**United
      States**


**Securities
      and Exchange Commission**


**Washington,
      D.C.  20549**









**FORM
      20-F**







(Mark
      One)




[****]   Registration Statement Pursuant to Section 12(b) or
      (g) of the Securities Exchange Act of 1934


or




[**X**]  
      Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
      of
      1934




**For the fiscal year ended December 31, 2006**


or





[  ]   
      Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
      Act
      of 1934




For the transition period from _________ to  _________


or





[  ]    Shell
      Company Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
      of
      1934




Date of event requiring this shell company report




Commission
      file number: **0-28879**







**China
      Pharmaceuticals International Corporation**


(Exact
      name of Registrant as specified in its charter)




**China
      Pharmaceuticals International Corporation**


(Translation
      of Registrant's name into English)







**British
      Virgin Islands**


(Jurisdiction
      of incorporation or organization)





**Suite
      A, 22/F, Noble Center, 3rd Fu Zhong
      Road, Fu
      Tian District,**


**518026,
      Shen Zhen, Guang Dong Province, China**


(Address
      of principal executive offices)





Securities
      registered or to be registered pursuant to Section 12(b) of the
      Act.  **None**





Securities
      registered or to be registered pursuant to Section 12(g) of the
      Act.


**Common
      Stock, No Par Value**


(Title
      of
      Class)





Securities
      for which there is a reporting obligation pursuant to Section 15(d) of the
      Act.


**Not
      Applicable**


(Title
      of
      Class)










Indicate
      the number of outstanding shares of each of the issuer’s classes of capital or
      common stock as of the close of the period covered by the annual
      report.




**79,758,837
      Common Shares as of December 31, 2006**





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





If
      this
      report is an annual or transition report, indicate by check mark if the
      registrant is not required to file reports pursuant to Section 13 or 15(d)
      of
      the Securities Exchange Act of 1934.  [  ] Yes  
[X] No





Note
–
      Checking the box above will not relieve any registrant required to file reports
      pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from
      their obligations under those Sections.





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 large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one):


Large
      accelerated
      filer  [  ]                                                                Accelerated
      filer  [  ]                                           Non-accelerated
      filer  [X]





Indicate
      by check mark which financial statement item the registrant has elected to
      follow.  [  ] Item 17  [X] Item 18





If
      this
      is an annual report, indicate by check mark whether the registrant is a shell
      company (as defined in Rule 12b-2 of the Exchange Act).  [X]
      Yes[  ] No














**General
      Information:**





**Unless
      otherwise indicated, all references herein are to US
      dollars.**





***Forward
      Looking Statements***





The
      Company cautions readers regarding forward looking statements found in the
      following discussion and elsewhere in this annual report and in any other
      statement made by, or on the behalf of the Company, whether or not in future
      filings with the Securities Exchange Commission (“SEC”).  Forward
      looking statements are statements not based on historical information and which
      relate to future operations, strategies, financial results or other
      developments.  Forward looking statements are necessarily based upon
      estimates and assumptions that are inherently subject to significant business,
      economic and competitive uncertainties and contingencies, many of which are
      beyond the Company’s control and many of which, with respect to future business
      decisions, are subject to change.  See “Item 3. Key Information - Risk
      Factors.”  These uncertainties and contingencies can affect actual
      results and could cause actual results to differ materially from those expressed
      in any forward looking statements made by or on behalf of the
      Company.  The Company disclaims any obligation to update forward
      looking statements.





**PART
      I**





**Item
      1. Identity of Directors, Senior Management and
      Advisors.**








Not
      applicable.








**Item
      2. Offer Statistics and Expected Timetable.**








Not
      applicable.








**Item
      3. Key Information.**




***Selected
      Financial Data***





The
      selected financial data of the Company for the year ended December 31, 2006
      was
      derived from the  financial statements of the Company which have been
      audited by Lake & Associates CPA’s LLC, the December 31, 2005 financial data
      was derived from the audited financial statements of Bongiovanni &
Associates PA our prior auditor as indicated in their report which is included
      elsewhere in this report.  The selected financial data set forth for
      the years ended September 30, 2004, 2003, and 2002 is derived from the Company’s
      audited consolidated financial statements, not included herein.





The
      information in the following table was extracted from the more detailed
      financial statements and related notes included herein and should be read in
      conjunction with such financial statements and with the information appearing
      under the heading “Item 5.  Operating and Financial Review and
      Prospects.”




2




Year
                Ended December 31,
            
            
            Year
                Ended September 30,**2006**
            
            
            **2005**
            
            
            **2004**
            
            
            **2003**
            
            
            **2002**Revenues
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            1,517,822
            
            
            $
            2,014,696Loss
                from operations
            
            $
            (113,813
            )
            
            $
            (678,154
            )
            
            $
            (643,448
            )
            
            $
            (460,465
            )
            
            $
            (1,115,911
            )Loss
                from continuing  operations
            
            $
            (113,813
            )
            
            $
            (714,335
            )
            
            $
            (643,448
            )
            
            $
            (460,465
            )
            
            $
            (1,115,911
            )Net
                loss
            
            $
            (113,813
            )
            
            $
            (714,335
            )
            
            $
            (643,448
            )
            
            $
            (460,465
            )
            
            $
            (1,115,911
            )Comprehensive
                loss
            
            $
            (113,813
            )
            
            $
            (714,335
            )
            
            $
            (651,220
            )
            
            $
            (623,056
            )
            
            $
            (1,099,915
            )Net
                loss from per share
            
            $
            (0.0014
            )
            
            $
            (0.01
            )
            
            $
            (0.02
            )
            
            $
            (0.98
            )
            
            $
            (4.22
            )Total
                assets
            
            $
            -
            
            
            $
            -
            
            
            $
            1,000
            
            
            $
            318,808
            
            
            $
            940,408Stockholders’
                equity (deficit)
            
            $
            (1,196,298
            )
            
            $
            (1,082,485
            )
            
            $
            (710,797
            )
            
            $
            (358,389
            )
            
            $
            37,714Weighted
                average number of shares
            
            
            79,758,837
            
            
            
            47,973,021
            
            
            
            28,249,500
            
            
            
            636,514
            
            
            
            260,633Dividends
                per share
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -




***Risk
      Factors***





*The
      Company has limited financial resources and if the Company is unable to secure
      additional funding and/or a business opportunity, the Company may
      fail.*





As
      of
      December 31, 2006, the Company had no cash and a working capital deficit of
      $113,813.  It currently has no business operations.  Without
      additional funding and/or a business opportunity, the Company may not continue
      to exist. As a result, for the year ended December 31, 2006, the Company's
      auditors, in Note H of the Financial Statements, have noted that there is
      substantial doubt about the Company's ability to continue as a going
      concern.  The Company's existence is dependent upon management funding
      operations and raising sufficient capital. At this point in time, it is
      impossible to state an amount of additional funding which the Company believes
      would remove the going concern opinion.





*If
      the Company issues shares or options to its officers, directors or key
      employees, or if the Company obtains funding through the sale of additional
      common shares, the shareholders will experience dilution.*





The
      Company may in the future grant to some or all of its directors, officers,
      insiders and key employees options to purchase the Company’s common shares as
      non-cash incentives to those employees.  Such options may be granted
      at exercise prices equal to market prices.  To the extent that
      significant numbers of such options may be granted and exercised, the interests
      of then existing shareholders of the Company will be subject to additional
      dilution.





The
      Company is currently without a source of revenue and will most likely be
      required to issue additional shares to finance its operations and acquire a
      business opportunity.  The issuance of additional shares will cause
      the Company’s existing shareholders to experience dilution of their ownership
      interests.





*The
      price of the Company’s common shares is subject to market fluctuations and
      volatility which may not be related to the Company’s operations and such
      fluctuations may impact the Company’s ability to complete equity financings; if
      the Company cannot complete additional equity financings, it may not be able
      to
      continue its operations.*





The
      trading volume of the Company’s stock is low, thereby making the market price of
      the stock subject to wide fluctuations in price, which have not necessarily
      been
      related to the operating performance, underlying asset values or prospects
      of
      such companies.  In particular, the per share price of the Company’s
      common shares fluctuated from a low of $0.03 to a high of $0.20 during the
      12-month period ending December 31, 2006.  Continued price
      fluctuations will have a significant impact on the Company’s ability to complete
      equity financings.




3





*Conflicts
      of interest may arise among the members of the Company’s board of directors and
      such conflicts may cause the Company to enter into transactions on terms, which
      are not beneficial to the Company.*





Several
      of the Company’s directors are also directors, officers or shareholders of other
      companies.  Some of the directors and officers are engaged and will
      continue to be engaged in the search for additional business opportunities
      on
      behalf of other corporations, and situations may arise where these directors
      and
      officers will be in direct competition with the Company.  Such
      associations may give rise to conflicts of interest from time to
      time.  Such a conflict poses the risk that the Company may enter into
      a transaction on terms that could place the Company in a worse position than
      if
      no conflict existed.  Conflicts, if any, will be dealt with in
      accordance with the relevant provisions of the *International Business
      Companies Act (*British Virgin Islands).  The directors of the
      Company are required by law to act honestly and in good faith with a view to
      the
      best interests of the Company and to disclose any interest which they many
      have
      in any project or opportunity of the Company.  However, each director
      has a similar obligation to other companies for which such director serves
      as an
      officer or director.





*The
      Company does not pay dividends on its common shares; therefore, investors
      seeking dividend income should not purchase the common shares.*





The
      Company has never declared or paid cash dividends on its common shares and
      does
      not anticipate doing so in the foreseeable future.  Additionally, the
      determination as to the declaration of dividends is within the discretion of
      the
      Company’s Board of Directors, which may never declare cash dividends on the
      Company’s common stock.  Investors cannot expect to receive a dividend
      on the Company’s common shares in the foreseeable future, if at
      all.





*The
      Company is dependent upon its management and the loss of any of its management
      and/or if the Company is unable to recruit additional managers could negatively
      impact the Company’s ability to continue its operations.*





The
      success of the operations and activities of the Company is dependent to a
      significant extent on the efforts and abilities of its key officer, Dr. FAN
      Di,
      a director, and President, Chief Executive Officer and acting Chief Financial
      Officer of the Company.  The loss of services of Dr. Fan could have a
      material adverse effect on the Company.  The Company has not obtained
      key-man life insurance on any of its officers or directors.  The
      Company’s ability to recruit and retain highly qualified management personnel is
      critical to its success; if it is unable to do so this may materially affect
      the
      Company’s financial performance.





*The
      Company’s shares are subject to the SEC’s penny stock rules, which may restrict
      the ability of brokers to sell the Company’s common stock and may reduce the
      secondary market for the common stock.*





The
      SEC
      has adopted rules that regulate broker-dealer practices in connection with
      transactions in “penny stock.”  Generally, penny stocks are equity
      securities with a price of less than US $5.00 (other than securities registered
      on certain national securities exchanges or quoted on the NASDAQ
      system).  If the Company’s shares are traded for less than US $5 per
      share, as they currently are, the shares will be subject to the SEC’s penny
      stock rules unless (1) the Company’s net tangible assets exceed US $5,000,000
      during the Company’s first three years of continuous operations or US $2,000,000
      after the Company’s first three years of continuous operations; or (2) the
      Company has had average revenue of at least US $6,000,000 for the last three
      years.  The penny stock rules require a broker-dealer, prior to a
      transaction in a penny stock not otherwise exempt from the rules, to deliver
      a
      standardized risk disclosure document prescribed by the SEC that provides
      information about penny stocks and the nature and level of risks in the penny
      stock market.  The broker-dealer also must provide the customer with
      current bid and offer quotations for the penny stock, the compensation of the
      broker-dealer and its salesperson in the transaction and monthly account
      statements showing the market value of each penny stock held in the customer’s
      account.  In addition, the penny stock rules require that prior to a
      transaction in a penny stock not otherwise exempt from those rules, the
      broker-dealer must make a special written determination that the penny stock
      is
      a suitable investment for the purchaser and receive the purchaser’s written
      agreement to the transaction.  These requirements may have the effect
      of reducing the level of trading activity in the secondary market for a stock
      that becomes subject to the penny stock rules.  Since the Company’s
      shares are traded for less than US $5.00 per share, the Company’s common stock
      is subject to the penny stock rules.  Therefore, the holders of the
      common stock may find it difficult to sell the common stock of the
      Company.  These rules may restrict the ability of brokers to sell the
      common stock and may reduce the secondary market for the common
      stock.  A limited secondary market may result in a decrease in the
      value of the shares and/or a partial or total loss of an investor’s
      investment.




4





*This
      annual report contains statements about future events and results that may
      not
      be accurate.*





Statements
      contained in this annual report that are not historical facts are
      forward-looking statements that involve risks and uncertainties.  Such
      statements may not prove to be accurate as actual results and future events
      could differ materially from those anticipated in such statements.





*Investors
      in the United States may not be able to enforce their civil liabilities against
      the Company or its directors and officers.*





It
      may be
      difficult to bring and enforce suits against the Company.  The Company
      is a corporation domiciled in British Virgin Islands.  None of the
      Company’s directors and officers are residents of the United States, and all or
      a substantial portion of their assets are located outside of the United
      States.  As a result, it may be difficult for U.S. holders of the
      Company’s common shares to effect service of process on these persons within the
      United States or to enforce judgments obtained in the U.S. based on the civil
      liability provisions of the U.S. federal securities laws against the Company
      or
      its officers and directors.  In addition, a shareholder should not
      assume that the courts outside the United States (i) would enforce judgments
      of
      U.S. courts obtained in actions against the Company, its officers or directors
      predicated upon the civil liability provisions of the U.S. federal securities
      laws or other laws of the United States, or (ii) would enforce, in original
      actions, liabilities against the Company, its officers or directors predicated
      upon the U.S. federal securities laws or other laws of the United
      States.




**Item
          4.**




***History
      and Development of the Company***





The
      Company was incorporated in the State of Colorado on June 17, 1996, under the
      name Minas Novas Gold Corp., to engage in mining operations.  From
      inception to January 1999, the Company obtained options to acquire various
      mining properties.  On January 29, 1999, the Company abandoned all
      mining operations and proceeded to acquire all of the issued and outstanding
      capital stock of Cool Entertainment, Inc., a Washington corporation, in exchange
      solely for 65% of its outstanding common stock.  The acquisition of
      the Washington Corporation was completed March 1, 1999, and effective February
      22, 1999, the Company changed its name to Cool Entertainment, Inc.





From
      March 1, 1999 to November 2000, the Company was able to generate only a minimal
      amount of revenues.  Realizing that it was undercapitalized and unable
      to market its services properly, the Company searched for another business
      opportunity.  On February 21, 2001, the Company acquired all of the
      issued and outstanding capital stock of E-Trend Networks, Inc., a Nevada
      corporation, in exchange solely for approximately 92% of its common
      stock.  The Company changed its name to E-Trend Networks, Inc.,
      changed its domicile to Delaware, and effected a 1-for-100 reverse split of
      its
      issued and outstanding shares of common stock.




On
      December 26, 2001, an agreement was reached whereby a new organization and
      management team led by eAngels Equity, LLC would acquire controlling interest
      in
      E-Trend Networks, Inc.  Effective February 19, 2002, the Company
      changed its name to Wilmington Rexford, Inc.  Prior to the fourth
      calendar quarter of 2003, the Company operated an online retail website
      www.EntertainMe.com and through its fulfillment and distribution subsidiary,
      Langara Entertainment, it offered distribution and fulfillment services to
      both
      traditional retail and online merchants.





In
      October 2003, the Company entered into agreements to exchange its 100% ownership
      in Langara Entertainment, Inc. and EntertainMe.com for equity stakes in Langara
      Group, Inc. and Fly.com, Inc.





On
      February 13, 2004, the Company entered into an agreement with China Merchants
      DiChain Investment Holdings Limited, pursuant to which the Company spun out
      as a
      dividend to the shareholders on a 1 for 1 share basis shares of its
      wholly-subsidiary, E-Trend Networks, Inc.  The agreement provided for
      the acquisition of a company to be identified by China Merchants DiChain
      Investment Holdings Limited and a 1-for-20 reverse stock split.  The
      reverse stock split and the change of the Company’s name to China
      Pharmaceuticals Corporation were effected March 25, 2004.




5




On
      May
      24, 2004, the Company closed its acquisition of 87.475% of Zhejiang University
      Pharmaceutical Co., Ltd., a Sino-foreign equity joint venture (“Zheda
      Pharmacy”), pursuant to the terms of an agreement dated as of May 24, 2004 with
      the owners of Sheung Tai Investments Limited.  The Company issued
      13,848,220 shares of its common stock to the owners of Sheung Tai Investments
      Limited for 100% ownership of that entity.  Sheung Tai Investments
      Limited owns 87.475% of Zheda Pharmacy.




Also
      on
      May 24, 2004, the Company issued 31,151,780 shares to China Merchants DiChain
      Investment Holdings Limited and its designees for approximately $290,000 in
      debt
      conversion and assumption of costs of the transaction.




Shortly
      after the acquisition of Zheda Pharmacy, the Company realized that management
      of
      Sheung Tai Investments refused to turn over day-to-day control of the operations
      of Zheda Pharmacy to management of the Company.  The disputes between
      management of the Company and management of Sheung Tai Investment resulted
      in
      litigation and protracted negotiations.  In January 2005, the Company
      relinquished its ownership of Sheung Tai Investments (and therefore Zheda
      Pharmacy) in exchange for the 13,848,220 shares of the Company’s common stock
      that originally had been issued to the owners of Sheung Tai
      Investments.




Effective
      August 26, 2004, the Company changed its domicile to the British Virgin Islands
      and its name to China Pharmaceuticals International Corporation.  It
      is governed by the International Business Companies Act, Cap. 291, of the
      Territory of the British Virgin Islands.




The
      Company’s registered agent is Equity Trust (BVI)
      Ltd, Palm Grove House, P.O. Box 438, Road Town, Tortola, British Virgin
      Islands.  Its principal business office is located at Room A, F/22,
      Noble Center, 3 rd Fu Zhong Road, Fu Tian District, Shen Zhen, 518026, Guang
      Dong Province, P. R. China since 1st Oct, 2005.
      The
      telephone number is 86.755. 3398 3366 and the facsimile number is 86.755.3398
      3368.  The Company does not have a registered agent in the United
      States.




On
      September 21, 2005, the Company issued a total of 45,200,000 shares of its
      common stock to six buyers. As of the date of this filing, the buyers have
      not
      settled the subscription money and $452,000 is still owed to the
      Company.  It is uncertain whether the Company will be able to collect
      the subscription money.  As a result, management has recorded an
      allowance for doubtful stock subscriptions receivable of $452,000 to reflect
      this uncertainty.  Pursuant to its Articles of Association, the
      Company may, upon written notice to the six buyers, treat the unpaid for shares
      as cancelled shares, but has not opted to do so as of the date of this
      filing.  Furthermore, pursuant to the subscription agreements, the
      Company accrued interest on the Subscription Receivable at the rate of Hong
      Kong
      Prime plus 2% from September 28, 2005 through December 31, 2005, for a total
      of
      $11,350.  However, in estimating uncollectible accounts, management
      recorded an allowance for doubtful accounts of $11,350.





**Business
      Overview**





For
      the
      financial years ended September 30, 2002 and 2003, the Company operated an
      online entertainment media retail website www.EntertainMe.com and through its
      fulfillment and distribution subsidiary, Langara Entertainment, it offered
      distribution and fulfillment services to both traditional retail and online
      merchants.  Since October 2003, the Company has not engaged in
      business activities.  As of the time of this filing, the Company has
      not created a plan for future operations.





**Organizational
      Structure**





As
      of the
      date of this annual report, the Company has no subsidiaries.




6





**Property,
      Plants and Equipment**





The
      Company’s corporate office is located at Unit 3611, 36/F, West Tower, Shun Tak
      Centre, 168-200 Connaught Road Central, Hong Kong from January 1, 2005 to
      December 30, 2005. The Company shares the offices of China Merchants DiChain
      and
      is allocated HK$15,000 (US$1,923 as of October 01, 2005) as its pro rata share
      of the cost of the facility. Since 1st Oct, 2005, the Company’s corporate office
      is located at Room A, F/22, Noble Center, 3 rd Fu Zhong Road, Fu Tian District,
      Shen Zhen, 518026, Guang Dong Province, P. R. China. The Company shares the
      offices of DC Capital Management, Inc. and is allocated HK$13,400 (US$1,718
      as
      of January 01, 2006) as its’ pro rata share of the cost of the
      facility.




**Item
          5.**




The
      following discussion of the results of operations of the Company for the year
      ended December 31, 2006 and 2005 should be read in conjunction with the
      financial statements of the Company and related notes included
      therein.





From
      February 21, 2001 to October 2003, the Company operated an online entertainment
      media retail website www.EntertainMe.com and through its fulfillment and
      distribution subsidiary, Langara Entertainment, offered distribution and
      fulfillment services to both traditional retail and online
      merchants.  In October 2003, the Company entered into agreements to
      exchange its 100% ownership in Langara Entertainment, Inc. and EntertainMe.com
      for an equity stakes in Langara Group, Inc. and Fly.com, Inc.





On
      February 13, 2004, the Company entered into an agreement with China Merchants
      DiChain Investment Holdings Limited, pursuant to which the Company spun out
      as a
      dividend to the shareholders on a 1 for 1 share basis shares of its
      wholly-subsidiary, E-Trend Networks, Inc. The agreement provided for the
      acquisition of a company to be identified by China Merchants DiChain Investment
      Holdings Limited and a 1-for-20 reverse stock split.  The reverse
      stock split and the change of the Company’s name to China Pharmaceuticals
      Corporation were effected March 25, 2004.





On
      February 20, 2004, the Company changed its fiscal year end to December
      31.





For
      the
      year ended December 31, 2006, the Company's auditors, in Note H of the Financial
      Statements, have noted that there is substantial doubt about the Company's
      ability to continue as a going concern.  The Company's existence is
      dependent upon management funding operations and raising sufficient capital.
      At
      this point in time, it is impossible to state an amount of additional funding
      which the Company believes would remove the going concern opinion.





***Operating
      Results***





**Year
      Ended December 31, 2006 Compared to Year Ended December 31,
      2005**





The
      Company did not have any business operations during the twelve months ended
      December 31, 2006.  Despite the disposition of these business
      operations, the Company continued to incur general and administrative expenses
      to maintain the Company’s existence as a reporting company with the Securities
      and Exchange Commission whose stock is traded on the OTC Bulletin Board. In
      addition, legal expenses were incurred in connection with the issuance to shares
      to six independent companies on September 21, 2005. Total operating expenses
      and
      net loss were each $113,813 for the year ended December 31, 2006 versus $714,335
      for the year ended December 31, 2005.




7





**Year
      Ended December 31, 2005 Compared to the Fifteen Months Ended December 31,
      2004**





The
      Company did not have any business operations during the twelve months ended
      December 31, 2005.  Despite the disposition of these business
      operations, the Company continued to incur general and administrative expenses
      to maintain the Company’s existence as a reporting company with the Securities
      and Exchange Commission whose stock is traded on the OTC Bulletin Board. In
      addition, legal expenses were incurred in connection with the issuance to shares
      to six independent companies on September 21, 2005.  Total operating
      expenses and net loss were each $714,335 for the year ended December 31, 2005
      versus $715,438 for the fifteen months ended December 31, 2004.





**Fifteen
      Months Ended December 31, 2004 Compared to Year Ended September 30,
      2003**





Due
      to
      the disposal of Langara Entertainment, Inc. and EntertainMe.com in October
      2003,
      the Company did not have any business operations during the fifteen months
      ended
      December 31, 2004.  Despite the disposition of these business
      operations, the Company continued to incur general and administrative expenses
      to maintain the Company’s existence as a reporting company with the Securities
      and Exchange Commission whose stock is traded on the OTC Bulletin
      Board.  In addition, legal expenses were incurred in connection with
      the acquisition and subsequent disposition of Sheung Tai Investments, as
      described in “Item 4. Information on the Company – History and Development of
      the Company.”





***Liquidity
      and Capital Resources***





At
      December 31, 2006, the Company had no cash, the same as December 31,
      2005.  The Company used cash of $113,813 for operating
      activities.  Cash was provided by advances from related parties in the
      sum of $46,776.





The
      Company also anticipates spending approximately $150,000 during fiscal 2007
      for
      administrative and other operating expenditures.  It will depend upon
      advances from related parties to fund these expenditures.





As
      of
      December 31, 2006, the Company owed a total of $100,000 on a note payable.
      The
      note bears interest at 10% per year and is in default. For the year ended
      December 31, 2006 and 2005, accrued interest was $36,274 and $26,274,
      respectively. The Company has disputed their liability for this
      debt.





There
      are
      no material commitments for capital expenditures during fiscal 2007. Other
      than
      the inter company advances from China Technology Global Corporation, China
      Merchants DiChain (Asia) Limited, DiChain Holdings Ltd, DC Capital Management,
      Inc., and Farsight Holdings, Ltd. which have been made on an interest-free
      basis, with no fixed term or repayment date, there is no debt owed by the
      Company.





***Trend
      Information***





The
      Company is not aware of any trends that might affect its financial results
      or
      business.





***Off
      Balance Sheet Arrangements***





The
      Company does not have any material off balance sheet arrangements that have
      or
      are reasonably likely to have a current or future effect on the Company’s
      financial condition, changes in financial condition, revenues or expenses,
      results of operations, liquidity, capital expenditures or capital
      resources.




8





***Contractual
      Obligations***





The
      Company does not have any contractual obligations.




**Item
          6.**




***Directors
      and Senior Management***





The
      names, positions held with the Company and terms of office of each director
      and
      officer of the Company as of the date of this annual report, are as
      follows:





**Name**
            **Position
                with the Company**
            **Term
                of Office (for each office held)**FAN
                Di
            Chief
                Executive Officer
              President
              Acting
                Chief Financial Officer
              Director
            July
                2004 to present
              
              August
                2006 to present
              February
                2004 to presentLI
                Xinggui
            Director
            August
                2005 to presentTAI
                Ching Nam
            Executive
                Vice President
            August
                2005 to presentFU
                Li
            Assistant
                President
              Corporate
                Secretary
            August
                2005 to present
              July
                2006 to present





Each
      officer’s and director’s term of office shall expire at the Company’s next
      annual general meeting.  The Company does not have an executive
      committee, audit committee, or a compensation committee.





There
      are
      no family relationships between any directors or executive officers of the
      Company.  To the best of the Company’s knowledge, there are no
      arrangements or understandings with major shareholders or others, pursuant
      to
      which any of the Company’s officers or directors was selected as an officer or
      director of the Company.





Set
      forth
      below are brief descriptions of recent employment and business experience of
      the
      Company’s officers and directors, each of whom devote on average approximately
      15 hours per week to the business of the Company.





**DR.
      FAN DI**





Since
      July 2004, Dr. Fan has served as the Company’s President and Chief Executive
      Officer.  He has been a Director since February 2004.  Dr.
      Fan assumed the role of acting Chief Financial Officer in August 2006. Dr.
      Fan
      is responsible for overseeing the Company’s strategic
      development.  Since April 2003, Dr. Fan has served as the Chairman,
      Chief Executive Officer and an Executive Director of China Technology Global
      Corporation, a British Virgin Islands corporation whose stock is traded on
      the
      OTC Bulletin Board and registered under the Securities Exchange Act of
      1934.  Since April 2002, Dr. Fan has served as the Chairman and Chief
      Executive Officer of China Merchants DiChain (Asia) Limited, a company listed
      on
      the Stock Exchange of Hong Kong, Limited.  From December 1999 to April
      2002, he served as an Executive Director and Chief Financial Officer of China
      Merchants Group.  Dr. Fan has substantial experience in financial
      management and business management.  He holds a Ph.D. in Business
      Administration from the University of Southern California.




9




**Mr.
      LI Xinggui**





Since
      August 2005, Mr. Li has served as a Director of the Company. Since December
      2000, Mr. Li has worked for China Merchants DiChain Group, which is the ultimate
      controlling shareholder of the Company, as the Executive Director and President.
      Prior to joining DICHAIN, Mr. Li was executive vice president of S-T Anda,
      the
      first modern logistics company in China serving Fortune Global 500 companies
      in
      China. He also served as Director of Enterprise Management at China Merchants
      Group. He has extensive operation management experience in China. Mr. Li has
      a
      Master's Degree in Economics from Sichuan University of China.




**TAI
      Ching Nam**





Since
      August 2005, Mr. Tai has served as Executive Vice President of the Company.
      Since August 2001, Mr. Tai has worked in China Merchants DiChain Group, which
      is
      the ultimate controlling shareholder of the Company. His previously experiences
      include: Senior Manager of China Merchants Group Research Department &
Reform Center, Project Manager of China Merchants Group joint project with
      McKinsey & Company in corporate strategy development and transformation. Mr.
      Tai has a Master Degree of Business Economics from Chinese University of Hong
      Kong.





**FU
      LI**





Since
      August 2005, Ms. Fu has served as Assistant President of the Company. Ms. Fu
      has
      worked for China Merchants DiChain Group, which is the ultimate controlling
      shareholder of the Company since October, 2002. Since July 2006, she has served
      as the secretary of the Company, and she also served as the secretary of China
      Technology Global Corporation since July 2006. She obtained a Bachelors Degree
      and Masters Degree from Hua Qiao Foreign Language University and Newport
      University.





***Compensation***





During
      the fiscal year ended December 31, 2006, the directors and officers of the
      Company, as a group, had received or charged the Company a total of $0 for
      services rendered by the directors and officers or companies owned by the
      individuals.  No amounts were set aside or accrued by the Company to
      provide pension, retirement or similar benefits.





***Employees***





As
      of
      December 31, 2006, the Company had no full-time employees in the area of
      management and administration.





***Share
      Ownership***





The
      following table sets forth certain information regarding ownership of the
      Company’s common shares by the Company’s officers and directors as of June 13,
      2007.




10





Title
                of Class
            **Name
                and Address of Owner**
            **Shares
                and Rights Beneficially**
              **Owned
                or Controlled (1)**
            **Percent
                of Class (1)**Common
                Stock
            **FAN
                Di (2)**
              
              **Room
                A, F/22, Noble Center, 3 rd Fu Zhong Road, Fu Tian District, Shen
                Zhen,
                518026, Guang Dong Province, P. R. China**
            **20,772,330**
            **26.04%**Common
                Stock
            **LI
                Xinggui**
              
              **Room
                A, F/22, Noble Center, 3 rd Fu Zhong Road, Fu Tian District, Shen
                Zhen,
                518026, Guang Dong Province, P. R. China**
            **-0-**
            **0%**Common
                Stock
            **TAI
                Ching Nam**
              
              **Room
                A, F/22, Noble Center, 3 rd Fu Zhong Road, Fu Tian District, Shen
                Zhen,
                518026, Guang Dong Province, P. R. China**
            **-0-**
            **0%**Common
                Stock
            **FU
                Li**
              
              **Room
                A, F/22, Noble Center, 3 rd Fu Zhong Road, Fu Tian District, Shen
                Zhen,
                518026, Guang Dong Province, P. R. China**
            **-0-**
            **0%**





(1)
            Where
                persons listed on this table have the right to obtain additional
                shares of
                common stock through the exercise of outstanding options or warrants
                within 60 days from June 13, 2007, these additional shares are deemed
                to
                be outstanding for the purpose of computing the percentage of common
                stock
                owned by such persons, but are not deemed to be outstanding for the
                purpose of computing the percentage owned by any other person. Based
                on
                79,758,837 shares of common stock outstanding as of June 13,
                2007.




(2)
            These
                shares are held of record by China Merchants DiChain Investment Holdings
                Limited.  As Dr. FAN is a director of China Merchants DiChain
                Investment Holdings Limited and a director of the sole controlling
                shareholder of China Merchants DiChain Investment Holdings Limited,
                he is
                deemed to be beneficial owner of these
                shares.




11




**Item
          7.**




***Principal
      Holders of Voting Securities***





The
      following table sets forth certain information regarding ownership of the
      Company’s common shares by the beneficial owners of 5% or more of each class of
      the Company’s voting securities as of June 13, 2007.





**Title
                of Class**
            **Name
                and Address of Owner**
            **Shares
                and Rights Beneficially**
              **Owned
                or Controlled (1)**
            **Percent
                of Class (1)**Common
                Stock
            China
                Merchants DiChain Investment Holdings Limited **(2)**
              Room
                A, F/22, Noble Center, 3 rd Fu Zhong Road, Fu Tian District, Shen
                Zhen,
                518026, Guang Dong Province, P. R. China
            20,772,330
            26.04%Common
                Stock
            Dr.
                FAN Di **(2)**
              Room
                A, F/22, Noble Center, 3 rd Fu Zhong Road, Fu Tian District, Shen
                Zhen,
                518026, Guang Dong Province, P. R. China
            20,772,330
            26.04%Common
                Stock
            Fivestar
                International Limited
              R2908,
                29/F, Guo Ji Ming Yuan, You Yi Road, Luo Hu District, Shen Zhen Province,
                518000, Guang Dong Province, P. R. China
            7,700,000
            9.65%Common
                Stock
            Sino
                Castle Holdings Ltd
              R2908,
                29/F, Guo Ji Ming Yuan, You Yi Road, Luo Hu District, Shen Zhen Province,
                518000, Guang Dong Province, P. R. China
            7,500,000
            9.40%Common
                Stock
            Mart
                Burkit Limited
              R2908,
                29/F, Guo Ji Ming Yuan, You Yi Road, Luo Hu District, Shen Zhen Province,
                518000, Guang Dong Province, P. R. China
            7,500,000
            9.40%Common
                Stock
            Rich
                Gush Limited
              R2908,
                29/F, Guo Ji Ming Yuan, You Yi Road, Luo Hu District, Shen Zhen Province,
                518000, Guang Dong Province, P. R. China
            7,500,000
            9.40%Common
                Stock
            Mart
                Express Limited
              R2908,
                29/F, Guo Ji Ming Yuan, You Yi Road, Luo Hu District, Shen Zhen Province,
                518000, Guang Dong Province, P. R. China
            7,500,000
            9.40%Common
                Stock
            Global
                China Enterprises Limited
              R2908,
                29/F, Guo Ji Ming Yuan, You Yi Road, Luo Hu District, Shen Zhen Province,
                518000, Guang Dong Province, P. R. China
            7,500,000
            9.40%Common
                Stock
            Asian
                Century Development Limited
              C/O
                16F Chinese Bank Building, 61 Des Veoux Road Central
              Hong
                Kong
            6,929,450
            8.68%Common
                Stock
            Cede
                & Co.
              PO
                Box
                #20                                          Bowling
                Green
                Station                         New
                York, NY 10004
            4,120,214
            5.16%





(1)
            Based
                on 79,758,837 shares of common stock outstanding as of June 13,
                2007.




(2)
            These
                shares are held of record by China Merchants DiChain Investment Holdings
                Limited.  As Dr. FAN is a director of China Merchants DiChain
                Investment Holdings Limited and a director of the sole controlling
                shareholder of China Merchants DiChain Investment Holdings Limited,
                he is
                deemed to be beneficial owner of these
                shares.




12




***Control
      by Foreign Government or Other Persons***





As
      of
      June 13, 2007 the Company was 26.4% indirectly owned
      by DiChain
      Holdings Limited, an investment holding company located in Hong
      Kong.





None
      of
      the Company’s common shareholders has different voting rights than any of the
      Company’s other common shareholders.





***Changes
      in Shareholdings***





China
      Merchants DiChain Investment Holdings Limited issued totally 45,200,000 shares
      on 21 September 2005 at US$0.01 each to six companies as listed in item#7.
      Thenceforward China Merchants DiChain Investment Holdings Limited’s shareholding
      has been diluted to 26.04% from 64.3%.





***Change
      of Control***





As
      of the
      date of this annual report, there are no arrangements known to the Company
      that
      may at a subsequent date result in a change of control of the
      Company





***United
      States Shareholders***





As
      of
      June 13, 2007, there were 79 registered holders of the Company’s common shares
      in the United States, with combined holdings of 6,823,402 shares, representing
      8.55% of the issued shares of the Company.  In addition, CEDE & Co
      held 4,120,214 shares of record, representing 5.16% of the issued shares of
      the
      Company.  The Company does not know how many beneficial shareholders
      it has in the United States, but management believes there are less than 300
      such shareholders.





***Related
      Party Transactions***





Other
      than as disclosed below, for the period from December 31, 2005 through December
      31, 2006, the Company has not entered into any transactions or loans between
      the
      Company and any (a) enterprises that directly or indirectly through one or
      more
      intermediaries, control or are controlled by, or are under common control with,
      the Company; (b) associates; (c) individuals owning, directly or indirectly,
      an
      interest in the voting power of the Company that gives them significant
      influence over the Company, and close members of any such individuals’ family;
      (d) key management personnel and close members of such individuals’ families; or
      (e) enterprises in which a substantial interest in the voting power is owned,
      directly or indirectly, by any person described in (c) or (d) or over which
      such
      a person is able to exercise significant influence.





The
      Company’s corporate office is located at Room A, F/22, Noble Center, 3 rd Fu
      Zhong Road, Fu Tian District, Shen Zhen, 518026, Guang Dong Province, P. R.
      China. The Company shares the offices of China Merchants DiChain (Asia) Ltd
      from
      January, 2005 to September, 2005, and is allocated HK$15,000 per month (US$1,923
      as of October 01, 2005) as its pro rata share of the cost of the
      facility.  There is no written agreement regarding this office sharing
      arrangement.





The
      Company shares the offices of DC Capital Management, Inc. from October, 2005
      to
      December, 2006, and is allocated HK$13,400 per month (US$1,718 as of January
      01,
      2006) as its pro rata share of the cost of the facility.  There is no
      written agreement regarding this office sharing arrangement.  There is
      no written agreement regarding this office sharing arrangement.




13





China
      Technology Global Corporation, a company indirectly owned by DiChain Holdings
      Limited, and China Merchants DiChain (Asia) Limited (“China Merchants DiChain”)
      have advanced $205,708 and $197,128 to the Company, respectively, since October
      1, 2003. These advances have been made on an interest-free basis, with no fixed
      term or repayment date.





DiChain
      Holdings Limited and DC Capital Management, Inc., companies sharing mutual
      ownership with the Company, have advanced $26,790 and $9,000 to the Company,
      respectively, since January 1, 2005. These advances have been made on an
      interest-free basis, with no fixed term or repayment date.





Farsight
      Holdings Limited, an affiliate of the Company, has advanced $46,000 since June
      1, 2006. These advances have been made on an interest-free basis, with no fixed
      term or repayment date.





***Indebtedness
      of Directors, Officers, Promoters and Other
      Management***





No
      executive officers, directors, employees or former executive officers and
      directors of the Company are indebted to the Company.  None of the
      directors, executive officers or proposed nominees of the Company, or any
      associate or affiliate of these individuals, is or has been indebted to the
      Company since January 1, 2005.





**Item
      8.  Financial Information.**





***Financial
      Statements and Other Financial Information***




**Description**
            **Page**Audited
                Financial Statements for the Year Ended December 31, 2006,
              and
                the Year Ended December 31, 2005
            F-1
                to F-11





**Legal
      Proceedings**





The
      Company knows of no material, active or pending legal or arbitration proceedings
      against it; nor is the Company involved as a plaintiff in any material
      proceeding or pending litigation.  There are no legal or arbitration
      proceedings (including governmental proceedings pending or known to be
      contemplated) which may have, or have had in the recent past, significant
      effects on the Company’s financial position or profitability.





**Dividend
      Policy**





The
      Company has not paid any dividends on its common shares and does not intend
      to
      pay dividends on its common shares in the immediate future.  Any
      decision to pay dividends on its common shares in the future will be made by
      the
      board of directors on the Company on the basis of earnings, financial
      requirements and other such conditions that may exist at that time.





***Significant
      Changes***





None.




14





**Item
                9.**
            **The
                Offer and Listing.**




***Price
      History***





The
      common stock has been trading on the Over-The-Counter Bulletin Board (“OTCBB”)
      since June 9, 1998 under the following symbols:





·
            MNGD
                - June 9, 1998 to March 1, 1999;


·
            CULE
                - March 1, 1999 to February 22,
                2001;


·
            ETDN
                - February 22, 2001 to February 19,
                2002;


·
            WREX
                – February 19, 2002 to March 25,
                2004;


·
            CPCL
                – March 25, 2004 to August 26, 2004;
                and


·
            CPICF
                - since August 26, 2004.





There
      have been no trading suspensions imposed by the OTCBB or any other regulatory
      authorities in the past three years.





The
      following table sets forth the market price ranges and the aggregate volume
      of
      trading of the common shares of the Company on the OTCBB, and predecessor
      exchanges, for the periods indicated:




**OTCBB
      Stock Trading Activity**





**Sales
                Price****Year
                Ended**
            
            **Volume**
            
            
            **High**
            
            
            **Low**December
                31, 2006
            
            
            4,661,200
            
            
            $
            0.20
            
            
            $
            0.03December
                31, 2005
            
            
            7,199,400
            
            
            $
            0.80
            
            
            $
            0.02December
                31, 2004
            
            
            4,633,887
            
            
            $
            8.95
            
            
            $
            0.02September
                30, 2003*
            
            
            936,022
            
            
            $
            0.149
            
            
            $
            0.02September
                30, 2002
            
            
            3,645,100
            
            
            $
            1.02
            
            
            $
            0.10September
                30, 2001
            
            
            6,107,200
            
            
            $
            2.50
            
            
            $
            0.02September
                30, 2000
            
            
            40,835,000
            
            
            $
            1.8438
            
            
            $
            0.08





* Fifteen-months
      ended September 30, 2003




15





**Sales
                Price****Quarter
                Ended**
            
            **Volume**
            
            
            **High**
            
            
            **Low**December
                31, 2006
            
            
            428,900
            
            
            $
            0.12
            
            
            $
            0.05September
                30, 2006
            
            
            184,300
            
            
            $
            0.11
            
            
            $
            0.06June
                30, 2006
            
            
            554,500
            
            
            $
            0.17
            
            
            $
            0.11March
                31, 2006
            
            
            3,493,500
            
            
            $
            0.20
            
            
            $
            0.03December
                31, 2005
            
            
            767,900
            
            
            $
            0.05
            
            
            $
            0.02September
                30, 2005
            
            
            4,100,000
            
            
            $
            0.13
            
            
            $
            0.02June
                30, 2005
            
            
            754,700
            
            
            $
            0.15
            
            
            $
            0.06March
                31, 2005
            
            
            1,576,800
            
            
            $
            0.80
            
            
            $
            0.10December
                31, 2004
            
            
            318,371
            
            
            $
            3.90
            
            
            $
            0.40September
                30, 2004
            
            
            57,303
            
            
            $
            3.25
            
            
            $
            1.27June
                30, 2004
            
            
            66,522
            
            
            $
            6.75
            
            
            $
            2.00March
                31, 2004
            
            
            4,191,691
            
            
            $
            8.95
            
            
            $
            0.02December
                31, 2003
            
            
            36,422
            
            
            $
            0.03
            
            
            $
            0.02September
                30, 2003
            
            
            56,100
            
            
            $
            0.05
            
            
            $
            0.03June
                30, 2003
            
            
            195,700
            
            
            $
            0.11
            
            
            $
            0.02March
                31, 2003
            
            
            159,600
            
            
            $
            0.04
            
            
            $
            0.03December
                31, 2002
            
            
            488,200
            
            
            $
            0.149
            
            
            $
            0.02September
                30, 2002
            
            
            1,019,300
            
            
            $
            0.29
            
            
            $
            0.10





**Sales
                Price****Month
                Ended**
            
            **Volume**
            
            
            **High**
            
            
            **Low**December
                31, 2006
            
            
            75,200
            
            
            $
            0.10
            
            
            $
            0.08November
                30, 2006
            
            
            342,500
            
            
            $
            0.12
            
            
            $
            0.05October
                31, 2006
            
            
            11,200
            
            
            $
            0.08
            
            
            $
            0.07September
                30, 2006
            
            
            42,300
            
            
            $
            0.09
            
            
            $
            0.08August
                31, 2006
            
            
            109,100
            
            
            $
            0.09
            
            
            $
            0.06July
                31, 2006
            
            
            32,900
            
            
            $
            0.11
            
            
            $
            0.08June
                30, 2006
            
            
            61,400
            
            
            $
            0.11
            
            
            $
            0.11May
                31, 2006
            
            
            301,200
            
            
            $
            0.16
            
            
            $
            0.11April
                30, 2006
            
            
            191,900
            
            
            $
            0.17
            
            
            $
            0.13March
                31, 2006
            
            
            3,206,400
            
            
            $
            0.20
            
            
            $
            0.08February
                28, 2006
            
            
            98,900
            
            
            $
            0.04
            
            
            $
            0.03January
                31, 2006
            
            
            188,200
            
            
            $
            0.03
            
            
            $
            0.03December
                31, 2005
            
            
            121,800
            
            
            $
            0.05
            
            
            $
            0.02November
                30, 2005
            
            
            382,300
            
            
            $
            0.04
            
            
            $
            0.02October
                31, 2005
            
            
            263,800
            
            
            $
            0.04
            
            
            $
            0.02September
                30, 2005
            
            
            3,520,800
            
            
            $
            0.08
            
            
            $
            0.02August
                31, 2005
            
            
            525,100
            
            
            $
            0.13
            
            
            $
            0.04July
                31, 2005
            
            
            54,100
            
            
            $
            0.10
            
            
            $
            0.09





These
      above quotations reflect inter-dealer prices without retail mark-up, markdown,
      or commissions and may not necessarily represent actual
      transactions.




16




**Item
      10.  Additional Information.**





***Memorandum
      and Articles of Association***





The
      Company is incorporated in the Territory of the British Virgin Islands under
      the
      International Business Companies Act, Cap. 291, IBC No. 569163.  The
      Company’s objects and purposes, found in paragraph 4 of the Memorandum of
      Association, are general in nature and permit the Company to engage in any
      business, acts, or activities which are not prohibited under any law for the
      time being in force in the British Virgin Islands.





There
      are
      no provisions in the Company’s Articles of Association that limit a director’s
      power to vote on a matter in which he is materially interested, to vote
      compensation to himself or any other director in the absence of an independent
      quorum, or to vote on matters regarding borrowings by the
      Company.  There are no retirement age requirements, and there are no
      shareholding requirements to qualify as a director.





The
      Company has only one class of stock:  ordinary (or common)
      shares.  The holders of ordinary shares do not have dividend rights,
      are entitled to one vote for each share held of record on all matters submitted
      to the stockholders, do not have rights to share in the Company’s profits, have
      rights to share in any surplus in the event of liquidation, do not have
      redemption or sinking fund provisions, are not liable to further capital calls
      by the Company, and are not subject to any provisions discriminating against
      any
      existing or prospective holder of such securities as a result of such
      shareholder owning a substantial number of shares.





In
      order
      to change the rights of holders of any class of the Company’s stock, the
      Memorandum of Association must be amended by a majority vote of the Company’s
      shareholders and of the holders of any class of stock whose rights are
      changed.





Annual
      or
      special meetings of the Company’s shareholders are called by the directors at
      any time or place of their choosing and must be called upon the written request
      of shareholders holding ten percent (10%) or more of the outstanding shares
      of
      the Company’s common stock.  At least seven days notice of a
      shareholders’ meeting must be given.  A shareholder may be represented
      at a meeting by a proxy who may speak and vote on behalf of the
      shareholder.





There
      are
      no limitations on the rights to own the Company’s securities or the rights of
      non-residents or foreign shareholders to hold or exercise voting rights on
      the
      securities imposed by foreign law or the Company’s constituent
      documents.





There
      are
      no provisions in the Company’s Memorandum or Articles of Association that would
      have an effect on delaying, deferring or preventing a change in control of
      the
      Company and that would operate only with respect to a merger, acquisition or
      corporate restructuring involving the Company or any of its
      subsidiaries.





There
      are
      no provisions in the Company’s Articles of Association governing an ownership
      threshold above which shareholder ownership must be disclosed.





With
      regard to the foregoing matters, the laws in the British Virgin Islands are
      not
      significantly different than those in the United States.





There
      are
      no conditions in the Memorandum and Articles of Association governing changes
      in
      the Company’s capital or changes in the rights of holders of any class of its
      stock that are more stringent than is required by law.




17





***Material
      Contracts***





The
      following are material contracts entered into by the Company during the two
      years preceding the date of this annual report:





1.
            Share
                Exchange Agreement with China Merchants DiChain Investment Holdings
                Limited dated February 13, 2004, relating to the acquisition of 100%
                of a
                company to be approved by the Company’s board of directors in exchange for
                45,000,000 post-reverse split shares of the Company’s common
                stock.





2.
            Sale
                and Purchase Agreement in relation to the entire issued share capital
                of
                Sheung Tai Investments Limited dated May 24, 2004, which provided
                for the
                acquisition of Sheung Tai Investments Limited by the Company in exchange
                for 13,848,220 post-reverse split shares of the Company’s common
                stock.





3.
            Agreement
                Dated January 19, 2005 Between Good Achieve Investments Limited,
                Profit
                Spring International Limited, Anmer Capital Limited, Dunkley International
                Limited, and Nation Express Limited (As Vendors); Han Hong Lu, Ma
                Leung,
                Alan Li, Chen Ming You, and Guo Jianjun (As Warrantors); China
                Pharmaceuticals International Corporation (As Purchaser); and Dichain
                Holdings Limited (As Guarantor), which provided for the sale of Sheung
                Tai
                Investments Limited back to the original owners thereof in exchange
                for
                the return of 13,848,220 post-reverse split shares of the Company’s common
                stock.





4.
            Agreements
                Dated Sep 21, 2005 of the Company to subscribe 7,500,000 shares of
                the
                Company to Global China Enterprises
                Limited.





5.
            Agreements
                Dated Sep 21, 2005 of the Company to subscribe 7,700,000 shares of
                the
                Company to Fivestar international
                Limited.





6.
            Agreements
                Dated Sep 21, 2005 of the Company to subscribe 7,500,000 shares of
                the
                Company to Mart Express Limited.





7.
            Agreements
                Dated Sep 21, 2005 of the Company to subscribe 7,500,000 shares of
                the
                Company to Rich Gush Limited.





8.
            Agreements
                Dated Sep 21, 2005 of the Company to subscribe 7,500,000 shares of
                the
                Company to Mart Burkit Limited.





9.
            Agreements
                Dated Sep 21, 2005 of the Company to subscribe 7,500,000 shares of
                the
                Company to Sino Castle Holdings
                Limited.





***Exchange
      Controls***





The
      Company’s business is conducted in and from Hong Kong and the People’ Republic
      of China (the “PRC”) in Hong Kong dollars and the PRC
      Renminbi.  Periodic reports made to U.S. shareholders are expressed in
      U.S. dollars using the then-current exchange rates.





The
      PRC
      Government imposes foreign currency control in part through direct regulation
      of
      the conversion of Renminbi into foreign exchange and through foreign trade
      restrictions.  The conversion of the Renminbi into U.S. dollars must
      be based on the People’s Bank of China (“PBOC”) Rate.  The PBOC Rate
      is set based on the previous day’s PRC interbank foreign exchange market rate
      and with reference to current exchange rates on the world financial
      markets.  In line with the unification of the two exchange rates, the
      Renminbi was revalued at HK$1.00=RMB1.12 and US$1.00=RMB8.70 on January 3,
      1994.  Since revaluation, the exchange rate has fluctuated between a
      range of US$1.00 = RMB7.90 and US$1.00 = RMB8.70.




18





The
      Hong
      Kong dollar is freely convertible into the U.S. dollar.  Since October
      17, 1983, the Hong Kong dollar has been pegged to the U.S. dollar at HK$7.80
      to
      US$1.00. The central element in the arrangements for the peg is an agreement
      between the Hong Kong government and the three Hong Kong banknote issuing banks,
      HSBC, Standard Chartered Bank and the Bank of China.  Under the
      agreement, certificates of indebtedness, which are issued by the Hong Kong
      Government Exchange Fund to the banknote issuing bank to be held as cover for
      their banknote issues, are issued and redeemed only against payment in U.S.
      dollars, at the fixed exchange rate of US$1.00 = HK$7.80.  When the
      bank notes are withdrawn from circulation, the banknote issuing banks surrender
      the certificates of indebtedness to the Hong Kong Government Exchange Fund
      and
      are paid the equivalent of U.S. dollars at the fixed rate. Exchange rates
      between the Hong Kong dollar and other currencies are influenced by the linked
      rate between the U.S. dollar and the Hong Kong dollar.





The
      market exchange rate of the Hong Kong dollar against the U.S. dollar continues
      to be determined by the forces of supply and demand in the foreign exchange
      market.  However, against the background of the fixed rate system
      which applies to the issue of Hong Kong currency in the form of bank notes,
      as
      described above, the market exchange rate has not deviated significantly from
      HK$7.80 to US$1.00.  See “Selected Financial Data” in Item 3 of this
      annual report.  The Hong Kong government has stated its intention to
      maintain the link at that rate.  The Hong Kong government has stated
      that is has no intention of imposing exchange controls in Hong Kong and that
      the
      Hong Kong dollar will remain freely convertible into other currencies (including
      the U.S. dollar).  The PRC and the United Kingdom agreed in 1984
      pursuant to the Joint Declaration of the Government of the United Kingdom of
      Great Britain and Northern Ireland and the Government of the People's Republic
      of China on the Question of Hong Kong (“the Joint Declaration”) that, after Hong
      Kong became a special administrative region of the PRC (the “SAR”) on July 1,
      1997, the Hong Kong dollar will continue to circulate and remain freely
      convertible.  However, no assurance can be given that the SAR
      government will maintain the peg at HK$7.80 to US$1.00, if at all.





***Taxation***





There
      are
      no British Virgin Islands (“BVI”) governmental laws, decrees or regulations
      affecting the remittance of dividends or other payments to nonresident holders
      of the Company’s securities.  U.S. holders of the Company’s securities
      are subject to no taxes or withholding provisions under existing BVI laws and
      regulations.  By reason of the fact that the Company conducts no
      business within the BVI, there are no applicable reciprocal tax treaties between
      the BVI and the U.S. that would affect the preceding statement that there are
      no
      BVI taxes, including withholding provisions, to which U.S. security holders
      are
      subject under existing laws and regulations of the BVI.





***Documents
      on Display***





The
      constituent documents concerning the Company may be inspected at the offices
      of
      its U.S. counsel, Dill Dill Carr Stonbraker & Hutchings, P.C., 455 Sherman
      Street, Suite 300, Denver, Colorado 80203, Attn.: Fay M. Matsukage,
      Esq.





The
      Company’s documents publicly filed with the Securities and Exchange Commission
      may also be viewed and inspected at the SEC’s Public Reference Room located at
      100 F Street, N.E., Room 1580, Washington, DC 20549.  Copies may also
      be obtained from the SEC at prescribed rates.




19




**Item
      11.  Quantitative and Qualitative Disclosures About Market
      Risk.**




Not
      applicable.





**Item
      12.  Description of Securities Other than Equity
      Securities.**




Not
      applicable.





**PART
      II**





**Item
      13.  Defaults, Dividend Arrearages and
      Delinquencies.**




Not
      applicable.




**Item
      14.  Material Modifications to the Rights of Security Holders and Use
      of Proceeds.**




The
      Company changed its domicile effective August 26, 2004.  See “Item
      4.  Information on the Company - History and Development of the
      Company,” and “Item 10. Additional Information – Memorandum and Articles of
      Association.” These actions have affected the rights of the Company’s common
      shareholders.




**Item
      15.  Controls and Procedures**




An
      evaluation was performed under the supervision and with the participation of
      the
      Company’s management, including Dr. FAN Di, the Company’s Chief Executive
      Officer and acting Chief Financial Officer, of the effectiveness of the design
      and operation of the Company’s disclosure controls and procedures pursuant to
      Rule 13a-15 of the Securities Exchange Act of 1934 (the “Exchange Act”) as of
      December 31, 2006.  Based upon that evaluation, Dr. Fan concluded that
      the Company’s disclosure controls and procedures are effective to ensure that
      information required to be disclosed by the Company in reports that it files
      or
      submits under the Exchange Act is recorded, processed, summarized and reported
      within the time periods specified in Securities and Exchange Commission’s rules
      and forms.





During
      the fiscal year ended December 31, 2006, there were no changes in the Company’s
      internal control over financial reporting that have materially affected, or
      are
      reasonably likely to materially affect, the Company’s internal control over
      financial reporting.




**Item
      16.  [Reserved]**




Not
      applicable.




**Item
      16A.  Audit Committee Financial Expert.**




The
      Board
      of Directors has determined that the Company has at least one member who is
      a
      financial expert, Dr. Fan Di.  Dr. Fan is not considered to be an
“independent director” as that term is defined in Rule 4200(a) (15) of the
      National Association of Securities Dealers.




20




**Item
      16B.  Code of Ethics.**




The
      Company has not yet adopted a code of ethics that applies to the Company’s
      principal executive officer, principal financial officer, principal accounting
      officer, or controller, or persons performing similar
      functions.  Given the Company’s current operations, management does
      not believe a code of ethics is necessary at this stage of the Company’s
      development.




**Item
      16C.  Principal Accountant Fees and Services.**




**Audit
      Fees**





For
      the
      fiscal years ended December 31, 2005 and December 31, 2006, the Company’s
      principal accountant billed $20,000 and $15,000, respectively, for the audit
      of
      the Company’s annual financial statements or services that are normally provided
      by the accountant in connection with statutory and regulatory filings or
      engagements for those fiscal years.





**Audit-Related
      Fees**





For
      the
      fiscal years ended December 31, 2005 and December 31, 2006, the Company’s
      principal accountant billed $nil and $nil, respectively, for assurance and
      related services that were reasonably related to the performance of the audit
      or
      review of the Company’s financial statements outside of those fees disclosed
      above under “Audit Fees”.





**Tax
      Fees**





For
      the
      fiscal years ended December 31, 2005 and December 31, 2006, the Company’s
      principal accountant billed $nil and $nil, respectively, for tax compliance,
      tax
      advice, and tax planning services.





**All
      Other Fees**





For
      the
      fiscal years ended December 31, 2005 and December 31, 2006, the Company’s
      principal accountant billed $nil and $nil, respectively, for products and
      services other than those set forth above.





**Pre-Approval
      Policies and Procedures**





Prior
      to
      engaging the Company’s accountants to perform a particular service, the
      Company’s board of directors obtains an estimate for the service to be
      performed.  The Company’s board of directors reviews and pre-approves
      all audit and audit-related services and the fees and other compensation related
      thereto, and any non-audit services provided by the Company’s external
      auditors.  The board of directors in accordance with procedures for
      the Company approved all of the services described above.





At
      no
      time since the commencement of the Company’s most recently completed financial
      year has the Company relied on the waiver in paragraph (c)(7)(i)(C) of Rule
      2-01
      of Regulation S-X.




21





**Principal
      Accountant Services**





To
      the
      best of the Company’s knowledge, the percentage of hours expended on the
      Company’s principal accountant’s engagement to audit the Company’s financial
      statements for the fiscal year ended December 31, 2006, that were attributed
      to
      work performed by persons other than the principal accountant’s full-time
      permanent employees was less than fifty percent (50%).




**Item
      16D.  Exemptions from the Listing Standards for Audit
      Committees.**




Not
      applicable.




**Item
      16E.  Purchases of Equity Securities by the Issuer and Affiliated
      Persons.**




Not
      applicable.





**PART
      III**





**Item
      17.  Financial Statements.**




Not
      applicable.




**Item
      18.  Financial Statements.**




See
      page
      F-1 to F-11.




**Item
      19.  Exhibits.**





**Exhibit
                Number**
            **Description**
            **Page**1.1
            Memorandum
                and Articles of Association (1)
            N/A4.1
            Share
                Exchange Agreement with Langara Group, Inc. (2)4.2
            Share
                Exchange Agreement with Fly.com, Inc. for EntertainMe.com e-Commerce
                portal (2)4.3
            Share
                Exchange Agreement with China Merchants DiChain Investment Holdings
                Limited (2)4.4
            Sale
                and Purchase Agreement in relation to the entire issued share capital
                of
                Sheung Tai Investments Limited dated May 24, 2004 (3)4.5
            Form
                of Subscription Agreements dated September 21, 2005 between the Company
                and each of Global China Enterprises Limited, Fivestar International
                Limited, Mart Express Limited, Rich Gush Limited, Mart Burkit Limited
                and
                Sino Castle Holdings Limited. (3)12.1
            Certification
                of Chief Executive Officer and Chief
                Financial Officer Pursuant to Rule 13a-14(a)13.1
            Certification
                of Chief Executive Officer and Chief
                Financial Officer Pursuant to 18 U.S.C. Section 1350





(1)
            Incorporated
                by reference to the exhibits to the registrant’s definitive information
                statement filed July 20, 2004.


(2)
            Incorporated
                by reference to the exhibits to the registrant’s annual report on Form
                10-KSB for the fiscal year ended September 30,
                2003.


(3)
            Incorporated
                by reference to the exhibits to the registrant’s current report on Form
                8-K dated May 24, 2004, filed May 27,
                2004.




22




**SIGNATURES**





The
      registrant hereby certifies that it meets all of the requirements for filing
      on
      Form 20-F and that it has duly caused and authorized the undersigned to sign
      this annual report on its behalf.




**CHINA
                PHARMACEUTICALS INTERNATIONAL****CORPORATION**Date:
                June 25,
                2007
            By:
            /s/ FAN
              DiFAN
              DiPresident
              (Chief Executive
              Officer), Acting Financial Officer








23




REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To
      the
      Board of Directors and


Stockholders
      of China Pharmaceuticals International Corporation





We
      have
      audited the accompanying balance sheet of China Pharmaceuticals International,
      Corporation (the “Company”) as of December 31, 2006 and related statements of
      operations, stockholders’ deficit, and cash flows for the year ending December
      31, 2006. These financial statements are the responsibility of the company’s
      management. Our responsibility is to express an opinion on these financial
      statements based on our audits. The financial statements of China
      Pharmaceuticals International, Corporation as of December 31, 2005 were audited
      by other auditors whose report dated July 7, 2006, expressed an unqualified
      opinion on those statements.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. The Company is not required to
      have, nor were we engaged to perform, an audit of its internal control over
      financial reporting. Our audit included consideration of internal control over
      financial reporting as a basis for designing audit procedures that are
      appropriate in the circumstances, but not for the purpose of expressing an
      opinion on the effectiveness of the Company’s internal control over financial
      reporting. Accordingly, we express no such opinion. An audit also includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements, assessing the accounting principles used and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provide a
      reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of China Pharmaceuticals International
      Corporation as of December 31, 2006 and the results of its operations and its
      cash flows for years ended December 31, 2006 in conformity with accounting
      principles generally accepted in the United States of America.





The
      accompanying financial statements have been prepared assuming the Company will
      continue as a going concern.  The Company has a deficit book value and
      a negative cash flow from operations that have placed substantial doubt as
      to
      whether the Company can continue as a going concern. The ability of the Company
      to continue as a going concern is dependent on developing operations, increasing
      revenues, and obtaining new capital. As of this report date management has
      not
      enacted a plan to raise capital and increase sales.








/s/
      Lake & Associates, CPA’s LLC




Boca
      Raton, Florida


May
      31,
      2007





24


CHINA
                PHARMACEUTICALS INTERNATIONAL CORPORATIONBALANCE
                SHEETAs
                of December 31, 2006**ASSETS****2006**CURRENT
                ASSETSInvestment
            
            $
            -**TOTAL
                ASSETS**
            
            
            -**LIABILITIES
                AND STOCKHOLDERS' EQUITY**CURRENT
                LIABILITIESOther
                payables and accrued liabilities
            
            
            574,897Advances
                from related parties
            
            
            521,401Note
                payable
            
            
            100,000TOTAL
                LIABILITIES
            
            
            1,196,298STOCKHOLDERS'
                EQUITY (DEFICIT)Paid-in
                Capital, no par value, 500,000,000 shares authorized79,758,837
                shares issued and outstanding
            
            
            5,430,679Stock
                subscriptions receivable
            
            
            (452,000
            )Allowance
                for doubtful stock subscriptions receivable
            
            
            452,000Retained
                Earnings (Deficit)
            
            
            (6,626,977
            )TOTAL
                STOCKHOLDERS' EQUITY (DEFICIT)
            
            
            (1,196,298
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY**
            
            $
            -The
                accompanying notes are an integral part of these financial
                statements.




25


CHINA
                PHARMACEUTICALS INTERNATIONAL CORPORATIONSTATEMENT
                OF OPERATIONSFor
                the Years Ended December 31, 2006 and 2005**2006**
            
            
            **2005**REVENUESSales
            
            $
            -
            
            
            $
            -Cost
                of Sales
            
            
            -
            
            
            
            -GROSS
                PROFIT
            
            
            -
            
            
            
            -OPERATING
                EXPENSESGeneral
                and administrative expenses
            
            
            113,813
            
            
            
            214,804Bad
                debts
            
            
            -
            
            
            
            463,350TOTAL
                OPERATING EXPENSES
            
            
            113,813
            
            
            
            678,154OPERAING
                INCOME (LOSS)
            
            
            (113,813
            )
            
            
            (678,154
            )INCOME
                FROM CONTINUING OPERATIONSInterest
                and other (expense) income, net
            
            
            -
            
            
            
            (36,181
            )NET
                INCOME (LOSS)
            
            
            (113,813
            )
            
            
            (714,335
            )OTHER
                COMPREHENSIVE (LOSS) INCOMEForeign
                currency translation adjustment
            
            
            -
            
            
            
            -COMPREHENSIVE
                LOSS
            
            $
            (113,813
            )
            
            $
            (714,335
            )NET
                LOSS COMMON PER SHAREBasically
                and Fully Dilluted
            
            
            **
            
            
            
            (0.01
            )**Less
                than .01WEIGHTED
                AVERAGE COMMON SHARESOUTSTANDING,
                BASIC AND DILUTED
            
            $
            79,758,837
            
            
            $
            47,973,021The
                accompanying notes are an integral part of these financial
                statements.




26


CHINA
                PHARMACEUTICALS INTERNATIONAL CORPORATIONStatement
                of Stockholders' EquityFor
                the Years Ended December 31, 2006 and 2005Allowance
                forCommon
                Stock
            
            
            
            
            
            
            
            
            DoubtfulStock
                Subscriptions
            
            
            Stock
                Subscriptions
            
            
            RetainedShares
            
            
            Amount
            
            
            Receivables
            
            
            Receivables
            
            
            (Deficit)
            
            
            TotalBalances,
                January 1, 2005
            
            
            46,160,733
            
            
            $
            4,912,289
            
            
            $
            -
            
            
            $
            -
            
            
            $
            (5,798,829
            )
            
            $
            (886,540
            )Cancellation
                of shares on March 04, 2005
            
            
            (13,848,220
            )
            
            
            (1,000
            )
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (1,000
            )Issuance
                of stock for services
            
            
            2,246,324
            
            
            
            67,390
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            67,390Proceeds
                from issuance of shares
            
            
            45,200,000
            
            
            
            452,000
            
            
            
            (452,000
            )
            
            
            452,000
            
            
            
            -
            
            
            
            452,000Net
                Income(Loss) for the year
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (714,335
            )
            
            
            (714,335
            )Balances,
                December 31, 2005
            
            
            79,758,837
            
            
            $
            5,430,679
            
            
            $
            (452,000
            )
            
            $
            452,000
            
            
            $
            (6,513,164
            )
            
            $
            (1,082,485
            )Net
                Income(Loss) for the year
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (113,813
            )
            
            
            (113,813
            )Balances,
                December 31, 2006
            
            
            79,758,837
            
            
            $
            5,430,679
            
            
            $
            (452,000
            )
            
            $
            452,000
            
            
            $
            (6,626,977
            )
            
            $
            (1,196,298
            )The
                accompanying notes are an integral part of these financial
                statements.




27


CHINA
                PHARMACEUTICALS INTERNATIONAL CORPORATIONStatement
                of Cash FlowsFor
                the Years Ended December 31, 2006 and 2005**2006**
            
            
            **2005**CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                loss
            
            $
            (113,813
            )
            
            $
            (714,335
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Bad
                debt
            
            
            -
            
            
            
            463,350Interest
                income
            
            
            -
            
            
            
            (11,350
            )Issuance
                of common shares for consulting services rendered
            
            
            -
            
            
            
            67,390Accounts
                payable and accrued liabilities
            
            
            67,038
            
            
            
            68,598NET
                CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
            
            
            (46,776
            )
            
            
            (126,347
            )CASH
                FLOWS FROM INVESTING ACTIVITIES:NET
                CASH (USED IN) INVESTING ACTIVITIES
            
            
            -
            
            
            
            -CASH
                FLOWS FROM FINANCING ACTIVITIES:Advances
                from related parties
            
            
            46,776
            
            
            
            126,347NET
                CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
            
            
            46,776
            
            
            
            126,347NET
                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
            
            
            -
            
            
            
            -CASH
                AND CASH EQUIVALENTSBeginning
                of Period
            
            
            -
            
            
            
            -End
                of Period
            
            $
            -
            
            
            $
            -The
                accompanying notes are an integral part of these financial
                statements.




28




**NOTE
      A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





Business
      Activity


China
      Pharmaceuticals International Corporation (the “Company”) was incorporated on
      November 25, 2003 in the British Virgin Islands, formerly known as China
      Pharmaceuticals, Corp., Wilmington Rexford, Inc., E-Trend Networks, Inc., Cool
      Entertainment, Inc. and prior to March 1, 1999, Minas Novas Gold Corp. Minas
      Novas Gold Corp was incorporated in the State of Colorado on June 17, 1996,
      to
      engage in mining operations. On March 1, 1999, the Company acquired Cool
      Entertainment, Inc. and changed its name accordingly. From March 1, 1999 to
      November 2000, the Company was able to generate only a minimal amount of
      revenues. On February 21, 2001, the Company acquired E-Trend Networks, Inc.
      The
      Company changed its name to E-Trend Networks, Inc. and changed its domicile
      to
      the State of Delaware. On December 26, 2001 an agreement was reached whereby
      a
      new organization and management team led by eAngels Equity, LLC would acquire
      controlling interest in E-Trend Networks, Inc. Effective February 19, 2002,
      the
      Company changed its name to Wilmington Rexford, Inc. On February 13, 2004,
      the
      Company entered into an agreement with China Merchants DiChain Investment
      Holdings Limited, pursuant to which the Company spun out shares of it wholly
      owned subsidiary, E-Trend Networks, Inc. On March 25, 2004 the Company changed
      its name to China Pharmaceuticals Corporation. Effective August 26, 2004, the
      Company changed its domicile to the British Virgin Islands and its name to
      Chains Pharmaceuticals International Corporation. Since October 2003, the
      Company has not engaged in business activities.





Basis
      of Presentation


The
      financial statements included herein were prepared under the accrual basis
      of
      accounting.





Cash
      and Cash Equivalents


For
      purposes of the Statement of Cash Flows, the Company considers liquid
      investments with an original maturity of three months or less to be cash
      equivalents.





Management’s
      Use of Estimates


The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosures of contingent assets and liabilities at the date
      of
      consolidated financial statements and the reported amounts of revenues and
      expenses during the reporting period. Actual results could differ from those
      estimates.





Comprehensive
      Income (Loss)


The
      Company adopted Financial Accounting Standards Board Statement of Financial
      Accounting Standards (SFAS) No. 130, *“Reporting Comprehensive Income,”*
      which establishes standards for the reporting and display of comprehensive
      income and its components in the consolidated financial statements.





Foreign
      Currencies


Assets
      and liabilities denominated in respective functional currencies are translated
      into United States Dollars at the exchange rate as of the balance sheet
      date.  The share capital and retained earnings are translated at
      exchange rates prevailing at the time of the transactions. Revenues, costs,
      and
      expenses denominated in respective functional currencies are translated into
      United States Dollars at the weighted average exchange rate for the period.
      The
      effects of foreign currencies translation adjustments are included as a separate
      component of accumulated other comprehensive income.





Loss
      Per Share


The
      Company applies Statement of Financial Accounting Standards No. 128, “Earnings
      Per Share” (FAS 128) which requires dual presentation of net earnings (loss) per
      share: Basic and Diluted.  Basic earnings (loss) per share are
      computed using the weighted average number of common shares outstanding during
      the period.  Diluted earnings per share is computed using the weighted
      average number of common shares outstanding during the period adjusted for
      the
      effect of dilutive outstanding options and warrants.  Outstanding
      stock options and warrants were not considered in the calculation of diluted
      net
      loss per share as their effect was anti-dilutive.




29





Fair
      Value of Financial Instruments


The
      carrying amounts reported in the balance sheet for cash, accounts receivable,
      accounts payable, and loans payable approximate fair value based on the
      short-term maturity of these instruments.  The carrying value of the
      Company’s long-term debt approximated its fair value based on the current market
      conditions for similar debt instruments.





Recently
      Issued Accounting Pronouncements


In
      February 2006, FASB issued SFAS No. 155, *“Accounting for Certain Hybrid
      Financial Instruments.”* SFAS No. 155 amends SFAS No 133*, “Accounting
      for Derivative Instruments and Hedging Activities,”* and SFAS No. 140,
*“Accounting for Transfers and Servicing of Financial Assets and
      Extinguishments of Liabilities.”* SFAS No. 155, permits fair value
      re-measurement for any hybrid financial instrument that contains an embedded
      derivative that otherwise would require bifurcation, clarifies which
      interest-only strips and principal-only strips are not subject to the
      requirements of SFAS No. 133, establishes a requirement to evaluate interest
      in
      securitized financial assets to identify interests that are freestanding
      derivatives or that are hybrid financial instruments that contain an embedded
      derivative requiring bifurcation, clarifies that concentrations of credit risk
      in the form of subordination are not embedded derivatives, and amends SFAS
      No.
      140 to eliminate the prohibition on the qualifying special-purpose entity from
      holding a derivative financial instrument that pertains to a beneficial
      interest, other than another derivative financial instrument. This statement
      is
      effective for all financial instruments acquired or issued after the beginning
      of the Company’s first fiscal year that begins after September 15, 2006. The
      adoption of SFAS No. 155 is not expected to have a material impact on the
      Company’s results of operations or financial position.




In
      June
      2006, the FASB issued Interpretation No. 48, *“Accounting for Uncertainty in
      Income Taxes - an interpretation of FASB Statement No. 109,”* (“FIN 48”),
      which prescribes a recognition threshold and measurement attribute, as well
      as
      criteria for subsequently recognizing, derecognizing and measuring uncertain
      tax
      positions for financial statement purposes. FIN 48 also requires expanded
      disclosure with respect to the uncertainty in income tax assets and liabilities.
      FIN 48 is effective for fiscal years beginning after December 15, 2006, which
      will be the Company’s calendar year 2007, and is required to be recognized as a
      change in accounting principle through a cumulative-effect adjustment to
      retained earnings as of the beginning of the year of adoption. The adoption
      of
      FIN 48 is not expected to have a material impact on the Company’s consolidated
      results of operations or financial position.





In
      June
      2006, the Financial Accounting Standards Board (“FASB”) ratified the provisions
      of Emerging Issues Task Force (“EITF”) Issue No. 06-3, *“How Taxes Collected
      from Customers and Remitted to Governmental Authorities Should Be Presented
      in
      the Income Statement (That Is, Gross versus Net Presentation).”* EITF Issue
      No. 06-3 requires that the presentation of taxes within revenue-producing
      transactions between a seller and a customer, including but not limited to
      sales, use, value added, and some excise taxes, should be on either a gross
      (included in revenue and cost) or a net (excluded from revenue) basis. In
      addition, for any such taxes that are reported on a gross basis, a company
      should disclose the amounts of those taxes in interim and annual financial
      statements for each period for which an income statement is presented if those
      amounts are significant. The disclosure of those taxes can be done on an
      aggregate basis. EITF Issue No. 06-3 is effective for fiscal years beginning
      after December 15, 2006, which will be the Company’s calendar year 2007. The
      adoption of EITF Issue No. 06-3 is not expected to have a material impact on
      the
      Company’s results of operations or financial position.




In
      September 2006, the Securities and Exchange Commission issued Staff Accounting
      Bulletin No.108 (“SAB No. 108”), *“Considering the Effects of Prior Year
      Misstatements when Quantifying Current Year Misstatements.”* SAB No. 108
      requires analysis of misstatements using both an income statement (rollover)
      approach and a balance sheet (iron curtain) approach in assessing materiality
      and provides for a one-time cumulative effect transition adjustment. SAB No.
      108
      is effective for the fiscal year beginning November 15, 2006. The adoption
      of
      SAB No. 108 is not expected to have a material impact on the Company’s results
      of operations or financial position.




In
      March
      2006, the FASB issued SFAS No. 156. This Statement amends FASB Statement No.
      140, *“Accounting for Transfers and Servicing of Financial Assets and
      Extinguishments of Liabilities,”* with respect to the accounting for
      separately recognized servicing assets and servicing liabilities. This Statement
      is effective as of the beginning of its first fiscal year that begins after
      September 15, 2006.




30




An
      entity
      should apply the requirements for recognition and initial measurement of
      servicing assets and servicing liabilities prospectively to all transactions
      after the effective date of this Statement.




In
      September 2006, the FASB issued SFAS No. 157 and No. 158. Statement No. 157
      defines fair value, establishes a framework for measuring fair value in
      generally accepted accounting principles (GAAP), and expands disclosures about
      fair value measurements. This Statement applies under other accounting
      pronouncements that require or permit fair value measurements, the Board having
      previously concluded in those accounting pronouncements that fair value is
      the
      relevant measurement attribute. Accordingly, this Statement does not require
      any
      new fair value measurements. However, for some entities, the application of
      this
      Statement will change current practice.





Statement
      No. 158 is an amendment of FASB Statements No. 87, 88, 106, and 132(R). It
      improves financial reporting by requiring an employer to recognize the over
      funded or under funded status of a defined benefit postretirement plan (other
      than a multiemployer plan) as an asset or liability in its statement of
      financial position and to recognize changes in that funded status in the year
      in
      which the changes occur through comprehensive income of a business entity or
      changes in unrestricted net assets of a not-for-profit organization. This
      Statement also improves financial reporting by requiring an employer to measure
      the funded status of a plan as of the date of its year-end statement of
      financial position, with limited exceptions. The Company does not expect
      application of SFAS No. 156, 157 and 158 to have a material effect on its
      financial statements.





On
      February 15, 2007, the Financial Accounting Standards Board (“FASB”) issued
      Statement of Financial Accounting Standards No. 159, *“**The Fair
      Value Option for Financial Assets and Financial Liabi**lities**—**Including an Amendment of FASB Statement
      No.**115”* (“SFAS 159”). This standard permits an entity to
      measure financial instruments and certain other items at estimated fair value.
      Most of the provisions of SFAS No. 159 are elective; however, the amendment
      to FASB No. 115, *“**Accounting for Certain Investments in Debt
      and Equity Securities,*” applies to all entities that own trading and
      available-for-sale securities. The fair value option created by SFAS 159 permits
      an entity to measure eligible items at fair value as of specified election
      dates. The fair value option (a) may generally be applied instrument by
      instrument, (b) is irrevocable unless a new election date occurs, and
      (c) must be applied to the entire instrument and not to only a portion of
      the instrument. SFAS 159 is effective as of the beginning of the first fiscal
      year that begins after November 15, 2007. Early adoption is permitted as of
      the beginning of the previous fiscal year provided that the entity
      (i) makes that choice in the first 120 days of that year,
      (ii) has not yet issued financial statements for any interim period of such
      year, and (iii) elects to apply the provisions of FASB 157. Management is
      currently evaluating the impact of SFAS 159, if any, on the Company’s financial
      statements.





**NOTE
      B - SUPPLEMENTAL CASH FLOW INFORMATION**





Supplemental
      disclosures of cash flow information for the period ended December 31, 2006
      and
      2005 is summarized as follows:





Cash
      paid
      during the period ended December 31, 2006 and 2005 for interest and income
      taxes:





2006                      2005


Income
      Taxes                                                                                      $  
 -0-                        
-0-


Interest                                                                                               
      $   
-0-                         -0-


Common
      Stock Issued for Stock Subscriptions
      Receivable                      $   
-0-                
452,000


Common
      Stock Cancelled for Reversal of
      Investment                            $    -0-             
       1,000




31




**NOTE
      C - SEGMENT REPORTING**





In
      June
      1997, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards No. 131, *“Disclosures about Segments of an Enterprise
      and Related Information.”*  This statement requires companies to
      report information about operating segments in interim and annual consolidated
      financial statements.  It also requires segment disclosures about
      products and services, geographic areas, and major customers.  The
      Company determined that it did not have any separately reportable operating
      segments as of December 31, 2006 and 2005.





**NOTE
      D - NOTES PAYABLE - CURRENT AND LONG-TERM**





As
      of
      December 31, 2006, notes payable consist of the following:


2006                         2005


Unsecured
      note payable to an unrelated party.


Bearing
      10 % interest with a maturity date of May 16,
      2004                     $ 100,000                     100,000





For
      the
      years ended December 31, 2006 and 2005, accrued interest was $36,274 and
      $26,274, respectively.




**NOTE
      E – CONTIGENCIES**





As
      of
      December 31, 2006, the Company owed a total of $375,244 to eAngels EquiDebt
      Partners (“eAngels”). The due balance bears interest at 10% per year. For the
      year ended December 31, 2006 and 2005, accrued interest was $112,573 and the
      $75,049, respectively. The Company has disputed their liability for this
      debt.





As
      of
      December 31, 2006, the Company owed a total of $100,000 on a note payable.
      The
      note bears interest at 10% per year and is in default. For the year ended
      December 31, 2006 and 2005, accrued interest was $36,274 and $26,274,
      respectively. The Company has disputed their liability for this
      debt.





As
      of
      December 31, 2006, the Company owed a total of $2,000 for consulting services
      provided by FutureVest, Inc. The Company has disputed their liability for this
      amount.





As
      of
      December 31, 2006, the Company owed a total of $24,000 for consulting services
      provided by Alexis Global, Inc. The Company has disputed their liability for
      this amount.





**NOTE
      F - RELATED-PARTY TRANSACTIONS**





Related
      Parties Payable Stockholder


China
      Technology Global Corporation, a company indirectly owned by DiChain Holdings
      Limited, and China Merchants DiChain (Asia) Limited (“China Merchants DiChain”)
      have advanced $205,708 and $197,128 to the Company, respectively, since October
      1, 2003. These advances have been made on an interest-free basis, with no fixed
      term or repayment date.





DiChain
      Holdings Limited and DC Capital Management, Inc., companies sharing mutual
      ownership with the Company, have advanced $26,790 and $9,000 to the Company,
      respectively, since January 1, 2005. These advances have been made on an
      interest-free basis, with no fixed term or repayment date.





Farsight
      Holdings Limited, an affiliate of the Company, has advanced $46,000 since June
      1, 2006. These advances have been made on an interest-free basis, with no fixed
      term or repayment date.





32




Accounts
      Payable Officers and Directors


As
      of
      December 31, 2006 and 2005, no executive officers, directors, employees or
      former executive officers and directors of the Company are indebted to the
      Company.




Share
      of Business Offices


The
      Company shares the offices of DC Capital Management, Inc. from January 01,
      2006
      to December 31, 2006, and is allocated HK$13,400 per month (US$ 1,718) as its
      pro rata share of the cost of the facility. There is no written agreement
      regarding this office sharing agreement.





**NOTE
      F - RELATED-PARTY TRANSACTIONS (CONT’D)**





Share
      of Office Staff


The
      Company shares the office staff of DC Capital Management, Inc. from January
      01,
      2006 to December 31, 2006, and is allocated HK$10,000 per month (US$ 1,282)
      as
      its pro rata share of the cost. There is no written agreement regarding this
      staff sharing agreement.





**NOTE
      G -COMPREHENSIVE INCOME**





Statement
      of Financial Accounting Standards (SFAS) No. 130, *“Reporting
      Comprehensive Income,”* establishes standards for reporting and display of
      comprehensive income, its components and accumulated balances. Comprehensive
      income as defined includes all changes in equity during a period from non-owner
      sources. Accumulated comprehensive income, as presented in the accompanying
      statement of changes in stockholders’ equity consists of changes in unrealized
      gains and losses on foreign currency translation. This comprehensive income
      is
      not included in the computation of income tax expense or benefit. For the years
      ended December 31, 2006 and 2005, total comprehensive income was $0 and $0,
      respectively.





**NOTE
      H - GOING CONCERN**





As
      shown
      in the accompanying audited financial statements, the Company has a deficit
      book
      value and a negative cash flow from operations that have placed substantial
      doubt as to whether the Company can continue as a going concern. The ability
      of
      the Company to continue as a going concern is dependent on developing
      operations, increasing revenues, and obtaining new capital. As of this report
      date management has not enacted a plan to raise capital and increase
      sales.





**NOTE
      I - INCOME TAXES**




The
      components of income taxes were as follows:





2006
            
            
            2005Income
                tax benefit at combined statutory rate of 42.62%
            
            $
            48,507
            
            
            $
            111,807Change
                in Valuation Allowance
            
            
            (48,507
            )
            
            
            (111,807
            )Income
                Tax Benefit
            
            $
            -
            
            
            $
            -





The
      income tax benefit for the year ended December 31, 2006 and 2005, differed
      from
      the combined federal and provincial statutory rates due principally to the
      decrease in the deferred tax asset valuation allowance.





Due
      to
      mainly operating losses and the inability to recognize an income tax benefit
      there from, there is no provision for current federal or state income taxes
      for
      the year ended December 31, 2006 and 2005.




33




Deferred
      income taxes reflect the net tax effects of temporary differences between the
      carrying amounts of assets and liabilities for financial reporting purposes
      and
      the amount used for federal and state income tax purposes.





At
      December 31, 2006, the approximate deferred tax assets were as
      follows:





Non-capital
                loss
                carryforwards
            
            $
            2,215,601Capital
                assets
            
            
            -Total
                deferred tax
                assets
            
            
            2,264,108Less
                valuation
                allowance
            
            
            (2,264,108
            )$
            -





**NOTE
      J – STOCK SUBCRIPTIONS RECEIVABLE**





The
      Company issued 45,200,000 shares on September 21, 2005 at $0.01 per share as
      follows:




Company
              
              Shares
              
              
              USDGlobal
                  China Enterprises Limited
              
              
              7,500,000
              
              
              $
              75,000Mart
                  Express Limited
              
              
              7,500,000
              
              
              
              75,000Rich
                  Gush Limited
              
              
              7,500,000
              
              
              
              75,000Mart
                  Burkit Limited
              
              
              7,500,000
              
              
              
              75,000Sino
                  Castle Holdings Limited
              
              
              7,500,000
              
              
              
              75,000Fivestar
                  International Limited
              
              
              7,700,000
              
              
              
              75,000TOTAL
              
              
              45,200,000
              
              
              $
              452,000




As
      of
      December 31, 2006, the investing companies have not paid the subscription amount
      of $452,000.




34