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 MARCH 31, 2005

     [_]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

             FOR THE TRANSITION PERIOD FROM __________ TO __________
             COMMISSION FILE NUMBER ________________________________

                           CHINA HEALTH HOLDING, INC.
                  --------------------------------------------
                 (Name of small business issuer in its charter)

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

                 Julianna Lu, BSc. MSc., Chief Executive Officer
                    Suite 600 - 666 Burrard St., Park Place,
                  Vancouver, British Columbia, Canada V6C 2X8
                    (Address of principal executive offices)

                    Issuer's telephone Number: (604) 608-6788

                                 WITH COPIES TO:

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

     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
[_]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest  practicable date: As of May 9, 2005, the issuer
had 42,530,600 outstanding shares of Common Stock.

     Transitional Small Business Disclosure Format (check one): Yes [_] No [X]


<PAGE>

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                      Page
                                                                                      ----
                         PART I - FINANCIAL INFORMATION
<S>           <C>                                                                     <C>
Item 1.       Financial Statements..................................................... 2
Item 2.       Management's Discussion and Analysis or Plan of Operation................16
Item 3.       Controls and Procedures..................................................19

                                        PART II - OTHER INFORMATION

Item 1.       Legal Proceedings........................................................20
Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds..............20
Item 3.       Defaults Upon Senior Securities..........................................20
Item 4.       Submission of Matters to a Vote of Security Holders......................20
Item 5.       Other Information........................................................20
Item 6.       Exhibits and Reports on Form 8-K.........................................21

SIGNATURES.............................................................................22
</TABLE>

                                       1
<PAGE>
                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

                            CHINA HEALTH HOLDING INC.
                       (formerly A E&E Pharma Corporation)
                          (a development stage company)

                                 BALANCE SHEETS
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

                                                                                    March 31,            Dec. 31,
                                                                                      2005                 2004
                                                                                       $                     $
                                                                                  (Unaudited)
------------------------------------------------------------------------------------------------------------------------------------

                                     ASSETS

CURRENT ASSETS
<S>                                                                                  <C>                    <C>
    Cash                                                                             128,668                3,511
    Prepaid expenses (Note 6 and 7)                                                   17,245              349,750
                                                                                     -------              -------
                                                                                     145,913              353,261

FIXED ASSETS, net of depreciation (Note 4)                                             9,300                5,132

INTANGIBLE ASSETS (Note 3)                                                                 3                    2

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

                                                                                     155,216              358,395
====================================================================================================================================


                                   LIABILITIES

CURRENT LIABILITIES
    Accounts payable and accrued liabilities                                          23,551               24,172
     Due to shareholders (Note 5)                                                    345,693              335,014
                                                                                 -----------           ----------
                                                                                     369,244              359,186
                                                                                 -----------           ----------

                            STOCKHOLDERS' DEFICIENCY

STOCKHOLDERS' EQUITY (Note 6 and 11)
       Common stock, $0.001 issued and outstanding                                    42,531               36,523
       Preferred stock, $0.001 par value, 20,000,000 shares authorized,
          Nil shares issued and outstanding                                                -                    -
       Additional paid-in capital                                                  4,008,287            2,293,570
       Deficit accumulated during the development stage                           (4,088,611)          (2,319,622)
       Shares to be returned for cancellation (Note 7(b))                           (175,000)                   -
       Accumulated other comprehensive (loss) income                                  (1,235)             (11,262)
                                                                                 -----------           ----------
                                                                                    (214,028)                (791)


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

                                                                                     155,216              358,395
====================================================================================================================================
GOING CONCERN (Note 2(a))
COMMITMENTS (Note 3 and 9)
</TABLE>
    The accompanying notes are an integral part of these financial statements

                                       2
<PAGE>

                            CHINA HEALTH HOLDING INC.
                       (formerly A E&E Pharma Corporation)
                          (a development stage company)

                        INTERIM STATEMENTS OF OPERATIONS

                                   (UNAUDITED)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  April 3, 2002
                                                                  Three Months ended March 31,   (inception) to
                                                                      2005           2004         Mar. 31, 2005
                                                                        $              $                 $

------------------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                <C>               <C>
SALES                                                                      -                 -              7,305
                                                                -------------     -------------      -------------

EXPENSES
       Advertising and promotion                                       8,713             1,837             55,723
       Amortization of intangible assets                                   -                 -              7,125
       Consulting fees (Note 6 and 7)                                212,452            20,998            643,588
       Depreciation of tangible assets                                   538             1,569              1,550
       Licensing rights (Note 3)                                   1,359,999                 -          1,542,873
       Interest and bank charges (Note 8)                             14,169             1,701             40,285
       Loss on settlement of debts and issuance of shares
       (Notes 7 and 12)                                                    -            23,420             70,405
       Management fees (Note 6)                                       30,000            15,000            839,000
       Office                                                         14,482             1,532             28,064
       Professional fees (Note 7)                                    120,487                 -            446,531
       Rent                                                            5,159             2,305             37,840
       Research and development (Note 3)                                   -                 -            366,306
       Travel                                                          2,990               440             11,411
       Vehicle                                                             -             1,148              5,215
                                                                -------------     -------------      -------------
                                                                   1,768,989            69,950          4,095,916



NET LOSS FOR THE YEAR                                             (1,768,989)          (69,950)        (4,088,611)

====================================================================================================================================
BASIC NET LOSS PER SHARE                                               $0.05             $0.00
====================================================================================================================================
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING              37,652,521        30,008,473
====================================================================================================================================
</TABLE>
    The accompanying notes are an integral part of these financial statements

                                       3
<PAGE>
                            CHINA HEALTH HOLDING INC.
                       (formerly A E&E Pharma Corporation)
                          (a development stage company)

                        INTERIM STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

                                                                                                April 3, 2002
                                                                Three Months ended March 31,    (inception) to
                                                                    2005            2004        Mar. 31, 2005
                                                                      $              $                 $
------------------------------------------------------------------------------------------------------------------------------------


OPERATING ACTIVITIES
<S>                                                               <C>                <C>            <C>
       Net loss                                                   (1,768,989)        (69,950)       (4,088,611)
       Items not affecting cash
          Accrued interest                                             8,130           1,653            32,983
          Amortization of intangible assets                                -               -             7,125
          Depreciation of tangible assets                                538           1,569             1,550
          Licensing rights                                         1,359,999               -         1,542,873
          Loss on settlement of debts and
            issuance of shares                                             -          23,420            70,405
          Non cash expenses                                          315,005          35,998         1,177,399
                                                                   ----------      ----------        ----------
          Stock-based compensation                                         -               -           909,375
                                                                     (85,317)         (7,310)         (346,901)

       Changes in non-cash working capital
          Prepaid expenses                                                 -               -              (832)
          Accounts payable                                                 -          (9,679)           32,553
                                                                   ----------      ----------        ----------
                                                                     (85,317)        (16,989)         (315,180)
                                                                   ----------      ----------        ----------
INVESTING ACTIVITIES
       Purchase of fixed assets                                       (4,706)         (1,509)          (10,850)
                                                                   ----------      ----------        ----------

FINANCING ACTIVITIES
       Issuance of common stock                                      245,000           8,500           513,697
       Net (repayment) advances from shareholders                    (39,847)         13,620           (57,764)
                                                                   ----------      ----------        ----------
                                                                     205,153          22,120           455,933
                                                                   ----------      ----------        ----------
EFFECT OF EXCHANGE RATE CHANGES                                       10,027          (2,709)           (1,235)
                                                                   ----------      ----------        ----------
INCREASE IN CASH                                                     125,157             913           128,668

CASH, BEGINNING OF YEAR                                                3,511             141                 -
------------------------------------------------------------------------------------------------------------------------------------

CASH, END OF YEAR                                                    128,668           1,054           128,668
====================================================================================================================================
SUPPLEMENTAL DISCLOSURES
       Interest paid                                                       -               -                 -
       Taxes paid                                                          -               -                 -
====================================================================================================================================
SUPPLEMENTARY NON-CASH INFORMATION (Note 7)
</TABLE>
    The accompanying notes are an integral part of these financial statements

                                       4
<PAGE>

                            CHINA HEALTH HOLDING INC.
                       (formerly A E&E Pharma Corporation)
                          (a development stage company)

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

                                 MARCH 31, 2005


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

1.   NATURE OF OPERATIONS AND BASIS OF PRESENTATION

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

     China Health Holding Inc. (the "Company") is a Nevada company  incorporated
     on April 3, 2002 as A E&E Pharma Corporation.  The Company changed its name
     to China Health  Holding Inc. on May 25, 2004. The Company is a development
     stage company that was formed to market and distribute  proprietary natural
     medicinal products. The Company's product line includes King of Herbs-based
     products and a line of natural  multi-vitamins and supplements.  All of the
     Company's  products  are  based on  traditional  Chinese  medicine  and the
     principals of Taoism (see Note 3).

     The Company  completed a form SB2  registration  statement  with the United
     States Securities and Exchange Commission on February 11, 2005 and received
     approval from the NASD for the listing of the Company's  shares for trading
     on the Over the Counter Bulletin Board ("OTCBB') on April 18, 2005.

     Unaudited Interim Financial Statements

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

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

2.   SIGNIFICANT ACCOUNTING POLICIES

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

     a)   Basis of presentation

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

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

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

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


                                       5
<PAGE>
                            CHINA HEALTH HOLDING INC.
                       (formerly A E&E Pharma Corporation)
                          (a development stage company)

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

                                 MARCH 31, 2005

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

2.   SIGNIFICANT ACCOUNTING POLICIES - CONT'D

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

     b)   Use of estimates and assumptions

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

     c)   Prepaid expenses

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

     d)   Fixed assets

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

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

     e)   Intangible assets

          The Company has adopted the  provision  of the  Statement of Financial
          Accounting Standards No. 142 ("SFAS No.142"), "Goodwill and Intangible
          Assets",  which  revises the  accounting  for  purchased  goodwill and
          intangible assets. Under SFAS 142, goodwill and intangible assets with
          indefinite  lives are no  longer  amortized  and are to be tested  for
          impairment annually or whenever events or circumstances  indicate that
          the estimated  fair value is less than the related  carrying  value as
          determined  on a  reporting  unit  basis.  The  determination  of  any
          impairment  would include a comparison of estimated  future  operating
          cash flows anticipated during the remaining life with the net carrying
          value of the asset as well as a  comparison  of the fair value to book
          value  of  the  Company.  As  at  December  31,  2004  management  has
          determined  that  the  Company's   proprietary   rights  and  formulas
          described  in  Note 3 a) have  indefinite  lives  and as such  are not
          subject to amortization and further that no impairment of the carrying
          value of these intangible assets has occurred.

          Costs incurred in connection with the licence  agreements entered into
          as  described  in  Note  3  b)  would   normally  be  amortized  on  a
          straight-line basis over the term of the underlying licence agreements
          and then tested for impairment  annually in accordance  with SFAS 144,
          "Accounting for the Impairment on Disposal of Long-Lived Assets" (SFAS
          No.144).   The   determination  of  any  impairment  would  include  a
          comparison of estimated future operating cash flows anticipated during
          the  remaining  life with the net carrying  value of the asset.  As at
          March 31, 2005,  management has determined  that it is not possible at
          this time to  estimate  future  cash flows  from these  assets and has
          recorded  an  impairment  charge of  $182,874  in 2005 to  reduce  the
          carrying value of these intangible assets to $1.


                                       6
<PAGE>

                            CHINA HEALTH HOLDING INC.
                       (formerly A E&E Pharma Corporation)
                          (a development stage company)

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

                                 MARCH 31, 2005


--------------------------------------------------------------------------------
2.   SIGNIFICANT ACCOUNTING POLICIES - CONT'D

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

     e)   Intangible assets - cont'd

          As at March 31, 2005  management  has  determined  that the  Company's
          proprietary rights and formulas described in Note 3(c) have indefinite
          lives and as such are not  subject to  amortization.  Management  has,
          however,  determined  that it is not possible at this time to estimate
          future cash flows from these  assets and has  recorded  an  impairment
          charge of $1,359,999 to reduce the carrying value to $1.

     f)   Revenue Recognition

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

     g)   Fair value of financial instruments

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

     h)   Foreign currency translation

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

     i)   Income taxes

          The Company  follows the  liability  method of  accounting  for income
          taxes.  Under this method,  deferred income tax assets and liabilities
          are  recognized  for the estimated tax  consequences  attributable  to
          differences  between the financial statement carrying values and their
          respective  income tax basis  (temporary  differences).  The effect on
          deferred income tax assets and liabilities of a change in tax rates is
          recognized in income in the period that  includes the enactment  date.
          At March 31, 2005 full deferred tax asset valuation allowance has been
          provided and no deferred tax asset benefit has been recorded.


                                       7
<PAGE>

                           CHINA HEALTH HOLDING INC.
                      (formerly A E&E Pharma Corporation)
                         (a development stage company)

                NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

                                 MARCH 31, 2005


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

2.   SIGNIFICANT ACCOUNTING POLICIES - CONT'D

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

     j)   Net loss per common share

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

     k)   Stock-based compensation

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

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

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

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


                                       8
<PAGE>
                            CHINA HEALTH HOLDING INC.
                       (formerly A E&E Pharma Corporation)
                          (a development stage company)

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

                                 MARCH 31, 2005


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

2.   SIGNIFICANT ACCOUNTING POLICIES - CONT'D

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

     l)   Recent accounting pronouncements

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

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

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

3.   INTANGIBLE ASSETS

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

     a)   Asset purchase agreement

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

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

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

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


                                        9
<PAGE>

                            CHINA HEALTH HOLDING INC.
                       (formerly A E&E Pharma Corporation)
                          (a development stage company)

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

                                 MARCH 31, 2005


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

3.   INTANGIBLE ASSETS - CONT'D

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

     b)   Licensing rights agreement

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

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

                                       10
<PAGE>

                            CHINA HEALTH HOLDING INC.
                       (formerly A E&E Pharma Corporation)
                          (a development stage company)

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

                                 MARCH 31, 2005


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

3.    INTANGIBLE ASSETS - CONT'D

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

     b)   Licensing rights agreement - cont'd

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

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

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

     c)   Asset purchase agreement

          Pursuant to an asset  purchase  agreement  dated March 22,  2005,  the
          Company acquired from the Company's  shareholders  intellectual rights
          to 108 Taoist  medicinal  products.  In exchange  for the rights,  the
          Company agreed to pay total consideration as follows:

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

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

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


                                       11
<PAGE>

                            CHINA HEALTH HOLDING INC.
                       (formerly A E&E Pharma Corporation)
                          (a development stage company)

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

                                 MARCH 31, 2005


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

4.   FIXED ASSETS

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

                                                       Mar. 31,      Dec.31,
                                                        2005          2004
                                                          $             $
                                                       -------       ------

           Computer                                      9,256        5,766
           Furniture and Fixtures                        1,594          378
                                                       -------       ------
                                                        10,850        6,144

           Less:  accumulated depreciation              (1,550)      (1,012)
                                                       -------       -------
                                                         9,300        5,132
                                                       =======       =======

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

5.   DUE TO SHAREHOLDERS

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

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

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

6.   CAPITAL STOCK

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

     The authorized capital of the Company consists of 300,000,000 voting common
     shares with $0.001 par value and 20,000,000  voting  preferred  shares with
     $0.001 par value.  On March 28,  2005,  the  Company  increased  authorized
     common shares from 55,000,000 shares to 300,000,000 shares.

     The Company has issued common shares as follows:
<TABLE>
<CAPTION>
                                                                                           Additional
                                                                    Common shares            Paid in
                                                                Number        Amounts        Capital        Total
                                                                                 $              $             $
                                                             -------------------------------------------------------

<S>                                                          <C>               <C>         <C>            <C>
     Balance, December 31, 2004                              36,522,700        36,523      2,293,570      2,330,093
     Issued for cash at $0.25 per share                       1,080,000         1,080        268,920        270,000
     Issued for consulting and  professional services
     at an average of $0.29 per share                           427,900           428        125,297        125,725
     Issued for intellectual rights (Note 3(c))               4,500,000         4,500      1,345,500      1,350,000
     Finder fee paid                                                  -             -        (25,000)       (25,000)
                                                             -----------   -----------    -----------    -----------
     Balance, March 31, 2005                                 42,530,600        42,531      4,008,287      4,050,818
                                                             ===========   ===========    ===========    ===========


</TABLE>
                                       12
<PAGE>

                            CHINA HEALTH HOLDING INC.
                       (formerly A E&E Pharma Corporation)
                          (a development stage company)

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

                                 MARCH 31, 2005


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

6.   CAPITAL STOCK - CONT'D

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

     The Company has granted stock options as follows:

<TABLE>
<CAPTION>
                                                                                                  Weighted average
                                                                                                  Weighted Average
                                                  Number of               Weighted average           Remaining
                                                   Options                Exercise price          contractual Life
                                                 -----------------------------------------------------------------
<S>                                               <C>                          <C>                   <C>
     Balance, December 31, 2004                   6,600,000                    0.11                  3.33 years

     Issued during the quarter (i)                  300,000                    0.30                       -
                                                 -----------------------------------------------------------------

     Balance, March 31, 2005                      6,900,000                    0.12                  2.99 years
                                                 =================================================================
</TABLE>
     i.   The Company  granted 300,000 stock options to consultants and officers
          with an exercise  price of $0.30  subject to  immediate  vesting.  The
          intrinsic  value of these  options at the date of grant was $Nil.  The
          Company  determined  that there was no additional fair value resulting
          from  application  of the fair value  method  using the Black  Scholes
          option pricing model as there was no established market for trading in
          the  Company's  shares and,  as such,  the  volatility  factor was 0%.
          Accordingly, no stock-based compensation was recorded for the options.

     The Company has issued share purchase warrants as follows:

                                               Number of      Weighted Average
                                                Warrants       Exercise Price
                                               ---------       --------------
         Balance, December 31, 2004              339,000              $0.56

         Issued during the quarter (i)         1,080,000               0.75
                                               ---------       --------------
         Balance, March 31, 2005               1,419,000              $0.70
                                               =========       ==============


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


                                       13
<PAGE>

                            CHINA HEALTH HOLDING INC.
                       (formerly A E&E Pharma Corporation)
                          (a development stage company)

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

                                 MARCH 31, 2005

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

7.   SUPPLEMENTARY NON-CASH INFORMATION

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

     The Company entered into the following non-cash transactions:

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

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

          During the current  quarter,  this services  agreement was  cancelled.
          Subsequent to the current  quarter end, the Company and the consultant
          agreed that 700,000 out of the 1,00,000  common  shares issued in 2004
          wre to be  returned  to the  Company  for  cancellation.  Accordingly,
          during the current  quarter,  $28,125 was recorded as consulting  fees
          and $175,000 was recorded as shares to be returned for cancellation.

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

     c)   During the quarter, the Company issued 427,900 common shares with fair
          values  ranging  from  $0.25 to $0.30 for a total  value of  $125,725.
          $50,725 was recorded as  consulting  expenses and $75,000 was recorded
          as professional fees.

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

8.   RELATED PARTY TRANSACTIONS

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

     The Company has entered into the following related party transactions:

     a)   Accrued  management  and  consulting  fees to directors,  officers and
          shareholders totalling $39,500 (December 31, 2004 - $96,649);

     b)   Accrued  interest  expense to  directors  and  shareholders  totalling
          $60,452 (December 31, 2004 - $19,734);

     c)   Recorded sales to directors and shareholders  totalling $Nil (December
          31, 2004 - $7,571);

     d)   Acquired  intellectual property from shareholders with a total cost of
          $1,360,000 (see Note 3 and 7).

                                       14
<PAGE>

                            CHINA HEALTH HOLDING INC.
                       (formerly A E&E Pharma Corporation)
                          (a development stage company)

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

                                 MARCH 31, 2005

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

9.   COMMITMENTS

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

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


          -    pay  a  monthly  management  fee  of  $10,000  to  the  Company's
               President  starting  on  January  1, 2005 and pay a 3% royalty on
               gross sales of the Company.
          -    pay a monthly  consulting  fee of $3,500 to a shareholder  of the
               Company.
          -    issue  100,000  common  shares  as  compensation  for  consulting
               services to an officer on March, 2006.

     (See also Note 3)

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

10.  INCOME TAXES

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

     The  Company  has net  operating  loss  carry  forwards  for  income  taxes
     amounting  to  approximately  $1,879,500  as at March 31, 2005 which may be
     available to reduce future years' taxable income.  Management believes that
     the realization of the benefits from these losses appears  uncertain due to
     the Company's limited operating history and continuing losses. Accordingly,
     a full,  deferred tax asset  valuation  allowance  has been provided and no
     deferred tax asset benefit has been recorded.



11.  SUBSEQUENT EVENTS


     Subsequent  to the March 31,  2005  period end the  Company  completed  the
     following stock transactions:

     a)   granted a total of 900,000 stock  options to officers and  consultants
          with exercise prices ranging from $0.30 to $0.80 per share.

     b)   issued  315,000 common shares at $0.30 per share as  compensation  for
          consulting services provided to the Company.

     c)   cancelled  400,000  stock  options  issued to a former  officer of the
          Company.


     On May 3, 2005, the Company  formed two  wholly-owned  subsidiaries,  China
     Health Pharmaceutical Corporation and China Health World Trade Corporation.


                                       15

<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.

     The information in this report contains  forward-looking  statements within
the meaning of the Private  Securities  Litigation  Reform Act of 1995. This Act
provides a "safe harbor" for  forward-looking  statements to encourage companies
to provide  prospective  information  about  themselves so long as they identify
these statements as forward looking and provide meaningful cautionary statements
identifying important factors that could cause actual results to differ from the
projected results.  All statements other than statements of historical fact made
in this  report are  forward  looking.  In  particular,  the  statements  herein
regarding  industry  prospects  and future  results of  operations  or financial
position are  forward-looking  statements.  Forward-looking  statements  reflect
management's  current  expectations  and are  inherently  uncertain.  Our actual
results may differ significantly from management's expectations.

Background

     China Health Holding,  Inc. is a development stage business that was formed
in 2002 for the purpose of manufacturing, marketing and distributing proprietary
natural medicinal products. We have had nominal revenues since our inception. We
currently  market and  distribute  products in Canada  through our King of Herbs
product line. We also plan on  developing a Taoist  Medicine  product line and a
Vitamins and  Supplements  product line over the next twelve months.  All of the
products for the three product lines are fully developed and we expect to launch
the Taoist Medicine and Vitamins and  Supplements  product lines within the next
twelve  months.  All of our  manufacturing  is  currently  outsourced  to  third
parties. We plan to generate revenues by sales of our herbal supplement products
(1) through a website that is currently under  construction,  (2) through retail
and wholesale  distributors,  and (3) through the establishment of retail stores
in major cities in North America.  While all of our current operations and sales
are in Canada, we anticipate expanding our sales into the United States over the
next six to twelve months and, thereafter, into regions of Europe and Asia.

Capital Resources

     As of March 31, 2005,  we had cash of $128,668 and current  liabilities  of
$369,244.  As of March 31, 2005, we had a working capital deficiency of $223,331
and an accumulated  deficit of $4,088,611.  With our current resources we expect
to be able to satisfy our cash  requirements for  approximately  six months.  In
order to  commercialize  our Taoist  Medicine  product line and our Vitamins and
Supplements  product line we will need to raise at least $1 million in financing
over the next twelve  months.  In order to implement  our plan of operation  and
commercialize our Taoist Medicine and Vitamins and Supplements product lines, we
intend to seek  outside  debt and  equity  financing,  to the  extent  that such
funding is available  under  reasonable  terms and  conditions.  We have not yet
sought any  commitments  for such  financing  and no assurance can be given that
additional financing will be available,  or if available,  will be on acceptable
terms.

Future Development

     We expect to focus our  resources  over the next twelve months on expanding
the scope of our product  offerings and expanding our business  operations  from
Canada into the United  States and  Europe.  Other than the  products  described
below under  "Research  and  Development"  we do not have any  current  plans to
expand our product lines.

     To expand our operations,  we will need to implement a worldwide  marketing
strategy  for our  products  and  develop  our  website  to allow  for  Internet
purchases of our products. A worldwide marketing strategy will involve a website
that has  multi-language  and  multi-currency  capabilities,  will involve media
advertising in multiple  countries and  distribution  agreements  throughout the
world.  We are  currently  constructing  a website that will feature an Internet
store  which  will  also be used to  market  our  products.  We plan to have our
website  operational  within the next six months,  and with  multi-language  and
multi-currency capabilities in 2006.

                                       16
<PAGE>
     As we grow,  we intend to  establish  regional  sales  teams in the  United
States  and  ultimately  internationally.  These  sales  teams  will  work  with
distributors  and  retailers in their  regions to promote and sell our products.
Also, together with our investor relations consultant,  Bevitor Holding Ltd., we
are  currently  developing  a  marketing  plan to promote our brand name and our
products.  We do not  currently  have any  agreements  with retail or  wholesale
distributors.  Our  management  will work to negotiate and enter into retail and
wholesale distribution  agreements for our products over the next twelve months.
We also plan to begin opening  retail  outlets in large cities in North America,
Europe and the People's  Republic of China over the next five years. We have not
yet located any sites to establish  retail stores but are initially  looking for
locations in New York, Los Angeles,  San Francisco,  Seattle, Las Vegas or other
large cities in the United States.  We plan to open our first retail  storefront
in the United States within the next twelve months.

     We anticipate  the  following  expenses  over the next twelve  months:  (a)
$20,000 to develop our Internet  website;  (b) $200,000 for media advertising to
promote our brand name;  (c) $60,000 for our research and  development  program;
(d) $250,000-$400,000 to establish our first retail outlet in the United States,
including  an  integrated  inventory   management/manufacturing/sales   computer
system; (e) $50,000 for an investor relations program; (f) $150,000-$250,000 for
professional and consultant fees; and (g)  $200,000-$300,000 for general working
capital,   including   product   development,   inventory,   and   general   and
administrative  expenses.  We do not  expect  to  purchase  or sell  significant
equipment or to significantly increase the number of our employees over the next
twelve months.

Research and Development

     We expect  to pay  approximately  $60,000  over the next  twelve  months to
scientific  consultants  in the  People's  Republic  of China for  research  and
development of certain products.  Each of the formulations described below would
be considered by the FDA to be unapproved new drugs and will require approval by
the FDA or foreign  regulators  before we can sell  them.  If  approval  of such
products by the FDA or foreign  regulators is delayed or cannot be obtained,  we
will be  forced  to delay  our plans  for  producing  the  products  for sale to
consumers.  While any delay could  adversely  affect our  operations,  we do not
expect such a delay to be material  since the great majority of our products are
considered  dietary  supplements  which  generally  do not  require FDA or other
regulatory  approval.  With the anticipated  $60,000 in research and development
expenses,  we expect to begin  commercial  development  of DFU898 and  undertake
development  efforts of other  product  candidates  as our  financial  and other
resources permit.  However, since we have not yet acquired the rights to DFU898,
no assurance can be given that such rights will be acquired and the  anticipated
research and development expenses may not be incurred.

     Our scientific  consultants  in the People's  Republic of China are helping
develop DFU 898, DVT 896 and ASO 989.  These  products are owned  jointly by two
parties: Dr. Xi JiYi and the Shanghai Chinese & Western Medical Vascular Disease
Research  Institute.  We currently do not have rights to these products,  but we
are currently in negotiations to acquire these rights.

     DFU898.  A treatment of Diabetic Foot Ulceration  ("DFU") and Diabetic Food
Gangrene  ("DFG").  DFU898 was first  discovered  by Dr. Xi JiYe at the Shanghai
Chinese & Western Medical Vascular  Disease  Research  Institute in the People's
Republic of China. This product candidate is based on more than fifteen years of
research and clinical  trials in the areas of DFU and DFG.  DFU898 has undergone
human  clinical  testing in the People's  Republic of China for the treatment in
certain  specialized  hospitals  of patients  who suffer  from DFU and DFG.  The
clinical  testing was performed in accordance with  regulatory  standards in the
People's Republic of China. The United States Food and Drug  Administration  was
not  consulted  in designing  the  clinical  tests.  Since  discovering  DFU898,
Shanghai Chinese & Western Medical  Vascular Disease Research  Institute and Dr.
Xi  JiYe  have  undertaken   detailed  research  and  conducted   doctor/patient
interviews to validate its  effectiveness.  The principal  validation factors at
this time include  positive human clinical  research  results,  research  awards
attributed  to DFU898  from  Chinese  medical  authorities  and the  current and
ongoing use of DFU898 in treating  DFU and DFG in  specialized  hospitals in the
People's  Republic of China.  This  product is  currently  available  for use in
certain  hospitals  in the  People's  Republic of China under  limited  clinical
licenses for special patients.

                                       17
<PAGE>
     Clinical Research of DFU898.  Dr. Xi JiYe undertook a formal clinical study
involving over 400 patients suffering from DFU and DFG. A repeat validation test
was performed in cooperation with the Hong Kong Chinese  University  Hospital to
validate the initial clinical results.  The clinical research revealed a DFU 898
efficacy  rate  greater than 95%, an  amputation  rate lower than 4% and a death
rate of 1.4%.  The test results were  positive for the  treatment of more severe
stages of DFU and DFG. The longer term curative  efficacy rate revealed a two to
three  year  recurrence  rate of  approximately  10% with  recurring  DFU  cured
immediately after a very short period of re-establishing  DFU898 treatment.  The
use of DFU898 has not been reviewed by any United  States or foreign  regulatory
agencies.  Statistical  analysis  of the DFU898  clinical  trials  provided  the
following p values. A p value indicates whether any difference in results of the
clinical  studies is due entirely to chance.  Biological  scientists are usually
willing  to  accept a 5%  probability  that  differences  are due to chance (p =
0.05). A p value of less than 5% (p < 0.05) suggests that the probability of any
differences seen are due to chance is less than 5%.

Observations of DFU898 Treatment                             P Value
--------------------------------                             --------
Reduce blood glucose                                         P < 0.01
Heighten level of C peptide                                  P < 0.05
Reduce levels of 3-lipid-glycerin, cholesterol and the       P < 0.01
   low-density lipid protein
Heighten the level of tPA                                    P < 0.01
Reduce the level of PAI                                      P < 0.05
Increase the value of tPa/PAI                                P < 0.01
Reduce the level of NOS                                      P < 0.05

     Even if the rights to this product are  obtained,  the product would not be
allowed to be marketed in the United States labeled for treatment of diabetes or
complications  thereof  unless a New Drug  Application  (NDA) is  submitted  and
approved by the FDA.  Since the clinical  trials were conducted in China without
consultation  with  the  FDA,  it is  unknown  if the  trials  would  be  deemed
acceptable by the agency as proof of the product's safety and  effectiveness for
use in the  treatment  of  diabetes.  If approval of this  product by the FDA or
foreign regulators is delayed or cannot be obtained,  we will be forced to delay
our plans for producing the product for sale to consumers. While any delay could
adversely  affect our  operations,  we do not expect such a delay to be material
since the great  majority of our products  are  considered  dietary  supplements
which generally do not require FDA or other regulatory approval.

     DVT896.  This product  candidate  has proven  effective in the treatment of
Deep Vein Thrombosis  ("DVT").  DVT is a formation of deep vein blood clots that
can lead to many serious  conditions,  ranging from cerebral  hemorrhage,  heart
disease,  and to what  has  been  popularized  in the  airline  industry  as the
"Economy Class Syndrome."  Clinical  research testing of DVT896 was performed by
Dr. Xi JiYi and the Shanghai Chinese & Western Medical Vascular Disease Research
Institute.  The clinical  testing was  performed in accordance  with  regulatory
standards in the  People's  Republic of China.  The United  States Food and Drug
Administration  was not consulted in designing the clinical tests.  The clinical
research testing indicated an efficacy rate of 99% in treating DVT patients. The
clinical research undertaken to date indicates that DVT896 has the potential for
treating other  conditions  such as  superficial  vein  inflammation,  traumatic
hematoma,  acute  periarthritis of the shoulder and synovitis of the knee joint.
However,  no statistical  analysis was performed of the DVT896 clinical  trials.
Accordingly,  it cannot be  determined  whether  the  results of the trials were
statistically  significant or the  probability of getting more extreme  results.
The use of  DVT896  has not  been  reviewed  by any  United  States  or  foreign
regulatory  agencies.  This  product is currently  available  for use in certain
hospitals in the People's  Republic of China under limited clinical licenses for
special patients.

     This product, if labeled for the specified indications, would be considered
an  unapproved  new  drug by the FDA,  and will  require  an  approved  New Drug
Application  before the product can be marketed in the United States.  Since the
clinical trials were conducted in China without consultation with the FDA, it is
unknown if the trials would be deemed  acceptable  by the agency as proof of the
product's  safety and  effectiveness  for use in the  treatment of diabetes.  If
approval of this product by the FDA or foreign  regulators  is delayed or cannot
be obtained,  we will be forced to delay our plans for producing the product for
sale to consumers.  While any delay could adversely affect our operations, we do
not expect such a delay to be material  since the great majority of our products
are considered  dietary  supplements which generally do not require FDA or other
regulatory approval.

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<PAGE>
     ASO 989.  This  product  candidate  is intended  to treat  Arteriosclerotic
Obliteration  ("ASO").  ASO is the  hardening  of artery blood  vessels  causing
severe  conditions such as myocardial  infractions  and heart attacks.  Clinical
studies  of ASO 989 were  performed  by Dr. Xi JiYi and the  Shanghai  Chinese &
Western Medical Vascular Disease  Research  Institute.  The clinical testing was
performed in accordance  with regulatory  standards in the People's  Republic of
China.  The United  States Food and Drug  Administration  was not  consulted  in
designing the clinical tests. The clinical studies indicated an efficacy rate of
97% and an amputation rate of less than 1.5%. In addition, the clinical research
conducted to date  indicates that ASO 989 has the potential to treat ischemia of
extremities,  cerebral thrombosis,  cerebral arteriosclerosis and coronary heart
disease.  However, no statistical analysis was performed of the ASO 989 clinical
trials.  Accordingly,  it cannot be determined whether the results of the trials
were  statistically  significant  or the  probability  of getting  more  extreme
results. The use of DVT896 has not been reviewed by any United States or foreign
regulatory  agencies.  This  product is currently  available  for use in certain
hospitals in the People's  Republic of China under limited clinical licenses for
special patients.

     This product, if labeled for the specified indications, would be considered
an  unapproved  new  drug by the FDA,  and will  require  an  approved  New Drug
Application  before the product can be marketed in the United States.  Since the
clinical trials were conducted in China without consultation with the FDA, it is
unknown if the trials would be deemed  acceptable  by the agency as proof of the
product's  safety and  effectiveness  for use in the  treatment of diabetes.  If
approval of this product by the FDA or foreign  regulators  is delayed or cannot
be obtained,  we will be forced to delay our plans for producing the product for
sale to consumers.  While any delay could adversely affect our operations, we do
not expect such a delay to be material  since the great majority of our products
are considered  dietary  supplements which generally do not require FDA or other
regulatory approval.

     We also plan to add VG-ALLERGY, VG-EYE AND VG-ANTI-TUMOR to the products in
our King of Herbs Product Line. We acquired the rights to each of these products
under a  purchase  agreement  dated May 1, 2004 with  Julianna  (Jenny)  Lu, our
founder and principal executive officer,  and Xiao Fei Yu, our President and one
of our directors.  VG-ALLERGY is a product designed to reduce allergic reactions
of the human body.  VG-EYE is formulated to prevent  deterioration  of eyesight.
VG-ANTI-TUMOR is formulated specifically to prevent cancerous growths for cancer
patients who are undergoing chemotherapy treatment. Each of these products would
be considered an unapproved new drug by the FDA and will require an approved New
Drug  Application  before the products can be marketed in the United States.  No
clinical trials have been conducted for these products. The New Drug Application
process is expensive,  lengthy and rigorous requiring extensive  nonclinical and
clinical  trials  to  be  successfully  conducted.  Additionally,  there  is  no
guarantee  that  the  FDA  would  accept  the  data  or  approve  any  New  Drug
Applications  for these  products.  If approval of these  products by the FDA or
foreign regulators is delayed or cannot be obtained,  we will be forced to delay
our plans for  producing  the  products for sale to  consumers.  While any delay
could  adversely  affect our  operations,  we do not  expect  such a delay to be
material  since  the great  majority  of our  products  are  considered  dietary
supplements which generally do not require FDA or other regulatory approval.

Item 3. Controls and Procedures.

     As of the  end of the  period  covered  by this  report,  we  conducted  an
evaluation,  under  the  supervision  and with the  participation  of our  chief
executive  officer and chief  financial  officer of our disclosure  controls and
procedures  (as defined in Rule  13a-15(e)  and Rule  15d-15(e)  of the Exchange
Act).  Based  upon  this  evaluation,  our  chief  executive  officer  and chief
financial  officer  concluded  that our  disclosure  controls and procedures are
effective  to ensure  that  information  required to be  disclosed  by us in the
reports that we file or submit  under the  Exchange Act is recorded,  processed,
summarized and reported,  within the time periods  specified in the Commission's
rules  and  forms.  There was no change  in our  internal  controls  or in other
factors that could affect these controls during our last fiscal quarter that has
materially affected,  or is reasonably likely to materially affect, our internal
control over financial reporting.

                                       19
<PAGE>
                                     PART II

Item 1. Legal Proceedings.

     We are not  currently a party to, nor is any of our property  currently the
subject of, any pending legal  proceeding.  None of our  directors,  officers or
affiliates is involved in a proceeding adverse to our business or has a material
interest adverse to our business.

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

        Not applicable.


Item 3. Defaults Upon Senior Securities.

        Not applicable.

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

        Not applicable.

Item 5. Other Information.

        Not applicable.

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<PAGE>
Item 6. Exhibits.

Exhibit Number           Description
----------------    ------------------------------------------------------------
3.1                 Certificate  of  Amendment  to  Articles  of   Incorporation
                    (Incorporated  by  reference  to Form  8-K  filed  with  the
                    Securities and Exchange Commission on March 28, 2005)

10.1                Purchasing  Agreement  for 108 100%  Natural  Taoist  Herbal
                    Medicinal  Products,  Formulas and Ownership entered into on
                    March 22, 2005 between China Health Holding,  Inc., Xiao Fei
                    Yu and Fei Yu  (Incorporated  by reference to Form 8-K filed
                    with the  Securities  and Exchange  Commission  on March 28,
                    2005)

10.2                Amended  and   Restated   Intellectual   Property   Purchase
                    Agreement  dated as of March 22, 2005  between  China Health
                    Holding,  Inc.,  Xiao  Fei Yu and  Fei Yu  (Incorporated  by
                    reference to Form 8-K filed with the Securities and Exchange
                    Commission on March 28, 2005)

31.1                Certification  by  Chief  Executive  Officer  and  Principal
                    Financial  Officer,  required  by  Rule  13a-14(a)  or  Rule
                    15d-14(a)  of the  Exchange  Act,  promulgated  pursuant  to
                    Section 302 of the Sarbanes-Oxley Act of 2002.

32.1                Certification  by  Chief  Executive  Officer  and  Principal
                    Financial  Officer,  required  by  Rule  13a-14(b)  or  Rule
                    15d-14(b) of the Exchange Act and Section 1350 of Chapter 63
                    of Title 18 of the United States Code,  promulgated pursuant
                    to Section 906 of the Sarbanes-Oxley Act of 2002.



                                       21
<PAGE>
                                   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 HEALTH HOLDING, INC.


     Dated:   May 12, 2005               By:/s/ Julianna Lu
                                            -------------------
                                            Julianna (Jenny) Lu
                                            Chief Executive Officer, Principal
                                            Financial Officer, Principal
                                            Accounting Officer, Treasurer and
                                            Chairman of the Board of Directors



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