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

                                   FORM 10-QSB

(MARK ONE)

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

     FOR THE QUARTERLY PERIOD ENDED JUN3 30, 2006

[_]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934 FOR THE

     TRANSITION PERIOD FROM _________ TO __________

COMMISSION FILE NUMBER: 0-19276


                           Fushi International, Inc.
--------------------------------------------------------------------------------
        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

           NEVADA                                      13-3140715
--------------------------------------     -------------------------------------
(STATE OR OTHER JURISDICTION OF               (I.R.S.  EMPLOYER  IDENFIFICATION
INCORPORATION OR ORGANIZATION                   NO.)


     1 Shuang Qiang Road, Jinzhou, Dalian, People's Republic of China 116100
        ----------------------------------------------------------------
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

ISSUER 'S TELEPHONE NUMBER, INCLUDING AREA CODE: 011-86-411-9770-3333


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes |X| No |_|.

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes |_| No |X|.

The  number of shares of Common  Stock of the  Registrant,  par value  $.006 per
share, outstanding at June 30, 2006 was 19,894,315.

Transitional Small business Disclosure Format (Check one): Yes |_|; No |X|.



<PAGE>


                            FUSHI INTERNATIONAL INC.
                       INDEX TO MARCH 31, 2006 FORM 10-QSB

                                                                            Page
                                                                           -----
Part I - Financial Information

Item 1 - Financial Statements                                                 3

Condensed Consolidated Balance Sheet as of March 31, 2006 (unaudited)         3

Condensed Statements of Operations and Comprehensive Income
 for the three months ended March 31, 2006 (consolidated)
 and March 31, 2005 (unaudited)                                               4

Condensed Statements of Cash Flows
 for the three months ended March 31, 2006 (consolidated)
 and March 31, 2005 (unaudited)                                               5

Notes to the Condensed Consolidated Financial Statements (unaudited)          6

Item 2 - Management's Discussion and Analysis of Results of Operations and
         Financial Condition                                                 11

Item 3 - Controls and Procedures                                             28

Part II - Other Information

Item 6 - Exhibits                                                            28

Signature Page                                                               29



<PAGE>


                          I. FINANCIAL INFORMATION

Item 1. Financial Statements

<TABLE>
<CAPTION>
                            FUSHI INTERNATIONAL, INC.
                                AND SUBSIDIARIES
                                  BALANCE SHEET
                         AS OF JUNE 30, 2006 (UNAUDITED)

<S>                                                                             <C>
      ASSETS
CURRENT ASSETS
      Cash and cash equivalents                                                 $     4,583,936
      Accounts receivable, net                                                       10,318,928
      Inventories, net                                                                8,418,957
      Other receivables and prepaid expenses                                         10,616,221
      Income taxes recoverable                                                        1,525,141
                                                                                ---------------
                  Total Current Assets                                               35,463,183

PROPERTY AND EQUIPMENT, NET                                                          44,925,456

OTHER
ASSETS
      Intangible assets, net                                                            785,633
      Land use rights, net                                                            4,706,932
                                                                                ---------------
TOTAL ASSETS                                                                    $    85,881,204
                                                                                ---------------


         LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
      Accounts payable                                                          $     3,526,165
      Other payables and accrued liabilities                                          1,063,290
      Notes payable - current maturities                                             13,450,000
      Value added tax and other taxes payable                                         1,325,803
      Due to related parties                                                             62,720
                                                                                ---------------
                  Total Current Liabilities                                          19,427,978

LONG-TERM LIABILITIES
      Notes payable - long term                                                      10,000,000
                                                                                ---------------

TOTAL LIABILITIES                                                                    29,427,978
                                                                                ---------------

STOCKHOLDERS' EQUITY
      Common Stock- $0.006 par value 100,000,000 shares
      authorized  19,894,315 shares issued and outstanding                              119,366


      Additional paid-in capital                                                     29,107,078
      Retained earnings
        Unappropriated                                                               23,662,957
        Appropriated                                                                  2,428,310
      Comprehensive income                                                            1,135,515
                                                                                ---------------
                  Total Stockholders' Equity                                         56,453,226
                                                                                ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                      $    85,881,204
                                                                                ---------------
</TABLE>

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

                                       3
<PAGE>

<TABLE>
<CAPTION>
                            FUSHI INTERNATIONAL, INC.
                                AND SUBSIDIARIES
           CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                                   (UNAUDITED)

                                                            For the three     For the three      For the six        For the six
                                                             months ended      months ended      months ended       months ended
                                                            June 30, 2006     June 30, 2005      June 30, 2006      June 30, 2005
                                                          ---------------    --------------     --------------    ---------------
<S>                                                       <C>                <C>                <C>               <C>
NET SALES                                                 $    18,335,021    $    5,557,236     $  32,925,164     $     9,551,462

COST OF SALES                                                 (10,199,652)       (3,113,375)       (19,521,213)        (5,593,166)
                                                          ---------------    --------------     --------------    ---------------
GROSS PROFIT                                                    8,135,369         2,443,861         13,403,951          3,958,296
                                                          ---------------    --------------     --------------    ---------------
OPERATING EXPENSES
     Selling expenses                                             132,629            48,328            249,249             91,798
     General and administrative expenses                          224,442           215,814            571,682            350,306
     Professional fees                                            280,246                 -            469,034                768
     Depreciation                                                 169,796            66,356            334,593            201,400
     Amortization of land use rights                               25,037            24,225             50,074             48,450
     Amortization of intangible assets                             30,659            29,666             61,318             59,332
                                                          ---------------    --------------     --------------    ---------------
                Total Operating Expenses                          862,809           384,389          1,735,950            752,054
                                                          ---------------    --------------     --------------    ---------------
INCOME FROM OPERATIONS                                          7,272,560         2,059,472         11,668,001          3,206,242

OTHER INCOME (EXPENSES)
     Interest income                                                1,419             6,050             12,431             13,535
     Interest expenses                                           (263,458)         (131,454)          (513,564)          (234,316)
     Other income                                                 229,175                 -            320,722                  -
     Other expenses                                              (113,552)                -           (138,850)            (7,814)
                                                          ---------------    --------------     --------------    ---------------
                Total Other Expenses                             (146,416)         (125,404)          (319,261)          (228,595)

INCOME BEFORE INCOME TAX EXPENSE                                7,126,144         1,934,068         11,348,740          2,977,647

INCOME TAX EXPENSE                                                 60,064          (303,884)          (396,616)          (446,648)

NET INCOME                                                $     7,186,208    $    1,630,184    $    10,952,124   $      2,530,999
                                                          ---------------    --------------     --------------    ---------------
OTHER COMPREHENSIVE INCOME
     Foreign currency translation gains                                 -                 -          1,118,315                  -
                                                          ---------------    --------------     --------------    ---------------

COMPREHENSIVE INCOME                                      $     7,186,208    $    1,630,184     $   12,070,439          2,530,999
                                                          ---------------    --------------     --------------    ---------------

Net income per share-basic                                $          0.36    $         0.11     $         0.55    $          0.16
                                                          ---------------    --------------     --------------    ---------------
Net income per share-diluted                              $          0.34    $         0.11     $         0.55    $          0.16
                                                          ---------------    --------------     --------------    ---------------

Weighted average number of shares outstanding during the
period-basic                                                   19,894,315        15,475,595         19,894,315         15,475,595
                                                          ---------------    --------------     --------------    ---------------
Weighted average number of shares outstanding during the
period-diluted                                                 21,434,692        15,475,595         21,434,692         15,475,595
                                                          ---------------    --------------     --------------    ---------------
</TABLE>

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

                                       4
<PAGE>


<TABLE>
<CAPTION>
                            FUSHI INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                       CONDENSED STATEMENTS OF CASH FLOWS
           FOR THE SIX MONTHS ENDED JUNE 30, 2006 AND 2005 (UNAUDITED)

                                                                                  2006                    2005
                                                                             (Consolidated)
                                                                           -------------------      ------------------
<S>                                                                        <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                                             $        10,952,124      $        2,530,999
    Adjusted to reconcile net income to cash provided
           by operating activities:
           Depreciation - cost of sales                                                666,065                 177,513
           Depreciation - operating expenses                                           334,593                 201,400
           Amortization of land use rights                                              50,074                  48,450
           Amortization of intangible assets                                            61,318                  59,332
    Changes in operating assets and liabilities (Increase) decrease in:
           Accounts receivable                                                      (4,120,223)             (2,357,460)
           Inventories                                                                (791,091)               (381,460)
           Other receivables and prepaid expenses                                   (6,857,149)               (607,136)
           Increase (decrease) in:
           Accounts payable                                                            781,513
                                                                                                              (187,698)
           Other payables and accrued liabilities                                      283,392                 689,137
           Value added tax and other taxes payable                                  (2,544,011)               (697,677)
           Income tax  payables (recoverable)                                       (3,629,850)                446,647
           Net cash used in operating activities                                    (4,813,245)                (77,953)
                                                                           -------------------      ------------------
CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property and equipment                                              (5,057,136)             (2,327,730)
                                                                           -------------------
           Net cash used in investing activities                                    (5,057,136)             (2,327,730)
                                                                           -------------------      ------------------
CASH FLOWS FROM FINANCING ACTIVITIES
    Additional paid-in capital                                                         (82,313)                      -
    Due from related companies                                                       3,323,528              (1,238,392)
    Due to a stockholder                                                                42,720                       -
    Due to related companies                                                            20,000                 549,350
    Loans borrowed                                                                  13,450,000               9,192,066
    Loans repaid                                                                    (7,496,902)
                                                                                                            (6,894,049)
           Net cash provided by financing activities                                 9,257,033               1,608,975
                                                                           -------------------      ------------------
EFFECT OF EXCHANGE RATE ON CASH                                                       (966,386)                      -
                                                                           -------------------      ------------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                           (1,579,734)               (796,708)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                     6,163,670               2,612,282

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                 $         4,583,936      $        1,815,574
                                                                           -------------------      ------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

         Cash paid for interest                                            $           655,951      $          646,010
                                                                           -------------------      ------------------

         Cash paid for income tax                                          $         4,044,883      $                -
                                                                           -------------------      ------------------
</TABLE>

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


                                       5
<PAGE>


                            FUSHI INTERNATIONAL, INC.
                                AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                         AS OF JUNE 30, 2006 (UNAUDITED)


NOTE 1   BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements have
     been prepared in accordance with accounting  principles  generally accepted
     in the United  States of America  for  interim  financial  information  and
     pursuant  to the rules  and  regulations  of the  Securities  and  Exchange
     Commission.  Accordingly,  they do not include all of the  information  and
     footnotes required by generally accepted accounting principles for complete
     financial statements.

     In  the  opinion  of  management,   the  unaudited  condensed  consolidated
     financial  statements  contain all  adjustments  consisting  only of normal
     recurring  accruals  considered  necessary to present  fairly the Company's
     financial  position at June 30,  2006,  the results of  operations  for the
     three and six months  ended June 30, 2006 and 2005,  and cash flows for the
     six months  ended June 30,  2006 and 2005.  The  results for the six months
     ended June 30,  2006 are not  necessarily  indicative  of the results to be
     expected for the entire fiscal year ending December 31, 2006.

     These financial statements should be read in conjunction with the Company's
     annual  report on Form  10-KSB as filed with the  Securities  and  Exchange
     Commission.


NOTE 2   ORGANIZATION

     Fushi  International,  Inc.  (formerly  Parallel  Technologies,  Inc.)  was
     incorporated under the name of M, Inc. in the State of Nevada on October 6,
     1982. The name was changed to Parallel  Technologies,  Inc. ("Parallel") on
     June  3,  1991  and   changed   to  Fushi   International,   Inc.   ("Fushi
     International")   on  January  30,  2006  on  consummation  of  a  business
     combination   transaction.   During  1995,  Parallel  ceased  all  business
     operations   and  disposed  of  all  assets,   liabilities   and  operating
     activities.  Since the fiscal year ended December 31, 1995, Parallel had no
     business operations,  assets or liabilities,  until December 13, 2005, when
     it acquired  Diversified Product  Inspections,  Inc. ("DPI") and its wholly
     owned subsidiary,  Dalian Diversified Product Inspections  Bimetallic Cable
     Co., Ltd. ("Dalian DPI").

     DPI was  incorporated  on  September  22,  2005 in the  State of  Delaware.
     Through  its  wholly  owned  subsidiary,  Dalian  DPI  incorporated  in the
     People's  Republic  of China  ("PRC")  as a wholly  owned  foreign  limited
     liability   company  on  September   24,  2005,   DPI  is  engaged  in  the
     manufacturing  and selling of copper clad aluminum and steel wire,  both of
     which are bimetallic  composite wire products that are principally used for
     network  signal   transmission  cable,  cable  television  wire  and  other
     applications. Dalian DPI commenced business on December 28, 2005.

     Dalian Fushi Bimetallic  Manufacturing Company Limited ("Dalian Fushi") was
     incorporated on January 16, 2002 in the PRC as a limited liability company.
     The business  activities  of Dalian Fushi are the same with those of Dalian
     DPI.

     On  December  13,  2005,  Parallel  consummated  a Plan of  Exchange  ("the
     Agreement")  with the shareholders of DPI pursuant to which Parallel issued
     784,575.16 shares of newly designated Series A Convertible  Preferred Stock
     to the  stockholders  of DPI for all the issued and  outstanding  stocks of
     DPI.

     The merger of Parallel  and DPI was treated  for  accounting  purposes as a
     capital transaction and recapitalization by DPI ("the accounting acquirer")
     and re-organization by Parallel ("the accounting acquiree").  The financial
     statements  have  been  prepared  as if  the  reorganization  had  occurred
     retroactively.


                                       6
<PAGE>



                            FUSHI INTERNATIONAL, INC.
                                AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                         AS OF JUNE 30, 2006 (UNAUDITED)

NOTE 2   ORGANIZATION-continued

     Accordingly, the financial statements include the following:

     (1)  The  balance  sheet  consists  of the net  assets of the  acquirer  at
          historical cost and the net assets of the acquiree at historical cost.

     (2)  The  statement of operations  includes the  operations of the acquirer
          for the periods  presented and the operations of the acquiree from the
          date of the merger.

     On  the  same  date,  Dalian  DPI  entered  into  a  series  of  agreements
     (collectively known as the Restructuring  Agreements) with Dalian Fushi and
     the  shareholders  of Dalian  Fushi in which  Dalian DPI will take over the
     management of the business  activities of Dalian Fushi and will hold a 100%
     variable  interest in Dalian  Fushi.  As both  companies  are under  common
     control,  this has been accounted for as a  reorganization  of entities and
     the financial  statements have been prepared as if the  reorganization  had
     occurred retroactively.

     Fushi International  (formerly Parallel),  DPI, Dalian DPI and Dalian Fushi
are hereinafter referred to as ("the Company").


NOTE 3   PRINCIPLES OF CONSOLIDATION

     The accompanying  unaudited condensed consolidated financial statements for
     2006 include the financial statements of Fushi International and its wholly
     owned  subsidiaries,  DPI, Dalian DPI and its 100% variable interest entity
     Dalian Fushi.

     The accompanying  unaudited condensed financial statements for 2005 include
the financial statements of Dalian Fushi.

     All  significant   inter-company   transactions   and  balances  have  been
eliminated in consolidation.


NOTE 4   SEGMENTS

     The Company adopted  Statement of Financial  Accounting  Standards No. 131,
     Disclosures about Segments of an Enterprise and Related  Information ("SFAS
     131"). SFAS 131 establishes  standards for operating  information regarding
     operating  segments in annual  financial  statements and requires  selected
     information for those segments to be presented in interim financial reports
     issued to  stockholders.  SFAS 131 also  establishes  standards for related
     disclosures  about  products and services and geographic  areas.  Operating
     segments are identified as components of an enterprise about which separate
     discrete  financial  information  is available for  evaluation by the chief
     operating  decision maker, or decision making group, in making decision how
     to allocate resources and assess performance.

     1.   The Company operates in a single segment.

     2.   The following is geographic information of the Company's revenue:

                           For the three months ended  For the six months ended
                                   June 30,                     June 30,
                              2006           2005          2006        2005
                          ------------------------------------------------------
Domestic lChina           $ 18,063,543   $ 8,718,037   $ 32,031,345  $ 9,113,698
Other foreign countries        271,478       400,149        893,819      437,764
                          ------------   -----------   ------------  -----------
                          $ 18,335,021     9,118,186   $ 32,925,164  $ 9,551,462


                                       7
<PAGE>


                            FUSHI INTERNATIONAL, INC.
                                AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                         AS OF JUNE 30, 2006 (UNAUDITED)

NOTE 5    INVENTORIES

           Inventories at June 30, 2006 consisted of the following:

Raw materials                               $        5,716,406
Work-in-progress                                       735,202
Finished goods                                       1,967,349
                                            ------------------
                                                     8,418,957
Less: provision of obsolescence                              -
                                            ------------------
Inventories, net                            $        8,418,957
                                            ------------------

          For the six months ended June 30, 2006, the Company has not recorded a
     provision for obsolete inventories.


NOTE 6     NOTES PAYABLE

     Notes payable at June 30, 2006 consisted of the following:

Note  payable to a bank,  interest  rate of 5.58% per annum,
collateralized  by buildings  and plant and machinery of the
Company and related parties, due April 2008                     $     5,000,000

Note  payable to a bank,  interest  rate of 5.58% per annum,
guaranteed by a related company, due April 2008                       5,000,000

Note payable to a bank,  interest  rate of 5.742% per annum,
collateralized by buildings of the Company, due July 2006             1,250,000

Note  payable to a bank,  interest  rate of 5.94% per annum,
collateralized  by buildings  of the  Company,  due November
2006                                                                  2,500,000

Note payable to a bank,  interest  rate of 5.742% per annum,
collateralized by buildings of the Company, due July 2006             1,625,000

Note  payable to a bank,  interest  rate of 5.94% per annum,
collateralized  by buildings  of the  Company,  due December
2006                                                                  2,125,000

Note payable to a bank,  interest  rate of 5.742% per annum,
collateralized by buildings of the Company, due July 2006             1,250,000

Note payable to a bank,  interest  rate of 6.338% per annum,
collateralized by buildings of the Company, due May 2007                950,000

Note  payable to a bank,  interest  rate of 5.94% per annum,
collateralized  by buildings of the Company,  due  September
2007                                                                  3,750,000
                                                               ----------------
                                                               $     23,450,000
Less: current maturities                                             13,450,000
                                                               $     10,000,000
                                                               ----------------

     Maturities are as follows:

For the period ending June 30,

                2007                $    13,450,000
                2008                     10,000,000
                                    ---------------
                                    $    23,450,000
                                    ---------------

     Interest  expense for the six months ended June 30, 2006 was  $655,951,  of
     which $142,387 was capitalized in  construction in progress.  The notes due
     July 2006 have not been repaid are under  negotiations with the bankers for
     a further extension.


                                       8
<PAGE>


                            FUSHI INTERNATIONAL, INC.
                                AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                         AS OF JUNE 30, 2006 (UNAUDITED)


NOTE 7  NET INCOME PER SHARE

          The following is information of net income per share at June 30:

                                                          2006          2005
                                                    -------------  ------------

Net income                                          $  10,952,124  $  2,530,999
                                                    -------------  ------------

Basic weighted-average common stock outstanding        19,894,315    15,475,595
Effect of dilutive securities
    Warrants                                            1,540,377             -
                                                    -------------  ------------
Diluted weighted-average common stock outstanding      21,434,692    15,475,595
                                                    -------------  ------------

Net income per share - basic                                 0.55          0.16
                                                    -------------  ------------

Net income per share - diluted                               0.51          0.16
                                                    -------------  ------------


NOTE 8 STOCKHOLDERS' EQUITY

     (A)  Reverse stock split

     On January 30, 2006, the Company  effected a 245.27:1  reverse stock split.
     All share and per share amounts have been retroactively restated to reflect
     the stock split.

     (B)  Series A and Series B Convertible Preferred Stocks

     The Series A and Series B  Convertible  Preferred  Stocks  ("Series A and B
     Stocks")  were   automatically   converted   into  common  stock  upon  the
     effectiveness   of  the  reverse  split  on  January  30,  2006  under  the
     certificates of designation for Series A and B Stocks

     (C)  Following the reverse stock split and as of June 30, 2006, the Company
          had outstanding:

          (1)  19,894,315 shares of common stock, par value $.006.

          (2)  warrants  to  purchase  2,125,000  shares of  common  stock at an
               initial exercise price of $3.67 per share, expires December 2010.

          (3)  warrants to purchase 424,929 shares of common stock with exercise
               prices of $3.11 per share, expires December 2011.

          (4)  warrants to purchase  80,000 shares of common stock with exercise
               price of $.01 per share,  expires at the earlier of (i)  December
               2010, or (ii) immediately preceding a Change of Control.


NOTE 9  RELATED PARTY TRANSACTIONS

     As of June 30, 2006, the Company owed $20,000 and $42,720 respectively to a
     related  company  and a  stockholder  as  unsecured  loan free of  interest
     payment and repayable on demand.


                                       9
<PAGE>


                            FUSHI INTERNATIONAL, INC.
                                AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                         AS OF JUNE 30, 2006 (UNAUDITED)


NOTE 10 COMMITMENTS AND CONTINGENCY

     (A)  Capital commitments

     According to the amended Articles of Association of Dalian DPI, the Company
     has to fulfill registered  capital  contributions of $29,800,000 within one
     year  from  September  21,  2005.  As of June 30,  2006,  the  Company  has
     fulfilled   $9,132,500  of  the  registered  capital  requirement  and  has
     registered capital commitments of $20,667,500.

     (B)  Commitments

          As at June 30, 2006, the Company had commitments for capital  projects
     in progress of $171,663.

     (C)  Contingency

     On March 27, 2006, the Company received  advances of $1,250,000 in the form
     of  Acceptance  Bills ("the  bills")  from two  customers  and entered into
     agreements  with a bank to discount the bills in exchange.  Pursuant to the
     terms of the  agreement,  the  Company is  contingently  liable to the bank
     should the customers  fail to honor the bills when they mature on September
     17, 2006 and September 28, 2006.
















                                       10
<PAGE>



Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS


DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS

     Certain  statements in this report,  including  statements in the following
discussion,  which are not  statements of historical  fact,  may be deemed to be
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation  Reform Act of 1995 which are basically  statements about the future.
For that reason,  these statements involve risk and uncertainty since no one can
accurately  predict  the  future.  Words  such as  "plans,"  "intends,"  "will,"
"hopes,"  "seeks,"  "believes,"  "anticipates,"  "expects," and the like,  often
identify such forward-looking statements, but are not the only indication that a
statement  is  a  forward-looking  statement.  Such  forward-looking  statements
include  statements  concerning  our plans and  objectives  with  respect to the
present and future operations of Fushi International,  Inc. (the "Company," "we"
or "us"),  and  statements  which  express or imply that such present and future
operations will or may produce revenues, income or profits. Numerous factors and
future  events could cause the Company to change such plans and  objectives,  or
fail to successfully  implement such plans or achieve such objectives,  or cause
such  present  and  future  operations  to fail to produce  revenues,  income or
profits.  Therefore,  the reader is advised that the following discussion should
be considered in light of the discussion of risks and other factors contained in
this  report  on  Form  10-QSB  and in the  Company's  other  filings  with  the
Securities  and Exchange  Commission.  No statements  contained in the following
discussion should be construed as a guarantee or assurance of future performance
or future results.  These  forward-looking  statements are made as of August 14,
2006;  the date of the filing of this Form 10-QSB and the Company  undertakes no
responsibility to update these forward-looking statements.

     The  following  discussion  and  analysis of our  financial  condition  and
results  of  operations  should  be  read  in  conjunction  with  the  financial
statements and accompanying notes and the other financial  information appearing
in Part I, Item 1 and elsewhere in this report.

     We are engaged, through our indirectly wholly-owned operating subsidiary in
China,  Dalian  Diversified  Product  Inspections  Bimetallic  Cable,  Co., Ltd.
("Dalian  DPI"),  in the  manufacture  and  sale of  bimetallic  composite  wire
products,  principally  copper clad aluminum wires ("CCA") and copper clad steel
wires ("CCS").  CCA combines the conductivity and corrosion resistance of copper
with  the  light  weight  and  relatively  low  cost of  aluminum.  It is a cost
effective  substitute  for single copper wire in a wide variety of  applications
such as  coaxial  cable  for cable  television,  signal  transmission  lines for
telecommunication networks,  distribution lines for electricity, wire components
for electronic instruments and devices.  Similarly,  CCS combines the properties
of copper with the  strengths of steel and is used where  strengths  higher than
copper  are  required,  such  as  power  system  grounding  lines,   electricity
distribution  lines,  conductor lines of electrified  railroad tracks, and patch
cords in electronic components.

     Our bimetallic  composite wire products are produced using our patented and
proprietary "rolling bond welding" manufacturing technology,  which was included
as a research  project under the National Torch Program of the Peoples  Republic
of China ("PRC").  Our proprietary  technology allows us to produce high quality
products that deliver stable conductivity performance.



                                       11
<PAGE>



Summary of Operating Results

THREE MONTHS ENDED JUNE 30, 2006 AND JUNE 30, 2005.

                                  For the three    For the three
                     Increase/    months ended     months ended
                    (Decrease)    June 30, 2006    June 30, 2005
                                  ------------    -------------

Net sales             229.9%      $  18,335,021   $   5,557,236

Gross Profit          232.9%      $   8,135,369   $   2,443,861

Operating Income      253.1%      $   7,272,560   $   2,059,727
Net Income            340.8%      $   7,186,208   $   1,630,184

ESP- Basic            227.3%      $        0.36   $        0.11
EPS- Diluted          209.1%      $        0.34   $        0.11

Gross Margins           0.4%              44.4%           44.0%
Operating Margins       2.6%              39.7%           37.1%
Net Margins             9.9%              39.2%           29.3%

Overview

     During  the three  months  ended  June 30,  2006,  we have  maintained  our
positive  revenue growth and have achieved  record  results.  The demand for our
products has  continued  to grow  throughout  this year and remains  robust as a
result of sharp  increases in copper  prices.  Our products,  which utilize less
copper,  but  provide  the same  performance  as  copper  wire,  provide  a cost
effective  alternative to our  customers.  In addition to strong demand from our
traditional  customers which utilize bimetallic products,  we have seen emerging
new  applications  in areas such as electric  wire,  electric  transformers  and
network  infrastructure  that have  expanded the market for our products and our
growth potential.

     In addition to increasing  copper  prices,  our financial  performance  and
results  have  been  driven by (i)  increased  manufacturing  capacity,  (ii) an
increase  in the  average  selling  prices  ("ASP") of our  products,  (iii) and
improved  operating  efficiency.  Comparing the quarter ended June 30, 2006 with
the quarter  ended June 30, 2005,  our sales volume  increased by 112.8% and ASP
increased by 55.0%,  resulting in net revenue growth of 229.9%. Our gross profit
and net profit also increased substantially by 233% and 341% respectively,  year
over year, and 54.4% and 90.8%, respectively,  when compared sequentially to the
first  quarter of 2006.  Our net income was $7.19  million,  representing  a net
margin of 39.2%, and earnings per share on diluted basis of $0.33.

     While   increasing  raw  material   prices   resulted  in  a  corresponding
significant  increase in our cost of sales,  we have been able to  increase  our
prices to cover the increased costs.  Robust demand led to a rapid escalation of
selling  prices,  with ASP in the second quarter of 2006 reaching a record level
at $6,132 per ton, and increase of 55% compared to the same period in 2005.



                                       12
<PAGE>



     As a result of the capital  investment which we made during the fiscal year
ended December 31, 2005, we increased  production  capacity to twenty production
lines  which can be  utilized  interchangeably  with each  other to  manufacture
bimetallic products.  In addition,  during the three months ended June 30, 2006,
we  increased  the  number of "thin"  lines from five to ten.  "Thin  lines" are
production lines which produce thinner wire for specialized  applications  which
tend to have higher ASPs and profitability.  While we temporarily  experienced a
supply  shortage of copper which caused  sporadic  disruption of production  (it
typically takes twenty to twenty five days to bring a new line into production),
utilization for the three months ended June 30, 2006 remained high at 90.7%.

     Going forward, in order to accommodate the rapidly increasing demand of our
products, we plan to continue to expand our manufacturing capacity to capitalize
on new and incremental market  opportunities.  In addition,  we will continue to
invest in our business to (i) expand on our core competencies in products;  (ii)
enhance research and development and our leading position in the industry in the
PRC; (iii)start to aggressively pursue growth in the international markets; (iv)
develop new growth drivers to facilitate long term sustainable  growth. With the
PRC economy expanding at a brisk pace, we believe that we are well-positioned to
capture  further market share as a leading low cost supplier and our that we can
deliver long term growth and profitability.

Net Sales

     For the  three-month  period ended June 30, 2006,  we achieved net sales of
$18.4 million, representing an increase of $12.8 million or 230% compared to the
three months ended June 30, 2005,  and a sequential  increase of $3.7 million or
25.7%  compared to the three months  ended March 31, 2006.  Our net revenues are
net of value-added  tax. Our revenue  increase during the period relative to the
second quarter of 2005 was primarily the result of significant increases in ASP,
and a substantial increase in sales volume. The ASP increase is primarily due to
higher raw material costs and is also  reflective of strong market  demand.  The
volume growth is largely  attributable to (i) strong demand from the traditional
co-axial  market and (ii) an  enlarged  addressable  market  resulting  from new
applications for bimetallic products.

                              REVENUE                         VOLUME
                       ----------------------------  -----------------------
                           Q2 06          Q2 05         Q2 06       Q2 05
---------------------  ------------- --------------  ----------- -----------

 Overall               $ 18,335,021  $   5,557,239    2990 tons   1405 tons
                       ------------- --------------  ----------- -----------
CCA Coaxial                   27.8%          85.0%        28.5%       85.4%
CCA Regular                   27.8%          10.0%        28.4%        9.9%
CCA-M Regular                 37.0%           5.0%        36.3%        4.7%
CCA Thin                       3.7%           0.0%         3.5%        0.0%
CCA-M Thin                     3.7%           0.0%         3.4%        0.0%
                       ------------- --------------  ----------- -----------
Total                          100%           100%         100%        100%
---------------------  ------------- --------------  ----------- -----------





                                       13
<PAGE>



<TABLE>
<CAPTION>
                                      ASP                         Average Unit Cost                Gross Margin
                         -------------------------------    ------------------------------     ----------------------
                                  Q2 06           Q2 05               Q2 06         Q2 05          Q2 06       Q2 05
---------------------    --------------- --------------- -- ---------------- ------------- --- ---------- -----------
<S>                       <C>             <C>               <C>              <C>                    <C>         <C>
Overall                   $        6,132  $        3,955    $          3,411 $      2,216           44.4%       44.0%
---------------------    --------------- --------------- -- ---------------- ------------- --- ---------- -----------
CCA Coaxial               $        5,979  $        3,937    $          3,312  $      2,206          44.6%       44.0%

CCA Regular               $        6,000  $        3,991    $          3,324  $      2,216          44.6%       44.5%

CCA-M Regular             $        6,250  $        4,233    $          3,463  $      2,216          44.6%       47.7%

CCA Thin                  $        6,500             N/A    $          3,853           N/A          40.7%         N/A

CCA-M Thin                $        6,750             N/A    $          4,001           N/A          40.7%         N/A
--------------------- -- --------------- --------------- -- ---------------- ------------- --- ---------- -----------
</TABLE>

We currently derive revenues from three main product groups:

     1. Sales of CCA,  co-axial  cable and wire.  With an aluminum  core wrapped
with T2 pure copper external  cladding,  diameters range from 5.08 - 2.05mm, CCA
is utilized in a variety of  applications  including  cable  television,  signal
transmission  lines  for  wireless  telecommunications,  and  base  station  sub
systems.  The CCA coaxial  accounted for  approximately 28% and 85% of our total
net revenues and 29% and 85% of our total sales volume in the three months ended
June 30, 2006 and the corresponding period in 2005, respectively.  ASP increased
from  $3,937  per ton to $5,979 per ton,  or by 51.9%.  Gross  margin  increased
slightly from 44% to 44.6%.

     2. Sales of CCA and  Copper-clad  Aluminum and Magnesium  alloy  ("CCA-M"),
regular size,  sold to  downstream  manufacturers  for further  processing to be
drawn and pulled into enameled  "thin wire".  With an aluminum core wrapped with
T2 pure copper external  cladding,  diameters range from 3.00 - 2.05mm.  The CCA
regular, and CCA-M, regular combined to account for approximately 65% and 15% of
our total net  revenues  and 65% and 15% of our total sales  volume in the three
months ended June 30, 2006 and the corresponding  period in 2005,  respectively.
ASP for CCA  regular  increased  from  $3,991 per ton to $6,000  per ton,  or by
51.9%. ASP for CCA-M regular increased from $4,233 to $6,250, or by 47.6%. Gross
margin remain relatively unchanged for the product.

     3.  Sales of CCA and  CCA-M,  thin  size.  Instead of being sold to outside
manufacturers,  a portion of regular  sized CCA and CCA-M was processed in house
to yield enameled "thin wire". With diameters ranging from 5.08 - 2.05mm,  these
thin  wires  are  utilized  in  distribution  lines  for  electricity  and  wire
components for  electronic  instruments  and devices.  We did not offer any thin
wire products in fiscal 2005 and we only began scale production of thin wires in
the first quarter of 2006. The thin wires accounted for  approximately 7% of our
total net  revenues  and 8% of our total sales  volume in the three months ended
June 30,  2006.  ASP was $6,500 and $6,750 per ton,  respectively,  for CCA thin
CCA-M thin. Gross margin was about 41%.



                                       14
<PAGE>



     Pricing of our products is principally  affected by raw material  costs. We
price our products  based on the  prevailing  copper price and aluminum price at
the time we enter into sales  contracts with our customers,  taking into account
the size of the contract, the strength and history of our relationship with each
customer.   Fluctuations  in  the  prevailing   market  prices  of  copper  have
historically  affected  the prices of our products and are likely to continue to
have a material effect on the prices of products in the future.

     Our five largest customers in the years ended December 31, 2003, 2004, 2005
and the quarters ended March 31 and June 30, 2006, were as follows:

<TABLE>
<CAPTION>
------------------------------------------------ ----------- ----------- ----------- ----------- ----------
Five Largest Customers                           % of Sales  % of Sales  % of Sales  % of Sales  % of sales
                                                       '03         '04       '05         Q1 '06     Q2 `06
------------------------------------------------ ----------- ----------- ----------- ----------- ----------
<S>                                              <C>         <C>         <C>         <C>         <C>
Andrew Corporation                                    14%        21.15%     8.22%         N/A         N/A
Zhuhai Hansheng Industrial Co., Ltd.                  14%        19.21%    11.59%        6.71%       7.77%
Jiangxi Lianchuang Photoelectricity Science Co.       18%        16.19%     9.95%       14.34%       9.09%
Shantou Jinqiao Cable Co., Ltd.                       17%         8.74%     7.10%        7.88%       6.91%
ACOME Xintai Cable Co., Ltd.                          N/A        10.08%     3.91%        6.56%       5.57%
Datang Telecom                                        10%          N/A       N/A          N/A         N/A
Taizhou Yihua Specialty Electric Co., Ltd.            N/A          N/A       N/A          5.6%       5.44%

       Five Largest as % of Total Sales:              73%        75.37%    40.77%       41.10%     34.78%
------------------------------------------------ ----------- ----------- ----------- ----------- ----------
</TABLE>

     The following table sets forth the accounts  receivables  from our top five
customers as a percentage of our total accounts receivables:

 ------------------------------------------------ -----------------------
 Five Largest Customers                           % of A/R as of 6/30/06
 ----------------------                           -----------------------
 Jiangxi Lianchuang Photoelectricity Science Co.           7.02%
 Zhuhai Hansheng Industrial Co., Ltd.                      9.83%
 Shantou Jinqiao Cable Co., Ltd.                           7.88%
 ACOME Xintai Cable Co., Ltd.                              7.81%
 Taizhou Yihua Specialty Electric Co., Ltd.                8.69%

    Five Largest Customers as % of A/R:                   41.23%
 ------------------------------------------------ -----------------------

     During the three months ended June 30, 2006,  we continued to diversify our
customer  base.  Our five largest  customers  accounted for only 34.78% of total
sales, down significantly  from a year ago when a small  concentrated  number of
customers  collectively  accounted for a majority of our sales. As we expand our
business  and seek to further  diversify  our  customer  base,  product  mix and
geographic presence, we anticipate that our overall customer composition and the
largest  customers  will change from time to time.  Our objective is to focus on
retaining the existing  business and winning new business to capture more market
share, both inside the PRC and overseas.



                                       15
<PAGE>



     Utilization  was 90.7% of  capacity  computed  on the basis of two  regular
12-hour  shifts per day(75.6%  utilization  when  capacity is computed  based on
around-the-clock  three 12-hour shift per day manufacturing),  compared to 95.4%
(79.5%)  in the  first  quarter  of 2006  and 99% for the same  period  in 2005,
respectively.  The  decrease was largely due to: (i) five new "thin" lines which
are taking  time to achieve  full  capacity;  (ii) our  increased  manufacturing
capacity  which  means we do not have to operate  our  machinery  at rates which
exceed their design capacity which we have done in the past.

Cost of Sales

     Cost of sales was $10.2  million for the three  months ended June 30, 2006,
compared to $3.1 million for the three  months ended June 30, 2005,  an increase
of $7.1 million or 227.6%. Cost of sales measured by percentage of net sales was
55.6%,  slightly  down from 56.0%.  Average  cost of sales per ton  increased by
$1,195 to  $3,411,  from  $2,216,  or  53.9%,  comparing  the two  corresponding
periods. The significant increase in Cost of Sales was principally the result of
expanded sales volume,  increased  purchasing  costs of raw materials and higher
production  costs  associated  with the  increase in orders.  Total raw material
costs amounted to $9.7 million, accounting for 94.7% of Cost of Sales during the
second quarter of 2006. By comparison,  raw material costs totaled $3.0 million,
accounting  for 95.3% of Cost of Sales  during the second  quarter of 2005.  Raw
material costs by percentage of Cost of Sales remained relatively unchanged.

     Copper price is a critical  factor  affecting the results of our operations
for the  following  reasons:  (i) it is one of the most  important raw materials
that we use to make our products and its acquisition  cost directly  affects our
cost of goods sold, gross profit, and net income;  (ii) our bimetallic  products
target existing  customers of pure copper products as we provide a viable,  cost
effective substitute to pure copper; thus increases in copper prices prompt more
potential  customers to switch to our  products.  For example,  CCA coaxial wire
normally is composed of 33.3% copper and 66.7% aluminum in terms of weight. When
of the same  weight,  CCA wire yields three times the length of pure copper wire
while offering  virtually the same conductivity and  anti-corrosion  properties.
Copper prices doubled in the first six months of 2006, reaching all time high in
mid May as demonstrated in the following chart.

     The  following  chart shows Grade A Copper  official  cash price per ton at
London Metal Exchange (LME) from 1/1/2006 to the date of this filing:


        9000    [
                [                                           X
                [                                           X
                [                                           X
        8000    [                                           X
                [                                           X
                [                                           X
                [                            X              X
        7000    [                            X              X
                [                            X              X
                [                            X              X
                [                            X              X
        6000    [                            X              X
                [                            X              X
                [                            X              X
                [                            X              X
        5000    [           X                X              X
                [           X                X              X
                [X          X                X              X
                [X          X                X              X
        4000    [X          X                X              X
                 !          !                !              !
            01/01/2006  02/03/2006      01/05/2006      03/06/2006

Source: London Metal Exchange




                                       16
<PAGE>



     The following table sets forth, for the periods indicated,  the cash prices
for  copper  and  aluminum,  two  most  important  raw  material  inputs  to our
production.  The Shanghai Futures Exchange price and Yangtze price, are combined
to constitute the basis for the purchase prices we receive when making orders in
China:

                     Copper Price/ Ton             Aluminum Price/ Ton
                     -----------------             -------------------
                   SHFE      Yangtze Cash      SHFE       Yangtze Cash   RMB/USD
                ---------    ------------   ----------   -------------  --------

   6/30/2006    $   7,674    $      7,694   $    2,453   $       2,451   8.0065
   5/31/2006    $   9,125    $      9,154   $    2,630   $       2,634   8.0406
   5/15/2006    $  10,158    $     10,216   $    2,950   $       2,931   8.0165
   4/28/2006    $   8,493    $      8,412   $    2,627   $       2,565   8.0239
   3/31/2006    $   6,264    $      6,262   $    2,497   $       2,490   8.0167
   2/28/2006    $   5,708    $      5,764   $    2,339   $       2,325   8.0415
   1/26/2006    $   5,738    $      5,613   $    2,552   $       2,515   8.0702
  12/30/2005    $   5,189    $      5,278   $    2,365   $       2,366   8.0808
  11/30/2005    $   4,687    $      4,779   $    2,155   $       2,154   8.0877
  10/31/2005    $   4,603    $      4,692   $    2,107   $       2,116   8.0924
   9/30/2005    $   4,517    $      4,552   $    2,049   $       2,060   8.0956


Source: www.ometal.com.

*    The currency  exchange rates were the noon buying rates in New York City on
     the dates indicated for cable  transfers as certified for customs  purposes
     by the Federal Reserve Bank of New York.

     The following  table sets forth the  percentage  of raw material  purchases
from our four largest suppliers:


Five Largest                                    % of Purchase % of Purchase
Suppliers                                        Q2 '06         Q2 '05
----------------------                          ------------- -------------
Baotou Aluminum Co., Ltd.                         22.83%          N/A
Harbin Electric Wire Co.                          12.28%        55.95%
Shanghai Jutai Copper Co.                         17.33%        44.05%
Beijing Golden Eagle Huichuang Copper Co.         20.74%          N/A
Dalian Zhonghe                                    17.25%          N/A

 Five largest suppliers as % of total purchase:   90.43%
 Two largest suppliers as % of total purchase:    43.57%       100.00%
----------------------------------------------- ------------- -------------

     In order to secure adequate and timely supplies of copper,  we have entered
into various  supply  agreements  with our  principal  suppliers  under which we
advanced  cash to secure  supplies of copper and locked in prices  determined at
signing of the contract. This has helped reduce our exposure to risks associated
with  fluctuating  copper prices and benefited us an environment in which prices
are rising,  leading to increased  gross  margins.  We believe that the price of
copper remain at a high level in the near future.




                                       17
<PAGE>



     We have not  encountered  material  difficulties  in securing  raw material
supplies to utilize our existing  manufacturing  capacity since we commenced our
business operations.  Our principal suppliers usually dedicate portions of their
inventories as reserves to meet our manufacturing  requirements.  As we continue
to grow to address  market  opportunities,  raw  material  supplies,  to a large
extent,  determine  our  capability  to  utilize  capacity.  Failure  to  obtain
sufficient  quantities of copper raw materials  could  decrease our revenues and
limit our ability to expand our manufacturing capacity as planned.

     During the quarter  ended June 30,  2006,  we did not engage in  derivative
financial instrument related hedging activities to manage our exposure to market
risks associated with commodity price  movements,  although in the future we may
consider  entering  into such programs or  instruments  to manage these risks to
help  ameliorate  the effects of  unanticipated  commodity  price  increases and
protect our primary business activities.

Gross Profit

     Gross profit for the three months ended June 30, 2006 was $8.14 million, up
232.9% from gross profit of  approximately  $2.44 million for the  corresponding
period in the prior year.  As a percentage  of net sales (gross  margin),  gross
profit  increased  slightly  from 44.0% to 44.4% year over year.  In response to
increasing  copper  prices,  we raised selling prices and therefore were able to
expand gross margins to above 44%. The gross margin  increase was due in part to
the  prepayment  we advanced to suppliers to lock in copper at  relatively  low
price  levels;  gross  margin  would have been 38% rather  than 44.4% had we not
entered  into  this  arrangement.   In  addition,  we  benefited  from  improved
manufacturing  efficiencies,  higher production  volumes against fixed costs and
the use of low cost labor.

     Our gross profit margins have historically  fluctuated  between 36% and 44%
and we anticipate  that they will continue to fluctuate due to several  factors,
including,  changes in the relative mix of our products,  the per-unit costs for
our  products  and the ASP for our  products.  We  will  continue  to  focus  on
enhancing profitability, optimizing cost structure and expanding margins.

Operating Expenses

     Selling  expenses  and general and  administrative  expenses  remained  low
during  the three  months  ended  June 30,  2006 at 0.7% and 1.2% of net  sales,
respectively.  This is compared to .9% and 3.9%,  respectively,  a year ago
and 0.8% and 3.8%, respectively,  in the first quarter of 2006. Selling, general
and administrative expenses consist primarily of salaries, bonuses, benefits and
related costs for administrative personnel,  travel, training and other expenses
related to sales and marketing  activities,  and for general and  administrative
purposes.

     Professional  fees during the second  quarter of fiscal 2006 were $280,246,
or 1.5% of net sales,  while we incurred no such cost during the  corresponding
period a year ago. The increase  reflects the additional costs relating to going
public and operating as a public company since December, 2005. Professional fees
principally consist of costs for legal, consulting and accounting services.




                                       18
<PAGE>



     Depreciation  and amortization  were $225,492,  or 1.2% of net sales during
the first quarter of fiscal 2006 as compared to $120,247,  or 2.1% of net sales,
in the first quarter of fiscal 2005. The increase as an absolute amount reflects
expanded  asset base while drop as a percentage  of net sales  reflects  greater
leverage.

     Operating  expenses increased by 124.5% to $862,808 in the second quarter
of fiscal 2006 from $384,134 in the second  quarter of fiscal 2005. The increase
is primarily  due to sales  increase.  As a percentage  of net sales,  operating
expenses  were 4.7% in the second  quarter of 2006  compared  to 6.9% during the
same period last year. Compared  sequentially,  we incurred $862,808 to generate
net sale of $18.3  million in the quarter ended June 30, 2006r while we incurred
$873,141 to generate net sales of $14.6  million in the quarter  ended March 31,
2006;  operating  expenses  were down $10,333  while sales were up $3.7 million,
reflecting scalability and increased operating efficiency.

     During the second  quarter of fiscal 2006,  economics of scale and leverage
of operating  expenses  benefited  us. But as we prepare to increase  production
capacity and more aggressively  address market  opportunities,  we anticipate an
expansion of our sales force to better  respond to the market.  In addition,  we
expect  that  general  and   administrative   expenses  will  increase  for  the
foreseeable future as a result of our expected continued growth and the costs of
complying with our reporting and other requirements as a public company.

Income from Operations

     Operating  income grew to $7.31 million for the three months ended June 30,
2006  compared to  operating  income of $2.1  million for the three months ended
June 30,  2005,  up $5.2  million  or  253.1%.  As a  percentage  of net  sales,
operating  income was  39.7%  for the second  quarter of 2006 as compared to
37.1% for the  corresponding  period of the prior year. The operating margin
improvement was principally  due to lower  operating  expenses,  and to a lesser
extent, slightly increased gross margin.

Income Taxes

     We  are  a  company  incorporated  in  the  State  of  Nevada  and  conduct
substantially  all  our  operations  through  our  PRC  operating  subsidiaries.
Although  we are  subject  to  United  States  taxation,  we do  not  anticipate
incurring  significant  United States  income tax liability for the  foreseeable
future because:

o    we did not conduct any material  business or maintain any branch  office in
     the United States during the three months ended June 30, 2006,

o    the earnings generated from our non-U.S.  operating companies are generally
     eligible for a deferral from United States taxation until such earnings are
     repatriated to the United States, and

o    we  believe  that we will not  generate  any  significant  amount of income
     inclusions under the income  imputation rules applicable to a United States
     company  that owns  "controlled  foreign  corporations"  for United  States
     federal  income tax  purposes.  Therefore,  no provision  for U.S.  federal
     income taxes or tax benefits on the undistributed earnings and/or losses of
     our company has been made.




                                       19
<PAGE>



PRC Enterprise income tax

     In the three  months  ended June 30, 2006,  our  business  operations  were
solely  conducted by our  subsidiaries  incorporated  in the PRC. PRC enterprise
income tax is calculated based on taxable income determined under PRC accounting
principles.  In accordance  with "Income Tax Law of China for  Enterprises  with
Foreign  Investment  and Foreign  Enterprises,"  or the Income Tax Law,  foreign
invested enterprises,  or FIEs,  established in the PRC are generally subject to
an enterprise income tax rate of 33%. PRC domestic companies are governed by the
Enterprise  Income  Tax Laws of the PRC and are  also  generally  subject  to an
enterprise income tax rate of 33%. However,  the Income Tax Laws provide certain
favorable tax treatment to a company that qualifies as a "new or high-technology
enterprise".  Additionally,  the  governments at the  provincial,  municipal and
local levels can provide many tax incentives and abatements based on a number of
programs at each level.

     The Dalian  Municipal  Government  issued a notice in 2000  providing for a
series of tax  preferential  treatments  to  companies  that  qualify as "new or
high-tech"  enterprise  or  companies  that  are  registered  and  operate  in a
specified development zone in Dalian.

     Dalian Fushi was  incorporated  in the PRC and is subject to PRC income tax
which is computed  according to the relevant  laws and  regulations  in the PRC.
Dalian  Fushi's  bimetallic  composite  conductor  wire  product was approved by
Dalian City as a "high-tech"  project.  As a result,  Dalian Fushi is a business
entity  that is  qualified  as a "new  or  high-technology  enterprise,"  and is
entitled  to a  two-year  full  exemption  from the PRC  enterprise  income  tax
starting from its first year of operation  (which  expired on December 31, 2003)
followed by a 50% reduction and other favorable tax treatment for the succeeding
three  years  (which  will  expire on  December  31,  2006).  Income tax expense
recorded for the first quarter of 2006 was $456,680.

     Dalian  DPI was  incorporated  in the PRC as an FIE and is  subject  to PRC
income tax which is computed  according to the relevant laws and  regulations in
the PRC.  Dalian DPI  located  its  factories  in a special  economic  region in
Dalian.  This economic  region allows foreign  enterprises a two-year income tax
exemption  beginning  in the first year after they become  profitable  (2006 and
2007),  and a 50% income tax reduction  for the  following  three years (2008 to
2010). Dalian DPI was approved as a wholly owned foreign enterprise in September
2005.

     Because  substantially all operations of Dalian Fushi have been transferred
to Dalian DPI pursuant to a the series of  agreements  between  Dalian Fushi and
Dalian DPI as more fully  described in our Form 10-KSB for the fiscal year ended
December 31, 2005, Dalian Fushi experienced  pretax operating loss mainly due to
loan interest payment  obligations for the three months ended June 30, 2006. The
loss was carried  back to offset  against the taxable  income of Dalian Fushi in
the previous quarter.  As a result, the loss generated a carryback benefit which
decreased income tax provision.  Subsequently, the tax provision made as of June
30, 2006 is less than the tax provision made as of March 31, 2006 by $60,024. No
income tax expense has been  recorded  for Dalian DPI for the three months ended
June 30,  2006 as Dalian DPI is entitled to the tax  exemption  treatment  which
commenced  December  28,  2005.  Consolidated,  net tax  benefit  for the second
quarter of 2006 is $60,024.



                                       20
<PAGE>



Net Income

     Net income  increased to  approximately  $7.2 million or 39.2% of net sales
for the three  months  ended June 30, 2006 from  approximately  $1.6  million or
29.3% of net sales for the three  months ended June 30,  2005,  representing  an
increase  of $5.6  million or 340% and an  increase  in net margin by 9.9%.  The
increases are primarily  attributable to continued  increase in sales levels and
ASPs,  continued  improvement in operating margins,  and exemption and carryback
benefit of income tax.

     Earnings per share on a diluted  basis was $0.34 for the three months ended
June 30, 2006. As of June 30, 2006, we have outstanding:


-    approximately 20,000,000 shares of our common stock.

-    warrants  to  purchase  2,125,000  shares  of  common  stock at an  initial
     exercise price of $3.67 per share, expire December 2010.

-    warrants to purchase 424,929 shares of common stock with exercise prices of
     $3.11 per share, expire December 2011.

-    warrants to purchase  80,000 shares of common stock with exercise  price of
     $.01 per share, expire the earlier of (i) December 2010 or (ii) immediately
     preceding a Change of Control.

Basic and diluted earnings per share are calculated as follows:

                                                  For the three months ended
                                                June 30, 2006    June 30, 2005
                                                -------------    -------------
Earnings:
Net income                                        $ 7,186,208      $ 1,630,184
                                                -------------    -------------
Income applicable to common shareholders          $ 7,186,208      $ 1,630,184
                                                -------------    -------------

Basic:
Income applicable to common shareholders          $ 7,186,208      $ 1,630,184
Weighted-average common stock outstanding          19,894,315       15,474,595
                                                -------------    -------------
      Basic earnings per share                    $      0.36      $      0.11
                                                -------------    -------------

Diluted:
Income applicable to common shareholders          $ 7,186,208      $ 1,934,068
                                                -------------    -------------
Weighted-average common stock outstanding          19,894,315       15,474,595
Effect of dilutive securities (assuming
 FSIN.OB 30-day average of $8.38/share
 as of June 30, 2006):                              1,540,377                -
                                                -------------    -------------
Diluted weighted-average
   common stocks outstanding                      $21,434,692      $15,474,595
       Diluted earnings per share                        0.34             0.11
                                                -------------    -------------



                                       21
<PAGE>



SIX MONTHS ENDED JUNE 30, 2006 AND JUNE 30, 2005.

                                         For the six       For the six
                          Increase/      months ended      months ended
                         (Decrease)     June 30, 2006     June 30, 2005
                                      ---------------   ---------------

Net sales                   244.7%    $    32,925,164   $     9,551,462
Gross Profit                238.6%    $    13,403,951   $     3,958,296
Operating Income            263.9%    $    11,668,001   $     3,206,242
Net Income                  332.7%    $    10,952,124   $     2,530,999

ESP- Basic                  243.8%              $0.55             $0.16
EPS- Diluted                218.8%              $0.51             $0.16

Gross Margins               (0.7%)              40.7%             41.4%
Operating Margins             1.8%              35.4%             33.6%
Net Margins                   6.8%              33.3%             26.5%

Revenue

     For the six-month  period ended June 30, 2006, we generated net revenues of
$32.9  million as  compared to $9.6  million  for the six months  ended June 30,
2006. The increase was principally driven by higher selling prices and increased
sales volume due to significantly expanded manufacturing  capacity.  Compared to
the same  period in 2005,  sales  volume  grew by  138.1% to 5,874  tons and the
average  selling  price  (ASP) grew by 44.8% to $5,605 per ton,  resulting  in a
revenue  increase  of $23.4  million or 244.7%.  During the first half of fiscal
2006,  we  benefited  from 1) the  secular  trend of  higher  commodity  prices,
particularly  copper, as our pricing is largely raw material cost driven; and 2)
the  growing  demand  for  our  products  as  they  offer  attractively   priced
alternatives  to single copper wires with the same or better  functionality.  In
terms  of   manufacturing   capacity,   we  maintained   production  of  the  20
manufacturing lines at relatively high utilization averaging 93.1%.

Gross Profit

     We achieved a gross  profit of $13.4  million for the six months ended June
30, 2006  compared to $4.0 million for the six months  ended June 30,  2005,  an
increase of $9.4  million,  or 239%.  The  increase  is directly  related to our
increases in sales. Gross profit as a percentage of revenues (gross margin), was
40.7% for the six  months  ended  June 30,  2006  compared  to 41.4% for the six
months ended June 30, 2005, a slight  decrease which was primarily due to change
in overall gross margin structure  resulting from  fluctuating  gross margins of
individual  products  relating  mostly  to  movement  of  raw  material  prices.
Specifically,  the sharp margin  increase to 44.4% during the second  quarter of
2006 was largely  balanced out by a decrease in gross margin to 36.1% during the
first quarter, resulting in the overall gross margin for the first six months of
fiscal  2006 at 40.7%.  Therefore,  for the first half of 2006,  we were able to
deliver high levels of continued  growth while  maintaining  existing  levels of
profitability.

Operating Expenses

     We  incurred  total  operating  expenses of $1.74  million,  or 5.3% of net
sales,  for the six months ended June 30, 2006.  This  represents an increase of
$983,896, or 131%, compared to $752,054, or 7.9% of net sales for the six months




                                       22
<PAGE>



ended June 30, 2005.  As a percentage  of net sales,  selling  expenses was down
from 1.0% to 0.8%,  general and  administrative  expenses  was down from 3.7% to
1.7%, depreciation and amortization decreased from 2.1% and 1.1%,  respectively,
to 1.0% and 0.4%,  respectively.  Except for professional fee which was incurred
relating to going public and operating as a public company since December, 2005,
we experienced decease in operating expenses as a percentage of net sales across
the board.  The fact that  operating  expenses  increased  at a slower pace than
revenue growth reflects that we achieved and benefited from improved operational
efficiency, economics of scale, and leverage of operating expenses.

Foreign Currency Translation Gains

     In the first half of 2006, the RMB rose against the US dollar.  As a result
of the  appreciation  of the RMB, we recognized a foreign  currency  translation
gain of  $1,118,315  during  the six  months  ended  June 30,  2006.  Given  the
uncertainty  of exchange  rate  fluctuations,  we cannot  estimate the effect of
these  fluctuations  on  our  future  business,   product  pricing,  results  of
operations or financial condition.

     All of our  revenues  and a majority  of our  expenses in the first half of
2006 were  denominated in RMB. The income  statement  accounts and balance sheet
amounts with the  exception of equity at June 30, 2006 were  translated  at 8.00
RMB to $1.00 USD as compared to 8.26 RMB at June 30, 2005.  The equity  accounts
were stated at their historical rate.

Net Income

     Our net  income was  $10.9million  or 33.3% of net sales for the six months
ended June 30, 2006,  compared to  $2.5million or 26.5% of net sales for the six
months ended June 30, 2005.  The increase was the result of continued  increases
in sales levels and capacity as well as economics of scale in operations.

     Earnings  per share on a diluted  basis was $0.51 for the six months  ended
June 30, 2006.


Cash

     We have  historically  financed  our  operations  and capital  expenditures
through cash flows from  operations  and bank loans.  However,  neither our cash
flows from  operations nor our bank loans had been  sufficient to keep pace with
the  growth of our  business  and  provide  sufficient  working  capital to meet
increased new orders and purchase necessary new equipment to expand production.

     On December 13,  2005,  we entered into the  Restructuring  Agreements  and
consummated  the  transactions  resulting  in the  acquisition  and/or  lease of
substantially  all of our assets to Dalian DPI,  and raised $12 million in gross
proceeds through a private  placement  offering.  We received  $9,930,412 in net
proceeds after  deducting  placement agent discounts and commissions and payment
of  professional  and other  related  expenses.  We intend to use a  substantial
portion of the net  proceeds  from the  offering  for  corporate  expansion  and
general corporate purposes, including but limited to, funding of working capital
needs,  purchase  of new  equipment  to  meet  existing  orders  and to  provide
additional  capacity for further  expansion,  IR and Executive Search, and other
general corporate purposes.



                                       23
<PAGE>



     We regularly review our cash funding requirements and attempt to meet those
requirements  through a combination of cash on hand, cash provided by operations
and  available  borrowings  under bank lines of credit.  We believe  that we can
continue meeting our cash funding requirements for our existing business in this
manner.

     It is  management's  intention  to expand  our  operations  as  quickly  as
reasonably practicable to capitalize on the demand for our products. Under these
circumstances, we may need substantial additional capital to fund such expansion
efforts.  To that end, we may seek to raise such  additional  funds  through the
sale of public or private equity, as well as from other sources.  However, there
can be no assurance that the Company will be able to raise capital when desired,
or on terms  favorable  to the  Company.  If we are  unable to raise  additional
working  capital,  it would  likely have a  significant  negative  impact on the
expansion of our business.

     As of June 30, 2006, we had  approximately  $4.5 million in cash, down $1.7
million from $6.2 million at December 31, 2005.

     Working  capital  (measured by current assets less current  liabilities) at
June 30, 2006, was $16 million compared to $10 million at December 31, 2005. The
increase  in  working  capital is  primarily  driven by (i)  increased  accounts
receivable  resulting from revenue growth as pat of our expansion plan; (ii) the
use of cash to secure raw  materials at  favorable  prices;  (iii)  advances for
production facilities; (iv) VAT tax paid and income tax overpaid.

     For the six months ended June 30, 2006,  cash used in operating  activities
totaled  $4.8  million.  This was  principally  due to (i)  extended  cash cycle
between  timing of inventory  purchases and  collection  of accounts  receivable
partially  offset by an  increase in accounts  payables  and (ii) a  substantial
increase in other  receivables and prepaid  expenses.  In order to secure supply
and lock in copper supplies at preferential  prices,  we made a decision to make
prepayments for copper well in advance of shipment, which required a significant
working capital  commitment.  Advances to suppliers of manufacturing  facilities
and suppliers of raw materials comprised approximately 90% of prepaid expenses.

     Later this year,  when we begin to receive  shipments for raw materials and
equipment for which we made  pre-payments,  most of the prepaid expenses will be
re-categorized to inventory and fixed assets. The following provides a breakdown
of other receivables and prepaid expenses:

             Description                    Closing balance 6/30/2006
---------------------------------------     ---------------------------
 - Advances to suppliers
   Manufacturing facilities                 $  3,155,136
                 Raw materials                 6,124,594
                                            ------------
                    sub total                              $  9,279,730
  - Prepaid expenses                                            412,569
  - Advances to staff                                           357,892
    - Other receivables                                           565,940

---------------------------------------                    ------------
                Total                                        10,616,131
                                                           ============



                                       24
<PAGE>



     We paid a total of $5.1  million VAT in the six months ended June 30, 2006.
Value added tax payable in the PRC is charged on an  aggregated  basis at a rate
of 15% or 17%  (depending  on the type of  goods  involved)  on the  full  price
collected for the goods sold or, in the case of taxable services provided,  at a
rate of 17% on the charges for the taxable services provided, but excluding,  in
respect of both goods and  services,  any amount  paid in respect of value added
tax included in the price or charges,  and less any  deductible  value added tax
already  paid by the  taxpayer on  purchases  of goods and  services in the same
financial year.

VAT

VAT payable balance - 12/31/2005                  $      3,869,814
 + VAT accrued for H1 06                          $      2,564,187
 - VAT paid in H1 06                              $      5,108,198
----------------------------------------------    ----------------
VAT payable Balance- 6/30/2006                    $      1,325,803

     The income tax we paid  amounted to $4 million.  We overpaid  approximately
$1.5 million.  The following  table breaks down income tax provision and payment
for the first half of 2006:

Income Tax Computation

Income tax payable balance - 12/31/2005           $     2,104,709
  + Q1 06 provision                               $       456,680
  + Q2 06 provision (carryback benefit)           $       (60,064)
  - Income tax paid                               $     4,044,883
----------------------------------------------    ---------------
  Effect of foreign exchange translation          $        18,417
----------------------------------------------    ---------------
Income tax payable (recoverable) balance -        $    (1,525,141)
6/30/2006

     Dalian  Fushi over paid income tax by  $1.5million  during the three months
ended June 30, 2006.  Because all Dalian Fushi  operations  were  transferred to
Dalian DPI, , we can not use  carryforwards  from Dalian Fushi to offset  future
taxable income. We have obtained approval from relevant government  authority to
receive a refund of the full overpayment. However, we can not guarantee that the
government tax authority  will not change their position on the refund.  If that
happens,  based on 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, we will need to establish  valuation  allowances when necessary,
to reduce deferred tax assets to the amount expected to be realized.

     For the six months ended June 30, 2006,  cash used in investing  activities
was approximately $5 million, primarily as a result of capital investment on new
equipment and machinery as part of our planned expansion.

     Financing  activities  provided net cash inflow of $9.3 million  during the
six months  ended June 30,  2006.  We rolled  over  approximately  $7.5  million
working  capital  loans and also drew down  approximately  $6  million  from our
existing credit line  facilities to meet working  capital needs.  Maturities for
the working capital financing range from three to six months. We intend to renew
these loans over again when they become  due.  In  addition,  the loans due from
related parties and various  non-operational  transactions incurred with related
parties  prior to our going  public in the  amount  of  $3,323,528  had all been
repaid by May 2006.





                                       25
<PAGE>



     As of June  30,  2006,  we had  the  following  long-term  bank  loans  and
short-term working capital financing outstanding with the following terms:

<TABLE>
<CAPTION>
---------------------------------------- -------------- ------------- --------- ----------------- ----------------
                                                                      Interest
                                            Date of       Date of     rate per   Borrowed amount   Borrowed amount
            Name of lenders                borrowing      maturity      annum        (RMB)             (USD)
---------------------------------------- -------------- ------------- --------- ----------------- ----------------
<S>                                      <C>            <C>           <C>       <C>                <C>
LONG TERM LOANS

Industrial and Commercial Bank of China  2003.05.06     2008.04.10       5.580%       40,000,000  $    5,000,000
Industrial and Commercial Bank of China  2003.05.17     2008.04.10       5.580%       40,000,000  $    5,000,000
---------------------------------------- -------------- ------------- --------- ----------------- ----------------
                                                        Total long terms loans:       80,000,000  $   10,000,000
                                                                                ----------------- ----------------
</TABLE>

<TABLE>
<CAPTION>
SHORT TERM LOANS

Revolving credit line of RMB100MM for working capital
<S>                                      <C>            <C>           <C>       <C>               <C>
             Bank of China               2006.01.23     2006.07.10       5.742%       10,000,000  $    1,250,000
             Bank of China               2006.06.20     2006.11.19       5.940%       20,000,000  $    2,500,000
             Bank of China               2006.02.17     2006.07.05       5.742%       13,000,000  $    1,625,000
             Bank of China               2006.03.15     2006.07.14       5.742%       10,000,000  $    1,250,000
             Bank of China               2006.06.28     2006.12.27       5.940%       17,000,000  $    2,125,000
             Bank of China               2006.06.12     2006.09.11       5.940%       30,000,000  $    3,750,000
    Commercial Bank of Dalian City       2006.05.16     2007.05.15       6.338%        7,600,000  $      950,000
                                                        Total short term loans:  RMB 107,600,000  $   13,450,000
                                                                                ----------------- ----------------
</TABLE>
* Translated using 1USD=8.0000RMB

     We paid interest in the amount of $655,951 during the six months ended June
30,  2006,  of which  $142,387  was  capitalized  to  Construction  in Progress,
resulting in interest expense of $513,564.

Accounts Receivable

     Accounts receivable was $10.3 million at June 30, 2006. Accounts receivable
related to our five largest  customers  totaled  $4.2  million,  accounting  for
41.23% of all accounts receivable as of June 30, 2006.

     We extend unsecured  credit to large or regular  customers with good credit
history.  Management  reviews  its  accounts  receivable  on a regular  basis to
determine  if  the  allowance   for  doubtful   accounts  is  adequate  at  each
quarter-end.  We  only  extend  30 to 90 day  trade  credits  to  our  large
customers,  who tend to be well-established  and large sized businesses,  and we
have  not  seen  any  accounts  receivable  go  uncollected  beyond  90  days or
experienced any write-off of accounts  receivable in the past.  Thus, we elected
not to make any  provision  for  doubtful  accounts  and  consider  all accounts
receivable collectable.



                                       26
<PAGE>



Critical Accounting Policies

     Management's discussion and analysis of its financial condition and results
of operations are based upon the Company's  consolidated  financial  statements,
which have been prepared in accordance  with United  States  generally  accepted
accounting principles.  The Company's financial statements reflect the selection
and  application  of  accounting  policies  which  require  management  to  make
significant  estimates and judgments.  See note 1 to the Company's  consolidated
financial   statements,   "Summary  of  Significant   Accounting   Policies  and
Organization".  Management  bases its estimates on historical  experience and on
various  other  assumptions  that  are  believed  to  be  reasonable  under  the
circumstances.  Actual results may differ from these  estimates  under different
assumptions or conditions.  The Company believes that the following  reflect the
more critical  accounting policies that currently affect the Company's financial
condition and results of operations:

Revenue recognition

     Product  sales are  recognized  when the products are shipped and title has
passed.  Sales revenue represents the invoiced value of goods, net of a VAT. All
of the  Company's  products  that are sold in the PRC are  subject  to a Chinese
value-added  tax at a rate of 17% of the  gross  sales  price.  This  VAT may be
offset by VAT paid by the Company on raw materials and other materials  included
in the cost of producing its finished products.

     Although  most of our products are covered by our  warranty  programs,  the
terms and  conditions  of which vary  depending on the customers and the product
sold.  Because we have not experienced  any  significant  warranty claims in the
past, we have not  established any reserve fund for warranty claims or defective
products.

Property, Plant and Equipment

     Building,  plant  and  equipment  are  recorded  at cost  less  accumulated
depreciation  and  amortization.  Depreciation  and  amortization  are  recorded
utilizing the straight-line  method over the estimated  original useful lives of
the  assets.   Amortization  of  leasehold   improvements  is  calculated  on  a
straight-line  basis  over  the  life of the  asset  or the  term of the  lease,
whichever  is shorter.  Major  renewals  and  betterments  are  capitalized  and
depreciated;  maintenance  and  repairs  that  do not  extend  the  life  of the
respective  assets are charged to expense as incurred.  Upon disposal of assets,
the cost and related accumulated  depreciation are removed from the accounts and
any gain or loss is included  in income.  Depreciation  related to property  and
equipment used in production is reported in cost of sales.

     Long-term  assets of the Company are reviewed  annually as to whether their
carrying value has become impaired.

Bad debts

     The  Company's  business  operations  are conducted in the PRC. The Company
extends  unsecured  credit to its  relatively  large  customers with good credit
history.  Management  reviews  its  accounts  receivable  on a regular  basis to
determine  if the bad debt  allowance is adequate at each  year-end.  Because we
only  extend  trade   credits  to  our  largest   customers,   who  tend  to  be
well-established  and large sized  businesses,  and we have not  experienced any
write-off of accounts  receivable  in the past.  Thus, we elected not to provide
for any bad debt allowance and considered all accounts receivable collectable.



                                       27
<PAGE>



Off-Balance Sheet Arrangements

     Dalian Fushi has not engaged in any off-balance  sheet  transactions  since
its inception.


Item 3. Controls and Procedures.

     (a) Evaluation of disclosure  controls and procedures.  Our chief executive
officer and our chief financial  officer,  after evaluating the effectiveness of
the company's "disclosure controls and procedures" (as defined in the Securities
Exchange  Act of 1934,  as amended  (the  "Exchange  Act"),  Rules  13a-15e  and
15d-15e) as of the end of the period  covered by this  report  (the  "Evaluation
Date"),  have concluded that, as of the Evaluation Date, our disclosure controls
and procedures were effective.

     (b) Changes in internal controls. During the fiscal quarter covered by this
quarterly  report,  there was no change in our internal  control over  financial
reporting that has materially  affected,  or is reasonably  likely to materially
affect our internal control over financial reporting.



                                     PART II

Item 6. Exhibits

    (a) Exhibits

31.1 - Certification  of Chief Executive  Officer pursuant to Section 302 of the
       Sarbanes-Oxley Act of 2002.

31.2 - Certification  of Chief Financial  Officer pursuant to Section 302 of the
       Sarbanes-Oxley Act of 2002.

32.1 - Certification  of Chief Executive  Officer  and Chief  Financial  Officer
       pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.






                                       28
<PAGE>




                                   SIGNATURES

     Pursuant to the  requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned  there
unto duly authorized.

                            FUSHI INTERNATIONAL, INC.



Date: August 14, 2006            BY:      /s/ Wenbing Chris Wang
                                     ----------------------------------------
                                          Wenbing Chris Wang
                                          Chief Financial Officer










                                       29