U. S.
Securities and Exchange Commission


Washington,
D. C. 20549





FORM
10-Q




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




For the quarterly period ended March 31, 2009





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




For the transition period from _____ to _____





Commission
File No. 0-52496





CHINA JIANYE FUEL,
INC.


(Name of
Registrant in its Charter)







Deleware
            20-8296010(State
      or Other Jurisdiction of incorporation or organization)
            (IRS Employer I.D. No.)







100 Wall Street, 15th Floor,
New York, NY 10005


(Address
of Principal Executive Offices)





Issuer's
Telephone Number: (212) 232-0120





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




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files.)  Yes _____    No _____






Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check One)




Large
accelerated filer __     Accelerated filer
____      Non-accelerated filer 
____     Small reporting company  _X_




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





APPLICABLE
ONLY TO CORPORATE ISSUERS:  Indicate the number of shares outstanding
of each of the Registrant's classes of common stock, as of the latest
practicable date:


April
30, 2009


Common
Voting Stock:  29,976,923
















TABLE
      OF CONTENTS
              PagePART
      I. FINANCIAL INFORMATION


Item
      1. Financial StatementsConsolidated
      Balance Sheets as of March 31, 2009 (Unaudited) and June
      30, 2008
                  3Consolidated
      Statements of Operations and comprehensive income for
      the three and nine months ended March 31, 2009 and 2008
      (Unaudited)
                  4Consolidated
      Statements of Cash Flows for the nine months ended March 31, 2009 and 2008
      (Unaudited)
                  5Notes
      to Condensed Consolidated Financial Statements
                  6-10Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations
                  11-16Item
      3. Qualitative and Quantitative Disclosures About Market
    Risks
                  17Item
      4. Evaluation of Controls and Procedures
                  17PART
      II. OTHER INFORMATIONItem
      1. Legal Proceedings
                  18Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
                  18Item
      3. Defaults Upon Senior Securities
                  18Item
      4. Submission of Matters to a Vote of Security Holders
                  18


Item
      5. Other Information
                    18Item
      6. Exhibits
                    18Signatures
                    19





2




PART
I.  FINANCIAL INFORMATION





ITEM
1. FINANCIAL STATEMENTS.






CHINA JIANYE FUEL,
      INC.Consolidated Balance
      SheetsMarch 31,
                              
                              
                              June 30,2009
                              
                              
                              2008Assets:
                              
                              (Unaudited)Current
      assets:Cash and cash
      equivalents
                              
                              $
                              29,718
                              
                              
                              $
                              129,635Accounts receivable, net of
      allowance for doubtful accounts of
                              
                              
                              5,353,006
                              
                              
                              
                              5,793,568$29,233 and $29,113
      at March 31, 2009 and June 30, 2008, respectivelyInventory
                              
                              
                              765,693
                              
                              
                              
                              662,571Advances to
    suppliers
                              
                              
                              1,006,633
                              
                              
                              
                              1,031,406Prepaid expenses
                              
                              
                              -
                              
                              
                              
                              203,793Other Current
    assets
                              
                              
                              298,356
                              
                              
                              
                              147,481Total current
    assets:
                              
                              
                              7,453,406
                              
                              
                              
                              7,968,454Property
      and equipment, net:
                              
                              
                              2,704,546
                              
                              
                              
                              2,833,086Other
      assets:Intangibles, net
                              
                              
                              48,359
                              
                              
                              
                              55,040Total assets:
                              
                              $
                              10,206,311
                              
                              
                              $
                              10,856,580Liabilities
      and stockholders’ equity:Current
      liabilities:Accounts payable and accrued
      expenses
                              
                              $
                              769,976
                              
                              
                              $
                              1,215,896VAT taxes payable
                              
                              
                              441,727
                              
                              
                              
                              434,580Income taxes
    payable
                              
                              
                              528,957
                              
                              
                              
                              526,791Other current
      liabilities
                              
                              
                              1,013,466
                              
                              
                              
                              873,471Total current
      liabilities:
                              
                              
                              2,754,126
                              
                              
                              
                              3,050,738Total
liabilities:
                              
                              
                              2,754,126
                              
                              
                              
                              3,050,738Stockholders’
      equity:Common Stock, $0.001 par value,
      200,000,000 shares authorized, 29,976,923
                              
                              
                              29,977
                              
                              
                              
                              29,977shares issued and
      outstandingAdditional paid-in
      capital
                              
                              
                              5,695,058
                              
                              
                              
                              5,695,058Retained Earnings
                              
                              
                              953,468
                              
                              
                              
                              1,343,116Accumulated other comprehensive
      income
                              
                              
                              773,682
                              
                              
                              
                              737,691Total stockholders’
      equity:
                              
                              
                              7,452,185
                              
                              
                              
                              7,805,842Total liabilities and
      stockholders' equity:
                              
                              $
                              10,206,311
                              
                              
                              $
                              10,856,580The accompanying notes are an
      integral part of these consolidated financial statements.


3




CHINA JIANYE FUEL,
      INC.Consolidated Statements of
      Operations and Comprehensive Income (Loss)(Unaudited)For the Three Months Ended
                                          
                                          
                                          For the Nine Months EndedMarch 31,
                                          
                                          
                                          March 31,2009
                                          
                                          
                                          2008
                                          
                                          
                                          2009
                                          
                                          
                                          2008Sales:
                                          
                                          $
                                          -
                                          
                                          
                                          $
                                          3,249,795
                                          
                                          
                                          $
                                          324,430
                                          
                                          
                                          $
                                          6,705,173Cost
      of goods sold:
                                          
                                          
                                          -
                                          
                                          
                                          
                                          2,655,469
                                          
                                          
                                          
                                          294,770
                                          
                                          
                                          
                                          3,985,519Gross
      profit:
                                          
                                          
                                          -
                                          
                                          
                                          
                                          594,326
                                          
                                          
                                          
                                          29,660
                                          
                                          
                                          
                                          2,719,654Operating
      expenses:Selling, general and
      administrative
                                          
                                          
                                          80,758
                                          
                                          
                                          
                                          229,642
                                          
                                          
                                          
                                          418,813
                                          
                                          
                                          
                                          270,264Income
      (loss) from operations:
                                          
                                          
                                          (80,758
                                          )
                                          
                                          
                                          364,684
                                          
                                          
                                          
                                          (389,153
                                          )
                                          
                                          
                                          2,449,390Other
      income (expenses):Other expenses
                                          
                                          
                                          (165
                                          )
                                          
                                          
                                          -
                                          
                                          
                                          
                                          (495
                                          )
                                          
                                          
                                          -Income
      (loss) before provision forIncome
      tax:
                                          
                                          
                                          (80,923
                                          )
                                          
                                          
                                          364,684
                                          
                                          
                                          
                                          (389,648
                                          )
                                          
                                          
                                          2,449,390Provision
      for income tax:
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -Net
      income (loss):
                                          
                                          
                                          (80,923
                                          )
                                          
                                          
                                          364,684
                                          
                                          
                                          
                                          (389,648
                                          )
                                          
                                          
                                          2,449,390Other
      comprehensive income (loss):Foreign currency translation
      adjustment
                                          
                                          
                                          (11,606
                                          )
                                          
                                          
                                          357,422
                                          
                                          
                                          
                                          35,986
                                          
                                          
                                          
                                          673,122Comprehensive
      income (loss):
                                          
                                          $
                                          ( 92,529
                                          )
                                          
                                          $
                                          722,106
                                          
                                          
                                          $
                                          ( 353,662
                                          )
                                          
                                          $
                                          3,122,512Basic
      earnings per share:
                                          
                                          $
                                          ( 0.00
                                          )
                                          
                                          $
                                          0.01
                                          
                                          
                                          $
                                          ( 0.01
                                          )
                                          
                                          $
                                          0.11Diluted
      earnings per share:
                                          
                                          $
                                          ( 0.00
                                          )
                                          
                                          $
                                          0.01
                                          
                                          
                                          $
                                          ( 0.01
                                          )
                                          
                                          $
                                          0.11Weighted
      average shares outstandingBasic:
                                          
                                          
                                          29,976,923
                                          
                                          
                                          
                                          24,314,615
                                          
                                          
                                          
                                          29,976,923
                                          
                                          
                                          
                                          23,046,211Diluted:
                                          
                                          
                                          29,976,923
                                          
                                          
                                          
                                          24,314,615
                                          
                                          
                                          
                                          29,976,923
                                          
                                          
                                          
                                          23,046,211The
      accompanying notes are an integral part of these consolidated financial
      statements.


4








CHINA JIANYE FUEL,
      INC.Consolidated Statements of Cash
      Flows(Unaudited)For
      the Nine Months EndedMarch 31,2009
                            
                            
                            2008Cash
      flows from operating activities:Net
      income (loss)
                            
                            $
                            ( 389,648
                            )
                            
                            $
                            2,449,390Adjustments
      to reconcile net income (loss) to net cashprovided by (used in)
      operating activities:Bad
      debt expense
                            
                            
                            -
                            
                            
                            
                            35,840Depreciation
      and amortization
                            
                            
                            187,199
                            
                            
                            
                            167,906Deferred
      production costs
                            
                            
                            -
                            
                            
                            
                            1,119Changes
      in current assets and current liabilities:Accounts
    receivable
                            
                            
                            464,229
                            
                            
                            
                            (7,168,045
                            )Inventory
                            
                            
                            (100,363
                            )
                            
                            
                            (423,088
                            )Due from intercompany and related
      party
                            
                            
                            -
                            
                            
                            
                            (142,599
                            )Advances to
    suppliers
                            
                            
                            29,004
                            
                            
                            
                            1,679,749Prepaid expense
                            
                            
                            204,561
                            
                            
                            
                            (284,844
                            )Other current
    assets
                            
                            
                            (150,217
                            )
                            
                            
                            (67,466
                            )Accounts payable and accrued
      expenses
                            
                            
                            (436,347
                            )
                            
                            
                            2,781,581VAT taxes payable
                            
                            
                            5,358
                            
                            
                            
                            422,955Due to
    shareholders
                            
                            
                            -
                            
                            
                            
                            15,778Deferred
      revenue
                            
                            
                            -
                            
                            
                            
                            4,103Other current
      liabilities
                            
                            
                            121,727
                            
                            
                            
                            (123,852
                            )Total
adjustments:
                            
                            
                            325,151
                            
                            
                            
                            (3,100,863
                            )Net cash used in operating
      activities:
                            
                            
                            (64,497
                            )
                            
                            
                            (651,473
                            )Cash
      flows from investing activities:Acquisition of property and
      equipment
                            
                            
                            (36,152
                            )
                            
                            
                            (29,725
                            )Net cash used in investing
      activities:
                            
                            
                            (36,152
                            )
                            
                            
                            (29,725
                            )Cash
      flows from financing activities:Proceeds from capital
      contributions
                            
                            
                            -
                            
                            
                            
                            793,538Net cash provided by
      financing activities:
                            
                            
                            -
                            
                            
                            
                            793,538Effect
      of foreign currency translation on cash:
                            
                            
                            732
                            
                            
                            
                            5,978Net
      increase (decrease) in cash and cash equivalents:
                            
                            
                            (99,917
                            )
                            
                            
                            118,318Cash
      and cash equivalents – beginning:
                            
                            
                            129,635
                            
                            
                            
                            561Cash
      and cash equivalents – ending:
                            
                            $
                            29,718
                            
                            
                            $
                            118,879The accompanying notes are an integral part of
      these consolidated financial
  statements


5
 CHINA
JIANYE FUEL, INC
 Notes
to Consolidated Financial Statements
 March
31, 2009 and 2008
 (Unaudited)




NOTE
1 – ORGANIZATION AND NATURE OF BUSINESS





China
Jianye Fuel Inc. was incorporated as Standard Commerce, Inc. (“Standard
Commerce”) in December 1994 in Nevada. On November 13, 2007, Standard Commerce
acquired the outstanding capital stock of American Jianye Ethanol Company, Inc.,
a Delaware corporation (“American Jianye”) and changed its name to China Jianye
Fuel Inc. For accounting purposes, the acquisition was treated as a
recapitalization of American Jianye. American Jianye is a holding company that
owns 100% of Zhao Dong Jianye Fuel Co., Ltd. (“Zhao Dong”), a corporation
organized under the laws of the People’s Republic of China. The accompanying
consolidated financial statements include the financial statements of China
Jianye Fuel Inc. and its subsidiaries (the “Company”). The Company’s primary
business is to manufacture and distribute ethanol and methanol as alternative
fuel for automobile use.





NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Basis
Of Presentation





The
Company’s Consolidated Financial Statements include the accounts of its direct
wholly-owned subsidiaries and of its indirect proportionate share of
subsidiaries owned by the wholly-owned subsidiaries. All intercompany balances
and transactions are eliminated in consolidation. The accompanying unaudited
financial statements have been prepared in accordance with generally accepted
accounting principles (GAAP) applicable to interim financial information and
with the requirements of Form 10-Q and Regulation S-X of the Securities and
Exchange Commission applicable to smaller reporting companies. Accordingly, they
do not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for complete
financial statements. Interim results are not necessarily indicative of results
for a full year. In the opinion of management, all adjustments considered
necessary for a fair presentation of the financial position and the results of
operations and cash flows for the interim periods have been
included.





Interim
Financial Statements





These
interim financial statements should be read in conjunction with the audited
financial statements for the year ended June 30, 2008, as not all disclosures
required by generally accepted accounting principles for annual financial
statements are presented. The interim financial statements follow the same
accounting policies and methods of computations as the audited financial
statements for the year ended June 30, 2008.





NOTE
3 – EARNINGS (LOSS) PER SHARE





The
Company presents earnings per share on a basic and diluted basis. Basic earnings
per share have been computed by dividing net earnings by the weighted average
number of common shares outstanding. Diluted earnings per share has been
computed by dividing net earnings plus convertible preferred dividends and
interest expense (after-tax) on convertible debt by the weighted average number
of common shares outstanding including the dilutive effect of equity securities.
The weighted average number of common shares calculated for Diluted EPS excludes
the potential common stock that would be exercised under the options and
warrants granted to officers because the inclusion of the potential shares from
these options and warrants would cause an anti-dilutive effect by increasing the
net earnings per share.


6
 CHINA
JIANYE FUEL, INC
 Notes
to Consolidated Financial Statements (continued)
 March
31, 2009 and 2008
 (Unaudited)


NOTE
3 – EARNINGS (LOSS) PER SHARE (continued)





Three
      Months Ended March 31,2009
                  
                  
                  2008Net
      income (loss)
                  
                  $
                  ( 80,923
                  )
                  
                  $
                  364,684Weighted
      average common shares
                  
                  
                  29,976,923
                  
                  
                  
                  24,314,615Effect
      of diluted securities:
                  
                  
                  -
                  
                  
                  
                  -Weighted
      average common shares
                  
                  
                  29,976,923
                  
                  
                  
                  24,314,615Basic
      net income per share
                  
                  $
                  ( 0.00
                  )
                  
                  $
                  0.01Diluted
      net income per share
                  
                  $
                  ( 0.00
                  )
                  
                  $
                  0.01





Nine
      Months Ended March 31,2009
                  
                  
                  2008Net
      income (loss)
                  
                  $
                  ( 389,648
                  )
                  
                  $
                  2,449,390Weighted
      average common shares
                  
                  
                  29,976,923
                  
                  
                  
                  23,046,211Effect
      of diluted securities:
                  
                  
                  -
                  
                  
                  
                  -Weighted
      average common shares
                  
                  
                  29,976,923
                  
                  
                  
                  23,046,211Basic
      net income per share
                  
                  $
                  ( 0.01
                  )
                  
                  $
                  0.11Diluted
      net income per share
                  
                  $
                  ( 0.01
                  )
                  
                  $
                  0.11


7
 CHINA
JIANYE FUEL, INC
 Notes
to Consolidated Financial Statements (continued)
 March
31, 2009 and 2008
 (Unaudited)


NOTE
4 – INVENTORY





Inventory
at March 31, 2009 and June 30, 2008 consists of the following:




March 31, 2009
                      
                      
                      June 30, 2008Raw
      materials
                      
                      $
                      595,305
                      
                      
                      $
                      594,495Packaging
      supplies
                      
                      
                      34,445
                      
                      
                      
                      32,058Finished
      goods
                      
                      
                      135,943
                      
                      
                      
                      36,018Total
                      
                      $
                      765,693
                      
                      
                      $
                      662,571





NOTE
5 – ADVANCES TO SUPPLIERS





As a
common business practice in China, the Company is required to make advance
payments to certain suppliers for raw material procurement and construction.
Such advances are interest-free and unsecured.


NOTE
6– PROPERTY AND EQUIPMENT





Property
and equipment at March 31, 2009 and June 30, 2008 consists of the
following:




March 31, 2009
                    
                    
                    June 30, 2008Property
      and equipment
                    
                    $
                    3,440,509
                    
                    
                    $
                    3,386,419Less:
      accumulated depreciation
                    
                    
                    735,963
                    
                    
                    
                    553,333Total
                    
                    $
                    2,704,546
                    
                    
                    $
                    2,833,086




Depreciation
expense for the nine months ended March 31, 2009 and 2008 was $180,355 and
$166,484, respectively.


8
 CHINA
JIANYE FUEL, INC
 Notes
to Consolidated Financial Statements (continued)
 March
31, 2009 and 2008
 (Unaudited)


NOTE
7– INTANGIBLE ASSETS





Intangible
assets at March 31, 2009 and June 30, 2008 consisted of the
following:





March 31, 2009
                  
                  
                  June 30, 2008Rights
      to use land
                  
                  $
                  73,690
                  
                  
                  $
                  73,387Less:
      accumulated amortization
                  
                  
                  25,331
                  
                  
                  
                  18,347Total
                  
                  $
                  48,359
                  
                  
                  $
                  55,040




Amortization
expense for the nine months ended March 31, 2009 and 2008 amounted to $6,906 and
$1,422, respectively.





NOTE
8 – OTHER CURRENT LIABILITIES





Other
payable represents a short-term loan from a third party individual for
purchasing raw materials. It is unsecured and non-interest bearing.





NOTE
9 – EMPLOYEE WELFARE PLAN





The
Company has established an employee welfare plan in accordance with Chinese law
and regulations. The Company makes annual contributions of 14% of all employees'
salaries to the employee welfare plan.


9
 CHINA
JIANYE FUEL, INC
 Notes
to Consolidated Financial Statements (continued)
 March
31, 2009 and 2008
 (Unaudited)


NOTE
10 – RISK FACTORS





For the
nine months ended March 31, 2009, the Company had four vendors that provided
approximately 74% of the Company’s raw materials. Total purchases from these
vendors amounted to $230,203. For the nine months ended March 31, 2008, the
Company had one major vendor that provided approximately 78% of the Company’s
raw materials. Total purchases from this vendor were $3,596,047.





For the
nine months ended March 31, 2009, one major customer accounted for approximately
57% of the Company’s net sales. Total sales made to this customer amounted to
$185,608. For the nine months ended March 31, 2008, one major customer accounted
for approximately 98% of the net sales. Total sales made to this customer were
$6,580,279.




The
Company's operations are carried out in the PRC. Accordingly, the Company's
business, financial condition and results of operations may be influenced by the
political, economic and legal environments in the PRC as well as by the general
state of the PRC’s economy. The Company's business may be influenced by changes
in governmental policies with respect to laws and regulations, anti-inflationary
measures, currency conversion and remittance abroad, and rates and methods of
taxation, among other things.





NOTE
11 - CONCENTRATIONS OF CREDIT RISK





Financial
instruments which potentially subject the Company to credit risk consist
principally of cash on deposit with financial institutions. Management believes
that the financial institutions that hold the Company’s cash and cash
equivalents are financially sound and minimal credit risk exists with respect to
these investments.





NOTE
12 - SUBSEQUENT EVENTS





None.





10





ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF
OPERATIONS




Forward
Looking Statements




This
Quarterly Report on Form 10-Q contains “forward-looking” statements, as such
term is defined in the Private Securities Litigation Reform Act of
1995.  These forward-looking statements consist of information
relating to the Company that is based on the beliefs of the Company’s management
as well as assumptions made by and information currently available to the
Company’s management. When used in this report, the words “anticipate,”
“believe,” “estimate,” “expect” and “intend” and words or phrases of similar
import, as they relate to the Company or Company management, are intended to
identify forward-looking statements. Such statements reflect the current risks,
uncertainties and assumptions related to certain factors including, without
limitations, competitive factors, general economic conditions, customer
relations, relationships with vendors, the interest rate environment,
governmental regulation and supervision, seasonality, distribution networks,
product introductions and acceptance, technological change, changes in industry
practices, onetime events and other factors described herein and in other
filings made by the Company with the Securities and Exchange Commission. Based
upon changing conditions, should any one or more of these risks or uncertainties
materialize, or should any underlying assumptions prove incorrect, actual
results may vary materially from those described herein as anticipated,
believed, estimated, expected or intended. The Company does not intend to update
these forward-looking statements.




Results
of Operations




Zhao Dong
Jianye Fuel commenced operations in 2004. Its activities, however, have
been essentially developmental. Its research and development efforts have
led to the development of a series of fuel products and the award of several
patents. With funds provided by its Chairman, Jianye Wang, it has developed
a state-of-the-art refinery for the production of methanol-based fuels. And
it has organized a staff of engineers, managers and sales professionals that
will be able to support its full-scale entry into the fuel market.




Until the
year ended June 30, 2008, the Company’s revenue-producing activities had been
incidental to the Company’s research and development activities. Prior to
September 30, 2007, Zhao Dong Jianye Fuel sold modest amounts of fuel to a
variety of customers, primarily to (a) develop the channels through which it
will market when it commences full scale production and (b) introduce new
products to those markets for testing and publicity.  However, in the
most recent fiscal year, which ended on June 30, 2008, Zhao Dong Jianye Fuel
generated $6,917,508 in revenue, primarily during the first half of fiscal year
2008. During the quarter ended December 31, 2007, Zhao Dong Jianye Fuel recorded
revenue of $3,449,434, primarily from  a sale and delivery of fuel
additives to Zhanjiang Runtong Trading Corp. In the quarter ended March 31,
2008, the Company realized the first significant revenue from the sale of fuel,
as 4,200 tons of methanol-based fuel was sold to CIPC Heilongjiang HuBei, a fuel
distributor, for $3,249,795.  These two sales represented
approximately 97% of our revenues for the year ended June 30, 2008. Since
then, however, our revenues have returned to prior levels.  In
the  quarter  ended June 30, 2008, for example, our sales
totaled only $212,335, primarily consisting of incidental sales of sample
batches.




During
the three and nine month periods ended March 31, 2009, our sales continue to be
incidental to research and development. These sales again represent our
distribution of sample batches to potential customers, and reflect the current
volatile market. Especially during the quarter ended March 31, in which no
sales were generated, this figure does not represent the type of marketing that
will accompany full production. This situation has occurred despite the fact
that during the summer of 2008 we entered into supply contracts with two
contractors, Zhuhai Zhonghuan Oil Ltd and Hanzhong Xilan Liquefied Petroleum,
which we expected to be the basis for significant revenue growth. The
primary reason for our lack of sales has been the dramatic decrease in world oil
prices. The low cost of oil  has limited the demand for alcohol
based fuel. Although the oil price was moving up slightly higher during the
quarter ended March 31, 2009, it still settles down at a much lower stage as
compared to  the corresponding period of last year. We are unable
to predict when this trend will reverse itself. Until oil prices increase,
demand for our alcohol-based products is likely to be limited.




11


A second
reason for our poor operating results for the quarter and nine months ended
March 31, 2009 was the effective of the reform on fuel taxation on January 1,
2009 by National Development and Reform Commission, Ministry of Finance,
Ministry of Transport and State Administration of Taxation. Pursuant to the
provisions of the reform plan, the tax on oil and gas are reduced by up to
80%. The gasoline tax is decreased from 1 Yuan (about 0.14 USD) per liter
to 0.2 Yuan (about 0.03 USD) and the diesel tax moves from 0.8 yuan (about 0.11
USD) per liter to 0.1 yuan (about 0.01 USD). At the same time, the Government’s
tax policy for alcohol based fuel, including our ethanol-based fuel and other
ancillary fuel additives, has not been announced. This uncertainty
regarding the comparative pricing of petroleum-based fuel and alcohol-based fuel
has increased our difficulty in developing a market for our alcohol-based
products.




Our gross
profit margin during the nine months ended March 31, 2009 was approximately
9%. This figure is not meaningful, however, since we have not commenced
full scale production. When the market price of the raw materials for
methanol-based fuels (i.e. methanol and petroleum distillate) is
substantially lower than the market price for gasoline, and we start our full
production and sales of our major fuel products, we expect our gross profit
margin to be significantly higher than that which is customary for refiners of
petroleum-based fuels. At current market prices, we believe that we will be
able to produce methanol-based fuel for $27 to $40 per ton less than the
prevailing cost of refining gasoline with comparable octane levels. The
price advantage can only be achieved, however, when we produce our fuels in
quantities that make efficient use of our refinery and ship it in quantities
that enable us to obtain wholesale shipping charges. Those conditions will
be achieved only after we obtain large volume customers and we obtain the funds
necessary to bring our operations up to the full production level.




Our
operating expenses incurred in the quarter ended March 31, 2009 decreased
significantly as compared to  the quarter ended March 31, 2008. During
the quarter ended March 31, 2008, we realized $3,249,795 in revenue, almost all
of which was the result of a sale of fuel additives to
one  customer. As compared to the operating expenses for the nine
months ended March 31, 2008, our operating expenses for the nine months ended
March 31, 2009 increased slightly to $418,813. The main reasons for the increase
were (a) increased expenses of operating our facility, as we prepare for full
production, and (b) the professional and other costs attendant to functioning as
a U.S. public company, a situation initiated in November 2007. As we
commence full-scale production, our operating expenses will continue to
increase, primarily due to (a) increased staff required for production and
marketing, (b) increased selling expense required to develop and expand the
market for our products, and (c) increased depreciation expense. Currently,
we only depreciate the portion of our facility that has been put into active
use.  The numerator for our depreciation calculation will
increase when our entire facility is engaged in production.




Due to
our lack of revenues, the Company incurred a net loss of $80,923 for the
quarter ended March 31, 2009, compared to our net income of $364,684 for the
quarter ended March 31, 2008. Likewise our net loss of $389,648 during the
nine months ended March 31, 2009 contrasted poorly with the $2,449,390 in net
income that we realized during the nine months ended March 31,
2008.




Our
business operates primarily in Chinese Renminbi (“RMB”), but we report our
results in our SEC filings in U.S. Dollars.  The conversion of our
accounts from RMB to Dollars results in translation
adjustments.  While our net income is added to the retained earnings
on our balance sheet; the translation adjustments are added to a line item on
our balance sheet labeled “accumulated other comprehensive income,” since it is
more reflective of changes in the relative values of U.S. and Chinese currencies
than of the success of our business. During the nine months ended on March
31, 2009, the effect of converting our financial results to Dollars was to add
$35,986 to our accumulated other comprehensive income.




12


Liquidity and Capital
Resources




Our
operations to date have been funded primarily by capital contributions and
short-term loans from our Chairman, Jianye Wang, which have been adequate to
bring us to the point where we are prepared to commence full scale
production.




Our
working capital at March 31, 2009 totaled $4,699,280. Included in our working
capital, however, was $5,353,006 in accounts receivable, almost all of which are
owed by the two customers who were the source of 97% of our 2008
revenue. We are not certain when those receivables will be paid. Also
included in working capital was an advance payment to the raw material suppliers
in the amount of $1,006,633. The recipient of this advance payment will be
our primary source of petroleum distillate, and we made this payment in accord
with Chinese custom, to enable the refinery to expand its production capacity in
anticipation of doing a large amount of business with us. We have,
therefore, only a small amount of liquid assets.




Despite
the net loss of $389,648 that we incurred during the nine months ended March 31,
2009, our operations in that period reduced our cash position by only
$64,497. This disparity occurred primarily because the amount that we
applied to reduce our accounts payable and accrued expenses, $436,347, was
approximately equal to the amount that we collected on our accounts receivable,
$464,229. This offset enabled us to preserve the goodwill of our
vendors. During the same period we realized $204,561 in value from prepaid
expenses, which partially offset our net loss, allowing us to preserve our
cash.




In order
to commence full scale operations, we will need approximately $4,000,000 to
purchase raw materials and fund our initial receivables. On our March 31,
2009 balance sheet, we have property and equipment with a book value of
$2,704,546 on which there is no lien. We expect that some amount of the
funds that we require can be obtained by pledging those assets to secure a
loan. The remainder, however, will be obtained from the sale of
equity. To date we have no commitment from any source for either debt or
equity financing.




Off-Balance
Sheet Arrangements




We do not
have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition or results of
operations.




Risk
Factors That May Affect Future Results




You
should carefully consider the risks described below before buying our common
stock. If any of the risks described below actually occurs, that event
could cause the trading price of our common stock to decline, and you could lose
all or part of your investment.




Because
we have not yet commenced our full scale production operations, unexpected
factors may hamper our efforts to implement our business plan.




Our
business plan contemplates that we will become a fully-integrated refiner and
marketer of methanol-based fuel oil.  To date, however, we have
produced and marketed our fuels only in limited quantities.  If the
necessary funding can be obtained, we will commence operations on a much larger
scale.  The complexity of this undertaking means that we are likely to
face many challenges, some of which are not yet foreseeable.  Problems
may occur with our raw material acquisition, with the roll-out of efficient
manufacturing processes, and with our ability to deliver fuel
efficiently.  If we are not able to minimize the costs and delays that
result, our business plan may fall short of its goals, and we will be unable to
achieve profitability.




13


The
capital investments that we plan may result in dilution of the equity of our
present shareholders.




Our
business plan contemplates that we will invest approximately $4 million in the
start-up of our full-scale operations.  We intend to raise a large
portion of the necessary funds by selling equity in our company.  At
present we have no commitment from any source for those funds.  We
cannot determine, therefore, the terms on which we will be able to raise the
necessary funds.  It is possible that we will be required to dilute
the value of our current shareholders’ equity in order to obtain the
funds.  If, however, we are unable to raise the necessary funds, our
growth will be limited, as will our ability to compete effectively.




The
market for methanol-based fuel is not developed in China.




One of
the greater challenges that we will face in the implementation of our business
plan will be the development of widespread acceptance of methanol as automobile
fuel. Because our products perform as an alternative to conventional
gasoline-based fuel, we will be challenged by the inertial effect of the
association of gasoline with automobiles. Until we commence widespread
marketing activities, we will not know the extent to which we will be able to
persuade distributors and, ultimately, consumers, to trust our fuels in their
automobiles.  If we are unable to effect a change in the public
concept of automobile fuel, our business plan may fail.




Zhao
Dong Jianye Fuel’s profitability will be dependent on market prices for
methanol, ethanol and gasoline.




Zhao Dong
Jianye Fuel’s profitability and financial condition will be significantly
affected by the selling price for methanol-based fuel.  That price, in
turn, will depend on the market prices for competitive products, specifically
gasoline and ethanol.  Uncontrolled market forces ultimately drive the
price and supply of each of these fuels.  Factors that affect these
market prices include the level of consumer product demand, governmental
regulations and taxes, the level of foreign imports of oil and natural gas, and
the overall economic environment. Significant declines in world wide prices for
oil could have a material adverse effect on our success in introducing
methanol-based fuels.




Zhao
Dong Jianye Fuel creates products that may have harmful effects on the
environment if not stored and handled properly prior to use, which could result
in significant liability and compliance expense.





The
distribution of methanol-based fuel involves the controlled use of materials
that are hazardous to the environment. Zhao Dong Jianye Fuel cannot eliminate
the risk of accidental contamination or discharge and any resulting problems
that occur. Government regulations govern the use, manufacture, storage,
handling and disposal of these materials. Zhao Dong Jianye Fuel may be named a
defendant in any suit that arises from the improper handling, storage or
disposal of these products. Zhao Dong Jianye Fuel could also be subject to civil
damages in the event of an improper or unauthorized release of, or exposure of
individuals to, hazardous materials. Compliance with environmental laws and
regulations may be expensive, and current or future environmental regulations
may impair Zhao Dong Jianye Fuel’ research, development and production
efforts.





An
increase in raw material prices could increase Zhao Dong Jianye Fuel’s costs and
decrease its profits.




Changes
in the cost of raw materials could significantly affect Zhao Dong Jianye Fuel’s
business. Although the cost of methanol has traditionally been relatively
stable, increased use of methanol for fuel would create increased demand and
could introduce volatility into the market for methanol.  Our other
two primary raw materials, gasoline distillate and ethanol, already trade in
volatile markets.  The market price for gasoline distillate is a
function of the market price of oil, which has been highly volatile in recent
years.  The market price of ethanol depends primarily on the
availability of feedstocks, which again has become volatile in recent years due
to the heightened demand caused by the widespread acceptance of ethanol as a
fuel supplement.   Increased prices in any of these markets could
decrease Zhao Dong Jianye Fuel’s profitability.  Zhao Dong Jianye Fuel
does not expect to enter into hedging contracts with respect to raw material
prices, but will rely on its Chairman’s network of industry relationships to
obtain the best available prices.




14


Reliance
on third party suppliers for raw materials may affect Zhao Dong Jianye Fuel’s
production and profitability.




To date,
Zhao Dong Jianye Fuel has no binding commitments for the supply of raw
materials, although it has established a favourable relationship with its
primary distillate supplier by making a large advance payment.  Even
as it develops supply arrangements, Zhao Dong Jianye Fuel’s suppliers could
terminate the contracts and sell to other buyers, or enter into the
methanol-based fuel production business in direct competition with Zhao Dong
Jianye Fuel.  If Zhao Dong Jianye Fuel’s suppliers do not perform
their obligations as agreed, Zhao Dong Jianye Fuel will not be able to maintain
its refinery operations at an efficient level, and may itself default in
satisfying deliver orders, all of which would adversely affect Zhao Dong Jianye
Fuel’ profitability.




Increased
government regulation of our production and/or marketing operations could
diminish our profits.




The fuel
production and supply business is highly regulated.  Government
authorities are concerned with effect of fuel distribution on the national and
local economy.  To achieve optimal availability of fuel, governments
regulate many key elements of both production and distribution of
fuel.  Increased government regulation may affect our business in ways
that cannot be predicted at this time, potentially involving price regulation,
distribution regulation, and regulation of manufacturing
processes.  Any such regulation or a combination could have an adverse
effect on our profitability.




In
addition, the day-to-day operations of our business will require frequent
interaction with representatives of the Chinese government
institutions.  The national, provincial and local governments in the
People’s Republic of China are highly bureaucratized.  The effort to
obtain the registrations, licenses and permits necessary to carry out our
business activities can be daunting.  Significant delays can result
from the need to obtain governmental approval of our
activities.  These delays can have an adverse effect on the
profitability of our operations.  In addition, compliance with
regulatory requirements applicable to fuel manufacturing and distribution may
increase the cost of our operations, which would adversely affect our
profitability.




Our
business and growth will suffer if we are unable to hire and retain key
personnel that are in high demand.




Our
future success depends on our ability to attract and retain highly skilled
engineers, chemists, industrial technicians, production supervisors, and
marketing personnel.  In general, qualified individuals are in high
demand in China, and there are insufficient experienced personnel to fill the
demand.  In a specialized scientific field, such as ours, the demand
for qualified individuals is even greater.  If we are unable to
successfully attract or retain the personnel we need to succeed, we will be
unable to implement our business plan.




We
may have difficulty establishing adequate management and financial controls in
China.




The
People’s Republic of China has only recently begun to adopt the management and
financial reporting concepts and practices that investors in the United States
are familiar with.  We may have difficulty in hiring and retaining
employees in China who have the experience necessary to implement the kind of
management and financial controls that are expected of a United States public
company.  If we cannot establish such controls, we may experience
difficulty in collecting financial data and preparing financial statements,
books of account and corporate records and instituting business practices that
meet U.S. standards.




15


Capital
outflow policies in China may hamper our ability to pay dividends to
shareholders in the United States.




The
People’s Republic of China has adopted currency and capital transfer
regulations. These regulations require that we comply with complex regulations
for the movement of capital. Although Chinese governmental policies were
introduced in 1996 to allow the convertibility of RMB into foreign currency for
current account items, conversion of RMB into foreign exchange for capital
items, such as foreign direct investment, loans or securities, requires the
approval of the State Administration of Foreign Exchange. We may be unable to
obtain all of the required conversion approvals for our operations, and Chinese
regulatory authorities may impose greater restrictions on the convertibility of
the RMB in the future. Because most of our future revenues will be in RMB, any
inability to obtain the requisite approvals or any future restrictions on
currency exchanges will limit our ability to pay dividends to our
shareholders.




Currency
fluctuations may adversely affect our operating results.




Zhao Dong
Jianye Fuel generates revenues and incurs expenses and liabilities in RMB, the
currency of the People’s Republic of China.  However, as a subsidiary
of China Jianye Fuel, it will report its financial results in the United States
in U.S. Dollars.  As a result, our financial results will be subject
to the effects of exchange rate fluctuations between these
currencies.  From time to time, the government of China may take
action to stimulate the Chinese economy that will have the effect of reducing
the value of RMB.  In addition, international currency markets may
cause significant adjustments to occur in the value of the RMB.  Any
such events that result in a devaluation of the RMB versus the U.S. Dollar will
have an adverse effect on our reported results.  We have not entered
into agreements or purchased instruments to hedge our exchange rate
risks.




We
have limited business insurance coverage.




The
insurance industry in China is still at an early stage of development. Insurance
companies in China offer limited business insurance products, and do not, to our
knowledge, offer business liability insurance. As a result, we do not have any
business liability insurance coverage for our operations. Moreover, while
business disruption insurance is available, we have determined that the risks of
disruption and cost of the insurance are such that we do not require it at this
time. Any business disruption, litigation or natural disaster might result in
substantial costs and diversion of resources.




China
Jianye Fuel is not likely to hold annual shareholder meetings in the next few
years.




Management
does not expect to hold annual meetings of shareholders in the next few years,
due to the expense involved.  The current members of the Board of
Directors were appointed to that position by the previous
directors.  If other directors are added to the Board in the future,
it is likely that the current directors will appoint them.  As a
result, the shareholders of China Jianye Fuel will have no effective means of
exercising control over the operations of China Jianye Fuel.




16


ITEM
3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISKS





Not
applicable.




ITEM
4. CONTROLS AND PROCEDURES




(a)  Evaluation of disclosure controls and
procedures.




The term
“disclosure controls and procedures” (defined in SEC Rule 13a-15(e)) refers to
the controls and other procedures of a company that are designed to ensure that
information required to be disclosed by a company in the reports that it files
under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded,
processed, summarized and reported within required time periods. The Company’s
management, with the participation of the Chief Executive Officer and the Chief
Financial Officer, has evaluated the effectiveness of the Company’s disclosure
controls and procedures as of the end of the period covered by this report (the
“Evaluation Date”). Based on that evaluation, the Company’s Chief Executive
Officer and Chief Financial Officer has concluded that, as of the Evaluation
Date, such controls and procedures were effective.





(b)
 Changes in internal
controls.




The term
“internal control over financial reporting” (defined in SEC Rule 13a-15(f))
refers to the process of a company that is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles. The Company’s management, with the participation
of the Chief Executive Officer and Chief Financial Officer, has evaluated any
changes in the Company’s internal control over financial reporting that occurred
during the fiscal quarter covered by this quarterly report, and they have
concluded that there was no change to the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.














17





PART
II   -   OTHER INFORMATION




ITEM 1.
LEGAL PROCEEDINGS




The
company is not party to any material legal proceeding.




ITEM
2. CHANGES IN SECURITIES




None.




ITEM
3. DEFAULTS UPON SENIOR SECURITIES




None.




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




None.




ITEM
5. OTHER INFORMATION




None.




ITEM
6. EXHIBITS




31
            Rule
      13a-14(a) Certification




31
            Rule
      13a-14(b) Certification










18










SIGNATURES





Pursuant
to the  requirements  of the Securities  Exchange Act of 1934,
the Registrant  has duly  caused  this  Report  to be
 signed  on its  behalf by the undersigned thereunto duly
authorized.







CHINA
      JIANYE FUEL, INC.Date:
      May 11, 2009
                        /s/Jianye
      WangJianye Wang, Chief
      Executive Officer and
      Chief Financial
Officer








19