**China
      3C Group Files Annual Report on Form 10-K**





**--Provides
      Clarification Related to 2008 Outlook--**





**ZHEJIANG
      PROVINCE** **,
      China -March 27, 2007 --** China
      3C
      Group (OTC
      Bulletin Board: CHCG) ,
      a
      rapidly growing retailer and distributor of consumer and business products
      in
      China, announced that the Company filed its Annual Report on Form 10-K with
      the
      SEC today. In the section of the Form 10-K entitled “Recent Developments”,
      management provided additional insight into its 2008 financial forecast
      addressed on its earnings conference call that occurred March 16, 2008. This
      information includes the following:





·
            Relative
                to the impact of snow storms in China on the Company’s first quarter 2008
                results, two points are to be clarified. First, while the snow storms
                had
                less impact in major cities like Shanghai, in other areas of the
                Company’s
                operating region (Jiangsu, Anhui and Zhejiang provinces) snow storms
                had a
                much larger impact on transport systems that take people and products
                to
                stores. In addition to impacting traffic at stores where the Company
                has
                outlets, transportation impediments had a substantive impact on the
                ability of the Company to replenish products on the shelves. Because
                the Company operates on only several days of inventory, it is the
                belief
                of management that the supply chain interruptions resulted in a
                significant number of lost sales.





Additionally,
      the Company is providing additional disclosure related to why gross margin
      is
      expected to stabilize in the 13-14% range in 2008. These additional factors
      include:





·
            The
                Company pays concession fees, or leasing fees, to its retail
                partners. These fees are typically passed on to the customers by
                being
                included in the price of goods sold. Approximately 50% of these concession
                agreements have fixed payments which are not tied to sales. As such,
                when
                sales per store decreases, as happened in the first quarter due to
                the
                snow storms, the leasing fees do not change which leads to decreased
                gross
                margin.





·
            The
                Company believes that the majority of the anticipated decrease in
                gross margin during 2008 will likely result from increased
                competition. The “Huadong” region where the Company operates has seen the
                growth of competitors who are increasingly utilizing the Company’s
                successful “store-in-store” model. As a result, China 3C expects to
                conduct promotional campaigns in 2008 to maintain its competitive
                advantage.









These
      factors along with increased transportation costs as well as efforts by the
      government to control inflation which is expected to have a slight impact on
      consumer spending, are expected to result in a gross margin in the range of
      13-14% for fiscal 2008.





While
      sales are expected to decrease in the first quarter by approximately 15%-20%,
      the Company believes it will be in a position for overall sales to increase
      in
      the mid-single digits for the remaining three quarters of the year. The lower
      year-over-year sales growth trends expected for 2Q08-4Q08 are primarily due
      to
      anticipated effects related to increased competition and a leveling of growth.
      These projections do not take into account any impact related to future
      acquisitions.





The
      Company believes that sales and margin trends can improve over time as it
      focuses its efforts on internal
      cost controls, improved logistics coordination, greater economies of scale,
      closure of underperforming store counters, expansion of well performing stores,
      adding new store counters in more productive locations, additional product
      introductions, new customer and supplier agreements, customer marketing and
      after sales support initiatives, acquisition opportunities and an increase
      in
      the overall managerial efficiency of the Company.





The
      Company currently has approximately $25 million of cash on its balance sheet,
      which it currently plans to use for consideration in connection with potential
      acquisitions.





**About
      China 3C**


China
      3C
      Group is a leading retail chain operating approximately 908 retail outlets
      in
      Eastern China. The company specializes in selling 3C products (communication,
      information technology and digital) in China. Among China 3C’s primary
      attributes is its efficient distribution network and rapid logistics system.





**Forward-looking
      Statements**


*Certain
      of the statements set forth in this press release constitute "Forward looking
      statements" within the meaning of the Private Securities Litigation Reform
      Act
      of 1995. We have included and from time to time may make in our public filings,
      press releases or other public statements, certain forward-looking statements,
      including, without limitation, those under "Management's Discussion and Analysis
      of Financial Condition and Results of Operations" in Part II, Item 7. In some
      cases these statements are identifiable through the use of words such as
      "anticipate," "believe," "estimate," "expect," "intend," "plan," "project,"
      "target," "can," "could," "may," "should," "will," "would" or words or
      expressions of similar meaning. You are cautioned not to place undue reliance
      on
      these forward- looking statements. In addition, our management may make
      forward-looking statements to analysts, investors, representatives of the media
      and others. These forward-looking statements are not historical facts and
      represent only our beliefs regarding future events, many of which, by their
      nature, are inherently uncertain and beyond our control. There can be no
      assurance that such forward-looking statements will prove to be accurate and
      China 3C Group undertakes no obligation to update any forward-looking statements
      or to announce revisions to any of the forward-looking
      statements.*





**For
      more information, contact:**





**In
      the U.S.:**


Joe
      Levinson


China
      3C
      Group


Tel:
      +1-646-884-0829





Bill
      Zima


ICR,
      Inc.


Tel:
      +1-203-682-8200




**In
      Asia:**


Dan
      Joseph


ICR,
      Inc.


Tel:
      86-21-6122-1077