U.S. SECURITIES AND
EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [ X ]
     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
        September 30, 2007 [     ]
     TRANSITION REPORT
        PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File No.
0-23015 GREAT CHINA
INTERNATIONAL HOLDINGS, INC.(Exact name of small business issuer as specified in its
charter) Nevada
     
     87-0450232(State or Other Jurisdiction of
        Incorporation or Organization)
     
     (IRS Employer Identification No.)  C Site 25-26F
Presidential Building, No. 69 Heping North StreetHeping District,
Shenyang 110003, Peoples Republic of China(Address of Principal Executive Offices)  0086-24-22813888
(Issuers telephone number)  Not Applicable
(Former name, address and fiscal year, if changed since last report)  Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [ X ] No [    ] Indicate by check mark whether registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule
12b-2 of the Exchange Act). [    ] Large accelerated filer [     ] Accelerated filer [ X ]
Non-accelerated filer Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).   Yes [    ] No [ X ] State the number of shares outstanding of each of the issuers
classes of common equity:  As of November 16, 2007, there were 11,759,966 shares of common
stock outstanding.




FORM 10-QGREAT CHINA INTERNATIONAL
HOLDINGS, INC. TABLE OF CONTENTS PagePART I.
     Item 1.  Financial Information
     3Balance Sheet as of September 30, 2007 (Unaudited) andDecember 31, 2006
     3Statements of Operations for the Three Months and Nine MonthsEnded September 30, 2007 and 2006 (Unaudited)
     4Statements of Cash Flows for the Nine MonthsEnded September 30, 2007 and 2006 (Unaudited)
     5Notes to the Financial Statements
     6Item 2.  Managements Discussion and Analysis of
Financial Condition and Results of Operations
     17Item 3.  Quantitative and Qualitative DisclosuresAbout Market Risk
     23Item 4.  Controls and Procedures
     24PART II.
     Other Information
     24Item 1A.  Risk Factors
     24Item 6.  Exhibits
     24Signatures
     25 2




GREAT CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                                        CONDENSED CONSOLIDATED BALANCE SHEET
                                       SEPTEMBER 30, 2007 AND DECEMBER 31, 2006 2007
     
     2006(Unaudited)ASSETSCurrent assets:Cash and equivalents
     $4,944,080
        
     
     $1,769,744Accounts receivable
     444,733
        
     
     1,454,164Advances to suppliers
     49,467
        
     
     1,089,048Other receivable, net
     2,184
        
     
     1,729,032Real estate for sale
     9,400,946
        
     
     10,620,550Other current assets
     13,973
        
     
     --Construction in process
     --
        
     
     9,372,189Total current assets
        
        
     
        14,855,382
        
     
     26,034,727Property and equipment, net
     48,314,834
        
     
     43,894,578Total assets
     $63,170,217
        
     
     $69,929,305LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Short-term loans
        
        
     $
        13,053,333
        
     
     $
        51,308,184Accounts payable and accrued expenses
        
        
     
        8,358,458
        
     
     
        10,554,995Advances from buyers
     2,275,497
        
     
     3,004,011Other payables
     4,091,601
        
     
     767,481Amounts due to related companies
     23,513
        
     
     695,002Taxes payable
     5,716,369
        
     
     1,083,765Net liabilities of the entities held for sale
     17,056,254
        
     
     --Current portion of long-term liabilities
     240,000
        
     
     428,076Total current liabilities
        
        
     
        50,815,025
        
     
     
        67,841,514Long term debt, net of current portion shown above
        
        
     
        7,413,333
        
     
     
        1,999,465Stockholders equity:Common stock,  $.001 par value 50,000,000 shares authorized,11,759,966 issued and outstanding
     11,760
        
     
     11,760Additional paid in capital
     4,542,331
        
     
     4,542,331Other comprehensive income
     1,205,491
        
     
     468,344Accumulated deficit
     (817,723
        )
     
     (4,934,109
        )Total stockholders equity
     4,941,859
        
     
     88,326Total liabilities and stockholders equity
     $63,170,217
        
     
     $69,929,305 The accompanying notes are an integral part of these unaudited
consolidated financial statements. 3




GREAT CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                                   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2007 AND 2006
                                                     (UNAUDITED) Three month periods ended
     Nine month periods endedSeptember 30,2007
        
     September 30,2006

     September 30, 2007
        
     September 30, 2006RevenueReal estate Sales
        
        
     $
        709,419
        

     $
        503,188
        

     $
        2,334,219
        

     $
        5,028,766Rental and management fee income
     1,195,996
        

     1,184,786
        

     4,058,230
        

     3,742,139Total revenues
     1,905,415
        

     1,687,974
        

     6,392,449
        

     8,770,905Cost of revenue
     664,227
        

     1,192,478
        

     3,896,087
        

     5,241,279Gross revenue
     1,241,189
        

     495,496
        

     2,496,362
        

     3,529,626Operating expensesSelling expenses
     3,354
        

     419,762
        

     77,074
        

     479,980General Administrative expenses
     5,059,096
        

     416,010
        

     7,253,434
        

     2,642,811Agent fee
     2,649,007
        

     --
        

     2,649,007
        

     --Depreciation and amortization
     635,280
        

     574,465
        

     1,750,523
        

     1,701,318Total operating expenses
     8,346,737
        

     1,410,237
        

     11,730,038
        

     4,824,109Loss from continuing operations
     (7,105,548
        )

     (914,741
        )

     (9,233,676
        )

     (1,294,483
        )Other income (expense)Land leveling income
     --
        

     --
        

     5,960,265
        

     --Gain on settlement of debt
     15,918,226
        

     --
        

     15,918,226
        

     --Loss on terminated project
     (1,311,323
        )

     --
        

     (1,510,865
        )

     --Interest and finance costs
     (2,155,487
        )

     (953,493
        )

     (3,450,746
        )

     (3,166,936
        )Other income (expense)
     (753,474
        )

     244,590
        

     (229,638
        )

     339,739Total other income (expense)
     11,697,942
        

     (708,903
        )

     16,687,242
        

     (2,827,197
        )Income (loss) before income taxes
     4,592,394
        

     (1,623,644
        )

     7,453,567
        

     (4,121,680
        )Provision for income taxes
     2,532,595
        

     --
        

     3,548,240
        

     --Net income (loss) from continuing operations
     2,059,799
        

     (1,623,644
        )

     3,905,327
        

     (4,121,680
        )Discontinued operationsGain from entities held for sale
     --
        

     --
        

     211,059
        

     --Net income (loss)
     2,059,799
        

     (1,623,644
        )

     4,116,386
        

     (4,121,680
        )Other comprehensive income:Foreign currency translation adjustment
     277,707
        

     98,780
        

     507,427
        

     164,997Comprehensive income (loss)
     2,337,506
        

     (1,524,864
        )

     4,412,754
        

     (3,956,683
        )Net income (loss) per outstanding commonshares - basic and diluted
     $0.18
        

     $(0.14
        )

     $0.33
        

     $(0.37
        )Weighted average outstanding common shares -basic and diluted
     11,759,966
        

     11,439,751
        

     11,759,966
        

     11,268,609 The accompanying notes are an integral part of these unaudited
consolidated financial statements. 4




GREAT CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2007 AND 2006
                                                     (UNAUDITED) 2007
     
     2006Cash flows from operating activities:Net income (loss)
     $4,116,386
        
     
     $(4,121,680
        )Adjustments to reconcile net income (loss) to operating activities -Depreciation and amortization
     1,750,523
        
     
     1,701,318Gain on settlement of debt
     (15,918,226
        )
     
     --Provision for doubtful accounts
     3,665,323
        
     
     (482,287
        )Gain on disposal of fixed assets
        
        
     
        --
        
     
     
        (13,996
        )Loss on termination project
        
        
     
        --
        
     
     
        --Non-cash stock compensation expense
     --
        
     
     511,134Changes in assets and liabilities:(Increase) decrease in current assets:Accounts receivable and other receivable
     (943,016
        )
     
     958,573Advances to suppliers
     1,039,581
        
     
     3,460,808Real estate held for resale
     1,219,604
        
     
     2,967,722Restricted cash
     --
        
     
     482,548(Increase) decrease in current liabilities:Accounts payable and other payables
        
        
     
        688,569
        
     
     (1,175,555
        )Advances from buyers
     (728,514
        )
     
     779,450Income and other taxes payable
     4,632,604
        
     
     293,251Net cash provided by operating activities from continuing operations
     $(477,166
        )
     
     --Net cash provided by operating activities of entity held for sale
        
        
     
        17,056,254
        
     
     
        --Net cash provided by (used in) operating activities
        
        
     
        16,597,087
        
     
     
        5,361,286Cash flows from investing activities:Construction in progress
     9,372,189
        
     
     (86,756,549
        )Sales of fixed assets
     --
        
     
     117,470Purchases of fixed assets
        
        
     
        (6,182,583
        )
     
     
        (1,291,323
        )Net cash provided by (used in) investing activities from continuing operations
        
        
     
        3,189,606
        
     
     
        (87,930,402
        )Cash flows from financing activities:Proceeds from stock issuance, net of offering costs
     --
        
     
     2,478,280Loan proceeds
     5,333,333
        
     
     76,835,664Loan repayments
     (22,005,151
        )
     
     (8,177,427
        )Advances to directors and affiliated companies
     (671,489
        )
     
     3,154,231Net cash provided by (used in) financing activities from continuing operations
     (17,343,307
        )
     
     74,290,748Effect of exchange differences
     748,950
        
     
     164,997Net increase (decrease) in cash and cash equivalents
     3,174,336
        
     
     (8,113,371
        )Cash and cash equivalents, beginning of period
     1,769,744
        
     
     10,896,807Cash and cash equivalents, end of period
     $4,944,080
        
     
     $2,783,436Supplemental disclosures of Cash Flow information:Interest paid, net of capitalized amounts
     $1,951,286
        
     
     $2,148,267Income taxes paid
     $380,888
        
     
     $249,262 The accompanying notes are an integral part of these unaudited
consolidated financial statements. 5




GREAT CHINA INTERNATIONAL HOLDINGS, INC.
                               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2007 1.     Description
of business Nature of
organization Great China
 International  Holdings,  Inc., (the Company,  We, Us, Our) was incorporated in
the State      of Nevada on December 4, 1987,  under the name of Quantus  Capital,  Inc.,
and in 1992, it changed its name to      Red Horse  Entertainment  Corporation.
 Effective  July 5, 2005,  the Company  completed  the  acquisition  of      Silverstrand
 International  Holdings Limited  (Silverstrand),  a Hong Kong limited  liability
 company,  by      issuing  10,102,333  shares of its common voting stock to the former
 stockholders of Silverstrand in exchange      for all of the capital stock of
 Silverstrand.  For financial  reporting  purposes the acquisition was treated      as a
 recapitalization  of  Silverstrand.  On September 15, 2005, the Company  changed its
name to Great China      International Holdings,  Inc. Prior to its acquisition of
Silverstrand,  the Company was not engaged in active      business operations. Silverstrand  was
 incorporated  on September  30, 2004 in Hong Kong  Special  Administrative  Region,  in
the      Peoples Republic of China (PRC) with an authorized  capital of $12,820,513
 divided in 100 million ordinary      shares of par value $0.12 per share. During October of
2004, Silverstrand acquired all of the outstanding capital of Shenyang Maryland
International Industry Co., Limited (Shenyang Maryland) for $5,000,000, payable to its
former owners as follows: 
     Frank Jiang as to $4,350,000;
     Jiang Peng as to $500,000; and,
     Pay $50,000 to each of Duan Jing Shi, Li Guang Hua and Wang Li Rong This transaction was
treated as a recapitalization  of Shenyang Maryland for financial  reporting purposes and
     the excess purchase was treated as dividends to shareholders. On  November  23,
2004 the  Ministry of Commerce  and  Business  Registration  issued a business
 registration      certificate approving Shenyang Maryland reclassification to a wholly
owned foreign enterprise. Pursuant to several
agreements dated December 8, 2005 and December 28, 2005, the Company, through its
subsidiaries, agreed to acquire in 2006 a 100 percent interest in the land use rights for
the Xita Project. First, pursuant to a sale and purchase agreement dated December 8,
2005, subsequently amended on December 28, 2005, the Company agreed to acquire, through
Shenyang Maryland, 70 percent of the equity interest in Shenyang Xinchao Development Co.
Limited (Xinchao), a Sino-Foreign joint venture corporation that owns approximately 66
percent of the land use rights of the Xita Project, from Shenyang Yunfeng Real Estate
Development Co., Limited (Yunfeng). The Company agreed to acquire the remaining 30
percent equity interest in Xinchao through Silverstrand from Sapphire Corporation Limited
(formerly: I.R.E. Corporation Limited) (Sapphire), an unrelated Singapore corporation,
pursuant an agreement dated December 28, 2005. 6




GREAT CHINA INTERNATIONAL HOLDINGS, INC.
                               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2007 The  remaining
 approximately  34%  interest  in the land use rights of the Xita  Project is held by
 Shenyang      Yindu Property Co.,  Limited  (Yindu),  also a  Sino-Foreign  joint
 venture.  Pursuant to agreements  dated      December 28, 2005,  Shenyang Maryland
acquired a 70 percent interest in Yindu from Yungfeng,  and Silverstrand      acquired a
30%  interest in Yindu from  Sapphire.  Following  the closing of these  transactions,
 the Company      held, through its subsidiaries, 100 percent interest in the land use
rights comprising the Xita Project. Shenyang  Xin Chao
 Property  Company  Limited  (Xinchao)  was  registered  on August 16, 2005 in
 Shenyang,      Liaoning  Province,  in the PRC with a registered  capital of $12,330,456
and a defined period of existence of      11 years to August 15, 2016. Shenyang  Yindu
Property  Company  Limited  (Yindu) was registered on August 16, 2005 in Shenyang,
 Liaoning      Province,  in the PRC with a registered  capital of $6,615,228  and a
defined  period of existence of 11 years      to August 15, 2006. On August 7, 2007,
 the Company  completed  the  acquisition  of all of the issued share capital of Loyal
Best      Property  Development  Limited  (Loyal  Best),  a Hong Kong  limited
 company,  from Gentle  Knight  Limited      (GKL). Loyal Best is the
sole owner of an entity  called  Shenyang  Loyal Best Hunnan  Property  Development
 Limited      (Shenyang  Loyal  Best),  a wholly owned  foreign  enterprise  that is a
party to a  Confirmation  Letter of      Auction  with  respect  to a parcel of land
 located  at the  center  area of  Hunnan  New Zone in the city of      Shenyang,  China
(the Project).  Immediately after acquisition,  the Company decided to sell Loyal Best
at a      gain. The  Company
 engages  in the  development  and  sale of  high  quality  private  residential
 properties  and      commercial  buildings for lease in the City of Shenyang,  China.
 Shenyang  Maryland,  the Companys  indirect      wholly-owned  subsidiary,  was one of
the first  private  property  developers  and  retailers in China,  and,      according
to the statistical  information on sales of construction  area as published by Shenyang
 Statistical      Authority, Shenyang Maryland was the ninth largest private property
developer in Shenyang City in 2004. 2.     Going concern The  accompanying
 financial  statements  have been prepared on a going concern basis which  contemplates
 the      realization of assets and the  satisfaction  of liabilities in the normal
course of business.  The Company had      an accumulated deficit of $817,723 as of
September 30, 2007. If the Company is
unable to  generate  profits  and unable to  continue  to obtain  financing  for its
working      capital requirements, it may have to curtail its business sharply or cease
business altogether. The financial
statements do not include any adjustments relating to the recoverability and
classification of liabilities that might be necessary should the Company be unable to
continue as a going concern.  The Company's continuation as a going concern is dependent
upon its ability to generate sufficient cash flow to meet its obligations on a timely
basis, to retain its current financing, to obtain additional financing, and ultimately to
attain profitability. 7




GREAT CHINA INTERNATIONAL HOLDINGS, INC.
                               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2007 Management  has
taken the  following  steps to revise  its  operating  and  financial  requirements,
 which it      believes are  sufficient  to provide the Company with the ability to
continue as a going  concern.  Management      devoted  considerable  effort  during the
period ended  September 30, 2007,  towards (i) obtaining  additional      equity
 financing  (ii)  controlling  of salaries and general and  administrative  expenses and
 management of      accounts payable. 3.     Summary
of significant accounting policies The
financial  statements are prepared in accordance  with  accounting  principles  generally
 accepted in the      United States of America and the following is a summary of
significant accounting policies: Basis
of presentation- The accompanying unaudited financial statements have been prepared in conformity with accounting principles
generally accepted in the United States. However, certain information and footnote disclosures normally included
in financial statements prepared in accordance with accounting principles generally accepted in the United States
have been omitted or condensed pursuant to the rules and regulations of the Securities and Exchange Commission
("SEC"). In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for
a fair presentation have been included. The results of operations and cash flows for the three month period
presented are not necessarily indicative of the results of operations for a full year. These financial statements
should be read in conjunction with the Company's December 31, 2006 audited financial statements and notes thereto
included in the Company's Annual Report on Form 10K. Consolidation
policy  All significant inter-company transactions and balances within the
Company are eliminated in consolidation. Real estate held for
sale  The Company capitalizes as real estate held for sale the direct construction and
development costs, property taxes, interest incurred on costs related to land
under development and other related costs (i.e. engineering, surveying,
landscaping, etc.) until the property reaches its intended use. At September 30,
2007, real estate held for sale amounted to $9,400,946. Entities held for
sale Assets held for sale are comprised of two companies acquired by the Company
during the three month period ended September 30, 2007. Immediately after the
acquisition of these companies, the Company decided to sell them at a profit.
The Company has already signed a letter of intent to sale the companies
subsequent to September 30, 2007. The net liabilities of the companies, amounting to
$17,056,254, have been presented as entities held for sale in the accompanying
financials. Property and
equipment Property and equipment is being depreciated over the estimated useful
lives of the related assets. Depreciation is computed on the straight-line
basis for both financial and income tax reporting purposes over useful lives as
follows: Building and land use rights
     8-26 yearsLeasehold improvements
     20 yearsEquipment
     5 yearsMotor vehicles
     5 yearsOffice furniture and fixtures
     5 years 8




GREAT CHINA INTERNATIONAL HOLDINGS, INC.
                               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2007 Depreciation
 expense for the nine months ended September 30, 2007 and 2006 totaled  $1,750,523 and
$1,701,318      respectively. Repairs and
 maintenance  costs are normally  charged to the statement of operations in the year in
which they      are incurred.  In situations  where it can be clearly  demonstrated  that
the  expenditure  has resulted in an      increase in the future economic  benefits
 expected to be obtained from the use of the asset,  the expenditure      is capitalized
as an additional cost of the asset. Property and
equipment are evaluated  annually for any impairment in value.  Where the  recoverable
 amount of      any property and equipment is determined to have declined below its
carrying  amount,  the carrying  amount is      reduced to reflect the decline in value.
 There were no property and equipment  impairments  recognized during      the year ended
December 31, 2006. As of September 30,
2007 fixed assets  totaling  $33,696,608  have been pledged as securities to various
banks      in respect of borrowings totaling $18,386,667 and mortgage loans of $2,320,000. Revenue Recognition The Company follows the guidance of the Securities and Exchange Commissions Staff
Accounting Bulletin 104 for revenue recognition.  In general, the Company
records revenue when persuasive evidence of an arrangement exists, services have
been rendered or product delivery has occurred, the sales price to the customer is
fixed or determinable, and collectability is reasonably assured.  The following
policies reflect specific criteria for the various revenues streams of the Company: The Company follows
the guidance of the Securities and Exchange  Commissions  Staff  Accounting  Bulletin
104      for Real estate sales which primarily  involve the sale of multi-family  homes
and community  environments are      reported in accordance with the provisions of
Statement of Financial  Accounting  Standard No. 66, "Accounting      for  Sales of Real
 Estate".  Profit  from the sales of  development  properties,  less 5%  business  tax,
 is      recognized  by the full accrual  method when the sale is  consummated.  A sale
is not  considered  consummated      until (1) the parties are bound by the terms of a
contract,  (2) all  consideration  has been  exchanged,  (3)      any permanent
 financing of which the seller is responsible  has been arranged,  (4) all conditions
 precedent      to closing have been  performed,  (5) the seller does not have
 substantial  continuing  involvement  with the      property,  and (6) the usual  risks
and  rewards  of  ownership  have been  transferred  to the  buyer.  Sales
     transactions  not meeting all the  conditions  of the full accrual  method are
accounted for using the deposit      method of accounting.  Under the deposit method, all
costs are capitalized as incurred,  and payments received      from the buyer are
recorded as a deposit  liability  (reflected  as advances  from  customers in the Companys
     consolidated balance sheets). Revenue  primarily
 derived from rental  operations and management  fees is recognized when rooms are
occupied      and services have been rendered. Other income Other
income consists of primarily services performed on behalf of the purchasers of Jitian.
These revenues are recognized when the services have been performed in
accordance with the terms of the agreement. 9




GREAT CHINA INTERNATIONAL HOLDINGS, INC.
                               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2007 Foreign currencies- The Companys principal country of operations is in The Peoples Republic of China.
The financial position and results of operations of the Company are
determined using the local currency (Renminbi or Yuan) as the functional
currency. The results of operations denominated in foreign currency are translated
at the average rate of exchange during the reporting period. Assets and
 liabilities  of the Company have been  translated at quarter- end exchange  rates,
 while revenues      and  expenses  have been  translated  at  average  exchange  rates
in effect  during  the nine  month  period.      Resulting  cumulative  translation
 adjustments have been recorded as other  comprehensive  income (loss) as a      separate
component of stockholders' equity. Equity  denominated
 in the functional  currency is translated at the historical  rate of exchange at the
time      of  capital  contribution.  All  translation  adjustments  resulting  from the
 translation  of the  financial      statements  into the reporting  currency (US Dollars)
are dealt with as an exchange  fluctuation  reserve in      shareholders equity. Earnings Per Share Basic
earnings per share is computed by dividing net income by the weighted-average
number of common shares outstanding during the period. Diluted earnings per
share is computed by dividing net income by the weighted-average number of common
shares and dilutive potential common shares outstanding during the period. As of September 30,
2007 and December 31, 2006,  there were no  outstanding  securities or other  contracts
to      issue common stock,  such as options,  warrants or conversion  rights,  which
would have a dilutive  effect on      earnings per share as the effect of options
outstanding at that time was anti- dilutive. Fair value of
financial instruments The carrying amounts of certain financial instruments,
including cash, accounts receivable, commercial notes receivable, other
receivables, accounts payable, commercial notes payable, accrued expenses,
and other payables approximate their fair values as at September 30, 2007 and
December 31, 2006, because of the relatively short-term maturity of these
instruments. Use of estimates The
preparation of financial statements in accordance with generally accepted accounting
principles require management to make estimates and assumptions that affect
reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and reported amounts of
revenues and expenses during the reporting period. Actual results could differ from
those estimates. Concentrations of
business and credit risk Financial instruments that potentially subject the Company
to concentrations of credit risk are cash, accounts receivable and other
receivables arising from its normal business activities. The Company places
its cash in what it believes to be credit-worthy financial institutions. The
Company has a diversified customer base, most of which are in China. The Company controls
credit risk related to accounts receivable through credit approvals, credit limits and
monitoring procedures. The Company routinely assesses the financial strength of its
customers and, based upon factors surrounding the credit risk, establishes an allowance,
if required, for uncollectible accounts and, as a consequence, believes that its accounts
receivable credit risk exposure beyond such allowance is limited. 10




GREAT CHINA INTERNATIONAL HOLDINGS, INC.
                               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2007 Recent accounting
pronouncements In September 2006, FASB issued SFAS 157 Fair Value Measurements.
This Statement defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles (GAAP), and expands
disclosures about fair value measurements. This Statement applies under other
accounting pronouncements that require or permit fair value measurements, the
Board having previously concluded in those accounting pronouncements that
fair value is the relevant measurement attribute. Accordingly, this Statement
does not require any new fair value measurements. However, for some entities, the
application of this Statement will change current practice. This Statement is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. The management
is currently evaluating the effect of this pronouncement on financial statements. In  September  2006,
 FASB issued  SFAS 158  Employers  Accounting  for  Defined  Benefit  Pension and Other
     Postretirement  Plans  an  amendment of FASB  Statements No. 87, 88, 106, and 132(R) This
 Statement  improves      financial  reporting  by  requiring  an employer to  recognize
 the over  funded or under  funded  status of a      defined  benefit  postretirement
 plan  (other  than a  multiemployer  plan) as an asset or  liability  in its
     statement  of  financial  position  and to  recognize  changes in that funded
 status in the year in which the      changes occur through  comprehensive  income of a
business entity or changes in  unrestricted  net assets of a      not-for-profit
 organization.  This  Statement also improves  financial  reporting by requiring an
employer to      measure the funded  status of a plan as of the date of its  year-end
 statement of  financial  position,  with      limited  exceptions.  An employer with
publicly  traded equity  securities is required to initially  recognize      the funded
status of a defined benefit  postretirement plan and to provide the required  disclosures
as of the      end of the fiscal year ending after December 15, 2006. An employer without
 publicly traded equity  securities      is  required  to  recognize  the funded  status
of a defined  benefit  postretirement  plan and to provide the      required  disclosures
 as of the end of the fiscal  year  ending  after June 15,  2007.  However,  an employer
     without  publicly traded equity  securities is required to disclose the following
 information in the notes to      financial  statements for a fiscal year ending after
 December 15, 2006,  but before June 16, 2007,  unless it      has applied the
recognition provisions of this Statement in preparing those financial statements: The  requirement  to
measure  plan  assets and benefit  obligations  as of the date of the  employers  fiscal
     year-end  statement of financial  position is effective for fiscal years ending
after  December 15, 2008.  The      management is currently evaluating the effect of this
pronouncement on financial statements. In  February  2007,
 FASB  issued  FASB  Statement  No. 159 The Fair Value  Option for  Financial  Assets
and      Financial  Liabilities.  FASB 159 is effective  for fiscal years  beginning
 after  November 15, 2007.  Early      adoption  is  permitted  subject  to  specific
 requirements   outlined  in  the  new  Statement.   Therefore,      calendar-year
companies may be able to adopt FASB 159 for their first quarter 2007 financial statements. The new Statement
allows entities to choose, at specified election dates, to measure eligible financial
assets and liabilities at fair value that are not otherwise required to be measured at
fair value. If a company elects the fair value option for an eligible item, changes in
that item's fair value in subsequent reporting periods must be recognized in current
earnings. FASB 159 also establishes presentation and disclosure requirements designed to
draw comparison between entities that elect different measurement attributes for similar
assets and liabilities. 11




GREAT CHINA INTERNATIONAL HOLDINGS, INC.
                               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2007 Reclassifications Certain
amounts in the 2006 financial statements have been reclassified to conform to
the 2007 presentation. These reclassifications had no effect on previously
reported results of operations or retained earnings. 4.     Real Estate held for sale Real Estate held for
sale at September 30, 2007 and December 31, 2006 by project is as follows: 2007
     2006Qiyun New Village
     
     
     $
        1,820,469
        
             
     $
        1,795,644Peacock Garden
     270,959
        
     
     312,584Chenglong Garden
     6,721,640
        
     
     7,712,615President Building
     199,067
        
     
     412,167Maryland Building
     244,320
        
     
     234,322Others
     144,492
        
     
     153,218Total
     $9,400,946
        
     
     $10,620,550 5.     Amounts due to directors and related parties The amounts due
from/(to) directors and related parties at September 30, 2007 and December 31, 2006 are
as      follows: Amounts due from/(to) directors
     2007
     2006Frank Jiang Fang
     
     
     $
        (62,428
        )
    
     $
        (418,708
        )Duan jing Shi
     2,000
        
     
     --Jiang Peng
     36,915
        
     
     --Gong Wang Fu
     --
        
     
     (276,294Amounts due from/(to) affiliates, net
     $(23,513
        )
     
     $(695,002
        ) Amounts due to
related parties are unsecured, non interest bearing, and due on demand. 6.     Short-term loans 2007
     2006Loans from banks  delinquent
     
     
     $
        2,320,000
        
             
     $
        29,089,514Loans from banks
     9,000,000
        
     
     --Loan from investment company - Unrelated party
     1,733,333
        
     
     --Bank loans purchased by asset management company
     --
        
     
     22,218,670Total current notes payable
     $13,053,333
        
     
     $51,308,184 12




GREAT CHINA INTERNATIONAL HOLDINGS, INC.
                               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2007 At December  31,
2006,  all bank loans and those  purchased  by the asset  management  company were
treated as      short-term  because all bank loans have  matured and  negotiations,
 while  ongoing,  are not settled as to an      extension of the due dates of the bank
loans.      Assets of the Company are pledged against these bank loans. The delinquent notes
had due dates on December 21, 2005. The defaulted  loans
 borrowed from  Industrial  and Commercial  Bank of China  amounting to $23,166,667  were
     assigned to a third party.  The Company  entered into an agreement  with the third
party to buy back the loans      for  $7,581,333 on July 30, 2007. As of September 30,
2007,  the total  consideration  of $7,581,333 was fully      paid.  According to the
agreement,  the outstanding  interest payable associated with the non-performing  loan
     amounted to $439,014  was also  waived as of  September  30,  2007.  As of
 September  30,  2007,  the Company      realized gain on settlement of debt amounted to
$15,918,226. There have been
 numerous  instances  of events of defaults  arising  from the  non-payment  of  interest
 and      principal in accordance with the terms of the loan  agreements  with two of the
banks.  No definitive  demands      have been made by the banks to foreclose on the
secured  borrowings.  The Company is still in discussions with      the banks to approve
an extension of the terms and tenure of the secured and unsecured loans. Interest is accruing
on all other past due loans at rates  ranging from  6.0535% to 12.024%,  the rates called
     for in the original loan agreements. 7.      Long-term debts  secured 2007
     2006Long term debts:Mortgage loans
     $2,320,000
        
     
     $2,427,541Bank loans
     5,333,333Less: Current portion of long-term debts
     (240,000
        )
     
     (428,076
        )Long-term debts
     $7,413,333
        
     
     $1,999,465 On June 18, 2007 the
Company  obtained a loan from a bank for  $5,333,333  at 8.775%  interest  due on June
12,     2009.  The loan is secured by fixed assets and land use rights. On April 13,  2007
the Company  obtained a ten year  mortgage  loan  secured by fixed  assets at 6.04356%
 with     monthly payments of $26,697. Maturities of
long-term  debt  including  mortgage  loans for each of the next five years and
thereafter are as     follows: 13




GREAT CHINA INTERNATIONAL HOLDINGS, INC.
                               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2007 Amount2007
     
     
     
        60,0002008
     240,0002009
     5,573,3332010
     240,0002011
     240,0002012
     240,0001,060,000$7,653,333 8.     Loyal Best Purchase - Entities held for sale On August 7, 2007,
 the Company  completed  the  acquisition  of all of the issued share capital of Loyal
Best      Property  Development  Limited  (Loyal  Best),  a Hong Kong  limited
 company,  from Gentle  Knight  Limited      (GKL). Loyal Best is the
sole owner of an entity  called  Shenyang  Loyal Best Hunnan  Property  Development
 Limited      (Shenyang  Loyal  Best),  a wholly owned  foreign  enterprise  that is a
party to a  Confirmation  Letter of      Auction  with  respect  to a parcel of land
 located  at the  center  area of  Hunnan  New Zone in the city of      Shenyang,  China
(the  Project).  Shenyang  Loyal Best paid a land  transfer  fee of  US$20,000,000  for
the      Project. The  acquisition
 was closed on August 7, 2007.  Immediately  after  acquisition,  the Company decided to
sell      Loyal Best at a gain.  The Company has recorded the net  liabilities  of Loyal
Best as entity held for sale in      the accompanying  financials.  The Company has also
signed a Letter of Intent subsequent to September 30, 2007      with for the sale of the
entity. 9.     Stock Options During the nine
month  period ended  September  30, 2007,  no options were granted to any  employees.
 173,568      options were forfeited/cancelled during the nine month period ended
September 30, 2007. Following were the
 Black-Scholes  option pricing model assumptions used for calculating the fair value of
the      options at the grant date: Expected volatility
     
     
     
        25
        %Weighted-average volatility
     25
        %Expected dividends
     0
        %Expected term (in years)
        
        
     
        1 to 5 yea
        rsRisk-free rate
     4.
        5% 14




GREAT CHINA INTERNATIONAL HOLDINGS, INC.
                               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2007 A summary of option activity under the Plan as of September 30, 2007, and changes during the nine months then
ended is presented below: Options
     Shares
     Weighted-AverageExercisePrice
     Weighted-AverageRemainingContractualTerm
     AggregateIntrinsicValueOutstanding at January 1, 2007
     
     
     
        173,568
        
     $
        5.88
        
     
        6.67
        
     $
        --Granted
     --
        
     $--Exercised
     --
        
     $--Forfeited or expired
     173,568
        
     $5.88
        
     6.67
        
     $--Outstanding at September 30, 2007
     --
        
     $--
        
     
        
     $--Exercisable at September 30, 2007
     --
        
     $--
        
     
        
     $-- A summary of the
status of the Companys  non-vested  shares as of September 30, 2007,  and changes during
the      nine months then ended, is presented below: Nonvested Shares
     Shares
     Weighted-AverageGrant DateFair ValueNonvested at January 1, 2007
     
     
     
        10,000
        
     
        $    1.08Granted
     --
        
     $        --Vested
     --
        
     $        --Forfeited
        
        
     
        (10,000)
        
     
        $    1.08Nonvested at September 30, 2007
        
       
     
        --
        
     
        $        -- On March 3, 2006 the
Company issued to its Chief Executive  Officer options to purchase  572,491 shares of its
     common stock at a purchase price of $6 per share.  The options vest in five equal
 instalments  beginning with      the date of issuance in March 2006 and the  following
 four  anniversary  dates.  The options are  exercisable      over a term of five  years
 from the date of  vesting.  In March  2007 the Chief  Executive  Officer  left the
     Company and agreed to surrender 114,498 of vested option shares. On March 15, 2006
the Company  issued to an employee  options to purchase  245,350  shares of its common
stock      at a purchase price of $6.00 per share. The options vest in five equal
 increments  beginning with the date of      issuance in March 2006 and the following
four  anniversary  dates.  The options are exercisable over a term of      five years
from the date of vesting.  In November  2006 the  employee  left the Company and during
2007 agreed      to surrender 49,070 of vested options shares. 15




GREAT CHINA INTERNATIONAL HOLDINGS, INC.
                               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                                  SEPTEMBER 30, 2007 On May 18, 2006 the
Company issued to its Chief  Financial  Officer  options to purchase  10,000 shares of
its      common stock at a purchase  price of $11.00 per share.  The options  vest
 immediately  upon  issuance and are      exercisable  over the one year period from the
date of  issuance.  The Chief  Financial  Officer  subsequently      left the Company and
has surrendered all options that were issued. On October 1, 2006
the Company  issued to an employee  options to purchase  10,000  shares of its common
stock      at a  purchase  price of $7.00 per  share.  The  options  vest in one year
from the date of  issuance  and are      exercisable over the one year period from the
date of issuance.  These options were  subsequently  surrendered      in February 2007. 10.     Loss on Termination Project On July 20, 2007,
Xinchao and Yindu ceased development on Xi Ta project and disposed off the associated
     assets. Shenyang Heping District Investment Promotion Bureau of local government,
the agency overseeing      development of the Xi Ta area, is expanding the project and,
as a consequence of the expansion, has reached      an agreement with the Company to
re-acquire the land use rights for the Xita Project in exchange for      refunding the
land transfer fee of $4,437,397 and reimbursing the Company for amounts expended on the
     development in the amount of $1,646,024. On July 20, 2007, the local government
approvals and procedures      were completed for transferring the land use rights back to
the local government and the Company received      reimbursement of the land transfer fee
and the amount expended on the development in August 2007. As of      September 30, 2007,
the Company had loss on termination project amounted to $1,510,865. 16




Item 2. 
 Managements Discussion and Analysis of Financial Condition and Results of
Operations (1)    Caution
Regarding Forward-Looking Information The  following
 discussion  and  analysis  should  be read in  conjunction  with our  consolidated
 financial       statements  prepared  in  accordance  with  accounting  principles
 generally  accepted  in the  USA.  Unless       otherwise  indicated,  references in
this discussion to we,our and us are to Great China  International       Holdings,
Inc., and its subsidiaries. Any statements in
this discussion that are not historical facts are  forward-looking  statements that
involve       risks and  uncertainties;  actual  results  may differ  from the
 forward-looking  statements.  Sentences  or       phrases  that  use  such  words  as  believes,  anticipates,  plans,  may,  hopes,  can,  will,      expects, is
designed to, with the intent, potential and others indicate  forward-looking
 statements,       but their absence does not mean that a statement is not
 forward-looking.  Factors that could have a material       and adverse impact on actual
 results are described  under the heading Risk Factors in our annual report on
      Form 10-KSB,  filed with the  Securities  and Exchange  Commission  on April 16,
2007,  and under the caption       Item 1A. Risk Factors,  below.  We do not undertake
any  obligation to publicly  release the results of any       revisions to these
 forward-looking  statements that may be made to reflect events or circumstances after
the       date hereof or to reflect the occurrence of unanticipated events. (2)    Executive
Summary Great China
International  Holdings,  Inc., is a comprehensive real estate company with principal
 activities       in real estate investment,  development,  sales and management.  We
conduct all our operation in the Peoples       Republic  of  China  through  our  direct
 and  indirect  wholly  owned   subsidiaries;   Shenyang   Maryland       International
 Industry  Company  Limited,  , Shenyang  Yindu  Property  Company  Limited,  Shenyang
 Xinchao       Property Company  Limited,Loyal Best Property  Development  Limited and
Silverstrand  International  Holdings       Company Limited. Prior to September
30, 2006, Shenyang Maryland  International  Industry Company Limited (Maryland) has
been       the principal operating company and until 2005 owned five real estate projects. 
     The President Building comprises three blocks of commercial towers located in the financial district, Heping
Street, of Shenyang City. While the original intention was to sell the buildings, management subsequently decided
to retain most of the properties for leasing purposes. The buildings maintain a high occupancy rate with tenants
who are mostly international companies, approximately 20 of them are Fortune 500 companies. Great China
Internationals head office is situated on the 25/F and 26/F of the President Building.
     Chenglong Garden, situated in Shenyang Huanggu District, comprises 12 blocks of modern apartments, a number of
retail shops and ancillary facilities including basement car parking facilities and parks.
     Qiyun New Village is situated along the Nanyun Riverside and consists of 347 residential units, among which 327
units have been sold, and 2,186 square meters of commercial units. 17





     Peacock Garden is situated in Heping North Street, the commercial district of Shenyang. Construction was
completed in November 2000 and Peacock Garden comprises 197 low-density residential apartments of which 193 have
been sold
     The Maryland Building consists of 12,858 square meters of commercial space among which 11,310 have been sold and
other remaining 1,548 square meters are held for leasing purposes. Shenyang  Xinchao
 Property  Company  Limited  (Xinchao)  was established in August 16, 2005 for a
mixed-use      development,  later called the Xita Urban  Reconstruction  Project.  The
Xita project  occupies  83,071 square      meters of land with an  estimated
 construction  area of 350,000  square  meters.  As of  December  31,  2006,      Xinchao
 held a 70%  equity  interest  in the  Xita  Project  and  Shenyang  Yindu  Property
 Company  Limited      (Yindu),  another  subsidiary of Great Chian  International,
 holds the other 30%. A preliminary plan of the      Xita project area has been
 submitted to the district  government  for  approval.  Because the plan was highly
     appraised by the government,  so the government  decided to expand the total
 development area to about double      the original size; as a result,  there was going
to be a detailed review process on this substantial  project,      and the approval on
the final plan would not be acquired even by the end of 2007.  The Company has
 considered      the  financial  pressure  and  timing  problem;  therefore,  during
 2007  the  Company  determined  to  cease      development on this project and sell the
associated assets. Shenyang Heping
District  Investment  Promotion Bureau,  which is the agency overseeing  development of
the Xi      Ta area is expanding the project and, as a consequence of the  expansion,
 has reached an agreement with us to      reacquire  the land use rights for the Xita
Project in exchange  for  refunding  the land  transfer fee of RMB      33,228,480,  and
reimbursing us for amounts  expended on the  development in the amount of RMB 12,345,180.
 On      July 20, 2007, the local  government  approvals and procedures  were completed
for  transferring  the land use      rights back to the local  government and we received
 reimbursement of the land transfer fee of RMB 33,228,480      and the expended on the
development of RMB 12,345,180 received in August 2007. On August 7, 2007,
 the Company  completed  the  acquisition  of all of the issued share capital of Loyal
Best      Property  Development  Limited  (Loyal  Best),  a Hong Kong  limited
 company,  from Gentle  Knight  Limited      (GKL). Loyal Best is the
sole owner of an entity  called  Shenyang  Loyal Best Hunnan  Property  Development
 Limited      (Shenyang  Loyal  Best),  a wholly owned  foreign  enterprise  that is a
party to a  Confirmation  Letter of      Auction  with  respect  to a parcel of land
 located  at the  center  area of  Hunnan  New Zone in the city of      Shenyang,  China
(the  Project).  Shenyang  Loyal Best paid a land  transfer  fee of  US$20,000,000  for
the      Project. Pursuant to the
letter of intent, the parties entered into a definitive agreement for the acquisition on
June 28, 2007. The definitive agreement provided for closing of the transaction by August
10, 2007. The principal terms of the agreement were: 
     The Company purchased from GKL all of the outstanding shares of Loyal Best for US$4,010,000, of which
US$2,580,000 was previously paid as a deposit and the remainder was paid at the closing.
     The Company purchased from the directors of Loyal Best at a total price of US$20,500,000, all of the director
loan notes issued by Loyal Best in the aggregate principal amount of 18




US$20,000,000, which were used to make Shenyang Loyal Bests land transfer fee payment on the Project of
US$20,000,000. (3)   Results
of Operations Comparison of operations for the three months ended June 30, 2007 with the three months ended June 30, 2006: The Company
 incurred net income of  $2,059,799  for the three months ended  September 30, 2007
compared to a       net loss of  $(1,623,644)  for 2006,  representing  an  increase of
 $3,683,443  or 227 % quarter on quarter.       Components of sales and expenses
resulting in this increase in net income are discussed below. Sales revenues
increased by $206,231 or 41% quarter-on-quarter to $709,419 for the three months ended
September 30, 2007 compared to 2006 of $503,188. Rental and management fee income
increased by $11,210 or 1% to $1,195,996 during the quarter ended September 30, 2007 from
$1,184,786 for the comparable period in 2006. These changes are mainly attributable to: 
     Increase in sales of Chenglong Garden by $192,987 or 38%;
     Increases in gross floor area sold by 134 square meters quarter-on-quarter to 617 square meters for the quarter
ended September 30, 2007 compared to 483 square meters in 2006;
     The number of units sold increased by 1 units or 33% quarter-on-quarter to 4 units for the quarter ended
September 30, 2007 compared to 3 units in 2006;
     Decreases in rental income by $21,954 or 3%; and
     Increase in building management income by $33,163 or 9%; and
     No new development projects were introduced during 2007. Cost of revenue
 decreased by $528,251 or 44% during the quarter  ended  September  30, 2007,  as
compared to       the  corresponding  period in 2006. This was primarily  attributable to
a decrease in the costs of management       of the President Building. Selling  expenses
 decreased  by  $416,400  or 99% to $3,354 for the  quarter  ended  September  30,  2007
as       compared to $419,762  for the quarter  ended  September  30,  2006.  The
increase is mainly due to a decrease       advertising expenses. General and
administrative expenses increased by $4,643,086 or 1116% to $5,059,096 during the three
months ended September 30, 2007 compared to $416,010 for the three months ended September
30, 2006. The increase is due to provision for bad debt of $3,483,499 and handling fees
of $509,934 paid during the quarter.  Also, the Company incurred agent fee of $2,649,007
associated with acquisition of Loyal Best. 19




Total  depreciation
 expense  increased by $60,815 or 11% to $635,280  for the quarter  ended  September  30,
      2007,  compared to $574,465  for the  corresponding  period in 2006.  $524,370  and
 $501,144 for the quarter       ended September 30, 2007 and 2006, respectively, was
reclassified into building management expenses. Gain  on  settlement
 of  debt  amounting  of   $15,918,226   related  to  the  buy-back  of  the  previously
      non-performance  ICBC loans  totaling  $23,166,667  (Rmb.173,750,000)  from
 Shenyang  Hua Hai  International       Investment Co., Limited. Interest and
 financing  costs  increased by $1,201,944  to  $2,155,487  for the quarter ended
 September 30,       2007,  as compared to $953,493 for the quarter ended  September  30,
2006.  The increase was primarily due to       additional borrowings during the quarter. Comparison of operations for the nine months ended
September 30, 2007 with the nine months ended September 30, 2006: The Company
 incurred net income of  $4,116,386  for the nine months ended  September  30, 2007
compared to a       net loss of  $(4,121,680)  for 2006,  representing  an  increase  of
 $8,238,066  or 200%  period on  period.       Components of sales and expenses resulting
in this increase in net income are discussed below. Sales revenues
decreased by $2,694,547 or 54% to $2,334,219 for the nine months ended September 30, 2007
compared to 2006 of $5,028,766. Rental and management fee income increased by $316,091 or
8% to $4,058,230 during the nine months ended September 30, 2007 from $3,742,139 for the
comparable period in 2006. These changes are mainly attributable to: 
     Significant decrease in sales of Qiyun New Village by $1,733,726 or 94%;
     Decreases in gross floor area sold by 5,272 square meters to 2,498 square meters for the nine months ended
September 30, 2007 compared to 7,770 square meters in 2006;
     The number of units sold decreased by 23 units or 62%  to 14 units for the nine months ended September 30, 2007
compared to 37 units in 2006;
     Increases in rental income by $184,624 or 7%; and
     Increase in building management income by $131,467 or 12%; and
     No new development projects were introduced during 2007. Cost of revenue
decreased by $1,345,192 or 26% during the nine months ended September 30, 2007, as
compared to the corresponding period in 2006. This was primarily attributable to the 62%
decrease in the number of units sold as described above. 20




Selling  expenses
 decreased  by $402,906 or 84% to $77,074 for the nine months ended  September  30, 2007
as       compared to $479,980 for the nine months ended  September 30, 2006.  The
increase is mainly due to a decrease       advertising expenses. General and
 administrative  expenses  increased by $4,610,623  or 174% to $7,253,434  during the
nine months       ended  September 30, 2007 compared to $2,642,811  for the nine months
ended  September 30, 2006. The increase       is due to provision for bad debt of
$3,625,323  and handling fees of $509,934 paid during the third  quarter.       Also, the
Company incurred agent fee of $2,649,007 associated with acquisition of Loyal Best. Depreciation  and
 amortization  expense  increased by $49,205 or 3% to $1,750,523  for the nine months
ended       September 30, 2007,  compared to $1,701,318 for the  corresponding  period in
2006.  Depreciation  expense of       $1,565,929  and  $1,496,580  for the nine  months
 ended  September  30,  2007 and  2006,  respectively,  was       reclassified to
building management expenses. Other income
increased by $5,960,265 in 2007 was due primarily to a land leveling fee . Interest and
 financing  costs  increased by $283,810 to $3,450,746  for the nine months ended
 September 30,       2007, as compared to  $3,166,936  for the nine months ended
 September  30, 2006.  The increase was primarily       due to an increase in borrowings. (4)    Liquidity and Capital Resources Net cash flows
provided by (used in) operating  activities for the nine months ended  September 30,
2007, and       2006 were  $16,579,087 and $5,361,286,  respectively.  The increase in
funds provided by was primarily due to       decrease  in  advance  to  suppliers  and
real  estate  held for  sale  offset  by an  increase  in  accounts       receivable,
 accounts  payable,  taxes  payable  and  entities  held for sale  during the nine
 months  ended       September 30, 2007. Net cash  flows
 provided  by  investing  activities  for the nine  months  ended  September  30,  2007,
 was       $3,189,606  compared to net cash flows  $87,930,402  used in investing
 activities  for the nine months ended       September 30, 2006. The investing  activity
change was primarily  construction  projects was disposed in 2007       and new projects
just starting in 2006. Net cash flows used
in financing  activities for the nine months ended  September 30, 2007,  was  $17,343,307
      compared to net cash provided by financing  activities  of  $74,290,748  for the
nine months ended  September       30, 2006 representing  substantial  additional
borrowings in 2006 compared to the net amount of repayments in       excess of proceeds
in 2007. Current  liabilities
 exceeded  current assets by  $35,959,643 as of September 30, 2007. The working  capital
      deficit was incurred  primarily due to $13,053,333 of short term  borrowings  and
 $17,056,254  entities held       for sale. Due to frequent
changes in government fiscal and bank lending policies in the past 15 years as well as
other administrative controls from time to time in China, it is not uncommon for many
companies to find themselves unexpectedly holding overdue loans borrowed from the banks,
although the 21




initial  intention
 between the borrowers and lenders was for terms with longer  maturity  period.  Under
the       circumstances,  most lending banks had and have usually  worked
 sympathetically  and closely with  borrowers       for loan  extension  or
 restructuring  for a shorter  period  within the  administrative  guidelines  of the
      government.  As State  policies  are issued  outside  the  control of the banks in
China and form part of the       macro and micro-economic  measures,  many bankers and
their customers are often stuck in the situation,  thus       they are  generally  more
 tolerant  and  supportive  to overdue  loans than  their  counterparts  in Western
      economies;  they will work hard to deal with the situation  provided the borrowers
are  responsible  and have       good relationship with the lenders. As of September 30,
2007, the Companys  subsidiary,  Shenyang  Maryland  International  Industry Co. Limited
      (Maryland),  has ongoing  discussions with lending banks to renegotiate various
matured bank loans totaling       $82,758,358 with the following relevant banks: 1. The Bank of
China:  As of September 30, 2007,  bank loans from the Bank of China totaled  $8,000,000.
 The       loans were  originally  extended for the  development of the President
 Building in 2000.  While the bank had       originally  agreed orally on a 10-year
 long-term loan period for the project,  in 2002, owing to a change in       lending
 policy,  the Bank  changed  the terms of the loans  into  short-term  development
 loans.  Since the       maturity of the various loans by December 31, 2004,  Maryland
commenced ongoing  negotiation with the Bank of       China for an extension of the
loans.  Due to the initial verbal  agreement and a credible  relationship  over       the
years,  the Bank has agreed to renegotiate a settlement  term. As of December 2006, the
Company agreed to       a  debt-restructuring  plan to repay the loans over the next
three years.  Payments remaining on the schedule       are: 
$2,000,000 in 2007;
$2,666,667 in 2008; and,
$3,333,333 in 2009.  2.  The Agricultural Bank of China: As of September 30, 2007, bank loans from the Agricultural Bank of China totaled
$2,320,000. The loans were originally extended for the development of Chenglong Garden. Since the loans matured
on December 21, 2005, Maryland has commenced ongoing negotiation with the Agricultural Bank of China for a
short-term loan extension for another one-year term. 3.  
  Shenyang City Commercial Bank: As of June 30, 2007, bank loan from the Shenyang City Commercial Bank amounted
to$21,333,333  (RMB 160,000,000). The loan was intended to finance the renovation of the President Building and to
finance the Company's operations.  Among the loan, RMB 120 million loan was borrowed on Dec. 13, 2005 due Dec.
12, 2006 at an annual interest of 7.254%, which is extended due Nov. 5, 2007 dated Dec. 5, 2006 at an annual
interest of 8.19% during extension period. The remaining amount of RMB 40,000,000 was due June 12, 2009 with
bears interest at 8.775%, 4.  
  On September 28, 2007, Shenyang Loyal Best Property Development Co., Limited entered into another Loan Agreement
with Shenyang Hua Hai International Investment Co., Limited for an unsecured short-term loan totaling $60,000,000
(Rmb.450,000,000) for a loan period from August 22




10,  2007 to
 December  26,  2007 and  carrying  interest  at  1.002%  per  month.  The loan  will be
used in       development of Olympic Center project. As of September  30,
2007,  Shenyang  Loyal had repaid  $13,266,667  (Rmb.99,500,000)  and the balance of the
      unsecured loan was $46,733,333 (Rmb.350,500,000). (5)   Contractual
Obligations The
following table is a summary of the Companys contractual obligations as of September 30, 2007: Total
     
     Less thanone year
     
     1-3 Years
     
     ThereafterShort-Term Debt
     
     
     $
        13,053,333
        
     
     $
        13,053,333
        
     
     $
        --
        
             
     $
        --Short-Term Debt under Entities held for sale
     
     
     
        60,000,000
        
     
     
        60,000,000
        
     
     
        --
        
             
     
        --Long-Term Debt
        
        
     7,653,333
        
     
     240,000
        
     
     5,813,333
        
     
     1,600,000Amounts due to related parties
     23,513
        
     
     23,513
        
     
     --
        
     
     --Total Contractual Cash Obligations
     $80,730,179
        
     
     $73,316,846
        
     
     $5,813,333
        
     
     $1,600,000  Item 3.
 Quantitative and Qualitative Disclosure About Market Risk As an  underpinning
 industry in China,  real estate has  developed  into a crucial  pulling force to the
all-round growth of national  economy with its long-term  continuous  speedy growth and
positive  momentum of both production and marketing  thrive which have attracted
 extensive  attention  both in the domestic and from overseas.  A lot of problems and
risks arose with the real estate prosperity due to its overly rapid development. The  national  land
is fully  controlled  by the  government,  and its price keeps  rising in  accordance
 with the supply-demand  relationship,  which  resulted in the  over-fast  increase of
the  investment in real estate and the capital pressure. Meanwhile, the adjustment of
lending rate increased the risk and pressure of capital operation. The  contradictions
 of real estate market  structure in some regions  emerged,  among which the
 contradiction  of commodity houses supply structure is conspicuous.  On one hand, some
large-area residences,  high rises and premium projects emerged in endlessly,  but they
are unsuitable for sale; on the other hand,  normal-sized commodity houses and economic
 and  functional  houses  targeting  the low and medium  wages  earners in the urban area
are in short supply.  The housing price still rises faster in some cities,  the
 construction of living houses  safeguard system lags behind in other cities,  which
 resulted in the  disharmony  between  supply and demand.  So the order of real estate
market is to be further standardized. There still exist
the phenomena of false advertisements, contract fraud and illegal actions in agent
service and logistic administration, which are to be kept within limits in effect.  It
should not only rely on the self-restriction of real estate enterprises to address all
these problems.  The credit standing system of real estate market is to be perfected. The
operation, supervision and control systems of real estate market are to be further
improved. 23




Item  4.
 Controls and Procedures As of September 30, 2007 an evaluation was performed  under the  supervision  and with the  participation  of Great
China's  management,  including the Chief Executive  Officer and Chief Financial  Officer,  of the effectiveness of
the design and operation of Great China's  disclosure  controls and  procedures.  Based on that  evaluation,  Great
China's  management,  including the Chief  Executive  Officer and Chief  Financial  Officer,  concluded  that Great
China's  disclosure  controls  and  procedures  were  effective.  There have been no  significant  changes in Great
China's internal controls or in other factors that could  significantly  affect internal controls subsequent to the
date of the evaluation. PART II. OTHER INFORMATION Item  1A.
 Risk Factors Any statements in this discussion that are not historical facts are forward-looking statements that involve risks
and uncertainties; actual results may differ from the forward-looking statements. Sentences or phrases that use
such words as believes, anticipates, plans, may, hopes, can, will, expects, is designed to,
with the intent, potential and others indicate forward-looking statements, but their absence does not mean
that a statement is not forward-looking. Forward-looking statements are based on current expectations, estimates,
and projections as of the date of this report, and they are subject to a number of risks, uncertainties, and
assumptions that could cause actual results to differ materially from those described in the forward-looking
statements.  Such forward-looking statements should, therefore, be considered in light of various important
factors, including those set forth in this report and under the caption ITEM 1A. RISK FACTORS in our other
reports filed with the Securities and Exchange Commission, including our reports on Form 10-Q for the interim
periods ended June 30 and March 31, 2007, and in our annual report on Form 10-K for the year ended December 31,
2006.  In particular, the matters discussed above under PART I, ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS should be viewed as creating substantial uncertainty about the
Company and its prospects for the future.  Any one or a combination of factors could materially affect our
operations and financial condition. Item  6.
 Exhibits. Exhibits:
 Copies of the following documents are included or furnished as exhibits to this report
pursuant to Item 601 of Regulation S-K. ExhibitNo.
     SEC Ref.No.
     Title of Document31.1
     31
     The certification of chief executive officer required by
        Rule 13a-14(a) or Rule 15d-14(a)31.2
     31
     The certification of chief financial officer required by
        Rule 13a-14(a) or Rule 15d-14(a)32.1
     32
     The certifications required by Rule 13a-14(b) or
        Rule 15d-14(b) and 18 U.S.C. Section 1350 24




SIGNATURES In
accordance with the Exchange Act, the registrant caused this report to be signed on its
behalf by the undersigned thereunto duly authorized. GREAT CHINA INTERNATIONAL HOLDINGS, INC. Date: November 19, 2007
        
     By:
     
     /s/ Frank JiangFrank Jiang, Chief Executive Officer(Principal Executive Officer)   Date: November 19, 2007
     
     By:
     
     /s/ Wang Li RongWang Li Rong, Chief Financial Officer(Principal Financial and Accounting Officer) 25