UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
________________________________________________________________________________

                                   FORM 10-QSB

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
ACT OF 1934

                 For the First Quarter Ended September 30, 2005


[ ] 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 333-119034

                           CHINA HEALTH HOLDING, INC.
        (Exact name of small business issuer as specified in its charter)

                     NEVADA                                98-0432681
 (State or other jurisdiction of incorporation           (IRS Employer
                 or organization)                      Identification No.)


SUITE 600 - 666 BURRARD STREET, PARK PLACE                     (604) 608-6788
 VANCOUVER, BRITISH COLUMBIA, CANADA            V6C 2X8          (Issuer's
(Address of principal executive office)      (Postal Code)    telephone number)

                           Julianna Lu, B.Sc. & M.Sc.
                             Chief Executive Officer
                     666 Burrard St., Park Place, Suite 600
                   Vancouver, British Columbia, Canada V6C 2X8
                               Phone 604-608-6788

                                 WITH COPIES TO:

                             Richard Friedman, Esq.
                       Sichenzia Ross Friedman Ference LLP
                           1065 Avenue of the Americas
                            New York, New York 10018
                               Phone 212-930-9700


Securities registered under Section 12(b) of the Exchange Act:

Securities registered under Section 12(g) of the Exchange Act:

Indicate by check mark whether the issuer (1) has filed all reports  required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the  preceding 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 ]

Total revenues for quarter ended September 30, 2005 were $0.

As of November 10, 2005 there were 44,722,290 shares of issuer's common stock
issued and outstanding.
________________________________________________________________________________
<PAGE>
                           CHINA HEALTH HOLDING, INC.
                                   FORM 10-QSB
                 For the Fiscal Quarter Ended September 30, 2005
________________________________________________________________________________

Part I
                                                                           Page
                                                                           ----

Item 1.  Financial Statements.                                               3

Item 2.  Management's Discussion and Analysis or Plan of Operations.        19

Item 3.  Controls and Procedures                                            33

Part ll
                                                                           Page
                                                                           ----

Item 1.  Legal Proceedings.                                                 34

Item 2.  Unregistered Sale of Equity Securities and Use of Proceeds         34

Item 3.  Defaults Upon Senior Securities                                    34

Item 4.  Submission of Matters to a Vote of Security Holders.               34

Item 5.  Other Information                                                  34

Item 6. Exhibits.                                                           34

Signatures.                                                                 35


                                       2
<PAGE>
                            CHINA HEALTH HOLDING INC.

                          (a development stage company)

                    INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2005
                                   (Unaudited)






    CONSOLIDATED BALANCE SHEETS

    INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

    INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

    NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS


<PAGE>

                                     PART I

ITEM 1.  FINANCIAL STATEMENTS.

<TABLE>
<CAPTION>
                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

                           CONSOLIDATED BALANCE SHEETS
_______________________________________________________________________________________________________
                                                                   September 30,        December 31,
                                                                       2005                2004
                                                                        $                   $
                                                                   (Unaudited)
_______________________________________________________________________________________________________


                                     ASSETS

CURRENT ASSETS
<S>                                                                   <C>                   <C>
    Cash                                                              11,193                3,511
    Prepaid expenses (Note 7)                                          2,278              349,750
                                                                 -----------           ----------
                                                                      13,471              353,261

FIXED ASSETS, net of depreciation (Note 4)                            13,995                5,132

INTANGIBLE ASSETS (Note 3)                                                 3                    2

_______________________________________________________________________________________________________

                                                                      27,469              358,395
=======================================================================================================


                                   LIABILITIES

CURRENT LIABILITIES
    Accounts payable and accrued liabilities                          28,531               24,172
     Due to shareholders (Note 5)                                    559,400              335,014
                                                                 -----------           ----------
                                                                     587,931              359,186
                                                                 -----------           ----------


                            STOCKHOLDERS' DEFICIENCY

STOCKHOLDERS' EQUITY (DEFICIENCY) (Note 6)
       Common stock, $0.001 par value, 300,000 shares authorized      44,807               36,523
       44,807,290 (2004-36,522,700)issued and outstanding
       Preferred stock, $0.001 par value 20,000,000
          shares authorized, Nil shares issued and outstanding             -                    -
       Additional paid-in capital                                  5,039,411            2,293,570
       Deficit accumulated during the development stage           (5,456,755)          (2,319,622)
       Shares to be returned for cancellation (Note 7(b))           (175,000)                   -
       Accumulated other comprehensive loss                          (12,925)             (11,262)
                                                                 -----------           ----------
                                                                    (560,462)                (791)
_______________________________________________________________________________________________________

                                                                      27,469              358,395
=======================================================================================================

GOING CONCERN (Note 2(a))
COMMITMENTS (Note 3 and 9)


 The accompanying notes are an integral part of these interim consolidated financial statements
</TABLE>

                                       3
<PAGE>
<TABLE>
<CAPTION>
                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

                  INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)
__________________________________________________________________________________________________________________________________
                                                                                                                         April 3,
                                                         Three months     Three months   Nine months      Nine months     2002
                                                             ended          ended         ended            ended       (inception)
                                                           Sept 30,       Sept 30,       Sept 30,         Sept 30,      to Sept 30,
                                                             2005           2004          2005             2004           2005
                                                               $              $             $                $              $
__________________________________________________________________________________________________________________________________

<S>                                                         <C>              <C>        <C>              <C>            <C>
SALES                                                             -          2,474              -           6,495          7,305
                                                         ----------    -----------  -------------     -----------    -----------

EXPENSES
 Advertising and promotion                                   19,626          8,226         65,928          13,559        112,938
 Amortization of intangible assets                                -              -              -           5,700          7,125
 Consulting fees (Note 7)                                   899,495        292,649      1,271,020         326,565      1,702,156
 Depreciation of tangible assets                              1,039            305          2,298             652          3,310
 Foreign exchange loss (gain)                                (2,725)             -          4,559               -          5,828
 Licensing rights (Note 3)                                        -              -      1,359,999               -      1,542,873
 Interest and bank charges                                   12,218          7,150         29,844          12,891         55,960
 Loss on settlement of debts and issuance of shares               -              -          9,192          29,297         79,597
 Management fees (Note 8)                                    72,000        611,500        174,000         647,500        983,000
 Office                                                       2,058          3,125          7,063           6,960         19,376
 Professional fees (Note 7)                                  29,239        223,843        182,109         232,234        508,153
 Rent                                                         5,507          4,275         15,361          12,172         48,042
 Research and development (Note 3)                                -        185,807              -         366,306        366,306
 Investor relations Trips                                    11,856            163         15,760           5,315         24,181
 Vehicle                                                          -             14              -           1,361          5,215
                                                       ------------    -----------     ----------     -----------    -----------
                                                          1,050,313      1,337,057      3,137,133       1,660,512      5,464,060
                                                       ------------    -----------     ----------     -----------     ----------

NET LOSS FOR THE PERIOD                                  (1,050,313)    (1,334,583)    (3,137,133)     (1,654,017)    (5,456,755)
==================================================================================================================================
BASIC NET LOSS PER SHARE                                      (0.02)         (0.04)         (0.08)          (0.05)
==================================================================================================================================
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING     43,234,176     34,249,167     41,175,039      32,169,841
==================================================================================================================================

 The accompanying notes are an integral part of these interim consolidated financial statements
</TABLE>

                                       4
<PAGE>
<TABLE>
<CAPTION>
                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

                  INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)
___________________________________________________________________________________________________________________________
                                                                                                                April 3,
                                                                        Nine months        Nine months            2002
                                                                           ended              ended           (inception)
                                                                          Sep 30,            Sep 30,           to Sept 30,
                                                                           2005               2004                2005
                                                                            $                  $                   $
___________________________________________________________________________________________________________________________

OPERATING ACTIVITIES
<S>                                                                        <C>                <C>                 <C>
       Net loss                                                         (3,137,133)        (1,654,017)         (5,456,755)

       Items not affecting cash
          Accrued interest                                                  28,433              8,491              53,286
          Amortization of intangible assets                                      -              5,700               7,125
          Depreciation of tangible assets                                    2,298                652               3,310
          Licensing rights                                               1,359,999                  -           1,542,873
          Loss on settlement of debts and issuance of  shares                9,192             29,297              79,597
          Non cash expenses                                              1,342,670            613,046           2,205,064
          Stock-based compensation                                         156,056            851,875           1,065,431
                                                                        ----------         ----------          ----------
                                                                         (238,485)           (144,956)           (500,069)
                                                                        ----------         ----------          ----------

       Changes in non-cash working capital
          Prepaid expenses                                                       -               (813)               (832)
          Accounts payable and accrued laibilities                           4,359             (3,136)             36,912
                                                                        ----------         ----------          ----------
                                                                          (234,126)          (148,905)           (463,989)
                                                                        ----------         ----------          ----------

INVESTING ACTIVITIES
       Purchase of fixed assets                                            (11,160)            (3,626)            (17,304)
                                                                        ----------         ----------          ----------

FINANCING ACTIVITIES
       Issuance of common stock                                            245,000            119,944             513,697
       Net (repayment) advances from shareholders                            9,631             57,910              (8,286)
                                                                        ----------         ----------          ----------
                                                                           254,631            177,854             505,411
                                                                        ----------         ----------          ----------

EFFECT OF EXCHANGE RATE CHANGES                                             (1,663)            (3,982)            (12,925)
                                                                        ----------         ----------          ----------

INCREASE (DECREASE) IN CASH                                                  7,682             21,341              11,193

CASH, BEGINNING OF PERIOD                                                    3,511                282                   -
                                                                        ----------         ----------          ----------

CASH, END OF PERIOD                                                         11,193             21,623              11,193
                                                                        ==========         ==========          ==========



SUPPLEMENTAL DISCLOSURES
    Interest paid                                                                -                  -                   -
    Taxes paid                                                                   -                  -                   -
                                                                        ===========        ==========          ==========

SUPPLEMENTARY NON-CASH INFORMATION (Note 7)

 The accompanying notes are an integral part of these interim consolidated financial statements

</TABLE>

                                       5
<PAGE>
                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2005
________________________________________________________________________________

1.   NATURE OF OPERATIONS AND BASIS OF PRESENTATION
________________________________________________________________________________

     China Health Holding Inc. (the "Company") is a Nevada company  incorporated
     on April 3, 2002 as A E&E Pharma Corporation.  The Company changed its name
     to China Health  Holding Inc. on May 25, 2004. The Company is a development
     stage   company  that  is  engaged  in  the   development,   marketing  and
     manufacturing of innovative  enhanced  traditional Chinese medicinal herbal
     supplement product lines. The Company's product lines includes dietary food
     supplements  that are  helpful  in  strengthening  the  immune  system  and
     cardio-cerebral vascular function as well as promoting overall physical and
     mental health..  The Company's three primary product lines include the King
     of Herbs-based products, the Taoist herbal medicinal products and a line of
     natural  multi-vitamins and supplements.  All of the Company's products are
     based on  traditional  Chinese  medicine and the  principals of Taoism (see
     Note 3).

     The Company's  three main product lines offers  proprietary  natural herbal
     supplements and is protected by China Health Holdings.  All of China Health
     Holding's  product  lines are  currently  manufactured  for the  Company in
     accordance  with the Good  Manufacturing  Standards  of Canada,  the US and
     China.

     The Company  plans to  introduce a line of natural  skin care and  cosmetic
     products  as well as to develop  new  products  based on its  knowledge  of
     traditional  Chinese medical  practice.  Please visit China Health Holding,
     Inc.'s website www.chinahealthholding.com for Company Profile details.


     The Company  completed a form SB-2  registration  statement with the United
     States Securities and Exchange Commission on February 11, 2005 and received
     approval from the NASD for the listing of the Company's  shares for trading
     on the Over the Counter Bulletin Board ("OTCBB') on April 18, 2005.

     On April 29, 2005, the Company formed two wholly-owned subsidiaries,  China
     Health Pharmaceutical Corporation and China Health World Trade Corporation.


     UNAUDITED INTERIM FINANCIAL STATEMENTS

     The accompanying  unaudited interim financial statements have been prepared
     in accordance with United States generally accepted  accounting  principles
     for interim  financial  information and in accordance with the instructions
     to Form 10-QSB of Regulation  S-B. They do not include all  information and
     footnotes   required  by  United  States  generally   accepted   accounting
     principles for complete financial statements. In the opinion of Management,
     all adjustments  considered  necessary for a fair presentation,  consisting
     solely of normal recurring  adjustments,  have been made. Operating results
     for the nine months ended September 30, 2005 are not necessarily indicative
     of the results that may be expected for the year ended December 31, 2005.

                                       6
<PAGE>
                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2005
________________________________________________________________________________

2.   SIGNIFICANT ACCOUNTING POLICIES
________________________________________________________________________________

     a)   Basis of presentation

          These  financial  statements  have been presented in U.S.  dollars and
          prepared  in  accordance   with  United  States   Generally   Accepted
          Accounting  Principles ("US GAAP"). The Company's year end is December
          31.

          The  financial  statements  have been prepared on the basis of a going
          concern  which   contemplates   the  realization  of  assets  and  the
          satisfaction  of  liabilities  in the normal  course of business.  The
          Company has incurred  significant  losses since  inception and further
          losses are  anticipated  in the  development  of its products  raising
          substantial  doubt as to the Company's  ability to continue as a going
          concern.

          The  Company  will depend  almost  exclusively  on outside  capital to
          complete the development and marketing of its  intellectual  property.
          Such outside capital will include the sale of additional stock and may
          include commercial  borrowing.  There can be no assurance that capital
          will be available as necessary to meet these  development costs or, if
          the capital is available,  that it will be on terms  acceptable to the
          Company.  The issuances of additional equity securities by the Company
          may result in a  significant  dilution in the equity  interests of its
          current stockholders. Obtaining commercial loans, assuming those loans
          would be available, will increase the Company's liabilities and future
          cash commitments.  If the Company is unable to obtain financing in the
          amounts  and on terms  deemed  acceptable,  the  business  and  future
          success may be adversely affected.

          Given the Company's limited operating history,  lack of sales, and its
          operating  losses,  there can be no assurance  that it will be able to
          achieve or maintain  profitability.  Accordingly,  these factors raise
          substantial  doubt about the Company's  ability to continue as a going
          concern.

     a)   Consolidation

          The  consolidated  financial  statements  include the  accounts of the
          Company and its wholly-owned subsidiaries, China Health Pharmaceutical
          Corporation and China Health World Trade Corporation.  All significant
          intercompany transactions and account balances have been eliminated.

     b)   Use of estimates and assumptions

          Preparation of the Company's  financial  statements in conformity with
          United  States  generally  accepted  accounting   principles  requires
          management  to make  estimates  and  assumptions  that affect  certain
          reported  amounts and disclosures.  Accordingly,  actual results could
          differ from those estimates.

     c)   Prepaid expenses

          The Company  records as prepaid  expenses  amounts paid in advance for
          which the associated expense will be incurred in a subsequent period.

                                       7
<PAGE>
                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2005
________________________________________________________________________________

2.   SIGNIFICANT ACCOUNTING POLICIES
________________________________________________________________________________

     d)   Fixed assets

          Fixed  assets  are stated at cost.  Depreciation  is  computed  at the
          following rates over the estimated useful lives of the assets:

                        Computer - 30% declining balance
                 Furniture and fixtures - 20% declining balance

     e)   Intangible assets

          The Company has adopted the  provision  of the  Statement of Financial
          Accounting Standards No. 142 ("SFAS No.142"), "Goodwill and Intangible
          Assets",  which  revises the  accounting  for  purchased  goodwill and
          intangible assets. Under SFAS 142, goodwill and intangible assets with
          indefinite  lives are no  longer  amortized  and are to be tested  for
          impairment annually or whenever events or circumstances  indicate that
          the estimated  fair value is less than the related  carrying  value as
          determined  on a  reporting  unit  basis.  The  determination  of  any
          impairment  would include a comparison of estimated  future  operating
          cash flows anticipated during the remaining life with the net carrying
          value of the asset as well as a  comparison  of the fair value to book
          value of the Company.  Management  has  determined  that the Company's
          proprietary rights and formulas described in Note 3 a) have indefinite
          lives and as such are not subject to amortization  and further that no
          impairment  of the  carrying  value of  these  intangible  assets  has
          occurred.

          Costs incurred in connection with the licence  agreements entered into
          as  described  in  Note  3  b)  would   normally  be  amortized  on  a
          straight-line basis over the term of the underlying licence agreements
          and then tested for impairment  annually in accordance  with SFAS 144,
          "Accounting for the Impairment on Disposal of Long-Lived Assets" (SFAS
          No.144).   The   determination  of  any  impairment  would  include  a
          comparison of estimated future operating cash flows anticipated during
          the  remaining  life  with  the  net  carrying  value  of  the  asset.
          Management  has  determined  that it is not  possible  at this time to
          estimate  future  cash  flows from these  assets and has  recorded  an
          impairment  charge of $182,874 in 2004 to reduce the carrying value of
          these intangible assets to $1.

          Management has determined  that the Company's  proprietary  rights and
          formulas  described in Note 3(c) have indefinite lives and as such are
          not subject to amortization.  Management has, however, determined that
          it is not  possible  at this time to  estimate  future cash flows from
          these assets and has recorded an  impairment  charge of  $1,359,999 in
          2005 to reduce the carrying value to $1.

                                       8
<PAGE>
                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2005
________________________________________________________________________________

2.   SIGNIFICANT ACCOUNTING POLICIES - CONT'D
________________________________________________________________________________

     g)   Revenue recognition

          The  Company's  revenue is  primarily  derived from the sale of herbal
          medicinal  products and natural food supplements.  The Company records
          revenue  when  the  amount  is  fixed or  determinable,  delivery  has
          occurred or services  have been  performed  and both title and risk of
          loss have  transferred  to the customer,  and collection is reasonably
          assured.

     h)   Fair value of financial instruments

          In accordance with the  requirements  of SFAS No.107,  the Company has
          determined  the estimated  fair value of financial  instruments  using
          available market information and appropriate valuation  methodologies.
          The fair value of financial  instruments  classified as current assets
          or liabilities  including  cash,  accounts  payable and amounts due to
          shareholders,   approximate  carrying  value  due  to  the  short-term
          maturity of the instruments.

     i)   Foreign currency translation

          In accordance with Statement of Financial  Accounting Standards No.52,
          "Foreign  Currency  Translation"  (SFAS  No.52),  foreign  denominated
          monetary  assets and liabilities are translated to their United States
          dollar equivalents using foreign exchange rates which prevailed at the
          balance  sheet date.  Revenue and expenses are  translated  at average
          rates of exchange during the year. Related translation adjustments are
          reported as a separate  component  of  stockholders'  equity,  whereas
          gains or losses  resulting  from  foreign  currency  transactions  are
          included in results of operations.

     j)   Income taxes

          The Company  follows the  liability  method of  accounting  for income
          taxes.  Under this method,  deferred income tax assets and liabilities
          are  recognized  for the estimated tax  consequences  attributable  to
          differences  between the financial statement carrying values and their
          respective  income tax basis  (temporary  differences).  The effect on
          deferred income tax assets and liabilities of a change in tax rates is
          recognized in income in the period that  includes the enactment  date.
          At September 30, 2005 full deferred tax asset valuation  allowance has
          been provided and no deferred tax asset benefit has been recorded.

                                       9
<PAGE>
                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2005
________________________________________________________________________________

2.   SIGNIFICANT ACCOUNTING POLICIES - CONT'D
________________________________________________________________________________

     k)   Net loss per common share

          Basic  earnings  (loss) per share includes no dilution and is computed
          by dividing  income  available to common  stockholders by the weighted
          average number of common shares  outstanding for the period.  Dilutive
          earnings (loss) per share reflect the potential dilution of securities
          that could share in the  earnings  of the  Company.  The  accompanying
          presentation  is only of  basic  loss  per  share  as the  potentially
          dilutive factors are anti-dilutive to basic loss per share.

     l)   Stock-based compensation

          In December  2002,  the Financial  Accounting  Standards  Board issued
          Financial  Accounting  Standard No. 148,  "Accounting  for Stock-Based
          Compensation  -  Transition  and  Disclosure   ("SFAS  No.  148"),  an
          amendment of Financial  Accounting  Standard No. 123  "Accounting  for
          Stock-Based Compensation" ("SFAS No. 123). The purpose of SFAS No. 148
          is to: (1) provide  alternative  methods of  transition  for an entity
          that voluntarily  changes to the fair value based method of accounting
          for  stock-based  employee  compensation,  (2)  amend  the  disclosure
          provisions  to  require  prominent  disclosure  about the  effects  on
          reported net income of an entity's  accounting  policy  decisions with
          respect  to  stock-based  employee  compensation,  and (3) to  require
          disclosure  of those  effects in interim  financial  information.  The
          disclosure  provisions of SFAS No. 148 were  effective for the Company
          for the year ended December 31, 2002.

          The  Company  has  elected  to  continue  to account  for  stock-based
          employee  compensation  arrangements in accordance with the provisions
          of Accounting  Principles Board Opinion No. 25,  "Accounting for Stock
          Issued to  Employees",  ("APB  No.25") and comply with the  disclosure
          provisions  of SFAS No. 123 as  amended  by SFAS No. 148 as  described
          above.  In  addition,  in  accordance  with SFAS No.  123 the  Company
          applies the fair value method using the  Black-Scholes  option-pricing
          model in accounting for options granted to consultants.  Under APB No.
          25,  compensation  expense is recognized  based on the difference,  if
          any,  on the date of grant  between  the  estimated  fair value of the
          Company's  stock and the amount an  employee  must pay to acquire  the
          stock. Compensation expense is recognized immediately for past service
          and pro-rata for future service over the option-vesting period.

          In  accordance  with SFAS No. 123, the Company  applies the fair value
          method using the Black-Scholes  option-pricing model in accounting for
          options granted to consultants.

          The  Company  accounts  for equity  instruments  in  exchange  for the
          receipt of goods or services  from other than  employees in accordance
          with SFAS No. 123 and the  conclusions  reached by the Emerging Issues
          Task Force in Issue No. 96-18, "Accounting for Equity Instruments That
          Are Issued to Other than  Employees  for  Acquiring or in  Conjunction
          with Selling Goods or Services" ("EITF 96-18").  Costs are measured at
          the estimated fair market value of the  consideration  received or the
          estimated fair value of the equity  instruments  issued,  whichever is
          more reliably  measurable.  The value of equity instruments issued for
          consideration  other  than  employee  services  is  determined  on the
          earlier of a performance  commitment or completion of  performance  by
          the provider of goods or services as defined by EITF 96-18.

                                       10
<PAGE>
                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2005
________________________________________________________________________________

2.   SIGNIFICANT ACCOUNTING POLICIES - CONT'D
________________________________________________________________________________

     m)   Recent accounting pronouncements

          In December  2004, the FASB issued  Statement of Financial  Accounting
          Standards ("SFAS") No. 123R,  Share-Based  Payment,  which establishes
          standards  for the  accounting  for  transactions  in which an  entity
          exchanges  its  equity  instruments  for  goods  or  services.  A  key
          provision of this  statement is the  requirement of a public entity to
          measure the cost of  employee  services  received  in exchange  for an
          award of equity  instruments  (including  stock  options) based on the
          grant date fair value of the award.  That cost will be recognized over
          the period during which an employee is required to provide  service in
          exchange for the award (i.e., the requisite  service period or vesting
          period).  This  standard  becomes  effective  for the  Company for the
          interim  period  beginning  after  December  15, 2005.  Management  is
          currently  evaluating  the impact of this  standard  on the  Company's
          financial condition and results of operations.

          In  December  2004,  the  FASB  issued  SFAS  No.  153,  Exchanges  of
          Non-monetary  Assets,  an amendment of APB Opinion No. 29,  Accounting
          for  Non-monetary  Transactions  ("SFAS 153") SFAS 153  requires  that
          exchanges  of  non-monetary  assets are to be  measured  based on fair
          value and  eliminates  the exception  for  exchanges of  non-monetary,
          similar  productive  assets,  and adds an exemption  for  non-monetary
          exchanges  that do not  have  commercial  substance.  SFAS 153 will be
          effective for fiscal periods beginning after June 15, 2005. Management
          does not  believe  that the  adoption  of this  standard  will  have a
          material  impact on the  Company's  financial  condition or results of
          operations.



________________________________________________________________________________

3.   INTANGIBLE ASSETS
________________________________________________________________________________

     a)   Asset purchase agreement

          Pursuant to an asset purchase agreement dated May 1, 2004, the Company
          acquired  from the Company's  President and a significant  shareholder
          proprietary  rights and  formulas to the 26 natural  herbal  medicinal
          products that comprise the King of Herbs and Taoist  Medicine  product
          lines.  In exchange for the  proprietary  rights and formulas to these
          products, the Company agreed to pay total consideration as follows:

            - 2,200,000 common shares at a fair value
              of $0.087 per share                                    $ 191,307
            -  Due to shareholders (Note 5)                            175,000
                                                                     --=------
                                                                     $ 366,307
                                                                     =========

          In addition,  the Company  agreed to pay the vendors a combined  total
          royalty equal to 5% of annual gross sales of the products until May 1,
          2009.

          For  accounting  purposes,  the  Company  has  recorded  the  cost  of
          acquiring the proprietary  rights and formulas as intangible assets at
          the related  party  vendor's  carrying  value of $1. The excess of the
          purchase  price  over  the  carrying  value of the  intangible  assets
          totalling  $366,306 has been  expensed as incurred in 2004 as research
          and development costs.

                                       11
<PAGE>

                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2005
________________________________________________________________________________

3.   INTANGIBLE ASSETS - CONT'D
________________________________________________________________________________

     b)   Licensing rights agreement

          On March 9,  2004,  the  Company  entered  into an  initial  licensing
          agreement with Hotway  Nutraceuticals  Canada Co., Ltd. ("Hotway"),  a
          British  Columbia  company  (the  "Cordyceps  Agreement").  Under this
          agreement  Hotway has  granted the  Company  exclusive  licenses to 19
          cordyceps  products  for a term  of  twenty  years  in  the  following
          countries: United States, Canada, Argentina,  Brazil, Columbia, Chile,
          Uruguay,  Paraguay,  England,  France, Germany, Italy, Spain, Holland,
          Poland,  Switzerland,  Sweden,  Australia,  Monaco,  Norway,  Denmark,
          Austria,  Ireland,  Israel,  Kuwait, Iran, Hong Kong, Japan,  Malaise,
          Singapore,  India,  Indonesia and the People's  Republic of China. The
          licensing  agreement  grants the Company (a) the exclusive  license to
          utilize 19  neutraceutical  products  and their raw  materials  in the
          above-listed  territories;  (b) the  exclusive  rights to register the
          Trademarks/Trade  Names of the products  under the  Company's  name in
          each of the  above-listed  territories;  (c) the exclusive  license to
          use, replicate,  copy, modify,  adopt and manufacture the products for
          the purpose of developing derivative products by modifying,  refining,
          upgrading,  or improving the licensed property;  and (d) the exclusive
          rights to the licensed  products'  ingredients.  In  addition,  Hotway
          granted  the  Company  a right of first  refusal  to  acquire  any new
          products  developed by Hotway after January 9, 2004. In  consideration
          for rights granted under the licensing  agreement,  the Company agreed
          to pay Hotway  $10,000 for each country  listed above,  for a total of
          $330,000,  originally due to Hotway by March 9, 2005. The Company also
          agreed  to:  (a) sell a minimum of 2,000  bottles/60  capsules  of the
          licensed  products  within 6-12 months after March 9, 2004; (b) manage
          marketing  programs for the licensed  products within 3-6 months after
          March 9, 2004;  (c)  maintain  sales of a minimum of 6,000  bottles/60
          capsules  annually for each  above-listed  country  within 6-12 months
          after  March 9,  2004;  and (d) sell a minimum of  200kg/month  of raw
          materials in Canada within 6-12 months after March 9, 2004.

          On March 9, 2004, the Company entered into a licensing  agreement with
          Hotway (the "De-Daibe Agreement"),  which grants the Company exclusive
          licenses to De-Daibe and Depressor Herbs neutraceutical products for a
          term of  twenty  years  in the  following  countries:  United  States,
          Canada,  Argentina,   Brazil,  Columbia,  Chile,  Uruguay,   Paraguay,
          England, France, Germany, Italy, Spain, Holland, Poland,  Switzerland,
          Sweden, Australia,  Monaco, Norway, Denmark, Austria, Ireland, Israel,
          Kuwait, Iran, Hong Kong, Japan, Malaise,  Singapore,  India, Indonesia
          and the People's  Republic of China.  This licensing  agreement grants
          the Company (a) the  exclusive  license to utilize  the  De-Daibe  and
          Depressor Herbs neutraceutical products and their raw materials in the
          above-listed  territories;  (b) the  exclusive  rights to register the
          Trademarks/Trade  Names of the products  under the  Company's  name in
          each of the  above-listed  territories;  (c) the exclusive  license to
          use, replicate,  copy, modify,  adopt and manufacture the products for
          the purpose of developing derivative products by modifying,  refining,
          upgrading,  or improving the licensed property;  and (d) the exclusive
          rights to the licensed  products'  ingredients.  In  addition,  Hotway
          granted  the  Company  a right of first  refusal  to  acquire  any new
          products developed by Hotway after March 9, 2004. In consideration for
          rights granted under this licensing  agreement,  the Company agreed to
          pay Hotway  $10,000  for each  country  listed  above,  for a total of
          $330,000  originally  due to Hotway by March 9, 2005. The Company also
          agreed  to:  (a) sell a minimum of 2,000  bottles/60  capsules  of the
          licensed  products  within 6-12 months after March 9, 2004; (b) manage
          marketing  programs for the licensed  products within 3-6 months after
          March 9, 2004;  (c)  maintain  sales of a minimum of 6,000  bottles/60
          capsules  annually for each  above-listed  country  within 6-12 months
          after  March 9,  2004;  and (d) sell a minimum of  200kg/month  of raw
          materials in Canada within 6-12 months after March 9, 2004.

                                       12
<PAGE>
                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2005
________________________________________________________________________________

3.   INTANGIBLE ASSETS - CONT'D
________________________________________________________________________________

     b)   Licensing rights agreement - cont'd

          Under the terms of the  original  Cordyceps  and  De-Daibe  agreements
          ("Exclusive Licensing  Agreements"),  if the Company fails to meet any
          of the licensing  commitments,  the license  agreements will terminate
          and all obligations under the agreements terminate. Upon expiration of
          the Exclusive  Licensing  agreements Hotway will own the rights to any
          modifications, upgrades or improvements made to the licensed products.

          On November 2, 2004, the Company entered into an agreement with Hotway
          to  amend  the   Exclusive   Licensing   Agreements   (the   "Amending
          Agreement").  The Amending  Agreement  amended  certain  payment terms
          under the Exclusive Licensing  Agreements as follows:  (1) the Company
          shall issue to Hotway 760,000  shares of common stock;  and (2) pay an
          aggregate  of  $100,000  to  Hotway  no later  than 90 days  after the
          Company's  common  stock has been  approved  for  quotation on the OTC
          Bulletin  Board.  Other than this  consideration,  the  Company is not
          required to make  royalty or any other  payments of any kind to Hotway
          in respect of the Exclusive  Licensing  agreements.  In the event that
          the Company does not pay or issue this  consideration to Hotway,  then
          the  Exclusive  Licensing  Agreements  will  terminate  and all  other
          obligations under the Exclusive  Licensing  Agreements will terminate.
          This amendment supercedes the previous  consideration that the Company
          owed to Hotway under the Exclusive Licensing Agreements. The amendment
          also  provides  that the Company  shall have the  exclusive  licensing
          rights on any future improvements to the products that are licensed to
          the Company under the Exclusive Licensing Agreements.

          On November 2, 2004,  760,000 common shares with a fair value of $0.25
          each  were  issued  to  Hotway  representing  total  consideration  of
          $190,000  paid in  respect of these  licences.  The  Company  recorded
          amortization of $7,125 to December 31, 2004. Management has determined
          that it is not possible at this time to estimate  future cash flows to
          be generated from these licences and accordingly an impairment  charge
          equal to the unamortized balance of $182,874 has been recorded leaving
          a carrying value of $1.

          (Note 11)

     c)   Asset purchase agreement

          Pursuant to an asset  purchase  agreement  dated March 22,  2005,  the
          Company acquired from the Company's  shareholders  intellectual rights
          to 108 "100% Natural Taoist Herbal  Medicinal  Products" that comprise
          the  Company's  Taoist  Medicine  product  lines.  In exchange for the
          rights, the Company agreed to pay total consideration as follows:

            - 4,500,000 common shares at a fair
              value of $0.30 per share                             $ 1,350,000
            - Payable to shareholder                                    10,000
                                                                   -----------
                                                                   $ 1,360,000
                                                                   ===========

          In addition,  the Company  agreed to pay the vendors a combined  total
          royalty equal to 5% of annual gross sales of the products  until March
          22, 2039.

          Management  has  determined  that it is not  possible  at this time to
          estimate  future  cash flows to be  generated  from  these  rights and
          accordingly an impairment charge equal to $1,359,999 has been recorded
          leaving a carrying value of $1.

                                       13
<PAGE>
                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2005
________________________________________________________________________________

4.   FIXED ASSETS
________________________________________________________________________________

                                                    Sept 30,         Dec.31,
                                                      2005            2004
                                                        $               $
                                                    --------        --------

    Computer                                          14,601           5,766
    Furniture and Fixtures                             2,704             378
                                                    --------        --------
                                                      17,305           6,144

    Less:  accumulated depreciation                   (3,310)         (1,012)
                                                    --------        --------
                                                      13,995           5,132
                                                    ========        ========

________________________________________________________________________________

5.   DUE TO SHAREHOLDERS
________________________________________________________________________________

     The  amount  due to  shareholders  bears  interest  at 10%  per  annum,  is
     unsecured and has no specific date of repayment (Note 8).


________________________________________________________________________________

6.   CAPITAL STOCK
________________________________________________________________________________

     The authorized capital of the Company consists of 300,000,000 voting common
     shares with $0.001 par value and 20,000,000  voting  preferred  shares with
     $0.001 par value.  On March 28, 2005, the Company  increased the authorized
     common shares from 55,000,000 shares to 300,000,000 shares.
<TABLE>
<CAPTION>
     The Company has issued common shares as follows:

                                                                                                  Additional
                                                                       Common shares                Paid in
                                                                Number           Amounts            Capital          Total
                                                                                    $                  $               $
                                                            -----------------------------------------------------------------
<S>                                                           <C>                  <C>             <C>              <C>
     Balance, December 31, 2004                              36,522,700           36,523          2,293,570        2,330,093
     Issued for cash at $0.25 per share                       1,080,000            1,080            268,920          270,000
     Issued for consulting and professional services
     at an average of $0.40 per share                         2,622,900            2,623            992,277          994,900
     Issued for intellectual rights (Note 3(c))               4,500,000            4,500          1,345,500        1,350,000
     Exercise of option                                          81,690               81              8,088            8,169
     Stock based compensation                                                                       156,056          156,056
     Finder fee paid                                                  -                -            (25,000)         (25,000)
                                                            -----------       ----------         ----------       ----------

     Balance, Sept 30, 2005                                  44,807,290           44,807          5,039,411        5,084,218
                                                            ===========       ==========         ==========       ==========

</TABLE>

                                       14
<PAGE>
                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2005
________________________________________________________________________________

6.   CAPITAL STOCK - CONT'D
________________________________________________________________________________

     The Company has granted stock options as follows:


                                                                Weighted average
                                 Number of   Weighted average      Remaining
                                  Options     Exercise price    contractual Life
                              --------------------------------------------------
 Balance, December 31, 2004      6,600,000         $ 0.11          3.33 years

 Issued                          1,650,000           0.63              -
 Exercised                         (81,690)          0.10              -
 Expired                          (350,000)          0.10              -
 Cancelled                      (1,400,000)          0.13              -
                              --------------------------------------------------

 Balance, Sept 30, 2005          6,418,310         $ 0.16          2.81 years
                              ==================================================


     a)   During the first and second  quarters,  the Company granted  1,200,000
          stock options to consultants  and officers with an exercise price from
          $0.30 to $0.80 subject to immediate  vesting.  The intrinsic  value of
          these  options at the date of grant was $Nil.  The Company  determined
          that there was no additional fair value resulting from  application of
          the fair value method using the Black Scholes  option pricing model as
          there was no established market for trading in the Company's shares at
          that tiime and, as such, the volatility factor was 0%. Accordingly, no
          stock-based compensation was recorded for the options.

     b)   During the current quarter,  the Company granted 200,000 stock options
          to  consultants  with an exercise  price of $1.00 subject to immediate
          vesting.   Stock-based   compensation  of  $156,056  was  recorded  as
          consulting  expense  during the period ended  September 30, 2005.  The
          fair value of the stock  options was estimated by  application  of the
          fair  value  method  using  Black  Scholes   option   pricing   model.
          Assumptions used in this model were as follows:


                Risk-free interest rate                  3.5%
                Dividend yield                             0%
                Volatility factor                        179%
                Expected option life                  2 years


     c)   The Company  granted  250,000  stock  options to a consultant  with an
          exercise price of $1.00.  Subsequent to the period ended September 30,
          2005,  the option  was  cancelled  before  the  expiry of  three-month
          probation  period.   Accordingly,   no  stock-based  compensation  was
          recorded in respect of these options.

                                       15
<PAGE>
                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2005
________________________________________________________________________________

6.   CAPITAL STOCK - CONT'D
________________________________________________________________________________

     The Company has issued share purchase warrants as follows:

                                          Number of           Weighted Average
                                           Warrants             Exercise Price

          Balance, December 31, 2004        339,000                $ 0.56

          Issued                          1,080,000                  0.75
          Expired                          (219,000)                 0.75
                                          ----------

          Balance, Sept 30, 2005          1,200,000                $ 0.70
                                          =========                ======


     During 2005, the Company  issued  1,080,000  units at $0.25 per unit.  Each
     unit  consisted of one common share and one share  purchase  warrant.  Each
     warrant  entitles  the holder to purchase an  additional  common  share for
     $0.75  and must be  exercised  within  one  year of the date the  Company's
     shares commence trading on a United States Stock exchange.


________________________________________________________________________________

7.   SUPPLEMENTARY NON-CASH INFORMATION
________________________________________________________________________________

     The Company entered into the following non-cash transactions:

     a)   During 2005,  the Company issued  4,500,000  common shares with a fair
          value of $0.30 per share as partial  consideration for the purchase of
          licensing rights. (See Note 3 (c)).

     b)   During 2004,  the Company issued  1,000,000  common shares with a fair
          value of $0.25 per share pursuant to a two-year services agreement. In
          2004,  $46,875  was  recorded  as  consulting  fees and  $203,125  was
          recorded  as prepaid  expenses.  Pursuant to the same  agreement,  the
          Company  granted  1,000,000  stock options to the  consultant  with an
          exercise price of $0.10 per share subject to immediate vesting.  These
          options were granted in respect of a contract that  required  services
          to be performed  over a two year term.  The  intrinsic  value of these
          options at the date of grant was  estimated to be  $150,000.  In 2004,
          $9,375 was recorded as a consulting fee and $140,625 was recorded as a
          prepaid expense.

          During 2005,  this services  agreement was cancelled.  The Company and
          the consultant  agreed that 700,000 out of the 1,000,000 common shares
          issued in 2004 were to be returned  to the  Company for  cancellation.
          Accordingly,  $28,125 was recorded as consulting fees and $175,000 was
          recorded as shares to be returned for cancellation.

          Both parties also agreed to cancel  1,000,000 stock options granted in
          2004.  During  2005,  the balance of  $140,625 in prepaid  expense was
          recorded as consulting fee.

     c)   During 2005,  the Company  issued  2,572,900  common  shares with fair
          values  ranging  from  $0.25 to $0.62 for a total  value of  $976,750.
          $901,750 was recorded as consulting  expenses and $75,000 was recorded
          as professional fees.

                                       16
<PAGE>
                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2005


________________________________________________________________________________

8.   RELATED PARTY TRANSACTIONS
________________________________________________________________________________
     The Company has entered into the following related party transactions:

     a)   Accrued  management  and  consulting  fees to directors,  officers and
          shareholders totalling $202,800 (September 30, 2004 - $60,000);

     b)   Accrued  interest  expense to  directors  and  shareholders  totalling
          $28,433 (September 30, 2004 - $12,375);

     c)   Acquired  intellectual property from shareholders with a total cost of
          $1,360,000 (see Note 3 and 7) (September 30, 2004 - $177,200).

________________________________________________________________________________

9.   COMMITMENTS
________________________________________________________________________________

     Pursuant to various  management  and  consulting  contracts the Company has
     committed to pay fees and issue common stock as follows:

     -    pay a monthly  management  fee of $18,000 to the  Company's  President
          starting  on April 1, 2005 and pay a 3% royalty on gross  sales of the
          Company.
     -    pay a monthly consulting fee of $6,000 to a shareholder and officer of
          the Company.
     -    pay  a  monthly  consulting  fee  of  $7,500  for  investor  relations
          services.
     -    issue 100,000 common shares as compensation for consulting services to
          an officer on March, 2006.

     (See also Note 3)

________________________________________________________________________________

10.  INCOME TAXES
________________________________________________________________________________

     The Company has incurred  operating  losses from inception to September 30,
     2005 that may be available to offset  against future  taxable  income.  The
     Company has adopted FASB No. 109 for reporting purposes.  The potential tax
     benefit of these losses has not been recorded and a full deferred tax asset
     valuation allowance has been provided due to the uncertainty  regarding the
     realization of these losses.

                                       17
<PAGE>
                            CHINA HEALTH HOLDING INC.
                          (a development stage company)

          NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2005


________________________________________________________________________________

11.  SUBSEQUENT EVENTS
________________________________________________________________________________

     Subsequent  to the  September  30,  2005,  the  Company  entered  into  the
     following transactions:

     a)   480,000  common  shares  were  issued from $0.25 to $0.37 per share as
          compensation for consulting services provided to the Company.

     b)   135,000  stock  options  were  exercised as partial  settlement  of an
          outstanding shareholder loan to the Company.

     c)   300,000 stock options were granted to consultants with exercise prices
          of $0.50 per share for one year.

     d)   the   Company   cancelled   its   licence   agreements   with   Hotway
          Nutraceuticals Canada Co., Ltd. (Note 3(b).




                                       18
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.

FORWARD LOOKING STATEMENTS

     This Quarterly  Report on Form 10-QSB contains  forward-looking  statements
within the meaning of section 27A of the Securities Act of 1933, as amended, and
section 21E of the Securities Exchange Act of 1934, as amended. In addition,  we
may from time to time make oral forward-looking statements. These statements may
generally  be  identified  by the use of such words as  "expect,"  "anticipate,"
"believe,"   "intend,"   "plan,"  "will,"  or  "shall."  These   forward-looking
statements  are based on  current  expectations  and  entail  various  risks and
uncertainties. Our actual results could differ materially from those anticipated
in  these  forward-looking  statements  as a  result  of a  number  of  factors,
including  those set forth below under "Risk Factors." When reading the sections
titled  "Results of Operations,"  you should also read our financial  statements
and related notes included  elsewhere  herein,  our Annual Report on Form 10-KSB
for the year ended  December  31, 2004,  and the section  below  entitled  "Risk
Factors." We disclaim any obligation to update any forward-looking statements as
a result of developments occurring after the date of this Quarterly Report.

BACKGROUND

     China Health Holding,  Inc. is a development  stage company that was formed
in 2002 for the purpose of manufacturing, marketing and distributing proprietary
natural medicinal  products.  On April 3, 2002, we were  incorporated  under the
laws of the State of Nevada under the name A E&E Pharma Corporation.  On May 25,
2004, we changed our name to China Health Holding,  Inc. We intend to market and
distribute proprietary natural medicinal products. Our product lines include:

     1. King of Herbs-based products;

     2. Taoist Medicinal products; and

     3. A line of natural multi-vitamins and supplements.

     All of our  products  are based on  traditional  Chinese  medicine  and the
principals of Taoism.  Taoist  philosophy and Taoist medicinal healing practices
have been incorporated into a broad spectrum of medical practices and treatments
in the People's Republic of China.  Traditional  Chinese medicine practices have
generally  been  labeled  worldwide  as  "alternative   medicine"  or  "holistic
medicine" since they rely more on natural remedies versus chemical  remedies and
treatments.

     We have had nominal revenues since our inception. Our goal is to launch our
King of Herbs and Taoist Medicinal product lines and our Vitamins and Supplement
product line over the next six to twelve months, provided that we are successful
raising at least $5 million of  financing  during the next three to six  months.
All of the  products  for our  three  product  lines  are  fully  developed.  We
currently  outsource our  manufacturing to third parties.  We anticipate that we
will generate revenues from sales of our herbal supplement  products (1) through


                                       19
<PAGE>
our corporate website, www.chinahealthholding.com that was initially launched in
May of this  year and our  e-commerce  website,  www.thechinahealth.com  that we
anticipate launching in early 2006, (2) through the establishment of third party
retail and wholesale distribution agreements,  and (3) through the establishment
of  company-owned  retail stores and franchises in major cities in North America
and the  People's  Republic of China.  Our  management  will  attempt to work to
negotiate and enter into retail and wholesale  distribution  agreements  for our
products over the next six to twelve months. We will also attempt to open retail
outlets in large cities in North  America,  Europe and the People's  Republic of
China over the next five years.  We have not yet located any sites to  establish
retail  stores,  but are initially  looking for locations in Beijing,  Shanghai,
Nanjing  and Hong Kong in the  People's  Republic  of China  and New  York,  Los
Angeles,  San Francisco,  Seattle, Las Vegas or other large cities in the United
States.  We  anticipate  that we will open our first  retail  storefront  in the
People's  Republic of China and the United  States within the next six to twelve
months. We anticipate expanding and developing our operations and sales into the
the United  States and the  People's  Republic of China,  and  thereafter,  into
regions of Europe and Asia as we continue to grow our business.

     In April 2005,  we formed two wholly owned  subsidiaries:  (1) China Health
World Pharmaceutical Corporation;  and (2) China Health World Trade Corporation.
China  Health  World  Pharmaceutical  Corporation  and China  Health World Trade
Corporation both recently started operations and conducting business. We plan to
conduct our  proposed  pharmaceutical  operations  through  China  Health  World
Pharmaceutical  Corporation  and our proposed  sales  activities  through  China
Health World Trade Corporation.

     China  Health  World  Trade  Corporation  will  support  us in the  area of
worldwide  branding,  marketing and distribution of our unique natural medicinal
products   produced  by  us.  This  will  involve   multi-media   marketing  and
multi-channel distribution to global customers and markets in order to:

     o    Build and maintain worldwide brand recognition of our products;
     o    Establish     global    market     penetration     utilizing    global
          infrastructure/distribution/sales channels worldwide; and
     o    Employ uniform market strategy to create worldwide market  recognition
          of our brands.

PRODUCTS

     We  intend  to  market  and  sell  proprietary   neutraceutical   products.
Neutraceuticals  are  products  isolated or purified  from plants or other foods
that are sold in dosage form.  These  products  are intended to provide  certain
physiological    benefits   and/or    protection    against   chronic   disease.
Neutraceuticals   are  commonly   referred  to  as  "dietary   supplements"   or
"nutritional  supplements."  Neutraceuticals  are generally viewed as preventive
supplements,  as opposed to drugs, which are active chemical  substances used to
treat  illnesses  or  symptoms  of  illnesses.   Neutraceuticals   represent  an
alternative approach to medicine,  based on nutrition and the health or wellness
of  the  body.  Since  most  of  our  products  are  considered  to  be  dietary
supplements,  as opposed  to  pharmaceutical  products  or drugs,  our  existing
product line is not subject to stringent  clinical testing.  All of our products
are  manufactured  in accordance  with Good  Manufacturing  Practices  rules and
standards.

                                       20
<PAGE>
KING OF HERBS PRODUCT LINE

     King of Herbs is a term that we use to refer to the main proprietary herbal
formulations  that are essential to all of our products.  The herbs that make up
King of Herbs have been used in Chinese medicine to reinforce what is called the
body's vital energy source,  or qii. Qii is a Chinese medical term for the human
body's  energy.  Our  product  line is  intended  to improve  immune  system and
cardio-vascular  system,  and improve and increase energy and endurance  levels,
sexual  function  and the  health  and  wellness  of the  entire  body.  We have
developed proprietary  formulations that target certain physiological conditions
which we intend to market and sell to the public.

TAOIST MEDICINAL PRODUCT LINE

     Taoist  medicinal  healing  sciences  have been  incorporated  into a broad
spectrum of medical  practices and treatments in the People's  Republic of China
and are  collectively  known  as  traditional  Chinese  medicine.  From a global
perspective,  medical treatments are divided into two broad categories:  western
medicine  and  traditional  Chinese  medicine.  In the  United  States and other
western countries, traditional Chinese treatments have been labeled "alternative
medicine" or "holistic  medicine." The products in our Taoist Medicinal  product
line are considered to be dietary supplements.  They are based on the principles
of  traditional  Chinese  medicine  and Taoist  healing  sciences.  Taoism is an
ancient worldview that acknowledges the movement towards balance inherent in all
things.   Our  Taoist  Medicinal   product  line  is  intended  to  enhance  the
cardiovascular  system,  strengthen the immune system,  enhance the  respiratory
system,  improve  liver and  kidney  function,  increase  overall  vitality  and
longevity and enhance sexual function.

MULTI-VITAMINS AND SUPPLEMENTS

     This   product  line  will  offer  a  full   compliment   of  100%  natural
multi-vitamins and multi-mineral  food supplements.  These products are intended
to support the immune system, increase energy, provide stress relief, strengthen
bones, enhance mental clarity and support relaxation and overall vitality.

RESULTS OF OPERATIONS

     We had a net loss of  $1,050,313  for the three months ended  September 30,
2005  as  compared  to a net  loss of  $1,334,583  for the  three  months  ended
September 30, 2004.  The net loss for the three months ended  September 30, 2005
consisted primarily of $19,626 of advertising and promotional expenses, $899,495
of consulting fees, $72,000 of management fees, $29,239 of professional fees and
$11,856 of investor relations related travel costs. The decrease in net loss was
the result of a decrease in operating expenses.

     We had a net loss of  $3,137,133  for the nine months ended  September  30,
2005 as compared to a net loss of $1,654,017 for the nine months ended September
30, 2004.  The net loss for the nine months ended  September 30, 2005  consisted
primarily of $65,928 of  advertising  and  promotional  expenses,  $1,271,020 of
consulting  fees,  $1,359,999  of expenses  due under  licensing  agreements  as
compared  to the same  period  in 2004  when we did not  incur  any  expense  in

                                       21
<PAGE>
connection with amounts due under licensing  agreements,  $156,000 of management
fees, and $182,109 of professional fees. The increase in net loss was the result
of a significant  increase in consulting  expenses and licensing fees during the
six months ended June 30, 2005.

     Net loss of  $5,456,755  for the period from April 3, 2002  (inception)  to
September 30, 2005 included of $112,938 of advertising and promotional expenses,
$1,720,156  of  consulting  fees,  $1,542,873  of expenses  due under  licensing
agreements,  $55,960 of interest and bank  charges,  $79,597 of loss incurred in
connection with the settlement of debts,  $983,000 of management fees,  $508,153
of professional fees,  $48,042 of rent and $366,306 of expenses  associated with
the costs of research and development.

LIQUIDITY AND CAPITAL RESOURCES

     As of September 30, 2005, we had cash of $11,193 and current liabilities of
$587,931.  As of September  30, 2005,  we had a working  capital  deficiency  of
$574,460 and an accumulated deficit of $5,456,755. With our current resources we
expect to be able to satisfy our cash requirements through December 31, 2005. In
order to sustain our current level of operations, we will need to raise at least
$ 1million over the next six to twelve months.  In order to expand our business,
fund future  development and begin marketing and selling our three product lines
we will need to raise at least $5 million over the next six to twelve months. We
intend to seek  outside  debt and  equity  financing,  to the  extent  that such
funding is available  under  reasonable  terms and  conditions.  We have not yet
sought any  commitments  for such  financing  and no assurance can be given that
additional financing will be available,  or if available,  will be on acceptable
terms. If adequate working capital is not available, we may be forced to curtail
or cease operations.

     As of September 30, 2005, we had oustanding loans to our President Julianna
Lu, Vice  President  XiaoFei Yu and Director  Dick Wu of  $434,153,  $82,000 and
$41,663, respectively.  There are no formal agreements for when repayment of the
loans must be made. The loans accrue interest at the rate of 10% per annum.

     We have no off  balance  sheet  arrangements  as defined by Item  303(c) of
Regulation S-B.

FUTURE DEVELOPMENT

     We  expect  to focus our  resources  over the next six to twelve  months on
expanding  the scope of our three  product  lines,  and  expanding  our business
operations into the People's Republic of China, the United States and Europe. To
expand our  operations  and business,  we are  implementing  and  developing our
worldwide  marketing  and  distribution  strategy  and  infrastructures  for our
products and business  development,  and we are developing and  implementing our
worldwide  e-commerce  infrastructure,   including  our  e-commerce  website  at
www.thechinahealth.com.    Our   worldwide    e-commerce   website   will   have
multi-language  and  multi-currency   capabilities.   Our  worldwide  e-commerce
infrastructure  is expected to also include media  advertising and  distribution
agreements in multiple countries.

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<PAGE>
     We are  developing  a  proprietary  enhanced  Global  Retail and  Franchise
Infrastructure  and  System to  support  the  launch of our  global  retail  and
franchising operations.  The System is expected to be fully operational in about
twelve months. The new Global Retail Infrastructure will enable our employees to
perform  global  customer  maintenance,  process  account  payments  and  view a
customer's sales history.

     As we attempt to grow, we intend to establish  regional  sales teams in the
United States and ultimately  internationally.  These sales teams will work with
distributors  and  retailers in their  regions to promote and sell our products.
Also, together with marketing and sales consultants we will attempt to develop a
marketing plan to promote our brand name and product lines worldwide. Currently,
we do not have  any  agreements  with  retail  or  wholesale  distributors.  Our
management will attempt to work to negotiate and enter into retail and wholesale
distribution  agreements for our products over the next six to twelve months. We
will also  attempt  to open  retail  outlets in large  cities in North  America,
Europe and the People's  Republic of China over the next five years. We have not
yet located any sites to establish retail stores,  but are initially looking for
locations in New York, Los Angeles,  San Francisco,  Seattle, Las Vegas or other
large cities in the United  States.  We  anticipate  that we will open our first
retail storefront in the United States within the next six to twelve months.

     If we are  successful in raising $5 million of financing in order to expand
our business and fund future  development,  we anticipate the following expenses
over the next twelve  months:  (a) $150,000 to develop our Internet  website and
e-commerce system; (b) $150,000 for media advertising to promote our brand name;
(c) $200,000  for our  research  and  development  program;  (d)  $2,000,000  to
establish our first retail outlet in the United States,  including an integrated
inventory management/  manufacturing/sales  computer system; (e) $200,000 for an
investor relations  program;  (f) $500,000 for professional and consultant fees;
and (g) $1,800,000 for general working capital,  including product  development,
inventory, and general and administrative expenses. We do not expect to purchase
or sell  significant  equipment or to  significantly  increase the number of our
employees over the next twelve months.

     If we are only successful in raising $1 million of financing to sustain our
current level of business operations,  we anticipate the following expenses over
the next  twelve  months:  (a)  $20,000  to develop  our  Internet  website  and
e-commerce system; (b) $200,000 for media advertising to promote our brand name;
(c) $60,000 for our research and development program;  (d)  $250,000-$400,000 to
begin the process of establishing  our first retail outlet in the United States;
(e)  $50,000  for an  investor  relations  program;  (f)  $150,000-$250,000  for
professional and consultant fees; and (g)  $200,000-$300,000 for general working
capital,   including   product   development,   inventory,   and   general   and
administrative  expenses.  We do not  expect  to  purchase  or sell  significant
equipment or to significantly increase the number of our employees over the next
twelve months.

RESEARCH AND DEVELOPMENT

     We  expect  to pay  approximately  $200,000  over the next  six  months  to
scientific  consultants  in the People's  Republic of China to identify and work
with new  product  candidates  held by  third  parties  that we will  ultimately
attempt to acquire the rights to. Each of the  formulations  would be considered
by the FDA to be  unapproved  new drugs and will require  approval by the FDA or
foreign  regulators before we can sell them. If approval of such products by the
FDA or foreign regulators is delayed or cannot be obtained, we will be forced to
delay our plans to market and sell these  products.  Any delay  could  adversely
affect our operations.

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<PAGE>
     As part of our growth  strategy,  we are  currently  in  negotiations  with
respect to a number of product  candidates  that we intend to license or acquire
for development and commercialization although no formal agreements with respect
to any such proposed products have been entered into. Proposing, negotiating and
implementing an economically  viable product acquisition or license is a lengthy
and complex process. Other companies, including those with substantially greater
financial,   marketing  and  sales  resources,  may  compete  with  us  for  the
acquisition or license of product  candidates.  We may not be able to acquire or
license  the  rights to  additional  product  candidates  on terms  that we find
acceptable,  or at all. If we are successful  acquiring such product candidates,
we will be required to raise  additional  capital for research and  development,
regulatory review and marketing efforts associated with such products. This will
require  substantial  investment before our new product candidates could provide
us with any revenue. We intend to seek outside debt and equity financing, to the
extent that such funding is available under reasonable terms and conditions,  in
order to fund our research and development  efforts.  We have not yet sought any
commitments  for such  financing and no assurance  can be given that  additional
financing will be available, or if available, will be on acceptable terms.

     We also plan to add VG-ALLERGY, VG-EYE and VG-ANTI-TUMOR to the products in
our King of Herbs product line. We acquired the rights to each of these products
under a purchase  agreement  dated May 1, 2004 with Julianna Lu, our founder and
principal  executive  officer,  and Xiao Fei Yu,  our  President  and one of our
directors.  VG-ALLERGY is a product designed to reduce allergic reactions of the
human  body.  VG-EYE  is  formulated  to  prevent   deterioration  of  eyesight.
VG-ANTI-TUMOR is formulated specifically to prevent cancerous growths for cancer
patients who are undergoing chemotherapy treatment. Each of these products would
be considered an unapproved new drug by the FDA and will require an approved New
Drug  Application  before the products can be marketed in the United States.  No
clinical trials have been conducted for these products. The New Drug Application
process is expensive,  lengthy and rigorous requiring extensive  nonclinical and
clinical trials to be successfully conducted. We intend to seek outside debt and
equity financing,  to the extent that such funding is available under reasonable
terms and conditions,  in order to fund this process. We have not yet sought any
commitments  for such  financing and no assurance  can be given that  additional
financing  will be  available,  or if available,  will be on  acceptable  terms.
Additionally,  there is no  guarantee  that  the FDA  would  accept  the data or
approve  any New Drug  Applications  for these  products.  If  approval of these
products by the FDA or foreign  regulators is delayed or cannot be obtained,  we
will be  forced  to  delay  our  plans to  market  and sell  these  products  to
consumers.

RISK FACTORS

     Our business  involves a high degree of risk.  Any of the  following  risks
could materially and adversely  affect our business,  financial  condition,  and
results of operations. This could cause the trading price of our common stock to
decline, with the loss of part or all of an investment in our common stock.

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<PAGE>
RISKS RELATED TO OUR FINANCIAL CONDITION
----------------------------------------

OUR FINANCIAL STATUS CREATES DOUBT WHETHER WE WILL CONTINUE AS A GOING CONCERN.

     We reported net losses totaling $3,137,133, $2,098,276 and $149,673 for the
periods  ended  September  30,  2005,  December  31, 2004 and December 31, 2003,
respectively.  As of September 30, 2005 we had a working  capital  deficiency of
$574,460 (current assets less current liabilities) and an accumulated deficit of
$5,456,755.  With our current resources we expect to be able to satisfy our cash
requirements  through  December  2005.  In order to expand our current  business
operations,  fund  future  development  and market  and sell our three  existing
product  lines we will need to raise at least $5 million in  financing  over the
next twelve months. We intend to raise additional working capital either through
private  placements,  public  offerings  and/or  bank  financing.  There  are no
assurances  that we will be able to  achieve  a level of  revenues  adequate  to
generate  sufficient  cash flow from operations or obtain  additional  financing
through private placements,  public offerings and/or bank financing necessary to
support our working  capital  requirements.  To the extent that funds  generated
from  any  private  placements,  public  offerings  and/or  bank  financing  are
insufficient, we will have to raise additional working capital. No assurance can
be given that additional financing will be available,  or if available,  will be
on acceptable terms.  These conditions raise substantial doubt about our ability
to continue as a going concern.  If adequate working capital is not available we
may be forced to discontinue operations, which would cause investors to lose the
entire amount of their investment.

WE NEED  SIGNIFICANT  INFUSIONS  OF  ADDITIONAL  CAPITAL,  WHICH  MAY  RESULT IN
DILUTION TO OUR SHAREHOLDERS' OWNERSHIP AND VOTING RIGHTS IN OUR COMPANY.

     Based upon our current cash reserves and forecasted operations,  we believe
that we will need to obtain at least $1 million  of outside  funding in order to
sustain our current  business  operations  over the next twelve  months,  and at
least $5 million of outside funding in order to expand our business, fund future
development and market and sell our three existing  product lines.  Our need for
additional capital to finance our business strategy, operations, and growth will
be greater should, among other things,  revenue or expense estimates prove to be
incorrect. If we fail to arrange for sufficient capital in the future, we may be
required  to reduce  the scope of our  business  activities  until we can obtain
adequate  financing.  We may not be  able  to  obtain  additional  financing  in
sufficient  amounts or on acceptable  terms when needed,  which could  adversely
affect our  operating  results  and  prospects.  Debt  financing  must be repaid
regardless of whether or not we generate profits or cash flows from our business
activities. Equity financing may result in dilution to existing shareholders and
may involve  securities  that have rights,  preferences,  or privileges that are
senior to our common stock.

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<PAGE>
RISKS RELATED TO OUR BUSINESS
-----------------------------

WE ARE A  DEVELOPMENT  STAGE COMPANY AND HAVE A LIMITED  OPERATING  HISTORY UPON
WHICH AN  EVALUATION  OF OUR COMPANY CAN BE MADE.  FOR THAT REASON,  IT WOULD BE
DIFFICULT FOR A POTENTIAL INVESTOR TO JUDGE OUR PROSPECTS FOR SUCCESS.

     We were organized in April 2002 and have had limited  operations  since our
inception  from which to evaluate our business  and  prospects.  There can be no
assurance that our future proposed  operations will be implemented  successfully
or that we will ever have profits.  If we are unable to sustain our  operations,
our  shareholders  may lose  their  entire  investments.  We face all the  risks
inherent in a new business, including the expenses, difficulties,  complications
and delays  frequently  encountered in connection  with  conducting  operations,
including capital  requirements and management's  potential  underestimation  of
initial and ongoing costs. As a new business,  we may encounter delays and other
problems  in  connection  with  the  methods  of  product  distribution  that we
implement.  We also  face  the  risk  that we  will  not be able to  effectively
implement our business  plan. In evaluating  our business and  prospects,  these
difficulties  should be considered.  If we are not effective in addressing these
risks,  we will not  operate  profitably  and we may not have  adequate  working
capital to meet our obligations as they become due.

IF WE FAIL TO ADEQUATELY  PROTECT OR ENFORCE OUR  INTELLECTUAL  PROPERTY RIGHTS,
COMPETITORS MAY PRODUCE AND MARKET PRODUCTS SIMILAR TO OURS. IN ADDITION, WE MAY
BE SUBJECT TO INTELLECTUAL  PROPERTY LITIGATION AND INFRINGEMENT CLAIMS BY THIRD
PARTIES.

     Our ability to compete effectively is dependent upon the proprietary nature
of the  designs,  processes,  technologies  and  materials  owned by, used by or
licensed to us. All of our intellectual  property rights are based on common law
and our license agreements with Hotway  Nutraceuticals Canada Co., Ltd. and from
rights  to  herbal  supplement  formulas  that we  obtained  from our  principal
officers,  Ms.  Julianna  Lu and Mr.  Xiao  Fei Yu.  We do not own and  have not
applied for patents,  trademarks or any other  registrations of our intellectual
properties.  Although we attempt to protect such proprietary properties, both in
the  United  States and in  foreign  countries  through  trade  secret  laws and
non-disclosure  agreements,  these may be insufficient.  In addition, because of
the differences in foreign laws concerning  proprietary rights, our products may
not receive the same degree of protection in foreign  countries as they would in
the United States. We may not always be able to successfully  protect or enforce
our proprietary  properties against competitors,  which may materially adversely
affect our business.

     In  addition,  although we do not believe  that our  products  infringe the
rights of others and while to date we have not been subject to such  claims,  in
the  future  we  may  be  subject  to  intellectual   property   litigation  and
infringement  claims,  which  could  cause us to incur  significant  expenses or
prevent us from selling our products. A successful claim of trademark, patent or
other intellectual  property  infringement against us could adversely affect our
growth and  profitability,  in some cases materially.  Others may claim that our
proprietary or licensed  products are  infringing  their  intellectual  property
rights, and that our products may infringe those  intellectual  property rights.
If we are found to have infringed on the intellectual property rights of another

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<PAGE>
party, licenses for such intellectual property may not be available on favorable
terms or at all. If someone  claims  that our  technology  or products  infringe
their intellectual property rights, any resulting litigation could be costly and
time  consuming and would divert the  attention of management  and key personnel
from other business  issues.  The complexity of the technology  involved and the
uncertainty of intellectual  property  litigation  increase these risks. We also
may be  subject  to  significant  damages  or  injunctions  preventing  us  from
manufacturing,  selling or using some  aspect of our  products in the event of a
successful claim of patent or other intellectual property  infringement.  Any of
these adverse  consequences could have a material adverse effect on our business
and profitability.

WE MAY INCUR MATERIAL PRODUCT LIABILITY COSTS.

     We are in the business of formulating and selling  nutritional  supplements
for  human  consumption.  As  a  distributor  of  products  designed  for  human
consumption,  we are  subject  to  product  liability  claims  if the use of our
products  is alleged to have  resulted  in injury.  We may be subject to various
product liability claims, including, among others, allegations that our products
include  inadequate  instructions  for  use or  inadequate  warnings  concerning
possible  side  effects and  interactions  with other  substances.  In addition,
although our manufacturers maintain quality controls and procedures with respect
to products that we sell,  our products could contain  contaminated  substances.
All of the  products we sell are  produced by  third-party  manufacturers.  As a
distributor of products manufactured by third parties, we may also be liable for
various product  liability claims for products we do not manufacture even though
we have no control over the manufacturing procedures used in connection with the
production of these third-party  products. We are in the process of applying for
product liability insurance. Such insurance, once obtained, may not be available
at a reasonable cost, or may not be adequate to cover liabilities.

IF WE ARE NOT ABLE TO MANAGE GROWTH OF OUR BUSINESS, OUR FINANCIAL CONDITION AND
RESULTS OF OPERATIONS WILL BE NEGATIVELY AFFECTED.

     Over the next six to twelve  months,  we  anticipate  launching our King of
Herbs, Taoist Medicinal and Vitamins and Supplements products lines. We have not
yet implemented any marketing and distribution strategies.  Accordingly,  we may
experience  a period  of  significant  growth.  While  we have  not  experienced
problems with growth of our business in the past,  any future growth could cause
significant  strain  on  our  managerial,   operational,   financial  and  other
resources.  Success in managing this expansion and growth will depend,  in part,
upon the ability of our senior  management to  effectively  manage the growth of
our  business.  Any failure to manage the proposed  growth and  expansion of our
business  could have a material  adverse  effect on our financial  condition and
results of operations.

IF WE FAIL TO ACQUIRE AND DEVELOP OTHER PRODUCTS OR PRODUCT  CANDIDATES,  WE MAY
BE UNABLE TO GROW OUR BUSINESS.

     We license  the rights to a majority of our  products  from  outside  third
parties.  As part of our  growth  strategy,  we intend  to  license  or  acquire
additional    products   and   product    candidates   for    development    and
commercialization.  The  success of this  strategy  depends  upon our ability to
identify, select and acquire the right product candidates. Any product candidate
we  license or acquire  may  require  additional  development  efforts  prior to

                                       27
<PAGE>
commercial sale, including extensive clinical testing and approval by regulatory
authorities.  All product  candidates are prone to the risks of failure inherent
in product  development,  including the possibility  that the product  candidate
will not be shown to be sufficiently safe and effective.  In addition, we cannot
assure you that any products that we license or acquire will be  manufactured or
produced  economically,  successfully  commercialized  or widely accepted in the
marketplace.  Proposing,  negotiating and  implementing  an economically  viable
product  acquisition  or  license  is  a  lengthy  and  complex  process.  Other
companies,  including those with substantially greater financial,  marketing and
sales  resources,  may compete with us for the acquisition or license of product
candidates.  We may not be able to acquire or license  the rights to  additional
products on terms that we find acceptable, or at all.

IF OUR RELATIONSHIPS WITH OUR MANUFACTURERS  TERMINATE,  OR THEIR FACILITIES ARE
DAMAGED OR DESTROYED, WE MAY BE UNABLE TO DEVELOP OR COMMERCIALIZE OUR PRODUCTS.

     Currently, only a limited number of companies manufacture our products. The
number  of  contract  manufacturers  with  the  expertise,  required  regulatory
approvals and facilities to manufacture  our product  candidates on a commercial
scale is extremely  limited,  and it would take a significant  amount of time to
arrange  for  alternative  manufacturers.  If any of our  manufacturers  fail to
deliver the required commercial quantities of bulk substance or finished product
on a timely basis and at commercially  reasonable  prices,  and we are unable to
find  one  or  more  replacement   manufacturers  capable  of  production  at  a
substantially  equivalent cost, in substantially equivalent volumes and quality,
and on a timely basis,  we will likely be unable to meet  customer  demand as we
begin to market and sell our existing product lines.

THE LOSS OF OUR CURRENT  MANAGEMENT TEAM COULD HAVE A MATERIAL ADVERSE EFFECT ON
OUR  BUSINESS.  IF WE ARE NOT  ABLE TO  RETAIN  ADDITIONAL  KEY  PERSONNEL,  OUR
BUSINESS COULD SUFFER.

     Our  success  depends  to a large  degree  upon the  skills of our  current
management team and advisors, including Ms. Julianna Lu and Mr. Xiao Fei Yu, and
upon our ability to identify,  hire, and retain  additional  senior  management,
sales, marketing, scientific, and financial personnel. Although, to date we have
not  experienced  problems  attracting  and  retaining  key  personnel,  we  may
encounter such problems in the future as we grow and expand our operations.  The
loss of any of our current executives,  employees, or advisors or the failure to
attract,  integrate,  motivate, and retain additional key employees could have a
material  adverse  effect on our  business.  To our  knowledge,  none of our key
employees  has plans to retire  or leave us in the near  future.  We do not have
"key person" insurance on the lives of any of our management team.

RISKS RELATED TO OUR INDUSTRY
-----------------------------

THE  NUTRITIONAL  SUPPLEMENTS  INDUSTRY IS INTENSELY  COMPETITIVE.  WE HAVE MANY
WELL-ESTABLISHED  COMPETITORS  WITH  SUBSTANTIALLY  GREATER  FINANCIAL AND OTHER
RESOURCES  THAN  US.  THESE  FACTORS  MAY  MAKE  IT  MORE  DIFFICULT  FOR  US TO
SUCCESSFULLY IMPLEMENT OUR BUSINESS PLAN AND MAY ADVERSELY AFFECT OUR RESULTS OF
OPERATIONS.


     The  nutritional  supplements  industry is a large,  highly  fragmented and
growing industry,  with no single industry participant  accounting for more than
10% of total industry retail sales.  Participants  include specialty  retailers,
supermarkets,  drugstores,  mass merchants (wholesalers),  multi-level marketing

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<PAGE>
organizations, mail order companies and a variety of other smaller participants.
The  market  is also  highly  sensitive  to the  introduction  of new  products,
including various  prescription  drugs,  which may rapidly capture a significant
share of the  market.  Increased  competition  from  companies  that  distribute
through retail or wholesale channels could have a material adverse effect on our
financial  condition  and  results  of  operations.  Some  of the  nutraceutical
companies that we will compete with are Weider  Nutrition  International,  Inc.,
USANA Health  Sciences  Inc.,  Nature's  Sunshine  Products,  Inc. and Herbalife
International, Inc. We are a development stage business and the only revenues we
have received from product sales since inception were nominal and were generated
during 2004. Accordingly, we have not been operational long enough to experience
any of the above problems.  However,  since we are a development stage business,
most,  if not all  companies in our industry  have greater  financial  and other
resources  available  to  them  and  possess  manufacturing,   distribution  and
marketing  capabilities  greater than ours. In addition,  our competitors may be
more effective and efficient in integrating new products.  We may not be able to
compete  effectively  and  any of the  factors  listed  above  may  cause  price
reductions, reduced margins and difficulties in gaining market share.

COMPLIANCE WITH GOVERNMENTAL  REGULATIONS MAY IMPOSE ADDITIONAL COSTS, WHICH MAY
ADVERSELY AFFECT OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

     The   processing,   formulation,    manufacturing,   packaging,   labeling,
advertising and distribution of our products are subject to regulation by one or
more federal agencies,  including the Health  Protectorate Branch in Canada, the
FDA,  the  Federal  Trade  Commission  ("FTC"),   the  Consumer  Product  Safety
Commission,  the United  States  Department  of  Agriculture,  the United States
Customs and Border Protection and the  Environmental  Protection  Agency.  These
activities are also  regulated by various  agencies of the states and localities
in which our products are sold.

     The FDA may attempt to regulate  any of our  products  that fall within its
jurisdiction,  and the FTC has  jurisdiction  to regulate the advertising of our
products that fall within its jurisdiction.  The FDA may not accept the evidence
of safety for any new ingredients that we may want to market, may determine that
a particular product or product ingredient presents an unacceptable health risk,
may determine that a particular statement of nutritional support that we want to
use is an unacceptable  drug claim or an unauthorized  version of a food "health
claim," may determine  that a particular  product is an unapproved  new drug, or
the FDA or the FTC may  determine  that  particular  claims  are not  adequately
supported by available scientific  evidence.  Such a determination would prevent
us from marketing particular products or using certain statements of nutritional
support on our products.  One of the key areas of our  development  focus is the
specialty  supplements  category,  which includes  products that are directed at
particular  nutritional  concerns.  The FDA may not agree with our statements of
nutritional  support as to a  particular  specialty  supplement  or permit us to
promote our specialty  supplements directed at particular  nutritional concerns.
We also may be unable to disseminate  third-party  literature in connection with
our  products  if  the   third-party   literature   fails  to  satisfy   certain
requirements.  In  addition,  the FDA could  require  us to remove a  particular
product from the market. Any future recall or removal would result in additional
costs to us,  including  lost revenues from any products that we are required to
remove from the market, any of which could be material. Any such product recalls
or  removals  could lead to  liability,  substantial  costs and  reduced  growth
prospects.

                                       29
<PAGE>
     Although the regulation of dietary supplements is less restrictive than the
regulation of drugs,  dietary supplements may not continue to be subject to less
restrictive  regulation.  Many of our dietary  supplements  contain  traditional
Chinese  herbs which may or may not have been  previously  evaluated by the FDA.
All herbs marketed in dietary supplements in the United States must be Generally
Recognized as Safe (GRAS). The FDA maintains a list of problems herbs. If any of
the  herbs  in  our  products  appeared  on the  FDA's  list,  or if the  agency
determined there were issues  concerning  their safety,  we would not be able to
market the products  containing these  ingredients in the United States. We have
not determined whether any of the herbs in our products are on the FDA's list of
problem  herbs and we have not  determined  whether any such herbs are Generally
Recognized as Safe. If any of the herbs in our products have not been  evaluated
by the FDA and are not  Generally  Recognized  as  Safe,  then we  would  not be
permitted  to sell  products  containing  them in the  United  States.  Any such
prohibition  could  materially  adversely  affect our results of operations  and
financial condition.

     Further, if more stringent statutes are enacted for dietary supplements, or
if more stringent regulations are promulgated, we may not be able to comply with
such statutes or regulations without incurring  substantial  expense, or at all.
Legislation has been introduced in Congress to impose substantial new regulatory
requirements for dietary  supplements  including  adverse event reporting,  post
market surveillance requirements, FDA reviews of dietary supplement ingredients,
safety  testing  and  records  inspection.  If  enacted,  any  of  the  proposed
legislation  may result in  difficulty  getting  our  products to the market and
could raise our costs and hinder our business.

     In addition,  we expect that the FDA soon will adopt the proposed  rules on
Good  Manufacturing  Practice in  manufacturing,  packaging,  or holding dietary
ingredients  and  dietary  supplements,  which  will  apply to the  products  we
manufacture.  These regulations will require dietary supplements to be prepared,
packaged and held in  compliance  with strict  rules,  and will require  quality
control  provisions  similar  to  those  in  the  Good  Manufacturing   Practice
regulations  for drugs.  We may not be able to comply with the new rules without
incurring additional expenses.

     Each of our products  imported into the United States may be blocked at the
border  by U.S.  Customs.  The FDA  could  issue  Import  Alerts  for any of our
products  if the agency  considers  them to be  misbranded,  adulterated  and/or
unapproved new drugs.

     The FTC exercises jurisdiction over the advertising of dietary supplements.
In the past, the FTC has instituted numerous enforcement actions against dietary
supplement companies for failure to have adequate substantiation for claims made
in advertising or for the use of false or misleading  advertising claims.  These
enforcement  actions have often  resulted in consent  decrees and the payment of
civil penalties by the companies involved.

     We  are  also  subject  to  regulation  under  various  state,  local,  and
international  laws that include provisions  governing,  among other things, the
processing,  formulation,  manufacturing,  packaging,  labeling, advertising and
distribution  of  our  products  that  are  deemed   "dietary   supplements"  or
"over-the-counter  drugs."  Government  regulations  in  foreign  countries  may
prevent or delay the introduction,  or require the reformulation,  of certain of
our products.

                                       30
<PAGE>
     In addition, from time to time in the future, Congress, the FDA, the FTC or
other federal,  state, local or foreign  legislative and regulatory  authorities
may impose  additional  laws or  regulations  that apply to us,  repeal  laws or
regulations  that  we  consider   favorable  to  us  or  impose  more  stringent
interpretations  of current laws or regulations.  We are not able to predict the
nature of such  future  laws,  regulations,  repeals  or  interpretations  or to
predict the effect additional  governmental  regulation,  when and if it occurs,
would have on our  business in the future.  Such  developments  could,  however,
require  reformulation  of certain  products to meet new  standards,  recalls or
discontinuance  of  certain  products  not able to be  reformulated,  additional
record-keeping  requirements,  increased  documentation  of  the  properties  of
certain  products,  additional  or  different  labeling,  additional  scientific
substantiation,  or other new requirements.  Any such developments  could have a
material  adverse  effect on our  business,  financial  condition and results of
operations.

RISKS RELATED TO OUR COMMON STOCK
---------------------------------

THERE IS A LIMITED  PUBLIC  MARKET FOR OUR COMMON  STOCK.  FAILURE TO DEVELOP OR
MAINTAIN A TRADING  MARKET COULD  NEGATIVELY  AFFECT THE VALUE OF OUR SHARES AND
MAKE IT DIFFICULT OR IMPOSSIBLE FOR SHAREHOLDERS TO SELL THEIR SHARES.

     On April 18, 2005,  our common stock was approved for  quotation on the OTC
Bulletin  Board  under the symbol  "CHHH."  To date  there is a limited  trading
market in our  common  stock on the OTC  Bulletin  Board.  Failure to develop or
maintain  an active  trading  market  could  negatively  affect the value of our
shares  and make it  difficult  for our  shareholders  to sell  their  shares or
recover any part of their investment in us. The market price of our common stock
may be highly volatile. In addition to the uncertainties  relating to our future
operating  performance and the profitability of our operations,  factors such as
variations in our interim financial  results,  or various,  as yet unpredictable
factors, many of which are beyond our control, may have a negative effect on the
market price of our common stock.

OUR  COMMON  STOCK IS  SUBJECT  TO THE  "PENNY  STOCK"  RULES OF THE SEC AND THE
TRADING MARKET IN OUR  SECURITIES IS LIMITED,  WHICH MAKES  TRANSACTIONS  IN OUR
COMMON STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

     The  Securities  and  Exchange  Commission  has adopted  Rule 3a51-1  which
establishes the definition of a "penny stock," for the purposes  relevant to us,
as any equity  security  that has a market price of less than $5.00 per share or
with an  exercise  price of less  than  $5.00  per  share,  subject  to  certain
exceptions.  For any transaction  involving a penny stock,  unless exempt,  Rule
15g-9 requires:

     - that a broker or dealer approve a person's  account for  transactions  in
penny stocks; and

     - the broker or dealer receive from the investor a written agreement to the
transaction,  setting  forth the  identity and quantity of the penny stock to be
purchased.

                                       31
<PAGE>
     In order to approve a person's  account for  transactions  in penny stocks,
the broker or dealer must:

     - obtain financial  information and investment experience objectives of the
person; and

     - make a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient  knowledge and experience
in financial  matters to be capable of evaluating the risks of  transactions  in
penny stocks.

The broker or dealer  must also  deliver,  prior to any  transaction  in a penny
stock, a disclosure  schedule  prescribed by the SEC relating to the penny stock
market, which, in highlight form:

     - sets forth the basis on which the broker or dealer  made the  suitability
determination; and

     - that the broker or dealer received a signed,  written  agreement from the
investor prior to the transaction.

Generally,  brokers may be less willing to execute  transactions  in  securities
subject  to the  "penny  stock"  rules.  This  may  make it more  difficult  for
investors to dispose of our common stock and cause a decline in the market value
of our stock.

Disclosure  also has to be made about the risks of  investing in penny stocks in
both public offerings and in secondary trading and about the commissions payable
to both the broker-dealer and the registered representative,  current quotations
for the securities and the rights and remedies available to an investor in cases
of fraud in penny stock  transactions.  Finally,  monthly  statements have to be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks.

                                       32
<PAGE>
ITEM 3.  CONTROLS AND PROCEDURES.

a)   EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. As of September 30, 2005,
     the Company's  management carried out an evaluation,  under the supervision
     of the Company's Chief Executive Officer and the Chief Financial Officer of
     the  effectiveness  of the design and operation of the Company's  system of
     disclosure  controls and procedures pursuant to the Securities and Exchange
     Act, Rule 13a-15(e) and 15d-15(e) under the Exchange Act).  Based upon that
     evaluation,  the  Chief  Executive  Officer  and  Chief  Financial  Officer
     concluded  that the  Company's  disclosure  controls  and  procedures  were
     effective,  as of the  date  of  their  evaluation,  for  the  purposes  of
     recording,   processing,   summarizing   and  timely   reporting   material
     information  required to be disclosed in reports filed by the Company under
     the Securities Exchange Act of 1934.

b)   CHANGES IN INTERNAL  CONTROLS.  There were no changes in internal  controls
     over financial  reporting  that occurred  during the period covered by this
     report that has materially affected, or is likely to materially effect, the
     Company's internal control over financial reporting. a)


                                       33
<PAGE>
                                     PART II
                                    ---------

ITEM 1.  LEGAL PROCEEDINGS.

From  time to time,  we may  become  involved  in  various  lawsuits  and  legal
proceedings  that  which  arise in the  ordinary  course of  business.  However,
litigation is subject to inherent uncertainties,  and an adverse result in these
or other matters may arise from time to time that may harm our business.  We are
currently not aware of any such legal proceedings or claims that we believe will
have,  individually  or in the  aggregate,  a  material  adverse  affect  on our
business, financial condition or operating results.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During  the  quarter  ended  September  30,  2005,  we issued an  aggregrate  of
1,720,000  shares of common stock to nine  consultants  in exchange for services
rendered. The aggregate value of the shares issued was $723,525. These issuances
are  considered  exempt  from  registration  by  reason of  Section  4(2) of the
Securities Act of 1933.

On September 1, 2005, we issued 10,000 shares of common stock to Dick Wu, one of
our directors, for services rendered. The value of the shares issued was $6,150.
Such issuance is considered  exempt from  registration by reason of Section 4(2)
of the Securities Act of 1933.

On September 1, 2005,  we issued  81,690  shares of common stock to one investor
upon the  exercise of options at $0.10 per share.  Such  issuance is  considered
exempt from  registration  by reason of Section  4(2) of the  Securities  Act of
1933.

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

          31.1 -  Certification  of Chief  Executive  Officer  pursuant  to Rule
          13a-14  and Rule  15d-14(a),  promulgated  under  the  Securities  and
          Exchange Act of 1934, as amended

          31.2 -  Certification  of Chief  Financial  Officer  pursuant  to Rule
          13a-14  and Rule 15d  14(a),  promulgated  under  the  Securities  and
          Exchange Act of 1934, as amended

          32.1 -  Certification  pursuant to 18 U.S.C.  Section 1350, as adopted
          pursuant  to  Section  906 of the  Sarbanes-Oxley  Act of 2002  (Chief
          Executive Officer)

          32.2 -  Certification  pursuant to 18 U.S.C.  Section 1350, as adopted
          pursuant  to  Section  906 of the  Sarbanes-Oxley  Act of 2002  (Chief
          Financial Officer)

                                       34
<PAGE>
SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


China Health Holding, Inc.
(Registrant)

By: /s/ JULIANNA LU                         Dated: November 14, 2005
-------------------
Julianna Lu
Chief Executive  Officer  (Principal  Executive  Officer),  Principal  Financial
Officer,  Principal  Accounting Officer,  Treasurer and Chairman of the Board of
Directors


                                       35