UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549


FORM
      10-QSB


(Mark
      One)




x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934





For
      the
      quarterly period ended September 30, 2007





o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                ACT




For
      the
      transition period from ________________ to _______________





000-51429


(Commission
      file number)





CHINA
      HOUSING & LAND DEVELOPMENT, INC.


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





Nevada
            20-1334845(State
                or other jurisdiction
            (IRS
                Employerof
                incorporation or organization)
            Identification
                No.)





6
      Youyi
      Dong Lu, Han Yuan 4 Lou


Xi'An,
      Shaanxi Province


China
      710054


(Address
      of principal executive offices)


86-029-82582632


(Issuer's
      telephone number)


N/A


(Former
      name, former address and former fiscal year,


if
      changed since last report)





Check
      whether the issuer (1) filed all reports required to be filed by
      Section


13
      or
      15(d) of the Exchange Act during the past 12 months (or for such
      shorter


period
      that the registrant was required to file such reports), and (2) has
      been


subject
      to such filing requirements for the past 90 days. Yes x No o





Indicate
      by check mark whether the registrant is a shell company (as defined
      in


Rule
      12b-2 of the Exchange Act). Yes o No x





State
      the
      number of shares outstanding of each of the issuer's classes of
      common


equity,
      as of the latest practicable date: As of November 14, 2007


30,096,585
      shares of common stock




Transitional
      Small Business Disclosure Format (check one): Yes o No x










CHINA
      HOUSING & LAND DEVELOPMENT, INC.




Index




Page
              NumberPART
                I.
            
            FINANCIAL
                INFORMATIONItem
                1.
            
            Financial
                StatementsConsolidated
                Balance Sheets as of September 30, 2007 (unaudited) and December
                31,
                2006
            2Consolidated
                Statements of Income and Other Comprehensive Income for the three
                and nine
                months ended September 30, 2007 and 2006 (unaudited)
            3Consolidated
                Statements of Cash Flows for nine months ended September 30, 2007 and
                2006 (unaudited)
            4Notes
                to Consolidated Financial Statements (unaudited)
            5Item
                2.
            
            Management's
                Discussion and Analysis or Plan of Operations
            21Item
                3.
            
            Controls
                and Procedures
            25PART
                II.
            
            OTHER
                INFORMATIONItem
                1.
            
            Legal
                Proceedings
            25Item
                2.
            
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            25Item
                3.
            
            Defaults
                Upon Senior Securities
            25Item
                4.
            
            Submission
                of Matters to a Vote of Security Holders
            26Item
                5.
            
            Other
                Information
            26Item
                6.
            
            Exhibits
            26SIGNATURES
            
            
            27EX-31.1
                (Certifications required under Section 302 of the Sarbanes-Oxley
                Act of
                2002)EX-31.2
                (Certifications required under Section 302 of the Sarbanes-Oxley
                Act of
                2002)EX-32.1
                (Certifications required under Section 906 of the Sarbanes-Oxley
                Act of
                2002)EX-32.2
                (Certifications required under Section 906 of the Sarbanes-Oxley
                Act of
                2002)









PART
      I.
      FINANCIAL INFORMATION


CHINA
        HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
  CONSOLIDATED
        BALANCE SHEETS
 AS
        OF
        SEPTEMBER 30, 2007 AND DECEMBER 31, 2006


September
                  30,
              
              December
                  31,2007
              
              2006(Unaudited)ASSETSCash
              
              $
              3,745,870
              
              $
              379,633Cash
                  - restricted
              
              
              949,740
              
              
              1,108,271Accounts
                  receivable, net of allowance for doubtfulaccounts
                  of $78,705 and 79,118, respectively
              
              
              3,306,776
              
              
              3,070,516Notes
                  receivable, net
              
              
              90,317
              
              
              2,127,271Real
                  estateFinished
                  projects
              
              
              28,118,570
              
              
              37,247,436Construction
                  in progress
              
              
              26,151,798
              
              
              9,730,650Total
                  real estate held for development or sale
              
              
              54,270,368
              
              
              46,978,086Property
                  and equipment, net
              
              
              5,611,874
              
              
              17,701,896Assets
                  held for sale
              
              
              12,563,133
              
              
              -Advance
                  to suppliers
              
              
              8,894,622
              
              
              493,570Receivables,
                  deferred charges and other assets
              
              
              495,311
              
              
              986,039Exclusive
                  development rights
              
              
              2,299,359
              
              
              -Goodwill
              
              
              29,916,668
              
              
              -Total
                  assets
              
              $
              122,144,038
              
              $
              72,845,282LIABILITIESAccounts
                  payable
              
              $
              6,554,345
              
              $
              5,324,815Advances
                  from customers
              
              
              3,954,755
              
              
              2,902,426Accrued
                  expenses
              
              
              1,221,270
              
              
              1,738,584Payable
                  to original shareholders
              
              
              22,888,932
              
              
              5,462,798Income
                  and other taxes payable
              
              
              14,087,158
              
              
              11,386,169Other
                  payables
              
              
              4,323,990
              
              
              2,572,838Loans
                  from employees
              
              
              1,879,208
              
              
              1,037,842Loans
                  payable
              
              
              14,692,676
              
              
              23,206,852Warrants
                  liability
              
              
              2,448,876
              
              
              -Total
                  liabilities
              
              
              72,051,210
              
              
              53,632,324SHAREHOLDERS'
                  EQUITYCommon
                  stock: $.001 par value, authorized 100,000,000 shares
              
              
              30,096
              
              
              20,619issued
                  and outstanding 30,096,585 and 20,619,223, respectivelyAdditional
                  paid in capital
              
              
              28,302,124
              
              
              7,192,600Statutory
                  reserves
              
              
              2,563,796
              
              
              2,150,138Retained
                  earnings
              
              
              16,552,668
              
              
              14,414,181Capital
                  contribution receivable
              
              
              -
              
              
              (5,462,798
              )Accumulated
                  other comprehensive income
              
              
              2,644,144
              
              
              898,218Total
                  shareholders' equity
              
              
              50,092,828
              
              
              19,212,958Total
                  liabilities and shareholders' equity
              
              $
              122,144,038
              
              $
              72,845,282




2


CHINA
        HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
  CONSOLIDATED
        STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
 FOR
        THE
        THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER, 2007 AND 2006


Three
                  months ended September 30 ,
              
              Nine
                  months ended September 30 ,2007
              
              2006
              
              2007
              
              2006(Unaudited)
              
              (Unaudited)
              
              (Unaudited)
              
              (Unaudited)REVENUESale
                  of properties
              
              $
              5,700,596
              
              $
              14,182,007
              
              $
              24,881,984
              
              $
              50,421,060Other
                  income
              
              
              336,333
              
              
              50,100
              
              
              1,369,732
              
              
              205,941Total
                  revenue
              
              
              6,036,929
              
              
              14,232,107
              
              
              26,251,716
              
              
              50,627,001COSTS
                  AND EXPENSESCost
                  of properties sold
              
              
              3,019,240
              
              
              9,765,850
              
              
              17,585,887
              
              
              32,109,142Selling,
                  general and administrative expenses
              
              
              886,405
              
              
              1,262,648
              
              
              2,007,351
              
              
              4,712,089Other
                  expense
              
              
              20,153
              
              
              91,123
              
              
              190,404
              
              
              337,929Interest
                  expense
              
              
              1,120,150
              
              
              21,287
              
              
              1,501,105
              
              
              80,215Loss-change
                  in fair value of warrants
              
              
              408,261
              
              
              -
              
              
              419,465
              
              
              -Total
                  costs and expense
              
              
              5,454,209
              
              
              11,140,908
              
              
              21,704,212
              
              
              37,239,375INCOME
                  BEFORE PROVISION FOR INCOME TAXES
              
              
              582,720
              
              
              3,091,199
              
              
              4,547,504
              
              
              13,387,626PROVISION
                  FOR INCOME TAXES
              
              
              653,957
              
              
              1,057,370
              
              
              1,995,359
              
              
              4,455,191NET
                  INCOME
              
              
              (71,237
              )
              
              2,033,829
              
              
              2,552,145
              
              
              8,932,435GAIN
                  (LOSS) ON FOREIGN EXCHANGE
              
              
              786,813
              
              
              195,336
              
              
              1,745,926
              
              
              26,815OTHER
                  COMPREHENSIVE INCOME
              
              $
              715,576
              
              $
              2,229,165
              
              $
              4,298,071
              
              $
              8,959,250WEIGHTED
                  AVERAGE SHARES OUTSTANDINGBasic
              
              
              30,090,699
              
              
              20,474,993
              
              
              25,723,046
              
              
              18,539,120Diluted
              
              
              30,257,923
              
              
              20,474,993
              
              
              25,838,126
              
              
              18,536,120EARNINGS
                  PER SHAREBasic
              
              $
              0.00
              
              $
              0.10
              
              $
              0.10
              
              $
              0.48Diluted
              
              $
              0.00
              
              $
              0.10
              
              $
              0.10
              
              $
              0.48




3




CHINA
        HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
  CONSOLIDATED
        STATEMENTS OF CASH FLOWS
 FOR
        THE
        NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006


2007
              
              2006(Unaudited)
              
              (Unaudited)CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  income
              
              $
              2,552,145
              
              $
              8,932,435Adjustments
                  to reconcile net income to cashprovided
                  by (used in) operating activities:Allowance
                  for bad debt
              
              
              20,661Depreciation
              
              
              365,560
              
              
              189,722Exchange
                  loss (gains)
              
              
              134,197
              
              
              (387,153
              )Gain
                  on disposal of fixed assets and inventory
              
              
              (707,451
              )
              
              -Amortization
                  of stock issued for investor relations fees
              
              
              98,500
              
              
              -Accrued
                  interest on loan to shareholders
              
              
              905,770
              
              
              -Loss-change
                  in fair value of warrants
              
              
              419,465
              
              
              -Change
                  in operating assets and liabilitiesAccounts
                  receivable
              
              
              (91,148
              )
              
              -Real
                  estate
              
              
              (1,545,058
              )
              
              5,404,764Advance
                  to suppliers
              
              
              (7,831,904
              )
              
              9,284,058Other
                  receivable and deferred charges
              
              
              1,302,366
              
              
              (3,379,743
              )Accounts
                  payable
              
              
              (2,291,251
              )
              
              8,839,530Advances
                  from customers
              
              
              915,265
              
              
              (30,161,309
              )Accrued
                  expense
              
              
              (1,539,723
              )
              
              7,029,454Other
                  payable
              
              
              (486,759
              )
              
              1,027,881Income
                  and other taxes payable
              
              
              2,449,306
              
              
              -Net
                  cash used in (provided by) operating activities
              
              
              (5,330,059
              )
              
              6,779,639CASH
                  FLOWS FROM INVESTING ACTIVITIES:Change
                  in restricted cash
              
              
              199,275
              
              
              -Purchase of
                  buildings, equipment and automobiles
              
              
              (194,423
              )
              
              (12,721,532
              )Notes
                  receivable collected
              
              
              2,037,505
              
              
              -Purchase
                  of intangible assets
              
              
              -
              
              
              (3,532
              )Cash
                  from acquisition
              
              
              51,433
              
              
              872Net
                  cash provided by (used in) investing activities
              
              
              2,093,790
              
              
              (12,724,192
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Loan
                  proceeds
              
              
              3,919,200
              
              
              6,225,000Payments
                  on loans
              
              
              (13,179,053
              )
              
              (1,739,841
              )Loans
                  from employees
              
              
              782,733
              
              
              -Proceeds
                  from issuance of common stock and warrants
              
              
              23,036,138
              
              
              1,750,853Payments
                  to original shareholder
              
              
              (8,099,680
              )
              
              -Net
                  cash provided by financing activities
              
              
              6,459,338
              
              
              6,236,012INCREASE
                  IN CASH
              
              
              3,223,069
              
              
              291,459EFFECTS
                  ON FOREIGN CURRENCY EXCHANGE
              
              
              143,168
              
              
              4,353CASH,
                  beginning of period
              
              
              379,633
              
              
              30,746CASH,
                  end of period
              
              $
              3,745,870
              
              $
              326,558Supplemental
                  disclosure of cash flow information:Cash
                  paid for interest expense
              
              $
              857,315
              
              $
              1,315,518Cash
                  paid for income taxes
              
              $
              -
              
              $
              -




4


CHINA
        HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (UNAUDITED)
  **Note
        1 - Organization and basis of presentation**
 
 Organization
 
 China
        Housing & Land Development, Inc. (the “Company”) is a Nevada corporation,
        incorporated on July 6, 2004 under the name Pacific Northwest Productions
        Inc.
        On May 6, 2006, the Company changed its name to China Housing & Land
        Development Inc. The Company, through its subsidiary Xi’an Tsining Housing
        Development Company Inc. (XTHDC), is engaged in acquisition, development,
        management, and sale of commercial and residential real estate properties
        located primarily in Xi'an city, the People’s Republic of China
        (PRC).
 
 XTHDC
        was
        established during May 1992 as a state-owned enterprise, whose former name
        is
        Xi’an New Star Group Real Estate Development Co. Ltd, and was formerly the
        logistics department of Lan Zhou Military area of the People's Liberation
        Army
        of China. The Company was reorganized as a limited liability company with
        equity
        capital invested by management personnel in September 1999. The Company is
        a
        Chinese registered limited liability company with a legal structure similar
        to a
        regular corporation and a limited liability company. The Articles of Association
        provide for a 54 year term beginning September 7, 1999 with registered capital
        of approximately $3,140,000 (RMB26,000,000). On March 28, 2002, the registered
        capital of Tsining was increased to approximately $6,050,000 (RMB50,000,000).
 
 On
        April
        21, 2006, XTHDC entered into and closed a share purchase agreement with Pacific
        Northwest Productions, Inc. (“Pacific”), a public shell in the United States of
        Americaincorporated
        in the state of Nevada.
        Pursuant to the purchase agreement, Pacific acquired all of the issued and
        outstanding capital stock of XTHDC in exchange for 16,000,000 (post-split)
        shares of Pacific’s common stock.
 
 Concurrently
        with the closing of the purchase agreement and as a condition thereof, Pacific
        entered into an agreement with Deljit Bains and Davinder Bains, its executive
        officers, pursuant to which they each returned 4,000,000 (post-split) shares
        (8,000,000 shares in total) of Pacific common stock to Pacific for cancellation.
        They were not compensated in any way for the cancellation of their shares
        of
        Pacific common stock. Upon completion of the foregoing transactions, Pacific
        had
        an aggregate of 20,000,000 shares of common stock issued and outstanding.
 
 As
        a
        result of the merger, XTHDC’s stockholders own approximately 80% of the combined
        company and the directors and executive officers of XTHDC became the directors
        and executive officers of Pacific. Accordingly, the transaction has been
        accounted for as a reverse acquisition of Pacific by XTHDC resulting in a
        recapitalization of XTHDC. XTHDC is deemed to be the purchaser and surviving
        company for accounting purposes. Accordingly, its assets and liabilities
        are
        included in the balance sheet at their historical book values and the results
        of
        operations of XTHDC have been presented for the comparative prior period.
 
 In
        addition, on May 5, 2006, Pacific changed its name to China Housing & Land
        Development, Inc. (hereafter referred to as the “Company”) and the stockholders
        approved a stock dividend of seven shares for each share held, which has
        been
        accounted for as an eight to one forward stock split. All shares and per
        share
        data have been restated retrospectively.
 
 In
        2007,
        the Company acquired 100% equity of Xi’an New Land Development Co., Ltd. See
        note 2 for details of acquisition.
 
 Xi’an
        New
        Land Development Co., LTD (“New Land”) was
        originally incorporated in September 2003 in Xi’an city in Shaanxi province,
        China .
        In
        2006, New Land entered into an agreement with Baqiao District Government
        of
        Xi’an City to develop Baqiao Science & Technology Industrial Park, a
        provincial development zone in Shaanxi Province to establish a joint
        venture for New Land to develop and purchase approximately 487 acres in Baqiao
        Park. The agreement covers period from July 2006 to June 2011. New Land is responsible
        for the installation and maintenance of all basic infrastructures, including
        water, electricity, and gas supply, along with telecommunication and sewer
        systems. In return, New
        Land
        will be given the exclusive rights to obtain 487 acres land use
        right.
  5
 CHINA
          HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
          30, 2007
 (UNAUDITED)
 On
        June
        19, 2007, New Land established Xi’an Hao Tai Housing Development Company Inc.
        (“Hao Tai”) for the purpose of obtaining, developing, and trading land use
        rights in China. Hao Tai’s registered capital is RMB8.0 million, approximately
        $1.06 million, and is 100% owned by New Land. The company received the formal
        business license from the government in July 2007. Hao Tai did not have any
        operating activities during the period ended September 30, 2007.
 
 **Note
        2 - Acquisition**
 
 On
        March
        9, 2007, the Company entered into a Shares Transfer Agreement (the Agreement)
        to
        acquire 32 million shares of Xi'an New Land Development Co., Ltd. (New Land),
        representing 100% equity ownership of New Land. The acquisition was effective
        on
        May 31, 2007. The total purchase price for the acquisition is RMB 270 million,
        approximately $35 million. The total purchase price includes 1) an initial
        cash
        payment of RMB 5 million, approximately $610,000, payable within 20 days
        after
        the signing of the Agreement, 2) an additional cash payment of RMB 57 million,
        approximately $7.2 million, and 3) a promissory note of the aggregate amount
        of
        RMB 208 million, approximately $26.2 million, bearing 10% interest with a
        maturity of January
        30, 2009. As of September 30, 2007, the total payable to original shareholders
        amounted to $22,888,932 Pursuant
        to SFAS 141, Business Combination, the excess of purchase price over total
        fair
        value acquired is recorded as goodwill. As a result, the Company recorded
        $25.4M
        of goodwill after the acquisition.
 
 Prior
        to
        the acquisition, management was aware that New Land had agreements with the
        local Baqiao government to perform various constructions services during
        2003 to
        2005. The New Land management was not able to determine the exact amount
        of the
        progress billing and costs incurred on the projects. The Company’s management is
        currently obtaining information related to certain construction contracts
        with
        the Baqiao government. The amounts shown below recorded related to this
        acquisition is expected to be reallocated once all information is obtained.
  Acquired
                  (assumed)Item
              
              Book
                  Value
              
              by
                  the CompanyCurrent
                  assets
              
              $
              297,131
              
              $
              297,131Construction
                  in progress
              
              
              8,824,887
              
              
              8,824,887Property,
                  plant, and equipment
              
              
              103,212
              
              
              103,212Exclusive
                  rights
              
              
              -
              
              
              2,266,610Goodwill
              
              
              -
              
              
              29,490,569Total
                  assets
              
              
              9,225,230
              
              
              40,982,409Current
                  liability
              
              
              5,477,408
              
              
              5,477,408Total
                  liabilities
              
              
              5,477,408
              
              
              5,477,408Net
                  assets
              
              $
              3,747,822
              
              $
              35,505,001
 
 The
        financial data of New Land from June 1 to September 30, 2007 is included
        in the
        Company’s consolidated financial statements.
  6
 CHINA
          HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
          30, 2007
 (UNAUDITED)
 **Pro
        Forma**
 
 The
        following unaudited pro forma condensed income statement for the nine months
        ended September 30, 2007 was prepared under generally accepted accounting
        principles and as if the acquisition of New Land had occurred on January
        1,
        2006. The pro forma information may not be indicative of the results that
        actually would have occurred if the acquisition had been in effect from and
        on
        the dates indicated or which may be obtained in the future.
 
 For
                  the Nine Months Ended
              
              For
                  the Year EndedSeptember
                  30, 2007
              
              December
                  31, 2006Total
                  Revenue
              
              $
              25,915,393
              
              $
              32,785,718Cost
                  of Goods Sold
              
              
              17,585,887
              
              
              21,236,598Gross
                  Profit
              
              
              8,329,506
              
              
              11,549,120Operating
                  Expenses
              
              
              4,063,198
              
              
              4,576,201Income
                  Tax
              
              
              1,995,268
              
              
              2,333,444Net
                  Income
              
              $
              2,270,949
              
              $
              4,639,475
 
 **Note
        3 - Summary of significant accounting policies**
 
 Principles
        of consolidation and basis of presentation
 
 The
        accompanying consolidated financial statements include the accounts of China
        Housing & Land Development, Inc. and its wholly owned subsidiaries, XTHDC,
        New Land, and Hao Tai. All material inter-company accounts and transactions
        have
        been eliminated in consolidation. The accompanying consolidated financial
        statements have been prepared in conformity with accounting principles generally
        accepted in the United States of America.
 Use
        of
        estimates
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the financial statements
        and
        the reported amounts of revenues and expenses during the reporting period.
        Actual results could differ from those estimates.
 
 Foreign
        currency translation
 
 As
        of
        September 30, 2007, the accounts of the Company are maintained in their
        functional currency the Chinese Yuan Renminbi (RMB). The reporting currency
        for
        the consolidated financial statements is the United States Dollars (USD).
        In
        accordance with Statement of Financial Accounts Standards ("SFAS") No. 52,
        "Foreign Currency Translation," all assets and liabilities were translated
        at
        the exchange rate on the balance sheet date, stockholder's equity are translated
        at the historical rates and statement of operations are translated at the
        weighted average exchange rate for the period. Cash flows are also translated
        at
        the weighted average exchange rate for the year; therefore, amounts reported
        on
        the statement of cash flows will not necessarily agree with changes in the
        corresponding balances on the balance sheet.
 
 The
        resulting translation adjustments are reported under other comprehensive
        income
        in accordance with SFAS No. 130, "Reporting Comprehensive Income."
  7
 CHINA
          HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
          30, 2007
 (UNAUDITED)
 Revenue
        recognition
 
 Real
        estate sales are reported in accordance with the provisions of Statement
        of
        Financial Accounting Standard No. 66, “Accounting for Sales of Real Estate”.
        Profit from the sales of development properties, less 5% business tax, is
        recognized by the full accrual method when the sale is consummated. A sale
        is
        not considered consummated until (1) the parties are bound by the terms of
        a
        contract, (2) all consideration has been exchanged, (3) any permanent financing
        of which the seller is responsible has been arranged, (4) all conditions
        precedent to closing have been performed, (5) the seller does not have
        substantial continuing involvement with the property, and (6) the usual risks
        and rewards of ownership have been transferred to the buyer. Sales transactions
        not meeting all the conditions of the full accrual method are accounted for
        using the deposit method of accounting. Under the deposit method, all costs
        are
        capitalized as incurred, and payments received from the buyer are recorded
        as a
        deposit liability. Real estate rental income, less 5% business tax, is
        recognized on the straight-line basis over the terms of the tenancy
        agreements.
  For
        Company financed sales, the Company is recognizing sales based on the full
        accrual method provide that the buyer’s initial and continuing investment is
        adequate according to SFAS No. 66. The initial investment is the buyer’s down
        payment less the loan amount provided by the Company. Interest on these loans
        is
        amortized over the terms of the loans.
  Real
        estate capitalization and cost allocation
  Residential
        properties completed or under construction are stated at cost or estimated
        net
        realizable value, whichever is lower. Costs include land use right and land
        improvements, direct construction costs and development costs, including
        predevelopment costs, interest on indebtedness, real estate taxes, insurance,
        construction overhead and indirect project costs. Selling and advertising
        costs
        are expensed as incurred. Total estimated costs of multi-unit developments
        are
        allocated to individual units based upon specific identification
        methods.
  Land
        use
        right and improvement costs include land use right, land improvements, interest
        on indebtedness and real estate taxes. Appropriate costs are allocated to
        projects based on acreage, dwelling units and relative sales value. Land
        held
        for development and improvements is stated at cost or estimated net realizable
        value, whichever is lower.
  Land
        use
        right and land improvements applicable to condominiums, town homes and
        single-family homes, are transferred to construction in progress when
        construction commences.
 
 Capitalization
        of interest
 
 The
        Company adopts SFAS 34 to account for capitalized interest. Interest incurred
        during construction is capitalized into construction in progress. All other
        interest is expensed as incurred. For the nine months ended September 30,
        2007,
        the Company incurred $2,508,035 of interest and capitalized $1,072,185 in
        to
        construction in progress. For the nine months ended September 30, 2006, the
        Company incurred $1,553,631 of interest and capitalized $1,473,416 into
        construction in progress.
 
 Concentration
        of risks
 
 Cash
        includes cash on hand and demand deposits in accounts maintained with
        state-owned banks within the PRC. Total cash in state-owned banks at September
        30, 2007 and December 31, 2006 amounted to $3,745,870 and $1,108,271
        respectively, of which no deposits are covered by insurance. The Company
        has not
        experience any losses in such accounts and believes it is not exposed to
        any
        risks on its cash in bank accounts.
 
 The
        Company sells residential and commercial units to residents and small business
        owners. The Company had two major customers that accounted for approximately
        57%
        of the Company’s sales for the nine months ended September 30, 2007 and accounts
        receivable for these customers at September 30, 2007 amounted to $2,323,144.
        There was no major customer that accounted for over 5% of the Company’s sales
        for the nine months ended September 30, 2006.
  8
  CHINA
          HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
          30, 2007
 (UNAUDITED)
 The
        Company is dependent on third-party sub-contractors, manufacturers, and
        distributors for all of construction services and supply of construction
        materials. Construction services or products purchased from the Company’s five
        largest subcontractors/suppliers accounted for 50% and 48% of the Company’s
        purchases for the nine months ended September 30, 2007 and 2006, respectively.
        Accounts payables to these subcontractors/suppliers amounted to $2,890,602
        and
        $5,937,955 at September 30, 2007 and 2006, respectively.
 
 The
        Company's operations are carried out in the People's Republic of China.
        Accordingly, the Company's business, financial condition and results of
        operations may be influenced by the political, economic and legal environments
        in the People's Republic of China, by the general state of the People's Republic
        of China’s economy. The Company's business may be influenced by changes in
        governmental policies with respect to laws and regulations, anti-inflationary
        measures, currency conversion and remittance abroad, and rates and methods
        of
        taxation, among other things.
 
 Restricted
        cash
 The
        bank
        grants mortgage loans to home purchasers and will credit these amounts to
        the
        Company's bank account once title passes. If the houses are not completed
        and
        the new homeowners have no ownership documents to secure the loan, the bank
        will
        deduct 10% of the homeowner’s loan from the Company's bank account and transfer
        that amount to a designated bank account classified on the balance sheet
        as
        restricted cash. Interest earned on the restricted cash is credited to the
        Company's normal bank account. The bank will release the restricted cash
        after
        home purchasers have obtained the ownership documents to secure the mortgage
        loan. Total restricted cash amounted to $949,740 and $1,108,271 as of September
        30, 2007 and December 31, 2006, respectively.
 
 Accounts
        receivable - trade
 
 Accounts
        receivable-trade consists of balances due from customers for the sale of
        residential and commercial units in the PRC. The Company provides an allowance
        for doubtful accounts equal to the estimated uncollectible amounts. The
        Company’s estimated uncollectible amounts are based on historical collection
        experience and a review of the current status of trade accounts receivable.
        It
        is reasonably possible that the Company’s estimate of the allowance for doubtful
        accounts will change. Accounts receivable are presented net of an allowance
        for
        doubtful accounts of $3,306,776 and $3,070,516 at September 30, 2007 and
        December 31, 2006, respectively.
 
 Notes
        receivable
 
 The
        Company finances sales to certain new homeowners. Financing agreements are
        signed and the loans are due in 1 to 3 years. The loans are non-interest
        bearing, therefore the Company has calculated imputed interest and discounted
        the carrying amount of notes receivable. Notes receivable are presented net
        of
        unamortized interest and allowance for doubtful accounts.
 
 For
                  the nine months ended
              
              For
                  the year endedSeptember
                  30, 2007
              
              December
                  31, 2006(Unaudited)Notes
                  receivable
              
              $
              302,729
              
              $
              2,290,378Less:
                  unamortized interest
              
              
              (36,118
              )
              
              (34,710
              )Less:
                  allowance for doubtfulaccounts
              
              
              (176,294
              )
              
              (128,397
              )Notes
                  receivable, net
              
              $
              90,317
              
              $
              2,127,271
  9
 CHINA
          HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
          30, 2007
 (UNAUDITED)
 Other
        receivables
 
 Other
        receivables consist of various cash advances to unrelated companies and
        individuals which the management of the Company have business relationships.
        These amounts are unsecured, non-interest bearing and generally are short
        term
        in nature.
 
 Advances
        to suppliers
 
 Advances
        to suppliers consist of amounts paid in advance to contractors and vendors
        for
        services and materials that have not been performed or received and generally
        relate to the development and construction of residential units in the PRC.
        Advances amounted to $8,894,622493,570 as of September 30, 2007 and December
        31,
        2006 respectively.
 
 Real
        estate held for development or sale
 
 Real
        estate held for development or sale consist of residential and commercial
        units
        under construction and units completed. Construction in progress also includes
        cost associated in development and construction of Baqiao project. Real estate
        held for development or sale are stated at the lower of cost or net realizable
        value. If the real estate is determined to be impaired, it will be written
        down
        to its fair market value. Real estate held for development or sale costs
        include
        land use right, land development and home construction costs, engineering
        costs,
        insurance costs, wages, real estate taxes, and interest related to development
        and construction. All costs are accumulated by specific projects and allocated
        to residential and commercial units within the respective projects. The Company
        leases the land for the residential unit sites under land use rights with
        various terms from the government of the PRC. The Company evaluates the carrying
        value for impairment based on the undiscounted future cash flows of the assets.
        Write-downs of inventory deemed impaired would be recorded as adjustments
        to the
        cost basis. No Impairment loss was incurred or recorded for the nine months
        ended September 30, 2007 and 2006.
 
 No
        depreciation is provided for construction in progress. Construction overhead
        and
        selling expenses are expensed as incurred.
 
 Assets
        held for sale
 
 The
        Company intends to sell one of its fixed assets which consists of 14,380
        square
        meters of retail units with net book value of $12,563,133 as of September
        30,
        2007. There is no asset held for sale as of December 31, 2006.
  Property
        and equipment
 
 Property
        and equipment are recorded at cost. Depreciation is computed using the
        straight-line method over the estimated useful lives of the assets. Depreciation
        expense for the nine months ended September 30, 2007 and 2006 amounted to
        $365,560 and $189,722, respectively. Estimated useful lives of the assets
        are as
        follows:
 
 Estimated
                  Useful LifeBuildings
              
              
              30
                  yearsVehicles
              
              
              6
                  yearsElectronic
                  equipment
              
              
              5
                  yearsOffice
                  furniture
              
              
              5
                  years
  10
 CHINA
          HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
          30, 2007
 (UNAUDITED)
 Maintenance,
        repairs and minor renewals are charged directly to expenses as incurred.
        Major
        additions and betterment to property and equipment are capitalized.
 
 Long-lived
        assets
 
 Effective
        January 1, 2002, the Company adopted Statement of Financial Accounting Standards
        No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"
        ("SFAS
        144"), which addresses financial accounting and reporting for the impairment
        or
        disposal of long-lived assets and supersedes SFAS No. 121, "Accounting for
        the
        Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
        Of,"
        and the accounting and reporting provisions of APB Opinion No. 30, "Reporting
        the Results of Operations for a Disposal of a Segment of a Business." The
        Company periodically evaluates the carrying value of long-lived assets to
        be
        held and used in accordance with SFAS 144. SFAS 144 requires impairment losses
        to be recorded on long-lived assets used in operations when indicators of
        impairment are present and the undiscounted cash flows estimated to be generated
        by those assets are less than the assets' carrying amounts. In that event,
        a
        loss is recognized based on the amount by which the carrying amount exceeds
        the
        fair market value of the long-lived assets. Loss on long-lived assets to
        be
        disposed of is determined in a similar manner, except that fair market values
        are reduced for the cost of disposal. Based on its review, the Company believes
        there was no impairment of its long-lived assets as of September 30,
        2007.
 
 Fair
        value of financial instruments
 
 Statement
        of Financial Accounting Standards No. 107, “Disclosures about Fair Value of
        Financial Instruments” requires disclosure of the fair value of financial
        instruments held by the Company. SFAS 107 defines the fair value of financial
        instruments as the amount at which the instrument could be exchanged in a
        current transaction between willing parties. The Company considers the carrying
        amount of cash, accounts receivable, other receivables, accounts payable,
        accrued liabilities and other payables to approximate their fair values because
        of the short period of time between the origination of such instruments and
        their expected realization and their current market rate of interest. Management
        believes the interest rate on notes reflect rates currently available. Thus,
        the
        carrying value of loans payable approximates fair value.
 
 Advances
        from customers
 
 Advances from
        customers represent prepayments by customers for home purchases. The Company
        records these prepayments as advances from customers when the payments are
        received. Advances from customers amounted to $3,954,755 and $2,902,426 at
        September 30, 2007 and December 31, 2006 respectively.
 
 Other
        payables
 
 Other
        payables consist of various cash advances to unrelated companies and individuals
        with whom management of the Company has business relationships. These amounts
        are not related to operations of the Company, are unsecured, non-interest
        bearing and generally are short term in nature. Other payables amounted to
        $4,323,990 and $2,572,838 as of September 30, 2007 and December 31,
        2006 ,
        respectively .
 
 Advertising
        costs
 
 Advertising
        and sales promotion costs are expensed as incurred. Advertising expense totaled
        $398,776 and $425,200 for the nine months ended September 30, 2007 and 2006
        respectively.
  11
 CHINA
          HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
          30, 2007
 (UNAUDITED)
 Warranty
        costs
 
 Generally,
        the Company provides all of its customers with a limited warranty period
        (half a
        year to 5 years) for defective workmanship. The
        Company accrues
        estimated warranty costs into the cost of its homes as a liability after
        each
        project is closed based on the Company's historical experience, which normally
        is less than 0.2% of total cost of the project. Any excess amounts are expensed
        in the period when they occur. Many of the items relating to workmanship
        are
        completed by the existing labor force utilized to construct other new houses
        and
        are therefore already factored into the labor and overhead costs of another
        project. Any significant material defects are generally under warranty with
        the
        Company's suppliers. Currently, the Company retains 5% of the total construction
        contract from the construction contractors for a period of one year after
        the
        completion of the construction. Such retention amounts will be used to pay
        for
        any repair expense incurred due to defects in the construction. The Company
        has
        not historically incurred any significant litigation requiring additional
        specific reserves for its product offerings. As of September 30, 2007 and
        December 31, 2006, the Company has accrued $0 and $68,682 as warranty costs,
        respectively.
 
 Income
        taxes
 
 The
        Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires
        the
        recognition of deferred tax assets and liabilities for the expected future
        tax
        consequences of events that have been included in the financial statements
        or
        tax returns. Under this method, deferred income taxes are recognized for
        the tax
        consequences in future years of differences between the tax bases of assets
        and
        liabilities and their financial reporting amounts at each period end based
        on
        enacted tax laws and statutory tax rates applicable to the periods in which
        the
        differences are expected to affect taxable income. Valuation allowances are
        established, when necessary, to reduce deferred tax assets to the amount
        expected to be realized. At September 30, 2007 and 2006, there was no
        significant book to tax differences.
 
 The
        Company adopted FASB Interpretation 48, “Accounting for Uncertainty in Income
        Taxes” (“FIN 48”), as of January 1, 2007. A tax position is recognized as a
        benefit only if it is “more likely than not” that the tax position would be
        sustained in a tax examination, with a tax examination being presumed to
        occur.
        The amount recognized is the largest amount of tax benefit that is greater
        than
        50% likely of being realized on examination. For tax positions not meeting
        the
“more likely than not” test, no tax benefit is recorded. The adoption had no
        affect on the Company’s financial statements.
 
 Local
        PRC income tax
 
 The
        Company is governed by the Income Tax Law of the PRC concerning Chinese
        registered limited liability companies. Under the Income Tax Laws of the
        PRC,
        Chinese enterprises are generally subject to an income tax at an effective
        rate
        of 33% (30% state income taxes plus 3% local income taxes) on income reported
        in
        the statutory financial statements after appropriate tax adjustments, unless
        the
        enterprise is located in a specially designated region for which more favorable
        effective tax rates are applicable. The provision for income taxes at September
        30 consisted of the following:
 
 2007
              
              2006(Unaudited)
              
              (Unaudited)Provision
                  for China income and local tax
              
              $
              1,995,359
              
              $
              4,455,191Deferred
                  taxes
              
              
              -
              
              
              -Total
                  provision for income taxes
              
              
              1,995,359
              
              
              4,455,191
  12
 CHINA
          HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
          30, 2007
 (UNAUDITED)
 The
        following table reconciles the U.S. statutory rates to the Company’s effective
        tax rate at September 30,
 
 2007
              
              2006U.S.
                  statutory rates
              
              $
              34.0
              %
              
              34.0Foreign
                  income not recognized in USA
              
              
              (34.0
              )
              
              (34.0
              )China
                  income taxes
              
              
              33.0
              
              
              33.0Totals
              
              
              33.0
              %
              
              33.0
 
 Beginning
        January 1, 2008, the new Enterprise Income Tax (“EIT”) law will replace the
        existing laws for Domestic Enterprises (“DES”) and Foreign Invested Enterprises
        (“FIEs”). The new standard EIT rate of 25% will replace the 33% rate currently
        applicable to both DES and FIEs. The two year tax exemption and three year
        50%
        tax reduction tax holiday for production-oriented FIEs will be eliminated.
        The
        Company is currently evaluating the effect of the new EIT law will have on
        its
        financial position.
 
 Sales
        and additional taxes
 
 In
        June
        2006, the Emerging Issues Task Force (EITF) reached a consensus on, “How Taxes
        Collected from Customers and Remitted to Governmental Authorities Should
        Be
        Presented in the Income Statement (EITF No. 06-3)”. EITF No. 06-3 permits that
        such taxes may be presented on either a gross basis or a net basis as long
        as
        that presentation is used consistently. The adoption of EITF No. 06-3 on
        January
        1, 2007 did not influence the Company’s consolidated financial statements. Taxes
        are presented within the scope of EITF No. 06-3 on a net basis.
 
 All
        sales
        recognized are subject to sales and additional taxes of 5.61% and are payable
        to
        local government. This amount is included in cost of properties sold. Sales
        and
        additional taxes incurred for the nine months ended September 30, 2007 and
        2006
        were $1,368,509 and $2,828,621, respectively. Sales and additional taxes
        incurred for the three months ended September 30, 2007 and 2006 were $292,433
        and $795,610, respectively.
 
 Basic
        and diluted earning per share
  Earning
        per share is calculated in accordance with the Statement of Financial Accounting
        Standards No. 128 (“SFAS No. 128”), “Earnings per share”. SFAS No. 128
        superseded Accounting Principles Board Opinion No.15 (APB 15). Net earning
        per
        share for all periods presented has been restated to reflect the adoption
        of
        SFAS No. 128. Basic net earning per share is based upon the weighted average
        number of common shares outstanding. Diluted net earning per share is based
        on
        the assumption that all dilutive convertible shares and stock warrants were
        converted or exercised. Dilution is computed by applying the treasury stock
        method. Under
        this method, options and warrants are assumed to be exercised at the beginning
        of the period (or at the time of issuance, if later), and as if funds obtained
        thereby were used to purchase common stock at the average market price during
        the period.
 
 Stock-based
        compensation
 
 The
        Company records stock-based compensation pursuant to Statement of Financial
        Accounting Standards No. 123 (revised 2004), "Share-Based Payments,"
        ("FAS123R"), which established standards for the accounting for transactions
        in
        which an entity exchange its equity instruments for goods or services. This
        statement requires companies to measure the cost of services received in
        exchange for an award of equity instruments based on the grant-date fair
        value
        of the award. The cost will be recognized over the period of services
        rendered.
  13
  CHINA
          HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
          30, 2007
 (UNAUDITED)
 Comprehensive
        income
 
 Comprehensive
        income consists of net income and foreign currency translation gains and
        losses
        affecting shareholders’ equity that, under generally accepted accounting
        principles are excluded from net income. Gain (Loss) on foreign exchange
        translation totaled $1,745,926 and $ 26,815 for the nine months ended September
        30, 2007 and 2006 respectively.
  Derivative
        financial instruments
 
 The
        Company accounts for its warrants in accordance with FAS No.133, “Accounting for
        Derivatives Instruments and Hedging Activity,” and EITF 00-19 which requires the
        warrants to be carried on the balance sheet at fair value and to mark to
        market
        at each reporting period. Under certain circumstances, the warrants are reported
        as liabilities on the balance sheet when issued and any changes in the fair
        value is reported in the income statement.
 
 Recent
        pronouncements
  In
        September 2006, FASB issued Statement of Financial Accounting Standards
        (‘‘SFAS’’) No.157 ‘Fair Value Measurements’. This Statement defines fair value
        as the price that would be received to sell an asset or paid to transfer
        a
        liability in an orderly transaction between market participants at the
        measurement date, it also establishes a framework for measuring fair value
        in
        generally accepted accounting principles (GAAP), and expands disclosures
        about
        fair value measurements. This Statement applies under other accounting
        pronouncements that require or permit fair value measurements, the Board
        has
        previously concluded in those accounting pronouncements that fair value is
        the
        relevant measurement attribute. Accordingly, this Statement does not require
        any
        new fair value measurements. However, for some entities, the application
        of this
        Statement will change current practice. This Statement is effective for
        financial statements issued for fiscal years beginning after November 15, 2007,
        and interim periods within those fiscal years. The management is currently
        evaluating the effect of this pronouncement on its financial
        statements .
  In
        February 2007, the Financial Accounting Standards Board (‘‘FASB’’) issued
        SFAS No. 159, ‘The Fair Value Option for Financial Assets and Financials
        Liabilities — Including an Amendment of FASB Statement No.115’. This standard
        permits measurement of certain financial assets and financial liabilities
        at
        fair value. If the fair value option is elected, the unrealized gains and
        losses
        are reported in earnings at each reporting date. Generally, the fair value
        option may be elected on an instrument-by-instrument basis, as long as it
        is
        applied to the instrument in its entirety. The fair value option election
        is
        irrevocable, unless a new election date occurs. SFAS No. 159 requires
        prospective application and the companies to establish certain additional
        presentation and disclosure requirements. The standard is effective as of
        the
        beginning of the fiscal year that begins after November 15, 2007. The
        Company is currently evaluating the provisions of SFAS No. 159 to determine
        the
        potential impact, if any; the adoption will have on the Company’s financial
        statements.
 
 In
        June
        2007, the FASB issued FASB Staff Position No. EITF 07-3, “Accounting for
        Nonrefundable Advance Payments for Goods or Services Received for use in
        Future
        Research and Development Activities” (“FSP EITF 07-3”), which addresses whether
        nonrefundable advance payments for goods or services that used or rendered
        for
        research and development activities should be expensed when the advance payment
        is made or when the research and development activity has been performed.
        Management believes this pronouncement has no effect on the Company’s financial
        statements.
 
 **Note
        4 - Supplemental disclosure of cash flow information**
 
 Income
        taxes paid amounted to $0 and $0 for the nine months ended September 30,
        2007
        and 2006 respectively. Interest (net of amount capitalized) paid for the
        nine
        months ended September 30, 2007 and 2006 amounted to $744,950 and $1,703,185
        respectively.
  14
 CHINA
          HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
          30, 2007
 (UNAUDITED)
 Noncash
        operating activity included transfer of fixed asset as prepayment to one
        of the
        Company’s contractors at fair market value for $864,850 in 2007 with a book
        value of $166,593.
 
 Noncash
        financing activities included issuance of 60,000 shares of common stock to
        an
        investor relations company in consideration of a one-year consulting service
        valued at $131,400 and issuance of 66,154 warrants to placement agents as
        compensations for the service provided. In addition, 123,845 warrants were
        exercised on a noncash basis resulting in the issuance of 29,377 shares of
        common stock.
 
 Noncash
        financing activities also included reclassification of notes receivable from
        accounts receivable of $302,729 and paying off $4,679,783 loan due to original
        shareholders of New Land using inventory appraised at fair market value.
 
 **Note
        5 - Real estate held for development or sale**
 
 The
        following summarizes the components of real estate inventories as of September
        30, 2007 and December 31, 2006:
 
 September
                  30, 2007
              
              December
                  31, 2006(Unaudited)Finished
                  projects
              
              $
              28,118,570
              
              $
              37,247,436Construction
                  in progress
              
              
              26,151,798
              
              
              9,730,650Total
                  real estate held for development or sale
              
              
              54,270,368
              
              
              46,978,086
 
 **Note
        6 - Receivables, deferred charges and other assets**
 
 Receivables,
        deferred charges and other assets consist of the following as of September
        30,
        2007 and December 31, 2006:
 
 September
                  30, 2007
              
              December
                  31, 2006(Unaudited)Other
                  receivable
              
              $
              679,092
              
              $
              1,282,831Less:
                  allowance for doubtful accounts
              
              
              (275,097
              )
              
              (301,920
              )Prepaid
                  expenses
              
              
              58,691
              
              
              5,128Other
                  Asset
              
              
              32,625
              
              
              -Receivables,
                  deferred charges & other assets
              
              $
              495,311
              
              $
              986,039
 
 **Note
        7 - Intangibles**
 
 The
        Company’s intangibles consist of goodwill (see note 2 for goodwill) and
        exclusive development rights to acquire 487 acre of land use right in Shaanxi
        province.. As of September 30, 2007, the amount recorded for the exclusive
        development rights was $2,299,359. The future benefit of this exclusive right
        is
        valued at $36,451,800. The Company evaluates its intangible assets for
        impairment issues and whenever events or changes in circumstances indicate
        that
        the carrying value of its intangibles may not be recoverable from its estimated
        future cash flows. As of September 30, 2007, the Company believes there is
        no
        impairment issue on intangibles.
 
 **Note
        8 - Property and equipment, net**
 
 Property
        and equipment consist of the following as of September 30, 2007 and December
        31,
        2006:
 
 15
  CHINA
          HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
          30, 2007
 (UNAUDITED)
 September
                  30, 2007
              
              December
                  31, 2006(Unaudited)Building
                  and improvements
              
              $
              6,338,380
              
              $
              18,255,045Machinery
                  and equipment
              
              
              -
              
              
              117,081Transportation
                  equipment
              
              
              25,303
              
              
              55,598Furniture
                  and fixture
              
              
              225,044
              
              
              95,5196,588,727
              
              
              18,523,243Less:
                  accumulated depreciation
              
              
              (976,853
              )
              
              (821,347
              )Property
                  and equipment, net
              
              $
              5,611,874
              
              $
              17,701,896
 
 **Note
        9 - Accounts receivable**
 
 Accounts
        receivable consist of the following as of September 30, 2007 and December
        31,
        2006:
 
 September
                  30, 2007
              
              December
                  31, 2006(Unaudited)Accounts
                  receivable
              
              $
              3,385,481
              
              $
              3,149,633Less:
                  Allowance for doubtful accounts
              
              
              (78,705
              )
              
              (79,117
              )Accounts
                  receivable, net
              
              $
              3,306,776
              
              $
              3,070,516
 
 **Note
        10 - Loans from employees**
 
 The
        Company has borrowed monies from certain employees to fund the Company’s
        construction projects. The loans bear interest ranging from 7% to 12% and
        the
        principal matures within one to three years. Loans from employees amounted
        to
        $1,879,208 and $1,037,842 as of September 30, 2007 and December 31, 2006,
        respectively.
  16
 CHINA
          HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
          30, 2007
 (UNAUDITED)
 **Note
        11 - Loans payable**
 
 Loans
        payable represent amounts due to various banks and are due on demand or normally
        within one year. These loans generally can be renewed with the banks when
        expired. Loans payable consisted of the following as of September 30, 2007
        and
        December 31, 2006:
 
 September
                  30, 2007
              
              December
                  31, 2006(Unaudited)Commercial
                  Bank Weilai BranchDue
                  August 7, 2008, annual interest rate is at 9.945%, secured by the
                  Company’s Xin Xing Gangwan, Xin Xing Tower and Ming Yuan
                  projects
              
              $
              5,066,667
              
              $
              5,128,000Shannxi
                  International Trust investment Co.Due
                  on demand, annual interest is at 10.80%, secured by 14 units of
                  the
                  Company’s Xin Xing In House and Harbor projects
              
              
              -
              
              
              2,564,000Shannxi
                  International Trust investment Co.Due
                  on demand, annual interest is at 10.80%, secured by 14 units of
                  the
                  Company’s Xin Xing In House and Harbor projects
              
              
              266,667
              
              
              503,826Merchant
                  bank Xi’an high and new technologyDevelopment
                  zone branch, due June 27, 2007 annual interest is at 19.20%, secured
                  by
                  the Company’s Jun Jin Yuan project
              
              
              -
              
              
              403,830Construction
                  Bank Zhuque Road BranchDue
                  May 6, 2007, annual interest is at 6.21% secured by the Company’s Jun Jin
                  Yuan project
              
              
              -
              
              
              4,107,528Construction
                  Bank Zhuque Road BranchDue
                  July 6, 2007, annual interest is at 6.21% secured by the Company’s Jun Jin
                  Yuan project
              
              
              -
              
              
              2,564,000Commercial
                  Bank Weilai BranchDue
                  December 31, 2007, annual interest is at 9.79%, secured by the
                  Company’s
                  24G project
              
              
              6,018,667
              
              
              6,410,000Xi’an
                  Rural Credit union Zao Yuan rd. Br, .Due
                  June 14, 2008, annual interest is at 9.527%, secured by the Company’s Jun
                  Jing Yuan I, Han Yuan project and Xin Xing Tower Projects
              
              
              3,333,333
              
              
              -Various
                  loans on demand, to unrelated parties,at
                  various interest rate
              
              
              7,342
              
              
              1,525,668Total
              
              $
              14,692,676
              
              $
              23,206,852
 
 All
        loans
        were borrowed for construction projects. Interest paid was capitalized during
        the periods of construction and allocated to various construction projects.
        When
        the projects are completed, interest incurred from these loans is
        expensed.
 
 **Note
        12 - Shareholders’ equity**
  Common
        stock
  On
        June
        28, 2006, the Company entered into securities purchase agreements with
        accredited investors and completed the sale of $1,075,000 of the Company’s
        common stock and common stock purchase warrants. The securities sold were
        an
        aggregate of 330,769 shares of common stock and 99,231 warrants. Each warrant
        is
        exercisable for three years at $3.60 per share. Pursuant to the terms of
        the
        warrant, each investor has contractually agreed to restrict its ability to
        exercise the warrants to an amount which would not exceed the difference
        between
        the number of shares of common stock beneficially owned by the holder or
        issuable upon exercise of the warrant held by such holder and 9.9% of the
        outstanding shares of common stock of the Company. New York Global Securities,
        Inc. acted as the placement agent of the transaction.
  17
 
 CHINA
        HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
        30, 2007
 (UNAUDITED)


In
        connection with the offering, the Company paid a placement fee of 10% of
        the
        proceeds in cash, together with other expenses in the amount of 3% of the
        proceeds, in cash. In addition, the placement agent was issued warrants to
        purchase 66,154 shares of common stock on the same terms and conditions as
        the
        investors.
  Pursuant
        to securities purchase agreements with accredited investors dated July 7,
        2006,
        the Company received $124,975 and issued 38,454 shares of common stock and
        11,536 warrants. Each warrant is exercisable for three years at $3.60 per
        share.
  In
        connection with the offering, the Company paid a placement fee of 10% of
        the
        proceeds in cash, together with other expenses in the amount of 3% of the
        proceeds, in cash. In addition, the placement agent was issued warrants to
        purchases 7,691 shares of common stock on the same terms and conditions as
        the
        investors.
  Pursuant
        to securities purchase agreements with accredited investors dated August
        21,
        2006, the Company received $812,500 and issued 250,000 shares of common stock
        and 75,000 warrants. Each warrant is exercisable for three years at $3.60
        per
        share.
  In
        connection with the offering, the Company paid a placement fee of 10% of
        the
        proceeds in cash, together with non-accountable expenses in the amount of
        3% of
        the proceeds, in cash. In addition, the placement agent was issued warrants
        to
        purchase 50,000 shares of common stock on the same terms and conditions as
        the
        investors.
  The
        Company filed the registration statement registering the resale of shares
        of the
        Company’s Common Stock and those issuable upon exercise of the Warrants on
        August 21, 2006 and the registration statement was effective on September
        14,
        2006.
 
 On
        January 15, 2007, the Company issued 60,000 shares of common stock to an
        investor relations company in consideration for one year of consulting service
        through December 31, 2007. The 60,000 shares of common stock have been recorded
        at $2.19 per share or $131,400 based on the trading price of the shares at
        January 12, 2007. This amount is included in prepaid expenses and is being
        amortized over the service period.
 
 Pursuant
        to securities purchase agreements with accredited investors dated May 7,
        2007,
        the Company received $25,006,978 and issued 9,261,847 shares of common stock
        and
        2,778,554 Warrants. Each Warrant is exercisable for five years at $4.50 per
        share. In connection with the offering, the Company paid a 7% placement
        fee.
 
 According
        to Section 4.8, Anti-Dilute of the Share Purchase Agreements dated June 28,
        2006, July 7, 2006 and August 21, 2006, the Company issued 126,138 shares
        common
        stock and 27,418 warrants; additionally, the Company reduced the exercise
        price
        of all related warrants from $3.60 to $3.31.
 
 Pursuant
        to EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to, and
        Potentially Settle in, a Company’s Own Stock,” the warrants contain a provision
        permitting the holder to demand payment based on a Black Scholes valuation
        in
        certain circumstances. Therefore, under EITP 00-19 and SFAS No. 133,
        the Company recorded the warrants as a liability at their fair value on date
        of
        grant and then marked them to $2,448,876 September 30, 2007. The change in
        fair
        value totaled $419,465 on fair value of warrants.
  18
 CHINA
          HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
          30, 2007
 (UNAUDITED)
 The
        Company has placed 510,000 shares of management owned common stock into an
        escrow as part of a “make good obligation.” This provision stipulates that in
        the event that the after-tax net income of the Company during fiscal year
        2007
        is less than $16.3 million and $35.8 million in fiscal 2008, management will
        distribute these escrow shares pro-rata to investors who participated in
        the May
        7 private placement. This transaction qualifies for equity accounting under
        SFAS. 133.
 
 The
        Company filed the registration statement registering the resale of shares
        of the
        Company’s Common Stock on June 22, 2007 and the registration statement was
        effective on July 5, 2007.
 
 123,845
        warrants at exercising price of $3.31 were exercised in July on a noncash
        basis
        resulting in the issuance of 29,377 shares of common stock.
 
 Warrants
 
 Following
        is a summary of the warrant activity:
 
 Warrants
                  Outstanding
              
              Warrants
                  Exercisable
              
              Weighted
                  Average
              
              Average
                  RemainingExercise
                  Price
              
              Contractual
                  LifeDecember
                  31, 2006
              
              
              309,612
              
              
              3,309,612
              
              $
              3.31
              
              
              2.04Granted
              
              
              2,805,918
              
              
              2,805,918
              
              $
              4.50
              
              
              4.60Forfeited
              
              
              -
              
              
              -
              
              
              -
              
              
              -Exercised
              
              
              123,845
              
              
              123,845
              
              
              -
              
              
              -September
                  30, 2007
              
              
              2,991,685
              
              
              2,991,685
              
              $
              4.37
              
              
              4.41
  Statutory
        reserves
 
 In
        accordance with the laws and regulations of the PRC, a wholly-owned
        Foreign Invested Enterprises’ income, after the payment of the PRC income taxes,
        shall be allocated to the statutory surplus reserves, the proportion of
        allocation for reserve funds is no less than 10 percent of the profit after
        tax
        until the accumulated amount of allocation for statutory surplus reserve
        funds
        reaches 50 percent of the registered capital. Statutory reserves represent
        restricted retained earnings.
 
 Statutory
        surplus reserves are to be utilized to offset prior years’ losses, or to
        increase its share capital. When the statutory surplus reserve fund of a
        limited
        liability company converts its surplus reserves to capital in accordance
        with a
        shareholders’ resolution, the Company will either distribute new shares in
        proportion to the number of shares held by the each shareholder, or increase
        the
        par value of each share. Except for the reduction of losses incurred, any
        other
        usage should not result in this reserve balance falling below 25% of the
        registered capital.
 
 Pursuant
        to the board of directors’ resolution, the Company transferred 10% of its net
        income, as determined in accordance with the PRC accounting rules and
        regulations, to a statutory surplus reserve fund until such reserve balance
        reaches 50% of the Company’s registered capital.
 
 The
        transfer to this reserve must be made before distributions of any dividends
        to
        shareholders. For the nine months ended September 30, 2007 and 2006, the
        Company
        appropriated $413,658 and $1,187,050, respectively to this surplus reserve.
 
 **Note
        13 - Employee welfare plan**
 
 Regulations
        in the PRC require the Company to contribute to a defined contribution
        retirement plan for all
        permanent employees .
        The
        Company established a retirement pension insurance, unemployment insurance,
        health insurance and house accumulation fund for the employees during the
        term
        they are employed. The amount contributed to the fund is based on a certain
        percentage on the base salaries set forth by the provincial and city government. For
        the
        nine months ended September
        30, 2007 and 2006, the Company had contributed in the amount of  $29,293
        and $11,195, respectively.
  19
  **Note
        14 - Earnings per share**
 
 Earnings
        per share for nine months ended September 30, 2007 and 2006 were determined
        by
        dividing net income for the periods by the weighted average number of both
        basic
        and diluted shares of common stock and common stock equivalents outstanding.
 
 September
                  30, 2007
              
              September
                  30, 2006(Unaudited)
              
              (Unaudited)Net
                  income for basic earning per share
              
              
              2,552,145
              
              
              8,932,435Weighted
                  average shares used in basic computation
              
              
              25,723,046
              
              
              18,536,120Diluted
                  effect of warrants
              
              
              115,080
              
              
              -Weighted
                  average shares used in diluted computation
              
              
              25,838,126
              
              
              18,536,120Earning
                  per shareBasic:
              
              
              0.10
              
              
              0.48Diluted:
              
              
              0.10
              
              
              0.48
  **Note
        15 - Commitments and contingencies**
 
 The
        Company leases part of its office space under long-term, non-cancelable
        operating lease agreements. The leases expire on 12/31/2008.
 
 The
        following is a schedule of future minimum rental payments required under
        the
        operating lease agreements:
 
 For
                  Year Ending
              
              Office
                  LeaseSeptember
                  30,2007
              
              $
              67,5852008
              
              
              67,585$
              135,170
 
 Rental
        expense for the nine months ended September 30, 2007 and 2006 amounted to
        $40,325 and $40,325, respectively.


20




ITEM
      2.
      Management's Discussion and Analysis





FORWARD
      LOOKING STATEMENTS





Some
      of
      the statements contained in this Form 10-QSB that are not historical facts
      are
      "forward-looking statements" which can be identified by the use of terminology
      such as "estimates," "projects," "plans," "believes," "expects," "anticipates,"
      "intends," or the negative or other variations, or by discussions of strategy
      that involve risks and uncertainties. We urge you to be cautious of the
      forward-looking statements, that such statements, which are contained in this
      Form 10-QSB, reflect our current beliefs with respect to future events and
      involve known and unknown risks, uncertainties and other factors affecting
      our
      operations, market growth, services, products and licenses. No assurances can
      be
      given regarding the achievement of future results, as actual results may differ
      materially as a result of the risks we face, and actual events may differ from
      the assumptions underlying the statements that have been made regarding
      anticipated events. Factors that may cause actual results, our performance
      or
      achievements, or industry results, to differ materially from those contemplated
      by such forward-looking statements include without limitation:





l
            Our
                ability to attract and retain management, and to integrate and maintain
                technical information and management information
                systems;l
            Our
                ability to raise capital when needed and on acceptable terms and
                conditions;l
            The
                intensity of competition; andl
            General
                economic conditions.




All
      written and oral forward-looking statements made in connection with this Form
      10-QSB that are attributable to us or persons acting on our behalf are expressly
      qualified in their entirety by these cautionary statements. Given the
      uncertainties that surround such statements, you are cautioned not to place
      undue reliance on such forward-looking statements.




**Three
      Months Ended September 30, 2007 as Compared To Three Months Ended September
      30,
      2006**





Revenue





We
      generated total revenues of $6,036,929 for the three months ended September
      30,
      2007, a decrease of $8,195,178 or 58% compared to $14,232,107 for the three
      months ended September 30, 2006. Tsining generated revenues of $5,739,382,
      including $4,201,050
      contributed by Tsining-24G, $1,136,538 contributed by Tsining JunJing I,
      $435,727 for others. And $263,814 interest income
      for New Land’s municipal infrastructure construction investment. For the
      three-month period ended September 30, 2006, we had revenues of $5,655,135
      contributed by Tsining-24G, $8,044,360 contributed by Tsining JunJing I, and
      $532,612 for other projects.





The
      reason for the revenue decrease of Tsining is that in the third quarter of
      2006,
      542,460 Sq. ft of JunJing I project was completed, and sales of units in JunJing
      I were recognized in earnings. No similar project was completed and therefore
      no
      similar revenues were recognized in 2007.




Revenue
      Contribution by Projects:


(All
      numbers in USD millions)





3
                months period ended September 30, 2007
            
            3
                months period ended September 30, 2006Tsining-24G
            $
            4.2
            $
            5.6Commercial
            $
            4.2
            $
            1.8Residencial
            $
            0
            $
            3.8JunJing
                Yuan I
            $
            1.1
            $
            8.0Commercial
            $
            0.2
            $
            1.0Residencial
            $
            0.9
            $
            7.0Other
                old projects
            $
            0.4
            $
            0.5New
                land
            
            0.2Total
            $
            6.0
            $
            14.2





On
      September 15, 2007, the Company began to offer select 'club members' the
      opportunity to secure a purchase right for a unit in the highly sought after
      JunJing Garden II development for an initial cash payment of 100,000 RMB or
      approximately $13,300 USD. The company provided 416 residential units for this
      event. As of September 30, 2007, over 250 units were pre-sold, covering
      252 ô 707
      Sq,ft, we received approximately $
      3 million
      deposit in cash, which was booked as Advance from Customers in Balance sheet
      of
      September 30, 2007. The total revenue of these 250 units will generate
      approximately 13 million, will be recognized after the projects is
      completed.




21




**Revenue
      Mix by product categories:**




Broken down by product categories, for the three-month period ended
      September 30, 2007, 17% revenue was contributed by sales of residential
      properties, and 73% revenue was contributed by sales of commercial properties,
      7% revenue was contributed by others including rental income and other income,
      and 3% was contributed by interest income. For the three-month period ended
      June
      30, 2006, 78% revenue was contributed by sales of residential properties, and
      21% revenue was contributed by sales of commercial properties, and 1% revenue
      was contributed by others including rental income and other income.














Costs
      and Expenses





The
      cost
      of properties sold for the three months ended September 30, 2007 was
      $  3,019,240,
      a decrease of $6,746,610 or 69% compared to $  9,765,850
      for the three months ended September 30, 2006. This is in line with the 58%
      decrease in revenue from the sale of properties.





Other
      expenses for the three months ended September 30, 2007 was $  20,153 ,
      a
      decrease of $70,970 compared to $  91,123
      for the three months ended September 30, 2006. This is in line with the revenue
      decrease for the three months ended September 30, 2007.





Our
      selling, general and administrative expenses for the three months ended
      September 30, 2007 was $886,405, a decrease of $376,243 or 30% compared to
      $  1,262,648
      c Selling, general and administrative expenses reflects our overhead expenses
      such as office rent, management and staff salaries, general insurance,
      accounting and legal expenses. We staff our sales department at fixed levels.
      As
      one project approaches the end of the sales cycle, the sales staff is shifted
      to
      the next project.





Loss-change
      in fair value of warrants for the three months ended September 30, 2007 was
      $408,262 compared to $0 for the three months ended September 30, 2006. On July
      17, 2007, 123,845 of cashless warrants were exercised into 29,377 shares of
      common stock, which was generated $169,912 loss-change in the fair value of
      warrants. $247,245 loss-change in the fair value of warrants was generated
      by
      2,991,685 warrants.





Interest
      Expense





We
      incurred interest expense for the three months end ed
      September 30, 2007 of $1,120,150, an increase of $1,098,863 co mpared
      to
      $21,287 for the three months ended September 30, 2006. Capitalized interest
      for
      the three months ended September 30, 2007 was $393,741
      a nd
      capitalized interest for the same period in 2006 was $416,740. As of
      September 30, 2007, there were $22,888,932 Payable to original shareholders
      of
      New Land, which generated $905,771 interest, and for the three months ended
      September 30, 2007, $679,328 interest was incurred.





Gross
      Profit & Margin





Our
      Gross
      Profit for the three months ended September 30, 2007 was $3,017,689 a decrease
      of $1,448,568 or 32% compared to $4,466,257 for the three months ended September
      30, 2006. Our Gross margin for the three months ended September 30, 2007
      was 50% an increase of 15% compared to 35% for the three months ended September
      30, 2006. The reason was the difference of revenue mix. For the three-month
      period ended September 30, 2007, 73% revenue was contributed by sales of
      commercial properties, compared to 78% revenue was contributed by sales of
      residential properties for the three-month period ended June 30,
      2006.





Net
      Income





Our
      net
      income for the three months ended September 30, 2007 was $-71,273, a decrease
      of
      $2,105,066 compared to $2,033,829 for the three months ended September 30,
      2006. The reason for this decrease was as of September 30, 2007, the gross
      profit decreased $1,448,568, the interest expense increased $964,291,
      and warrants cost increased $408,261 .




22




**Nine
      Months Ended September 30, 2007 as Compared To Nine Months Ended September
      30,
      2006**




Revenue





We
      generated revenues of $  26,251,716
      for the nine months ended September 30, 2007, a decrease of $24,375,285 or
      48%
      compared to $50,627,001 for the nine months ended September 30,
      2006. Tsining generated revenues of $25,987,902, including $ 21,816,495 contributed by Tsining-24G, $ 2,918,081 contributed by Tsining JunJing I, $1,219,392
      for other projects, and $263,814 interest for New Land’s municipal
      infrastructure construction investment. For the nine-month period ended
      September 30, 2006, we had revenues of $36,592,762 for Tsining JunJing I,
      $11,970,034 for Tsining-24G, and $2,044,205 for other projects.





The
      reason of this decrease was, as of September 30, 2006, 9 buildings (1,249,252
      sq.ft ) in JunJing Yuan I, and the one building (300,768 sq.ft) in 24G that
      were
      completed and all pre-sales of these areas were recognized into revenue in
      nine
      months of 2006. These recognized pre sales were contributed the most part of
      the
      revenues for the first quarter to the third quarter of 2006. No similar project
      was completed in 2007.





Revenue
      Contribution by Project:


(All
      numbers in USD millions)




9
                month period ended September 30, 2007
            
            
            9
                month period ended September 30, 2006Tsining-24G
            
            $
            21.8
            
            $
            12.0Commercial
            
            $
            8.5
            
            $
            6.9Residencial
            
            $
            13.4
            
            $
            5JunJing
                Yuan I
            
            $
            2.9
            
            $
            36.6Commercial
            
            $
            0.3
            
            $
            1.2Residencial
            
            $
            2.6
            
            $
            35.3Other
                projects
            
            $
            1.2
            
            $
            2.0New
                land
            
            $
            0.2
            
            $Total
            
            $
            26.2
            
            $
            50.6





R **evenue
      Mix by product categories:**





By
      product categories, for the nine-month period ended September 30, 2007, 61%
      revenue was contributed by sales of residential properties, and 34% revenue
      was
      contributed by sales of commercial properties, 4% revenue was contributed by
      others including rental income and other income, and 1% revenue was contributed
      by New Land. For the nine-month period ended September 30, 2006, 82% revenue
      was
      contributed by sales of residential properties, and 17% revenue was contributed
      by sales of commercial properties, and 1% revenue was contributed by others
      including rental income and other income.











Costs
      and Expenses





The
      cost
      of properties sold for the nine months ended September 30, 2007 was
      $  17,585,887,
      a decrease of $14,523,255 or 45% compared to $  32,109,142
      for the nine months ended September 30, 2006. This is in line with the 51%
      decrease in revenue from the sale of properties.




23




Other
      expenses for the nine months ended September 30, 2007 was $55,832, a decrease
      of
      $282,097 or 83% compared to $337,929 for the nine months ended September 30,
      2006.





Our
      selling, general and administrative expenses for the nine months ended September
      30, 2007 was $  2,007,315,
      a decrease of $2,704,738 or 57% compared to $  4,712,089
      for the nine months ended September 30, 2006. Selling, general and
      administrative expenses reflects our overhead expenses such as office rent,
      management and staff salaries, general insurance, accounting and legal expenses.
      We staff our sales department at fixed levels. As one project approaches the
      end
      of the sales cycle, the sales staff is shifted to the next project.





Loss-change
      in fair value of warrants for the nine months ended September 30, 2007 was
      $419,465 compared to $0 for the nine months ended September 30, 2006. On July
      17, 2007, 123,845 warrants were converted in a cashless exercise into 29,377
      shares of common stocks, which was generated $169,912 loss-change in the fair
      value of warrants. $249,553 loss-change in the fair value of warrants was
      generated by 2,991,685 warrants.





Interest
      Expense





We
      incurred interest expense for the nine months ended September 30, 2007 of
      $1 ,501,105 , an
      increase of $1,420,890 compared to $80,215 for the nine months ended September
      30, 2006. For the nine months ended September 30, 2007, capitalized interest
      for
      the same period was  $1,072,185
      a nd
      capitalized interest for the same period in 2006 was $1,473,416. Interest
      expense increased in 2007 as compared to 2006 since most projects were completed
      in 2006 and new projects did not start until second quarter of 2007, interest
      incurred during first quarter of 2007 was expensed rather than capitalized.
      As
      of September 30, 2007, there were $22,888,932 Payable to original shareholders
      of New Land, which generated $905,771 interest.




Gross
      Profit & Margin





Our
      Gross
      Profit for the nine months ended September 30, 2007 was $8,665,829 a decrease
      of
      $9,852,030 or 33% compared to $18,517,859 for the nine months ended September
      30, 2006. Our Gross margin for the nine months ended September 30, 2007 was
      33% a decrease of 4% compared to 37% for the three months ended September 30,
      2006. The reason of decrease margin was for the nine-month period ended
      September 30, 2007, all the JunJing I remaining residential units was sold
      out.
      We gave certain discount for the last few transaction.





Net
      Income





Our
      net
      income for the nine months ended September 30, 2007 was $  2,552,145,
      a decrease of $6,380,290 compared to $8,932,435 for the nine months ended
      September 30, 2006, which is a direct result of, 9 buildings (1,249,252 sq.ft
      )
      in JunJing Yuan I, and the one building (300,768 sq.ft) in 24G that were
      completed as of September 30, 2006, and all pre-sales of these areas were
      recognized into revenue in the first , second and third quarters of 2006. These
      recognized pre sales were contributed the most part of the revenues for the
      first quarter to the third quarter of 2006.




Liquidity
      and Capital Resources





Our
      principal demands for liquidity are for development of new properties, property
      acquisitions and general corporate purposes. As of September 30, 2007, we had
      total mortgage indebtedness of $ 14,692,676  with
      a
      weighted average interest rate of 11.36% per annum, payable quarterly. Future
      scheduled maturities of mortgages payable are as follows: August 7, 2008 --
      $5,066,667; September 20, 2008 -- $266,667; December 31, 2007 -- $6,018,667;
      June 14, 2008 -- $3,333,333. Various
      loans on demand- $7,342. The
      mortgage debt is secured by assets of the Company.





As
      of
      September 30, 2007, we had $3,745,870 of cash and cash equivalents on hand,
      an
      increase of $3,366,237 compared to $379,633 of cash and cash equivalents on
      hand
      as of December 31, 2006.





As
      of
      September 30, 2007, decrease in accounts payable was $  2,291,251
      and other payables was $  486,759.
      Cash used for properties and equipment was $ 194,423.
      Receivables, deferred charges and other assets increased by $4,682,109 compared
      to $  -3,379,743
      at December 31, 2006. Advances to suppliers decreased by $17,115,962 compared
      to
      $  9,284,058
      as of December 31, 2006. Most of it was the advance payment on Land related
      expenses for the JunJing II project. Accounts payable decreased $11,130,781
      compared to $  8,839,530
      as of December 31, 2006, other payables decreased $1,514,640 compared to
      $1,027,881 as of December 31, 2006, and accrued expenses decreased $8,569,117
      compared to $  7,029,454
      as of December 31, 2006, while advances from customers increased $31,076,574
      compared to $  -30,161,309
      as of December 31, 2006.





Our
      operating activities used cash of $5,330,059 for the nine months ended September
      30, 2007. We had cash of $2,093,790 in investing activities during the three
      months ended September 30, 2007 primarily $2,037,505 for the Notes receivable
      funded. For the nine months ended September 30, 2007, cash provided in financing
      activities was $6,459,338.





We
      intend
      to meet our liquidity requirements, including capital expenditures related
      to
      the purchase of land for the development of our future projects, through cash
      flow provided by operations and additional funds raised by future possible
      cash
      investments. Upon acquiring land for future development, we intend to raise
      funds to develop our projects by obtaining mortgage financing from local banking
      institutions with which we have done business in the past. We believe that
      our
      relationships with these banks are in good standing and that our real estate
      will secure the loans needed. We believe that adequate cash flow will be
      available to fund our operations.




24




As
      part
      of our funding plan, on March 9, 2007, we entered into a Shares Transfer
      Agreement with the shareholders of Xi'an New Land Development Co., Ltd. ("New
      Land"), pursuant to which we have acquired 32,000,000 shares of New Land,
      constituting 100% equity ownership of New Land. Xi'an New Land Development
      Co.,
      LTD (“New Land”) is now in cooperation with BaQiao District Government of Xi'an
      City in developing BaQiao Science & Technology Industrial Park, a provincial
      development zone in Shaan'xi Province. Now, this acquisition is in process,
      in
      the future, China Housing will take the first steps in the primary land market,
      and also have the right to develop and sell 487 acres of property which has
      been
      targeted for new residential developments.





The
      majority of the Company's revenues and expenses were denominated primarily
      in
      Renminbi ("RMB"), the currency of the People's Republic of China. There is
      no
      assurance that exchange rates between the RMB and the U.S. Dollar will remain
      stable. The Company does not engage in currency hedging. Inflation has not
      had a
      material impact on the Company's business.




Other
      Events





Beginning
      in mid September, the Company began to offer select 'club members' the
      opportunity to secure a purchase right for a unit in the highly sought after
      JunJing Garden II development for an initial cash payment of 100,000 RMB or
      approximately $13,300 USD. As of November 14, 2007, over 310 units were
      pre-sold, covering $15 million of revenue, by far, we have received
      approximately $4 million in cash as the deposit. The rest of payment will be
      got
      in the first quarter of 2008. China Housing will use these proceeds for working
      capital while recording these initial transactions as revenue and subsequent
      profit once the units are complete and the title is officially transferred
      to
      the new owner, which is anticipated to occur late next year. The buyers will
      be
      responsible for the approximate balance of $40,000 for each unit at the time
      of
      closing to officially consummate the sale with the Company recording
      approximately $14.0 million in 2008 revenue assuming all units close. There
      are
      risks that certain presale units may not come into final closings and if the
      transaction cannot close in 2008 a portion of the deposits maybe returned to
      customers. Presales are customary in China and enable developers to have
      visibility into sell- through rates, while providing access to capital to
      complete projects which augments overall internal rate of return.




On
      July
      26, 2007, New Land and the administrative committee of Baqiao Technology and
      Industrial Park reached the <<Agreement on Acknowledgement of New Land’s
      Investment in Infrastructure and Compensation Settlement>>, which
      finalizes the arrangement for compensating New Land for its investment in
      infrastructure within Baqiao district for the period from July 16, 2003 to
      May
      31, 2007, and the manner and terms of settlement. Specifically, the Baqiao
      district government will refund New Land its costs incurred for the
      infrastructure construction as assessed by independent appraiser plus interest
      accrued during above settlement period as well as 10% of the total costs as
      return on investment. The compensation will be in the form of deduction to
      New
      Land’s payable to the government for acquiring land usage rights and carried out
      by end of 2008. The agreement also applies to New Land’s further investment in
      infrastructure within the 487 acres land. In September 2007, New Land delivered
      the rubber dam it built to Baqiao district government, who issued New Land
      “Acknowledgement of Compensation for New Land's Investment in Infrastructure”
for New Land’s riverway renovation work done for the period from July
      16, 2003 to May 31, 2005 within Baqiao Technology and Industrial Park in the
      total amount of approximately $7,310,236, of which accrued interest and return
      on investment total approximately $3,803,141. The remaining infrastructure
      investment refund and return are in the process of being settled with the
      district government.




Item
      3.
      Controls and Procedures





The
      Chief
      Executive Officer and Chief Financial Officer conducted an evaluation of the
      effectiveness of the design and operation of the Company's disclosure controls
      and procedures (as defined in Rule 13a-15(e) under the Securities Exchange
      Act
      of 1934, as amended (the “Exchange Act”) as of the end of the period covered by
      this report. Based on that evaluation, the Chief Executive Officer and Chief
      Financial Officer concluded that the Company's disclosure controls and
      procedures were effective as of the end of the period covered by this report.
      There were no changes in internal control over financial reporting (as defined
      in Rule 13a-15(e) under the Exchange Act) that occurred during the third quarter
      of 2007 that have materially affected, or are reasonably likely to materially
      affect, the Company's internal control over financial reporting.




Part
      II.
      OTHER INFORMATION




Item
      1.
      Legal Proceedings





Not
      applicable





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




Not
      applicable





Item
      3.
      Defaults Upon Senior Securities





Not
      applicable




25





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





The
      Company has filed a preliminary information statement on Schedule 14C on the
      adoption of the 2007 Stock Incentive Plan on August 8, 2007.





Item
      5.
      Other Information





Not
      applicable





Item
      6.
      Exhibits





(a)
      Exhibits





Exhibit
                Number
            Description
                of Exhibit31.1
            Certification
                of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a),
                promulgated under the Securities and Exchange Act of 1934, as
                amended31.2
            Certification
                of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d
                14(a),
                promulgated under the Securities and Exchange Act of 1934, as
                amended32.1
            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)




26





SIGNATURES





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


China
                Housing & Land Development, Inc.November
                19  , 2007
            By:
            /s/
                LU PINGJILu
                Pingji
              Chief
                Executive Officer
              (Principal
                Executive Officer)








November
                19  , 2007
            By:
            /s/
                WAN YULONGWan
                Yulong
              Chief
                Financial Officer
              (Principal
                Financial and
              Accounting
                Officer)




27