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

                                  FORM 10-KSB/A

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

    For  the  fiscal  year  ended  December  31,  1999

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

    For  the  transition  period  from  _____________  to  _____________

                        Commission  file  number:  0-25963

                           CHINA GATEWAY HOLDINGS INC.
              ----------------------------------------------------
              (Exact name of small business issuer in its charter)

               DELAWARE
     -------------------------------                     ----------------------
     (State of other jurisdiction of                       (I.R.S.  Employer
      incorporation  or organization)                     Identification Number)

        CLI BUILDING, SUITE 1003, 313 HENNESSY  ROAD, HONG KONG
      ------------------------------------------------------------
      (Address of principal executive offices, including zip code)

Issuer's  telephone  number,  including  area  code:  852-2893-9676

Securities  registered  pursuant  to  Section  12(b)  of  the  Act:  None

Securities  registered  pursuant  to  Section  12(g)  of the Act:  Common Stock,
$0.001  par  value

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

Check  if  disclosure of delinquent filers in response to Item 405 of Regulation
S-B  is  not 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.  [X]

The  issuer's revenues for the fiscal year ended December 31, 1999 were RMB -0-.

The  aggregate  market value of the issuer's common stock held by non-affiliates
of  the  issuer  as  of  March  31,  2000  was  $37,851.

The  issuer  had  4,307,158  shares of common stock issued and outstanding as of
March  31,  2000.

Transitional  Small  Business  Disclosure  Format:  Yes  [ ]  No  [X]

Documents  incorporated  by  reference:  None.


<PAGE>
                                     PART I.

ITEM  1.  DESCRIPTION  OF  BUSINESS

OVERVIEW

     China  Gateway  Holdings Inc.,  formerly  Orient  Packaging  Holdings  Ltd.
(the  "Company"),  owns a joint venture interest in a manufacturer of paperboard
products  used  in  packaging material for the Chinese market. The manufacturing
operations  are conducted through Wuhan Dong Feng Paper Company Limited, a joint
venture  ("Wuhan Limited" or the "Joint Venture"). The Company's 60% interest in
the Joint Venture is accounted for under the equity method of accounting.  Wuhan
Limited  has  a  term  of  30  years  that  expires  in  2027. The manufacturing
facilities  are  located in Wuhan, Hubei Province, which is in the Yangtze River
basin  area  of  the  Central part of the People's Republic of China ("China" or
"PRC").  The  manufacturing  facilities  have  an  annual production capacity of
35,000 tons of paperboard products, and produce bleached (white top) paperboard,
a  product used primarily as covering in the manufacture of corrugated packaging
for  the  food  and  beverage  industry in China.  In response to the increasing
awareness  and  sophistication of Chinese customers, major manufacturers of food
and  beverages  in  China,  especially  foreign  brand  manufacturers,  have
increasingly  turned  to  bleached  paperboard  covering of corrugated boxes for
wholesale  distribution  of  products.

     The  Company's  objective  is to continue to develop the Joint Venture as a
supplier  of  high  quality  packaging  material  to foreign brand name consumer
product  companies  in  the  Chinese  market.

INDUSTRY

       According  to  the  industry publication Pulp & Paper International (July
1999),  in  1998, China ranked third, trailing only the United States and Japan,
for  the  consumption  of paper and paperboard products in the world. The demand
for  paperboard  packaging material is correlated to the rate of economic growth
and  consumer spending. The Company believes that China's rapid growth in recent
years and its entry into the World Trade Organization Pact in November 1999 will
increase  market  opportunities  in  China's  fragmented  paper  industry.

       As  a  result of the Chinese government's earlier attempts at producing a
self-sufficient  paper  industry based on local enterprise production, the paper
industry  in  China  is  highly fragmented into many small capacity paper mills.
This  has  resulted in large inefficiencies in the industry as well as a general
low  level  of  training  and  technical expertise. A large number of `backyard'
mills  with annual production capacity of less than 5,000 tons per annum account
for a significant proportion of China's total paper production capacity.  Due to
the  difficulties in regulating environmental pollution from such a large number
of  paper  mills,  and inefficiencies in such an industry structure, the Chinese
government  has introduced regulations, effective from 1997, to phase-in a close
down  of all paper mills with a capacity of less than 10,000 tons per annum. The
resulting  reorganization  of  the  industry  will  produce  a  consolidation of
business  among  those  paper  mills  currently  operating above this threshold,
resulting  in significant investment incentives to expand production capacity at
each  mill  and  a  trend  towards  developing  higher capacity mills.  With the
decreasing  number  of  suppliers  in the market, there will be a window for the
Joint  Venture  to  expand  its  market  share.

PRODUCTS

       The  Joint  Venture  produces  mainly  uncoated  and  coated  white-lined
chipboard  in  a  range  of  paperboard weights ranging from 180g/m2 to 400g/m2.
Uncoated  white-lined chipboard is used in consumer corrugated packaging. Coated
white-lined  chipboard  is  used  for  applications  that require higher quality
printed  surfaces. In addition, the Joint Venture also produces small quantities
of  other  types of paperboard products, including whiteback paperboard used for
the  packaging  of  foodstuffs.

       Paperboard  in  China  is  graded according to Chinese national technical
standards,  which  are used as an indicator of the quality of the paperboard but
have  no  formal  influence on the sales price achieved, which is market driven.
The  white-lined  chipboard produced by the Joint Venture is primarily graded as


                                        2
<PAGE>
Class C paperboard. Class C paperboard accounts for approximately 80% of China's
total domestic paperboard production. Class B paperboard, produced by relatively
few  premium mills, accounts for the balance of China's domestic production. The
highest quality paperboard available in the China market (Class A paperboard) is
imported  paperboard,  mainly  from South Korea, Taiwan and Japan, which is used
almost exclusively by foreign-owned joint venture operations in some specialized
high-quality  end-uses.

       The Joint Venture's product is used in a wide range of packaging for both
domestic  and  international consumer product manufacturers in China. Generally,
consumer  product manufacturers subcontract the conversion and printing of their
packaging to corrugated box manufacturers. These corrugated box manufacturers in
turn  assemble  and  fold containers using white-lined chipboard supplied by the
Joint  Venture  and  kraft  linerboard  imported  or  manufactured domestically.
Corrugated  paper  is  glued  on the inside of the white-lined chipboard and the
kraft  linerboard  covers  onto  the  corrugated  paper  and  forms  a  sandwich
structure.  Kraft linerboard is a kind of unbleached paperboard, which maintains
a light brown finishing. White-lined chipboard is a bleached paperboard that has
a white finishing like writing paper. The white-lined chipboard surface of these
containers  may  be  printed  with  the  end  users'  designs  and  logos.

       The  Joint  Venture's products have been utilized in final packaging by a
number  of international beverage manufacturers, including Coca-Cola, Pepsi Cola
and  Pabst  Blue  Ribbon  beer  for  domestic  China  sales.

       The  Joint  Venture's  customers,  comprised  of  both  paper dealers and
corrugated  box manufacturers, are based predominantly in Southern China and the
eastern  coastal  regions including Shanghai, Fujian and Zhejiang provinces. The
Joint  Venture  also  has  several  customers  based  in the Sichuan province in
Central  China.  As of December 31, 1999, the Joint Venture had approximately 20
major  customers,  of  which the largest two accounted for approximately 15% and
10%  of  sales,  respectively,  for  the  year  ended  December  31,  1999.

MARKETING  AND  SALES

       The  Joint Venture's sales and marketing activities are centered in Wuhan
with  additional  support  from the Company's executive office in Hong Kong. The
Joint  Venture  employs  22  salespersons with key sales regions controlled by a
total  of  five  regional  sales managers who operate on a salary and commission
basis. In addition to the Joint Venture's sales team in Wuhan, the Joint Venture
utilizes a network of five independent sales agents throughout the major markets
in  China.

       The  Joint  Venture  markets  its white-lined chipboard under the "Golden
Horse"  brand  name.  The  brand name has been used by the Wuhan Dong Feng Paper
Mill  Company  ("Wuhan  Company"),  the Company's joint venture partner in Wuhan
Limited,  for  over  40  years.

MANUFACTURING  PROCESS

       PRODUCTION

       In  the  production  process,  the fiber stock for paperboard is prepared
from  raw  materials  by  placing wastepaper or pulp sheets into large digesting
tanks where, with the addition of certain chemicals, a fiber slurry is produced.
This slurry is delivered from the tanks by pipelines to the paper machines where
it  is  laid  on  to  large  moving  mats which carry the slurry through various
rollers,  where  it  is  then  pressed and dried, producing a continuous line of
board  that  is  either  wound  onto  reels  or  cut  up separately into sheets.

       The  Joint  Venture's  facilities  have six individual paper machines for
paperboard  production and four separate digesting tanks for producing the fiber
slurry  to  be  used  in the paperboard production process. The trend in Western
paper  mills is towards single large and high capacity paper machines, which are
able  to  produce  significant  economies  of  scale.  However, the existence of
several small paper machines creates a competitive advantage for a paper mill by
allowing quick and efficient production of paperboard with varying dimensions to
meet  customized  customer specifications while minimizing the amount of wastage
produced.


                                        3
<PAGE>
       RAW  MATERIAL  SUPPLY

       The  major component of the Joint Venture's manufacturing expenditures is
the cost of raw material for the preparation of the fiber stock, which generally
accounts  for  between 60% - 75% of the paperboard's sales price. In addition to
being a major cost, the type and amount of fiber used directly correlates to the
quality  characteristics  of  the  paperboard.  As  a  result, fiber supply is a
crucial  aspect  of  the  manufacturing  process.

       Four  different  types  of  fiber  are used in the manufacturing process:
virgin  bleached  kraft  softwood  pulp (BKSP), straw pulp and two main types of
recycled  paper  (mixed  wastepaper  and  de-inked  newspaper). The BKSP used is
imported  from  North  America and trades at a price determined by international
commodity  markets.  The  price  of  recycled  paper  is  also determined by the
international  commodity markets. The Joint Venture imports approximately 30% of
its recycled paper requirements, with the remainder being sourced from the China
domestic  market.  The  Joint Venture manufactures its own straw pulp from straw
purchased  from  the  region  around  Wuhan. However, the Joint Venture's use of
straw pulp will shortly be discontinued and replaced with de-inked old newspaper
fiber.

       The  international  market  for  BKSP is cyclical. However, as the actual
proportion of BKSP used in the paperboard production process is less than 10% of
the  total  fiber  requirements,  the  Joint Venture's exposure to volatility in
these  markets  is  limited.

       More important to the Joint Venture's operations is the volatility of the
recycled  paper  market, which management believes is generally more stable than
that  for  virgin  pulp  products. Most of the internationally traded wastepaper
originates  from the United States, so movements in international prices closely
track  demand and supply in that market. The Joint Venture imports approximately
35% of its wastepaper requirements, of which two-thirds originate from Hong Kong
and  one-third  from  the  United  States.

       Domestic  Chinese  wastepaper  supply  is  less  volatile  than  that  of
internationally  traded  wastepaper  since it is generally of lower quality than
the international product and often requires further processing before it can be
used. As a result, Chinese wastepaper trades at a significantly lower price than
internationally  traded  wastepaper.  The  Joint  Venture  carries  out  its own
wastepaper  collection  activities  within  Wuhan  and  also  obtains  domestic
wastepaper  from  wastepaper brokers in Southern China where domestic wastepaper
is  available  in  plentiful  supply. The Joint Venture carries out barter trade
arrangements  with  these  domestic  wastepaper brokers. Specifically, the Joint
Venture  exchanges  paperboard  products  for  wastepaper,  which  gives  it  a
competitive  advantage  in  securing  a  reliable  wastepaper  supply.

       Other  significant  inputs  in  the paperboard production process include
chemicals  (for  pulping,  papermaking,  pigmentation  and  coating),  water,
electricity  and  steam.  All chemicals required are sourced from China domestic
manufacturers,  which  ensures  reliable  supply and significant lower cost than
that  of imported chemicals.  The Joint Venture's paper mill is located near the
banks  of the Yangtze River, and the Joint Venture has constructed its own water
treatment  facilities  at  this  source  to ensure a cost-effective and reliable
water supply. Electricity is purchased from the Wuhan grid. The large quantities
of  steam  required for the paperboard production processes are produced on-site
at  the  Joint  Venture's  paper  mill  by  coal-powered  boilers.

COMPETITION

       The  paper  industry  is  highly  fragmented  in China as a result of the
Chinese  government's  earlier  attempts  at  producing  a self-sufficient paper
industry  based  on  local enterprise production. The Company believes that as a
result  of the consolidation of the industry, the Joint Venture is positioned to
increase  its  market share in the industry. In particular, the Company believes
that  the  Joint  Venture  has  the  following  competitive  advantages:


                                        4
<PAGE>
       PRODUCTION  VERSATILITY  - The ability to produce paperboard according to
customized  customer  specification is a unique advantage that the Joint Venture
has  over  other  Chinese  manufacturers.  In  larger  paper  mills in the West,
significant investment in automated sheeting operations and inventory management
is  required  in  order  to  be  able to efficiently meet customer requirements.
Management  believes that no paper mill in China has such systems installed. The
Joint  Venture,  however,  is  able  to  simulate the process because it has six
individual  paper machines that provide it flexibility in scheduling production.

       PRODUCT  DISTRIBUTION  -  The  Joint Venture has established distribution
systems  throughout  its main customer markets in China. These include a network
of  independent  agencies  in Fujian  and Guangzhou province, allowing effective
servicing  of  customers  in  these  key  markets.

       RELIABILITY  OF RAW MATERIAL SUPPLY - With fiber being the most important
item  in  paperboard production, it is essential that reliable sources of supply
exist.  The  Joint  Venture has established relationships with suppliers through
its  barter  trade  arrangements  with  brokers  for  wastepaper.

       ESTABLISHED  BRANDS - Wuhan Limited's "Golden Horse" brand paperboard has
been  established  in the China domestic market for over 40 years.  Golden Horse
is  one of the oldest brands in the market and is well known for its quality and
reliability.  Accordingly, the Joint Venture is able to charge a premium for its
product  as  compared  to  similarly  situated  paper  mills.

       The  Company  believes  that  the signing of the World Trade Organization
Pact  between  the  United  States  and  China in November 1999 will lead to the
opening  of the Chinese market to foreign competitors who will be able to import
paper products into the Chinese market with lower import duties. The lower price
of  imported  paper  products  will  increase competition in the Chinese market.

GAMMA  LINK  ENTERPRISES  CORP.  ACQUISITION

       Effective  October 4, 1999, the Company entered into a Purchase Agreement
to  acquire  100%  of  the  outstanding  capital stock of Gamma Link Enterprises
Corp., a British Virgin Islands corporation ("Gamma"), in exchange for 3,600,000
shares  of  the  Company's  common stock valued at RMB 44,712,000 (RMB 12.42 per
share).  Gamma  owns  a  51%  equity  interest in Sino-Panel (Gaoyao) Limited, a
Sino-foreign  equity  joint venture ("Sino-Panel"), with the remaining 49% owned
by an unrelated company.  Sino-Panel's only assets consisted of a particle panel
production  line located in Gaoyao, China, including reconditioned wood particle
grinding  equipment,  multi-layer  presses,  and  other  ancillary equipment and
facilities that were originally manufactured in Finland.  Such equipment had not
been  employed in revenue-generating operations for the past several years.  The
closing  of the Purchase Agreement was subject to the satisfactory completion of
certain  conditions  by Gamma.  During May 2000, Gamma notified the Company that
it  could  not  accomplish  certain  of  the conditions required to complete the
proposed  transaction,  and  the  Purchase Agreement was thereupon terminated by
mutual  agreement.

HISTORY  OF  THE  COMPANY

       The Company was incorporated in the State of Delaware on June 26, 1997 as
Orient  Packaging  Holdings Ltd. On June 27, 1997, all the outstanding shares of
Orient  Investments  Limited ("Orient Investments") were acquired by the Company
in exchange for the issuance by the Company of a 100% interest in the Company to
the  former shareholders of Orient Investments. On December 1, 1999, the Company
changed  its  name  to  China  Gateway  Holdings  Inc.

       Orient  Investments, a British Virgin Islands corporation incorporated on
January 8, 1997, is a holding company for Orient Packaging Limited (f/k/a Orient
Financial  Services  Limited)  ("Orient  Packaging"),  a  British Virgin Islands
corporation incorporated on May 25, 1993. Orient Packaging is the owner of a 60%
interest  in  Wuhan  Limited, a PRC-registered Sino-foreign equity joint venture
company.  The  remaining  40%  interest  is  owned by Wuhan Dong Feng Paper Mill
Company,  a  China  state-owned  enterprise.


                                        5
<PAGE>
COMPLIANCE  WITH  ENVIRONMENTAL  LAWS

       To  date,  management  believes  that the Joint Venture has complied with
existing  environmental  regulations  in  the  PRC.  Commencing in 1996, the PRC
government  adopted  plans  intended  to  improve  the  environment  and control
pollution.  In  order to control acid rain, toxic waste and pollutant emissions,
the  PRC  targeted  certain  regions  for  environmental  protection.  The Joint
Venture's  production  plant  is located in the Yangtze River region and was not
one  of  the designated control areas. For production plants within the targeted
areas,  water  treatment  plants  must  be installed in order to comply with the
pollutant  emissions  standards.  The  Joint Venture has its own water treatment
facilities  and  a  system  for  recycling  the  chemicals used in paper making.
Therefore, the Joint Venture does not expect to be affected even if the targeted
areas  include the Yangtze River region. During 1998 and 1999, the Joint Venture
paid  RMB  430,991  and  RMB  374,088,  respectively, to the local environmental
protection  authority.

WUHAN  LIMITED

       The  Company presently owns a 60% interest in Wuhan Limited pursuant to a
Joint Venture Agreement dated December 20, 1997 (the "Joint Venture Agreement").
The  validity,  interpretation, execution and settlement of disputes are subject
to  Chinese law and disputes are required to be submitted for arbitration to the
Foreign  Economic  and Trade Arbitration Commission of the China Council for the
Promotion  of  International  Trade. Despite some progress in developing a legal
system,  China  does not have a comprehensive system of laws. The interpretation
of  Chinese  laws may be subject to policy changes reflecting domestic political
factors.  Enforcement  of  existing  laws,  including laws pertaining to Chinese
joint  ventures,  may  be  uncertain  and  sporadic,  and  implementation may be
inconsistent.

EMPLOYEES

       The  Company,  including  its  subsidiaries,  and  the Joint Venture have
approximately  900  full-time  employees.  The  Company's executive officers are
based  in  the Company's executive office in Hong Kong.  All other employees are
based  in  China.

PATENTS  AND  TRADEMARKS

       The  Golden Horse brand name has been registered as a trade name in China
since  1958  by  Wuhan  Company.  The trade name is licensed to Wuhan Limited by
Wuhan  Company  for  the  term  of  the  Joint  Venture.

ITEM  2.  DESCRIPTION  OF  PROPERTIES

       HONG  KONG.  The Company occupies office space in Wanchai, Hong Kong. The
lease  expires  May  9,  2001.

       WUHAN,  HUBEI.  The  Joint  Venture leases a paper manufacturing plant in
Wuhan  consisting of 25,730 square meters. The lease expires concurrent with the
term  of  the  Joint  Venture  in  2027.

ITEM  3.  LEGAL  PROCEEDINGS

       There are no pending or threatened legal proceedings against the Company,
including  its  subsidiaries,  or  the  Joint  Venture.


ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

       There  were  no  matters  submitted  to  a vote of the Company's security
holders  during  the  fourth quarter of the fiscal year ended December 31, 1999.


                                        6
<PAGE>
                                    PART II.

ITEM  5.  MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS

       The  Company  was  formed  on  June  26,  1997.  Since  October 1997, the
Company's  common  stock  has  been listed for trading on the OTC Bulletin Board
under  the  symbol "ORPK." The trading market is limited and sporadic and should
not  be deemed to constitute an "established trading market". In connection with
the  change  of the Company's name to China Gateway Holdings Inc., the Company's
symbol  was  changed  to  "CNGH"  on  December  13,  1999.

       The  following  table sets forth the range of bid prices of the Company's
common  stock  as quoted on the OTC Bulletin Board during the periods indicated.
Such  prices reflect prices between dealers in securities and do not include any
retail  markup,  markdown or commission and may not necessarily represent actual
transactions.  The  information set forth below was provided by NASDAQ Trading &
Market  Services.

<TABLE>
<CAPTION>
                                      HIGH    LOW
                                      -----  -----
<S>                                   <C>    <C>
FISCAL YEAR ENDED DECEMBER 31, 1998

First Quarter                         $9.99  $2.67
Second Quarter                         6.25   4.50
Third Quarter                          5.13   0.38
Fourth Quarter                         2.88   1.13

FISCAL YEAR ENDED DECEMBER 31, 1999

First Quarter                          2.00    .59
Second Quarter                         3.59    .75
Third Quarter                          2.25    .94
Fourth Quarter                         2.44    .69

FISCAL YEAR ENDING DECEMBER 31, 2000

Period from January 1, 2000 to         1.13   .016
     March 31, 2000
</TABLE>

       The  closing  bid  price  for  the  common  stock  as reported by the OTC
Bulletin  Board  on  March  31,  2000  was  $.016.

       As  of  March  31, 2000, there were 42 holders of record of the Company's
common  stock.

DIVIDEND  POLICY

       The  Company  has  never  paid dividends on the common stock and does not
anticipate paying dividends on its common stock in the foreseeable future. It is
the  present  policy of the Board of Directors to retain all earnings to provide
for  the  future  growth  of  the  Company. Earnings of the Company, if any, are
expected  to be retained to finance the expansion of the Company's business. The
payment  of dividends on the Company's common stock in the future will depend on
the  results  of  operations, financial condition, capital expenditure plans and
other  cash obligations of the Company and will be at the sole discretion of the
Board  of  Directors.

RECENT  SALES  OF  UNREGISTERED  SECURITIES

       The following is information for all securities that the Company has sold
since  inception  without  registering  the securities under the Securities Act:

       1.  On  June  27, 1997, the Company issued a total of 2,310,000 shares of
common  stock, consisting of 1,684,856 shares of common stock to Cartier-Fleming
International  Limited, 561,619 shares of common stock to Critical Success Ltd.,
57,750  to  Mr.  Xiang  Bin  and  5,775  shares  to  Mr. Lachlan J. Christie, in
connection  with  the  acquisition of 100% of the interest in Orient Investments
Limited.  The  shares  were  issued  in  a  private transaction not involving an
offering  pursuant  to  Section 4(2) of the Securities Act. This transaction was
characterized  as  a reincorporation and had no financial impact on the Company.


                                        7
<PAGE>
       2. On June 27, 1997, the Company issued 285,000 shares of common stock to
4  unrelated  accredited  financial  consultants  of  the  Company  for services
rendered  in connection with the reincorporation discussed in Transaction 1. The
shares  were  issued  pursuant  to  Rule  506  of  Regulation  D.

       3.  On  June  27, 1997, the Company issued 180,000 shares of common stock
and  an  option to purchase 150,000 shares of common stock at $1.66 per share to
an  unrelated  accredited  financial  consultant  of  the  Company  for services
rendered  in connection with the reincorporation discussed in Transaction 1. The
shares  were  issued  pursuant  to  Rule  504 of Regulation D and the option was
issued  pursuant  to  4(2)  of  the  Securities  Act.

       4.  From July 1997 through March 1998, the Company issued an aggregate of
317,700  shares of common stock to 23 accredited investors at $2.50 per share in
a  private placement, for an aggregate purchase price of $794,250. The investors
either  had  pre-existing  personal or business relationships with the Company's
officers  and/or  directors  or  were  introduced  to  the  Company by financial
consultants  of  the Company who were affiliated with registered broker-dealers.
The  offering  was  done  pursuant  to  Rule  504  of  Regulation  D.

       5.  From  January 1998 through May 1998, the Company issued 45,800 shares
of  common  stock  to  8  accredited  investors  at $2.50 per share in a private
placement,  for  an  aggregate  purchase  price  of $114,500. The investors were
introduced  to  the  Company  by  financial  consultants of the Company who were
affiliated  with  registered  broker-dealers. The shares were issued pursuant to
Rule  506  of  Regulation  D.

       6. From January 1998 through April 1998, the Company issued 23,050 shares
of  common  stock  to  12 accredited investors for $2.75 per shares in a private
placement,  for  an  aggregate  purchase  of  $63,387.50.  The  investors  were
introduced  to  the  Company  by  financial  consultants of the Company who were
affiliated  with  registered  broker-dealers. The shares were issued pursuant to
Rule  504  of  Regulation  D.

       7.  On  October  31,  1997, March 20, 1998 and April 3, 1998, the Company
issued  warrants  to an accredited unrelated financial consultant of the Company
to purchase 45,000, 30,000 and 45,000 shares, respectively, at an exercise price
of  $.10  per  share,  for  services  rendered  in  connection  with the private
placements  described  in  Transactions  4,  5  and  6. The warrants were issued
pursuant  to  Rule  504  of  Regulation  D.

       8.  In  March  1998  and April 1998, the warrants issued in Transaction 7
were  exercised  for  an aggregate of 120,000 shares of common stock. The shares
were  issued  pursuant  to  Rule  504  of  Regulation  D.

       9.  On  April  8,  1998, the option issued in Transaction 3 was exercised
pursuant  to  the  cashless  exercise  provision as provided in the Stock Option
Agreement  for  an  aggregate of 111,692 shares of common stock. The shares were
issued  pursuant  to  Section  4(2)  of  the  Securities  Act.

      10. On March 27, 1998, the Company issued 3,000 shares of common stock and
warrants  to  purchase  125,000  shares of common stock at $.10 per share, which
were  immediately exercised, to an accredited investor for an aggregate purchase
price  of  $100,000.  The investor had a pre-existing business relationship with
the  Company.  The 3,000 shares of common stock were issued pursuant to Rule 504
of  Regulation D and the warrants for the 125,0000 shares and the 125,000 shares
of  common  stock  were  issued  pursuant  to  Rule  506  of  Regulation  D.

      11.  On  April  16,  1998,  the  Company issued warrants to purchase 3,905
shares  of  common  stock  to  an  accredited  investor  in  Transaction  4  as
compensation  for  services  rendered  in  connection  with  Transaction  4. The
warrants  were  issued  pursuant  to  Rule  504  of  Regulation  D.


                                        8
<PAGE>
      12.  On  May  15,  1998,  the  Company  issued  235,316  units,  each unit
consisting of one share of common stock and one warrant to purchase one share of
common  stock  at  an  exercise price of $2.75 per share, at $2.75 per unit in a
private  placement to 24 accredited investors for an aggregate purchase price of
$647,119.  The investors were introduced to the Company by financial consultants
of  the  Company  who  were affiliated with registered broker-dealers. The units
were  issued  pursuant  to  Rule  506  of  Regulation  D.

      13.  On  August 10, 1998, the Company issued 15,000 shares of common stock
to  an accredited unrelated financial consultant for financial services rendered
in  connection  with Transaction 12. The shares were issued pursuant to Rule 504
of  Regulation  D.

      14. In August 1998 and September 1998, the Company issued 10,600 shares of
common  stock  to  3  accredited  unrelated  financial  consultants for services
rendered  in  connection with Transaction 12. The shares were issued pursuant to
Rule  504  of  Regulation  D.

      15.  From  September  1998  to  November  1998, the Company issued 250,000
units,  each  unit  consisting  of  one share of common stock and one warrant to
purchase  one  share of common stock at the exercise price of $.10, at $1.00 per
unit  to 4 accredited investors for an aggregate purchase price of $250,000. The
investors were introduced to the Company by financial consultants of the Company
who  were  affiliated  with  registered  broker-dealers.  The  units were issued
pursuant  to  Rule  504  of  Regulation  D.

      16.  On  November  5,  1998,  the  Company  issued 20,000 units, each unit
consisting of one share of common stock and one warrant to purchase one share of
common  stock  at  the exercise price of $.10, at $1.50 per unit to 1 accredited
investor for an aggregate purchase price of $30,000. The investor was introduced
to  the Company by a financial consultant of the Company who was affiliated with
a  registered  broker-dealer.  The  units  were  issued  pursuant to Rule 504 of
Regulation  D.

      17.  From  September 1998 to January 1999, warrants issued in Transactions
15  and 16 were exercised for an aggregate of 27,000 shares of common stock. The
shares  were  issued  pursuant  to  Rule  504  of  Regulation  D.

      18.  From  October 1998 to December 1998, the Company issued 35,000 shares
of  common  stock  to  2  accredited  unrelated  consultants  to the Company for
services  rendered  in  connection  with  Transaction 12. The shares were issued
pursuant  to  Rule  504  of  Regulation  D.

      19.  On  December  18,  1998,  the  Company  issued  30,000  shares  to an
accredited  unrelated  advisor  for investor relations services. The shares were
issued  pursuant  to  Rule  504  of  Regulation  D.

      20.  On  December 8, 1998, the Company granted an option to an employee to
purchase  10,000  shares  of  common  stock  at  the  exercise  price of $.10 as
compensation.  The  option  was  issued  pursuant  to  Rule 504 of Regulation D.

      21.  On  December  31,  1998,  the  option  granted  in Transaction 20 was
exercised  for 10,000 shares of common stock. The shares were issued pursuant to
Rule  504  of  Regulation  D.

      22.  On  March 17, 1999, the Company issued 148,000 shares of common stock
to  2  accredited investors at $.50 per share for an aggregate purchase price of
$74,000.  The  investors were introduced to the Company by financial consultants
of  the  Company  who were affiliated with registered broker-dealers. The shares
were  issued  pursuant  to  Rule  504  of  Regulation  D.

      23.  On  April 6, 1999, the Company issued 5,000 shares of common stock to
an accredited unrelated financial consultant for services rendered in connection
with  Transaction  22. The shares were issued pursuant to Rule 504 of Regulation
D.

     The Company believes that the transactions described above were exempt from
registration  under Sections 3(a)(9), 3(b) or 4(2) of the Securities Act because
the  Company  was  not  a development stage company, the aggregate amount of the
subject securities was less than $1,000,000 and the subject securities were sold
to  a  limited  group  of  persons,  each  of  whom  was believed to have been a
sophisticated  investor  or had a pre-existing business or personal relationship
with  the  Company  or  its  management  and  was  purchasing the securities for
investment  without  a  view  to  further distribution. Restrictive legends were
placed,  as  applicable,  on  stock  certificates  evidencing  the  securities.


                                        9
<PAGE>
ITEM  6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION

Cautionary  Statement  Pursuant  to  Safe  Harbor  Provisions  of  the  Private
Securities  Litigation  Act  of  1995:

       This  Annual  Report on Form 10-KSB contains "forward-looking" statements
within  the  meaning  of  the  Federal  securities  laws.  These forward-looking
statements  include,  among  others,  statements  concerning  the  Company's
expectations  regarding  sales  trends,  gross  and net operating margin trends,
political  and  economic matters, the availability of equity capital to fund the
Company's  capital  requirements, and other statements of expectations, beliefs,
future  plans  and  strategies,  anticipated  events  or  trends,  and  similar
expressions  concerning  matters  that  are  not  historical facts. Although the
Company  believes  that  the assumptions on which the forward-looking statements
are  based  are  reasonable,  and  the forward-looking statements are within the
definition  of  the  Private  Securities  Litigation  Reform  Act  of  1995, the
forward-looking  statements  in this Annual Report on Form 10-KSB are subject to
risks  and  uncertainties  that  could cause actual results to differ materially
from  those  results expressed in or implied by the statements contained herein.

OVERVIEW:

       China Gateway Holdings Inc., formerly Orient Packaging Holdings Ltd. (the
"Company"),  was  incorporated  in  the  State  of  Delaware  on  June 26, 1997.
Effective  June 27, 1997, the Company issued 2,310,000 shares of common stock to
the shareholders of Orient Investments Limited, a British Virgin Islands company
incorporated  on  January  9,  1997 ("OIL"), in exchange for 100% of the capital
stock  of  OIL.  OIL  owned a 100% interest in Orient Packaging Limited ("OPL"),
which was incorporated in the British Virgin Islands on May 25, 1993, originally
as  Orient  Financial  Services  Limited. OPL owned a 60% interest in Wuhan Dong
Feng Paper Company Limited, a Sino-foreign equity joint venture ("Wuhan Limited"
or  the  "Joint Venture"), with the remaining 40% owned by Wuhan Dong Feng Paper
Mill  Company,  a  PRC  state-owned  enterprise  ("Wuhan  Company" or the "Joint
Venturer").

       In  accordance  with  an  agreement  between  OPL and Wuhan Company dated
December  20,  1996  (the  "Joint  Venture  Agreement"),  the  Joint Venture was
established with a term of 30 years from the date the business license is issued
to  engage  in  the manufacture and sale of cartonboard packaging materials. The
Joint  Venture  produces  primarily  coated  and uncoated white-lined chipboard,
which  are  the  most common types of cartonboard used in consumer packaging for
beverages, dry foodstuffs, pharmaceutical products and other consumer items. The
Joint  Venture's production facilities and operations are located in the city of
Wuhan,  Hubei  Province,  PRC.  The Joint Venture commenced operations effective
March  1,  1997.  The  Company  had  no  significant  operations  prior  to  the
commencement  of  operations by the Joint Venture.  As a result of the Company's
interest in the Joint Venture, the Company operates in one business segment, the
manufacture  of  cartonboard  packaging  materials.

       Through  December  31, 1997, OPL had contributed cash of RMB 4,867,636 to
Wuhan  Limited,  and  Wuhan  Company  had  contributed a building and machinery,
accounts  receivable  and inventory, net of certain liabilities, with a carrying
value  of  RMB  7,102,039,  which  approximated  fair  value  at  the  date  of
contribution  to  Wuhan  Limited.  During  the year ended December 31, 1998, OPL
contributed  cash  of  RMB  5,752,909  to  Wuhan  Limited.  All  initial capital
contributions  required  by the Joint Venture Agreement had been completed as of
December  31,  1998.

       Pursuant  to  an  amendment to the Joint Venture Agreement dated February
26,  1998,  the  parties  to  the  Joint  Venture Agreement agreed to expand its
registered  capital in order to facilitate the expansion of the Joint Venture by
March  31,  1999.  OPL agreed to contribute additional cash of RMB 34,362,000 to
the  Joint  Venture,  consisting  of RMB 20,000,000 by December 31, 1998 and RMB
14,362,000  by  March 31, 1999, and Wuhan Company agreed to contribute machinery
and  equipment with a total value of RMB 22,908,000. The funds to be contributed
by  OPL  were  intended  to support growth and operations.  OPL did not fund its
required  capital  contributions  during  1998  and  1999.

     In  January  2000,  a  new  timetable  was  agreed  upon whereby OPL was to
contribute  RMB  5,000,000  by June 30, 2000, another RMB 5,000,000 by September
30,  2000,  and  RMB  10,000,000  by  December  31, 2000. No fixed timetable was


                                       10
<PAGE>
established  for the remaining contributions but they were expected to be funded
based  on  the proceeds available from anticipated capital raising transactions.
The parties  agreed to delay the discussion of a timetable for any contributions
that  may  be  made  after  December  31,  2000 until an unspecified later date.

     The  Company  did  not  meet  its  June  30, 2000 funding obligation of RMB
5,000,000  to  the Joint Venture, and the Company is currently unable to predict
if  it  will  be able to meet its funding obligations to the Joint Venture.  The
Company  is  engaged in continuing discussions with the Joint Venturer regarding
its  funding  obligations.

     To  date,  there  have been no adverse consequences to not contributing the
additional  RMB  34,362,000  to  the Joint Venture other than delays incurred to
modernize the equipment in the plant. However, management is currently unable to
predict  the  results  of  the ongoing discussions with the Joint Venturer or if
there  will be any adverse future consequences relating to the Company's failure
to  meet  its  funding  obligations.

       Pursuant  to  an amendment to the Joint Venture Agreement dated April 19,
1999,  certain  assets  and liabilities related to Wuhan Company aggregating RMB
26,112,048  were  extinguished, consisting of amounts due from the Joint Venture
to  Wuhan  Company of RMB 32,122,132, less amounts due from Wuhan Company to the
Joint  Venture of RMB 6,010,084, and were reflected as a capital contribution by
the Joint Venturer effective December 31, 1998, which resulted in an increase in
the  Company's equity investment and capital in excess of par of RMB 15,667,229.
The  amounts  due  to  Wuhan  Company that were forgiven reflected unrecoverable
charges  to the Joint Venture for raw material inventory, as well as general and
administrative expenses, financing expenses and certain other expenses. Based on
the agreement by Wuhan Company to forgive such amounts, OPL agreed to contribute
sufficient  capital  to  the  Joint  Venture  as  may  be  required  to fund its
operations  at current levels. Effective December 31, 1999, Wuhan Company agreed
to  forgive  an  additional  RMB  16,329,758  of amounts due it for raw material
inventory  and  general  and administrative expenses and interest expense, which
were  also  reflected  as  a  capital  contribution by the Joint Venturer, which
resulted in an increase in the Company's equity investment and capital in excess
of  par  of  RMB  9,797,855.

       Since  inception,  the  Company has accounted for its 60% interest in the
Joint  Venture,  which  is  similar  to  a  majority-owned  subsidiary,  as  a
consolidated subsidiary.  During the six months ended June 30, 2000, the Company
determined  that  the Joint Venturer had retained certain rights under the Joint
Venture  Agreement  that  provided  the  Joint  Venturer  with  the  ability  to
participate  in management, although such rights have never been asserted by the
Joint Venturer.  Under Emerging Issues Task Force Issue No. 96-16, if a minority
joint  venture  partner  has  such rights, the majority joint venture partner is
required  to  account  for  its  interest  in the joint venture under the equity
method  of  accounting.  As a result, the Company's financial statements through
December  31,  1999 have been restated to report the Company's investment in the
Joint  Venture  under  the equity method of accounting.  The restatement did not
have  any  effect  on  net  loss,  net  loss  per share or shareholders' equity.

       During  the  six  months ended June 30, 2000, the Joint Venture Agreement
was amended to clearly express the intent of the parties that the Company is the
controlling  party  in  the Joint Venture. Since the Joint Venture Agreement was
amended  during  2000,  the  Company  is  reporting  its investment in the Joint
Venture  as  a  consolidated  subsidiary  commencing  January  1,  2000.

       The  acquisition  of  OIL  by  the  Company  was  accounted  for  as  a
recapitalization  of OIL, as the shareholders of OIL acquired all of the capital
stock  of  the  Company  in  a  reverse acquisition. Accordingly, the assets and
liabilities  of  OIL  have  been  recorded at historical cost, and the shares of
common  stock  issued  by  the  Company  have been reflected in the consolidated
financial  statements  giving  retroactive effect as if the Company had been the
parent  company from inception. The historical consolidated financial statements
for the years ended December 31, 1999 and 1998 consist of the combined financial
statements  of  the  Company  and  its direct and indirect subsidiaries from the
dates  of  their  respective  formation  or  acquisition.


                                       11
<PAGE>
     The  Joint  Venture  supplies  paperboard  directly  or indirectly to major
international  consumer  brands.  The Joint Venture's customers are concentrated
in  the PRC.  Sales to such customers are generally on an open account basis and
are  denominated  in  RMB.  Approximately 15% of the Joint Venture's non-related
party  sales  were generated by one customer during the years ended December 31,
1999  and  1998. One other customer accounted for over 10% of total sales during
the  year  ended  December 31, 1999. During such periods, the Joint Venture also
had  significant  purchases of raw material inventory from the same customer. As
of  December  31, 1999 and 1998, approximately 43% and 30%, respectively, of the
Joint Venture's net trade receivables were due from five customers, of which one
customer  accounted  for  greater than 10% of the net trade receivables balance.

       The  consolidated  financial  statements  have  been presented in Chinese
Renminbi  ("RMB").  Transactions  and  monetary assets denominated in currencies
other than the RMB are translated into RMB at the respective applicable exchange
rates.  Monetary  assets  and  liabilities  denominated  in other currencies are
translated  into  RMB  at  the  applicable rate of exchange at the balance sheet
date.  The  resulting  exchange  gains  or losses are credited or charged to the
consolidated  statements of operations. Currency translation adjustments arising
from  the  use of different exchange rates from period to period are included in
comprehensive  income.

     Effective October 4, 1999, the Company entered into a Purchase Agreement to
acquire 100% of the outstanding capital stock of Gamma Link Enterprises Corp., a
British  Virgin  Islands corporation ("Gamma"), in exchange for 3,600,000 shares
of  the  Company's  common stock valued at RMB 44,712,000 (RMB 12.42 per share).
Gamma  owns a 51% equity interest in Sino-Panel (Gaoyao) Limited, a Sino-foreign
equity  joint  venture  ("Sino-Panel"),  with  the  remaining  49%  owned  by an
unrelated  company.  Sino-Panel's  only  assets  consisted  of  a particle panel
production  line located in Gaoyao, China, including reconditioned wood particle
grinding  equipment,  multi-layer  presses,  and  other  ancillary equipment and
facilities that were originally manufactured in Finland.  Such equipment had not
been  employed in revenue-generating operations for the past several years.  The
closing  of the Purchase Agreement was subject to the satisfactory completion of
certain  conditions  by Gamma.  During May 2000, Gamma notified the Company that
it  could  not  accomplish  certain  of  the conditions required to complete the
proposed  transaction,  and  the  Purchase Agreement was thereupon terminated by
mutual  agreement.

RESULTS  OF  OPERATIONS:

YEARS  ENDED  DECEMBER  31,  1999  AND  1998:

China  Gateway  Holdings  Inc.  -

       General  and  Administrative  Expenses.  For  the year ended December 31,
1999,  general  and  administrative  expenses were RMB 1,870,699, as compared to
general and administrative expenses of RMB 5,447,516 for the year ended December
31, 1998. General and administrative expenses decreased by RMB 3,576,817 in 1999
as compared to 1998 primarily as a result of reduced travel and personnel costs.

     Other  Income  (Expense).  The Company had commission income of RMB 767,689
during  the  year  ended  December  31,  1999.  The  Company  did  not  have any
commission  income  during  the  year  ended  December  31,  1998.

     Equity  in  Net  Loss  of  Joint Venture.  As a result of the Company's 60%
equity interest in the Joint Venture, the Company recorded equity in net loss of
joint venture of RMB 5,656,472 for the year ended December 31, 1999, as compared
to  RMB  14,780,842  for  the  year  ended  December  31,  1998.

       Income  Taxes.  The  Company did not recognize any income tax expense for
the  year  ended  December  31,  1999 and 1998. The Company is subject to income
taxes  on  an  entity  basis  on  income  arising  in  or  derived  from the tax
jurisdiction  in  which  each  entity is domiciled. The Company's British Virgin
Islands  subsidiaries  are  not  liable  for  income  taxes.

       Net  Loss.  Net  loss  was  RMB 6,757,569 for the year ended December 31,
1999,  as  compared  to a net loss of RMB 20,046,214 for the year ended December
31,  1998.


                                       12
<PAGE>
The  Joint  Venture  -

     Sales.  Sales  remained  relatively  constant  in 1999 as compared to 1998,
increasing  by  RMB  1,006,000  or  1.7%.  For the year ended December 31, 1999,
sales  were  RMB  61,328,000,  consisting  of  RMB 50,218,000 (82%) to unrelated
parties  and  RMB  11,110,000  (18%)  to  a  related  party.  For the year ended
December 31, 1998, sales were RMB 60,322,000, consisting of RMB 55,417,000 (92%)
to  unrelated  parties and RMB 4,905,000 (8%) to a related party.     During the
year  ended December 31, 1999, 22,129 metric tons of cartonboard were sold at an
average per ton selling price of RMB 2,771, as compared to 20,942 metric tons of
cartonboard  being sold at an average per ton selling price of RMB 2,880 for the
year  ended  December  31,  1998.

     Gross  Profit.  For  the year ended December 31, 1999, gross profit was RMB
6,363  or  10.4% of sales, as compared to a negative gross profit of RMB (6,432)
or  (10.7%)  of  sales  for the year ended December 31, 1998.  The Joint Venture
incurred  a  negative  gross  profit  for  the year ended December 31, 1998 as a
result  of  its  cost  of  raw  material  inventory  having  included  certain
unrecoverable  costs.  The Joint Venture was unable to sell its products in 1998
at  a  price  sufficient  to  recover  such  excess  inventory  costs because of
management's  concentration  at  that  time  on  sales to related parties and on
maintaining market share at the expense of profitability. The purchase liability
associated  with  such  excess inventory was forgiven by Wuhan Company effective
December  31,  1998,  as  described  above  at  "Overview".

     Operating  Expenses.  For  the  year  ended  December  31,  1999, operating
expenses  were  RMB  14,051,000  or  22.9%  of  sales,  as compared to operating
expenses of RMB 15,024,000 or 24.9% of sales, a decrease of RMB 973,000 or 6.5%,
primarily  as  a  result  of  reduced  marketing  costs.

     Loss  from Operations.  For the year ended December 31, 1999, the loss from
operations  was  RMB  7,688,000  as  compared  to  a loss from operations of RMB
21,456,000  for  the year ended December 31, 1998.  The net loss from operations
decreased  by  RMB  13,768,000  as  a  result  of the Joint Venture generating a
positive  gross  profit  in 1999 as compared to a negative gross profit in 1998.

     Other  Income  (Expenses).  For  the  year  ended  December 31, 1999, other
income  was  RMB  113,000,  consisting  of  interest  income  of  RMB 34,000 and
miscellaneous  income  of  RMB  79,000,  and other expense consisted of interest
expense of RMB 773,000, of which RMB 686,000 was to Wuhan Company.  For the year
ended  December  31,  1998, other income was RMB 234,000, consisting of interest
income  of RMB 26,000 and miscellaneous income of RMB 208,000, and other expense
consisted  of  interest  expense of RMB 3,413,000, of which RMB 3,116,000 was to
Wuhan Company.  Interest expense decreased in 1999 as compared to 1998 primarily
as  a  result  of  a  reduction in interest-bearing debt to Wuhan Company, which
decreased  as  a  result  of  Wuhan  Company  forgiving  RMB  16,329,758 and RMB
26,112,048  of  such  debt,  which  was recorded effective December 31, 1999 and
1998,  respectively,  as  described  above  at  "Overview".

     Income  Taxes.  The  Joint  Venture  recorded  income  tax  expense  of RMB
1,079,000  for the year ended December 31, 1999.  The Joint Venture did not have
any  income  tax  expense  for  the  year  ended  December  31,  1998.

     Net Loss.  Net loss was RMB 9,427,000 for the year ended December 31, 1999,
as  compared  to  a  net  loss of RMB 24,635,000 for the year ended December 31,
1998.

FINANCIAL  CONDITION  -  DECEMBER  31,  1999:

LIQUIDITY  AND  CAPITAL  RESOURCES:

China  Gateway  Holdings  Inc.:

       Operating. For the year ended December 31, 1999, the Company's operations
utilized  cash  resources  of  RMB  1,025,584,  as  compared  to  utilizing cash
resources  of RMB 3,437,859 for the year ended December 31, 1998. As of December
31,  1999,  the  Company  had a net working capital deficiency of RMB 1,191,332,
equivalent  to  a current ratio of .45:1. The Company's operations utilized less


                                       13
<PAGE>
cash  resources in 1999 as compared to 1998 primarily as a result of a reduction
in  the  operating  loss.  A  major  reason  for  the  Joint  Venture  having  a
significant  positive working capital position at December 31, 1999 and 1998 was
the forgiveness of debt by Wuhan Company effective December 31, 1999 and 1998 of
RMB  16,329,758  and  RMB  26,112,048,  respectively.

       Investing. During the year ended December 31, 1999, additions to property
and  equipment  aggregated  RMB  99,143. There were no additions to property and
equipment  during  the  year  ended  December  31,  1998.  During the year ended
December  31,  1998,  the  Company  made  an  additional investment in the Joint
Venture  of  RMB  5,752,909.  Additional  transactions with respect to the Joint
Venture  are  described  above  at  "Overview".

       Financing.  From  March  1997  through  December 1999, the Company relied
primarily  on  the  sale  of its securities for the working capital resources to
fund  its  operations  and  investments  in  the  Joint  Venture.

     In  conjunction  with  the  reverse  merger  transaction  on June 27, 1997,
pursuant  to  which  2,310,000  shares  of common stock were issued, the Company
received  net  assets with an historical cost basis of RMB 1,655,780. During the
ten  months  ended  December 31, 1997, the Company sold 212,000 shares of common
stock for net proceeds of RMB 4,393,414, and issued an additional 465,000 shares
of  common  stock  to entities arranging such financing for consideration of RMB
24,836.  During  the  year  ended  December 31, 1998, the Company issued 773,466
shares  of  common  stock  for  net  proceeds  of RMB 9,131,001, and also issued
393,692  shares of common stock for net proceeds of RMB 28,200 upon the exercise
of  outstanding  stock  options and warrants. During the year ended December 31,
1999,  the Company issued 153,000 shares of common stock for net proceeds of RMB
621,691.

       During  the  year  ended  December  31,  1999,  certain shareholders made
advances  to the Company totaling RMB 779,322, which are unsecured, non-interest
bearing  and  are  payable  on  demand.

The  Joint  Venture  -

     Operating.  As  of  December  31,  1999,  the Joint Venture had net working
capital  of  RMB  24,275,000,  equivalent  to  a  current  ratio  of  2.0:1.

     Investing.  As of December 31, 1999, the Joint Venture had budgeted capital
expenditures  of  approximately  RMB  1,000,000  through  December  31,  2000.

     Financing.  From  March  1997  through December 1999, the Joint Venture has
relied  on  the credit provided by Wuhan Company, the 40% interest holder in the
Joint  Venture,  supplemented  by investments by the Company and short-term bank
loans,  for  the  working  capital  resources  to  fund  its  operations.

     The  Joint  Venture  had short-term bank loans of RMB 1,227,057 at December
31,  1998,  which  were  fully  repaid  during  1999.

     The Joint Venture had RMB 10,462,659 due from Wuhan Company at December 31,
1999,  as  compared  to RMB 4,730,373 due to Wuhan Company at December 31, 1998,
net  of  the  amounts  extinguished  effective December 31, 1999 and 1998 of RMB
16,329,758  and  RMB  26,112,048,  respectively.

     Additional  transactions  with  respect  to the Joint Venture are described
above  at  "Overview".

     Both  the  Company and the Joint Venture have incurred operating losses and
negative  cash  flows  from operations during the past few years that may impair
the  Company's  ability  to  obtain  additional equity capital.  The Company has
relied on the sale of its securities and the credit provided by Wuhan Company to
fund  the  operations  of  the  Joint  Venture  since  1997.  Based on currently
proposed  plans  and assumptions relating to the Joint Venture's operations, the
Company  believes  that  the projected cash flows from operations, combined with
the  credit  provided  by  Wuhan  Company, will provide sufficient liquidity and
capital resources to support the Joint Venture's operations through December 31,
2000.


                                       14
<PAGE>
     However, the Company anticipates that it will require additional capital to
meet  its  funding obligations to the Joint Venture.  In addition, to the extent
that the Joint Venture experiences a substantial increase in revenues and/or the
Company  acquires other business operations, additional capital may be required.
Should  the  cash  flows  generated  by  operating  and  financing activities be
insufficient  to fund future operations, the ability of both the Company and the
Joint  Venture  to  conduct  operations  may  be  impaired.

INFLATION  AND  CURRENCY  MATTERS:

       In  recent  years,  the  Chinese economy has experienced periods of rapid
growth as well as relatively high rates of inflation, which in turn has resulted
in  the  periodic  adoption  by  the  Chinese  government  of various corrective
measures  designed  to  regulate  growth  and contain inflation. Since 1993, the
Chinese  government  has  implemented  an  economic  program designed to control
inflation,  which has resulted in the tightening of working capital available to
Chinese  business enterprises. The recent Asian financial crisis has resulted in
a  general  reduction in domestic production and sales, and a general tightening
of  credit,  throughout China. The success of the Company depends in substantial
part  on  the  continued  growth  and  development  of  the  Chinese  economy.

       Foreign  operations  are  subject to certain risks inherent in conducting
business  abroad,  including  price  and  currency  exchange  controls,  and
fluctuations  in the relative value of currencies. Changes in the relative value
of  currencies  may occur periodically and may, in certain instances, materially
affect the Company's results of operations. Both the conversion of Renminbi into
foreign  currencies and the remittance of foreign currencies abroad requires the
approval of the government of China. The Renminbi is not freely convertible into
foreign  currencies,  and  the ability to convert the Renminbi is subject to the
availability  of  foreign  currencies.  Effective  December 1, 1998, all foreign
exchange  transactions involving the Renminbi must take place through authorized
banks  in  China at the prevailing exchange rates quoted by the People's Bank of
China.  The  Company  expects  that  a  portion  of its revenues will need to be
converted  into  other currencies to meet foreign currency exchange obligations,
including  the  payment  of  any  dividends  declared.

       Although the central government of China has repeatedly indicated that it
does not intend to devalue its currency in the near future, recent announcements
by  the  central  government of China indicate that devaluation is an increasing
possibility.  Should  the  central  government  of  China  decide to devalue the
Renminbi,  the  Company  does  not  believe  that  such  an  action would have a
detrimental  effect  on  the  Company's  operations,  since the Company conducts
virtually  all of its business in China, and the sale of its products is settled
in  Renminbi.  However,  devaluation  of  the Renminbi against the United States
dollar  would adversely affect the Company's financial performance when measured
in  United  States  dollars.

RECENT  ACCOUNTING  PRONOUNCEMENTS:

       In  June  1998, the Financial Accounting Standards Board issued Statement
No.  133,  "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
No.  133"),  which,  as  amended,  is effective for financial statements for all
fiscal  quarters of all fiscal years beginning after June 15, 2000. SFAS No. 133
standardizes  the  accounting  for  derivative  instruments,  including  certain
derivative  instruments embedded in other contracts, by requiring that an entity
recognize  those  items  as  assets or liabilities in the statement of financial
position  and  measure  them  at  fair  value.  SFAS  No. 133 also addresses the
accounting  for  hedging activities. The Company will adopt SFAS No. 133 for its
fiscal  year  beginning January 1, 2001. The Company currently does not have any
derivative  instruments  nor  is  it engaged in any hedging activities, thus the
Company  does  not  believe  that  implementation  of  SFAS  No. 133 will have a
material  effect  on  its  financial  statement  presentation  and  disclosures.

YEAR  2000  ISSUE:

       The  Year 2000 Issue results from the fact that certain computer programs
have  been  written  using  two  digits  rather  than  four digits to define the
applicable  year. Computer programs that have sensitive software may recognize a


                                       15
<PAGE>
date using "00" as the year 1900 rather than the year 2000. This could result in
a  system  failure  or  miscalculations  causing  disruptions  of  operations,
including,  among other things, a temporary inability to process transactions or
engage  in  similar  normal  business  activities.

       As  of December 31, 1999, the Company and the Joint Venture had completed
any  required  modifications  to  their  software  to ensure that their software
systems  were  Year  2000  compliant.  The  cost  of  such modifications was not
material.

       Since  the  date  rollover  on January 1, 2000, the Company and the Joint
Venture  have  not  experienced  any  material adverse effect from the Year 2000
Issue. While the primary risk to the Joint Venture with respect to the Year 2000
Issue continues to be the ability of third parties to provide goods and services
in  a timely and accurate manner, the Joint Venture has not experienced any such
disruption to date. The Company does not expect any remaining risks with respect
to  the  Year 2000 Issue to have a material adverse effect on the Joint Venture.

ITEM  7.  FINANCIAL  STATEMENTS

     The consolidated financial statements for the years ended December 31, 1999
and  1998  are  listed  at  the  "Index  to  Consolidated Financial Statements".

ITEM  8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
          FINANCIAL  DISCLOSURE

     None.


                                       16
<PAGE>
                                    PART III.

ITEM  9.   DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
           COMPLIANCE  WITH  SECTION  16(a)  OF  THE  EXCHANGE  ACT

DIRECTORS  AND  EXECUTIVE  OFFICERS

       The  following  table  and  text  sets  forth  the  names and ages of all
directors and executive officers of the Company and the key management personnel
as  of  December 31, 1999. The Board of Directors of the Company is comprised of
only one class. All of the directors will serve until the next annual meeting of
stockholders  and  until  their  successors  are elected and qualified, or until
their  earlier  death,  retirement,  resignation  or removal. Executive officers
serve  at  the  discretion  of the Board of Directors and are appointed to serve
until  the  first  Board  of  Directors  meeting following the annual meeting of
stockholders. Also provided is a brief description of the business experience of
each  director and executive officer and the key management personnel during the
past  five  years  and  an  indication of directorships held by each director in
other  companies  subject  to  the  reporting  requirements  under  the  Federal
securities  laws.

<TABLE>
<CAPTION>
       NAME                     AGE  POSITION
<S>                             <C>  <C>
      Danny Wu                   39  Chairman of the Board of Directors, Chief
                                      Executive Officer and Secretary

      Lawrence Hon                51  Director

      Vincent Chan                36  Director

      Steven Tang                 44  Director (Resigned in May 2000)

      Chen Yuen Chen              29  Vice President - Business Department

      Oscar Shen                  25  Accounting and Finance Manager (Resigned
                                      in August 2000)
</TABLE>

       DANNY  W.  WU  was  appointed  Chairman  of the Board of Directors, Chief
Executive  Officer  and  Secretary of the Company in March 1999. Mr. Wu has over
ten  years  of  experience  in international trade, manufacturing management and
directed  investment  in  China. He started as a loan officer in Hang Lung Bank,
Hong Kong. He joined the Hong Kong Trade Development Council (HKTDC) in 1985 and
was  in  charge  of  promoting HKTDC's services to the local business community.
Subsequently,  he  was  assigned  to  promote  Hong  Kong's  export  trade  and
investments  and  assisted  a number of foreign companies to invest in Hong Kong
and  China  during  that  period.  Mr.  Wu was then promoted to project manager,
responsible  for  organizing  and  the  overall  management  of  a  number  of
international  conventions  and exhibitions. He joined Quanta Industries Inc., a
Taiwanese  conglomerate,  in 1989 as the general manager of its Hong Kong office
overseeing  trading,  direct  investment activities and setting up joint venture
enterprises  in  China.  The  joint  ventures  related  to  catering,  cable
manufacturing  and  metal  processing.  He  was  also  involved  in  the general
financial  management  of  these  ventures.  Mr.  Wu  was  a  founding member of
Sino-Forest  Corporation,  a  company listed on the Toronto Stock Exchange, with
investments  in  forestry in China. He was responsible for market development of
wood  chips  and  procurement  in  China  and  Asia.  In 1995, Mr. Wu founded an
investment company, and invested in a number of ventures in China, Hong Kong and
the United States. He is a graduate of the University of Hong Kong with a degree
in  management  studies  and  economics.

       LAWRENCE  HON  was  appointed a director of the Company in March 1999. He
started  his career as a professional accountant. In 1984, Mr. Hon joined Modern
Printing  Equipment  Ltd.  as  the Financial Director. Modern Printing Equipment
Ltd.  was  a subsidiary of KNP BT, a Dutch-based multinational group. KNP BT was
the  world's  eighth largest forestry group specializing in paper, packaging and


                                       17
<PAGE>
printing.  He  was  promoted to KNP BT's Regional Financial Director in 1986 and
Deputy Managing Director of Asian Operations in 1990, responsible for Hong Kong,
China,  Taiwan  and  Korea.  Between 1994 and 1996, Mr. Hon served as the Senior
Vice President of Sino-Forest Corporation, a company listed on the Toronto Stock
Exchange.  Mr.  Hon  was in charge of tree plantation, which provided wood fiber
for  paper, packaging and panel-board production. Mr. Hon is currently the Chief
Executive  Officer  and  President  of  AgroCan  Corporation, a public reporting
company  specializing  in the production and distribution of fertilizer products
in China. Mr. Hon is a professional accountant with fellowship in the respective
accountants'  associations in Hong Kong and the United Kingdom. He also holds an
MBA  degree  and  a  professional  qualification  in  Information  Technology.

       VINCENT  C.H.CHAN  was appointed a director of the Company in March 1999.
In 1996, Mr. Chan joined Suez Asia Inc., a European investment fund for China as
an  investment  director. Between 1989 and 1996, he served in various capacities
in  the  financial  field, including corporate finance and direct investment for
Standard  Chartered  Asia Limited and HSBC Private Equity Management Limited. He
has  over  11  years  of  experience  in  direct  investments  and  mergers  and
acquisitions  in  Asia,  including  China.  Mr.  Chan  received a B.A. degree in
geography  and  economics  from  the  University of Hong Kong in 1986 and an MBA
degree  from  the  Manchester  Business  School  in  the United Kingdom in 1998.

       STEVEN  TANG  was  appointed a director of the Company in March 1999. Mr.
Tang  is  the  President  of  Viasystems  Asia  Pacific Ltd. based in Hong Kong.
Viasystems  Asia  Pacific Ltd. is the Asia subsidiary of Viasystems Group, Inc.,
with  sales  turnover  of  over  US$1.4 billion in the printed circuit board and
electronic  assembly  business.  Mr.  Tang has extensive experience operating in
China,  Asia and the United States. He was the managing director for Utilux Asia
Ltd. from 1994 to 1999. Previously, he was the general manager for Amphenol East
Asia  Ltd.  in  the  electronics and interconnect business. Mr. Tang has a B.Sc.
degree  in electrical and electronics engineering from Nottingham University and
an  MBA  degree  from  Bradford  University  in  the  United  Kingdom.

       YUAN-CHENG  CHEN was appointed Vice President of Business Development for
the  Company  in  March  1999.  Mr.  Chen  is  responsible  for sales and market
development  for  the  Company's  products  produced  by  the Packaging and Wood
Divisions.  Mr.  Chen has a strong technical background and extensive experience
in  the  printing  and  packaging industry in China. From 1993 through 1999, Mr.
Chen  was  the  Marketing  Manager for a major toy manufacturer in Guangzhou. He
managed  a  team  of  30  sales and marketing personnel. He is a graduate of the
Faculty  of  Electronics  of  the Beijing Printing Institute where he majored in
electronic  publishing.

       OSCAR SHEN was appointed Accounting and Finance Manager of the Company in
1999.  Mr. Shen joined Ernst and Young in 1997 as an auditor and participated in
the  audits  of  major  listed companies in Hong Kong. He joined Hong Kong Metal
Work  Co.  Ltd.  in  1996  and  was  involved  in  the  establishment  of  a new
computerized  accounting  system for the accounting and shipping departments. In
1995,  he  joined Lippo Asia Investment Management (HK) Limited and was involved
in  financial analysis and corporate finance. Mr. Shen received his education in
Hong  Kong,  Canada and the United States. He is a graduate of the University of
Wisconsin-Madison  with  an  accounting  major.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

       Section  16(a)  of  the  Securities  Exchange  Act  of  1934, as amended,
requires the Company's directors and executive officers and persons who own more
than  10%  of  a  registered  class  of  the Company's equity securities to file
various  reports  with  the  Securities and Exchange Commission concerning their
holdings  of,  and  transactions  in, securities of the Company. Copies of these
filings  must be furnished to the Company. During the fiscal year ended December
31,  1999,  the  Company  did not have any class of equity securities registered
pursuant  to  Section 12 of the Securities Exchange Act of 1934, as amended, and
accordingly,  was not subject to the reporting requirements of Section 16 of the
Securities  Exchange  Act  of  1934,  as  amended.


                                       18
<PAGE>
ITEM  10.  EXECUTIVE  COMPENSATION

       The  following  table  sets forth the compensation paid during the fiscal
years  ended  December  31, 1999, 1998 and 1997 to the Company's Chief Executive
Officer.  No  officer  of  the Company received annual compensation in excess of
US$100,000  per  annum  during  such  years.

<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE
      NAME AND PRINCIPAL POSITION                YEAR  SALARY
      ---------------------------                ----  ------
<S>                                              <C>   <C>
      Danny Wu(1), Chairman, Chief Executive
      Officer and Secretary                      1999  US$nil

      Nils A. Ollquist(1), Chairman, President,  1999  US$nil
      Chief Executive Officer and Secretary      1998  US$86,710
                                                 1997  US$88,258

<FN>
(1)  On  March 20, 1999, Nils A. Ollquist resigned as Chairman, President, Chief
Executive  Officer  and  Secretary and Danny Wu became Chairman, Chief Executive
Officer  and  Secretary.
</TABLE>

COMPENSATION  AGREEMENTS

       There  are  currently  no  long-term  employment or consulting agreements
between  the  Company  and  the  executive officers or directors of the Company.

BOARD  OF  DIRECTORS

       During  the  year  ended  December  31,  1999, all corporate actions were
conducted  by  unanimous  written  consent  of the Board of Directors. Directors
receive  no  compensation  for  serving  on  the  Board  of  Directors,  but are
reimbursed  for any out-of-pocket expenses incurred in attending board meetings.
The  Company  had no audit, nominating or compensation committees, or committees
performing  similar  functions,  during  the  year  ended  December  31,  1999.

STOCK  OPTION  PLAN

       As of December 31, 1999, the Company has not adopted a stock option plan.


                                       19
<PAGE>
ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT

       The  following  table sets forth certain information as of March 15, 2000
with  respect  to the beneficial ownership of the common stock of the Company by
each  beneficial owner of more than 5% of the outstanding shares of common stock
of the Company, each director, each executive officer and all executive officers
and  directors  of  the Company as a group, the number of shares of common stock
owned  by  each  such  person  and group and the percent of the Company's common
stock  so  owned.

       As  used in this section, the term beneficial ownership with respect to a
security  is  defined by Rule 13d-3 under the Exchange Act as consisting of sole
or  shared  voting power (including the power to vote or direct the vote) and/or
sole or shared investment power (including the power to dispose of or direct the
disposition  of) with respect to the security through any contract, arrangement,
understanding,  relationship  or  otherwise,  subject to community property laws
where  applicable. Each person has sole voting and investment power with respect
to  the  shares  of  common  stock,  except  as  otherwise indicated. Beneficial
ownership consists of a direct interest in the shares of common stock, except as
otherwise  indicated.  The  address of those persons for which an address is not
otherwise  indicated  is CLI Building, Suite 1003, 313 Hennessy Road, Hong Kong.

<TABLE>
<CAPTION>
NUMBER OF SHARES OF COMMON            PERCENTAGE OUTSTANDING OF COMMON
NAME OF BENEFICIAL OWNER                  STOCK BENEFICIALLY OWNED      COMMON BENEFICIALLY OWNED(1)
------------------------              --------------------------------  ----------------------------
<S>                                   <C>                               <C>
Danny Wu                                                  1,250,000(2)                        29.02%
Lawrence Hon                                              1,250,000(2)                        29.02%
Vincent Chan                                                172,868(3)                         4.01%
Steven Tang                                                      --                              --%
All Directors and Executive Officers
as a group (4 persons)                                    1,422,868                           33.03%

5% Beneficial Owners
Gateway Worldwide Ltd.                                    1,250,000                           29.02%

Cartier-Fleming International Limited                       518,606                           12.04%
13C Chinaweal Centre
414-424 Jaffe Road
Wanchai, Hong Kong

<FN>
(1)     Calculations  based  upon  4,307,158  shares  issued  and  outstanding  on  March  15, 2000.
(2)     Represents  1,250,000  shares  held  by  Gateway  Worldwide  Ltd., a  British Virgin Islands
        corporation owned  equally  by  Lawrence  Hon  and  Danny  Wu.
(3)     Represents  172,868  shares  held  by  Critical  Success  Ltd.,  a  British  Virgin  Islands
        corporation,  of  which  Mr.  Chan  is  the  sole  shareholder.
</TABLE>

CHANGES  IN  CONTROL

     The  Company is unaware of any contract or other arrangement, the operation
of  which may at a subsequent date result in a change in control of the Company.

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     During  the  year ended December 31, 1999, the Company advanced RMB 160,585
and  RMB 2,245 to a shareholder and employees, respectively, and at December 31,
1999,  the  Company has RMB 427,518 due from the shareholder. These advances are
unsecured,  non-interest  bearing  and  are  due  on  demand.

     During  the  year  ended  December  31,  1999,  certain  shareholders  made
advances  to  the  Company  totaling  RMB  779,322.  The advances are unsecured,
non-interest  bearing  and  are  payable  on  demand.

     When  the  Joint Venture was formed in 1997, it owed the Joint Venturer net
current  payables  in  excess of RMB 33,000,000. In order to assist the economic
viability  of the Joint Venture, effective December 31, 1998, the Joint Venturer
forgave RMB 26,112,048 of the initial indebtedness. Because the debt forgiveness
was  made by a significant equity investor in the Joint Venture, for US GAAP the
Joint Venture accounted for the debt extinguishment as a capital contribution by
the  Joint  Venturer,  which  resulted  in  an  increase in the Company's equity


                                       20
<PAGE>
investment and capital in excess of par of RMB 15,667,229. During the year ended
December  31,  1999,  the Joint Venturer forgave an additional RMB 16,329,758 of
indebtedness,  which  resulted in an increase in the Company's equity investment
and  capital  in  excess  of  par  of  RMB  9,797,855.

     At  December  31,  1999,  the Joint Venture had RMB 10,462,659 due from the
Joint  Venturer, which is unsecured, non-interest bearing, and is due on demand.
Interest  expense  on amounts owed to the Joint Venturer was RMB 686,229 and RMB
3,115,937  for  the years ended December 31, 1999 and 1999, respectively, and is
included  in  total  debt amounts extinguished by the Joint Venturer during 1999
and  1998.  The  weighted  average  interest  rate  on  the amount due the Joint
Venturer  was 7.78% and 9.54% during the years ended December 31, 1999 and 1998,
respectively.

     At  December  31,  1999  and 1998, the Joint Venture had receivables of RMB
3,959,856  and  RMB  1,634,478,  respectively,  from  an  affiliate of the Joint
Venturer.  During  the years ended December 31, 1999 and 1998, the Joint Venture
incurred  RMB 9,725,528 and RMB 4,551,242, respectively, of manufacturing costs,
which  were  included  in cost of sales, and had net sales of RMB 11,110,000 and
RMB  4,905,190,  respectively,  to  this  affiliate.


                                       21
<PAGE>
                                    PART IV.

ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

     (a)  Exhibits:


Exhibit Number    Title
--------------    -----

     3.1          Certificate  of  Incorporation  as  filed  with  the  Delaware
                  Secretary  of  State  on  June  27,  1997  (1)

     3.2          Bylaws  (1)

     10.1         Joint Venture with Wuhan Dong Feng Paper Mill Company for
                  establishment of  Wuhan  Dong  Feng  Paper Company Limited (1)

     10.2         Tenancy  Agreement  (1)

     10.3         Agreement Associated with Amending the Joint Venture Agreement
                  and Articles  of  Association  (1)

     10.4         Purchase  Agreement  with  Gamma  Link  Enterprises Corp. (1)

     10.5         Amendment  to  the  Joint  Venture  Agreement  (1)

     21.1         Subsidiaries  of  Registrant  (1)

     27.1         Financial  Data  Schedule  (Electronic  filing  only)

          (1) Filed  as  an  exhibit to the Registration Statement on Form 10-SB
          filed  with the Securities and Exchange Commission on January 7, 2000,
          and  incorporated  herein  by  reference.

     (b)  Reports  on Form 8-K:  The Company did not file any Current Reports on
     Form 8-K  during  or  related  to the three months ended December 31, 1999.


                                       22
<PAGE>
                                   SIGNATURES

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


                                           CHINA GATEWAY HOLDINGS INC.
                                           ---------------------------
                                                  (Registrant)

Date:  October  12,  2000              By: /s/ DANNY WU
                                           -------------------------------------
                                           Danny Wu
                                           Chief Executive Officer


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




Date:  October  12,  2000              By: /s/ DANNY WU
                                           -------------------------------------
                                           Danny  Wu
                                           Chief  Executive  Officer,  Secretary
                                           and  Chairman  of  the  Board  of
                                           Directors


Date:  October  12,  2000              By: /s/ LAWRENCE HON
                                           -------------------------------------
                                           Lawrence  Hon
                                           Director


Date:  October  12,  2000              By: /s/ VINCENT CHAN
                                           -------------------------------------
                                           Vincent  Chan
                                           Director


Date:  October  12,  2000              By: /s/ CHEN YUEN CHEN
                                           -------------------------------------
                                           Chen  Yuen  Chen
                                           Vice  President - Business Department


                                       23
<PAGE>
         ===============================================================
                           CHINA GATEWAY HOLDINGS INC.
         ===============================================================


                        CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 1999 AND 1998



CONTENTS                                                                PAGE

Independent auditors' report                                            F-2

Consolidated balance sheet                                              F-3

Consolidated statements of operations                                   F-4

Consolidated statements of shareholders' equity
 and comprehensive income (loss)                                        F-5

Consolidated statements of cash flows                                   F-6

Notes to consolidated financial statements                              F-8


                                       F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT


The  Board  of  Directors  and  Shareholders
China  Gateway  Holdings  Inc.

     We  have  audited  the  accompanying  consolidated  balance  sheet of China
Gateway  Holdings Inc. and subsidiaries as of December 31, 1999, and the related
consolidated  statements  of  operations, shareholders' equity and comprehensive
income (loss), and cash flows for each of the years in the two year period ended
December  31,  1999.  These  financial  statements are the responsibility of the
Company's  management.  Our  responsibility  is  to  express an opinion on these
financial  statements  based  on  our  audits.

     We  conducted  our  audits  in  accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts and disclosures in the financial statements. An audit also includes
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
Gateway  Holdings Inc. and subsidiaries as of December 31, 1999, and the results
of  their  operations and their cash flows for each of the years in the two year
period ended December 31, 1999, in conformity with generally accepted accounting
principles.

     As  discussed  in  Note 1 to the financial statements, since inception, the
Company  has  accounted  for  its  60% interest in Wuhan Dong Feng Paper Company
Limited (a Joint Venture) as a consolidated subsidiary. Because the 40% minority
partner  in  the  Joint  Venture  retained  certain  participating  rights,  the
Company's  1999  and  1998 financial statements have been restated to report its
investment  in  the  Joint  Venture  using  the equity method of accounting. The
restatement did not change net loss, net loss  per share or shareholders' equity
from  what  was  previously  reported.


/s/  Horwath  Gelfond  Hochstadt  Pangburn,  P.C.

HORWATH  GELFOND  HOCHSTADT  PANGBURN,  P.C.
Denver,  Colorado
March  21,  2000


                                       F-2
<PAGE>
<TABLE>
<CAPTION>
============================================================================
                      CHINA  GATEWAY  HOLDINGS  INC.
============================================================================

                        CONSOLIDATED  BALANCE  SHEET
                            DECEMBER  31,  1999


ASSETS                                               US$           RMB
                                                 ------------  ------------
<S>                                              <C>           <C>
Current assets:
Cash and cash equivalents                        $     5,818        48,169
Deposits and other current assets                    112,503       931,446
                                                 ------------  ------------
Total current assets                                 118,321       979,615

Property and equipment - net                          10,728        88,820
Investment in Joint Venture                        2,180,798    18,055,484
                                                 ------------  ------------
Total assets                                     $ 2,309,847    19,123,919
                                                 ============  ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable                                 $   109,383       905,615
Other payables and accruals                           56,341       466,464
Due to Joint Venturer                                  2,360        19,546
Due to related parties                                94,129       779,322
                                                 ------------  ------------
Total liabilities                                    262,213     2,170,947


Shareholders' equity:
Common stock, par value US$0.0001;
Authorized - 50,000,000 shares;
Issued and outstanding - 4,307,158 shares                431         3,568
Capital in excess of par value                     5,063,867    41,925,275
Deficit                                           (3,014,546)  (24,958,332)
Accumulated other comprehensive loss                  (2,118)      (17,539)
                                                 ------------  ------------
Total shareholders' equity                         2,047,634    16,952,972
                                                 ------------  ------------

Total liabilities and shareholders' equity       $ 2,309,847    19,123,919
                                                 ============  ============
</TABLE>

See notes to consolidated financial statements.


                                       F-3
<PAGE>
<TABLE>
<CAPTION>
         ===========================================================================
                                 CHINA GATEWAY HOLDINGS INC.
         ===========================================================================

                            CONSOLIDATED STATEMENTS OF OPERATIONS
                            YEARS ENDED DECEMBER 31, 1999 AND 1998


                                                          1999         1999          1998
                                                       -----------  -----------  ------------
                                                            US$          RMB          RMB
<S>                                                    <C>          <C>          <C>
                                                       -----------  -----------  ------------
Net sales                                                       -            -             -
Cost of sales                                                   -            -             -
                                                       -----------  -----------  ------------
Gross profit                                                    -            -             -

General and administrative expenses                    $ (225,949)  (1,870,699)   (5,447,516)
                                                       -----------  -----------  ------------
Loss from operations                                     (225,949)  (1,870,699)   (5,447,516)

Other income (expense)

Commission income                                          92,724      767,689             -
Interest income                                               231        1,913        27,999
Interest expense                                                -            -       (76,522)
Other                                                           -            -       230,667
Equity in loss of Joint Venture                          (683,207)  (5,656,472)  (14,780,842)
                                                       -----------  -----------  ------------
Net loss                                               $ (816,201)  (6,757,569)  (20,046,214)
                                                       ===========  ===========  ============


Weighted average number of common shares outstanding
                                                        4,241,426    4,241,426     3,616,745
                                                       ===========  ===========  ============

Net loss per common share -
Basic and diluted                                      $    (0.19)       (1.59)        (5.54)
                                                       ===========  ===========  ============
</TABLE>

See  notes  to  consolidated  financial  statements.


                                       F-4
<PAGE>
<TABLE>
<CAPTION>
                          ===========================================================================
                                                  CHINA GATEWAY HOLDINGS INC.
                          ===========================================================================

                                      CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND
                                                  COMPREHENSIVE INCOME (LOSS)


                                            Years ended December 31, 1999 and 1998
                                                (Expressed in Chinese Renminbi)


                                                                                                        Foreign
                                                                             Capital      Retained     currency
                                                     Common Stock           in excess     earnings    translation
                                                  Shares        Amount       of par      (deficit)    adjustment      Total
                                               ------------  ------------  -----------  ------------  -----------  -----------
<S>                                            <C>           <C>           <C>          <C>           <C>          <C>

Balance, January 1, 1998                          2,987,000        2,475    6,071,555     1,845,451       18,139    7,937,620

Issuance of common shares                         1,122,158          900    9,158,301             -            -    9,159,201

Common stock issued for services                     45,000           61      608,776             -            -      608,837
Extinguishment of debt by Joint Venturer
                                                          -            -   15,667,229             -            -   15,667,229
Comprehensive income (loss):
Net loss for the year ended December 31, 1998             -            -            -  (20,046,214)            -  (20,046,214)

Other comprehensive income                                -            -            -             -        3,966        3,966

Comprehensive loss                                        -            -            -            -            -   (20,042,248)

                                               ------------  ------------  -----------  ------------  -----------  -----------
Balance, December 31, 1998                        4,154,158        3,436   31,505,861   (18,200,763)      22,105   13,330,639

Issuance of common shares                           153,000          132      621,559             -            -      621,691
Extinguishment of debt by Joint Venturer
                                                          -            -    9,797,855             -            -    9,797,855
Comprehensive income (loss):
Net loss for the year ended December 31, 1999             -            -            -             -   (6,757,569)  (6,757,569)

Other comprehensive loss                                  -            -            -             -      (39,644)     (39,644)

Comprehensive loss                                        -            -            -             -            -   (6,797,213)

                                               ------------  ------------  -----------  ------------  -----------  -----------
Balance, December 31, 1999                        4,307,158        3,568   41,925,275   (24,958,332)     (17,539)  16,952,972
                                               ============  ============  ===========  ============  ===========  ===========
</TABLE>

See  notes  to  consolidated  financial  statements.


                                       F-5
<PAGE>
<TABLE>
<CAPTION>
                          ===========================================================================
                                                  CHINA GATEWAY HOLDINGS INC.
                          ===========================================================================

                                           CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
                                         YEARS  ENDED  DECEMBER  31,  1999  AND  1998


                                                                                 1999        1999          1998
                                                                              ----------  -----------  ------------
                                                                                  US$         RMB          RMB
<S>                                                                           <C>         <C>          <C>
Cash flows from operating activities
Net loss                                                                      $(816,201)  (6,757,569)  (20,046,214)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation                                                                      1,844       15,266         3,700
Equity in loss of Joint Venture                                                 683,207    5,656,472    14,780,842
Compensation expense related to stock issuance                                        -            -       608,837
Increase in other receivables, deposits and prepayments
                                                                                (80,260)    (664,518)     (145,576)
Due from Joint Venture                                                                -            -     1,816,589
Increase (decrease) in accounts payable                                               5           44      (803,881)
Increase (decrease) in other payables and accruals                               (3,606)     (29,828)      303,525
Increase in amounts due to related parties                                       94,128      779,322             -
Due to Joint Venture                                                             (2,993)     (24,773)       44,319
                                                                              ----------  -----------  ------------
Net cash used in operating activities                                          (123,876)  (1,025,584)   (3,437,859)

Cash flows from investing activities:
Capital expenditures                                                            (11,975)     (99,143)            -
Investment in Joint Venture                                                           -            -    (5,752,909)
                                                                              ----------  -----------  ------------
Net cash used in investing activities                                           (11,975)     (99,143)   (5,752,909)

Cash flows from financing activities
Issuance of common stock                                                         75,090      621,691     9,159,201
                                                                              ----------  -----------  ------------

Net cash provided by financing activities                                        75,090      621,691     9,159,201
                                                                              ----------  -----------  ------------

Net decrease in cash and cash equivalents                                       (60,761)    (503,036)      (31,567)
Cash and cash equivalents, beginning                                             71,368      590,849       618,450
Effect of exchange rate changes on cash                                          (4,789)     (39,644)        3,966
                                                                              ----------  -----------  ------------
Cash and cash equivalents, ending                                             $   5,818       48,169       590,849
                                                                              ==========  ===========  ============
</TABLE>

                                   (continued)


                                       F-6
<PAGE>
   ===========================================================================
                           CHINA GATEWAY HOLDINGS INC.
   ===========================================================================

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)


Supplemental  disclosure  of  non-cash  investing  and  financing  activity:

Effective  December 31, 1999 and 1998, the Company's equity investment increased
as  a  result  of additional capital contributions made by the Joint Venturer of
RMB  16,329,758 (US$ 1,972,360) and RMB 26,112,048 (US$ 3,153,629), respectively
(Note  6).



See  notes  to  consolidated  financial  statements.


                                       F-7
<PAGE>
   ===========================================================================
                           CHINA GATEWAY HOLDINGS INC.
     ===========================================================================

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Organization  and  basis  of  consolidated  financial  statements:

(a)     The  accompanying consolidated financial statements include the accounts
of China Gateway Holdings Inc. ("CGH"), and its subsidiaries, Orient Investments
Limited  ("OIL"), and Orient Packaging Limited ("OPL"), collectively referred to
as  the  "Company".  The  Company's  investment in Wuhan Dong Feng Paper Company
Limited  ("Wuhan  Limited"  or the "Joint Venture") has been accounted for under
the  equity  method  of accounting (Note 5 1(c) and Note 2(c)). CGH, OIL and OPL
were  formed  for  the  purpose  of entering into a Joint Venture agreement with
Wuhan  Dong  Feng  Paper  Mill  Company  (the "Joint Venturer"). All significant
intercompany  transactions  have  been  eliminated  in  consolidation.

(b)     CGH  was  incorporated  in Delaware. Effective June 27, 1997, CGH issued
2,310,000  shares  of  common  stock  to the shareholders of OIL in exchange for
their interests in OIL. Prior to the exchange, CGH had no substantial operations
and,  under  generally  accepted  accounting  principles,  the  transaction  was
accounted  for as a recapitalization, as the shareholders of OIL acquired all of
the stock of CGH. Accordingly, there was no revaluation of assets or liabilities
for  financial  statement accounting purposes. For financial reporting purposes,
the consolidated financial statements reflect the above-mentioned reorganization
similar  to  a  pooling  of  interests,  with assets and liabilities recorded at
historical  cost.  The consolidated financial statements incorporate the results
of  operations  and  assets and liabilities of CGH and its subsidiaries. OIL and
OPL are wholly-owned, British Virgin Islands incorporated companies. On December
20,  1996,  OPL  entered  into a 30-year Joint Venture agreement with Wuhan Dong
Feng  Paper Mill Company. Pursuant to the Joint Venture agreement, Wuhan Limited
was  formed  to  engage  in the manufacturing and sales of cartonboard packaging
materials,  primarily  used  in  consumer  product  packaging  for items such as
beverages, dry foodstuffs, pharmaceutical products and other consumer items. The
Joint  Venture  commenced operations March 1, 1997. The Joint Venture facilities
and  operations  are  located  in  the  city  of Wuhan, Hubei Province, People's
Republic  of  China  ("PRC").

(c)     Pursuant  to  terms  of  the Joint Venture agreement, OPL acquired a 60%
interest  in  Wuhan  Limited  and  the  Joint  Venturer acquired a 40% interest.
Profits and losses of Wuhan Limited are shared based on the respective ownership
interests,  and the board of directors of Wuhan Limited consists of ten members,
six  of  which  are  appointed  by  OPL.

Since  inception,  the  Company  has accounted for its 60% interest in the Joint
Venture,  which  is  similar  to  a majority-owned subsidiary, as a consolidated
subsidiary.  During  the  six months ended June 30, 2000, the Company determined
that  the  Joint  Venturer  had  retained certain rights under the Joint Venture
Agreement  that  provided  the Joint Venturer with the ability to participate in
management, although such rights have never been asserted by the Joint Venturer.
Under  Emerging  Issues  Task Force Issue No. 96-16, if a minority joint venture
partner  has  such  rights,  the  majority  joint venture partner is required to
account  for  its  interest  in  the  joint  venture  under the equity method of
accounting.


                                       F-8
<PAGE>
   ===========================================================================
                           CHINA GATEWAY HOLDINGS INC.
   ===========================================================================

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.     Organization  and basis of consolidated financial statements: (continued)

During  the  six  months  ended  June  30, 2000, the Joint Venture Agreement was
amended  to  clearly  express  the intent of the parties that the Company is the
controlling  party  in  the Joint Venture.  As a result, the Company's financial
statements  through December 31, 1999 have been restated to report the Company's
investment  in  the  Joint  Venture  under the equity method of accounting.  The
restatement  did  not  have  any  effect  on  net  loss,  net  loss per share or
shareholders'  equity.  However, because the Joint Venture Agreement was amended
during  2000,  the Company is reporting its investment in the Joint Venture as a
consolidated  subsidiary  commencing  January  1,  2000.

(d)     Through  December 31, 1997, OPL had contributed cash of RMB 4,867,636 to
Wuhan  Limited, and the Joint Venturer had contributed a building and machinery,
accounts  receivable  and inventory, net of certain liabilities, with a carrying
value  of  RMB  7,102,039,  which  approximates  fair  value  at  the  date  of
contribution  to  Wuhan  Limited.  During  1998,  OPL  contributed  cash  of RMB
5,752,909  as  the remaining portion of its original capital contribution to the
Joint  Venture.  According  to the Joint Venture agreement, the Joint Venturer's
initial  forty  percent  ownership interest was predicated upon its contributing
current  assets  equal  to  current  liabilities plus RMB 7,102,039 in property,
plant  and  equipment. In 1998, the Joint Venture agreement was amended, and OPL
agreed  to contribute an additional RMB 34,362,000 and the Joint Venturer agreed
to contribute additional machinery and equipment valued at RMB 22,908,000. As of
December  31,1999,  the  Company  had not made any additional contributions. The
parties are negotiating a timetable for the Company to contribute the additional
agreed  upon  amounts.

(e)     The  financial  statements  have  been  prepared  in  accordance  with
accounting  principles  generally  accepted in the United States of America ("US
GAAP"),  and are presented in Chinese Renminbi ("RMB"), the national currency of
the  PRC  (note  2(e)).

2.       Principal  accounting  policies:

(a)     The  consolidated  financial  statements include the accounts of CGH and
its  wholly-owned  subsidiaries.  Material  intercompany  accounts  have  been
eliminated  in  consolidation.  The Company's investment in the Joint Venture is
accounted  for  using  the  equity  method.

(b)     Cash  and  cash  equivalents:

For  financial  reporting  purposes,  the  Company  considers  all highly liquid
investments  purchased  with  original  maturities of three months or less to be
cash  equivalents.

(c)     Investment:

The  Company  accounts  for  its  interest in the Joint Venture under the equity
method of accounting.  The Company's 60% interest in the Joint Venture is stated
at  cost, adjusted for its equity in earnings or losses of the Joint Venture and
for  its  share  of  additional capital contributions made by the joint venturer
(Note  6).


                                       F-9
<PAGE>
   ===========================================================================
                           CHINA GATEWAY HOLDINGS INC.
   ===========================================================================

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.       Principal  accounting  policies:  (continued)

(c)   Investment  (continued):

The  following  is  a  summary  of  condensed financial information of the Joint
Venture:


                             Condensed Balance Sheet
                                December 31, 1999
                                (in thousand RMB)

       Current assets due from related parties     14,422
       Other current assets                        33,845
       Property, plant and equipment                5,840
                                                  _______
       Total assets                                54,107
                                                  =======

       Current liabilities                         23,992
       Shareholders' equity                        30,115
                                                  _______
       Total liabilities and shareholders' equity  54,107
                                                  =======


At  December  31,  1999, the Joint Venture had RMB 10,462,659 due from the Joint
Venturer,  which  is  unsecured,  non-interest  bearing,  and  is due on demand.
Interest  expense  on amounts owed to the Joint Venturer was RMB 686,229 and RMB
3,115,937  for  the years ended December 31, 1999 and 1999, respectively, and is
included  in  total  debt amounts extinguished by the Joint Venturer during 1999
and  1998.  The  weighted  average  interest  rate  on  the amount due the Joint
Venturer  was 7.78% and 9.54% during the years ended December 31, 1999 and 1998,
respectively.

At  December  31,  1999  and  1998,  the  Joint  Venture  had receivables of RMB
3,959,856  and  RMB  1,634,478,  respectively,  from  an  affiliate of the Joint
Venturer.  During  the years ended December 31, 1999 and 1998, the Joint Venture
incurred  RMB 9,725,528 and RMB 4,551,242, respectively, of manufacturing costs,
which  were  included  in cost of sales, and had net sales of RMB 11,110,000 and
RMB  4,905,190,  respectively,  to  this  affiliate.


                                      F-10
<PAGE>
  =============================================================================
                           CHINA GATEWAY HOLDINGS INC.
  =============================================================================

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.      Principal  accounting  policies:  (continued)

(c)  Investment  (continued):

<TABLE>
<CAPTION>
                           Condensed Income Statements
                                (in thousand RMB)


                                    Years ended December 31,
                                        1999       1998
                                      --------  ---------
<S>                                   <C>       <C>
  Net sales
    Related parties                    11,110      4,905
         Other                         50,218     55,417
                                      --------  ---------
                                       61,328     60,322
                                      --------  ---------

       Cost of sales
         Related parties               (9,725)    (4,551)
         Other                        (45,240)   (62,203)
                                      --------  ---------
                                      (54,965)   (66,754)
                                      --------  ---------

  Gross profit                          6,363     (6,432)

  Operating expenses                  (14,051)   (15,024)
                                      --------  ---------
  Loss from operations                 (7,688)   (21,456)
  Interest expense
         Related parties                 (686)    (3,116)
         Other                            (87)      (297)
  Other income                            113        234
                                      --------  ---------
  Net loss before taxes                (8,348)   (24,635)
  Income tax expense                   (1,079)         -
                                      --------  ---------
  Net loss                             (9,427)   (24,635)
                                      ========  =========
</TABLE>

When  the  Joint  Venture  was  formed  in  1997, it owed the Joint Venturer net
current  payables  in  excess of RMB 33,000,000. In order to assist the economic
viability  of the Joint Venture, effective December 31, 1998, the Joint Venturer
forgave RMB 26,112,048 of the initial indebtedness. Because the debt forgiveness
was  made by a significant equity investor in the Joint Venture, for US GAAP the
Joint Venture accounted for the debt extinguishment as a capital contribution by
the  Joint  Venturer,  which  resulted  in  an  increase in the Company's equity
investment and capital in excess of par of RMB 15,667,229. During the year ended
December  31,  1999,  the Joint Venturer forgave an additional RMB 16,329,758 of
indebtedness,  which  resulted in an increase in the Company's equity investment
and  capital  in  excess  of  par  of  RMB  9,797,855.


                                      F-11
<PAGE>
     ===========================================================================
                           CHINA GATEWAY HOLDINGS INC.
     ===========================================================================

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.       Principal  accounting  policies:  (continued)


(d)     Property  and  equipment:

Property  and  equipment  are stated at cost. Depreciation is provided by use of
the  straight-line method over the estimated useful lives of the related assets,
less  residual  value  where  appropriate  as  follows:

                  Furniture  and  fixtures                  5  years
                  Office  equipment                         5  years

During  the year ended December 31, 1999, the Joint Venture changed its estimate
of  the  useful lives of its assets. The change reflects useful lives consistent
with  management  estimates of the remaining useful lives of the assets and with
practices  in the PRC. The change resulted in increased depreciation expense for
the  Joint  Venture  and  increased  the Company's net loss by approximately RMB
190,200  for  the  year ended December 31, 1999, and an increase in net loss per
share  of  RMB  0.04.

     Repairs  and  maintenance  costs  are  expensed  when  incurred.

Management  assesses the carrying values of its long-lived assets for impairment
when  circumstances  warrant  such  a  review.  Generally,  assets to be used in
operations  are  considered  impaired if the sum of expected undiscounted future
cash  flows  is  less  than  the  assets'  carrying  values. If an impairment is
indicated,  the  loss  is  measured  based  on  the amounts by which the assets'
carrying  values  exceed their fair values. Based on its review, management does
not  believe  any  impairment  has  occurred  as  of  December  31,  1999.

(e)     Translation  of  foreign  currencies:

Transactions and monetary assets and liabilities denominated in currencies other
than  RMB are translated into RMB at the respective applicable rates of exchange
quoted  by the People's Bank of China (the "Exchange Rate"). Monetary assets and
liabilities  denominated  in  other  currencies  are  translated into RMB at the
applicable  Exchange  Rate  at the respective balance sheet dates. The resulting
exchange  gains or losses are credited or charged to the consolidated statements
of  operations.  Currency  translation  adjustments  arising  from  the  use  of
different  exchange  rates  from  period  to  period  are  included  in  other
comprehensive  income.

The  translation  of amounts from RMB into US Dollars for the convenience of the
reader  has  been  made  at  the rate of exchange quoted by the People's Bank of
China on December 31, 1999 of US$1.00 equal RMB 8.2793, and accordingly, differs
from the underlying foreign currency amounts. No representation is made that the
RMB amounts could have been, or could be, converted into US Dollars at that rate
on  the  respective  balance  sheet  date  or  at  any  other  date.

(f)     Income  taxes:

Deferred  tax  assets  and  liabilities  are  recognized  for  the  future  tax
consequences  attributable  to  differences  between  the  financial  statement
carrying  amounts  of  existing  assets and liabilities and their respective tax
bases.  Deferred tax assets and liabilities are measured using enacted tax rates
expected  to  apply  to  taxable  income  in  the years in which those temporary
differences  are  expected  to  be  recovered  or  settled.  The  effect  on


                                      F-12
<PAGE>
   ===========================================================================
                           CHINA GATEWAY HOLDINGS INC.
   ===========================================================================

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.     Principal  accounting  policies:  (continued)

(f)     Income  taxes  (continued):

deferred  tax  assets  and liabilities of a change in tax rates is recognized in
the  consolidated  statement  of  operations  in  the  period  that includes the
enactment  date.

(g)     Earnings  per  share:

Basic  earnings  per  share  amounts  are  calculated using the weighted average
number of shares of common stock outstanding during the period. Diluted earnings
per  share  assumes the conversion, exercise or issuance of all potential common
stock  instruments  such as options, warrants and convertible securities, unless
the  effect is to reduce a loss or increase earnings per share. Weighted average
shares  outstanding  during  the  years  ended  December  31,  1999 and 1998 are
4,241,426  and  3,616,745, respectively. Options and warrants to purchase common
stock  were  not  included in the computation of diluted EPS for the years ended
December  31,  1999  or  1998  because  they  would decrease the loss per share.

(h)     Fair  value  of  financial  instruments:

The  fair  values  of  amounts  due to the Joint Venture related parties are not
practicable  to  estimate  due  to  the  indefinite payment terms and due to the
related  party nature of the underlying transactions. The carrying values of the
Company's  cash  and other liabilities approximate fair values primarily because
of  the  short  maturities  of  these  instruments.

(i)     Stock-based  compensation:

Statement  of  Financial  Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based  Compensation"  allows  companies  to  choose whether to account for
employee stock-based compensation on a fair value method, or to account for such
compensation  under  the  intrinsic  value  method  prescribed  in  Accounting
Principles  Board  Opinion  No.  25,  "Accounting for Stock Issued to Employees"
("APB  25").  The  Company  has  chosen  to  account  for  employee  stock-based
compensation  using  APB  25.

(j)     Comprehensive  income:

The  Company  adopted SFAS No. 130, "Reporting Comprehensive Income," on January
1,  1998.  SFAS  No.  130 establishes standards for the reporting and display of
comprehensive  income,  its components and accumulated balances in a full set of
general  purpose financial statements. SFAS No. 130 defines comprehensive income
to  include  all  changes  in  equity except those resulting from investments by
owners  and  distributions  to  owners.  Among  other  disclosures, SFAS No. 130
requires  that  all  items  that  are  required  to  be recognized under current
accounting  standards  as  components  of  comprehensive income be reported in a
financial  statement  that  is  presented  with  the  same  prominence  as other
financial  statements.  The  Company's  only  current component of comprehensive
income  is  foreign  currency  translation  adjustments.


                                      F-13
<PAGE>
   ===========================================================================
                           CHINA GATEWAY HOLDINGS INC.
   ===========================================================================

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.     Principal  accounting  policies:  (continued)

(k)     Segment  reporting:

The  Company  adopted SFAS No. 131, "Disclosures about Segments of an Enterprise
and  Related  Information"  January 1, 1998. The Company's results of operations
and financial position were not affected by implementation of SFAS No. 131 as it
operates  in only one segment, manufacturing of cartonboard packaging materials.

(l)     Pension  and  other  post  retirement  benefits:

The  Company  adopted  SFAS  No. 132, "Employers' Disclosures about Pensions and
Other  Post  Retirement  Benefits"  on  January  1,  1998. SFAS No. 132 requires
comparative  information for earlier years to be restated. The Company's results
of operations and financial position were not affected by implementation of SFAS
No.  132.

(m)     Recently  issued  accounting  pronouncements:

In  June  1998,  the  Financial  Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS No. 133"),
which  is  effective  for  financial  statements  for all fiscal quarters of all
fiscal  years  beginning  after  June  15,  2000.  SFAS No. 133 standardizes the
accounting  for derivative instruments, including certain derivative instruments
embedded  in  other contracts, by requiring that an entity recognize those items
as assets or liabilities in the statement of financial position and measure them
at  fair  value.  SFAS No. 133 also addresses the accounting for certain hedging
activities.  The  Company currently does not have any derivative instruments nor
is  it  engaged  in  hedging  activities,  thus  the  Company  does  not believe
implementation  of  SFAS  No.  133  will have a material impact on its financial
statement  presentation  or  disclosures.

(n)     Use  of  estimates  in  the  preparation  of  financial  statements:

The  preparation  of  financial statements in conformity with generally accepted
accounting principles requires management 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 periods.
Management  makes  these  estimates  using the best information available at the
time the estimates are made; however actual results could differ materially from
these  estimates.


                                      F-14
<PAGE>
===========================================================================
                           CHINA GATEWAY HOLDINGS INC.
    ===========================================================================

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2.     Principal  accounting  policies:  (continued)

(o)     Risk  considerations:

As  the Company's operations are conducted primarily through its equity investee
in  the  PRC,  the  Company is subject to special considerations and significant
risks  not  typically  associated with investments in equity securities of North
American  and  Western  European  companies.  The  Company's  operations  may be
adversely  affected  by significant political, economic and social uncertainties
in  the  PRC.  Although  the  PRC  government  has been pursuing economic reform
policies  for  the  past  several  years, no assurance can be given that the PRC
government  will  continue to pursue such policies or that such policies may not
be  significantly  altered,  especially  in the event of a change in leadership,
social  or  political disruption or unforeseen circumstances affecting the PRC's
political,  economic  and  social  life. There is also no guarantee that the PRC
government's  pursuit  of  economic  reforms  will  be  consistent or effective.

The  Company expects that substantially all of its income will be denominated in
RMB. A portion of such income will need to be converted into other currencies to
meet  foreign  currency  obligations  such as payment of any dividends declared.
Both the conversion of RMB into foreign currencies and the remittance of foreign
currencies  abroad  require  PRC  government approval. No assurance can be given
that  the  operating subsidiaries within the Company will continue to be able to
convert  sufficient  amounts of foreign currencies in the PRC's foreign exchange
markets  in  the  future  for  payment  of  dividends.

3.       Property  and  equipment:

         At  December  31,  1999  property,  plant  and equipment consist of the
         following:

                                                  1999                 1999
                                                  ----                 ----
                                               US Dollars               RMB

         Furniture and fixtures                $   8,109               67,137
         Office equipment                          6,640               54,972
                                               ----------           ----------
                                                  14,749              122,109

         Less: Accumulated depreciation           (4,021)             (33,289)
                                               ----------           ----------
                                               $  10,728               88,820
                                               ==========           ==========

4.       Related  party  transactions:

During  the  year  ended December 31, 1999, the Company advanced RMB 160,585 and
RMB  2,245  to  a  shareholder  and employees, respectively, and at December 31,
1999,  the  Company  has  RMB  427,518 due from the shareholder. These advances,
which  are  included  in  deposits  and  other  current  assets,  are unsecured,
non-interest  bearing  and  are  due  on  demand.

During  the  year  ended December 31,1999, certain shareholders made advances to
the  Company  totaling  RMB  779,322.  The  advances are unsecured, non-interest
bearing  and  are  payable  on  demand.


                                      F-15
<PAGE>
   ===========================================================================
                           CHINA GATEWAY HOLDINGS INC.
   ===========================================================================

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5.       Shareholders'  equity:

During  the year ended December 31, 1998, CGH issued a total of 1,167,158 shares
for net consideration of RMB 9,159,201. A total of 682,866 shares were issued in
private  placements  at  prices  ranging  from US $.78 per share to US $2.75 per
share.  In  addition, 55,600 shares were issued in 1998 to investment bankers in
connection  with 1997 and 1998 private placements, 35,000 shares were issued for
investment  services, 10,000 shares were issued to an employee in exercise of an
option  issued  for  services, 272,000 shares were issued as a result of warrant
exercises  and 111,692 shares were issued as a result of an option exercise. The
35,000  shares issued for investment services were valued at the market value at
the  date  of issue, and resulted in an expense of US $52,500 (RMB 434,642). The
stock  issued  to  an  employee resulted in compensation expense of $21,031 (RMB
174,113)  for  the  difference between the market value of the stock at the date
the option was granted and the exercise price. The warrants and the option which
were  exercised had been issued in connection with the original formation of CGH
or  subsequent  stock issuance transactions, and resulted in net proceeds to CGH
of  US$14,700  (RMB  121,700).

During  the  year ended December 31, 1999, the Company issued a total of 153,000
shares  for  net  consideration  of  US  $74,985  (RMB  621,691).

In  connection  with  1997  and  1998 private placements, CGH issued warrants to
purchase 518,905 common shares of CGH at an exercise price of US$0.10 (RMB 0.83)
each  and  an  option to purchase 150,000 shares at an exercise price of US$1.66
(RMB  13.74). The warrants expire April 2000 and 272,000 warrants were exercised
in  1998.  Also, during the year ended December 31, 1998, CGH issued warrants to
purchase  235,316  common  shares of CGH at US$2.75 (RMB 22.77) per share. These
warrants  expire  in  March  2003.

During the year ended December 31, 1999, the Company granted options to purchase
500,000  shares at an exercise price of US $1.00 (RMB 8.28) each and expiring on
December 31, 1999. The options were not exercised and were forfeited on December
31,  1999.

At  December  31,  1999  warrants to purchase 246,905 common shares of CGH at an
exercise price of US $0.10 (RMB 0.83) per share and warrants to purchase 235,316
common  shares  of  CGH  at  an exercise price of US $2.75 (RMB 22.77) per share
remain  outstanding.

The  following  table summarizes stock option and warrant activity for the years
ended  December,  1999  and  1998:

<TABLE>
<CAPTION>
                                      Options                                 Warrants
                     ----------------------------------------  ----------------------------------------
                               Exercise             Exercise             Exercise             Exercise
                      Shares     Price     Share      Price    Shares      Price    Shares      Price
                              US Dollars           US Dollars           US D0llars           US Dollars
                     -------  -----------  ------  ----------  -------  ----------  -------  ----------
<S>                  <C>      <C>          <C>     <C>         <C>      <C>         <C>      <C>
Outstanding at
  December 31, 1997  150,000  $      1.66       -           -   45,000  $     0.10        -           -
Granted                    -            -  10,000  $     0.10  473,905        0.10  235,316  $     2.75
Exercised            111,692         1.66  10,000        0.10  272,000        0.10        -           -
Forfeited             38,308         1.66       -           -        -           -        -           -
                     -------  -----------  ------  ----------  -------  ----------  -------   ---------
Outstanding at
  December 31, 1998        -            -       -           -  246,905        0.10  235,316        2.75
Granted              500,000            1       -           -        -           -        -           -
Exercised                  -            -       -           -        -           -        -           -
Forfeited            500,000            1       -           -        -           -        -           -
                     -------  -----------  ------  ----------  -------  ----------  -------  ----------
Outstanding at
  December 31, 1999        -  $         -       -  $        -  246,905  $     0.10  235,316  $     2.75
                     =======  ===========  ======  ==========  =======  ==========  =======  ==========
</TABLE>


                                      F-16
<PAGE>
   ===========================================================================
                           CHINA GATEWAY HOLDINGS INC.
   ===========================================================================

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5.     Shareholders'  equity:  (continued)

PRC  rules  and  regulations  governing  joint ventures require allocations of a
portion  of annual net income to three reserve funds; a general reserve fund, an
expansion  fund and a welfare fund. The amounts to be reserved are stipulated by
PRC  laws  and  regulations.  The  allocation  among required reserves is at the
discretion of the board of directors. These reserves cannot be used for purposes
other  than  those  for which they are created and are not distributable as cash
dividends.

Pursuant to the joint venture agreement, the profit and loss allocation of Wuhan
Limited  is  subject to certain provisions. With the exception of the first year
of  operations,  allocation  to  the  Joint  Venture parties of annual after-tax
profits  of  the  Joint  Venture,  after  the  deduction of contributions to the
reserve funds described above, are made according to the relative investments of
the  two  parties.

6.     US  GAAP  and  PRC  accounting  differences:

Pursuant  to  the  terms of an agreement dated April 19, 1999 entered into among
the  Joint Venturer, the Company and Wuhan Limited, the Joint Venturer agreed to
reimburse  Wuhan  Limited  for  certain  operating  expenses  and cost of sales,
amounting  to  RMB  10,715,919  and  RMB  12,280,192  respectively, and to waive
interest  payable to it by Wuhan Limited amounting to RMB 3,115,937 for the year
ended  December  31,  1998.  For  PRC  reporting  purposes,  these  amounts were
reflected  as  a  reduction  in  operating  expenses, cost of sales and interest
expense,  respectively, in the PRC financial statements of Wuhan Limited for the
year  ended  December  31,  1998.

Under  the  same  agreement, the Joint Venturer further reimbursed Wuhan Limited
certain operating expenses and cost of sales, amounting to RMB 4,650,389 and RMB
10,993,140  respectively,  and  to waive interest payable to it by Wuhan Limited
amounting  to RMB 686,229 for the year ended December 31, 1999. Such amounts for
PRC  reporting  purposes,  again,  were  reflected  as  a reduction in operating
expenses,  cost  of sales and interest expense respectively in the PRC financial
statements  of  Wuhan  Limited  for  the  year  ended  December  31,  1999.

In  accordance  with  US  GAAP,  these  transactions  must  be  accounted for as
additional  capital  contributions  made  by  the  Joint Venturer, and have been
reflected  as  an  increase  in  the  Company's equity investment and capital in
excess of par for the 60% interest the Company has in the Joint Venture in these
consolidated  financial  statements. As a result of the above, net income (loss)
of Wuhan Limited as shown in its PRC reporting financial statements is different
from  what  is  included in the equity method of accounting for Wuhan Limited in
these consolidated financial statements. The reconciliation of net income (loss)
between  the PRC financial statements and the US GAAP financial statements is as
follows:


                                      F-17
<PAGE>
   ===========================================================================
                           CHINA GATEWAY HOLDINGS INC.
   ===========================================================================

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6.     US  GAAP  and  PRC  accounting  differences:  (continued):

<TABLE>
<CAPTION>
                                          Net income
                                         as shown in       Net loss
                                     Wuhan Limited's       included
                                                 PRC     in US GAAP
                                           financial      financial
                                          statements     statements
                                      --------------  -------------
                                            RMB           RMB
<S>                                   <C>             <C>

  Income for the year ended
  December 31, 1998 pursuant to PRC
  accounting principles                    1,475,027     1,475,027
  Reimbursement of expenses, cost of
  sales and waiver of interest by
  Joint Venturer                                   -   (26,112,048)
                                      --------------  -------------
                                           1,475,027   (24,637,021)
                                      ==============  =============
  Income for the year ended
  December 31, 1999 pursuant to PRC
  accounting principles                    6,902,305     6,902,305
  Reimbursement of expenses, cost of
  sales and waiver of interest by
  Joint Venturer                                   -   (16,329,758)
                                      --------------  -------------
                                           6,902,305    (9,427,453)
                                      ==============  =============
</TABLE>

7.      Income  tax:

The  Company  is subject to income taxes on an entity basis on income arising in
or  derived  from  the  tax  jurisdiction in which each entity is domiciled. The
Company's  British Virgin Islands ("BVI") subsidiaries are not liable for income
taxes.

The reconciliation between the effective tax rate and the statutory U.S. federal
income  tax  rate  is  as  follows:

<TABLE>
<CAPTION>
                                      Year ended    Year ended
                                      December 31,  December 31,
                                      1999          1998
                                      ------------  ------------
                                      % of pre-tax  % of pre-tax
                                      income        income
<S>                                   <C>           <C>

Computed "expected" tax benefit              (34%)         (34%)
Operating losses for which a benefit
has not been recognized                        34            34
                                      ------------  ------------
  Actual income tax expense                     0%            0%
                                      ============  ============
</TABLE>


                                      F-18
<PAGE>
   ===========================================================================
                           CHINA GATEWAY HOLDINGS INC.
   ===========================================================================

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7.     Income  tax  (continue):

     At  December  31,  1999,  the Company's deferred tax assets are as follows:

                                              1999
                                            ---------
                                               RMB

     U.S.  operating  loss  carryforward     369,700
Deferred  tax  asset  valuation  allowance  (369,700)
                                            ---------
     Net  deferred  tax  assets                    -
                                            =========

At  December  31,  1999  the  Company  has  U.S. operating loss carryforwards of
approximately  $131,300.  Losses  are  available  for offset against future U.S.
taxable income, if any, through 2019. A valuation allowance has been provided to
reduce  the  deferred  tax  assets  to  zero as realization of the assets is not
assured.

8.     Commitments  and  contingencies:

     Lease  for  office  space

During 1999 the Company entered into a lease for office space in Hong Kong which
expires  in  2001.  Rental  expense  for 1999 was RMB 104,052 and future minimum
lease  payments  are  as  follows:

                                 RMB
                               -------

                 2000          249,724
                 2001           83,241
                               -------
                               332,965
                               =======


                                      F-19
<PAGE>