UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-KSB/A


Amendment
No. 1







x ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF
1934





For the
fiscal year ended December 31,
2007





o  TRANSITIONREPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.




For the
transition period from _________ to _________




Commission
file number 000-26119








CHINA WORLD TRADE
CORPORATION


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








Nevada
              (State or other jurisdiction
      of incorporation or
      organization)
            87-0629754
              (IRS
      Employer Identification No.)




5/F,
Guangdong Finance Building


88
Connaught Road West


Hong
Kong


(Address
of principal executive offices)




852-2116-3560


(Issuer's
telephone number)





3rd Floor,
Goldlion Digital Network Center


138
Tiyu Road East, Tianhe


Guangzhou,
PRC


(Former
name, address and fiscal year, if changed since last report)





Securities
registered under Section 12(b) of the Exchange Act: None





Securities
registered under Section 12(g) of the Exchange Act:





Common
Stock, par value $.001 per share


(Title of
Class)





Check
whether the issuer: (1) filed all reports required to be filed by Sections 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.   Yes x     No
o





Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. o





Issuer's
revenues for its most recent fiscal year were $743,430.





The
aggregate market value of the issuer's common stock held by non-affiliates was
approximately $2.64 million, based on the closing price of $0.1 for the common
stock on December 31, 2007.





As of
December 31, 2007, there were outstanding 49,565,923 shares of the issuer's
common stock, par value $.001.





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





CAUTIONARY
STATEMENT REGARDING FORWARD LOOKING INFORMATION





The
discussion contained in this 10-KSB/A under the Securities Exchange Act of 1934,
as amended, (the "Exchange Act") contains forward-looking statements that
involve risks and uncertainties. The issuer's actual results could differ
significantly from those discussed herein. These include statements about our
expectations, beliefs, intentions or strategies for the future, which we
indicate by words or phrases such as "anticipate," "expect," "intend," "plan,"
"will," "we believe," "the Company believes," "management believes" and similar
language, including those set forth in the discussion under "Description of
Business," including the "Risk Factors" described in that section, and
"Management's Discussion and Analysis or Plan of Operation" as well as those
discussed elsewhere in this Form 10-KSB/A. We base our forward-looking
statements on information currently available to us, and we assume no obligation
to update them. Statements contained in this Form 10-KSB/A that are not
historical facts are forward-looking statements that are subject to the "safe
harbor" created by the Private Securities Litigation Reform Act of 1995.








TABLE
OF CONTENTS





PagePart
      IItem
      1.
            Description
      of Business
            3Item
      2.
            Description
      of Property
            11Item
      3.
            Legal
      Proceedings
            11Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            11Part
      IIItem
      5.
            Market
      for Common Equity and Related Stockholder Matters
            12Item
      6.
            Management's
      Discussion and Analysis or Plan of Operation
            14Item
      7.
            Financial
      Statements
            19
      - 51Item
      8.
            Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
            52Item
      8A.
            Disclosure
      Controls and Procedures
            52Item
      8AT
            Internal
      Control Over Financial Reporting
            53Part IIIItem
      9.
            Directors
      and Executive Officers of the Registrant
            54Item
      10.
            Executive
      Compensation
            55Item
      11.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
            57Item
      12.
            Certain
      Relationships and Related Transactions
            57Item
      13.
            Exhibits,
      Lists and Reports on Form 8-K
            58Item
      14.
            Principal
      Accountant Fees and Services
            59OtherIndex
      to Exhibits
            59Signature
      Page
            60





- 2
-


PART I





Item 1.Description
of Business





History
of Our Company





We were
incorporated in the State of Nevada on January 29, 1998 under the name Txon
International Development Corporation to conduct any lawful business, to
exercise any lawful purpose and power, and to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Laws of Nevada.





On August
14, 2000, pursuant to a share exchange agreement dated August 10, 2000, by and
among Main Edge International Limited (“Main Edge”), a British Virgin Islands
corporation, Virtual Edge Limited (“Virtual Edge”), a British Virgin Islands
corporation and a wholly-owned subsidiary of Main Edge, Richard Ford, Jeanie
Hildebrand and Gary Lewis, we acquired from Main Edge all of the shares of
Virtual Edge (the “Acquisition”) in exchange for an aggregate of 1,961,175
shares of our common stock, which shares equaled 75.16% of Txon International’s
issued and outstanding shares after giving effect to the Acquisition. Both Main
Edge and Virtual Edge are non-operating holding companies organized to own the
stock of businesses which they acquired. On September 15, 2000, Txon
International Development Corporation changed its name to China World Trade
Corporation and effectuated an 8 for 1 forward stock split. As a result of the
forward stock split, Main Edge held 15,689,400 shares of our common stock, which
shares equaled 75.16% of our issued and outstanding shares.





In
September 2002, we underwent a debt for equity capital restructuring whereby
certain creditors of China World Trade converted an aggregate of $2,731,677 into
an aggregate of 4,000,000 shares of common stock.





On
September 3, 2002, Powertronic Holdings Limited (“Powertronic”), a British
Virgin Islands company, entered into a share purchase agreement with us (the
“First Share Purchase Agreement”), to purchase 1,000,000 shares of our common
stock and warrants to purchase up to 2,000,000 shares of our common stock (such
warrants, the “First Warrants”), for the total purchase price of $500,000.
Additionally, on December 17, 2002, Powertronic entered into a second share
purchase agreement (the “Second Share Purchase Agreement”) with us, to purchase
an additional 1,000,000 shares of our common stock and warrants to purchase up
to an additional 2,000,000 shares of our common stock (such warrants, the
“Second Warrants”), for the total purchase price of $500,000. The First Warrants
and the Second Warrants had an exercise price of $0.575 per share and were
exercised in 2004.





On
December 17, 2002, we entered into a share exchange agreement with Mr. William
Chi Hung Tsang, the sole beneficial owner of the share capital in General
Business Network (Holdings) Ltd. (“GBN Holdings”), a Hong Kong
company.  Pursuant to the Share Exchange Agreement, we acquired from
Mr. Tsang all of the issued and outstanding shares of GBN Holdings in exchange
for 4,000,000 shares of our common stock and warrants to purchase an additional
4,000,000 shares of our common stock (the “Tsang Warrants”) at an exercise price
of $0.92 per share.  As of the date of acquisition, GBN Holdings owned
two rental properties located at 20/F, Goldlion Digital Network Center, Unit
01-10, 138 Tiyu Road East, Tianhe, Guangzhou, the PRC and Flat B, 12/F.,
Champion Center, 301-309 Nathan Road, Hong Kong, collectively valued in excess
of $4,000,000. Both PRC and Hong Kong Properties were subsequently sold in May
2005 and September 2006 respectively.





On
January 24, 2003, 4,000,000 shares of our common stock and the Tsang Warrants
were issued to Mr. Tsang; to date, the Tsang Warrants have been fully
exercised.





On May 7,
2004, through one of our wholly-owned subsidiaries, we acquired 51% of the
capital stock of CEO Clubs China Limited, a Hong Kong corporation (“CEO Clubs
China”) for a total consideration in cash and shares of our common stock in the
amount of $360,000, payable $120,000 in cash and $240,000 in market value of our
common stock (80,000 shares) and a commitment to provide an operating cash in
the amount of $120,000.  CEO Clubs China has authorized chapters to
operate under the “CEO Clubs” trademarks in the Greater China Region, including
the PRC, Hong Kong and Taiwan. In fiscal year 2002, CEO Clubs opened its first
international chapter in China.





On August
2, 2004, we consummated an acquisition of 51% of the capital stock of Guangdong
New Generation Commercial Management Limited (“New Generation”), a limited
liability company organized and existing under the laws of the PRC, for an
aggregate consideration of $10,232,000, payable approximately $2,741,000 in cash
and approximately $7,487,000 in market value of our common stock (4,081,238
shares).  One of our purposes for the acquisition was because New
Generation was a formidable competitor in the travel agency business through
operations of its five subsidiaries and twenty-one selling points in Southern
China and a significant competitor in ticketing sales for international and
domestic flights as well as inbound business travel.  New Generation’s
business also includes insurance operations through its subsidiary, Huahao
Insurance, and it is a licensed insurance agent in China to provide accidental
and life insurance policies.





On
September 25, 2006, we entered into an agreement to acquire a 25% interest in
CWT International Excursion Investment Limited (“CWT Excursion”), a business
travel investment company, which owns a 51% controlling interest in Suzhou
Tongli (International) Excursion Development Limited (“Suzhou Tongli”), the sole
legal tourism operator and planner for Tongli.  Tongli is an ancient
town in Jiangsu province of China and home of the Tuisi Garden, a UNESCO World
Cultural Heritage site.  Under the terms of the agreement, we issued
9,000,000 shares of our stock to acquire the interest in CWT Excursion. In
addition, we were eligible to acquire an additional 35% interest (or up to 60%
majority ownership) in CWT Excursion within the next 12 months.  The
acquisition of CWT Excursion provided us with the higher margin tourism segment
of the travel business.





- 3
-






Given the
increasing high oil price in the year 2006 and continuous reduction of profit
margin in air ticket sales, we consummated the disposal of 51% of New
Generation by selling three of our wholly-owned subsidiaries in two
separate Sale and Purchase Agreements dated September 29, 2006 and June 30, 2007
respectively. Pursuant to the two Sales and Purchase Agreements, the total
consideration of disposing 51% of New Generation was $6.0 million payable
by installments in accordance with the schedule set forth of the Agreement. As a
result of this transaction, we also disposed 100% interest of GBN Holdings and
100% capital stock of General (GZ) Business Network Limited, a limited
liability company existing under the laws of the People’s Republic of China (“GZ
Business”). In return, on April 9, 2007 we received 100% outstanding share
capital of Sonytech Limited, which owns 8,000,000 shares of common stock of a
pink-sheet-listed Mobile Entertainment, Inc., as payment in lieu of the cash
consideration portion for selling all of the outstanding shares of Rejoice
Success Limited, a British Virgin Islands corporation which held a controlling
interest in New Generation.





In
parallel of disposing the low gross margin travel business, we incorporated a
new subsidiary CWT Hotel Management Limited (“CWT Hotel Management”) on Aug 20,
2007 to focus on the higher margin business & hospitality services sectors
of China.  On the same date, we also incorporated another new
subsidiary, CWT Investment Services Limited (“CWT Investment”), to capture the
project consultancy opportunities in key Chinese cities. Both subsidiaries are
wholly-owned by Virtual Edge.





In 2007
we also disposed some dormant subsidiaries under the original Business
Value-added Services division to simplify our group structure.





Overview
of Our Company’s Three Business Lines





Our
existing business plan involves the pursuit of three distinct lines of business
including:





·
            Business
      Clubs.  We have Beijing World Trade Center Club and
      Guangzhou World Trade Center Club located in Beijing and Guangzhou
      respectively.  Each business club is indirectly associated with
      the World Trade Center Association, by which we have positioned ourselves
      as a platform to facilitate trade between China and the world markets. We
      also operate CEO Clubs China chapter in Beijing under this business
      sector.·
            Tourism & Hotel
      Management. We provide hotel management services, including hotel
      design, pre-opening and hospitality management services in China under
      this business sector through CWT Hotel Management. The strategic
      acquisition of Suzhou Tongli also provided the Company with a foothold
      into the high margin tourism segment of the travel
  business·
            Investment & Consultancy
      Services. We provide technology and infrastructure expertise and
      investment to China-based development projects in key cities through CWT
      Investment.





Our
executive office is located at 3rd Floor, Goldlion Digital Network Center, 138
Tiyu Road East, Tianhe District, Guangzhou 510620, People’s Republic of
China.





Our
segment revenues are stated in United States dollars and are prepared in
accordance with United States generally accepted accounting
principles.  In this prospectus, unless otherwise specified, all
dollar amounts are expressed in United States Dollars.





China
World Trade Corporation


Segment
Revenues


Year
ended December 31, 2007




Year
      Ended Dec 31,2007
              
              
              2006
              
              
              2005US$
              
              
              %
      of Revenue
              
              
              US$
              
              
              %
      of Revenue
              
              
              US$
              
              
              %
      of RevenueClub
      and business centre
              
              
              710,610
              
              
              
              95.6
              
              
              
              712,368
              
              
              
              100.0
              
              
              
              894,550
              
              
              
              100.0Hotel
      Management
              
              
              32,820
              
              
              
              4.4743,430
              
              
              
              100.0
              
              
              
              712,368
              
              
              
              100.0
              
              
              
              894,550
              
              
              
              100.0


Our
Corporate Structure





We are a
holding company for 12 direct and indirect, majority and wholly-owned
subsidiaries that operate businesses in China. Eight of these companies are
incorporated under the laws of the British Virgin Islands, one under the laws of
Hong Kong, and the remaining 3 in the People’s Republic of China. All of our
business operations are located in China. Set forth below is an organizational
chart depicting the relationships among our various companies.





·
            Business Clubs:We
      carry out our Business Clubs operations through our subsidiaries Guangzhou
      World Trade Center Club Limited, Beijing World Trade Center Club, and CEO
      Clubs China Limited.  The Business Clubs commenced operations in
      August 2002.·
            Tourism and Hotel Management:Our Hotel Management operations are managed by through our
      subsidiary CWT Hotel Management which commenced operation in August 2007.
      The strategic acquisition of Suzhou Tongli to become our affiliate can
      provide us with revenue in the form of tourist entrance fee, and hence
      allows us to maintain foothold to the high margin tourism segment of the
      Chinese travel business.·
            Investment and Consultancy
      Services:Our Investment & Consultancy Services are offered
      through CWT Investment which commenced operation in August
      2007.  CWT Investment includes the provision of market and
      industrial research, corporate restructuring and planning, technology and
      infrastructural expertise, as well as investment matching to development
      projects in Chinese cities.





[The
Remainder of Page Intentionally Left Blank]


- 4
-



















- 5
-




Revenue
Derived From Our Businesses





Fiscal 2007: In fiscal 2007,
we derived approximately $710,600 in revenues, representing 95.6% of total
revenues from our Business Clubs operations; approximately $32,800 in revenues,
representing 4.4% of total revenues from our Hotel Management
Services.





Business
Plan for Our Business Clubs Division





The Opportunity in China.China has been considered one of the fastest growing economies in the
world. On November 11, 2001, China signed an agreement to become a member of the
World Trade Organization, sometimes referred to as the WTO, which is the
international body that sets most trade rules, further integrating China into
the global economy and significantly reducing the barriers to international
commerce. China’s membership in the WTO was effective on December 11,
2001.





The
accession into the WTO will offer new opportunities for foreign companies to
invest and do business in China. WTO membership for China will change the
methods of market entry for overseas companies. Foreign companies will need to
have well-tailored plans to cope with China’s target audience, services,
marketing, finance, and human resources for the effective entry into the China
market. The unique business culture and legal system in China will cause the
local business information and services in China to become a key component to
commerce.





As a
result of lower barriers to entry into the China market, and a more attractive
investment environment in recent years, we believe that many small and medium
sized foreign enterprises will have investment opportunities in China for the
first time. These foreign companies will need up-to-date business intelligence
and know-how to successfully invest in the Chinese market.





China’s
accession into the WTO also provides significant business opportunities to the
small to medium size private Chinese companies. The increase in involvement from
foreign companies and investors in the China market means more opportunities to
do business with foreign companies. Under the trend of globalization, the
Chinese market will evolve from many segmented and monopolized markets to an
integrated national market that is open to the world economy. The small and
medium sized companies in China will enjoy much lower cost to enter into the
worldwide market but will also confront more competition, lowered profit
margins, and new rules of the game. These Chinese companies will need up-to-date
business intelligence, professional strategic planning and the access to the
worldwide business networks to ensure success in the new environment. And with
its imminent accession into WTO, there will be unique opportunities for foreign
investment and international trade.





The World
Trade Centers Association (“WTC Association”) is a not-for-profit corporation
that focuses on promoting and assisting world trade activities. Its mission is
to encourage world trade by fostering and supporting the development and
operation of World Trade Centers in every region of the world. WTC Association
was established in 1970 and has members from more than 330 cities in about 100
countries with global members of over 750,000 enterprises.





The World
Trade Centers (“World Trade Centers”) are separate entities which are licensed
by the WTC Association, each of which generate revenue and profit from operating
businesses with access to a diverse array of state-of-the-art international
trade services and facilities, which enables them to facilitate international
trade.  Under the jurisdiction of the WTC Association, there are two
types of licenses that are available including (1) a license which enables the
licensee to operate a World Trade Center Club in cooperation with China’s
Commission for the Promotion of International Trade, and (2) a license which
enables the licensee to designate a building as a “World Trade Center” but not
operate such a club. We only have licenses that enable us to operate World Trade
Center Clubs and, as previously mentioned, we currently have two World Trade
Center Clubs in operation.





In the
WTC Association, every local member of a World Trade Center in a city is
automatically a member of all World Trade Centers worldwide. This helps the
World Trade Centers to market their local membership, and also vastly increases
the amount of services that a World Trade Center can offer to its local members.
Therefore, the World Trade Centers worldwide form a reciprocal business network
for businesses to access the international trade resources that may be expensive
and even inaccessible in a domestic environment.





We plan
to open and operate additional World Trade Center Clubs (also referred to as our
“Business Clubs”), which will be licensed by the WTC Association, in major
cities in China, where Business Club members can relax, entertain, network and
meet potential business affiliates in person, or via the Video Conferencing
facilities of the WTC Association worldwide network.





The WTC
Association has granted various licenses to the regional branches of the Trade
Promotion Commission. The WTC Association can grant either regular full
membership licenses or affiliate membership licenses to various branches of the
Trade Promotion Commission, depending on the initial membership fee
paid.





Through
our wholly-owned subsidiary, Virtual Edge, we have formed 20-year co-operative
joint ventures with the business subsidiaries of the Trade Promotion Commission
including (1) the Beijing Wanlong Economic Consulting Limited for the
joint-venture company Beijing World Trade Center Club and (2) the Guangzhou City
International Exhibition Co. Ltd. for the joint venture company Guangzhou World
Trade Center Club. Our Guangzhou World Trade Center Club and Beijing World Trade
Center Club were both granted regular full membership licenses.  We
indirectly own 75% of the joint venture companies and the remaining 25% are
owned by the business subsidiaries of the Trade Promotion Commission. Each
arrangement may be terminated in the event the venture suffers material business
setbacks or if a party materially breaches its obligations under the operating
contract. We acquired the operation rights of regular full membership from WTC
Association for running the world trade center clubs resulting from these two
joint venture companies.





Under the
co-operative joint venture of both Beijing World Trade Center Club and Guangzhou
World Trade Center Club, we are obligated to pay a minimum of RMB150,000 (or
approximately $18,500) annually until reaching their respective proportional
profit sharing of 25% each to Beijing Wanlong Economic Consulting Limited and
Guangzhou City International Exhibition Co. Ltd. They in turn pay WTC
Association an annual fee of $10,000 for each individual world trade center
club. Other than the annual fee which we pay to the business subsidiaries of the
Trade Promotion Commission, we do not have any revenue sharing obligation with
World Trade Center Association.





- 6
-






Facilities.The Guangzhou
World Trade Center Club and Beijing World Trade Center Club provide a full range
of top quality commercial and recreational services to our members. The
clubhouses are luxuriously decorated and provide an elegant environment under
which members can enjoy our facilities.





The
facilities in our Beijing World Trade Center Club include snack bars, seminar
and conference rooms, executive suites, office and meeting room packages,
videoconferencing facilities, and exhibition rooms. The facilities in our
Guangzhou World Trade Center Club include western fine dining, seminar and
conference rooms, executive suites, office and meeting room packages and
exhibition rooms. The business services offered by both the business clubs to
its members include (i) liaison work with potential trading partners, (ii)
international economic and trade exhibitions and seminars, (iii) interpreters
and secretarial services, (iv) organized trips to participate in World Trade
Center Association sponsored activities, (v) reception of visiting delegations
of foreign World Trade Center Association member units, (vi) arrangement of
meetings with Chinese government bodies, business corporations, and (vii) legal
consultancy and travel management services.





Events Management Services.We
assist foreign companies to organize and participate in conferences, exhibitions
and special events such as the “beer festival” in China and assist Chinese
companies to organize and participate in conferences and exhibitions overseas.
We have already generated revenue from this fee based service
business.





Virtual Office.Virtual office
services help foreign companies to establish a presence in China at minimum
cost. Each client will be assigned a dedicated phone number, fax number and mail
address. The phone number can be forwarded to a number assigned by the client,
or be answered by a well trained secretary who takes care of the communication
for the client. Foreign companies can also manage their communication with their
China affiliates over the Internet. These services started generating revenue in
2004 and a monthly fixed fee is charged for each account.





Incentive Programs.In April
2003, Guangzhou World Trade Center Club Limited (“Guangzhou WTC Limited”), a 75%
indirectly owned subsidiary of us, entered into an agreement with the
Agricultural Bank of China providing for the introduction of a co-branded credit
card. Pursuant to the agreement, Guangzhou WTC Limited is entitled to 15% of
processing fees obtained in connection with the issuance of the credit card,
with such amount increasing to 20% once the number of cards issued exceeds
10,000. The agreement is for a term of four years, subject to automatic
extension for an additional four year term, unless terminated on two months’
prior notice.





Marketing Strategy.We plan to
market memberships in our Business Club mainly to (1) international companies,
(2) businessmen who conduct business in China and with local Chinese companies
and (3) businessmen seeking business opportunities within and outside China. We
will utilize the good reputation and recognition of WTC Association name and the
recreational and business facilities which will be offered at each Business Club
to establish the Guangzhou Club, Beijing Club and other potential Business Clubs
in various cities in the PRC as the premier business clubs of their kind. We
also hope to make the ChinaWTC.com website into a distinctive Chinese/English
language Internet portal.





We plan
to achieve our marketing goals through (i) placing advertisements with
traditional media, such as newspapers, television, radio, magazines etc., (ii)
placing banners on high traffic web sites, (iii) sending e-mails to potential
users, (iv) participating in trade shows, (v) employing the services of external
public relations and marketing firms, (vi) airing television “infomercials” and
talk shows, (vii) placing outdoor advertising signs and (viii) attending /
holding press conferences.  We intend to form strategic alliances with
companies that can contribute services and local expertise in various market
sectors.  These alliances will increase our content and navigation
services, support our advertising services and expand our distribution
networks.  We intend to form vertical alliances, such as exhibition
management companies and travel agents, which will either allow us to integrate
their products to our services offerings or to access their distribution
networks.  We will also form horizontal alliances, such as golf clubs
and other business clubs, to increase our client base.





The
acquisition of the CEO Clubs China is an example of our strategies to
horizontally consolidate other business clubs so as to increase our client
base.





Sources of
Income.We will generate income from our Business Clubs in
several ways.





We intend
to expand our Business Clubs and operate Business Clubs in major Chinese
cities.  While the worldwide business network from WTC Association
together with the reciprocal services will be the core attraction to
businesspersons in China, the business community that we maintain in the major
Chinese cities will become a more valuable asset in the long
term.  Through our presence in major cities in China, we will develop
a community of active businesspersons from small and medium sized enterprises
with a common interest in world trade.





Additionally,
our Business Clubs intend to generate revenue from the owners and senior
management of small and medium sized enterprises in China, by providing a full
range of top quality commercial and recreational services, and education and
business networking programs.  Our Business Club will also help
members to liaise with potential trading partners from overseas, to join
international economic and trade exhibitions and seminars, and to organize
international business trips.





As part
of the reciprocal arrangement under the WTC Association, the Business Clubs will
also provide services to visiting delegations from foreign World Trade Center
members.  The China World Trade Business Club will help foreign
companies or businesspersons to minimize the barrier of doing business in China.
Services provided to foreign companies and businessperson may include organizing
meetings with Chinese government bodies, business corporations and potential
affiliates.





- 7
-






The
revenue that we have derived already from the Business Club business comes
directly from (1) membership fees, (2) fees collected from training and (3)
events, such as seminars.





At each
Business Club will be a Business Center, which is operated for the benefit of
the members and others. While the Business Center’s services are not confined to
members of the Business Club, members of the Business Club will enjoy special
discounts for the Business Center services and more dedicated support from the
staffs under the Business Club.





The
revenue we have derived from a Business Center comes directly from (1) rental
fees of facilities and (2) service fees. We will derive income from the Business
Center providing (i) temporary offices, seminar and conference rooms, video
conferencing facility, exhibition rooms, interpreters and secretarial services
and business consultation services.





Primary
Clientele.The main clients of our Guangzhou World Trade
Center Club in year 2007 included:





·
            XI'AN
      Assets and Equity Exchange which accounted for 6% of the total revenue of
      Guangzhou World Trade Center Club in 2007;·
            Solutia
      International Trading (Shanghai) Co., Ltd, which accounted for 6% of the
      total revenue of Guangzhou World Trade Center Club in
  2007;·
            PTT
      Polymer Marketing Company Limited, which accounted for 5% of the total
      revenue of Guangzhou World Trade Center Club in 2007;·
            Hyperion
      Technologies Co., Ltd., which accounted for 4% of the total revenue of
      Guangzhou World Trade Center Club in 2007 and·
            Esko-Graphics
      (Shanghai) Trading Ltd., which accounted for 3% of the total revenue of
      Guangzhou World Trade Center Club in
2007.





The main
clients of our Beijing World Trade Center Club in year 2007
included:





·
            DaimlerChrysler
      Northeast Asia Ltd., which accounted for 12.10% of the total revenue of
      Beijing World Trade Center Club in 2007;·
            Airnana
      Beijing Office,, which accounted for 9.38%of total revenue of Beijing
      World Trade Center Club in 2007;·
            Virgin
      Atlantic Airways Ltd. Beijing Representative Office, which accounted for
      6.92% of the total revenue of Beijing World Trade Center Club in
      2007;·
            Airways
      International Limited China Office,  which accounted for 6.16% of the
      total revenue of Beijing World Trade Center Club in 2007 
      and·
            Mercedes-Benz
      China Ltd., which accounted for 3% of the total revenue of Beijing World
      Trade Center Club in 2007.





Collectively,
the above clients aggregately representing over 24% of the total revenue of
Guangzhou World Trade Center Club and 37.56% of Beijing World Trade Center Club.
These above ten clients account for a considerable portion of the total revenue
of our two World Trade Center Clubs because all of these clients use our “Smart
Office” under a fixed term from a one-month period to a 12 month period. We
charge each of these clients additional fees for their uses of other facilities,
such as teleconferencing, seminar rooms and other electronic
equipment.





Competition.There are a
number of organizations utilizing the word of “Club” in China, such as the
Beijing American Club, which offers more in terms of recreational facilities and
services. There are other organizations, such as the American Chamber of
Commerce, which provide limited trades and business information and networking
capabilities. All other clubs and organizations in Guangzhou and Beijing only
operate as clubhouses with local presence. On the contrary, we operate under the
international brand name of “World Trade Center Club” exclusively in a certain
region of PRC area. As a result, we out-compete the other players with our
reciprocal membership advantage by leveraging on the global network of World
Trade Center Clubs and among our World Trade Center Clubs in China. The
management believes there will not be other business clubs in the regions that
could operate under a similar model and this would provide the competitive
advantage of our Business Clubs operations.





Our
management believes that there is no single source of information and research
report which is sophisticated enough for us to provide a meaningful estimate of
the number of competitors and our competitive position in the business clubs
industry.





Employees.We have 35
employees in our Business Clubs division as of December 31, 2007. None of them
are parties to any union or collective bargaining agreement.





- 8
-




Governmental Regulation of Business
Club Operations in China.The operation of our Business Clubs must
conform to the governmental regulations and rules of the Peoples’ Republic of
China. The practical effect of the People’s Republic of China legal system on
our business operations in China can be viewed from two separate but intertwined
considerations:





First, as
a matter of substantive law, the Foreign Invested Enterprise laws provide
significant protection from government interference. In addition, these laws
guarantee the full enjoyment of the benefits of corporate Articles and contracts
to Foreign Invested Enterprise participants. These laws, however, do impose
standards concerning corporate formation and governance, which are not
qualitatively different from the General Corporation Laws of the several states.
Similarly, the People’s Republic of China accounting laws mandate accounting
practices, which are not consistent with US Generally Accepted Accounting
Principles. The China accounting laws require that an annual “statutory audit”
be performed in accordance with People’s Republic of China accounting standards
and that the books of account of Foreign Invested Enterprises are maintained in
accordance with Chinese accounting laws. Article 14 of the People’s Republic of
China Wholly Foreign-Owned Enterprise Law requires a Wholly Foreign-Owned
Enterprise to submit certain periodic fiscal reports and statements to designate
financial and tax authorities, at the risk of business license
revocation.





Second,
while the enforcement of substantive rights may appear less clear than United
States procedures, the Foreign Invested Enterprises and Wholly Foreign-Owned
Enterprises are Chinese registered companies which enjoy the same status as
other Chinese registered companies in business-to-business dispute resolution.
Because the terms of the respective Articles of Association provide that all
business disputes pertaining to Foreign Invested Enterprises are to be resolved
by the Arbitration Institute of the Stockholm Chamber of Commerce in Stockholm,
Sweden applying Chinese substantive law, the Chinese minority partner in our
joint venture companies will not assume a privileged position regarding such
disputes.  Any award rendered by this arbitration tribunal is, by the
express terms of the respective Articles of Association, enforceable in
accordance with the “United Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (1958)”. Therefore, as a practical
matter, although no assurances can be given, the Chinese legal infrastructure,
while different in operation from its United States counterpart, should not
present any significant impediment to the operation of Foreign Invested
Enterprises.





China has
agreed upon its accession to the WTO to reduce tariffs and non-tariff barriers,
remove investment restrictions, provide trading and distribution rights for
foreign firms, and open various service sectors to foreign competition. China’s
accession to the WTO may favorably affect our business in that reduced market
barriers and a more transparent investment environment will facilitate increased
investment opportunities in China, while tariff rate reductions and other
enhancements will enable us to develop better investment strategies and attract
investment capital. In addition, the WTO’s dispute settlement mechanism provides
a credible and effective tool to enforce members’ commercial rights. Also, with
China’s entry to the WTO, it is believed that the relevant laws on foreign
investment in China will be amplified and will follow common
practices.





Business
Plan For Our Tourism and Hotel Management Services Division





We
engaged in the tourism and hotel management services through our direct 100%
ownership of the CWT Hotel Management Limited (“CWT Hotel Management”) and our
indirect 12.8% ownership of Suzhou Tongli (International) Excursion Development
Limited (“Suzhou Tongli”). This business division is a modification of our
previous Business Travel division by disposing the low margin New Generation
companies. We believe that the equity holding on both CWT Hotel Management and
Suzhou Tongli will allow us to participate a high margin tourism industry in
China, which are set forth below, although there can be no assurances that we
will be able to capitalize on them.





Hotel Management Services.
The hotel management service of the Company is conducted through a wholly-owned
subsidiary CWT Hotel Management focusing on the hotel management &
hospitality services provider of China. CWT Hotel Management is an attempt to
divest the Company of a low gross margin travel businesses to focus on the
higher margin business & hospitality services sectors, which are expected to
experience increased growth over the next decade as China increases its
visibility as a global business market and tourist destination.





This
business division will work in synergy with our business clubs division and
investment service divisions to provide a high yielding, well managed hotels for
club members and trade partners.





CWT Hotel
Management provides its clients with a wide range of hotel management services
and solutions, including hotel conceptual design, pre-opening, operation and
consultancy of hospitality. Our services covers a wide range of scopes, from
hotel pre-opening feasibility study, on-site construction guidance and
conceptual design assistance, to operational plan analysis, asset management,
personnel training and financial management advice





Suzhou Tongli’s Business Travel
Services.Suzhou Tongli is the sole tourism operator and planner of all
scenic sites in Tongli Town of Suzhou Province, China, including the Retreat and
Reflection (Tuisi) Garden which is recognized as one of the UNESCO World
Heritage. In additional to having entrance tickets operations rights for Tongli
scenic destinations, Suzhou Tongli is working with the government of Tongli to
implement tourism programs and to construct service facilities to expand the
town’s reputation as the best ancient water village travel
destination.





Tongli
Town is located in Wujiang city, within Jiangsu Province, on the eastern border
of China near Shanghai.. Well-developed water, land, and air transportation
means that Tongli is easily accessible to other major cities, such as Shanghai,
Suzhou and Hangzhou. Tongli is surrounded by rivers and lakes and is divided
into 15 islands by more than 10 river courses, connected by more than 40
different ancient bridges built at different times, forming the streets going
along-side the rivers, creating an interlinked pattern between roads and
bridges. The bridges are considered to be Tongli’s signature architectural
highlights.





Tongli
Town is located at the central area of the Yantze River Delta, which consists of
Shanghai, Zhejiang and Jiangsu. The Yantze River Delta is one of the fastest
growing districts in China from an economic stand point. The strong economy in
the Yangtze River Delta produces strong demand for tourism and purchasing power
in the tourists. For example, Jiangsu province has population of 743.25 million
with average GDP per person of US$2,524, compared to China’s urban disposable
income of its citizens of US$1,294 in 2004. Of the total employees in the
Jiangsu province, approximately 10% work in the tourism industry. The average
traveling expense in China increased approximately 50% compared with that
in 2005.





- 9
-






Source of Income.We will
generate income from the Tourism and Hotel Management division by the following
ways:





Project-based fee. We will
charge our client project-based fee from hotel management services. The income
will be received by installment as the hotel management project
proceeds.





Entrance ticket fee. At
present, the revenue of Suzhou Tongli mainly comes from traditional sightseeing
entrance tickets, and, in connection therewith, Suzhou Tongli owns the entrance
tickets operation rights for 12 scenic spots in Tongli, which include 3
exclusively operated scenic spots and 9 collaboratively operated scenic spots.
Besides generating revenues from traditional sightseeing entrance ticketing, the
Company endeavours to develop new tourism revenues from a combination of
participative tourism programs, leisure tourism, extended vacation tourism,
value-added business travel and so on. This new tourism revenue model will
extend the Company’s traditional ticket source of revenues to a more
comprehensive tourism revenue source which integrates various tourism
programs.





Primary Clientele.The
business development work of hotel management commenced in August 2007. The main
client of our hotel management service division in year 2007 is LakeviewHotel Nanchang Company,
Limited. CWT Hotel was in charge of the hotel renovation work of Lakeview Hotel
Nanchang, a four-star hotel opened in 1996 with a total of 302 guestrooms and
suites and located on the Huxin island, Nanchang, Jiangxi Province of China, and
scheduled to re-open before Oct 2008. We were further requested to provide
consultancy services to Lakeview Hotel in the areas of human resources planning,
marketing strategy, general administration and personnel training; in order to
walk Lakeview through the first two months after their re-opening.




Competition.The strengths of
Tongli lie in its convenient traffic, deep cultural accumulation, rich
sightseeing resources, and well-known public fame. Tongli is the only ancient
town which contains a World Cultural Heritage – Tuisi Garden. Tongli is the only
ancient town integrating the World Cultural Heritage and township lifestyle.
Besides, Tongli is the only ancient town acquiring the title of Top 10 Charming
Chinese Towns in Jiangsu Province. Special strengths of Tongli comparing with
other ancient towns include:(1) National AAAA tourism site; (2) The only
provincial culturally protected town in Zhengsu province; (3) 2005
National-Charm famous town; (4) Museum of Ming’s and Qing’s architectures; (5)
World Cultural Heritage -- Tuisi Garden ; and (6) Being named as “Natural
studio” by National Movie Association as a film base.




In the
hotel management service industry, the market is highly competitive and consists
of thousands of local and regional companies. Our management believe that there
is no single source of information and research report which is sophisticated
enough for us to provide a meaningful estimate of the number of competitors and
our competitive position in the hotel management service industry. We have
improved our competitive strengths in building our hotel management business by
hiring experienced hotel management expertise and a seasoned team of senior
managers at the operations level who are well qualified and experienced to
handle the challenges of the hotel management industry in China.





Employees.We currently have 1
employee in our hotel management services division. We believe our future
success will depend in large part upon the recruitment of more experienced
project management and investment consultants; and our ability to attract and
retain technical and managerial personnel. There can be no assurance that we
will retain our key technical and managerial employees or that we can attract,
assimilate or retain other highly qualified technical and managerial personnel
in the future. None of our employees are subject to any collective bargaining
agreements.





Business
Plan for Our Investment & Consultancy Services Division





We
provide investment and consultancy services through our direct 100% ownership of
the CWT Investment to concentrates on investment and advisory services as an
important bridge between foreign capital and major new investment opportunities
in China.. This division aims at becoming the investment and financing platform
of the Company.





Our
consultancy services focused primarily in the hotel, property, resources,
manufacturing and technology sectors of China, including the following area: (a)
business plans and prospectuses; (b) Public listing consultation and advisory;
(c) Private Equity sourcing and advisory; (d) management and directorship
support; (e) joint ventures and partnerships; (f) development of private equity
funds with Chinese and foreign sponsors to attract international capital to
Greater China investment opportunities; (g) investment and packaging of
traditional or distressed assets; (h) advising, negotiating and supporting
foreign investors interested in purchasing property or taking equity stakes in
development projects; and (i) consulting foreign enterprises in establishing
operations in China and assisting Chinese property companies to internationalize
operations through joint venture partners and funding.





Source of Income. Such
services are primarily fee based, and our payment is structured either on a flat
fee basis or on a success fee basis.





Clientele. The business
development work for investment and consultancy service division commenced in
August 2007 and there is still no clients as of December 31, 2007.





Competition.The project
consultancy industry of China is highly competitive and consists of thousands of
local and regional companies. Our management believes that there is no single
source of information and research report which is sophisticated enough for us
to provide a meaningful estimate of the number of competitors and our
competitive position in the investment and consultancy service
industry.





We
believe that purchasing decisions in the consultancy service industry are based
on (i) competitive price; (ii) long-term customer relationship; (iii) quality,
timeliness and reliability of consultancy services provided; and (iv) an
organization’s perceived stability based on years in business and financial
strength. To improve our competitive position, we focus on the hotel and
property to ride on the established customer relationship in the business clubs
division and hotel management division.





We cannot
assure you that we will compete successfully with any of our current or future
competitors.





- 10
-






Employees.We currently have 1
employee in our Investment and Consultancy Services division. We believe our
future success will depend in large part upon the recruitment of more
experienced project management and investment consultants; and our ability to
attract and retain technical and managerial personnel. There can be no assurance
that we will retain our key technical and managerial employees or that we can
attract, assimilate or retain other highly qualified technical and managerial
personnel in the future. None of our employees are subject to any collective
bargaining agreements.





Item 2.                      Description
of Property





Our main
office and the Guangzhou World Trade Center Club facilities are located at 3rd
Floor, Goldlion Digital Network Center, 138 Tiyu Road East, Tianhe, Guangzhou
510620, People’s Republic of China. Such office and club facilities are held
pursuant to a lease from Guangzhou Silver Disk Property Management Co. Ltd.,
which provides for an aggregate monthly rental of approximately $39,299
(RMB$287,061) and expires on December 31, 2011.





Our
Beijing World Trade Center Club facilities are located at 2nd Floor, Office
Tower II, Landmark Towers Beijing, 8 North Dongsanhuan Road, Beijing, People’s
Republic of China. The five-year lease for the location of the Beijing WTC Club
facilities, which runs from February 1, 2004 to January 31, 2009, was executed
by Beijing Landmark Towers Co Ltd. and Beijing WTC Club. The terms of the lease
provide for an aggregate monthly rental amount and management fees of
approximately $16,590 (RMB$121,180) and contains a rent free period from
February 1, 2004 to January 31, 2006.





Pursuant
to the Share Exchange Agreement dated December 17, 2002, entered into by us and
Mr. William Chi Hung Tsang, we acquired the entire issued share capital of
General Business Network, which owned two commercial properties, one located at
20/F, Goldlion Digital Network Center, Unit 01-10, 138 Tiyu Road East, Tianhe,
Guangzhou, People’s Republic of China (the “PRC Property”) and the other at Flat
B, 12/F, Champion Center, 301-309 Nathan Road, Hong Kong (the “Hong Kong
Property”).  The PRC Property was sold in May 2005 for approximately
$2,460,000.  The Hong Kong Property was sold together with the
disposal of Rejoice Success Limited on September 29, 2006 after an account of
rental income of $10,385 (HK$81,000).





Our Hong
Kong office is located Unit A, 5/F., Goldlion Holdings Centre, 13-15 Yuen Shun
Circuit, Siu Lek Yue, Shatin, NT, Hong Kong. The office is held pursuant to a
lease from Renard Investments Limited which provides for an aggregate monthly
rental of US$4,038. The lease runs from February 1, 2008 to January 31,
2010.





Item
3.                      Legal
Proceedings





We are
not aware of any pending or threatened legal proceedings, other than as set
forth below, in which we are involved. In addition, we are not aware of any
pending or threatened legal proceedings in which entities affiliated with our
officers, directors or beneficial owners are involved.





On
December 10, 2004, Kenneth P. Silverman, Esq., as Trustee for the Estate of
Chief Executive Officers Clubs, Inc. (the “Trustee”), filed a Complaint against
CEO Clubs China Limited, China World Trade Corporation, Simon Guo and J.P. Li
(the “Complaint”), which commenced an Adversary Proceeding relating to a Chapter
7 bankruptcy case pending in the U.S. Bankruptcy Court for the Southern District
of New York, captioned as In Re: Chief Executive Officers Clubs, Inc., Debtor.
The Complaint alleges, among other things, that certain assets of the Chief
Executive Officers Clubs, Inc. bankruptcy estate were transferred to our Company
in violation of Section 549 of the Bankruptcy Code. It requests that the
Bankruptcy Court order, among other things, a return of such assets by our
Company and/or seeks a judgment against us in the amount of not less than
$480,000.





As
previously disclosed, on May 7, 2004, the Company acquired 51% of the
outstanding capital stock of CEO Clubs China Limited, a Hong Kong corporation
(“CEO Clubs China”), through one of its wholly-owned subsidiaries, for a total
consideration of cash and shares of common stock amounting to US$480,000. CEO
Clubs China is an authorized chapter to operate under the “CEO Clubs” trademarks
in the Greater China region, including the Peoples’ Republic of China, Hong Kong
and Taiwan.





We have
engaged counsel and are vigorously defending the Adversary Proceeding. We filed
a Motion To Dismiss which was heard on March 22, 2005, and the judge ruled in
favor of the Trustee by refusing to dismiss the case at this preliminary stage
of the proceedings. Notwithstanding that decision, our primary defense is that
we purchased the stock of CEO Clubs China, and did not acquire any assets of the
Chief Executive Officers Clubs, Inc. bankruptcy estate. On April 19, 2007,
the Trustee’s Motion to have a settlement of the Adversary
Proceeding was approved by the Court.





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





No matter
was submitted to a vote of security holders, other than as set forth below,
during the twelve month of the fiscal year covered by this Report.





On August
8, 2007 the following was submitted to a vote of security holders: (1) to elect
Five directors to hold office for a one-year term and until each of their
successors are elected and qualified; (2) to approve an amendment to the
Articles of Incorporation of the Company to increase the authorized shares
of common stock from 50,000,000 to 200,000,000 shares; and (3) to ratify
the appointment of Child, Van Wagoner & Bradshaw, PLLC as the Company’s
independent public accountants for the fiscal year ending December 31,
2006.





- 11
-






PART II





Item 5.
            Market for Common Equity and Related Stockholder
      Matters





Market
Information





Our
common stock is currently quoted on a limited basis on the Over-the-Counter
Bulletin Board (“OTCBB”) under the symbol “CWTD”. The quotation of our common
stock on the OTCBB does not assure that a meaningful, consistent and liquid
trading market currently exists. We cannot predict whether a more active market
for our common stock will develop in the future. In the absence of an active
trading market:





(1)
Investors may have difficulty buying and selling or obtaining market
quotation;


(2)
Market visibility for our common stock may be limited; and


(3) A
lack of visibility of our common stock may have a depressive effect on the
market price for our common stock.





The
following table sets forth the range of bid prices of our common stock as quoted
on the OTCBB during the periods indicated. The prices reported represent prices
between dealers, do not include markups, markdowns or commissions and do not
necessarily represent actual transactions.





High
      (1)
            
            
            Low2007
            First
      Quarter
            
            $
            0.58
            
            
            $
            0.25Second
      Quarter
            
            $
            0.50
            
            
            $
            0.26Third
      Quarter
            
            $
            0.30
            
            
            $
            0.15Fourth
      Quarter
            
            $
            0.28
            
            
            $
            0.102006
            First
      Quarter
            
            $
            2.66
            
            
            $
            1.90Second
      Quarter
            
            $
            2.82
            
            
            $
            1.12Third
      Quarter
            
            $
            1.31
            
            
            $
            0.65.Fourth
      Quarter
            
            $
            0.68
            
            
            $
            0.20





Our
common shares are issued in registered form. Interwest Transfer Company in Salt
Lake City, Utah, is the registrar and transfer agent for our common
stock.





Effective
September 1, 2002, we executed a 1 for 30 reverse stock split of the outstanding
shares of common stock.





As a
result of a debt-to-equity capital restructuring in September 2002, we issued a
total of 4,000,000 shares of common stock for a total debt of
$2,731,677





As a
result of two share purchase agreements dated September 3, 2002 and December 17,
2002, respectively, and entered into between us and Powertronic Holdings
Limited, on January 24, 2003 we issued a total of 2,000,000 shares of common
stock and warrants to purchase up to 4,000,000 shares of common stock for a
total purchase price of $1,000,000 to Powertronic Holdings Limited.





As a
result of a share exchange agreement dated December 17, 2002 entered into
between the Company and Mr. William Chi Hung Tsang, on January 24, 2003, we
issued 4,000,000 shares of common stock and warrants to purchase up to 4,000,000
shares of common stock in exchange of 100% of the share capital of General
Business Network (Holdings) Ltd.





As a
result of a share exchange agreement dated September 25, 2006 entered into
between the Company and Mr. William Chi Hung Tsang, we issued 9,000,000 shares
of common stock in exchange for 25% of the share capital of CWT International
Excursion Investment Limited





As a
result of four service agreements dated Nov 15, 2006, Nov 20, 2006, January 11
and 17, 2007 entered into between the Company and Canyon Red Group Limited,
Techpro Services Limited, Grande Angel International Limited and Prospect Bright
Holdings Ltd. respectively, we issued a total of 57,000,000 consideration shares
as payment of the consultancy fee.





As a
result of the affirmative vote in the Annual General Meeting held on Aug 8,
2007, we increased our number of shares of authorized Common Stock, $.001 par
value, from 50,000,000 shares to 200,000,000 shares.





As of
December 31, 2007 there were 85 record holders of 49,565,923 outstanding shares
of common stock of the Company, not including approximately 5,000 holders of our
shares in street name.





- 12
-






Dividends





We have
not previously paid any cash dividends on its common stock and do not anticipate
paying dividends on its common stock in the foreseeable future. It is the
present intention of management to retain any earnings to provide funds for the
operation and expansion of our business. Any future determination to pay
dividends will be at the discretion of our board of directors and will depend on
our results of operation, financial condition, contractual and legal
restrictions and other factors the board of directors deem
relevant.





Penny
Stock Characterization





Our
Shares are "penny stocks" within the definition of that term as contained in the
Securities Exchange Act of 1934, which are generally equity securities with a
price of less than $5.00. Our shares will then be subject to rules that impose
sales practice and disclosure requirements on certain broker-dealers who
engage in certain transactions involving a penny stock. These will impose
restrictions on the marketability of the common stock.





Under the
penny stock regulations, a broker-dealer selling penny stock to anyone other
than an established customer or "accredited investor" must make a special
suitability determination for the purchaser and must receive the purchaser's
written consent to the transaction prior to the sale, unless the broker-dealer
is otherwise exempt. Generally, an individual with a net worth in excess of
$5,000,000 or annual income exceeding $200,000 individually or $300,000 together
with his or her spouse is considered an accredited investor. In addition, unless
the broker-dealer or the transaction is otherwise exempt, the penny stock
regulations require the broker-dealer to deliver, prior to any transaction
involving a penny stock, a disclosure schedule prepared by the Securities and
Exchange Commission relating to the penny stock market. A broker-dealer is also
required to disclose commissions payable to the broker-dealer and the Registered
Representative and current bid and offer quotations for the securities. In
addition a broker-dealer is required to send monthly statements disclosing
recent price information with respect to the penny stock held in a customer's
account, the account’s value and information regarding the limited market in
penny stocks. As a result of these regulations, the ability of broker-dealers to
sell our stock may affect the Selling Stockholders or other or other holders
seeking to sell their shares in the secondary market. In addition, the penny
stock rules generally require that prior to a transaction in a penny stock, the
broker-dealer 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
disclosure 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. These additional sales practice and disclosure requirements could
impede the sale of our securities. In addition, the liquidity for our securities
may be adversely affected, with concomitant adverse affects on the price of our
securities.





Agreements
to Register





The
Company entered into a financing agreement in August 2004 which included
registration rights that was terminated in 2007. In addition, on August 17,
2007, the Company filed with the Commission an application for immediate
withdrawal of the Registration Statement on Form SB-2 in accordance with Rule
477 under the Security Act 1933, as amended, that was filed pursuant to the
financing agreement..





Shares
Eligible for Future Sale





In
general, under Rule 144 as currently in effect, any of our affiliates and any
person or persons whose sales are aggregated who has beneficially owned his or
her restricted shares for at least one year, may be entitled to sell in the open
market within any three-month period a number of shares of common stock that
does not exceed the greater of (i) 1% of the then outstanding shares of our
common stock, or (ii) the average weekly trading volume in the common stock
during the four calendar weeks preceding such sale. Sales under Rule 144 are
also affected by limitations on manner of sale, notice requirements, and
availability of current public information about us. Non-affiliates who have
held their restricted shares for two years may be entitled to sell their shares
under Rule 144 without regard to any of the above limitations, provided they
have not been affiliates for the three months preceding such sale.





Further,
Rule 144A as currently in effect, in general, permits unlimited resales of
restricted securities of any issuer provided that the purchaser is an
institution that owns and invests on a discretionary basis at least $100 million
in securities or is a registered broker-dealer that owns and invests $10 million
in securities. Rule 144A allows our existing stockholders to sell their shares
of common stock to such institutions and registered broker-dealers without
regard to any volume or other restrictions. Unlike under Rule 144, restricted
securities sold under Rule 144A to non-affiliates do not lose their status as
restricted securities.





- 13
-






Changes
of Equity Securities During Period Covered By Report





On
February 27, 2007 we issued 712,000 shares of common stock to Prospect Bright
Holdings Limited for feasibility study of developing resort in Tong Li Town,
Wujiang City, Jiangsu Province of the People’s Republic of China pursuant
to a service engagement agreement dated January 17, 2007. We relied on an
exemption from registration provided by Section 4(2) of the Securities Act of
1933, as amended, in connection with this issuance.





On
February 27, 2007, the Company issued 2,860,000 shares to Grande Angel
International Limited for consulting services and assistance in business
planning, business development, and marketing related to the launch of virtual
office services in Guangzhou and/or Beijing pursuant to a service engagement
agreement dated January 11, 2007. We relied on an exemption from registration
provided by Section 4(2) under the Securities Act of 1933, as amended, in
connection with this issuance.





On
February 27, 2007 we issued 1,437,000 shares of common stock to Techpro Services
Limited in exchange for the services to expand the network of World Trade Center
Clubs and CEO Clubs China pursuant to a service engagement agreement dated
November 20, 2006. We relied on an exemption from registration provided by
Section 4(2) of the Securities Act of 1933, as amended, in connection with this
issuance.





On
February 27, 2007 we issued 691,000 shares of common stock to Canyon Red Group
Limited for in exchange for the Information Technology consultancy service
pursuant to a service engagement agreement dated November 15, 2006. We relied on
an exemption from registration provided by Section 4(2) of the Securities Act of
1933, as amended, in connection with this issuance.





Item
6.                      Management's
Discussion and Analysis or Plan of Operation





PRELIMINARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS





This
discussion contains forward-looking statements. The reader should understand
that several factors govern whether any forward-looking statement contained
herein will be or can be achieved. Any one of those factors could cause actual
results to differ materially from those projected herein. These forward-looking
statements include plans and objectives of management for future operations,
including plans and objectives relating to the products and the future economic
performance of the company. Assumptions relating to the foregoing involve
judgments with respect to, among other things, future economic, competitive and
market conditions, future business decisions, and the time and money required to
successfully complete development projects, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
company. Although the company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of those
assumptions could prove inaccurate and, therefore, there can be no assurance
that the results contemplated in any of the forward-looking statements contained
herein will be realized. Based on actual experience and business development,
the company may alter its marketing, capital expenditure plans or other budgets,
which may in turn affect the company's results of operations. In light of the
significant uncertainties inherent in the forward-looking statements included
therein, the inclusion of any such statement should not be regarded as a
representation by the company or any other person that the objectives or plans
of the company will be achieved.





OVERVIEW





We were
incorporated in the State of Nevada in 1998 to engage in any lawful corporate
undertaking. Initially, our business objective was to open and operate business
clubs in the major cities of China in association with the World Trade Center
Association in order to position ourselves as the platform to facilitate trade
between China and the world market. We currently operate two clubs, one in
Guangzhou and the other in Beijing, PRC. Additionally, we expect to open clubs
in Shanghai and Shenzhen, PRC in 2006. We have grown through acquisitions and
internal growth and our business objectives have expanded as set forth in the
following paragraphs.





Our
growth and development as a business enterprise has been marked by a number of
significant corporate events. Pursuant to a Share Exchange Agreement, dated as
of August 10, 2000, between Virtual Edge Limited ("Virtual Edge") and Main Edge
International Limited ("Main Edge"), Main Edge transferred all of the issued and
outstanding shares of the capital stock of Virtual Edge to the Company in
exchange for 1,961,175 shares of our pre-split common stock, representing
approximately 75% of our outstanding shares of the common stock. Accordingly, we
controlled the operations of Virtual Edge, and Main Edge became our majority
stockholder. We then undertook an 8-for-1 forward split that was effective on
15th day of September 2000, which resulted in Main Edge owning 15,689,400 shares
of our common stock. Then, five major developments occurred. These were: (i) the
consummation of two private placement financings by Powertronic Holdings Limited
("Powertronic") in September 2002 and December 2002 in which it acquired shares
of our common stock, (ii) an acquisition of all the issued and outstanding
shares of General Business Network (Holdings) Ltd. in December 2002, (iii) a
1-for-30 reverse stock split that was effective on September 1, 2002, (iv) the
assignment of the rights of the after tax rental income of certain premises from
Mr. William Chi Hung Tsang for a five year period in December 2003, and (v) the
exercise of warrants for the shares of our common stock by Mr. Tsang and
Powertronic in March 2004 and in July 2004, and the further exercise additional
warrants in December 2004. As a result of these transactions, Mr. William Chi
Hung Tsang became the new major shareholder and owns over 12,600,000 shares of
our common stock and Powertronic owns over 5,500,000 shares. Mr. Chi Hung Tsang
is currently President and Chairman of our Board of Directors.





China
World Trade Corporation ("China World Trade") has recently established its
businesses into three distinct divisions, namely the club and business center;
the tourism and hotel management services; and the investment and consultancy
services.





- 14
-


The Club
and Business Center division is devoted to the building of the branded World
Trade Center Clubs in China. Its objective is to open and operate business clubs
in the major cities of China in association with the World Trade Center
Association, in order to position the company as the platform to facilitate
trade between China and the world market. China World Trade currently operates
the Guangzhou World Trade Center Club, consisting of over 4,000 square meters
and located in 3-4th Floor
of Goldlion Digital Network Center, 136-138 Tiyu Road East, Tianhe District,
Guangzhou, People’s Republic of China; and The Beijing World Trade Center
Club, which is located at 2nd Floor, Office Tower II, Landmark Towers Beijing, 8
North Dongsanhuan Road, Beijing PRC, and consisting of 730 square meters. In
addition, since the acquisition of CEO Clubs China Limited ("CEO Clubs") in May
2004, CEO Clubs will complement China World Trade's offerings by targeting
higher profile leadership from larger companies than those normally associated
with China World Trade. The CEO Clubs family, of which each family member
operates independently of each other, has thirteen chapters in the US and China.
It focuses on recruiting CEO's of companies with annual sales exceeding $2
million as members. The average member of our affiliated CEO Clubs family has
$20 million in annual sales.





The
Tourism and Hotel Management division formerly included an effective interest
of 20.4% capital stock of Guangdong New Generation Commercial Management
Limited (the “New Generation Group” or “New Generation”). In the view that the
profit margin of air-ticketing business is diminishing because of the continuous
higher fuel price and additional cost associated into it, not to mention the
foreseeable huge increasing cost on manpower in China because of its improving
living standards; the Company disposed the remaining 20.4% New Generation on
June 30, 2007.





In order
to maintain a foothold into the high-end business travel market, the management
acquired Suzhou Tongli on September 25, 2006. This strategic acquisition is
believed to provide the Company with entry into the high margin tourism segment
of the travel business because Tongli town is quickly becoming one of the most
popular domestic and international tourist destinations in China with strong
tourism, business travel growth opportunities in the region. The Company also
incorporate a wholly-owned subsidiary CWT Hotel Management to focus on the hotel
management & hospitality services provider of China. CWT Hotel Management is
an attempt to divest the Company of a low gross margin travel businesses to
focus on the higher margin business & hospitality services sectors, which
are expected to experience increased growth over the next decade as China
increases its visibility as a global business market and tourist
destination.





The
Investment and Consultancy Services division concentrates on investment and
advisory services as an important bridge between foreign capital and major new
investment opportunities in China, largely in the hotel, property, resources,
manufacturing and technology sectors. This division aims at becoming the
investment and financing platform of the Company.





RESULTS OF
OPERATIONS





The
following table shows the financial data of the consolidated statements of
operations of the Company and its subsidiaries for the years ended December 2007
and 2006. The data should be read in conjunction with the audited consolidated
financial statements of the Company and related notes thereto.





Year
      Ended Dec 31,2007
            
            
            2006US$
      ‘000
            
            
            %
      of
            
            
            US$
      ‘000
            
            
            %
      ofOperating
      revenues
            
            
            
            Revenue
            
            
            
            
            
            RevenueClub
      and business centre
            
            710.6
            
            
            
            95.6
            
            
            
            712.4
            
            
            
            100.0Hotel
      Management
            
            32.8
            
            
            
            4.4743.4
            
            
            
            100.0
            
            
            
            712.4
            
            
            
            100.0Profit
      (Loss) from continuing operationsClub
      and business centre
            
            669.7
            
            
            
            90.1
            
            
            
            639.6
            
            
            
            89.8Hotel
      Management
            
            28.0
            
            
            
            3.8697.7
            
            
            
            93.9
            
            
            
            639.6
            
            
            
            89.8Corporate
      expenses
            
            3,332.3
            
            
            
            448.3
            
            
            
            4,333.9
            
            
            
            608.4Consolidated
      operating loss from continuing operation
            
            (2,634.6
            )
            
            
            (354.4
            )
            
            
            (3,694.3
            )
            
            
            (518.6
            )Realized
      gain on marketable securities - available-for-saleOther
      income
            
            64.9
            
            
            
            8.7
            
            
            
            26.8
            
            
            
            3.8Interest
      income
            
            0.8
            
            
            
            0.1
            
            
            
            0.9
            
            
            
            0.1Interest
      expenseEquities
      in earnings of affiliates
            
            (147.9
            )
            
            
            (19.9
            )
            
            
            (180.2
            )
            
            
            (25.3
            )Gain
      on disposal of a subsidiaryLoss
      on disposal of an affiliate
            
            (541.1
            )
            
            
            (72.8
            )Impairment
      loss on investment in an affiliate
            
            
            
            
            
            
            
            
            
            (2,140.4
            )
            
            
            (300.4
            )Loss
      on disposal of interest in a subsidiary
            
            
            
            
            
            
            
            
            
            (2,394.8
            )
            
            
            (336.2
            )Realized
      gains on available-for-sale securities
            
            
            
            
            
            
            
            
            
            (321.2
            )
            
            
            (45.1
            )Net
      loss from continuing operation before extraordinary item, income taxes and
      minority interest
            
            (3,257.9
            )
            
            
            (438.2
            )
            
            
            (8,703.2
            )
            
            
            (1,221.7
            )Income
      (loss) from discontinued operations
            
            (27.1
            )
            
            
            (3.6
            )
            
            
            (1,387.8
            )
            
            
            (194.8
            )Negative
      goodwill recognized as income
            
            1,000.0
            
            
            
            134.5Net
      income (loss)
            
            (2,285.00
            )
            
            
            (307.4
            )
            
            
            (10,091.0
            )
            
            
            (1,416.5
            )Earnings
      (loss) per shareBasic
            
            (0.05
            )
            
            
            
            
            
            
            (0.29
            )Diluted
            
            (0.05
            )
            
            
            
            
            
            
            (0.29
            )




- 15
-





FISCAL
YEAR ENDED DECEMBER 31, 2007 COMPARED TO YEAR ENDED DECEMBER 31,
2006.





OPERATING
REVENUE





The
Company has started to recruit members, and to provide club and business center
services through its subsidiary Guangzhou World Trade Center Club located in
Guangdong Province, People’s Republic of China since June 2002, We have disposed
our operation in the business travel business on June 30, 2007 that was
commenced since our acquisition of New Generation in August 2004. We have also
disposed the entire business value-added services and other related subsidiaries
in June 2007, which was commenced since March 2003. Consolidated operating
revenue for the twelve-month period ended December 31, 2007 was $743,400,
compared to $4,339,000 for the same corresponding period in year 2006, a
decrease of $3,595,600 or 82.9%. The decrease was mainly the result of the
cessation of business travel services incomes.





Of the
$743,400 revenue in the twelve-month period ended December 31, 2007,
approximately $710,600 (or 95.6%) was generated from providing club related
services by Guangzhou World Trade Center Club and Beijing World Trade Center
Club, and the remaining $32,800 (or 4.4%) from the newly launched hotel
management services.





The
disposal of the remaining 40% of our equity holding of GBN Holdings in June
2007, which leads to the effective disposal of effective interest of 20.4%
capital share of New Generation, continues to significantly reduce our operating
revenues. Since the disposal of the remaining 40% GBN Holdings was effective on
June 30, 2007, only 6 months of operating revenues from New Generation
were consolidated into our results as other income.





Consolidated
operating loss from continuous operation decreased by approximately $1,058,400
or 28.7% to $2,634,600 for the twelve-month period ended December 31, 2007 from
$3,694,300 for the same corresponding period in year 2006. The decrease was
caused by the newly launched hotel management services as well as the
improvement of our accommodation rate in our club and business centers, offset
by the corporate expenses.





CORPORATE
EXPENSES





Corporate
expenses decreased by approximately $1,000,300 or 23.1% to $3,332,300 for the
year ended December 31, 2007 from $4,333,900 for the same corresponding period
in 2006. The decrease was mainly a result of respective measures for trimming
costs.





EQUITIES
IN EARNINGS OF AFFILIATES





Equities
in earnings of affiliates reduced by $32,300 or approximately 18% for the year
end December 31, 2007. The decrease was mainly a result of the recognition of
the operational loss in only one affiliate, Suzhou Tongli as compared to
recognizing both New Generation and Suzhou Tongli for the same corresponding
period in 2006.





OTHER
INCOME AND REALIZED GAIN





The other
income and realized gain increased by $38,100 for the year ended December 31,
2007. The increase was the result of a waiver of debt during the reporting
period.





INETEREST
INCOME / INTEREST EXPENSES





There was
no interest expenses incurred for the year ended December 31, 2007 following the
disposal of New Generation. .





GOODWILL





Negative
Goodwill was $1,000,000 for the year ended December 31, 2007 following the
acquisition of Sontech Limited, which owned 8,000,000 shares of common stock of
pink sheet-listed Mobile Entertainment, Inc.





NET LOSS





Net loss
was approximately $2,285,000 for the year ended December 31, 2007, as compared
to the same corresponding period in year 2006, a decrease of $7,555,800 or 77.3%
from a loss of $10,091,000. Majority of the net loss was the result of the
recognition of the impairment loss on disposal of interest in an affiliate, GBN
Holdings. Management believes that our operations will continue to improve and
we do not foresee a trend of losses.





- 16
-






LIQUIDITY AND CAPITAL RESOURCES





As of
December 31, 2007, cash and cash equivalents totaled $43,945. This cash position
was the result of a combination of net cash used in financing activities in the
amount of $399,898, net cash provided in investing activities in the amount of
$1,531,562 and the net cash used in operating activities in the amount of
$1,183,963. The decrease in financing activities was mainly repayment to a
stockholder of $399,898, The net cash provide in investing activities was mainly
the disposal of two subsidiary of $900,000 and $12,821, disposal of an affiliate
amount to $647,564 and the increase of acquisition of property, plant and
equipment of $28,823. The net cash used in operating activities was mainly the
result from the net loss of $2,285,000, decrease in accrued expenses of $172,648
and increase in Prepayments of $155,891 offsetting by Loss on disposal of
interest in an affiliate $541,133, Negative goodwill recognized as income amount
to $1,000,000,and the stock, option and warrants issued for services amount to
$1,371,122.





We
believe that the level of financial resources is a significant factor for our
future development and accordingly may choose at any time to raise capital
through private debt or equity financing to strengthen its financial position,
facilitate growth and provide us with additional flexibility to take
advantage of business opportunities.





The
Company regarded the effort of filing with the Commission a Registration
Statement on Form SB-2 covering the sale in a secondary offering of the
Registrable Securities, and the sale of other securities pursuant to the Standby
Equity Distribution Agreement dated November 15, 2004 had been terminated
subsequent to the failure to file the Registration Statement through Form SB-2/A
Amendment No. 6 on February 3, 2006.  We do not have immediate plans
to have a public offering of our common stock.





OTHER
SIGNIFICANT EVENTS





Incorporation of new
subsidiaries. On August 20, 2007 the Company incorporated CWT Investment
Services Limited and CWT Hotel Management Limited, Both are incorporations under
the law of British Virgin Islands and are 100% held by the Company through
wholly-owned Virtual Edge Limited.





Disposal of 40% GGN Holdings.
On June 30, 2007, the Company through its wholly owned subsidiary, China Chance
Enterprises Limited (“China Chance”) , disposed 100% outstanding capital stock
of both June Success Limited (“June Success”) and Sinopac Success Limited
(“Sinopac”) to Wisdom Plus Limited (“Wisdom Plus”) at a total consideration of
$2,000,000 to be paid by installment. June Success and Sinopac owns a total of
40% of the outstanding capital stock of General Business Network (Holdings)
Limited (“GBN Holdings”), where GBN Holdings indirectly owns 51% of the
outstanding capital stock of New Generation Commercial Management Limited (“New
Generation”). Up to this point the Company has completely disposed GBN Holdings
and New Generation.





Disposal of Creative Idea Group
Limited.On June 29, 2007, the Company disposed 100% outstanding capital
stock of Creative Idea Group Limited (“Creative Idea”) to Merry Planet
Corporation (“Merry Planet”) at a total consideration of
HK$100,000..  Creative Idea owns a total of 55% of the outstanding
capital stock of WTC Full Capital Advisors Inc .





Acquisition of Sonytech Limited in
lieu of outstanding payment. The Company through its wholly-owned
subsidiary China Chance disposed 100% outstanding capital stock of Rejoice
Success Limited to Wisdom Plus in 2006. On April 9, 2007 Wisdom Plus exercised
an option in paying the consideration pursuant to the sales and purchase
agreement dated September 29, 2006, and delivered 100% outstanding registered
shares of its subsidiary Sonytech Limited (“Sonytech”) to the Company as
payments in lieu of the outstanding balance of the consideration to be paid by
Wisdom Plus. Sonytech beneficially owns 8,000,000 shares of common stock of
Mobile Entertainment, Inc, a Nevada corporation whose common stock is listed for
quotation on the Pink Sheets market under the trading symbol
“MBEI”.





CRITICAL
ACCOUNTING POLICIES





In
presenting our financial statements in conformity with generally accepted
accounting principles, we are required to make estimates and assumptions that
affect the amounts reported therein. Several of the estimates and assumptions we
are required to make relate to matters that are inherently uncertain as they
pertain to future events. However, events that are outside of our control cannot
be predicted and, as such, they cannot be contemplated in evaluating such
estimates and assumptions. If there is a significant unfavorable change to
current conditions, it could result in a material adverse impact to our
consolidated results of operations, financial position and liquidity. We believe
that the estimates and assumptions we used when preparing our financial
statements were the most appropriate at that time. Presented below are those
accounting policies that we believe require subjective and complex judgments
that could potentially affect reported results. However, the majority of our
businesses operate in environments where we pay a fee for a service performed,
and therefore the results of the majority of our recurring operations are
recorded in our financial statements using accounting policies that are not
particularly subjective, nor complex.





Valuation
of long-lived assets





We review
our long-lived assets for impairment, including property, plant and equipment,
and identifiable intangibles with definite lives, whenever events or changes in
circumstances indicate that the carrying amount of the assets may not be fully
recoverable. To determine recoverability of our long-lived assets, we evaluate
the probability that future undiscounted net cash flows will be greater than the
carrying amount of our assets. Impairment is measured based on the difference
between the carrying amount of our assets and their estimated fair
value.





- 17
-






Allowance
for Doubtful Accounts





We
perform ongoing credit evaluations of our customers and adjust credit limits
based upon customer payment history and current creditworthiness. We
continuously monitor collections and payments from our customers and maintain a
provision for estimated credit losses based upon our historical experience and
any specific customer collection issues that have been identified. While such
credit losses have historically been within our expectations and the provisions
established, we cannot guarantee that we will continue to experience credit loss
rates similar to those we have experienced in the past. Measurement of such
losses requires consideration of historical loss experience, including the need
to adjust for current conditions, and judgments about the probable effects of
relevant observable data, including present economic conditions such as
delinquency rates and financial health of specific customers.





Goodwill
on consolidation





Our
long-lived assets include goodwill. SFAS No. 142 "Goodwill and Other
Intangible Assets" requires that goodwill be tested for impairment at the
reporting unit level (operating segment or one level below an operating segment)
on an annual basis and between annual tests in certain circumstances.
Application of the goodwill impairment test requires judgment, including the
identification of reporting units, assigning assets and liabilities to reporting
units, assigning goodwill to reporting units, and determining the fair value of
each reporting unit. Significant judgments required to estimate the fair value
of reporting units include estimating future cash flows, determining appropriate
discount rates and other assumptions. Changes in these estimates and assumptions
could materially affect the determination of fair value for each reporting
unit.









- 18
-




Item 7.      Financial Statements





The
information required by this Item is located following the signature page and
exhibits of this annual report.










CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES




INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS











PageReport
      of Child, Van Wagoner & Bradshaw, PLLC, Independent Registered Public
      Accounting Firm
            20Consolidated
      Balance Sheet
            21Consolidated
      Statements of Operations and Comprehensive Income (Loss)
            22
      - 23Consolidated
      Statement of Changes in Stockholders’ Equity
            24Consolidated
      Statements of Cash Flows
            25
      - 26Notes
      to Consolidated Financial Statements
            27 -
      48





- 19
-





REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM







The Board
of Directors and Shareholders


China
World Trade Corporation







We have
audited the accompanying consolidated balance sheet of China World Trade
Corporation and subsidiaries as of December 31, 2007, and the related
consolidated statements of operations, changes in stockholders’ equity and
comprehensive income, and cash flows for the years ended December 31, 2007 and
2006. These consolidated financial statements are the responsibility of the
Group’s management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.





We
conducted our audits in accordance with the standards of the Public Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. The Group is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit includes 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 Group’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 consolidated 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 consolidated financial statements referred to above present fairly,
in all material respects, the financial position of China Trade World
Corporation and subsidiaries as of December 31, 2007, and the results of their
operations and their cash flows for the years ended December 31, 2007 and 2006,
in conformity with accounting principles generally accepted in the United States
of America.




The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company has suffered losses from operations during the year,
despite having a positive working capital, that raise substantial doubt about
its ability to continue as a going concern. Management’s plans in regard to
these matters are also described in Note 3. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.








/s/
Child, Van Wagoner & Bradshaw, PLLC


Child,
Van Wagoner & Bradshaw, PLLC


Certified
Public Accountants


Salt Lake
City, Utah, USA


March 28,
2008








- 20
-


CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEET


(Expressed
in United States Dollar (“US$”), except for per share data)




Notes
              
              
              December
      31, 2007ASSETSCurrent
      assets:Cash and cash equivalents
              
              
              
              
              $
              43,945Accounts receivable, net
              
              
              9
              
              
              
              2,229Prepayments
              
              
              
              
              
              
              16,147Other current assets
              
              
              
              
              
              
              13,815Note receivable – sale of affiliate
              
              
              11
              
              
              
              1,352,436Rental and other deposits
              
              
              10
              
              
              
              272,479Due from affiliate company
              
              
              12
              
              
              
              51,977-Total
      Current Assets
              
              
              
              
              
              
              1,753,028Property,
      Plant and Equipment:Property, plant and equipment, net
              
              
              14
              
              
              
              44,110Marketable securities – Available-for-sale
              
              
              13
              
              
              
              2,000,000Investment in affiliate companies
              
              
              7
              
              
              
              6,208,043Total
      Assets
              
              
              
              
              
              $
              10,005,181LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilities:Accounts payable
              
              
              
              
              
              $
              17,732Accrued expenses
              
              
              
              
              
              
              458,726Due to a stockholder
              
              
              17
              
              
              
              1,282,047Due to related companies
              
              
              12
              
              
              
              84,764Deferred income
              
              
              
              
              
              
              -Other
      current liabilities
              
              
              
              
              
              
              158,000Total
      Current Liabilities
              
              
              
              
              
              
              2,001,269Total
      Liabilities
              
              
              
              
              
              
              2,001,269STOCKHOLDERS’
      EQUITYPreferred
      stock, par value of US$0.001 each;10,000,000
      shares authorized, none issued or outstandingCommon
      stock, par value of US$0.001 each; 20,000,000 shares
      authorized,
                49,565,923
      shares issued and outstanding as of Dec 31, 2007
              
              
              20
              
              
              
              49,566Additional paid-in capital
              
              
              
              
              
              
              41,010,482Deferred stock-based compensation
              
              
              
              
              
              
              (715,537
              )Accumulated other comprehensive income
              
              
              
              
              
              
              -- foreign currency translation adjustment
              
              
              
              
              
              
              109,447-
      unrealized loss on marketable securities
    -available-for-sale
              
              
              
              
              
              
              (2,000,000
              )Accumulated deficit
              
              
              
              
              
              
              (30,450,046
              )Total
      Stockholders’ Equity
              
              
              
              
              
              
              8,003,912Total
      Liabilities and Stockholders’ Equity
              
              
              
              
              
              $
              10,005,181


See
accompanying notes to consolidated financial statements.


- 21
-


CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS


AND
COMPREHENSIVE INCOME (LOSS)


(Expressed
in United States Dollar (“US$”), except for per share data)




Years
      EndedDecember
      31,2007
              
              
              2006Operating
      revenuesClub
      and business centre
              $
              710,610
              
              
              $
              712,368Hotel
      Management
              
              32,820
              
              
              
              -743,430
              
              
              
              712,368Operating
      costs and expensesClub and business centre
              
              5,382
              
              
              
              37,118Hotel Management
              
              3,150
              
              
              
              -8,532
              
              
              
              37,118Other
      expensesBad debts expense (recovered)
              
              -
              
              
              
              (4,830
              )Impairment, depreciation and amortization
              
              43,040
              
              
              
              19,695Stock-based consultancy expenses
              
              1,155,263
              
              
              
              -Selling, general and administrative expenses
              
              2,171,123
              
              
              
              4,354,6183,369,426
              
              
              
              4,369,483Loss
      from continuing operations
              
              (2,634,528
              )
              
              
              (3,694,233
              )Non-operating
      income (expense)Other
      income
              
              64,882
              
              
              
              26,781Interest
      income
              
              796
              
              
              
              871Interest
      expense
              
              -
              
              
              
              -Other
      expense - share of affiliate loss
              
              (147,920
              )
              
              
              -Gain
      (loss) on disposal of a subsidiary
              
              -
              
              
              
              -Loss
      on disposal of an affiliate
              
              (541,133
              )
              
              
              (180,175
              )Impairment
      loss on investment in an affiliate
              
              -
              
              
              
              (2,140,359
              )Loss
      on disposal of interest in a subsidiary
              
              -
              
              
              
              (2,394,839
              )Gain
      (loss) on disposal of interest in a subsidiary
              
              -
              
              
              
              (321,185
              )Loss
      from continuing operations before extraordinary item, income taxes and
      minority interest
              
              (3,257,903
              )
              
              
              (8,703,139
              )Provision
      for income taxes
              
              -
              
              
              
              -


See
accompanying notes to consolidated financial statements.





- 22
-




CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS


AND
COMPREHENSIVE INCOME (LOSS)


(Expressed
in United States Dollar (“US$”), except for per share data)




Years
      EndedDecember
      312007
              
              
              2006Net
      loss from continuing operations before extraordinary item
              
              
              (3,257,903
              )
              
              
              (8,703,139
              )Discontinued
      operations:Loss
      from discontinued operations
              
              
              (27,133
              )
              
              
              (1,387,836
              )Net
      loss before extraordinary item
              
              
              (3,285,036
              )
              
              
              (10,090,975
              )Extraordinary
      itemNegative
      goodwill recognized as income
              
              
              1,000,000
              
              
              
              -Net
      loss
              
              
              (2,285,036
              )
              
              
              (10,090,975
              )Other
      comprehensive incomeUnrealized
      holding gain arising for the period
              
              
              (2,000,000
              )
              
              
              (1,108,375
              )Less:
      Reclassification adjustment for gains or losses included in net
      profit
              
              
              -
              
              
              
              357,125Foreign
      currency translation adjustment arising during the period
              
              
              (49,985
              )
              
              
              35,472Comprehensive
      loss
              
              $
              (4,335,021
              )
              
              $
              (10,806,753
              )Loss
      from continuing operations per share of common stock-
      Basic and diluted
              
              $
              (0.07
              
              
              $
              (0.25
              )Loss
      from extraordinary income per share of common stock-
      Basic and diluted
              
              $
              0.02
              
              
              $
              (0.00
              )Loss
      from extraordinary income per share of common stock-
      Basic and diluted
              
              $
              0.02
              
              
              $
              (0.00
              )Total
      net loss per share of common stock-
      Basic and diluted
              
              $
              (0.05
              )
              
              $
              (0.29
              )Total
      net loss per share of common stock-
      Basic and diluted
              
              $
              (0.05
              )
              
              $
              (0.29
              )Weighted
      average number of shares of common stock outstanding
              
              
              48,675,786
              
              
              
              35,252,090


See accompanying notes to consolidated financial
statements.





- 23
-


CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES


CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY


(Expressed
in United States Dollar (“US$”), except per share data)





Common
      stockNo.
      of shares
            
            
            Amount
      issued
            
            
            Additional
      paid in capital
            
            
            Deferred
      stock-based compensation
            
            Accumulated
      other comprehensive income - unrealized gain on available-for-sale
      securities
            
            
            Accumulated
      other comprehensive income (loss)
            
            
            Statutory
      reserves
            
            
            Accumulated
      deficit
            
            
            TotalBalance
      as of December 31, 2005
            
            
            33,668,923
            
            
            $
            33,669
            
            
            $
            31,014,949
            
            
            $-
            
            $-
            
            
            $
            775,240
            
            
            $
            169,624
            
            
            $
            (18,071,752
            )
            
            $
            13,921,730Common
      stock issued for service on
              April
      27, 2006
            
            
            280,000
            
            
            
            280
            
            
            
            383,320
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            383,600Common
      stock issued for service on
              April
      27, 2006
            
            
            117,000
            
            
            
            117
            
            
            
            162,513
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            162,630Common
      stock issued for service on August 15, 2006
            
            
            800,000
            
            
            
            800
            
            
            
            1,095,200
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1,096,000Common
      stock issued as consideration for acquisition of an affiliate
      on
              November
      20, 2006
            
            
            9,000,000
            
            
            
            9,000
            
            
            
            6,399,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            6,408,000Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (10,090,975
            )
            
            
            (10,090,975
            )Transfer
      to statutory reserve
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            2,283
            
            
            
            (2,283
            )
            
            
            -Foreign
      currency translation adjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            35,472
            
            
            
            -
            
            
            
            -
            
            
            
            35,472Unrealized
      holding (loss) gain arising during  the year
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            --
            
            
            
            
            
            
            
            (1,108,375
            )
            
            
            -
            
            
            
            -
            
            
            
            (1,108,375
            )Less:  Reclassification
      adjustment for gains or losses included in net profit
    (loss)
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            357,125
            
            
            
            -
            
            
            
            -
            
            
            
            357,125Adjustment
      on disposal of a subsidiary
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (171,907
            )
            
            
            -
            
            
            
            (171,907
            )Balance
      as of December 31, 2006
            
            
            43,865,923
            
            
            
            43,866
            
            
            
            39,054,982
            
            
            
            -
            
            -
            
            
            
            59,462
            
            
            
            -
            
            
            
            (28,165,010
            )
            
            
            10,993,300Common
      stock issued in exchange for service
            
            
            5,700,000
            
            
            
            5,700
            
            
            
            1,955,500
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1,961,200Net
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,285,036
            )
            
            
            (2,285,036
            )Foreign
      currency translation adjustment
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            49,985
            
            
            
            
            
            
            
            
            
            
            
            49,985Unrealized
      loss on marketable securities- available-for-sale
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,000,000
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,000,000
            )Issue
      of common stock-deferred compensation
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,442,357
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,442,357
            )Amortization
      of deferred stock compensation
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            726,820
            
            
            
            
            
            
            
            
            
            
            
            -
            
            
            
            
            
            
            
            726,820Balance
      as of December 31, 2007
            
            
            49,565,923
            
            
            $
            49,566
            
            
            $
            41,010,482
            
            
            $
            (715,537
            )
            
            $
            (2,000,000
            )
            
            $
            109,447
            
            
            $
            -
            
            
            $
            (30,450,046
            )
            
            $
            8,003,912





See
accompanying notes to consolidated financial statements.


- 24
-


CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS CASHFLOWS


(Expressed
in United States Dollar (“US$”))





Years
      ended December 31,2007
            
            
            2006Cash
      flows from continuing operating activities:Net loss
            $
            (2,285,036
            )
            
            $
            (10,090,975
            )Net loss from discontinued operations
            
            27,133
            
            
            
            1,387,836Net
      loss from continuing operations
            
            (2,257,903
            )
            
            
            (8,703,139
            )Adjustments
      to reconcile net loss from continuing operation to net cash used in
      continuing operating activities:Negative goodwill recognized as income
            
            (1,000,000
            )
            
            
            -Stock issued for services
            
            1,371,122
            
            
            
            1,391,977Share of losses in affiliate companies
            
            147,920
            
            
            
            180,175Depreciation  and amortization
            
            44,030
            
            
            
            19,696Bad debts
            
            5,132
            
            
            
            10,694(Gain) loss on disposal of interest in a subsidiary
            
            (27,133
            )
            
            
            2,140,359Loss on disposal of interest in an affiliate
            
            541,133
            
            
            
            -Impairment loss on investment in an affiliate
            
            -
            
            
            
            3,177,555Changes
      in working capital:Accounts receivables
            
            4,174
            
            
            
            (3,018
            )Other current assets
            
            4,795
            
            
            
            203,135Due from related companies
            
            -
            
            
            
            (415,755
            )Due from an affiliate company
            
            (24,377
            )
            
            
            (25,163
            )Rental and other deposits
            
            (18,069
            )
            
            
            (15,468
            )Prepayments
            
            155,891
            
            
            
            596Account payables
            
            4,302
            
            
            
            (1,610
            )Accrued expenses
            
            (172,648
            )
            
            
            250,613(Decrease) increase in deferred income
            
            (5,417
            )
            
            
            (985
            )Other current liabilities
            
            14,263
            
            
            
            67,396Due to related parties
            
            28,820
            
            
            
            -Due to related companies
            
            -
            
            
            
            19,927Net
      cash used in continuing operating activities
            
            (1,183,965
            )
            
            
            (1,703,015
            )Cash
      flows from continuing operations investing activities:Proceeds from a subsidiary disposed in preceding year
            
            900,000
            
            
            
            100,000Proceeds from disposal of an affiliate
            
            647,564
            
            
            
            1,282Proceeds from (used in) disposal of a subsidiary
            
            12,821
            
            
            
            (80,959
            )Acquisition of property, plant and equipment
            
            (28,823
            )
            
            
            -Net
      cash provided by continuing operations investing
activities
            
            1,531,562
            
            
            
            20,323Cash
      flows from continuing operations financing activities:Advance from (repayment to) a shareholder
            
            (399,898
            )
            
            
            1,662,470Net
      cash provided by (used in) continuing operations financing
      activities
            
            (399,898
            )
            
            
            1,662,470Net
      decrease in cash from continuing operation
            
            (52,301
            )
            
            
            (20,222
            )





See
accompanying notes to consolidated financial statements.





- 25
-


CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS CASHFLOWS


(Expressed
in United States Dollar (“US$”))





Years
      ended December 31,2007
            
            
            2006Discontinued
      operationsCash provided by (used in) discontinued operating
    activities
            
            26,341
            
            
            
            (2,668,484
            )Cash provided by discontinued operations investing
    activities
            
            -
            
            
            
            (1,895,770
            )Cash used in discontinued operations financing activities
            
            -
            
            
            
            1,424,944Net
      cash provided by discontinued operations
            
            26,341
            
            
            
            (3,139,310
            )Foreign
      currency translation adjustments
            
            (37,239
            )
            
            
            31,812Net
      decrease in cash and cash equivalents
            
            (63,199
            )
            
            
            (3,127,720
            )Cash
      and cash equivalents at beginning of year
            
            107,144
            
            
            
            3,234,864Cash
      and cash equivalents at end of year
            $
            43,945
            
            
            $
            107,144Supplemental
      disclosure information:Interest paid
            $
            -
            
            
            $
            -Income tax paid
            $
            -
            
            
            $
            -Non-cash
      operating, investing and financing activities:Common stocks issued for services
            $
            1,961,200
            
            
            $
            1,391,977Available for sale securities received as income
            $
            -
            
            
            $
            (375,000
            )





See
accompanying notes to consolidated financial statements.





- 26
-


CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS








1.         ORGANIZATION
AND DESCRIPTION OF BUSINESS





China
World Trade Corporation (“CWTC”) was incorporated under the laws of the State of
Nevada on January 29, 1998 as Weston International Development Corporation. On
July 28, 1998, the name was changed to Txon International Development
Corporation. On September 15, 2000 CWTC changed to its existing name. CWTC acts
as an investment holding company.





The
Company and subsidiaries are hereinafter collectively referred to as the
“Group”.





Details
of the major direct and indirectly owned subsidiaries and their principal
activities as of the date of this report are summarized below:





Name
      of company
            
            Date of
      acquisition/formation
            
            Place
      of incorporation
            
            Equity
      interest owned by the Company
            
            Principal
      activitiesBeijing
      World Trade Centre Club
            
            April
      1, 1999
            
            PRC
            
            75%
            
            Club
      servicesBeijing
      World Trade Full Capital Advisors Inc.
            
            December
      9, 2005
            
            PRC
            
            55%
            
            Business
      consulting serviceCEO
      Clubs China Limited
            
            May
      7, 2004
            
            Hong
      Kong
            
            51%
            
            LicensingChina
      Chance Enterprises Limited
            
            January
      26, 2004
            
            BVI
            
            100%
            
            Equity
      holding companyChina
      World Trade Corporation
            
            May
      5, 2004
            
            BVI
            
            100%
            
            Equity
      holding companyCreative
      Idea Group Limited
            
            January
      2, 2004
            
            BVI
            
            100%
            
            Business
      consulting serviceGuangzhou
      World Trade Centre Club Limited
            
            December
      29, 2001
            
            PRC
            
            75%
            
            Club
      servicesJune
      Success Limited
            
            August
      17, 2006
            
            BVI
            
            100%
            
            Equity
      holding companyRainbow
      Wish Limited
            
            August
      17, 2006
            
            BVI
            
            100%
            
            Equity
      holding companySinopac
      Success Limited
            
            August
      17, 2006
            
            BVI
            
            100%
            
            Equity
      holding companyVirtual
      Edge Limited
            
            August
      14, 2000
            
            BVI
            
            100%
            
            Equity
      holding company





2.           SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES





(a)           Basis
of consolidation





These
accompanying consolidated financial statements include the financial statements
of CWTC and subsidiaries and have been prepared in accordance with accounting
principles generally accepted in the United States of America (“US
GAAP”).  The results of subsidiaries acquired or disposed of during
the year are consolidated from or up to the date of their effective dates of
acquisition or disposal, respectively.





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





(b)           Use
of estimates





The
preparation of consolidated financial statements requires management of the
Group to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.




- 27
-


CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS






2.           SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


(c)           Cash
and cash equivalents





Cash and
cash equivalents of US$43,945 as of December 31, 2007 consist principally of
cash at bank. For purposes of the consolidated statements of cash flows, the
Group considers all highly liquid debt instruments with original maturities of
three months or less to be cash equivalents. None of the Group’s cash is
restricted as to withdrawal, which if any, has been separately disclosed in
current assets.





(d)           Accounts
receivable





Trade
accounts receivable are recorded at the invoiced amount and do not bear
interest. The allowance for doubtful accounts is the Group’s best estimate of
the amount of probable credit losses in the Group’s existing accounts
receivable. The Group determines the allowance based on historical write-off
experience of the Group. The Group reviews its allowance for doubtful accounts
on a regular basis. Past due balances over 90 days and over a specified amount
are reviewed individually for collectability. All other balances are reviewed on
a pooled basis by industry. Account balances are charged off against the
allowance after all means of collection have been exhausted and the potential
for recovery is considered remote. The Group does not have any off-balance-sheet
credit exposure related to its customers.





(e)         Property-use
rights





Property-use
rights are stated at cost less accumulated amortization and impairment
losses.  Costs of the property-use rights are amortized over the term
of the relevant rights on a straight line basis.





(f)           Property,
plant and equipment





Property,
plant and equipment and leasehold improvements are stated at cost less
accumulated depreciation and impairment losses, if any. Depreciation is
calculated on the straight-line method over the estimated useful lives of the
assets.  The estimated useful lives of the assets are as
follows:





Depreciable
      lifeLeasehold
      land and buildings
            50
      yearsLeasehold
      improvements
            2 –
      3 yearsOffice
      and computer equipment
            3 -
      5 yearsMotor
      vehicles
            3 -
      6 yearsFurniture
      and fixtures
            3 -
      10 years





(g)           Goodwill
on consolidation





Goodwill
represents the excess of the purchase consideration payable in acquisitions of
subsidiaries over the fair value of the net assets acquired at the time of
acquisition. Goodwill on consolidation is stated at cost when it arises. As part
of an ongoing review of the valuation of goodwill, management assesses the
carrying value of the goodwill to determine if changes in facts and
circumstances suggest that it may be impaired. If this review indicates that the
goodwill is not recoverable, the carrying value of the goodwill would be reduced
to its estimated fair market value.





On
disposal of a subsidiary, any attributable amount of purchased goodwill is
included in the calculation of the gain or loss on disposal.





(h)           Investment
in affiliate companies





The
Company accounts for its affiliate companies under the equity method of
accounting, by which the Company’s share of income or loss of affiliates are
recorded as “Equity in earnings of affiliates” in the consolidated statement of
operation. The investment in affiliate companies is included in balance sheet at
cost plus equity accounting adjustments which are the Company’s share of losses
since acquisition of the affiliates.





(i)           Impairment
of long-lived assets





In
accordance with FASB Statement 144, long-lived assets, such as property, plant
and equipment, and purchased intangibles subject to amortization, are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to estimated undiscounted future cash flows expected to be generated by the
asset. If the carrying amount of an asset exceeds its estimated future cash
flows, an impairment charge is recognized by the amount by which the carrying
amount of the asset exceeds the fair value of the asset. Assets to be disposed
of would be separately presented in the balance sheet and reported at the lower
of the carrying amount or fair value less costs to sell, and are no longer
depreciated. The assets and liabilities of a disposed group classified as held
for sale would be presented separately in the appropriate asset and liability
sections of the balance sheet.





Goodwill
is tested annually for impairment, and is tested for impairment more frequently
if events and circumstances indicate that the asset might be impaired. An
impairment loss is recognized to the extent that the carrying amount exceeds the
asset’s fair value. This determination is made at the reporting unit level and
consists of two steps. First, the Group determines the fair value of a reporting
unit and compares it to its carrying amount. Second, if the carrying amount of a
reporting unit exceeds its fair value, an impairment loss is recognized for any
excess of the carrying amount of the reporting unit’s goodwill over the implied
fair value of that goodwill. The implied fair value of goodwill is determined by
allocating the fair value of the reporting unit in a manner similar to a
purchase price allocation, in accordance with FASB Statement 141, Business Combinations.The
residual fair value after this allocation is the implied fair value of the
reporting unit goodwill.




- 28
-


CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
   2.           SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




(j)           Deferred
income





Deferred
income represents unamortized non-refundable admission fees, membership fees and
licensing fees received but the related services, or portion of the services,
have not yet been rendered.





(k)         Revenue
recognition





The Group
recognizes revenue when persuasive evidence of an arrangement exists, the
element has been delivered, the fee is fixed or determinable, collection of the
resulting receivable is probable, and VSOE of the fair value of any undelivered
element exists. A discussion about these revenue recognition criteria and their
applicability to the Group’s transactions as follows:





Persuasive evidence of an
arrangement: The Group uses either contract signed by both the customer
and the Group or written sales receipt issued by the Group that legally bind the
Group and the customer as evidence of an arrangement.





Product delivery: The Group
deems delivery to have occurred when the air tickets are accepted by and title
and risk of ownership has passed to the customer. Delivery of other services are
recognized as services are rendered under the terms of the
contract.





Fixed or determinable fee:
The Group considers the fee to be fixed or determinable if the fee is not
subject to refund or adjustment and the payment terms are within its normal
established practices. If the fee is not fixed or determinable, the Group
recognizes the revenue as amounts become due and payable.





Collection is deemed
probable: The Group conducts a credit review for all significant
transactions at the time of the arrangement to determine the credit-worthiness
of the customer. Collection is deemed probable if the Group expects that the
customer will pay amounts under the arrangement as payments become
due.





(i)
            Club
      and business center





The
Group, through its Business Club, provides members a commercial and recreational
service, education programs and business networking programs.  The
Group generally records membership revenue as deferred income on its
consolidated balance sheets and recognizes it over the membership
period.  Revenues generated from memberships that are subject to a pro
rata refund are recognized ratably over the membership period.





(ii)
            Hotel
      management


The hotel
management division focuses on high margin hotel management and development
support services.  Its commitment is to work in synergy with China
World Trade’s business clubs and investment service divisions to provide a high
yielding, well managed hotel by utilizing all its resources and
expertise.





(iii)
            Rental
      and others





Rental





The
Company also leases business facilities to members of the Club. These leases are
classified as operating leases and the lease revenues are recognized based on
the lease term of the facilities.





Others





The
Company recognizes revenue in accordance with SEC Staff Accounting Bulletin No.
101 “Revenue Recognition of Financial Statements”, when the title and risk of
loss have passed to the customer, there is persuasive evidence of an
arrangement, delivery has occurred or services have been rendered, the sales
price is determinable, and collectability is reasonably assured.





(iv)
            Interest
      income





Interest
income is recognized on a time apportionment basis, taking into account the
principal amounts outstanding and the interest rates applicable.




- 29
-
 CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
   2.           SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




(l)           Advertising
costs





The Group
expenses advertising costs as incurred in accordance with the SOP 93-7,
“Reporting for Advertising Costs”. Advertising costs are expensed as incurred
and were US$Nil for the year ended December 31, 2007 and US$274,486 for the year
ended December 31, 2006.





(m)           Income
taxes





The Group
accounts for income tax using SFAS No. 109 “Accounting for Income Taxes”, which
requires the asset and liability approach for financial accounting and reporting
for income taxes. Under this approach, deferred income taxes are provided for
the estimated future tax effects attributable to temporary differences between
financial statement carrying amounts of assets and liabilities and their
respective tax bases, and for the expected future tax benefits from loss
carry-forwards and provisions, if any. Deferred tax assets and liabilities are
measured using the enacted tax rates expected in the years of recovery or
reversal and the effect from a change in tax rates is recognized in the
statement of operations in the period of enactment. A valuation allowance is
provided to reduce the amount of deferred tax assets if it is considered more
likely than not that some portion of, or all of the deferred tax assets will not
be realized. For details please refer to Note 7 to these financial
statements.





(n)           Foreign
currency translation





Assets
and liabilities of the Group whose functional currency is the local currency are
translated into U.S. dollars at exchange rates prevailing at the balance sheet
date. Revenues and expenses are translated at average exchange rates for the
year. The net exchange differences resulting from these translations are
reported in accumulated other comprehensive income. Gains and losses resulting
from foreign currency transactions are included in the consolidated statements
of operations.





(o)
            Business
      segment reporting





SFAS No.
131 “Disclosures about Segments of an Enterprise and Related Information”
establishes standards for reporting information about operating segments on a
basis consistent with the Group’s internal organization structure as well as
information about geographical areas, business segments and major customers in
financial statements.





The Group
operates in two principal business segments: club and business centre, rental
and others.  There reportable segments are strategic business units
that offer different services. They are managed separately because they provide
distinct service that requires different knowledge and marketing
strategies.





(p)
            Stock-based
      compensation





In
December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment,”
which is a revision of SFAS No. 123, “Accounting for Stock-Based
Compensation.” Generally, the approach in SFAS No. 123(R) is similar
to the approach described in SFAS No. 123. However, SFAS
No. 123(R) requires all share-based payments to employees, including
grants of employee stock options, to be recognized in the income statement based
on their fair values. Pro forma disclosure is no longer an alternative. The new
standard will be effective for public entities (excluding small business
issuers) for the fiscal year beginning after June 15, 2005. The Group
adopted SFAS No. 123(R) on January 1, 2006 using the
modified-prospective transition method. Had the Group adopted SFAS
No. 123(R) for the year ended December 31, 2005, its diluted
earnings per share would have been unchanged, and going forward, the Group
expects that the adoption of SFAS No. 123(R) will have a similar
effect on diluted earnings per share.





The
Company records compensation expense for stock-based employee compensation plans
using the intrinsic value method in which compensation expense, if any, is
measured as the excess of the market price of the stock over the exercise price
of the award on the measurement date.





On
December 31, 2003, the Board of Directors adopted a stock option plan (The 2003
Plan). The 2003 Plan allows the Board of Directors to grant stock options to
various employees of the Company. 1,000,000 stock options were granted in
accordance with the terms of the 2003 Plan on December 31, 2003 to certain
officers and directors at an exercise price of US$0.673 per share. The stock
options will vest and become exercisable according to the following
schedule:





On April
30, 2004:           
25%





On
December 30, 2004:    25%





Each
quarter thereafter:   6.25% (until fully vested)




- 30
-
 CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
   2.           SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




By an
ordinary resolution passed at a directors’ meeting held on October 31, 2004, the
option holders of The 2003 Plan were allowed to begin exercising 50% of the
total entitlements as of November 1, 2005 (ahead of the original entitlement on
December 30, 2004) and on a cashless basis. The terms and conditions of the
remaining 50% of their entitlements under The 2003 Plan shall stay the
same.





(q)
            Stock-based
      compensation





As the
exercise price of the Company’s incentive stock options is higher than the
market price of the underlying stock on the date of grant, pursuant to APB
Opinion No. 25, no compensation expense has been recognized for stock options
granted to employees at the date of grant.





Following
modification the options granted under The 2003 Plan, the modified award (i.e.
50% of the total entitlements) was fully vested at October 31, 2004. The new
measurement of stock-based compensation was required and based on the intrinsic
value of the Company’s common stock at the date immediately prior to the
modification (i.e. October 31, 2004). The compensation cost was recognized in
the consolidated statement of operations and the same amount was credited to the
Company’s additional paid-in capital.





Had
compensation expense for the same stock options been determined based on their
fair values at the dates of grant and been amortized over the period from the
date of grant to the date that the award is vested, as consistent with the
provisions of SFAS No. 123, the Company's net loss and loss per share would have
been reported as follows:





Years
      ended December 31,2007
            
            
            2006Net
      profit (loss), as reported
            
            
            (2,285,036
            )
            
            
            (10,090,975
            )Total stock-based employee
      compensation expense determined under intrinsic value based on method for
      all awards, net of
      tax
            
            Nil
            
            
            NilTotal stock-based employee
      compensation expense determined under fair value based on method for all
      awards, net of
      tax
            
            Nil
            
            
            NilPro
      forma
            
            
            (2,285,036
            )
            
            
            (10,090,975
            )Earning
      (loss) per share-
      Basic and dilutedAs
      reported
            
            
            
            
            
            
            0.00Pro
      forma
            
            
            
            
            
            
            0.00





The fair
value of the options granted is estimated on the date of grant and date of
modification using a Black-Scholes option pricing model with the following
weighted average assumptions used:





Years
      ended December 31,2007
            
            
            2006Dividend
      yield
            
            
            -
            
            
            
            -Expected
      price volatility
            
            
            224
            %
            
            
            224
            %Risk-free
      interest rate
            
            
            2.1
            %
            
            
            2.1
            %Expected
      life of options (in years)
            
            
            2
            
            
            
            3Weighted-average
      fair value of options granted or modified
            
            $
            0.62
            
            
            $
            0.62





The
weighted average fair value per option granted at the date of grant and date of
modification was US$0.62 and US$1.97 respectively. For purposes of pro forma
disclosure, the estimated fair value of the options is amortized on a straight
line basis to expense over the options’ vesting periods, i.e., 3 years as
prescribed under The 2003 Plan.





(r)
            Comprehensive
      income (loss)





Accumulated
comprehensive income, as presented in the accompanying consolidated statement of
stockholder equity consists of changes in unrealized gains and losses on foreign
currency translation as well as unrealized gains or losses from
available-for-sale securities.  This comprehensive income is not
included in the computation of income tax expense or benefit.





(s)
            Related
      party





Parties
are considered to be related if one party has the ability, directly or
indirectly, to control the other party or exercise significant influence over
the party in making financial and operating decisions or vice versa, or where
the Group and the party are subject to common control or common significant
influence. Related parties may be individuals or other entities. All material
related party transactions have been disclosed in the disclosure note 15 to the
financial statements.


- 31
-
 CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
   2.           SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


(t)
            Concentrations
      of credit risk





Financial
instruments that potentially subject the Group to significant concentrations of
credit risk consist principally of cash and trade accounts receivable. The Group
performs ongoing credit evaluations of its customers' financial condition, but
does not require collateral to support such receivables.





The Group
utilizes a limited number of suppliers for certain components used in its
products but has no long-term supply contracts with them.





(u)
            Fair
      value of financial instruments





Management
considers that the carrying amounts of the Group’s cash, receivables, and
payables approximate their fair value because of the short maturity of these
instruments. Amounts due to related companies do not bear interest and do not
have fixed payment terms. Management is therefore unable to estimate the fair
value of such financial instruments.





(u)         Operating
leases





Leases
where substantially all the rewards and risks of ownership of assets remain with
the leasing company are accounted for as operating leases. Rent payable and
receivable under operating leases are recognized as expense and revenue on the
straight line basis over the lease terms.





The
Company leases certain premises under non-cancellable operating leases. Rental
expenses under operating leases were US$582,113 and US$551,387 for the years
ended December 31, 2007 and 2006, respectively.





(v)         Earnings
per share





The
Company computes earnings per common share (“EPS”) in accordance with SFAS
No. 128, “Earnings per Share.” Basic earnings per common share (“Basic
EPS”) are calculated using the weighted average number of shares of common stock
outstanding during each period. Diluted earnings per common share (“Diluted
EPS”) reflect the potential dilutive effect of additional common shares that are
issuable upon exercise of outstanding stock options, deferred compensation,
restricted stock units, and the outstanding commitment to issue shares
under the Employee Stock Purchase Plan, determined by the treasury stock
method.





As
      of December 312007
            
            
            2006Warrants
            
            
            921,002
            
            
            
            921,002Options
            
            
            1,400,000
            
            
            
            1,400,0002,321,002
            
            
            
            2,321,002




(w) Available-for-sale
securities





Available-for-sale
securities received in respect of the disposal of a subsidiary. The Company
determines the appropriate classification of its investments in debt and equity
securities at the time of purchase and reevaluates such determinations at each
balance-sheet date. Debt securities for which the Company does not have the
intent or ability to hold to maturity are classified as available for sale.
Available-for-sale security are carried at fair market value, with the
unrealized gains and losses, net of tax, included in the determination of
comprehensive income and reported in shareholders’ equity. The fair value of
substantially all securities is determined by quoted market prices. The
estimated fair value of securities for which there are no quoted market prices
is based on similar types of securities that are traded in the
market.





(x)         Recently
Issued Accounting Standards





In
February 2007, the FASB issued Statement No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities - Including an amendment to FASB Statement No.
115”. This statement permits companies to choose to measure many
financial instruments and other items at fair value. The objective is to improve
financial reporting by providing entities with the opportunity to mitigate
volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. This Statement is expected to expand the use of fair value
measurement of accounting for financial instruments. This statement applies to
all entities, including not for profit. The fair value option established by
this statement permits all entities to measure eligible items at fair value at
specified election dates. This statement is effective as of the beginning of an
entity’s first fiscal year that begins after November 15, 2007.  The
Company is currently assessing the impact adoption of SFAS No. 159 will have on
its consolidated financial statements.




- 32
-


CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
   2.           SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


In
December 2006, the FASB issued SFAS No. 157 “Fair Value Measurements” which
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles and expands disclosure about fair value
measurements. The statement clarifies that the exchange price is the price in an
orderly transaction between market participants to sell the asset or transfer
the liability in the market in which the reporting entity would transact for the
asset or liability, that is, the principal or most advantageous market for the
asset or liability. It also emphasizes that fair value is a market-based
measurement, not an entity-specific measurement, and that market participant
assumptions include assumptions about risk and effect of a restriction on the
sale or use of an asset. The provisions are effective for fiscal years beginning
after November 15, 2007. The Company is currently assessing the impact of the
statement.





In
December 2007, the Financial Accounting Standards Board (“FASB”) issued FASB
Statements No.141 (revised 2007), “Business Combinations” (“FAS
141(R)”) and No. 160, “Noncontrolling Interests in
Consolidated Financial Statements” (“FAS 160”). These standards aim to
improve, simplify, and converge internationally the accounting for business
combinations and the reporting of noncontrolling interests in consolidated
financial statements. The provisions of FAS 141 (R) and FAS 160 are effective
for the fiscal year beginning June 1, 2009. We are currently evaluating the
provisions of FAS 141(R) and FAS 160.





3.           GOING
CONCERN CONSIDERATIONS





Though
the Company has a negative working capital of US$(248,241) as of December 31,
2007, the Company had net loss of US$2,285,036 and net loss of US$10,090,975 for
the years ended December 31, 2007 and 2006 respectively.





Continuation
of the Company as a going concern is dependent upon obtaining additional working
capital through additional equity funding and attaining profitable operations in
the future. Management has developed a strategy, which they believe can be
accomplished and will enable the Company to operate in the future. However,
there can be no assurance that the Company will be successful with their efforts
to attain profitable operations. The inability of the Company to secure
additional financing and attain profitable operations in the near term could
adversely impact the Company’s business, financial position and
prospects.





4.           DISPOSAL
OF A SUBSIDIARY





(a)  Summary
of effect of disposal of a subsidiary





On
September 29, 2006, the Company through its wholly owned subsidiary, China
Chance Enterprises Limited, sold 100% outstanding capital stock of Rejoice
Success Limited (“Rejoice”) to Wisdom Plus Limited (“Wisdom Plus”) at a
consideration of $4,000,000. Rejoice owns 60% of the outstanding capital stock
of General Business Network (Holdings) Limited (“GBN”), which indirectly owns
51% of the outstanding capital stock of New Generation Commercial Management
Limited (“New Generation”).





The
purchase price will be paid by 4 installments from September 30, 2006 to July
29, 2007 in cash or shares of common stock issued by any Pink Sheet companies or
OTCBB companies in lieu of the consideration. The amount of share certificates
shall be agreed by both parties in a separate agreement. As of December 31,
2007, total amount of US$1,000,000 in cash had been received. The Company
also received 100% outstanding share capital of Sonytech Limited, which owns
8,000,000 shares of common stock of a pink-sheet-listed Mobile Entertainment,
Inc., as payment in lieu of the cash consideration portion for selling all of
the outstanding shares of Rejoice Success Limited.





Pursuant
to the Sale & Purchase Agreement dated June 29, 2007, the Company disposed
100% of equity interest of Creative Idea Group Limited (“CIGL”) for a cash
consideration of US$12,821 (or equivalent of HK$100,000).  The results
of operations before the effective date of the disposal and gain on disposal on
CIGL have been included in the condensed consolidated statement of operations
and comprehensive income for the period. The aggregate purchase price $12,821
has been received in cash on June 13, 2007.





The
excess of disposal consideration over fair value of net assets sold amounting to
$27,133 was recorded as loss from discontinued operations in the consolidated
statement of operations and comprehensive income in this year.





- 33
-
 
 CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


5.     ACQUSITION
OF A SUBSIDIARY





(a)  Summary
of effect of  acquisition of  a subsidiary





Pursuant
to the Settlement Agreement dated April 9, 2007 between Wisdom Plus Ltd. and
China Chance Enterprises Ltd., a wholly owned subsidiary of the Company, the
consideration outstanding of US$3,000,000 relating to disposal of General
Business Network (Holdings) Ltd. on June 29, 2006, a former subsidiary of the
Company, was set off against consideration payable by the Company in respect of
the acquisition of 100% equity interest of Sonytech Ltd, a BVI
company.





Sonytech
Ltd. beneficially owns 8,000,000 shares of Mobile Entertainment, Inc. (former
name is BIZ Outsourzing, Inc.), a Nevada corporation whose common stock is
listed for quotation in the Pink Sheets market.  The latter is
accounted for as available-for-sale securities in the books of Sonytech Ltd.
Sonytech is an equity holding company and a dormant company, and has no other
subsidiary.





(b)
Extraordinary item





In
accordance with Statement of Financial Accounting Standards No. 141 Business
Combination, the negative goodwill was apportioned to each asset class on a pro
rata basis. As there is no other eligible asset apart from available-for-sale
securities which can be reduced on a pro rata basis, unallocated negative
goodwill remained is to be recognized as an extraordinary gain for the period
immediately upon acquisition. Management believes this is a fair treatment
because of the dormant nature of Sonytech which implies there is no
consideration contingency existing as stated in paragraph B193 of SFAS No.
141.





The
following table summarizes the estimated fair value of the assets disposed and
liabilities discharged at the date of acquisition.





US$Assets
      acquiredAvailable-for-sale
      securities
            
            
            4,000,000Net
      assets acquired
            
            
            4,000,000Negative
      goodwill arising from acquisition of subsidiary
            
            
            (1,000,000
            )Acquisition
      consideration
            
            
            3,000,000





In
accordance with Statement of Financial Accounting Standards No. 141 Business
Combination, the negative goodwill of US$1,000,000 is recognized as other income
and has been included in statement of operations for the year ended December 31,
2007.





(b)  Analysis
of net outflow of cash and cash equivalents in respect of acquisition during the
period





For
      the year endedDecember
      31, 2007US$Cash
      consideration
            NilBank
      balance and cash acquired
            NilNet
      outflow of cash and cash equivalents
            Nil





6.     DISPOSAL
OF AN AFFILIATE





Pursuant
to a Sale and Purchase Agreement (“S&P Agreement”) dated June 29, 2007
between Wisdom Plus Ltd. and China Chance Enterprises Ltd., a wholly owned
subsidiary of the Company, the Company disposed of its 40% equities interest in
General Business Network (Holdings) Ltd. (“GBN”) at a consideration of
US$2,000,000.   Up to December 31, 2007, $647,564 of the
consideration was received in cash, and the total receivable amount is
$1,352,436.





Despite
the S&P Agreement was signed on June 29, 2007, Management believes the
negotiation and discussion of the S&P Agreement was practically concluded in
early April 2007.  The delay in signing is due to the unexpected
change in travel schedules of the signing parties of the Agreement.





The
Management believes taking April 1, 2007 as the effective date of disposal is a
fair treatment, having regard to the fact that the influence over the daily
management and operation of GBN and its subsidiaries effectively ended in early
April 2007 and the immaterial amount of share in earnings of affiliates under
equity accounting method to be included in the condensed consolidated statement
of operations and comprehensive income for the period.




- 34
-


CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




6.     DISPOSAL
OF AN AFFILIATE (CONTINUED)


Loss on
disposal of an affiliate is determined as follows





US$Carrying
      value as of April 1, 2007General
      Business Network (Holdings) Limited.Carrying
      value as of December 31, 2006
            
            
            2,538,529Equity
      in earnings during the three months ended March 31, 2007
            
            
            2,604Cash
      dividend received
            
            
            -Carrying
      value as of April 1, 2007
            
            
            2,541,133Disposal
      consideration
            
            
            2,000,000Loss
      on disposal of an affiliate
            
            
            541,133





7.           INVESTMENT
IN AFFILIATES





The
Company accounts for its 25% interest in CWT International Excursion Investment
Limited (“CWT Excursion”), a company organized and existing under the laws of
the British Virgin Islands, and 40% interest in General Business Network
(Holdings) Limited (“GBN”), a company organized and existing under the laws of
Hong Kong SAR, under the equity method of accounting. Under the equity method of
accounting, the Company’s share of income or loss of CWT Excursion and GBN are
recorded as “Equity in earnings of affiliates” in the consolidated statement of
operation.





Years
      EndedCarrying
      value of affiliates consists of the following:
            December
      31,Restated2007
            
            2006General
      Business Network (Holdings) Limited.Carrying
      value at beginning of period
            2,538,529
            
            
            2,666,667Equity
      in earnings during the period
            2,604
            
            
            128,138Cash
      dividend receivedDisposal
      during the period at carrying value
            (2,541,133
            )-Carrying
      value at end of period
            -
            
            
            2,538,529CWT
      International Excursion Investment LimitedCarrying
      value at beginning of period
            6,355,963
            
            
            6,408,000Equity
      in earnings during the period
            147,920
            
            
            52,037Cash
      dividend received
            -
            
            
            -Disposal
      during the period at carrying value
            -
            
            
            -Carrying
      value at end of period
            6,208,043
            
            
            6,355,963Carrying
      value in affiliates at end of period
            6,208,043
            
            
            6,355,963-





Results
of operations of CWT Excursion are summarized below. All amounts are presented
in accordance with accounting principles generally accepted in the United
States. The revenues and expenses have been translated at close
rates.





Years
      EndedDecember
      31,Restated2007
            
            
            2006Operating
      revenues
            
            
            4,099,105
            
            
            
            1,091,192Operating
      costs and expenses
            
            
            (5,241,004
            )
            
            
            (1,480,355
            )Loss
      from operation
            
            
            (1,141,899
            )
            
            
            (389,162
            )Interest
      and other income
            
            
            7,834
            
            
            
            5,149Minority
      interest
            
            
            542,384
            
            
            
            175,865Net
      loss
            
            
            (591,581
            )
            
            
            (208,148
            )




- 35
-
 CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


7.           INVESTMENT
IN AFFILIATES (CONTINUED)




(a)
Acquisition of affiliate





On June
25, 2006, the Company together with its wholly owned subsidiary, Rainbow Wish
Limited (“Rainbow Wish”), entered into a Share Exchange Agreement (the
“Agreement”) with CWT International Excursion Investment Limited, a company
organized and existing under the laws of the British Virgin Islands (“CWT
Excursion”), and Chi Hung Tsang, the Chairman of the Company and holder of sixty
percent (60%) of the capital stock of CWT Excursion, and also a citizen and
resident of the People’s Republic of China. Pursuant to the terms of the
Agreement, the Company will issue 9,000,000 shares of its common stock (the
“CWTC Shares”) to Mr. Tsang in exchange for 25 common shares of CWT Excursion
owned by him (the “CWT Excursion Shares”) to Rainbow Wish, presenting a 25%
equity interest in CWT Excursion.




CWT
Excursion was incorporated in March, 2006, and is the owner of 51% of the equity
interest in a joint venture company known as Suzhou Tongli International
Excursion Development Limited, which is a company organized and existing under
the laws of the People’s Republic of China (“Suzhou Tongli”). Suzhou Tongli is
in the business of operating tourist concessions in Tongli Town, Suzhou City,
Jiangsu Province, People’s Republic of China. Pursuant to the Agreement, Mr.
Tsang has also agreed to grant Rainbow Wish the option to purchase an additional
35% of the capital stock of CWT Excursion within twelve months of the date
hereof, at a price that will be agreed upon by both parties at the time of
exercise of said option in a separate agreement.  Please see footnote
no. 1 for business operation of CWT Excursion.





The
acquisition consideration of CWT Excursion amounts to $6,408,000, which is taken
as the carrying value in CWT Excursion at acquisition date of Jun 25, 2006. It
is the fair market value of the CWTD Shares to be issued to Mr. Tsang, based on
the closing bid price for the common stock of CWTD in the last five trading days
preceding the date of the Agreement of $0.712.





The
investment in CWT Excursion is categorized as an equity method investment
because the Company owns 25% of its equity, which is 20% or more and is 50% or
less of its outstanding capital stock. It is included in the consolidated income
statement using the equity method of accounting and is included in balance sheet
at cost plus equity accounting adjustments.





(b)
            Addition
      and disposal of affiliate





Upon
disposal of 60% of General Business Network (Holdings) Limited (“GBN”) common
shares on June 29, 2006, the Company holds 40% of its outstanding capital
stock.  GBN becomes an affiliate subsequent to the
disposal.   The carrying value of GBN at June 29, 2006 of
$2,666,667 is ascertained with reference to consideration for 60% equity of GBN
disposed ($4,000,000 x 40%/60%).





GBN, as
an affiliate of the Company, was disposed on June 29, 2007 at a consideration of
US$2,000,000.  Please see footnote no. 6 for details.





8.         INCOME
TAXES





The Group
are subject to income taxes on an entity basis on income arising in or derived
from the tax jurisdiction in which it is domiciled and operated.





The Hong
Kong subsidiaries incurred losses for taxation purposes for the year and thus
Hong Kong Profits Tax has not been provided.





Several
PRC subsidiaries are subject to PRC Enterprise Income Taxes (“EIT”) on an entity
basis on income arising in or derived from the PRC.  Income tax
expense comprises of the following:





Year
      ended December 31,2007
            
            
            2006Current
      tax
            
            
            -
            
            
            
            103,037Deferred
      tax
            
            
            -
            
            
            
            --
            
            
            
            -




- 36
-
 CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




8.         INCOME
TAXES (CONTINUED)




A
reconciliation of the income tax expense to the amount computed by applying the
current tax rate to the income before income taxes in the consolidated
statements of income is as follows:





Years
      ended December 31,2007
            
            
            2006%
            
            
            %Statutory
      rate
            
            33.0
            
            
            
            33.0Non-deductible
      expenses
            
            (1
            )
            
            
            5.9Tax
      exempt income
            
            -
            
            
            
            -Tax
      effect of net operating losses
            
            (21
            )
            
            
            (41.9
            )Unrecognized
      temporary differences
            
            8.8
            
            
            
            2.9Subsidiary
      not subject to tax
            
            (19.7
            )
            
            
            (0.8
            )Tax
      rate differential between subsidiaries
            
            (0.1
            )
            
            
            (0.1
            )Over
      provision in prior years related to a newly-acquired
      subsidiary
            
            -
            
            
            
            -Others
            
            -
            
            
            
            --
            
            
            
            (1.0
            )





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 amounts used for income tax purposes. Significant components of the Group’s
deferred tax assets and liabilities are as follows:





As
      of December 312007
            
            
            2006Deferred
      tax assetsNet
      operating loss
            
            
            7,258,829
            
            
            
            4,802,923Depreciation
            
            
            15,122
            
            
            
            51,041Deferred
      expenditure
            
            
            -
            
            
            
            638,1487,273,951
            
            
            
            5,492,112Valuation
      allowance
            
            
            (7,273,951
            )
            
            
            (5,492,112
            )Total
      deferred tax assets
            
            
            -
            
            
            
            -





In
assessing the realizability of deferred tax assets, management considers whether
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible.





9.           ACCOUNTS
RECEIVABLE, NET




As
      of
              December
      31,2007Accounts
      receivable, net
            
            
            2,229





The
management considers that the accounts receivable are stated at fair value
because it represents balances due from reputable customers and expects to
collect their outstanding balances in full.


- 37
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 CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS







10.           RENTAL
AND OTHER DEPOSITS





Included
in rental and other deposits are deposits paid to Guangzhou Goldlion City
Properties Co., Ltd. of US$83,921 and Guangzhou Goldlion Environmental
Technology Co., Ltd. of US$153,429 as of December 31, 2007.  For
relationship with the Group, please refer to note 18 (a) to these financial
statements.





11.           NOTES
RECEIVABLE-SALE OF AFFILIATE





Disposal
consideration receivable is the consideration receivable from Wisdom Plus
Limited relating to the disposal of GBN, as an affiliate, on June 29,
2007.





The total
consideration of US$2,000,000 is to be paid by 2 installments from June 30 to
December 31, 2007 in cash or shares of common stock issued by any Pink Sheet
companies or OTCBB companies in lieu of the consideration.  Cash of
US$100,000 had been received as of June 13, 2007 Up to December 31, 2007,
$647,564 of the consideration was received in cash and the total outstanding
amount is $1,352,436





12.           AMOUNT
DUE FROM/TO RELATED PARTIES





(a)Due
      from affiliate companyAs
      of December 31,2007CWT
      International Excursion Investment Ltd.
            
            
            51,977Classified
      as current assets
            
            51,977





The
amounts due from related parties and related companies and affiliate company as
of December 31, 2007 represented unsecured advances which were interest-free and
repayable on demand.





Guangzhou
      Goldlion City Properties Co., Ltd.
            
            
            (20,509
            )Beijing
      Wanlong Economic Consultancy Corporation Ltd.
            
            
            (2,730
            )Guangzhou
      City International Exhibition Co.
            
            
            (61,525
            )Classified
      as current liabilities
            
            
            (84,764
            )





The
amounts due to related parties as of December 31, 2007 represented unsecured
advances which were interest-free and repayable on demand.





The
amount due to related companies relates to rental and management fees and
advisory fees.





13.           AVAILABLE-FOR-SALE
SECURITIES





Available-for-sale
securities represent equity securities of which the aggregate cost, gross
unrealized gains and losses and fair value are as follows:





As
      of December 31, 2007Cost
            
            
            Unrealized
      loss
            
            
            Fair
      valueAvailable-for-sale:Equity
      securitiesNon-current
      assets – Mobile Entertainment, Inc.
            
            
            4,000,000
            
            
            
            (2,000,000
            )
            
            
            2,000,000





Mobile
Entertainment, Inc. (formerly named as BIZ Outsourzing, Inc.) is a Nevada
corporation whose common stock is listed for quotation in the Pink Sheets
market.




- 38
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 CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS







14.           PROPERTY,
PLANT AND EQUIPMENT





Property,
plant and equipment consist of the following:





As
      of December 31,2007Office
      and computer equipment
            
            
            19,668Motor
      vehicles
            
            
            69,772Less:
      Accumulated depreciation
            
            
            (45,330
            )Net
      book value
            
            
            44,110





Total
depreciation for the years ended December 31, 2007 and 2006 was US$23,040 and
US$245,196, respectively.





Despite
the operating loss experienced by the club operations of the Group, management
considers that impairment losses is not necessary for the year ended December
31, 2007 because of the immaterial amount .





15.           LOAN
RECEIVABLE





The loans
receivable are those loans to non-related companies which are interest bearing
and having a fixed repayment schedule.





16.           RELATED
PARTY TRANSACTIONS





(a)           Names
and relationship of related parties




Existing relationships with the
      CompanyBeijing
      Wanlong Economic Consultancy Corporation Ltd.
            PRC
      partner of a subsidiaryBernard
      Chan
            An
      ex-officer and an ex-shareholder of the CompanyChan
      Chi Ming
            A
      officer and ex-shareholder of the CompanyChen
      De Xiong
            A
      shareholder and director of a former subsidiaryChen
      Zeliang
            A
      director and ex-shareholder of the CompanyCWT
      International Excursion Investment Limited
            An
      affiliate company of the CompanyGlory
      River Corporation
            A
      company which an officer of the Company is a directorGuangzhou
      City International Exhibition Co.
            PRC
      partner of a subsidiaryGuangzhou
      Cyber Strategy Limited
            A
      company in which a director of the Company has beneficial
      interestGuangzhou
      Goldlion City Properties Co., Ltd.
            A
      company controlled by close family members of a
directorGuangzhou
      Goldlion Environmental Technology Co., Ltd.
            A
      company controlled by close family members of a
  director




- 39
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 CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




16.           RELATED
PARTY TRANSACTIONS (CONTINUED)


(a)           Names
and relationship of related parties





Existing
      relationships with the CompanyHK
      (Xian) Trade Association Ltd.
            A
      non-profit making organization in which a director of the Company is a
      directorHo
      Chi Kin
            A
      former independent director of the CompanyHuang
      Ze Hua
            A
      shareholder and director of a former subsidiaryJohn
      Hui
            A
      director, shareholder and ex-officer of the CompanyLuo
      Chao Ming
            A
      director and shareholder of the CompanyJune
      Yang
            A
      directorYe
      Xinlong
            A
      directorLarry
      Fan
            A
      Chief Financial OfficerRenard
      Investments Limited
            A
      company controlled by close family members of a
directorSuo
      Hong Xia
            A
      shareholder and director of a former subsidiaryWilliam
      Tsang
            A
      director, shareholder and officer of the
Company





(b)           Summary
of related party transactions





Year
      ended December 31,Notes
            
            2007
            
            
            2006US$
            
            
            US$Increase
      (decrease) in allowance for doubtful accounts toGuangzhou
      Cyber Strategy Limited
            (i)
            
            
            (73,600
            )
            
            
            (17,389
            )Guangdong
      WTC Link Information Services Ltd.
            (ii)
            
            
            
            
            
            
            15,525Consultancy
      fee expenses toBeijing
      Wanlong Economic Consultancy Corporation Ltd.
            (iii)
            
            
            19,603
            
            
            
            18,816Guangzhou
      City International Exhibition Co.
            (iv)
            
            
            19,603
            
            
            
            18,816Glory
      River Corporation
            (v)
            
            
            69,231
            
            
            
            65,385Bernard
      Chan
            (vi)
            
            
            
            
            
            
            12,821Huang
      Zehua
            (vii)
            
            
            
            
            
            
            2,779Suo
      Hongxia
            (viii)
            
            
            
            
            
            
            1,389Chen
      Dexiong
            (ix)
            
            
            
            
            
            
            4,446Director
      fee to:Ho
      Chi Kin
            (x)
            
            
            
            
            
            
            1,000William
      Tsang
            (xi)
            
            
            150,000
            
            
            
            150,000Chan
      Chi Ming
            (xii)
            
            
            26,419
            
            
            
            77,062John
      Hui
            (xiii)
            
            
            
            
            
            
            -Luo
      Chao Ming
            (xiv)
            
            
            4,284
            
            
            
            11,961Chen
      Zeliang
            (xv)
            
            
            6,403
            
            
            
            14,820June
      Yang
            (xvi)
            
            
            13,218




- 40
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 CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




16.           RELATED
PARTY TRANSACTIONS (CONTINUED)




(b)           Summary
of related party transactions





Years
      ended December 31,2007
            
            
            2006Rent
      and related expenses toGuangzhou
      Goldlion City Properties Co., Ltd.
            (xvii)
            
            
            290,928
            
            
            
            231,068Guangzhou
      Goldlion Environmental Technology Co., Ltd.
            (xviii)
            
            
            197,976
            
            
            
            179,948Personal
      guarantee granted fromMr.
      William Tsang
            
            
            
            -
            
            
            
            19,231NotesTraveling
      expenses toGuangzhou
      Sanranxin Travel Ltd.
            (xix)
            
            
            -
            
            
            
            115,553Other
      expenses toGoldlion
      Holdings Ltd.
            (xx)
            
            
            -
            
            
            
            1,362Sponsorship
      donation toHK
      (Xian) Trade Association Ltd.
            (xxi)
            
            
            -
            
            
            
            38,462





Notes:





(i)
            As
      of December 31, 2007, the amount due from/to Guangzhou Cyber Strategy
      Limited is US$Nil.(ii)
            As
      of December 31, 2007, the amount due from Guangdong WTC Link Information
      Services Ltd, is US$Nil.(iii)
            As
      of December 31, 2007, the amount due to Beijing Wanlong Economic
      Consultancy Corporation Ltd. is US$61,525(iv)
            As
      of December 31, 2007, the amount due to Guangzhou City International
      Exhibition Co. is US$20,508(v)
            As
      of December 31, 2007, the amount due from/to Glory River Corporation is
      US$Nil.(vi)
            As
      of December 31, 2007, the amount due from/to Mr. Bernard Chan is
      US$Nil.(vii)
            As
      of December 31, 2007, the amount due from Ms. Huang Zehua is
      US$Nil.(viii)
            As
      of December 31, 2007, the amount due to Ms. Suo Hongxia is
      US$Nil.(ix)
            As
      of December 31, 2007, the amount due from Mr. Chen Dexiong is
      US$Nil.(x)
            As
      of December 31, 2007, the amount due from/to Mr. Ho Chi Kin is
      US$Nil.(xi)
            As
      of December 31, 2007, the amount due to Mr. William Tsang is
      US$1,282,047(xii)
            As
      of December 31, 2007, the amount due from/to Mr. Chan Chi Ming is
      US$Nil.(xiii)
            As
      of December 31, 2007, the amount due from/to Mr. John Hui is
      US$Nil.(xiv)
            As
      of December 31, 2007, the amount due from/to Mr. Luo Chao Ming is
      US$Nil.(xv)
            As
      of December 31, 2007, the amount due from/to Mr. Chen Zeliang is
      US$Nil.(xvi)
            As
      of December 31, 2007, the amount due from/to Ms.June Yang is
      US$Nil.(xvii)
            As
      of December 31, 2006, the amount due to Guangzhou Goldlion City Properties
      Co., Ltd. is US$2,730.(xviii)
            As
      of December 31, 2007, the amount due to Guangzhou Goldlion Environmental
      Technology Co., Ltd. is US$ Nil.(xix)
            As
      of December 31, 2007, the amount due from Guangzhou Sanranxin Travel Ltd.
      is US$Nil.(xx)
            As
      of December 31, 2007, the amount due to Goldlion Holdings Ltd. is
      US$Nil.(xxi)
            As
      of December 31, 2007, the amount due to HK (Xian) Trade association Ltd.
      is US$Nil.





17.           AMOUNT
DUE TO A STOCKHOLDER





The
amount due to Mr. William Tsang represented unsecured advances which were
interest-free and repayable on demand.




- 41
-


CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





18.           OPERATING
LEASE COMMITMENT





(a)           Operating
lease payables





As of
December 31, 2007, the Group has total outstanding commitments not provided for
under non-cancelable operating leases, which are payable as
follows:





As
      of December 31,Year
            
            2007
            
            
            20062008
            
            
            719,120
            
            
            
            475,6182009
            
            
            520,045
            
            
            
            344,1342010
            
            
            475,622
            
            
            
            332,4962011
            
            
            275,090
            
            
            
            193,9561,989,877
            
            
            
            1,346,204





The Group
has also committed to pay contingent rental at the higher of the agreed rent and
the following portion of the membership fee income of a subsidiary:





·
            15%
      on the membership fee income of the subsidiary for the period from
      February 1, 2005 to January 31, 2006·
            7.5%
      on the membership fee income of the subsidiary for the period of February
      1, 2006 to January 31, 2009





(b)           Operating
lease receivables





The total
outstanding commitments under non-cancelable operating leases, which are
receivable as follows:





As
      of December 31,2007
            
            
            20062008
            
            
            155,934
            
            
            
            -2009
            
            
            -
            
            
            
            -155,934
            
            
            
            -





As of
December 31, 2007, property, plant and equipment held for use under operating
leases include gross amounts of US$89,249. Depreciation of property, plant and
equipment in respect of assets held for use under operating leases are US$22,983
and US$20,373 for the years ended December 31, 2007 and 2006
respectively.





19.           RETIREMENT
PLAN





The Group
operates a Mandatory Provident Fund (“MPF”) plan for its Hong Kong employees.
The pension expenses charged to the consolidated statement of operations
amounted to US$5,419 and US$5,215 for the year ended December 31, 2007 and 2006
respectively.  Total contribution to the MPF including employee
contribution (which is accounted for as salary and wages) charged to the
consolidated statement of operations amounted to US$10,839 and US$10,430 for the
year ended December 31, 2007 and 2006 respectively.





As
stipulated by the PRC regulations, all retired employees of the Group who are
residents of the PRC are entitled to an annual pension equal to their basic
annual salary upon retirement. The Group contributed to a state-sponsored
retirement plan at a certain percentage of the gross salary of its employees and
has no further obligations for the actual pension payments or post-retirement
benefits beyond the annual contributions. The state-sponsored retirement plan is
responsible for the entire pension obligations payable to all employees. The
pension expense for the year ended December 31, 2007 and 2006 was US$28,101 and
US$167,177, respectively.




20.           COMMON
STOCK





(a)
            On
      February 27, 2007, the Company issued 691,000 S-8 shares issued @USD0.001
      (nominal value) to Canyon Red Group Ltd re Tongli Town for IT consultancy
      provided during the period from 15Nov 2006 to 14 May
  2008.(b)
            On
      February 27, 2007, the Company issued 1,437,000 S-8 shares issued
      @USD0.001 (nominal value) to Techpro Services Ltd. re clubs for business
      consultancy provided during the period from 20 November 2006 to 19 August
      2007.(c)
            On
      February 27, 2007, the Company issued 2,860,000 S-8 shares issued
      @USD0.001 (nominal value) to Grande Angel Int'l Ltd for IT consultancy
      provided during the period from 15 January 2007 to 14 October
      2009.(d)
            On
      February 27, 2007, the Company issued 712,000 S-8 shares issued @USD0.001
      (nominal value) to Perfect Bright Hldg Ltd for Tongli resort feasibility
      provided during the period from 17 January 2007 to 16 July
      2007.




- 42
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 CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




21.           OPTIONS
PLAN





(a)
            (i)  On
      December 31, 2003, the Company adopted The 2004 Plan which was approved by
      the stockholders on the same date. The 2003 Plan allows the Board of
      Directors, or a committee thereof at the Board’s discretion, to provide
      for a total 1,000,000 stock options to officers, directors and key
      employees of the Company. All the stock options provided, were issued in
      accordance with the terms of The 2003 Plan on the same day to certain
      officers, directors and key employees of the Company at an exercise price
      of US$0.673 per share and are exercisable during the period from April 30,
      2004 to December 30, 2006.





(ii) On February 20, 2004, the Company cancelled 65,000 options and 30,000
options for the reason of resignation and job reposting
respectively.





(b)
            On
      February 27, 2004, the Company entered into an agreement with Xelex Inc.
      for consulting services provided. Apart from the consultancy fee expenses,
      an option to acquire 80,000 shares at an exercise price of US$1 per share
      was issued to Xelex Inc.. The stock option was fully vested and became
      exercisable on September 1, 2004. On November 9, 2004, the option was
      fully exercised on a cashless basis. A total of 58,552 common stocks of
      the Company were issued





The fair
value of this option, which is estimated by the Black-Scholes option pricing
model, was US$3.89.  The additional expense was recognized in the
preceding year consolidated statement of operations and the same amount was
credited to the Company’s additional paid-in capital. The following
weighted-average assumptions have been adopted in applying the Black-Scholes
option pricing model:





Expected
      dividend yield
            NoneRisk-free
      interest rate
            2.1%Expected
      volatility
            367%Contractual
      life
            2
      years





(c)              The
stock options activities and related information are summarized as
follows:





Years
      ended December 31,2007
            
            
            2006Number
      of Options
            
            
            Weighted
      average exercise price
            
            
            Number
      of Options
            
            
            Weighted
      average exercise priceOutstanding,
      beginning of year
            
            1,400,000
            
            
            
            3.0
            
            
            
            1,400,000
            
            
            
            3.0Granted
            
            
            
            
            
            
            
            
            
            -
            
            
            
            -Granted
            
            
            
            
            
            
            
            
            
            -
            
            
            
            -Exercised-
      The 2003 Plan
            
            
            
            
            
            
            
            
            
            -
            
            
            
            --
      Xelex Inc.
            
            
            
            
            
            
            
            
            
            -
            
            
            
            -Cancelled
            
            
            
            
            
            
            
            
            
            -
            
            
            
            -Outstanding,
      end of year
            
            1,400,000
            
            
            
            3.0
            
            
            
            1,400,000
            
            
            
            3.0Exercise price is less than
      market price on date
      of grant
            Nil
            
            
            Nil
            
            
            Nil
            
            
            NilExercisable,
      end of year
            
            1,400,000
            
            
            
            3.0
            
            
            
            1,400,000
            
            
            
            3.0





As
      of
              December 31, 2007Weighted
      average remaining contractual life
            0.5
      yearRange
      of exercise priceUS$3.0
            1,400,000




- 43
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 CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





22.
            PRIVATE
      PLACEMENTS OF COMMON STOCK AND WARRANTS TO PURCHASE COMMON
      STOCK





(a)
            On
      August 26, 2004, the Company entered into a Securities Purchase Agreement
      with Bridges & PIPES, LLC, TCMP3 Partners, Connell Capital Partners,
      LP and Stealth Capital, LLC (the “Purchasers”), providing for the issuance
      by the Company to the Purchasers, of the (i) number of shares of Common
      Stock, and (ii) Series A Warrants, subject to an option in favor of the
      Purchasers to purchase additional shares of common stock and receive
      additional warrants.





On August
26, 2004 and December 3, 2004 under the Securities Purchase Agreement, the
Purchasers acquired in the aggregate 433,333 and 966,667 shares of common stock
respectively, at a price of US$1.5 per share, for an aggregate purchase price of
US$2,100,000. Upon purchase, the Purchasers were also issued 700,001 five-year
Series A Warrants to purchase that number of warrant shares at an exercise price
equal to US$2.5 per share, without any additional consideration. In addition,
the Company granted each Purchaser an option (the "Option") to purchase that
number of shares of common stock equal to 1,400,001 shares (the "Firm Shares").
Upon exercise of the Option at a purchase price of US$3 per share of common
stock, the Purchaser would also receive, without additional consideration,
five-year Series B Warrants to purchase 50% of the Firm Shares at an exercise
price equal to US$4 per share.





The fair
values of attached Series A Warrants, Options and Series B Warrants were
recorded in the Company’s additional paid-in capital.





In
addition, the Company has issued 112,667 Placement Agent's Warrants to Duncan
Capital, LLC, who acted as Placement Agent to the Company in connection with the
offering. Such warrants are five-year non-cashless exercise, provisioned
warrants to purchase shares of common stock at US$2.5 per share. The costs
associated with these transactions are also accounted for based on the fair
value of these warrants at the date of issue.





On August
26, 2004, the Company also entered into a Registration Rights Agreement with the
investors signatories thereto, which provides that on or prior to 45 days after
the Escrow Date, the Company shall prepare and file with the Commission a
Registration Statement covering the resale of all of the Registrable Securities
(defined as the Firm Shares, Option Shares, shares issuable upon exercise of the
Agent's Warrants and shares issuable upon exercise of the Series A Warrants and
the Series B Warrants) for an offering to be made on a continuous basis pursuant
to Rule 415 under the Securities Act. In addition, the Registration Rights
Agreement also contains certain piggy-back registration rights in favor of the
holders of Registrable Securities. All fees and expenses incident to the
performance of or compliance with the Registration Rights Agreement are to be
borne by the Company.





(b)
            On
      November 22, 2004, the Company entered into a Standby Equity Distribution
      Agreement (a "SEDA") and a Registration Rights Agreement, with US-based
      investment fund, Cornell Capital Partners, LP ("Cornell Capital") for
      US$30,000,000. Under the SEDA, Cornell has committed to provide up to
      US$30,000,000 of funding to the Company over a 24-month period, to be
      drawn down at the Company's discretion by the purchase of the Company's
      common stock. The purchase price of the shares purchased under the SEDA
      with respect to any advance will equal 99% of, or a 1% discount to, the
      lowest closing bid price of the common stock during the five consecutive
      trading day period immediately following the notice date. The amount of
      each advance is subject to a maximum advance amount of $1,500,000, except
      for the first advance, which may be in the amount of $3,000,000. Cornell
      Capital intends to sell any shares purchased under the SEDA at the then
      prevailing market price. Duncan Capital, LLC has been engaged by the
      Company to act as Placement Agent with respect to the
  SEDA.





(c)
            In
      connection with the SEDA, the Company has entered into a Letter Agreement,
      dated as of November 19, 2004 (the "Letter Agreement"), pursuant to which
      it agreed to (a) not make any draw-downs under the SEDA for a period of
      thirty days from the date of effectiveness of the soon-to-be-filed
      registration statement, and (b) issue to Bridges & PIPES, LLC and
      TCMP3 Partners, the two Purchasers at the first closing referred to above,
      83,334 Series A Warrants and 25,000 Series A Warrants, respectively, in
      order to induce such Purchasers to waive their rights to be the sole
      registrants on the registration statement. The costs associated with these
      compensations are also accounted for based on the fair value of these
      warrants at the date of issue.





Using the
Black-Scholes option pricing model with the following weighted-average
assumptions:





Expected
      dividend yield
            NoneRisk-free
      interest rate
            3.61%Expected
      volatility
            211%Contractual
      life
            1.86
      years





The fair
value of these warrants was estimated as US$0.05 for the year ended December 31,
2007. The additional expenses for placement services provided and compensation
of were recognized in the preceding year consolidated statement of operations
and the same amounts were credited to the Company’s additional paid-in capital.
No additional expenses was recognized during the year because of no further
issue of warrants for services.




- 44
-
 CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS






22. PRIVATE
PLACEMENTS OF COMMON STOCK AND WARRANTS TO PURCHASE COMMON STOCK
(CONTINUED)


The
warrant activities and related information are summarized as
follows:




Years
      ended December 31,2007
              
              
              2006Number
      of Warrants
              
              
              Weighted
      average exercise price
              
              
              Number
      of Warrants
              
              
              Weighted
      average exercise priceOutstanding,
      beginning of year
              
              921,002
              
              
              
              2.5
              
              
              
              921,002
              
              
              
              2.5Granted
              
              -
              
              
              
              
              
              
              
              -Exercised
              
              -
              
              
              
              
              
              
              
              -Outstanding,
      end of year
              
              921,002
              
              
              
              2.5
              
              
              
              921,002
              
              
              
              2.5Exercise price is less
      than market price on
      date of grant
              Nil
              
              
              Nil
              
              
              Nil
              
              
              NilExercise
      price exceeds market price on date of grant
              
              921,002
              
              
              
              2.500
              
              
              
              921,002
              
              
              
              2.500Exercisable,
      end of year
              
              921,002
              
              
              
              2.500
              
              
              
              921,002
              
              
              
              2.500


As
      of December 31, 2007Weighted
      average remaining contractual life
            1.86
      yearsRange
      of exercise priceUS$2.500
            921,002





(d)
            The
      Group had fully accounted for liquidated damage expense of US$- and
      US$211,500 for the year ended December 31, 2007 and 2006 respectively in
      connection with the failure to have its registration statement become
      effective as required under the terms of the Securities Purchase Agreement
      in which US$650,000 was raised in August 2004 and US$1,400,000 was raised
      in December 2004.  Under section 2(c) of the Registration Rights
      Agreement, in part, that each investor is entitled to be paid an amount in
      cash until a registration statement is declared effective and/ or the
      Registrable Securities may be sold pursuant to Rule 144(k) (which requires
      a two years holding period. If a registration statement is not declared
      effective on or prior to one hundred twenty days (120) days of closing,
      such amount is equal to one percent (1%) of the aggregate purchase price
      paid by the Investors. We quantified the amount with reference to the date
      when the 120 days period expires and accrued the liquidated damage expense
      on a time apportionment basis in respect of both amounts raised in August
      and December 2005 amounting to US$650,000 and US$1,400,000 respectively.
      Of total amount of US$420,000 provided, US$145,000 had been paid in March
      2006.





23.           STOCK-BASED
COMPENSATION EXPENSE





The
Company issued 691,000 shares of its common stock on February 27, 2007 to Canyon
Red Group Limited as their compensation for the provision of information
technology consultancy services, at then market price of $0.27, for a total of
$186,570. The Company amortized the consultancy fee over a 18 months period. The
term for this agreement is 18 months beginning on November 15, 2006 to May 14,
2008. It resulted in an expense of $10,365 for each month, and the total
stock-based compensation expenses of $124,380and $15,893 for the years ended
December 31, 2007 and 2006, respectively.





The
Company issued 2,860,000 shares of its common stock on February 27, 2007 to
Grande Angel International Limited as their compensation for the provision of
information technology consultancy services, at then market price of $0.36, for
a total of $1,029,600. The Company amortized the consultancy fee over a 33
months period. The term for this agreement is 18 months beginning on January 15,
2007 to October 14, 2009. It resulted in an expense of $31,200 for each month,
and the total stock-based compensation expenses of $360,360 for the year ended
December 31, 2007.





The
Company issued 712,000 shares of its common stock on February 27, 2007 to
Perfect Bright Holdings Limited as their compensation for the provision of
feasibility study of developing resort in Tong Li Town Wujiang City, Jinagsu
Province, at then market price of $0.34, for a total of $242,080. The Company
amortized the consultancy fee over a 6 months period. The term for this
agreement is 6 months beginning on January 17, 2007 to July 16, 2007. The total
stock-based compensation expenses of $242,080 for the year ended December 31,
2007.





The
Company also issued 1,437,000 shares of its common stock on February 27,
2007 to Techpro  Services Limited as their compensation for the
provision of advisory services on business development and facilitation services
in the expansion of the Guangzhou World Trade Centre Club Limited and CEO Clubs
China Limited, at then market price of $0.35, for a total of $502,950. The
Company amortized the consultancy fee over a 9 months period. The term for this
agreement is 6 months beginning on November 20, 2006 to August 19, 2007. The
total stock-based compensation expenses of $428,443 for the year ended December
31, 2007.





As a
result, the total stock compensation expense reported was $1,155,263 and
$15,893for the years ended December 31, 2007 and 2006,
respectively.




- 45
-


CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS






24.           STATUTORY
RESERVES





Statutory
reserves of the Company’s PRC subsidiaries include the statutory common reserve
fund and the statutory common welfare fund. Pursuant to regulations in the PRC,
the subsidiaries set aside 10% of their profits after tax for the statutory
common reserve fund (except when the fund has reached 50% of the Company’s
registered capital) and 5% of their profits after tax for the statutory common
welfare fund. The statutory common reserve fund can be used for the following
purposes:





-
            to
      make good losses in previous years; or-
            to
      convert into capital, provided such conversion is approved by a resolution
      at a owners’ general meeting and the balance of the statutory common
      reserve fund does not fall below 25% of the registered
      capital.





The
statutory common welfare fund, which is to be used for the welfare of the staff
and workers of the subsidiaries, is of a capital nature.





Amount of
statutory reserve as of December 31, 2007 is nil subsequent to the loss of the
subsidiaries.





25.           SEGMENTAL
REPORTING





The Group
has two reportable segments; club and business centre, rental and others with
four separate businesses lines in access services and product
sales.





The
following table presents information about the Company's business segments for
the years ended December 31, 2007 and 2006:





Years
      Ended December 31,2007
            
            
            Restated
      2006Operating
      revenuesClub
      and business centre
            
            710,610
            
            
            
            712,368Hotel
      Management
            
            32,820
            
            
            
            -743,430
            
            
            
            712,368Profit
      (Loss) from continuing operationsClub
      and business centre
            
            669,698
            
            
            
            639,632Hotel
      Management
            
            28,029
            
            
            
            -697,727
            
            
            
            639,632Corporate
      expenses
            
            3,332,255
            
            
            
            4,332,583Consolidated
      operating loss from continuing operation
            
            (2,634,528
            )
            
            
            (3,692,951
            )Other
      income
            
            62,278
            
            
            
            26,781Interest
      income
            
            796
            
            
            
            871Equities
      in earnings of affiliates
            
            (147,920
            )
            
            
            -Loss
      on disposal of an affiliate
            
            (666,667
            )
            
            
            (180,175
            )Impairment
      loss on investment in an affiliate
            
            -
            
            
            
            (2,140,359
            )Loss
      on disposal of interest in a subsidiary
            
            -
            
            
            
            (2,394,839
            )Realized
      gains on available-for-sale securities
            
            -
            
            
            
            (321,185
            )Net
      loss from continuing operation before extraordinary item,
              income
      taxes and minority interest
            
            (3,386,041
            )
            
            
            (8,701,857
            )





As
      of
              December
      31, 2007Total
      assets
            
            US$Club
      and business centre
            
            
            439,130Others
            
            
            9,437,9139,877,043




- 46
-


CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





26.         CONCENTRATIONS
AND RISKS





(i)           Major
Customers





The
following is a table summarizing the revenues from customers that individually
represent greater than 10% of the total revenues for the year ended December 31,
2007 and their outstanding balances as at year end date:





Years
      ended December 31,2007
            
            
            2006Customer
      A
            
            
            -
            
            
            
            1,487,780





As of
December 31, 2007, the balances due to the Group amounted to
US$Nil.





(ii)                Major
Vendors





The
following is a table summarizing the purchases from vendors that individually
represent greater than 10% of the total purchases for the year ended December
31, 2007 and their outstanding balances as at year end date:





Years
      ended December 31,2007
            
            
            2006Vendor
      A
            
            
            -
            
            
            
            845,747





As of
December 31, 2007, the balances due from the Group amounted to
US$Nil.





(iii)                Credit
Risk





Financial
instruments that are potentially subject to credit risk consist principally of
trade receivables. The Group believes the concentration of credit risk in its
trade receivables is substantially mitigated by its ongoing credit evaluation
process and relatively short collection terms. The Group does not generally
require collateral from customers. The Group evaluates the need for an allowance
for doubtful accounts based upon factors surrounding the credit risk of specific
customers, historical trends and other information.





(iv)                Exchange
risk





The Group
cannot guarantee that the current exchange rate will remain steady; therefore
there is a possibility that the Group could post the same amount of profit for
two comparable periods and because of the fluctuating exchange rate actually
post higher or lower profit depending on exchange rate of RMB and HK$ converted
to US$ on that date. The exchange rate could fluctuate depending on changes in
political and economic environments without notice.





27.           DORMANT
SUBSIDIARIES





The
following subsidiaries are dormant during the year ended December 31,
2007.





(i)
            China
      Chance Enterprises(ii)
            Rainbow
      Wish Ltd.(iii)
            China
      World Trade Corp (BVI)(iv)
            CEO
      Clubs China Limited(v)
            Sonytech
      Ltd(vi)
            CWT
      Hotel Management(vii)
            CWT
      Investments Services Limited




- 47
-
 CHINA
WORLD TRADE CORPORATION AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS







28.     
SUSEQUENT EVENT





Share Exchange with Parure
Capital. On March 28, 2007, the Company entered into a Share Exchange
Agreement by and among the Company, William Tsang, the Chairman and President of
the Company (“Tsang”), Uonlive Limited, a corporation organized and existing
under the laws of the Hong Kong (“Uonlive”), Tsun Sin Man Samuel, Chairman of
Uonlive (“Tsun”), Hui Chi Kit, Chief Financial Officer of Uonlive (“Hui”),
Parure Capital Limited, a corporation organized and existing under the laws of
the British Virgin Islands and parent of Uonlive (“Parure
Capital”).  For purposes of the Exchange Agreement; Tsun and Hui, as
the holders of all of the outstanding capital stock of Parure Capital were
therein referred to as the “Stockholders”, and Parure Capital and Uonlive were
therein referred to as the “Uonlive Subsidiaries.”





Upon the
closing date of the Share Exchange Agreement on or about March 31, 2008, Tsun
and Hui transferred all of their share capital in Parure Capital to the Company
in exchange for, and assigned to corporations designated by Tsun and Hui, an
aggregate of 150,000,000 shares of common stock of the Company and 500,000
shares of Series A Convertible Preferred Stock of the Company, which is
convertible after six months from the date of issuance into one hundred
shares of common stock of the Company, thus causing Parure Capital to become a
direct wholly-owned subsidiary of the Company and Uonlive as indirect subsidiary
of the Company.





In
addition, on the closing date on or about March 31, 2008:





(a) the
current officers of the Company resigned from such positions and the persons
chosen by Uonlive were appointed as the officers of the Company, notably Tsun
Sin Man Samuel, as Chairman, Cheung Chi Ho, as Chief Executive Officer, and Wong
Kin Yu, as Chief Operating Officer, and Tsang and Zeliang Chen resigned from
their positions as directors and officers; and Tsun and Cheung filled the
vacancies on the Board created by their resignation. CM Chan resigned from his
position as Chief Executive Officer, Larry Wei Fan will remain as Chief
Financial Officer until further notice.





(b) the
remaining members of the Board, namely Xiao Lei Yang, Chao Ming Luo and Ye Xin
Long resigned from their positions as a director effective upon the expiration
of the ten day notice period required by Rule 14f-1, at which time such persons
designated by Uonlive will be appointed as directors of the Company, notably
Carol Kwok, Zeng Yang and Wong Kin Yu.





(c) the
Company disposed 100% outstanding capital stock of China Chance Enterprises
Limited (“China Chance”), China World Trade Corporation (“CWTC”), Virtual Edge
Limited (“Virtual Edge”) and Rainbow Wish Limited (“Rainbow Wish”) to Top Speed
Technologies Limited (“Top Speed”), a British Virgin Islands corporation
wholly-owned by William Tsang, pursuant to which in consideration of
cancellation of indebtedness owed by the Company to William Tsang.





Pro forma
financial report





The
following unaudited pro forma condensed combined balance sheet combines the
consolidated historical balance sheet of China World Trade Corporation (“CWTD”)
as of December 31, 2007 and the consolidated balance sheet of Parure Capital
Limited (“Parure”) as of December 31, 2007, giving effect to the completion of
(1) the share exchange of all share capital of Parure in exchange for
150,000,000 shares of common stock of CWTD and 500,000 shares of Series A
Convertible Preferred Stock (the “Share Exchange”) and (2) the transfer of all
of CWTD’s subsidiaries to Top Speed Technologies Limited,  British
Virgin Islands corporation owned by Mr. William Tsang, the former Chairman and
President of CWTD (the “Disposal”) as if they had been consummated on December
31, 2007. The following unaudited pro forma condensed combined statement of
operations for the year ended December 31, 2007 combines the statement of
operations of CWTD for the year ended December 31, 2007 with the statement of
operations of Parure for the period from November 21, 2007 (date of inception)
through December 31, 2007, giving effect to the Disposal and the Share Exchange
as if they had occurred at the beginning of the periods presented.





The
historical financial information has been adjusted to give effect to pro forma
events that are related and/or directly attributable to the Disposal and the
Share Exchange, are factually supportable and are expected to have a continuing
impact on the combined results. The adjustments presented on the pro forma
condensed combined financial statements have been identified and presented to
provide relevant information necessary for an accurate understanding of CWTD
upon consummation of these transactions.





- 48
-


CHINA
WORLD TRADE CORPORATION


UNAUDITED
PRO FORMA CONDENSED COMBINED BALANCE SHEET


AS
OF DECEMBER 31, 2007


(Currency
expressed in United States Dollars (“US$”))




Proforma
      Adjustment (1)
            
            
            
            
            
            
            
            
            Proforma
      Adjustment (2)
            
            
            Pro
      formaCWTD
      (consolidated)
            
            
            Parure
            
            
            Disposal
      Adjustment
            
            
            Transfer
      of sub to related parties to cancel indebtedness
            
            
            Recapitalization
      and satisfaction of liabilities adj
            
            
            Issuance
      of 150,000,000 shares of common stock and 50,000,000 preferred
      stock
            
            
            Combined1a
            
            
            1b
      and 2a
            
            
            
            2bASSETSCURRENT
      ASSETSCash & cash equivalents
            $
            43,945
            
            
            $
            50,000
            
            
            $
            (43,845
            )
            
            
            
            
            
            
            
            
            $
            --
            
            
            $
            50,100Pledged bank deposit
            
            -
            
            
            
            10,256
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            10,256Accounts receivable
            
            2,229
            
            
            
            
            
            
            
            (2,229
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            -Deferred tax asset
            
            -
            
            
            
            39,142
            
            
            
            0
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            39,142Due from related parties
            
            -
            
            
            
            
            
            
            
            0
            
            
            $
            23,247,477
            
            
            $
            (23,247,477
            )
            
            
            
            
            
            
            -Due from affiliate co.
            
            51,977
            
            
            
            
            
            
            
            (51,977
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            -Rental and other deposits
            
            272,479
            
            
            
            
            
            
            
            (272,479
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            -Prepayments
            
            16,147
            
            
            
            
            
            
            
            (16,147
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            -Other current assets - disposal proceeds receivables
            
            1,352,436
            
            
            
            
            
            
            
            (1,352,436
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            -Other current assets
            
            13,815
            
            
            
            
            
            
            (13,815
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            -Total
      Current Assets
            
            1,753,028
            
            
            
            99,398
            
            
            
            (1,752,928
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            99,498-Property and Equipment, net
            
            44,110
            
            
            
            23,728
            
            
            
            (44,110
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            23,728Available-for-sale securities
            
            2,000,000
            
            
            
            
            
            
            
            (2,000,000
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            -Investment in affiliate co.
            
            6,208,043
            
            
            
            
            
            
            
            (6,208,043
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            -Intangible assets
            
            
            
            
            
            384,615
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            384,615Total
      Assets
            $
            10,005,181
            
            
            $
            507,741
            
            
            $
            (10,005,081
            )
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            507,841LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESDue to related parties
            $
            -
            
            
            $
            -
            
            
            $
            23,247,477
            
            
            $
            (23,247,477
            )
            
            $
            -
            
            
            $
            -
            
            
            $Due to a shareholder
            
            (1,282,047
            )
            
            
            (159,962
            )
            
            
            (234,841
            )
            
            
            
            
            
            
            1,516,888
            
            
            
            
            
            
            
            (159,962
            )Due to related companies
            
            (84,764
            )
            
            
            (57,692
            )
            
            
            84,764
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (57,692
            )Accounts payable
            
            (17,732
            )
            
            
            
            
            
            
            17,732
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            -Accrued expenses
            
            (458,726
            )
            
            
            (40,000
            )
            
            
            90,691
            
            
            
            
            
            
            
            368,035
            
            
            
            
            
            
            
            (40,000
            )Other current liabilities
            
            (158,000
            )
            
            
            
            
            
            158,000
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            -Total
      Current Liabilities
            
            (2,001,269
            )
            
            
            (257,654
            )
            
            
            23,363,823
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (257,654
            )OTHER
      LONG-TERM LIABILITIESNote payable to a shareholder
            
            
            
            
            
            (384,615
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (384,615
            )STOCKHOLDERS'
      EQUITYPreferred stock
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (50,000
            )
            
            
            (50,000
            )Common stock
            
            (49,566
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (150,000
            )
            
            
            (199,566
            )Additional paid-in capital
            
            (41,010,482
            )
            
            
            (50,000
            )
            
            
            
            
            
            
            
            
            
            
            41,059,948
            
            
            
            200,000
            
            
            
            199,466Deferred stock based compensation
            
            715,537
            
            
            
            
            
            
            
            (715,537
            )Accumulated other comprehensive income
            
            1,890,553
            
            
            
            
            
            
            
            (1,976,379
            )
            
            
            
            
            
            
            85,827Accumulated deficit
            
            30,450,046
            
            
            
            184,528
            
            
            
            (10,666,826
            )
            
            
            
            
            
            
            (19,783,221
            )
            
            
            
            
            
            
            184,528Total
      Stockholders' Equity
            
            (8,003,912
            )
            
            
            134,528
            
            
            
            (13,358,742
            )
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            134,428Total
      Liabilities and Stockholders' Equity
            $
            (10,005,181
            )
            
            $
            (507,741
            )
            
            $
            10,005,081
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            (507,841
            )





- 49
-


CHINA
WORLD TRADE CORPORATION


(a)
            UNAUDITED
      PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED
      DECEMBER 31, 2007


(Currency
expressed in United States Dollars (“US$”))





DisposalProforma
              Adjustment
      (1)
            
            
            Pro
      formaCWTD
      (consolidated)
            
            
            Parure
            
            
            Disposal
      Adjustment
            
            
            CombinedRevenue,
      net
            $
            (743,430
            )
            
            $
            (10,256
            )
            
            $
            743,430
            
            
            $
            (10,256
            )Cost
      of revenue
            
            8,532
            
            
            
            
            
            
            
            (8,533
            )Gross
      profit
            
            (734,898
            )
            
            
            (10,256
            )
            
            
            734,897
            
            
            
            (10,256
            )Operating
      expensesAmortization
      and depreciation
            
            43,040
            
            
            
            
            
            
            
            (43,040
            )Stock-based
      consultancy expenses
            
            1,155,263
            
            
            
            
            
            
            
            (1,155,263
            )General
      & administrative - exchange difference
            
            (45,141
            )
            
            
            
            
            
            
            (8,286
            )
            
            
            (53,427
            )General
      & administrative
            
            2,216,264
            
            
            
            233,926
            
            
            
            (1,470,031
            )
            
            
            980,1603,369,426
            
            
            
            233,926
            
            
            
            (2,676,620
            )
            
            
            926,733Income/loss
      from operations
            
            2,634,528
            
            
            
            223,670
            
            
            
            (1,941,723
            )
            
            
            916,477Other
      income (expenses)Interest
      income
            
            (796
            )
            
            
            
            
            
            
            796Other
      income
            
            (64,882
            )
            
            
            
            
            
            
            64,882Other
      expense - share of affiliate loss
            
            147,920
            
            
            
            
            
            
            
            (147,920
            )Gain
      (loss) on disposal of a subsidiary
            
            27,133
            
            
            
            
            
            
            
            
            
            
            
            27,133Loss
      on disposal of an affiliate co.
            
            541,133
            
            
            
            
            
            
            
            (541,133
            )650,508
            
            
            
            
            
            
            (623,375
            )
            
            
            27,133Net
      income before extraordinary items, income tax and minority
      interest
            
            3,285,036
            
            
            
            223,670
            
            
            
            (2,565,098
            )
            
            
            943,610Income
      tax expense
            
            
            
            
            (39,142
            )
            
            
            
            
            
            (39,142
            )Loss
      from continuing operation
            
            3,285,036
            
            
            
            184,528
            
            
            
            (2,565,098
            )
            
            
            904,468Income
      from discontinued operation
            
            
            
            
            
            
            
            2,565,098
            
            
            
            2,565,098Extraordinary
      item
              Negative
      goodwill recognized as income
            
            (1,000,000
            )
            
            
            
            
            
            
            
            
            
            
            (1,000,000
            )Net
      Loss
            $
            2,285,036
            
            
            $
            184,528
            
            
            $
            
            
            $
            2,469,566Loss
      from continuing operations per share - basic and diluted
            
            
            
            
            
            
            
            
            
            
            
            
            $
            (0.00
            )Loss
      from discontinued operations per share – basic and diluted
            
            
            
            
            
            
            
            
            
            
            
            
            
            (0,01
            )Income
      from extraordinary item per share - basic and diluted
            
            
            
            
            
            
            
            
            
            
            
            
            $
            0.00Net
      loss per share – basic and diluted
            
            
            
            
            
            
            
            
            
            
            
            
            $
            (0.1
            )Basic
      and diluted common shares
            
            
            
            
            
            
            
            
            
            
            
            
            
            248,675,786




- 50
-





NOTE
      1
            BASIS
      OF PRESENTATION





The
unaudited pro forma condensed combined financial information is for illustrative
purposes only. The financial results may have been different had the companies
always been combined. The unaudited pro forma condensed combined financial
information should not be relied upon as being indicative of the historical
results that would have been achieved had the companies always been combined or
the future results that CWTD will experience. CWTD and Parure have not had any
historical relationships prior to the transaction. Accordingly, no pro forma
adjustments were required to eliminate activities among the
companies.





The
shares that the former Parure stockholders will receive at the closing of the
transactions will represent approximately 75.1% of the outstanding ordinary
shares of CWTD (without taking into account the conversion of 500,000 shares of
Series A Convertible Preferred Stock in six months from the date of issuance
into 100 shares of common stock of CWTD) following the consummation of the
transactions (and the former CWTD shareholders would own approximately 10.9% of
the outstanding ordinary shares of CWTD), assuming the following transactions
are completed:





Disposal
of all subsidiaries of CWTD





At the
closing date, CWTD transfers of all of its subsidiaries to Top Speed
Technologies Limited, a British Virgin Islands corporation owned by William
Tsang, pursuant to a sale and purchase agreement in consideration of
cancellation of indebtedness owed by CWTD to Mr. William Tsang, the former
Chairman and the President of CWTD.





The
Exchange





The
Exchange between CWTD and Parure is treated as a reverse acquisition and
recapitalization of CWTD whereby Parure is deemed to be the accounting acquirer
(legal acquiree) and CWTD to be the accounting acquiree (legal acquirer). The
net assets of Parure are recorded as of the closing date at their historical
costs, which is considered to be the equivalent of fair value. No good will or
intangible assets are recorded as a result of the merger.




NOTE
      2
            PRO
      FORMA ADJUSTMENTS





These
unaudited pro forma combined financial statements reflect the following pro
forma adjustments:





Adjustment
1, relating to the Disposal





To record
the disposal of all subsidiaries of CWTD at their carrying values as of December
31, 2007 in consideration of cancellation of indebtedness owed by CWTD to Mr.
William Tsang.





Adjustment
2, relating to the Merger





2a.
            To
      eliminate the accumulated deficit of CWTD as Parure will be the continuing
      entity as accounting acquirer for accounting purposes.2b.
            To
      record the issuance of 150,000,000 shares of common stock at par value of
      $0.001 and 500,000 shares of Series A Convertible Preferred Stock of CWTD
      in exchange for all the shares of
Parure.





- 51
-


Item 8.      Changes in and
Disagreements with Accountants on Accounting and Financial
Disclosure




On
February 16, 2006, Moore Rowland Mazars, Chartered Accountants (“MRM”) resigned
as the independent registered public accounting firm for the Company. MRM had
been the independent registered public accounting firm for and audited the
consolidated financial statements of the Company for the year ended September
30, 2003, for the three months ended December 31, 2003, and for the year ended
December 31, 2004. All of the foregoing audited consolidated financial
statements are hereinafter collectively referred to as the “consolidated
financial statements.” The reports of MRM on the consolidated financial
statements for the past fiscal years indicated contained no adverse opinion or
disclaimer of opinion, and were not qualified or modified as to uncertainty,
audit scope or accounting principles, except for an explanatory paragraph
relating to the Company’s ability to continue as a "going concern." The tender
of resignation by MRM was approved unanimously by the Board of
Directors.




In
connection with the audits for the two most recent fiscal years and in
connection with MRM’s review of the subsequent interim periods through February
16, 2006, there have been no disagreements between the Company and MRM on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which, if not resolved to the satisfaction of MRM,
would have caused MRM to make reference thereto in their report on the Company’s
financial statements for these fiscal years. MRM agreed with the foregoing
statements in the letter that it was required to send to the Commission pursuant
to Item 304 of Regulation S-B.




On
February 16, 2006, the Company engaged Zhong Yi (Hong Kong) C.P.A. Company
Limited as its independent registered public accounting firm. The Company had
not consulted with Zhong Yi (Hong Kong) C.P.A. Company Limited regarding the
application of accounting principles to any contemplated or completed
transactions nor the type of audit opinion that might be rendered on the
Company’s financial statements, and neither written nor oral advice was provided
that would be an important factor considered by the Company in reaching a
decision as to an accounting, auditing or financial reporting issues. At the
time of its engagement, Zhong Yi (Hong Kong) C.P.A. Company Limited had not yet
been credentialed for practice before the Commission, although it began the
credentialing process in November of 2005.




On March
23, 2006, Zhong Yi (Hong Kong) C.P.A. Company Limited (“Zhong Yi”) resigned as
the independent registered public accounting firm for the Company. Zhong Yi had
been engaged on February 16, 2006 as the independent registered public
accounting firm to audit the consolidated financial statements of the Company
for the year ended December 31, 2005. Zhong Yi was not credentialed to practice
accounting before the Commission, but it had an application to be admitted
pending with the Commission since November of 2005. Zhong Yi determined that it
may not be credentialed in time and may not be able to finish and submit its
audit report to the Commission in connection with the filing of the Annual
Report on Form 10-KSB for the year ended December 31, 2005. As a result, Zhong
Yi chose to resign in order to give the Company an opportunity to engage a
credentialed auditing firm. The draft report of Zhong Yi on the audited
consolidated financial statements for the past fiscal year contained no adverse
opinion or disclaimer of opinion, and was not qualified or modified as to
uncertainty, audit scope or accounting principles, except for an explanatory
paragraph relating to the Company’s ability to continue as a “going concern.”
Zhong Yi’s tender of resignation was approved unanimously by the Board of
Directors.





In
connection with Zhong Yi’s review of the interim periods through March 23, 2006,
there have been no disagreements between the Company and Zhong Yi on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which, if not resolved to the satisfaction of Zhong
Yi, would have caused Zhong Yi to make reference thereto in its review. Zhong Yi
agreed with the foregoing statements in the letter that it was required to send
to the Commission pursuant to Item 304 of Regulation S-B.





On March
23, 2006, the Company engaged Child, Van Wagoner & Bradshaw, PLLC as its
independent registered public accounting firm. The Company had not consulted
with Child, Van Wagoner & Bradshaw, PLLC regarding the application of
accounting principles to any contemplated or completed transactions nor the type
of audit opinion that might be rendered on the Company’s financial statements,
and neither written nor oral advice was provided that would be an important
factor considered by the Company in reaching a decision as to an accounting,
auditing or financial reporting issue





Item 8A.   Controls and
Procedures





Annual Evaluation of
Controls. As of the end of the period covered by this annual report on
Form 10-KSB/A, we evaluated the effectiveness of the design and operation of our
disclosure controls and procedures ("Disclosure Controls"). This evaluation
(“Evaluation”) was performed by our then Chief Executive Officer, Chi Ming Chan
(our “CEO”), and our then Principal Financial Officer, Larry Wei Fan (our
“CFO”). In addition, we have discussed these matters with our securities
counsel.  In this section, we present the conclusions of our CEO and
CFO based on and as of the date of the Evaluation with respect to the
effectiveness of our Disclosure Controls.





CEO and CFO Certifications.
Attached to this annual report are certain certifications of the CEO and CFO,
which are required in accordance with the Exchange Act and the Commission's
rules implementing such section (the "Rule 13a-14(a)/15d–14(a) Certifications").
This section of the annual report contains the information concerning the
Evaluation referred to in the Rule 13a-14(a)/15d–14(a) Certifications. This
information should be read in conjunction with the Rule 13a-14(a)/15d–14(a)
Certifications for a more complete understanding of the topic
presented.





Disclosure Controls.
Disclosure Controls are procedures designed with the objective of ensuring that
information required to be disclosed in our reports filed with the Commission
under the Exchange Act, such as this annual report, is recorded, processed,
summarized and reported, within the time periods specified in the Commission’s
rules and forms and to ensure that information required to be disclosed by an
issuer in the reports that it files or submits under the Act is accumulated and
communicated to the issuer’s management, including its principal executive and
principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required
disclosure.





- 52
-






Limitations on the Effectiveness of
Controls. Our management does not expect that our Disclosure Controls
will prevent all error and all fraud. A control system, no matter how well
developed and operated, can provide only reasonable, but not absolute assurance
that the objectives of the control system are met.  Further, the
design of the control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
design and monitoring costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within the Company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management
override of the control. The design of a system of controls also is based in
part upon certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated
objectives under all potential future conditions. Over time, control may become
inadequate because of changes in conditions, or because the degree of compliance
with the policies or procedures may deteriorate. Because of the inherent
limitations in a cost-effective control system, misstatements due to error or
fraud may occur and not be detected.





Scope of the Evaluation. The
CEO and CFO's evaluation of our Disclosure Controls included a review of the
controls' (i) objectives, (ii) design, (iii) implementation, and (iv) the effect
of the controls on the information generated for use in this annual report. In
the course of the Evaluation, the CEO and CFO sought to identify data errors,
control problems, acts of fraud, and they sought to confirm that appropriate
corrective action, including process improvements, was being undertaken. This
type of evaluation is done on a quarterly basis so that the conclusions
concerning the effectiveness of our controls can be reported in our quarterly
reports on Form 10-QSB and annual reports on Form 10-KSB. The overall goals of
these various evaluation activities are to monitor our Disclosure Controls, and
to make modifications if and as necessary. Our intent in this regard is that the
Disclosure Controls will be maintained as dynamic systems that change (including
improvements and corrections) as conditions warrant.





Conclusions. Based upon the
Evaluation, our disclosure controls and procedures are designed to ensure that
information required to be disclosed by the issuer in the reports it files or
submits under the Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and
forms and to ensure that information required to be disclosed by an issuer in
the reports that it files or submits under the Act is accumulated and
communicated to the issuer’s management, including its principal executive and
principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure. Our CEO and
CFO have concluded that our disclosure controls and procedures, as designed and
described above, are effective at that reasonable assurance level to ensure that
information required to be disclosed by the issuer in the reports it files or
submits under the Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and
forms and to ensure that information required to be disclosed by an issuer in
the reports that it files or submits under the Act is accumulated and
communicated to the issuer’s management, including its principal executive and
principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure .and the
Internal Controls are effective at that assurance level to provide reasonable
assurance that our financial statements are fairly presented inconformity with
accounting principals generally accepted in the United States. Additionally,
there has been no change in our Internal Controls that occurred during our most
recent fiscal quarter or fiscal year that has materially affected, or is
reasonably likely to affect, our Internal Controls.





ITEM
8AT - Controls and Procedures





(a)           The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting (as defined in Rule 13a-15(f) under
the Securities Exchange Act of 1934, as amended). Management conducted an
evaluation of the effectiveness of the Company’s internal control over financial
reporting based on the criteria set forth in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).  Based on this evaluation, management has concluded
that the Company’s internal control over financial reporting was effective as of
December 31, 2007.





(b)           This
annual report does not include an attestation report of the company’s registered
public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by the company’s registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the company to provide only management’s report
in this annual report.





(c)           There
were no changes in the Company's internal control over financial reporting,
known to the chief executive officer or the chief financial officer, that
occurred during the last fiscal quarter of the year ended December 31, 2007 that
has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.







- 53
-






PART III





Item 9.  Directors and Executive Officers of
the Registrant





Directors
and Executive Officers





Our
Bylaws provide that we shall have that number of directors determined by the
majority vote of the board of directors. Currently we have five directors. Each
director will serve until our next annual shareholder meeting. Directors are
elected for one-year terms. Our Board of Directors elects our officers at the
regular annual meeting of the Board of Directors following the annual meeting of
shareholders. Vacancies may be filled by a majority vote of the remaining
directors then in office. Our directors and executive officers are as
follows:





Name
            
            Age
            
            PositionWilliam
      Chi Hung Tsang
            
            46
            
            Chairman,
      Director and PresidentZeliang
      Chen
            
            42
            
            Vice
      Chairman and DirectorXiaolei
      Yang
            
            36
            
            DirectorChao
      Ming Luo
            
            57
            
            DirectorChi
      Ming Chan
            
            46
            
            Chief
      Executive OfficerLarry
      Wei Fan
            
            37
            
            Chief
      Financial OfficerYe
      Xin Long
            
            62
            
            Independent
      Director




Backgrounds
of Directors





Executive
Directors





Mr.
William Chi Hung Tsang, aged 46, is the President and Chairman of the Board of
Directors of China World Trade Corporation. Mr. Tsang has more than 20 years of
experience in real estate, business and trade development. Prior to joining the
Company, Mr. Tsang was executive director of Goldlion Holdings Limited, a Hong
Kong-listed company. He is currently also the Director of the China Overseas
Friendship Association, Chairman of All China Youth Federation, Chairman of the
Hong Kong Xi’an Trade Association, Vice Chairman of the Guangzhou Federation of
Foreign Investors, and Vice Chairman of the Guangzhou Federation of Industry and
Commerce.





Mr.
Zeliang Chen, aged 42, is the Vice Chairman and Director of the Company. Mr.
Chen graduated with honors from Renmin University of China with a Bachelor of
Law. He is the founder of Guangdong Hua Hao Group of Companies and is a
committee member of the Private Enterprise Council of Guangdong Province. Mr.
Chen now is a Chief Executive Officer and Chairman of Guangdong New Generation
Travel Service Co., Ltd., Director of Guangdong Huahao Industries Group of
Companies, Director and Vice Chairman of China World Trade
Corporation.





Mr. Chao
Ming Luo, aged 57 is a Director of the Company. Mr. Luo has long-term
collaborative relations with Hong Kong business circles and associations. He was
employed at the Xinhua News Agency Hong Kong from 1983 to 1996; he then joined
the Xinhua News Agency Hong Kong Branch Guangzhou Representative Office in 1996
before joining the Company. He is the Chief Council Member of Guangdong Overseas
Friendship Association, and Council Member of Guangzhou Overseas Friendship
Association. Mr. Luo worked as the Electric Design Technician in Guangzhou
Design Institute and the Assistant of Electric Technology Specialty, Electric
Engineering Department in Guangdong University of Technology.





Ms. Xiao
Lei Yang, aged 36 is a Director of the Company. Ms. Yang has more than 10 years
experience in business clubs and city clubs operation and was responsible for
launching the first World Trade Center Club of the Company in Beijing in 1997,
followed by its second Club in 2001. Since 2004 she has been the
General Manager of World Trade Center Club Beijing and also serves as the
Chief Representative for CEO Club in Beijing.




Independent
Directors





Mr. Ye
Xin Long, aged 62, is an Independent Director of the Company. Mr. Ye has over 35
years of experience doing business in China and investing in Chinese
enterprises. He has an excellent relationship with the Beijing Municipal
Government and the Guangzhou Municipal Government.





- 54
-






Officers





Mr. Chi
Ming Chan, aged 46, was appointed as Chief Executive Officer of the Company on
January 5, 2006. Mr. Chan is responsible for the strategic planning, corporate
development and project implementation of the Company. Before joining us, Mr.
Chan was a Corporate Development Strategist for Renren Holding Ltd., a publicly
listed company on the Hong Kong Stock Exchange. Mr. Chan founded Asian
Information Resources (Holding) Ltd. in 1995, which eventually listed on the
Hong Kong Stock Exchange in 1999. Mr. Chan holds a Master of Law degree from
Lancaster University, the United Kingdom, a Master of Philosophy degree in
Physics and Bachelor Degree in Physics both from the Chinese University of Hong
Kong.





Mr. Larry
Wei Fan, aged 44, was appointed as Chief Financial Officer on August 28, 2007.
Mr. Fan has more than 10 years of experience in the areas of investment,
transaction advisory services and commercial fields. Prior to joining the
Company, Mr. Fan was associate director of Greater China Capital Limited and
vice president of Beijing Xinyou Stone Investment Consultancy Limited. He earned
an masters degree in business from RMIT University of Australia





There are
no familial relationships between our officers and directors.




Code
of Ethics





The
Company has adopted a Code of Ethics that applies to the Company’s principal
chief executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, as well as other
employees (the "Code of Ethics"), a copy of which is attached as Exhibit 14.1 to
our Form 10-KSB for the fiscal year ended December 31, 2005, and is incorporated
herein by reference. The Code of Ethics is designed with the intent to deter
wrongdoing, and to promote the following:





--
            Honest
      and ethical conduct, including the ethical handling of actual or apparent
      conflicts of interest between personal and professional
      relationships--
            Full,
      fair, accurate, timely and understandable disclosure in reports and
      documents that a small business issuer files with, or submits to, the
      Commission and in other public communications made by the small business
      issuer--
            Compliance
      with applicable governmental laws, rules and
regulations--
            The
      prompt internal reporting of violations of the code to an appropriate
      person or persons identified in the code--
            Accountability
      for adherence to the code





Section
16(a) Beneficial Ownership Reporting Compliance





Under
Section 16(a) of the Exchange Act, all executive officers, directors, and each
person who is the beneficial owner of more than 10% of the common stock of a
company that files reports pursuant to Section 12 of the Exchange Act, are
required to report the ownership of such common stock, options, and stock
appreciation rights (other than certain cash-only rights) and any changes in
that ownership with the Commission. Specific due dates for these reports have
been established, and the Company is required to report, in this Form 10-KSB/A,
any failure to comply therewith during the fiscal year ended December 2007. The
Company believes that all of these filing requirements were satisfied by its
executive officers, directors and by the beneficial owners of more than 10% of
the Company’s common stock. In making this statement, the Company has relied
solely on copies of any reporting forms received by it, and upon any written
representations received from reporting persons that no Form 5 (Annual Statement
of Changes in Beneficial Ownership) was required to be filed under applicable
rules of the Commission.





Item 10 . Executive Compensation





Compensation
Discussion and Analysis





We
maintain a peer-based executive compensation program comprised of fixed and
performance variable elements. The design and operation of the program reflect
the following objectives:





-
            Recruiting
      and retaining talented leadership.-
            Implementing
      measurable performance targets.-
            Correlating
      compensation directly with shareowner value.-
            Emphasizing
      performance based compensation, progressively weighted with seniority
      level.-
            Adherence
      to high ethical, safety and leadership
  standards.





Designing
a Competitive Compensation Package





Recruitment
and retention of leadership to manage our Company requires a competitive
compensation package. Our Board of Directors emphasizes (i) fixed compensation
elements of base salary that compare with our compensation peer group of
companies, and (ii) variable compensation contingent on above-target
performance. The compensation peer group consists of those companies in the
Guangdong region that we deem to compete with our Company for executive talent.
Individual compensation will vary depending on factors such as performance, job
scope, abilities, tenure and retention risk.





- 55
-






Fixed
Compensation





The
principal element of fixed compensation not directly linked to performance
targets is based salary. We target the value of fixed compensation generally at
the median of our compensation peer group to facilitate a competitive
recruitment and retention strategy.





Incentive
Compensation





Our
incentive compensation programs are linked directly to earnings growth, cash
flow, and total shareowner return. Annual bonuses are tied to the current year’s
performance of our company. Restrictive stock awards are tied to an individual’s
success in exceeding targeted results set by management.





Employment
Agreements





Our
executives do not have the typical employment agreements that specify
compensation or length of employment. These matters are left to the discretion
of the Board of Directors and the employee. At present, there are no employment
contracts with any of our executives.





No
compensation in excess of $100,000 was awarded to, earned by, or paid to any
executive officer of China World Trade during the years 2007, 2006 and 2005,
except as described below. The following table and the accompanying notes
provide summary information for each of the last three fiscal years concerning
cash and non-cash compensation paid or accrued by our chief executive officer
and other executive officers earning in excess of $100,000 for the past three
years.





SUMMARY COMPENSATION TABLE





Name
      of officer
            
            Year
            
            Salary
            
            
            Bonus
            
            
            Stock
      Awards
            
            
            Option
      Awards
            
            
            Non-Equity
      Incentive Plan Compensation
            
            
            Nonqualified
      Deferred Compensation
            
            
            All
      Other Compensation
            
            
            TotalWilliam
      Chi Hung Tsang, Chairman & Director
            
            2007
            
            
            150,000
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            150,000William
      Chi Hung Tsang, Chairman & Director
            
            2006
            
            
            150,000
            
            
            
            -
            
            
            
            -
            
            
            
            
            
            
            
            
            
            -
            
            
            
            -
            
            
            
            150,000William
      Chi Hung Tsang, Chairman & Director
            
            2005
            
            
            150,000
            
            
            
            12,500
            
            
            
            198,480
            
            
            
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            360,980C.
      M. Chan, CEO & Director
            
            2007
            
            
            26,419
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            26,419C.
      M. Chan, CEO & Director
            
            2006
            
            
            77,062
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            77,062C.
      M. Chan, Director
            
            2005
            
            
            76,982
            
            
            
            15,215
            
            
            
            53,755
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            145,952





Compensation
of Directors





In 2001,
China World Trade committed itself to compensate each of its Directors with
2,000 shares of its common stock per annum. Board members typically meet on a
bi-monthly basis.





2006 Non-Qualified Stock Compensation
Plans





The
following table sets forth information about our 2006 Non-Qualified Stock
Compensation Plans adopted by our Board of Directors and filed with the
Commission as Exhibit 10.1 to our Registration Statement on Form S-8 on June 8,
2006 and December 21, 2006.





Shares
      remaining available
              for
      future issuance
            
            Shares
      issuable upon exercise of options
              to
      be granted in the future
            
            Weighted
      average exercise price
              of
      outstanding options5,700,000
            
            -
            
            -





Pursuant
to the 2006 plans, we registered a total of 6,500,000 shares of common stock.
The Compensation Committee of the Board of Directors will issue common stock and
award options to employees, directors, officers, consultants, advisors and other
persons associated with our company. The 2006 plans are intended to provide
a method whereby our company may be stimulated by the personal involvement of
our employees, directors, officers, consultants, advisors and other persons in
our business and reward such involvement, thereby advancing the interests of our
company and all of its shareholders.





As at
December 31, 2006, a total of 800,000 shares of common stock were issued to
consultants pursuant to our 2006 Non-Qualified Stock Compensation Plans, leaving
a balance of 5,700,000 to be issued in the future.   The Company
issued the remaining 5,700,000 shares during 2007.





The
Company did not adopt a Non-Qualified Stock Compensation Plan in
2007.




- 56
-






Item 11
      .
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters





The
following table sets forth the number of shares of common stock beneficially
owned as of December 31, 2007 by (i) those persons or groups known to us who
will beneficially own more than 5% of our common stock; (ii) each Director and
director nominee; (iii) each executive officer whose compensation exceeded
$100,000 in the fiscal year ended December 31, 2007; and, (iv) all directors and
executive officers as a group. The information is determined in accordance with
Rule 13d-3 promulgated under the Exchange Act based upon information furnished
by persons listed or contained in filings made by them with the Securities and
Exchange Commission and upon information provided by such persons directly to
us. Except as indicated below, the stockholders listed possess sole voting and
investment power with respect to their shares.





Name/Address
            
            Number
      of Shares
            
            Percentage
              Ownership(1)William
      Chi Hung Tsang
              Unit
      A, 5/F, Goldlion Holdings Center, 13-15 Yuen Shun Circuit, Siu Lek Yuen,
      Shatin, N.T. Hong Kong
            
            21,787,675
            
            44.0%Powertronic
      Holdings Limited
              9
      Des Voeus Road West, 12 thFloor, Hong Kong
            
            5,574,074
            
            11.3%Grand
      Perfection Limited
              15
      thFloor, Rihang Hotel, 198 Linhe Road West, Guangzhou,
      PRC
            
            1,368,619
            
            2.8%Chi
      Ming Chan
              138
      Tiyu Road East, 3 rdFloor, Goldlion Digital Network Center, Guangzhou,
    PRC
            
            35,837
            
            **Chao
      Ming Luo
              138
      Tiyu Road East, 3 rdFloor, Goldlion Digital Network Center, Guangzhou,
    PRC
            
            17,918
            
            **All
      Officers and Directors as a Group (4 persons)
            
            23,210,049
            
            47.0%




** Less
than 1%


(1) Based
on 49,565,923 shares outstanding as of December 31, 2007.





Item 12 . Certain
Relationships and Related Transactions





We
entered into an acquisition agreement (the “Acquisition Agreement”) dated
November 19, 2003, with Mr. William Chi Hung Tsang (“Mr. Tsang”), the owner of
the 21st to 23rd Floor of Goldlion Digital Network Center, 138 Tiyu Road,
Tianhe, Guangzhou 510620, the PRC (the “Premises”). Mr. Tsang assigned to us the
rents and other consideration (the “Rental Income Right”) valued at $1,800,000.
Mr. Tsang was issued 3,000,000 shares of our common stock and warrants to
purchase an additional 6,000,000 shares of our common stock (the “Warrants”) for
$1,800,000 ($0.60 per share). The Warrants may be exercised between December 5,
2003 and December 1, 2005 at an exercise price of $0.75 per share. To date, Mr.
Tsang has exercised the warrants to purchase up to 1,500,000 shares of our
common stock and Mr. Tsang continues to hold a warrant to purchase up to
4,500,000 shares of our common stock until December 1, 2005.




The value
of the Rental Income Right was determined by using the present value of the
5-year rental income rights of the Premises, or $1,831,795. This present value
was based on the then actual rental income of the Premises, or $556,569. We then
assumed the following percentages: (a) annual growth rate on the rental income
of 3.0%, (b) rent free period and vacancy loss of 10%, and (c) business tax rate
of 5.5%. We discounted back to November 2003 using a ten percent discount
rate.





By a
Settlement Agreement dated December 5, 2003, we converted $456,661.73 that was
previously advanced by Mr. Tsang into 761,103 shares of common stock. In the
quarter ended December 31, 2003, a personal guarantee was granted from Mr. Tsang
in the amount of $19,231. As a result of these transactions, Mr. Tsang will
beneficially own 71.82% of our shares of common stock, assuming exercise of all
of his warrants.





We
entered into a relationship with respect to rent and related expenses with
Guangzhou Goldlion City Properties Co., Ltd. and Guangzhou Cyber Strategy
Limited in the approximate amount of $96,154, and Dimension Marketing Limited in
the amount of $80,645. These amounts have been classified as current
liabilities.The amounts due to related parties represent unsecured advances
which are interest-free and repayable on demand.





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On
December 30, 2004, General Business Network (Holdings) Limited, a wholly-owned
subsidiary of our company, and Guangzhou Goldlion Environmental Technology
Company Ltd., an affiliate of William Chi Hung Tsang, our Chairman, entered into
an Agreement for Purchase and Sale of the premises known as the 20th Floor
of the Goldlion Digital Network Centre, Nos. 136 and 138 Ti Yu Dong Road, Tianhe
District, Guangzhou PRC, pursuant to which Goldlion agreed to purchase the
premises from General Business Network for $2,456,521.70 in cash.  The
closing occurred on May 31, 2005, and Goldlion paid the purchase price for the
premises to General Business Network.





On March
29, 2005, our board of directors approved the sale of the after-tax rental
income rights of 21st and
23rd Floor,
Goldlion Digital Network Center, 138 Tiyu Road East, Tianhe, Guangzhou to our
Chairman, Mr. Chi Hung Tsang at the book value of $1,320,000. As a result, a
cash balance due from Mr. Tsang in the amount of $377,504 as of March 31, 2005
was subsequently paid off on April 28, 2005. The total consideration of
$1,320,000 would be used to provide additional working capital for our group of
companies.





On
September 25, 2006, the Company together with its wholly owned subsidiary,
Rainbow Wish Limited (“Rainbow Wish”), entered into a Share Exchange Agreement
(the “Agreement”) with CWT International Excursion Investment Limited, a company
organized and existing under the laws of the British Virgin Islands (“CWT
Excursion”), and Chi Hung Tsang, the Chairman of the Company and holder of sixty
percent (60%) of the capital stock of CWT Excursion, and also a citizen and
resident of the People’s Republic of China. Pursuant to the terms of the
Agreement, the Company will issue 9,000,000 shares of its common stock (the
“CWTD Shares”) to Mr. Tsang in exchange for 25 common shares of CWT Excursion
owned by him (the “CWT Excursion Shares”) to Rainbow Wish, presenting a 25%
equity interest in CWT Excursion. Pursuant to the Agreement, Mr. Tsang has also
agreed to grant Rainbow Wish the option to purchase an additional 35% of the
capital stock of CWT Excursion within twelve months of the date hereof, at a
price that will be agreed upon by both parties at the time of exercise of said
option in a separate agreement.





As
described in the Subsequent Event footnote to the Notes to the Financial
Statements, the Company entered into a Share Exchange Agreement, dated March 28,
2008, among Uonlive Limited, Parure Capital Limited, William Tsang and other
parties thereto.  In connection with the Share Exchange Agreement, the
Company transferred the capital stock of Virtual Edge Limited, a British Virgin
Islands corporation, China World Trade Corporation, a British Virgin Islands
corporation, China Chance Enterprises Limited, a British Virgin Islands
corporation, and Rainbow Wish Ltd., a British Virgin Islands corporation, to Top
Speed Technologies Ltd., a British Virgin Islands corporation which is wholly
owed by William Tsang, the former Chairman and President of the
Company.  The corporations whose stock was transferred represented all
of the assets and liabilities of the Company, and contain viable, ongoing
businesses.  No fairness opinion was sought by the Board of Directors
with respect to the transfers and no appraisals were sought by the Board of
Directors with respect to the assets indirectly transferred.





The
amounts due to related parties represent unsecured advances which are
interest-free and repayable on demand.





Item
13.    Exhibits and Reports on Form 8-K





(a) Exhibits. The exhibit
list required by Item 13 of Form 10-KSB is provided in the "Index to Exhibits"
located herein, immediately following Item 15.





(b) Reports on Form 8-K Filed in
Fiscal Year 2007





(1)
            On
      June 29, 2007, China Chance Enterprises Limited,(“China Chance”), a wholly
      owned subsidiary of the Company, entered into a Sale and Purchase
      Agreement (the “Agreement”) with Wisdom Plus Limited, a limited liability
      company organized and existing under the laws of the British Virgin
      Islands (“Wisdom Plus”), pursuant to which China Chance agreed to sell and
      Wisdom Plus agreed to purchase, all of the outstanding registered shares
      (the “Shares”) of Sinopac Success Limited and June Success Limited, the
      Company’s  indirect wholly owned subsidiary holding a total of
      40% of the outstanding capital stock of General Business Network
      (Holdings) Ltd. which indirectly holds owns 51% of the outstanding capital
      stock of Guangdong New Generation Commercial Management Ltd (“New
      Generation”)., The purchase price for the Shares was $2.0 million, payable
      in installments in accordance with the schedule set forth in the
      Agreement.(2)
            On
      August 27, 2007, the Company filed a Form 8-K regarding the completion of
      a disposal of Sinopac Success and June Success(3)
            On
      September 4, 2007, the Company filed a Form 8-K regarding the appointment
      of Mr. Larry Wei Fan to the position of Chief Financial Officer of the
      Registrant, effective on August 28,
2007.






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Item 14.    Principal Accountant
Fees and Services





Fees Billed For Audit and Non-Audit
Services




The
following table represents the aggregate fees billed for professional audit
services rendered to accounting firm of Child, Van Wagoner & Bradshaw, PLLC,
our current independent auditor, and all fees billed for other services rendered
by Child, Van Wagoner & Bradshaw, PLLC during those periods.





Year
      Ended December 31
            
            2007
            
            2006Audit
      Fees (1)
            
            62,847
            
            
            102,313Audit-Related
      Fees (2)
            
            1,500
            
            
            -Tax
      Fees (3)
            
            
            
            
            3,077All
      Other Fees (4)
            
            -
            
            
            -Total
      Accounting Fees and Services
            
            64,347
            
            
            105,390





Audit Fee. These are
      fees for professional services for the audit of the Company's annual
      financial statements, and for the review of the financial statements
      included in the Company's filings on Form 10-QSB, and for services that
      are normally provided in connection with statutory and regulatory filings
      or engagements.Audit-Related Fee.
      These are fees for the assurance and related services reasonably related
      to the performance of the audit or the review of the Company's financial
      statements.Tax Fees. These are
      fees for professional services with respect to tax compliance, tax advice,
      and tax planning.All Other Fees. These
      are fees for permissible work that does not fall within any of the other
      fee categories, i.e., Audit Fees, Audit-Related Fees, or Tax
      Fees.




Pre-Approval
Policy For Audit and Non-Audit Services





The
Company does not have a standing audit committee, and the full Board performs
all functions of an audit committee, including the pre-approval of all audit and
non-audit services before the Company engages an accountant. All of the services
rendered to the Company by accounting firm of Moores Rowland Mazars after
May 2003 were pre-approved by the Board of Directors of the
Company.





The
Company is presently working with its legal counsel to establish formal
pre-approval policies and procedures for future engagements of the Company's
accountants. The new policies and procedures will be detailed as to the
particular service, will require that the Board or an audit committee thereof be
informed of each service, and will prohibit the delegation of pre-approval
responsibilities to management. It is currently anticipated that the
Company's new policy will provide (i) for an annual pre-approval, by the Board
or audit committee, of all audit, audit-related and non-audit services proposed
to be rendered by the independent auditor for the fiscal year, as specifically
described in the auditor's engagement letter, and (ii) that additional
engagements of the auditor, which were not approved in the annual pre-approval
process, and engagements that are anticipated to exceed previously approved
thresholds, will be presented on a case-by-case basis, by the President or
Controller, for pre-approval by the Board or audit committee, before management
engages the auditors for any such purposes. The new policy and procedures may
authorize the Board or audit committee to delegate, to one or more of its
members, the authority to pre-approve certain permitted services, provided thatthe estimated
fee for any such service does not exceed a specified dollar amount (to be
determined). All pre-approvals shall be contingent on a finding, by the Board,
audit committee, or delegate, as the case may be, that the provision of the
proposed services is compatible with the maintenance of the auditor's
independence in the conduct of its auditing functions. In no event shall any
non-audit related service be approved that would result in the independent
auditor no longer being considered independent under the applicable rules and
regulations of the Securities and Exchange Commission.





INDEX TO EXHIBITS





The
following exhibits are filed as part of this report:





Exhibit
      Number
            
            Description14.1
            
            Code
      of Ethics, incorporated by reference from Exhibit 14.1 to our Annual
      Report on Form 10-KSB for the fiscal year ended December 31,
      2005.31.1
            
            Rule
      13a-14(a)/15d-14(a) Certifications of Cheung Chi Ho, CEO
  *31.2
            
            Rule
      13a-14(a)/15d-14(a) Certifications of Hui Chi Kit, Principal Financial
      Officer *32
            
            Statement Required By 18 U.S.C. Section 1350, As
      Adopted Pursuant To Section 906 of The Sarbanes-Oxley Act of
      2002*.





*
Filed herewith.


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SIGNATURES





In
accordance with the Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.





Date:
July 29, 2008





CHINA
      WORLD TRADE CORPORATIONBy:
            /s/
      Cheung Chi HoCheung
      Chi Ho, Chief Executive Officer





In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.





Signature
            Title
            Date/s/
      Cheung Chi Ho
            Chief
      Executive Officer
            July
      29, 2008Cheung
      Chi Ho/s/
      Hui Chi Kit
            Chief
      Financial Officer
            July
      29, 2008Hui
      Chi Kit





Pursuant
to the requirements of the Exchange Act, this report has been signed by the
following persons in the capacities and on the date indicated.





Signature
            Title
            Date/s/
      Tsun Sin Man Samuel
            Chairman
      and Director
            July
      29, 2008Tsun
      Sin Man Samuel/s/
      Wong Kin Yu
            Chief
      Operating Officer and Director
            July
      29, 2008Won
      Kin Yu/s/
      Carol Kwok
            Director
            July
      29, 2008Carol
      Kwok/s/
      Zeng Yang
            Director
            July
      29, 2008Zeng
      Yang





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