**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
 _____________________
  **F** **ORM
        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 June 30, 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 China 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
                  ]
              No
                  [  ]
 
  Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act).
  Yes
              [  ]
              No
                  [ x ]
 
 
 The
        number of shares outstanding of each of the issuer’s classes of common equity,
        as of August 14, 2007 is 35,674,657 shares of common
        stock.
  
   
 **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
              11Item
                  3. Controls and Procedures
              12**PART
                  II - OTHER INFORMATION**
              13Item
                  1. Legal Proceedings
              13Item
                  2. Unregistered Sales of Equity Securities and Use of
                  Proceeds
              13Item
                  3. Defaults Upon Senior Securities
              13Item
                  4. Submission of Matters to a Vote of Security Holders
              13Item
                  5. Other Information
              13Item
                  6. Exhibits
              13**SIGNATURES**
              14
   
 
 *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**
 **JUNE
          30, 2007  AND  2006**
 **(UNAUDITED)**
 
 
 
 
 
 1
 
 
 
 
 
 
 
 
 **CHINA
          YINGXIA INTERNATIONAL, INC.**
 **INDEX
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **JUNE
          30, 2007 AND 2006**
 **(UNAUDITED)**
 
 
 **TABLE
          OF CONTENTS**
  **Page(s)**Condensed
                      Consolidated Balance Sheet as of June 30, 2007 (Unaudited)
                  3Condensed
                        Consolidated Statements of Income for the Six
                        Months   And Three Months Ended June 30, 2007 and
                      2006 (Unaudited)
                  4Condensed
                        Consolidated Statements of Cash Flows for the Six
                        Months
                    Ended June 30, 2007 and 2006 (Unaudited)
                  5Notes
                      to Condensed Consolidated Financial Statements (Unaudited)
                  6-10
 
  2
  **CHINA
            YINGXIA INTERNATIONAL, INC.**
 CONDENSED
          CONSOLIDATED BALANCE SHEET
          (UNAUDITED)  **JUNE
            30, 2007**
 **ASSETS**Current
                    assets:Cash
                    and cash equivalents
                
                $
                100,296Inventory
                
                
                2,004,655Other
                    receivables
                
                
                1,619,877Advances
                    to suppliers
                
                
                3,809,850Loans
                    to related party
                
                
                1,565,923Total
                    Current Assets
                
                
                9,100,602Property
                    and equipment, net of accumulated depreciationof
                    $2,779,156
                
                
                15,419,531Land
                    use right, net
                
                
                396,361Total
                    Assets
                
                $
                24,916,494**LIABILITIES
                    AND STOCKHOLDERS' EQUITY**Current
                    liabilities:Accounts
                    payable
                
                $
                1,597,108Unearned
                    revenue
                
                
                1,314Taxes
                    payable
                
                
                48,397Accrued
                    expenses and other payables
                
                
                519,281Total
                    Current Liabilities
                
                
                2,166,100Total
                    Liabilities
                
                
                2,166,100Stockholders'
                    EquityPreferred
                    stock, $0.001 par value, 10,000,000 shares authroized; - 0 -
                    sharesoutstanding
                    at June 30, 2007
                
                
                -Common
                    stock, $0.001 par value, 100,000,000 shares authorized;33,608,857
                    shares outstanding at June 30, 2007
                
                
                33,609Additional
                    paid in capital
                
                
                7,324,877Accumulated
                    other comprehensive income
                
                
                1,455,699Statutory
                    reserves
                
                
                901,463Retained
                    earnings
                
                
                13,034,746Total
                    Shareholders' Equity
                
                
                22,750,393Total
                    Liabilities and Stockholders' Equity
                
                $
                24,916,494
  The
          accompanying notes are an integral part of the condensed consolidated
          statements
 
 3
 **CHINA
          YINGXIA INTERNATIONAL, INC.**
 **CONDENSED
          CONSOLIDATED STATEMENTS OF INCOME**
 **(UNAUDITED)**
 **Six-Month
                      EndedJune
                      30,**
                
                
                **Three-Month
                      Ended June 30,****2007**
                
                
                **2006**
                
                
                **2007**
                
                
                **2006**Sales
                
                $
                6,867,039
                
                
                $
                3,450,960
                
                
                
                5,227,933
                
                
                $
                3,270,876Cost
                    of Sales
                
                
                3,099,185
                
                
                
                1,275,992
                
                
                
                2,317,113
                
                
                
                1,089,255Gross
                    Profit
                
                
                3,767,855
                
                
                
                2,174,968
                
                
                
                2,910,820
                
                
                
                2,181,621Operating
                    ExpensesResearch
                    & Development Expense
                
                
                134,739
                
                
                
                -
                
                
                
                135,452
                
                
                
                -Selling,
                    general and administrative
                
                
                628,236
                
                
                
                207,943
                
                
                
                311,605
                
                
                
                119,009Operating
                    income
                
                
                3,004,880
                
                
                
                1,967,025
                
                
                
                2,463,763
                
                
                
                2,062,612Other
                    Income and Expenses
                
                
                318
                
                
                
                (25,297
                )
                
                
                364
                
                
                
                (24,720
                )Income
                    Before Income Taxes
                
                
                3,005,198
                
                
                
                1,941,728
                
                
                
                2,464,127
                
                
                
                2,037,892Provision
                    for Income Taxes
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Net
                    Income
                
                $
                3,005,198
                
                
                $
                1,941,728
                
                
                $
                2,464,127
                
                
                $
                2,037,892Basic
                    and diluted income per common share
                
                $
                0.09
                
                
                $
                0.52
                
                
                $
                0.07
                
                
                $
                0.55Basic
                    and diluted weighted average common shares outstanding
                
                
                33,608,857
                
                
                
                3,735,066
                
                
                
                33,608,857
                
                
                
                3,735,066
  
  The
          accompanying notes are an integral part of the condensed consolidated
          statements
  4
  **CHINA
          YINGXIA INTERNATIONAL, INC.**
 **CONDENSED
          CONSOLIDATED STATEMENTS OF CASH FLOWS**
 **For
          the six months ended June 30, 2007 and 2006**
 **2007**
                    
                    
                    **2006****(Unaudited)**
                    
                    
                    **(Unaudited)**Cash
                        Flows From Operating Activities:Net
                        income
                    
                    
                    $
                    3,005,198
                    
                    
                    $
                    1,941,728Adjustments
                        to reconcile net income to net cashprovided
                        by (used in) operating activities:Depreciation
                        and amortization
                    
                    
                    
                    337,794
                    
                    
                    
                    272,549Changes
                        in operating assets and liabilities:Accounts
                        receivable
                    
                    
                    
                    1,314
                    
                    
                    
                    45,026Inventory
                    
                    
                    
                    (892,553
                    )
                    
                    
                    (593,277
                    )Other
                        receivable
                    
                    
                    
                    (1,273,102
                    )
                    
                    
                    (583,024
                    )Advances
                        to suppliers
                    
                    
                    
                    (3,364,596
                    )
                    
                    
                    (1,364,467
                    )Prepaid
                        expenses
                    
                    
                    
                    95,479
                    
                    
                    
                    (6,543
                    )Accounts
                        payable
                    
                    
                    
                    1,247,610
                    
                    
                    
                    (167,266
                    )Unearned
                        revenue
                    
                    
                    
                    1,314
                    
                    
                    
                    -Taxes
                        payable
                    
                    
                    
                    48,397
                    
                    
                    
                    48,140Accrued
                        expenses and other payables
                    
                    
                    
                    (41,184
                    )
                    
                    
                    773,734Cash
                        provided by (used in) operating activities(834,331
                    )
                    
                    
                    366,600Cash
                        Flows From Investing Activities:Purchase
                        of property and equipment
                    
                    
                    
                    (57,864
                    )
                    
                    
                    (109,568
                    )Purchase
                        of land use right
                    
                    
                    
                    (102,282
                    )
                    
                    
                    -Collections
                        on loans to related party
                    
                    
                    
                    1,198,676
                    
                    
                    
                    -Additions
                        to construction in process
                    
                    
                    
                    (545,353
                    )
                    
                    
                    (278,136
                    )Cash
                        provided by (used in) investing activities
                    
                    
                    
                    493,176
                    
                    
                    
                    (387,704
                    )Cash
                        Flows From Financing Activities:Payment
                        of notes payable
                    
                    
                    
                    -
                    
                    
                    
                    (111,982
                    )Cash
                        used in financing activities
                    
                    
                    
                    -
                    
                    
                    
                    (111,982
                    )Effect
                        of exchange rate changes on cash and cash equivalents
                    
                    
                    363,584
                    
                    
                    
                    154,584Increase
                        in cash and cash equivalents
                    
                    
                    
                    22,429
                    
                    
                    
                    21,498Cash
                        and Cash Equivalents - Beginning
                    
                    
                    
                    77,867
                    
                    
                    
                    37,903Cash
                        and Cash Equivalents - Ending
                    
                    
                    $
                    100,296
                    
                    
                    $
                    56,401Supplemental
                        disclosures of cash flow information:1
                    
                    Interest
                        paid
                    
                    
                    $
                    -
                    
                    
                    $
                    25,5452
                    
                    Income
                        Taxes paid
                    
                    
                    $
                    -
                    
                    
                    $
                    -
   The
              accompanying notes are an integral part of the condensed consolidated
              statements
    5
  **CHINA
                YINGXIA INTERNATIONAL, INC.**
 **CONDENSED
                CONSOLIDATED NOTES TO FINANCIAL
                STATEMENTS  (UNAUDITED)**
 **FOR
                THE SIX MONTHS ENDED
                JUNE 30, 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.
 
  6
  **CHINA
                    YINGXIA INTERNATIONAL, INC.**
 **CONDENSED
                    CONSOLIDATED NOTES TO FINANCIAL
                    STATEMENTS  (UNAUDITED)**
 **FOR
                    THE SIX MONTHS ENDED
                    JUNE 30, 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.
 
 7
 
 **CHINA
                    YINGXIA INTERNATIONAL, INC.**
 **CONDENSED
                    CONSOLIDATED NOTES TO FINANCIAL
                    STATEMENTS  (UNAUDITED)**
 **FOR
                    THE SIX MONTHS ENDED
                    JUNE 30, 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 three and six months ended June 30,
                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.
 
 8
  **CHINA
                    YINGXIA INTERNATIONAL, INC.**
 **CONDENSED
                    CONSOLIDATED NOTES TO FINANCIAL
                    STATEMENTS  (UNAUDITED)**
 **FOR
                    THE SIX MONTHS ENDED
                    JUNE 30, 2007 AND 2006**
  **2.
                SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**
  **NEW
                ACCOUNTING PRONOUNCEMENTS**
 
 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.
 
 In
                February 2007, the FASB issued SFAS No. 159, “The Fair Value Option
                for Financial Assets and Financial Liabilities — Including an Amendment of
                FASB Statement No. 115,” which is effective for fiscal years beginning
                after November 15, 2007. This statement permits an entity to choose to
                measure many financial instruments and certain other items at fair
                value at
                specified election dates. Subsequent unrealized gains and losses
                on items for
                which the fair value option has been elected will be reported in
                earnings. We
                are currently evaluating the potential impact of this statement.
 
 **3.
                PROPERTY, PLANT AND EQUIPMENT, NET**
 
 Property,
                plant and equipment consist of the following at June 30, 2007:
 
 Machinery
                        &
                        Equipment
                      
                      $
                      2,482,559Automobiles
                      
                      
                      357,351Cactus
                        Seedlings
                      
                      
                      6,302,062Sub
                          total
                      
                      
                      9,141,972Less:
                        Accumulated
                        Depreciation
                      
                      
                      (2,779,156
                      )Construction
                        in
                        progress
                      
                      
                      9,056,715Total
                        property, plant & Equipment,
                        net
                      
                      $
                      15,419,531
  
 Depreciation
                expense for the six months ended June 30, 2007 and 2006 was $337,794
                and
                $272,549, 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 June 30, 2007,
                the costs
                involved with construction in progress amounted to $9,056,715.
 
 **4.
                RELATED PARTY LOANS**
  As
                of
                June 30, 2007, the Company has loans receivable from related parties
                in the
                amount of $1,565,923. 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.
                During the six months ended June 30, 2007, a net amount of $1,198,676
                has been
                collected and the remaining balance is expected to be fully repaid
                by the end of
                2007. No allowance is considered necessary at this time.
   
 9
  **CHINA
                      YINGXIA INTERNATIONAL, INC.**
 **CONDENSED
                      CONSOLIDATED NOTES TO FINANCIAL
                      STATEMENTS  (UNAUDITED)**
 **FOR
                      THE SIX MONTHS ENDED
                      JUNE 30, 2007 AND 2006**
  **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 June 30, 2007, there are 33,608,857 shares of common
                stock
                outstanding and no preferred stock. There were no other shares issued
                for the
                six months ended June 30, 2007.
 
 **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.
 
 **7.
                SUBSEQUENT EVENT**
 
 On
                July
                16, 2007, The Company completed the sale of 1,000,000 Units of securities
                to a
                total of 3 investors. Each "Unit" included two shares of common stock
                and one
                common stock purchase warrants exercisable at $1.50.
 
 The
                Units
                were sold for a price of $2.00 per Unit, yielding gross proceeds
                of $2,000,000
                from the sale of the Units. The Company incurred approximately $20,000
                in legal
                and other expenses. Therefore, the net proceeds of the offering realized
                by the
                Company were $1,980,000.
 
 On
                August
                9, 2007 China Yingxia International, Inc. completed another sale
                of Units of
                securities to a total of twenty investors. Each Unit consisted of
                250,000 shares
                of common stock and warrants to purchase 125,000 shares of common
                stock,
                exercisable at $2.00 per share.
 
 The
                Units
                were sold for a price of $250,000 per Unit, yielding gross proceeds
                of
                $8,725,130 from the sale of the Units.  After deducting the
                commissions and legal expenses,  the Company received the net proceeds
                of $7,590,863 through this offering.
  10
  **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**
 
 Results
        of Operations  for the Six and Three Months Ended June 30, 2007
        compared to the Six and Three Months Ended June 30, 2006
 
 **Revenue**
  For
          the
          three months ended June 30, 2007, net sales totaled $5,227,933, an increase
          of
          $1,957,057 or 59.8% as compared to revenues of $3,270,876 for the three
          months
          ended June 30, 2006.
 This
        increase is directly attributable to the increase in the number of our
        distributors and the expansion of our product lines.
 
 During
        the quarter ended June 30, 2007, our products were sold through approximately
        650 franchisees, as compared to 300 during the same period in the prior year.
        These are franchisees who purchase our products and sell them on an exclusive
        basis in store fronts or market kiosks. Our initial franchise fee also includes
        discounted inventory and the designation of an exclusive regional territory
        to
        the individual. Franchises are granted on provincial, regional, and township
        levels.
 
 Our
        product mix also increased to include personal care products, cosmetics,
        and
        nutritional foods including Nestle cereals and drinks. During the same period
        in
        2006, our product mix was limited to cactus based supplements and millet
        and
        rice products.
  For
          the
          six months ended June 30, 2007, net sales totaled $6,867,039, an increase
          of
          $3,416,079 or 98.9% as compared to revenues of $3,450,960 for the three
          months
          ended June 30, 2006.
 
 This
          increase is mainly due to the dramatic rise in sales during the first quarter
          of
          this year when we
          realized net sales of $ 1,657,891
          as compared to $178,898 in the first quarter of 2006. Historically,
          the first quarter of our fiscal year has been the quarter which has accounted
          for the least revenue in part to the calendar New Year and Lunar New Year
          causing extended holidays and vacation schedules. We typically show a
          significant jump in revenues in the second quarter as a result of the return
          to
          a normal work schedule.
 By
        the
        end of the second quarter of 2007, we estimate our distribution network to
        have
        reached 650 franchisees. This is approximately an increase of 150 franchisees
        from the end of December 31, 2006, and an increase of approximately 575
        franchisees from the end of December 31, 2005.
 
 We
        estimate that the 150 newly added franchisees for the six months in 2007
        accounted for approximately 11% of total revenues in the six month period.
        The
        425 franchisees added during the fiscal year 2006 accounted for 36% of total
        revenues, while the 75 franchisees we maintained at the end of fiscal year
        2005
        accounted for approximately 44% of total revenues. We define an active
        franchisee as an individual or entity that places reorders within a three
        month
        period. Given that definition, we estimate our franchisee retention rate
        to
        exceed 90%.
  ***Cost
        of Sales***
  The
          cost
          of revenue was $2,317,113 for the three months ended June 30, 2007, an
          increase
          of $1,227,888 or 112.7% as compared to $1,089,255 for the three months
          ended
          June 30, 2006.
 
 Our
          cost
          of sales in the quarter increased at a higher rate than net sales. Among
          the
          reasons for the faster growth in cost of goods sold include the fact that
          the
          number of Stock Keeping Units increased from approximately 60 to 190. New
          products have significantly added to total revenues, but many of the new
          products we added have lower margins than our original products. On average,
          our
          cactus based nutraceutical products which we have been selling since inception
          have gross margins of upwards of 60% while the products we added in the
          second
          half of 2006 and early 2007 including the personal care
          items, Nestle foods
          and drinks, and millets and other health foods carry on the low end gross
          margins of 30% and on the high end gross margins of 40%. We
          expect
          the new products to be introduced in the second half of 2007 including
          organic
          rice and soybean milk and other food products to have margins on average
          to be
          higher than the products we added in the second half of 2006.
 
 The
          cost
          of revenue was $3,099,185 for the six months ended June 30, 2007, an increase
          of
          $1,823,193 or 142.9% as compared to the cost of revenue of $1,275,992 for
          the
          six months ended June 30, 2006.
 As
        mentioned earlier, with the addition of new products, we experienced higher
        cost
        of sales. During the first half of 2006, we estimate that cactus related
        products accounted for approximately 70% of total revenues while during the
        same
        period in 2007, cactus related products accounted of roughly 49% of total
        revenues. During this period, nutritional foods and supplements accounted
        for
        approximately 28% of revenues, while the balance of revenues is distributed
        among cosmetics (3%), personal care products (12%), and Nestle products (8%).
        As
        we move away from the heavy concentration of cactus based products, our cost
        of
        sales increased accordingly with the addition of the new nutraceutical
        foods.
 
 ***Total
        Operating Expenses***
  Total
          operating expenses were $447,057 for the three months ended June 30, 2007,
          an
          increase of $328,048 or 275.6% as compared to total operating expenses
          of
          $119,009 for the three months ended June 30, 2006.
  Our
          operating expenses are divided into research and development expenses and
          selling and general and administrative expenses. Research and development
          expenses were associated with our in-house testing and analysis of current
          supplement products and the application of tests toward new health related
          products. In the same period in 2006, we did not conduct any in-house research
          and development. We note that research and development expenses in the
          three
          month period ended June 30, 2007 totaled $135,452 while for the entire
          six month
          period ended June 30, 2007, the expenses totaled $134,739. This is due
          to the
          use of different average currency calculation rates used in the translation
          of
          the Chinese currency, RMB, to US dollar currency. The
          average exchange rate for the three month period was approximately 7.78
          RMB/1
          USD while the average exchange rate for the six month period was approximately
          7.82 RMB/1 USD. Therefore, in reality ,
          the
          total research and development expenses were the
          same in both periods.
 
 11
  Total
          operating expenses were $762,975 for the six months ended June 30, 2007,
          an
          increase of $555,032 or 266.9% as compared to total operating expenses
          of
          $207,943 for the six months ended June 30, 2006.
 
 Overall,
          selling and general and administrative expenses increased in correlation
          with
          the increase in revenue, the increase in the number of franchisees, and with
          the
          increased expenditures associated with the launch of new products in the
          second
          half of the year.
  Approximately
          56% of these costs were spread out among salaries to employees, travel
          expenses
          related to the recruitment and training of new franchisees, internal product
          inspection costs, and costs associated with investor relations. We
          added
          an additional 34 sales and marketing team members to promote our new organic
          rice and soybean milk and yogurt products to be launched in the second
          half of
          2007. Salaries for new staff personnel and their travel expenses totaled
          approximately $55,000. Internal product inspection costs totaled $30,000.
          The
          fees associated with the investor relations firm engaged in March totaled
          $34,000 for the six month period. In addition, travel and accommodation
          expenses
          to the US for conferences and expositions totaled $7,000. Advertising costs
          for
          products to be introduced in the second half of the year included TV commercials
          and internet advertising. These expenses approximately totaled
          $131,000. Depreciation expense totaled $337,794 or about 44% of total operating expenses
          in this six month period.
  ***Net
        Income***
 
 Net
          income for the three months ended June 30, 2007 increased by $426,235 or
          20.9%
          to $2,464,127 from $2,037,892 for the three months ended June 30,
          2006.
 Net
        income in the three month period ended June 30, 2007 increased as a result
        of
        the addition of 150 new franchisees and the continued activity of the 500
        existing franchisees from the end of 2006.
  Net
          income for the six months ended June 30, 2007 increased by $ 1,063,470
          or 54.7%
          to $3,005,198 from $1,941,728 for the six months ended June 30, 2006.
  In
          the
          six months ended June 30, 2007, our increase in net income was more dramatic
          in
          the first three months where we saw realized net income of $551,139 as
          compared
          to a net loss of $113,931. As we became publicly listed in May of 2006,
          we
          believe that during the first quarter in 2007, we were able to overcome
          the
          stagnancy we typically see during the quarter as a result of the extended
          holiday schedules in comparison to the first quarter of 2006 when we were
          still
          private and were not able to promote ourselves as a public company. This
          promotion led to the sharp increase of the number of franchisees and in
          turn
          increase in revenues which ultimately generated high net income for the
          Company.
  **Liquidity
        and Capital Resources**
  As
          of
          June 30, 2007, the Company had cash and cash equivalents of $100,296 ,
          as
          compared to $77,867 at December 31, 2006. As of June
          30,
          2007 ,
          the
          Company had working capital of $6,934,502, as compared to $3,933,427 as
          of
          December 31, 2006.
 
 **Net
          cash flow used in operating activities** totaled
          $834,331 for the six months ended June 30, 2007, as compared to cash provided
          by
          operating activities of $366,600 for the six months ended June 30,
          2006.
  During
          the six months end June 30, 2007, we underwent a major shift in the scale
          of our
          operations. As of May 2007, the Company completed the phase of construction
          of
          its new 54,000 square meter campus in Harbin which includes office spaces,
          manufacturing facilities for its nutritional food products, and its research
          and
          development center. Total
          construction in progress for the facilities has exceeded $9 million and
          has been
          financed primarily by our management team.
 The
        Company during this period had significant expenditures in preparation for
        the
        official launch of its two new products: organic rice aimed at diabetics
        and soybean yogurt and milk products in the second half of 2007.
  The
          increase in other receivables by $1,273,102 is due to the establishment
          of sales
          and marketing companies for our soybean products and the payment toward
          the
          acquisition of the patent a new strain of organic rice. Approximately $526,000
          was spent on the creation of sales centers for our soybean milk (Shenzhen
          Wang
          Zhan You milk sales center) and organic rice (Jiangsu East River Town Rice
          sales
          center). These sales centers are responsible for the management and control
          of
          operations for the distribution of these new products. The
          Shenzhen sales center required approximately $262,000 for the leasing of
          office
          space, equipment, working capital, and personnel to establish the Company’s main
          management center in the southern region for its soybean milk products.
          The
          Jiangsu sales center oversees the planting and harvesting of the organic
          rice
          along with the marketing force behind the product. The Company expects
          to
          realize revenues for these expenditures by the end of 2007.
  The
          increase in inventory by $892,553 is mostly due to the raw materials needed
          for
          the processing and packaging of soybean yogurt and milk products. We
          maintain approximately 1,080 tons of soybeans in our inventory which is
          valued
          at $473,684. The packaging materials total approximately $131,578. We estimate
          by year’s end, at least 800 tons of soybeans will be sold.
  An
        additional $263,000 was paid to Nanjing Agricultural University as part of
        a deposit for the acquisition of the patent of the W3660 strain of organic
        rice with lower levels of soluble albumins aimed at diabetics. The total
        amount
        to be paid for the patent is $5 million RMB or approximately $657,000 USD.
        This
        patent gives the Company exclusive rights in the marketing and use of the
        new
        strain of rice.
 
 The
          increase in advances to suppliers of $3,364,596 is comprised of prepayments
          we
          made to farmers to plant and harvest soybeans and rice and other various
          millet
          and grains for our nutritional food products and also ongoing additions
          to
          production lines at our new campus. Approximately
          $1,710,526 of the advances to suppliers is prepayments to the farmers.
          Our
          arrangement with the farmers consists of written agreements to plant and
          harvest
          crops based upon our commitment to pay for the seeds and materials the
          farmers
          require in the process. When the farmers sell the harvested crops to us,
          we
          deduct the costs of the seeds and materials from the purchase
          prices.  Approximately
          1,315,789 of the advances to suppliers is ongoing construction of production
          lines for our existing and new products at our manufacturing
          facilities.
  The
        increase in accounts payables of $1,247,610 are due in part to the increase
        in
        the added needs of the Company to have third party companies provided the
        packaging and manufacture of our prepared foods.
  Specifically,
        approximately $307,000 was paid to Yatai Food Company for the processing
        and
        packaging of grain noodles and millet crackers.  In general, the
        Company has the capability to manufacture products with its own equipment
        for
        raw goods including the packaging of grains and millet. However, for the
        preparation of foods including noodles, crackers, wafers and other sorts
        of
        processed foods, the Company still heavily depends on third party contractors.
        Given the major increase in sales and the total number units of products
        shipped
        to franchisees, the Company’s account payables increased
        accordingly.
  **Net
          cash provided by investing activities** totaled
          $493,176 for the six months ended June 30, 2007, as compared to net cash
          used in
          investing activities of $387,704 for the six months ended June 30,
          2006.
 During
          the six months ended June 30, 2007, we were able to collect $1,198,676
          in loans
          from various related parties. These parties included loans to individual
          franchisees who we financed to support their business on a startup level. As
          part
          of the terms of the recent capital raised from investors in August 2007,
          we are
          required to fully collect these loans to related parties by the end of
          the
          calendar year.
  Net
          cash
          used in financing activities were nil
          for the six months ended June 30, 2007, as compared to $111,982 for the
          six
          months ended June 30, 2006. This amount was attributed to the payment of
          the
          principal balance of a three-year loan from the local
          government.
 
 **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.
 
 
 12
 **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
  
  13
  **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: August
                  14, 2007
              By:
              /s/ 
                  *Yingxia Jiao*Yingxia
                  JiaoChief
                  Executive Officer,
                Chief
                  Financial Officer
      
  14