
            
            
            34,857
            
            
            57,971Accrued
                expenses and other payables
            
            
            (2,423
            )
            
            1,668,069Cash
                provided by operating activities
            
            
            857,492
            
            
            206,002Cash
                Flows From Investing Activities:Purchase
                of property and equipment
            
            
            (1,811
            )
            
            -Purchase
                of land use right
            
            
            (98,579
            )
            
            -Collections
                on loans to related party
            
            
            265,046
            
            
            -Additions
                to construction in process
            
            
            (280,360
            )
            
            (146,831
            )Cash
                used in investing activities
            
            
            (115,704
            )
            
            (146,831
            )Effect
                of exchange rate changes on cash and cash equivalents
            
            
            136,016
            
            
            71,693Increase
                in cash and cash equivalents
            
            
            877,804
            
            
            130,864Cash
                and Cash Equivalents - Beginning
            
            
            77,867
            
            
            34,903Cash
                and Cash Equivalents - Ending
            
            $
            955,671
            
            $
            165,767Supplemental
                disclosures of cash flow information:1     Interest paid
            
            $
            -
            
            $
            -2    Income
              Taxes paid
            
            $
            -
            
            $
            -






The
        accompanying notes are an  integral part of the condensed consolidated
        statements
   F-4




**CHINA
        YINGXIA INTERNATIONAL, INC.**
 **CONDENSED
        CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)**
 **FOR
        THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006**












1.
      ORGANIZATION AND BASIS OF PRESENTATION





China
      Yingxia International, Inc. (the “Company” or “China Yingxia”) was incorporated
      under the laws of State of Florida on May 6, 1996 and formerly known as Agronix,
      Inc. (“Agronix”).




The
      Company operates its business through its wholly-owned subsidiary Harbin Yingxia
      Business Group Co., Ltd. (“Harbin Yingxia”), a Chinese company primarily engaged
      in the development, production and sales of organic agricultural by-products
      and
      nutritional health food products. Harbin Yingxia has several lines of products
      including organic food and produce, nutritional supplements, health care
      products and skin and beauty care products.





The
      accompanying financial statements and footnotes have been condensed and
      therefore do not contain all disclosures required by generally accepted
      accounting principles. The interim financial statements are unaudited; however,
      in the opinion of China Yingxia, the interim financial statements include all
      adjustments, consisting only of normal recurring adjustments, necessary for
      a
      fair statement of the results for the interim periods. Results for interim
      periods are not necessarily indicative of those to be expected for the full
      year. It is suggested that these condensed financial statements be read in
      conjunction with the December 31, 2006 audited financial statements and the
      accompanying notes thereto. While management believes that the procedures
      followed in preparing these condensed consolidated financial statements are
      reasonable, the accuracy of the amounts are in some respects dependent upon
      the
      facts that will exist, and procedures that will be accomplished by the Company
      later in the year.





2.
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




MANAGEMENT
      ESTIMATES




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







F-5


**CHINA
          YINGXIA INTERNATIONAL, INC.**
 **CONDENSED
          CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)**
 **FOR
          THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006**




2.
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)




PRINCIPLES
      OF CONSOLIDATION




The
      accompanying consolidated Financial Statements include the accounts of the
      Company and its wholly owned subsidiaries, Harbin Yingxia Business Group Co.,
      Ltd. All significant inter-company transactions and balances have been
      eliminated in consolidation.




INVENTORIES





Inventories
      are valued at the lower of cost or market with cost determined on a first-in
      first-out basis. Cost of work in progress and finished goods comprises direct
      material, direct production cost and an allocated portion of production
      overheads.




ADVANCE
      TO SUPPLIERS





Advance
      to suppliers represent the payments made and recorded in advance for goods
      and
      services. Advances were also made for the purchase of the materials and
      equipment of the Company’s construction in progress. The final phase of the
      construction is not completed. As such, no amortization was made.




REVENUE
      RECOGNITION





The
      Company recognizes revenue on product sales when products are delivered and
      the
      title passes to the customers and collection is reasonably assured.




CONCENTRATION
      OF CREDIT RISK





Financial
      instruments that potentially subject the Company to concentration of credit
      risk
      consist primarily of accounts receivable and other receivables. The Company
      does
      not require collateral or other security to support these receivables. The
      Company conducts periodic reviews of its clients' financial condition and
      customer payment practices to minimize collection risk on accounts receivable.





The
      operations of the Company are located in the People’s Republic of China (“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, as well as by the general state of the PRC economy.




F-6


**CHINA
          YINGXIA INTERNATIONAL, INC.**
 **CONDENSED
          CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)**
 **FOR
          THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006**




2.
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)




INCOME
      TAXES





The
      Company accounts for income tax under the provisions of SFAS No.109 "Accounting
      for Income Taxes", which requires recognition of deferred tax assets and
      liabilities for the expected future tax consequences of the events that have
      been included in the financial statements or tax returns. Deferred income taxes
      are recognized for all significant temporary differences between tax and
      financial statements bases of assets and liabilities. Valuation allowances
      are
      established against net deferred tax assets when it is more likely than not
      that
      some portion or all of the deferred tax asset will not be realized.





According
      to the Provisional Regulations of the People’s Republic of China on Income Tax,
      the Document of Reductions and Exemptions of Income Tax for the Company has
      been
      approved by the local tax bureau and the Management Regulation of Harbin
      Economic and Technological Development Zone for the reporting period. The
      Company was granted the status of wholly foreign-owned entity (“WFOE”) and
      therefore is exempt from income tax from January 1, 2004 through December 31,
      2007. The Company has also been approved to have its tax rate reduced by 50%
      from January 1, 2008 to December 31, 2010. As a result of this tax exemption,
      no
      income tax was accrued for the quarter ended March 31, 2007.




FOREIGN
      CURRENCY TRANSLATION





The
      functional currency for the Company’s operations in China is the Renminbi
      (“RMB”). Foreign currency transactions are translated at the applicable rates of
      exchange in effect at the transaction dates. Monetary assets and liabilities
      denominated in foreign currencies at the balance sheet date are translated
      at
      the applicable rates of exchange in effect at that date. Revenues and expenses
      are translated at the average exchange rates in effect during the reporting
      period.





Translation
      adjustments arising from the use of different exchange rates from period to
      period are included as a component of stockholders' equity as "Accumulated
      Other
      Comprehensive Income". Gains and losses resulting from foreign currency
      translations are included in Accumulated Other Comprehensive
      Income.





F-7


**CHINA
          YINGXIA INTERNATIONAL, INC.**
 **CONDENSED
          CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)**
 **FOR
          THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006**




**2**.
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)




NEW
      ACCOUNTING PRONOUNCEMENTS





In
      February 2006, the Financial Accounting Standards Board ( “ FASB ” )
      issued
      SFAS No. 155, Accounting for Certain Hybrid Financial Instruments, which amends
      SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities
      ( “ SFAS
      No.
      155), and SFAS No. 140, Accounting for Transfers and Servicing of Financial
      Assets and Extinguishments of Liabilities. SFAS No. 155 simplifies the
      accounting for certain derivatives embedded in other financial instruments
      by
      allowing them to be accounted for as a whole if the holder elects to account
      for
      the whole instrument on a fair value basis. SFAS No. 155 also clarifies and
      amends certain other provisions of SFAS No. 133 and SFAS No. 144. The Company
      does not expect the adoption of SFAS No. 155 to have a material impact on its
      financial position, results of operations or cash flows as the Company currently
      has no financial instruments within the scope of SFAS No. 155.





In
      March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of
      Financial Assets, an amendment of FASB Statement No. 140.” SFAS
      No. 156 requires an entity to recognize a servicing asset or liability each
      time it undertakes an obligation to service a financial asset by entering into
      a
      servicing contract under a transfer of the servicer’s financial assets that
      meets the requirements for sale accounting, a transfer of the servicer’s
      financial assets to a qualified special-purpose entity in a guaranteed mortgage
      securitization in which the transferor retains all of the resulting securities
      and classifies them as either available-for-sale or trading securities in
      accordance with SFAS No. 115, “Accounting for Certain Investments in Debt
      and Equity Securities” and an acquisition or assumption of an obligation to
      service a financial asset that does not relate to financial assets of the
      servicer or its consolidated affiliates. Additionally, SFAS No. 156
      requires all separately recognized servicing assets and servicing liabilities
      to
      be initially measured at fair value, permits an entity to choose either the
      use
      of an amortization or fair value method for subsequent measurements, permits
      at
      initial adoption a one-time reclassification of available-for-sale securities
      to
      trading securities by entities with recognized servicing rights and requires
      separate presentation of servicing assets and liabilities subsequently measured
      at fair value and additional disclosures for all separately recognized servicing
      assets and liabilities. SFAS No. 156 is effective for transactions entered
      into after the beginning of the first fiscal year that begins after
      September 15, 2006. This standard did not have a material impact on the
      Company’s consolidated financial position, results of operations, or cash
      flows.






F-8


**CHINA
          YINGXIA INTERNATIONAL, INC.**
 **CONDENSED
          CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)**
 **FOR
          THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006**


2.
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)





In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      No.
      157, Fair Value Measurements, (“FAS 157”). This Standard defines fair value,
      establishes a framework for measuring fair value in generally accepted
      accounting principles and expands disclosures about fair value measurements.
      FAS
      157 is effective for financial statements issued for fiscal years beginning
      after November 15, 2007 and interim periods within those fiscal years. The
      adoption of FAS 157 is not expected to have a material impact on the Company’s
      financial position, results of operations or cash flows.





In
      September 2006, the Securities and Exchange Commission (“SEC”) issued Staff
      Accounting Bulletin (“SAB”) No. 108, “Quantifying Misstatements.” SAB 108
      provides interpretative guidance on how public companies quantify financial
      statement misstatements. There have been two common approaches used to quantify
      such errors. Under an income statement approach, the “roll-over” method, the
      error is quantified as the amount by which the current year income statement
      is
      misstated. Alternatively, under a balance sheet approach, the “iron curtain”
method, the error is quantified as the cumulative amount by which the current
      year balance sheet is misstated. In SAB 108, the SEC established an approach
      that requires quantification of financial statement misstatements based on
      the
      effects of the misstatements on each of the company’s financial statements and
      the related financial statement disclosures. This model is commonly referred
      to
      as a “dual approach” because it requires quantification of errors under both the
      roll-over and iron curtain methods. SAB 108 is effective for the first fiscal
      year ending after November 15, 2006. The adoption of SAB 108 did not have a
      material impact on the Company’s consolidated financial position and results of
      operations.





3.
      PROPERTY, PLANT AND EQUIPMENT, NET





Property,
      plant and equipment consist of the following at March 31, 2007:








Machinery
                  & Equipment
              
              $
              2,410,581Automobiles
              
              
              352,206Cactus
                  Seedlings
              
              
              6,192,337Sub
                  total
              
              
              8,955,124Less:
                  Accumulated Depreciation
              
              
              (2,572,653
              )Construction
                  in progress
              
              
              8,791,722Total
                  property, plant & Equipment, net
              
              $
              15,174,193













F-9




**CHINA
          YINGXIA INTERNATIONAL, INC.**
 **CONDENSED
          CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)**
 **FOR
          THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006**






3.
      PROPERTY, PLANT AND EQUIPMENT, NET (Continued)





Depreciation
      expense for the three months ended March 31, 2007 and 2006 was $166,442 and
      $123,232, respectively.





Construction
      in progress represents direct costs of construction or acquisition and design
      fees incurred for the Company’s new plant and new office building project. All
      construction costs associated with this project are accumulated and capitalized
      as construction in progress. The construction in progress is closed out to
      the
      appropriate asset classification when the project is substantially complete,
      occupied, or placed into services. No depreciation is provided until it is
      completed and ready for its intended use. As of March 31, 2007, the costs
      involved with construction in progress amounted to $8,791,722.





4.
      RELATED PARTY LOANS





As
      of
      March 31, 2007, the Company has loans receivable from related parties in the
      amount of $ 2,499,553. All related party loans are provided to the affiliated
      retail stores or companies to facilitate the initial establishment of their
      businesses for selling the Company’s products. These loans are interest free and
      unsecured and have no fixed repayment dates. All these loans are expected to
      be
      fully repaid upon demand.





The
      management of the Company has been making the efforts to collect these loans.
      As
      of the date of this report, $922,592 has been collected and the remaining
      balance is expected to be fully repaid by the end of the second quarter of
      2007.
      No allowance is considered necessary at this time.





5.
      STOCKHOLDERS' EQUITY





Upon
      the
      completion of the reverse acquisition on May 12, 2006, the Company had
      93,003,153 outstanding shares of Common Stock, 1,473,469 shares of Class A
      Preferred Stock, of which each share is convertible into five hundred (500)
      shares of common stock.





On
      May
      26, 2006, the Company's board of directors had proposed a 1 to 24.9 reverse
      stock split on both the common stock and preferred stock, subject to shareholder
      approval. On July 21, 2006, the proposal was approved by the Company's
      shareholders, each 24.9 shares of the Company's Common Stock and Class A
      Preferred Stock were converted into one (1) share of Common Stock and one (1)
      share of Class A Preferred Stock, respectively. Simultaneously, all of the
      preferred shares were converted into common shares and the preferred shares
      were
      cancelled. As of March 31, 2007, there are 33,608,857 shares of common stock
      outstanding and no preferred stock. There were no other shares issued in the
      first quarter of 2007.










F-10





**CHINA
          YINGXIA INTERNATIONAL, INC.**
 **CONDENSED
          CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)**
 **FOR
          THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006**






6.
      COMMITMENTS AND CONTINGENCIES





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





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





The
      Company’s sales, purchases and expenses transactions are denominated in RMB and
      all of the Company’s assets and liabilities are also denominated in RMB. The RMB
      is not freely convertible into foreign currencies under the current law. In
      China, foreign exchange transactions are required by law to be transacted only
      by authorized financial institutions at exchange rates set by the People’s Bank
      of China, the central bank of China. Remittances in currencies other than RMB
      may require certain supporting documentation in order to affect the remittance.












F-11




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




*The
      following discussion should be read in conjunction with the Financial Statements
      and Notes thereto appearing elsewhere in this Form 10-QSB.*







**Safe
      Harbor Regarding Forward-Looking Statements**




*The
      following discussion contains forward-looking statements within the meaning
      of
      Section 27A of the Securities Act of 1933 and Section 21E of the Securities
      Exchange Act of 1934 relating to future events or our future performance. Actual
      results may materially differ from those projected in the forward-looking
      statements as a result of certain risks and uncertainties set forth in this
      prospectus. Although management believes that the assumptions made and
      expectations reflected in the forward-looking statements are reasonable, there
      is no assurance that the underlying assumptions will, in fact, prove to be
      correct or that actual results will not be different from expectations expressed
      in this report.*





**Results
      of Operations** ****


**For
        the Three Months Ended March 31, 2007 compared to the Three Months Ended
        March
        31, 2006** :
 
 ***Revenue***
 
 The
        Company  generated  $1,657,891  in net sales for the three
        months  ended March  31, 2007,  an  increase  of 
$1,478,993 or 826% as compared to the revenue of  $178,898  for the
        three months ended  March 31, 2006. As we continue our development plan to
        increase the number of franchisees who sell our products, we have been able
        to
        realize a significant increase in net sales base upon the increased number
        of
        franchisees in our distribution network. With both the calendar new year
        and the
        Lunar New Year occurring in the first quarter, our sales have traditionally
        experienced the seasonality trends and been lower compared to any other quarter
        of the year. Even with the seasonality factor due to extended holidays and
        extended vacations, we were able to experience significantly higher net sales
        due in part to our increased number of franchisees and also greater variety
        of
        product mix.
 
 ***Cost
        of Sales***
 
 The
        cost
        of sales was  $790,106  for the three months ended  March 31,
        2007,  an  increase  of  $603, 368 or 323% as  compared
        to the cost of sales of $186,738  for the three months ended  March
        31, 2006.  The increase in costs of sales during the three month period
        ended March 31 is fully attributable to the 826% increase in revenues. During
        the period ended March 31, 2006, as we were still expanding our franchisee
        base,
        we experienced higher cost of sales as a result of heavier discounts offered
        to
        new franchisees and fewer products with relatively lower margins compared
        to the
        same period in 2007. During the period ended March 31, 2007, with a greater
        number of franchisees to distribute our increased number of products through,
        we
        saw significant increases in both net sales and cost of sales.
 
 4
 ***Total
        Operating Expenses***
 
 Total
        operating  expenses were $316,603 for the three months ended March 31,
        2007,  an increase  of  $ 210,540
        or 198% as  compared to total  operating expenses of 
$106,063  for the three  months  ended  March 31,
        2006.  The  increase  in operating  expenses  was 
principally  attributable  to  the  expansion  of 
our operations. Our selling and administrative expenses rose with our higher
        revenues accordingly. Compared to the same period in 2006, in 2007 we
        experienced greater costs associated with the increased number of franchisees
        and also costs with the general and administrative expenses related to our
        newly
        completed company campus in Harbin.
 
 ***Net
        Income***
 
 Net
        income for the three months ended March 31, 2007 increased to $551,139 from
        a
        net loss of $113,931 for the three months ended March 31, 2006. Overall increase
        in income before income taxes for the three months period can be mainly
        attributed the expansion of our franchise sales network. Without approximately
        400 additional franchisees at March 31, 2007 compared to at March 31, 2006,
        we
        experienced higher net sales and in turn higher net income.
 **Liquidity
        and Capital Resources**




As
        of
        March 31, 2007, the Company had cash and cash equivalents of $955,671, as
        compared to $ 77,867 at
        December 31, 2006. As of March 31, 2007, the Company had working capital
        of
        $  4,406,272,
        as compared to $ 3,933,427
        as of **** December
        31, 2006.
 
 Net
        cash
        provided by operating activities totaled $857,492 for the three months ended
        March 31, 2007, a increase of $651,490 or 316%, as compared to cash provided
        by
        operating activities of $206,002 for the three months ended March 31,
        2006.  The increase in net cash from operations is due to the increase in
        net income which increased to a net income of $665,070compared to a net loss of $113,931 in the same period year on year,
        the
        change in accounts payables of $657,518 provided compared to $183,627 used
        in
        operating activities year on year, and the change in accrued expenses and
        other
        payables of $2,423 used in compared to $1,668,069 provided by operating
        activities year on year. Cash used in inventory also increased from $38,690
        to
        $178,050 as we added over 100 new products at the period ended March 31,
        2007
        compared to March 31, 2006.
  Net
          cash
          used in investing activities totaled $115,704 for the three months ended
          March
          31, 2007, an decrease of $31,127
          or 21%, as compared to $146,831 for the three months ended March 31, 2006.
          During the three month period ended March 31, 2007, we were able to collect
          loans from related parties which resulted in overall lowered cash used
          in
          investing activities.
 
 Net
        cash
        used in financing activities were nil for the three months ended March 31,
        2007
        as compared to nil for the three months ended March 31, 2006.




**Off-Balance
      Sheet Arrangements**





We
      do not
      have off-balance sheet arrangements, financings, or other relationships with
      unconsolidated entities or other persons, also known as “special purpose
      entities” (SPEs).





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




**Evaluation
      of Disclosure Controls and Procedures**





Under
      the
      supervision and with the participation of our management, including our
      principal executive officer and principal financial officer, we conducted an
      evaluation of our disclosure controls and procedures, as such term is defined
      under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
      Exchange Act of 1934, as amended (Exchange Act), as of March 31, 2007. Based
      on
      this evaluation, our principal executive officer and principal financial officer
      have concluded that our disclosure controls and procedures are effective to
      ensure that information required to be disclosed by us in the reports we file
      or
      submit under the Exchange Act is recorded, processed, summarized, and reported
      within the time periods specified in the Securities and Exchange Commission's
      rules and forms and that our disclosure and controls are designed to ensure
      that
      information required to be disclosed by us in the reports that we file or submit
      under the Exchange Act is accumulated and communicated to our management,
      including our principal executive officer and principal financial officer,
      or
      persons performing similar functions, as appropriate to allow timely decisions
      regarding required disclosure.






**Changes
        in Internal Controls**
 
 There
        were no changes (including corrective actions with regard to significant
        deficiencies or material weaknesses) in our internal controls over financial
        reporting that occurred during the fiscal quarter ended March 31, 2007 that
        has
        materially affected, or is reasonably likely to materially affect, our internal
        control over financial reporting.





5





**PART
      II - OTHER INFORMATION**


**Item
        1.    **Legal
        Proceedings.****
  To
        the
        best of our knowledge, neither the Company nor any of its subsidiaries is
        a
        party to any pending or threatened legal proceedings.




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




None.




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


None.




**Item
        4.** **Submission
        of Matters to a Vote of Security Holders.**
  None.




**Item
        5.   **Other
        Information.****


None.




**Item
        6.   **Exhibits.****


**Exhibit No.**
            
            **Title
                of Document**31.1
            
            Certification
                pursuant to Section 302 of Sarbanes Oxley Act of 200232.1
            
            Certification
                pursuant to Section 906 of Sarbanes Oxley Act of
                2002







6






**SIGNATURES**




In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, there unto duly
      authorized.






**CHINA
                YINGXIA INTERNATIONAL, INC.**Date: May
              15,
              2007
            By:
            /s/ 
              *Yingxia Jiao*Yingxia
              JiaoChief
                Executive Officer,
              Chief
                  Financial Officer















7