[TYPE]10KSB/A
<SEQUENCE>1
[DESCRIPTION]AMENDMENT NO.1 TO FORM 10-KSB FYE 12/31/97

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               AMENDMENT NO. 1 ON
                                  FORM 10-KSB/A


[X]        ANNUAL  REPORT UNDER SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE
           ACT OF 1934.

                     FOR FISCAL YEAR ENDED DECEMBER 31, 1997


                         Commission File Number: 0-24624
                         -------------------------------

                      U.S.-CHINA INDUSTRIAL EXCHANGE, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in Its Charter)


                NEW YORK                                         13-3097642
----------------------------------------------                ----------------
(State or Other Jurisdiction of Incorporation)                (I.R.S. Employer
           or Organization)                                  Identification No.)

          7201 WISCONSIN AVENUE
            BETHESDA, MARYLAND                                     20814
----------------------------------------                         ----------
(Address of Principal Executive Offices)                         (Zip Code)

                                 (301) 215-7777
                                 --------------
                (Issuer's Telephone Number, Including Area Code)

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

Securities registered under Section 12(g) of the Exchange Act:
                                    Common Stock, $.01 par value
                                    Class A Warrants
                                    Class B Warrants

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

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 [X].

Issuer's revenues for its most recent fiscal year:  $24,381,000.

The aggregate market value of the voting stock held by  non-affiliates  computed
by reference to the price at which the stock was sold, the average bid and asked
prices of such stock, as of March 26, 1998 was approximately $13,124,000.

The  number of shares  outstanding  of each of the  issuer's  classes  of common
equity, as of March 26, 1998, was 4,772,500 shares of Common Stock and 2,000,000
shares of Class B Common Stock.

Documents Incorporated by Reference:  None.



<PAGE>



ITEM 9.      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.

           The directors and executive officers of the Company and their present
positions with the Company are as follows:

Name                           Positions with the Company
----                           --------------------------

Roberta Lipson (1)             Chairperson of the Board of Directors,
                               Chief Executive Officer and President

Elyse Beth Silverberg(1)       Executive Vice President, Secretary and
                               Director

Lawrence Pemble                Executive Vice President Finance and Business
                               Development and Director

Robert C. Goodwin, Jr.         Executive Vice President Operations, Treasurer,
                               Assistant Secretary, General Counsel and Director

A. Kenneth Nilsson (2)         Director

Julius Y. Oestreicher (2)      Director
---------------
(1)    Member of the Compensation Committee.
(2)    Member of the Audit Committee.

           All  directors  of the  Company  hold  office  until the next  annual
meeting of the  shareholders  and until their  successors  have been elected and
qualified.  The officers of the Company are elected by the Board of Directors at
the first meeting after each annual  meeting of the Company's  shareholders  and
hold office until their resignation, removal from office or death.

           Set forth below is certain information with respect to each director:

           ROBERTA  LIPSON,  42,  co-founded the Company in 1981. Ms. Lipson has
served as the Chairperson of the Board of Directors, Chief Executive Officer and
President  since that time.  From 1979 until  founding the Company in 1981,  Ms.
Lipson was  employed  in China by Sobin  Chemical,  Inc.,  a  worldwide  trading
company,  as  Marketing  Manager,  coordinating  marketing  and sales of various
equipment in China. Ms. Lipson was employed by Schering-Plough Corp. in the area
of product marketing until 1979. Ms. Lipson received a B.A. degree in East Asian
Studies from Brandeis University and an M.B.A. from Columbia University Graduate
School of Business.


                                       -2-

<PAGE>




           ELYSE BETH  SILVERBERG,  40,  co-founded  the  Company  in 1981.  Ms.
Silverberg  has served as the Company's  Executive  Vice President and Secretary
and as a Director since that time.  Prior to founding the Company,  from 1980 to
1981, Ms. Silverberg  worked with Ms. Lipson at Sobin Chemical,  Inc. and was an
intern in China with the  National  Council  for  U.S.-China  Trade from 1979 to
1980. Ms. Silverberg  received a B.A. degree in Chinese Studies and History from
the State University of New York at Albany.

           LAWRENCE  PEMBLE,  41,  joined the  Company in 1984 and has served as
Executive Vice President  Finance and Business  Development  since January 1996.
From 1986 until 1996,  Mr.  Pemble served as Vice  President of Marketing.  From
1986 through April 1992 and September  1993 to the present,  Mr. Pemble has also
served as a Director of the Company.  Prior to joining the Company,  Mr.  Pemble
was employed by China Books and Periodicals, Inc. as Manager, East Coast Center.
Mr. Pemble received a B.A.  degree in Chinese  Studies and Linguistics  from the
State University of New York at Albany.

           ROBERT C. GOODWIN,  JR., 57, has served as Executive  Vice  President
Operations  since January 1996,  as Assistant  Secretary  since June 1995 and as
General Counsel,  Treasurer and a Director of the Company since October 1992. In
addition to his other duties,  from October 1992 until January 1996, Mr. Goodwin
served as Vice  President of  Operations  for the Company.  Prior to joining the
Company,  Mr.  Goodwin was  engaged in the private  practice of law from 1979 to
1992, with a specialty in international law, in Washington,  D.C. and had served
as the Company's  outside  counsel  since 1984.  Prior to such  employment,  Mr.
Goodwin served for two years as the Assistant  General Counsel for International
Trade and Emergency  Preparedness for the United States Department of Energy and
for three years as the Deputy  Assistant  General Counsel for the Federal Energy
Administration.  From 1969 until 1974, Mr. Goodwin served as an attorney-advisor
for the U.S.  Department of Commerce.  Mr. Goodwin  received a B.A.  degree from
Fordham University and a J.D. from Georgetown University Law Center.

           A. KENNETH NILSSON, 65, has served as a Director of the Company since
January 1996.  Since 1989,  Mr.  Nilsson has served as Chairman of Eureka Group,
Inc., a consulting firm he founded in 1972. Prior to 1989,  Mr.  Nilsson  served
as  Vice  Chairman  of  Cooper  Companies,  Inc.,  and  as  President of  Cooper
Laboratories, Inc.,
and President of Cooper  Lasersonics,  Inc. He previously served as an executive
of Max Factor & Co., Ltd. and of Pfizer International, Inc. Mr. Nilsson received
a B.A. degree in  Telecommunications  from the University of Southern California
and an M.A. in Political Science from the University of California.




                                       -3-

<PAGE>



           JULIUS Y.  OESTREICHER,  68, has served as a Director  of the Company
since  January  1996.  Mr.  Oestreicher  has been a partner with the law firm of
Oestreicher & Ennis,  LLP and its  predecessor  firms for thirty years,  engaged
primarily in estate,  tax and  business  law.  Mr.  Oestreicher  received a B.S.
degree in Business  Administration from City College of New York and a J.D. from
Fordham University School of Law.


ITEM 10.             EXECUTIVE COMPENSATION.

           The  following  table sets forth  information  concerning  the annual
compensation  of the  Company's  chief  executive  officer and other most highly
compensated  executive  officers whose salary and bonus exceeded $100,000 during
1996 for services in all capacities to the Company during that year:

<TABLE>
<CAPTION>

                                                                                  Long Term
                                      Annual Compensation                        Compensation
                          -------------------------------------------------      ------------
                                                                  Other
Name and                                                          Annual         Shares Under-
Principal Position        Year       Salary         Bonus      Compensation      lying Options
------------------        ----       ------         -----      ------------      -------------
<S>                       <C>       <C>           <C>           <C>                    
Roberta Lipson,           1997      $167,670      $   --        $ 26,421(1)          --
  Chairperson of          1996      $154,913      $ 43,000      $ 18,620(1)          --
  the Board, Chief        1995      $135,000      $   --        $   --               --
  Executive Officer                                                             
  and President                                                                 
                                                                                
Elyse Beth Silverberg,    1997      $161,460      $   --        $ 29,834(2)          --
  Executive Vice          1996      $149,175      $43,000       $ 22,936(2)          --
  President and           1995      $130,000      $   --        $ 23,600(2)          --
  Secretary                                                                     
                                                                                
Lawrence Pemble,          1997      $161,221      $   --        $   --               --
  Executive Vice          1996      $144,278      $ 43,000      $   --               --
  President Finance       1995      $123,733      $   --        $   --               --
  and Business                                                                  
  Development                                                                   
                                                                                
Robert C. Goodwin, Jr     1997      $141,875      $ 31,203      $   --             20,000
  Executive Vice          1996      $126,602      $ 73,003      $   --             10,000
  President Operations,   1995      $110,000      $   --        $   --               --
  General Counsel,                                                              
  Assistant Secretary                                                           
  and Treasurer                                                                 
</TABLE>


--------

(1)        Includes tuition expense for Ms. Lipson's sons in China in the amount
           of $23,971.

(2)        Includes  yearly  rental  expense  in the  amount of  $9,400  for Ms.
           Silverberg's  housing in China and tuition  expense in the amounts of
           $20,434 for 1997, $13,536  for  1996, and  $14,200  for 1995 for Ms.
           Silverberg's son in China.


                                      -4-

<PAGE>




OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                                                                  POTENTIAL REALIZABLE
                                             % OF TOTAL                                           VALUE AT ASSUMED
                          NUMBER OF          OPTIONS                                              ANNUAL RATES OF STOCK
                          SECURITIES         GRANTED TO                                           PRICE APPRECIATION FOR
                          UNDERLYING         EMPLOYEES          EXERCISE OR      EXPIRATION       OPTION TERMS
NAME                      OPTIONS GRANTED    IN FISCAL 1996     BASE PRICE       DATE             5%($)       10%($)
----                      ---------------    --------------     ----------       ----------       -----       ------
<S>                          <C>                 <C>            <C>                  <C> <C>      <C>         <C>
Robert C. Goodwin, Jr.       20,000(1)           24.2%          $4.25/share     January 9, 2007     $53,456     $135,468
</TABLE>

---------------
(1)        The options are  exercisable  as to  one-third of the total number of
           shares on each of January 9, 1997, 1998 and 1999.


AGGREGATED  OPTION  EXERCISES  IN LAST  FISCAL  YEAR AND FISCAL  YEAR END OPTION
VALUES

<TABLE>
<CAPTION>
                                                           NUMBER OF SECURITIES
                         SHARES                            UNDERLYING UNEXERCISED       VALUE OF UNEXERCISED IN-THE-
                         ACQUIRED           VALUE          OPTIONS AT FISCAL YEAR END   MONEY OPTIONS AT FISCAL YEAR
NAME                     ON EXERCISE (#)    REALIZED ($)   EXERCISABLE/ UNEXERCISABLE   END EXERCISABLE/UNEXERCISABLE(1)
----                     ---------------    ------------   --------------------------   --------------------------------
<S>                           <C>              <C>               <C>    <C>                     <C>  <C> 
Robert C. Goodwin, Jr.        0                $0                29,333/16,667                      0/0
</TABLE>

---------------
(1)        Based on the  closing bid price per share of $1.75 on the last day of
           fiscal 1997.


EMPLOYMENT AGREEMENTS

           The Company has entered into an employment  agreement, with each of
Mmes. Lipson and Silverberg and Messrs. Pemble and Goodwin providing for base
salaries to be subject to annual review and adjustment as determined by the
company, and which currently are $167,670, $161,460, $155,250 and $136,620,
respectively. Each such executive  officer also receives  additional benefits,
including those generally provided to other executive officers of the Company.
In  addition, each of  Mmes. Lipson and Silverberg  also  receives reimbursement
of expenses relating to residing in China.  Each employment agreement also
contains non-competition  provisions that preclude each executive from competing
with the Company for a period of two years from the date of termination
of employment  unless his or her employment is terminated by the Company without
cause, as such term is defined in the employment  agreements.  Each employment
agreement has been automatically extended  for the one-year period ending April
30,  1999,  and is subject to successive annual renewal.



                                       -5-

<PAGE>



           The  Company  has  obtained  individual  term life  insurance  policy
covering each of Mmes.  Lipson and  Silverberg  in the amount of $2,000,000  per
person. The Company is the sole beneficiary under these policies.

COMPENSATION OF DIRECTORS

           Each  director  who is not an  employee  of the  Company  is paid for
service on the Board of Directors a retainer at the rate of $1,000 per annum and
an  additional  $500 for each  meeting of the Board of Directors  attended.  The
Company  also  reimburses  each  director for  reasonable  expenses in attending
meetings of the Board of  Directors.  Directors  who are also  employees  of the
Company are not separately compensated for their services as directors.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

           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 the Company's  Common Stock,  to file with the  Securities  and
Exchange  Commission  (the "SEC")  initial  reports of ownership  and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers,  directors  and  greater  than 10%  shareholders  are  required by SEC
regulation  to furnish the Company with copies of all Section 16(a) reports they
file. To the Company's  knowledge,  based solely on review of the copies of such
reports  furnished to the Company during the one-year  period ended December 31,
1996,  all  Section  16(a)  filing  requirements  applicable  to  its  officers,
directors and greater than 10% shareholders  were complied with.


                                       -6-

<PAGE>



ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

           The  following  table sets forth  information  as to the ownership of
shares of the  Company's  Common  Stock and Class B Common Stock as of April 15,
1998 with respect to (i) holders known to the Company to  beneficially  own more
than five percent of the  outstanding  Common Stock or the Class B Common Stock,
(ii) each director and nominee for director, (iii) each executive officer of the
Company  named in the Summary  Compensation  Table under the caption  "Executive
Compensation"  herein  and (iv) all  directors  and  executive  officers  of the
Company as a group.

<TABLE>
<CAPTION>
                                                 Amount and Nature
                                                  of Beneficial
                                                 Ownership (2)(3)                   Percent of:
                                        ---------------------------------     ------------------------
Name and Address of                     Common             Class B            Common        Class B
Beneficial Shareholder (1)              Stock          Common Stock(4)(5)     Stock       Common Stock
--------------------------              -----          ------------------     -----       ------------
<S>                                   <C>               <C>                   <C>           <C>  
Roberta Lipson                        488,000(6)        1,040,000(7)          9.3%          52.0%
                                                                                          
Elyse Beth Silverberg                 359,000(8)          680,000             7.0%          34.0%
                                                                                          
Lawrence Pemble                       100,300(9)          200,000             2.1%          10.0%
                                                                                          
Robert C. Goodwin, Jr                  82,333(10)               0             1.7%           0%
                                                                                          
A. Kenneth Nilsson                     10,000                   0              *             0%
  P.O. Box 2510                                                                           
  Monterey, California                                                                    
                                                                                          
Julius Y. Oestreicher                  74,000(11)               0             1.5%           0%
  235 Mamaroneck Avenue                                                                   
  White Plains, New York                                                                  
                                                                                          
All Executive Officers and          1,113,633(12)       2,000,000            19.1%          96%
Directors as a Group (6
persons)                                                                               
</TABLE>
---------------------
* Less than 1%.      

(1)   Unless otherwise  indicated,  the business address of each person named in
      the table is c/o  U.S.-China  Industrial  Exchange,  Inc.,  7201 Wisconsin
      Avenue, Bethesda, Maryland 20814.

(2)   Except as otherwise indicated,  each of the parties listed has sole voting
      and investment power with respect to all shares indicated below.

(3)   Beneficial  ownership is calculated in accordance  with  Regulation S-B as
      promulgated by the Securities and Exchange Commission.



                                      -7-

<PAGE>



(4)   Mmes.  Lipson and Silverberg and Mr. Pemble have placed  240,000,  153,000
      and 51,000 shares, respectively, of Class B Common Stock in escrow and may
      vote, but not dispose of, any of such shares during the term of the escrow
      agreement. See "Escrow Shares" below.

(5)   The Class B Common  Stock is entitled to six votes per share,  whereas the
      Common Stock is entitled to one vote per share.

(6)   Includes 486,000 shares that may be purchased pursuant to Class A Warrants
      and Class B Warrants.

(7)   Includes  40,000 shares held by the Ariel Benjamin Lee Trust, of which Ms.
      Lipson is a Trustee.

(8)   Includes 324,000 shares that may be purchased pursuant to Class A Warrants
      and Class B Warrants.

(9)   Includes 96,000 shares that may be purchased  pursuant to Class A Warrants
      and Class B Warrants.

(10)  Includes 32,250 shares that may be purchased  pursuant to Class A Warrants
      and Class B Warrants and 39,333  shares that may be purchased  pursuant to
      stock options that are exercisable currently or within 60 days.

(11)  Does not include 80,000 shares of Common Stock  beneficially  owned by Mr.
      Oestreicher's  wife,  which  includes  60,000 shares that may be purchased
      pursuant  to Class A  Warrants  and  Class B  Warrants,  as to  which  Mr.
      Oestreicher  disclaims  beneficial   ownership.   Includes  64,000  shares
      issuable  upon the exercise of 16,000 Unit  Purchase  Options,  as defined
      below. Each such option represents the right to purchase one Unit, each of
      which  consists of one share of Common Stock,  one Class A Warrant and one
      Class B  Warrant.  Also  includes  10,000  shares  that  may be  purchased
      pursuant to currently exercisable stock options.

(12)  Includes an aggregate of 1,051,583  shares that may be purchased  pursuant
      to  Unit  Purchase  Options,  Class  A  Warrants,  Class  B  Warrants  and
      currently exercisable stock options.



ESCROW SHARES

           Of the 2,000,000  shares of Class B Common Stock  outstanding  on the
date hereof,  450,000  shares (the "Escrow  Shares") are held in escrow and will
not be assignable or transferable  (but may be voted) until such time, if ever,
as the Escrow Shares are released  from escrow in  accordance  with terms of the
escrow  agreement.  Each  current  holder of Class B Common Stock of the Company
contributed  pro rata to the number of Escrow  Shares in  accordance  with their
percentage  ownership of Class B Common Stock.  All Escrow  Shares  remaining in
escrow on March 31, 1999 will be forfeited and then canceled and  contributed to
the  Company's  capital.  The  arrangement  relating  to the  Escrow  Shares was
required by the  underwriter  as a condition  to the  Company's  initial  public
offering.

           A  shareholder's  rights  to his or her  shares  in  escrow  are  not
affected by any change in his or her status as an employee,  officer or director
of, or his or her  relationship  with,  the  Company,  and, in the event of such
shareholder's  death,  the terms of the escrow agreement will be binding on such
shareholder's executor, administrator, estate and legatees.

           All Escrow  Shares will be  released  from escrow if and only if: (a)
the Minimum  Pretax  Income (as defined  below) is at least  $3,750,000  for the
fiscal year ending  December 31, 1997,  or (b) the Minimum  Pretax  Income is at
least $5,000,000 for the fiscal year ending December 31, 1998,


                                       -8-

<PAGE>



or (c) the  closing Bid Price of the Common  Stock  averages in excess of $14.60
per share  (subject to adjustment  in the event of any stock split,  dividend or
distribution,  reverse  stock split or other similar  event) for 20  consecutive
trading days at any time prior to August 18, 1997.  Conditions (a) and (c) above
are not possible to be achieved.

           "Minimum  Pretax  Income"  means for any  fiscal  year the  Company's
income  before  provision  for income taxes and  exclusive of any  extraordinary
earnings and  exclusive of any charges to income  resulting  from the release of
any  Escrow  Shares,  all  as  reflected  on  the  Company's  audited  financial
statements.  For purposes of calculating  Minimum  Pretax Income,  if additional
shares of Common Stock are issued,  then the  foregoing  Minimum  Pretax  Income
levels  for any year are  subject to  proportional  increase.  Accordingly,  the
Minimum  Pretax  Income  levels  set forth  above are  subject  to  proportional
increase to reflect the issuance of shares of Common Stock,  including shares of
Common Stock issuable upon exercise of Warrants,  in connection  with the second
public  offering by the Company that was completed in November  1996.  Since the
principal  market for the Common Stock  presently is the NASDAQ  National Market
the term "Bid Price" presently means the closing sales price of the Common Stock
as reported on that market.


ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

           Not applicable.




                                       -9-

<PAGE>


                                   SIGNATURES

           In  accordance  with  Section 13 or 15(d) of the  Exchange  Act,  the
Company caused this Form 10-KSB/A to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                          U.S.-CHINA INDUSTRIAL EXCHANGE, INC.


April 28, 1997                            By: /s/ Robert C. Goodwin, Jr.
                                             ------------------------------
                                          Robert C. Goodwin, Jr.
                                          Executive Vice President and
                                          General Counsel


                                      -10-

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