UNITED STATES 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 1934For the quarterly period ended March 31, 2008 ̈
     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934for the transition period from        to  Commission File No.
0-23015 GREAT CHINA
INTERNATIONAL HOLDINGS, INC. (Exact name of registrant 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 Street Heping 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 the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-3 of the Exchange Act). (check one) Large accelerated filer   ̈   Accelerated filer   ̈
          Non-accelerated filer  x   Smaller reporting company   ̈ 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 March 31, 2008,
there were 11,759,966 shares of common stock outstanding.




FORM 10-Q GREAT CHINA INTERNATIONAL HOLDINGS, INC. TABLE OF CONTENTS
     
     Page PART I.
     Item 1. Financial Information
     3Balance Sheet as of March 31, 2008 (Unaudited) and
December 31, 2007
     3Statements of Operations for the Three Month Period
Ended March 31, 2008 and 2007 (Unaudited)
     4Statements of Cash Flows for the Three Month Period
Ended March 31, 2008 and 2007 (Unaudited)
     5Notes to the Financial Statements
     6Item 2.  Managements Discussion and Analysis of
Financial Condition and Results of Operations
     18Item 3.  Quantitative and Qualitative Disclosures
About Market Risk
     21PART II.
     Other Information
     15Item 1A.  Risk Factors
     22Item 6. Exhibits
     22Signatures
     23  2




GREAT CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                                        CONSOLIDATED BALANCE SHEETS
                                    MARCH 31, 2008 AND DECEMBER 31, 2007 March 31, 2008
      
     December 31, 2007ASSETSCurrent assets:Cash and equivalents

     $18,572,767
        

     $10,044,579Accounts receivable, net
        
        
     230,653
        

     325,058Receivable on disposal of subsidiaries
     --
        

     30,701,957Other receivable, net
     56,541
        

     1,070,863Properties held for resale
     7,720,231
        
 
     7,696,437Total current assets
     26,580,192
        
 
     49,838,893Property and equipment, net
     52,004,645
        
 
     50,632,336Total assets
     $78,584,837
        

     $100,471,229LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Short-term loans
     $23,276,400
        

     $25,231,297Accounts payable and accrued expenses
     6,906,105
        

     8,615,415Other payable
     2,239,494
        

     5,723,489Payable to disposed subsidiaries
     871,881
        

     10,494,449Commission payable
     3,161,762
        

     8,898,502Advances from buyers
     1,866,289
        

     2,034,019Taxes payable
     8,638,464
        

     8,552,316Total current liabilities
     46,960,394
        

     69,549,487Long term debt, net
     5,712,000
        

     5,486,968Total liabilities
     52,672,394
        

     75,036,455Stockholders' equity:Common stock, $.001 par value 50,000,000 sharesauthorized, 11,759,966  issued and outstandingat March 31, 2008 and December 31, 2007, respectively
     11,760
        

     11,760Additional paid in capital
     4,566,156
        

     4,562,855Statutory reserve
     649,619
        

     638,128Other comprehensive income
     2,136,593
        

     1,468,546Retained earnings
     18,548,316
        

     18,753,485Total stockholders' equity
     25,912,443
        

     25,434,773Total liabilities and stockholders' equity
     $78,584,837
        

     $100,471,229 The accompanying notes are integral part of these unaudited consolidated
financial statements. 3




GREAT CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
                 FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2008, 2007 AND 2006 2008
      
     2007
     
     2006RevenuesReal estate sales
     1,453,855
        

     233,015
        
 
     1,357,244Rental and management fee income
     1,422,294
        

     1,358,273
        
     
     1,325,826Total revenues
     2,876,149
        

     1,591,288
        
     
     2,683,070Cost of revenues
     939,702
        

     442,055
        
     
     1,654,366Gross profit
        
     1,936,447
        

     1,149,233
        
     
     1,028,704Operation expensesSelling expenses
     44,639
        

     18,242
        
     
     39,850General and administrative expenses
     1,363,131
        

     378,781
        
     
     769,637Depreciation and amortization
     718,918
        

     580,321
        
     
     544,147Total operation expenses
     2,126,688
        

     977,344
        
     
     1,353,634Income (loss) from operations
     (190,241
        )

     171,889
        
     
     (324,930
        )Other income (expense)Gain on settlement of debt
     1,006,130
        

     --
        
     
     --Other income, net
     (183,035
        )

     1,949,269
        
     
     15,223Gain on disposal of fixed assets
     --
        

     --
        
     
     103,043Impairment loss
     --
        

     (199,542
        )
     
     --Interest and finance costs
     (788,229
        )

     (594,123
        )
     
     (1,331,177
        )Total other income (expense)
     34,866
        

     1,155,604
        
     
     (1,212,911
        )Income (loss) before income taxes
     (155,375
        )

     1,327,493
        
     
     (1,537,841
        )Provision for income taxes
     38,303
        

     478,088
        
     
     --Income (loss) from operations
     (193,678
        )

     849,405
        
     
     (1,537,841
        )Net income (loss)
     (193,678
        )

     849,405
        
     
     (1,537,841
        )Other comprehensive income:Foreign currency translation adjustment
     668,047
        

     33,411
        
     
     57,792Net comprehensive income (loss)
     $474,369
        

     $882,816
        
     
     $(1,480,049
        )Net income (loss) per share - basic  & diluted
     $(0.02
        )

     $0.07
        
     
     $(0.14
        )Weighted average number of shares outstanding - basic & diluted
     11,759,966
        

     11,782,036
        
     
     11,097,466 Weighted average number of shares for dilutive securities has not been
taken since the effect of dilutive securities is anti-dilutive The accompanying notes are integral part of these unaudited consolidated
financial statements. 4




GREAT CHINA INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                          FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2008, 2007 AND 2006 2008

     2007

     2006Cash flows from operating activities:Net income (loss)
     $(193,678
        )

     $849,405
        

     $(1,537,841
        )Adjustments to reconcile net income (loss)net cash provided by (used in) operating activities -Depreciation and amortization
     718,918
        

     580,324
        

     544,147Provision for doubtful accounts
     190,357
        

     672,678
        

     --Allowance for Xita projectNon-cash stock compensation expense
     3,301
        

     --
        

     180,711(Increase)/decrease in assets:Accounts receivable and other receivable
     31,651,817
        

     (1,316,154
        )

     (304,234
        )Refunds due from contractors
     --
        

     --
        

     (1,508,751
        )Advances to suppliers
     --
        

     (111,967
        )

     (5,241,075
        )Prepaid expenses
     --
        

     76,579
        

     1,237,103Properties held for resale
     285,659
        

     147,607
        

     693,216Increase/(decrease) in liabilities:Accounts payable and other payables and accrued expenses
     (21,141,255
        )

     (520,704
        )

     512,850Deposits held
     --
        

     (7,405
        )

     --Advances from buyers
     (245,821
        )

     (106,460
        )

     213,433Income and other taxes payable
     (56,297
        )

     192,445
        

     (317,678
        )Net cash provided by (used in) operating activities
     11,213,001
        

     655,890
        

     (5,528,119
        )Cash flows from investing activities:Construction in progress
        
     --
        

     (217,174
        )

     198,511Purchases of property & equipment
     (29,638
        )

     (447,130
        )

     (434,726
        )Net cash used in investing activities
     (29,638
        )

     (664,304
        )

     (236,215
        )Cash flows from financing activities:Loan repayments
     (2,926,247
        )

     (995,678
        )

     (2,945,039
        )Advances to directors and affiliated companies
     --
        

     (157,285
        )

     (960,950
        )Net cash used in financing activities
     (2,926,247
        )

     (1,152,963
        )

     (3,905,989
        )Effect of exchange differences
     271,072
        

     33,411
        

     57,792Net increase (decrease) in cash and cash equivalents
     8,528,189
        

     (1,127,966
        )

     (9,612,531
        )Cash and cash equivalents, beginning of period
        
        
     $
        10,044,579
        

     $
        1,769,744
        

     $
        10,896,807Cash and cash equivalents, end of period
     $18,572,767
        

     $641,778
        

     $1,284,276Supplemental disclosures of cash flow information:Interest paid
     $556,211
        

     $410,041
        

     $959,807Income taxes
     $39,550
        

     $247,431
        

     $-- The accompanying notes are integral part of these unaudited consolidated
financial statements. 5




GREAT
CHINA INTERNATIONAL HOLDINGS, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTSMARCH
31, 2008 1.
Description
of business Nature of organization Great  China  International  Holdings,  Inc.,  (the  Company
 ) 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  into 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: 
        Jiang Fang 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 the
reclassification of Shenyang Maryland as 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  acquired,  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  acquired the  remaining 30 percent  equity  interest in      Xinchao
through Silverstrand from Sapphire Corporation Limited on December 28, 2005. The  remaining  approximately  34  percent  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  70 percent  interest  in
Yindu from  Yungfeng,  and      Silverstrand  acquired  30  percent  interest  in  Yindu
 from  Sapphire.   Following  the  closing  of  these      transactions,  the Company
 holds,  through  its  subsidiaries,  100  percent  interest in the land use rights
     comprising the Xita Project. Shenyang  Xinchao  Property  Company  Limited  (Shenyang
 Xinchao)  was  registered  on August  16,  2005 in      Shenyang,  Liaoning  Province,
 in the PRC with a registered  capital of $12,330,456  (RMB  100,000,000) 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 6




capital  of
 $6,615,228  (RMB  50,000,000)  and a  defined  period  of  existence  of 11 years to
 August  15,      2016.Xinchao  and Yindu were formed to develop a certain tract of
property  located in the Heping  District of      Shenyang,  and will feature a
 construction  area of almost  500,000  square meters with a linear site area of
     approximately  101,000 square meters.  The local  government of Heping District of
Shenyang  received back the      land use rights of the Xita project because of new
developing plan of the district.  Heping District  refunded      the land usage right
paid by Xinchao and reimbursed the development cost incurred by Xinchao. Beijing  Xinchao
 Property  Company Limited  (Beijing  Xinchao) was registered in Beijing on March 27,
2008.      Beijing  Xinchao was 100% owned by Shenyang  Xinchao with a registered
 capital  amounting to $4,255,440  (RMB      29,800,000) and a defined period of
existence of 10 years. 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,
 through its  wholly-owned  subsidiary  -  Silverstrand,  transferred  100% of the issued
 share      capital of Loyal Best Property  Development Limited to Celebrities
 Realestate  Development Group Co., Ltd. in      exchange for the payment of
 approximately  $48.70  million(360  million  Chinese yuan).  The  transaction was
     closed on December 15, 2007. As of March 31, 2008,  the Company fully  received the
selling amount of disposal      of Loyal Best. The  Company  engages
in the  development  and sale of high  quality  real  estate  properties  and  developed
     residential and commercial  properties includes Maryland building,  President
 buildings,  Qiyuan new village,      Peacock Garden, and Chenglong Garden.  The Company
also engages in rental of commercial  buildings in the City      of Shenyang,  China.
Shenyang Maryland, the Companys indirect wholly-owned  subsidiary,  was one of the first
     private property developers and retailers in China. 2.
Summary
of significant accounting policies  The  accompanying
 consolidated  financial  statements  have  been  prepared  in  conformity  with
 accounting      principles  generally  accepted in the United  States of America.  The
 Companys  functional  currency is the      Chinese Renminbi (CNY);  however the
accompanying  consolidated  financial statements have been translated and      presented
in United States Dollars ($) on the basis set forth below. The following is a
summary of significant accounting policies: Unaudited Interim
Financial Information- The accompanying unaudited financial statements of the
Company have been prepared in accordance with generally accepted accounting
principles for interim financial information. Accordingly, they do not
include all of the information required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation have been included. Operating results for the interim
periods are not necessarily indicative of the results for any future period.
These statements should be read in conjunction with the Company's audited
financial statements and notes thereto for the fiscal year ended December 31,
2007. The results of the three month period ended March 31, 2008 are not
necessarily indicative of the results to be expected for the full fiscal year
ending December 31, 2008. Principles of
Consolidation All significant inter-company transactions and balances within the
Company are eliminated in consolidation. Allowance for
Doubtful Accounts- The Company maintains reserves for potential credit losses on
accounts receivable. Management reviews the composition of accounts receivable
and other receivable and analyzes historical bad debts, customer concentrations,
customer credit worthiness, current economic trends and changes 7




in customer  payment
 patterns to evaluate  the adequacy of these  reserves.  As of March 31, 2008 and
     December 31, 2007, the Company reserved $5,581,612 and $5,174,895 respectively. Properties held for
sale  The Company  capitalizes as properties 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 March 31, 2008
and December 31, 2007,  properties  held for sale  amounted to  $7,720,231  and
 $7,696,437,      respectively. 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
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 As of March 31, 2008
and December 31, 2007 Property, Plant & Equipment consist of the following: 3-21-2008

     12-31-2007Building
     
     
     $
        61,594,407
        
        
     $
        58,605,918Automobile
     1,184,841
        
        
     1,115,768Office equipment & Furniture
     408,972
        

     948,066Others
     11,377
        

     10,93063,199,597
        

     60,680,682Accumulated depreciation
     11,194,952
        

     10,048,346Property and equipment, net
     $52,004,645
        

     $50,632,336 Depreciation expense
for the three month periods ended March 31, 2008, 2007 and 2006 and totaled $718,918,
     $580,321 and $580,324 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 three
month periods ended March 31, 2008, 2007 and 2006. As of March 31, 2008
fixed assets  totaling  $36,245,512  have been pledged as  securities to various banks in
     respect of borrowings totaling $28,988,400. Construction-in-progress Properties currently under development are accounted for as
construction-in-progress. Construction-in-progress is recorded at acquisition
cost, including land rights cost, development expenditure, professional fees
and the interest expenses capitalized during the course of construction for the 8




purpose of financing
the project.  Upon completion and readiness for use of the project,      the cost of
construction-in-progress is to be transferred to properties held for sale. Construction-In-Progress
 is valued at the lower of cost or market.  Management  evaluates the market value of
     its  properties  on a  quarterly  basis by  comparing  selling  prices of its
 properties  with those of other      equivalent  properties in the vicinity  offered by
other developers  reduced by anticipated  selling costs and      associated taxes. In the
case of construction in progress,  management takes into  consideration the estimated
     cost to complete the project when making the lower of cost or market calculation. As of March 31, 2008
and December 31, 2007, the Company had no construction-in-progress balance. Revenue Recognition Real estate sales Real estate sales are
reported in  accordance  with the  provisions of SFAS 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.  Real estate rental income,  less 5% business tax, is recognized on
the straight-line      basis over the terms of the tenancy agreements. For land sales,  the
Company  recognizes the revenue when title of the land  development  right is transferred
     and collectability is assured. For the reimbursement
on infrastructure  costs, the Company recognizes the income(loss),  which is at the fair
     market  value  agreed  between the Company and the PRC  government,  when they enter
into a binding  agreement      with the government agreeing on the reimbursement. Real Estate
Capitalization and Cost Allocation Real estate held for
development or sale consists of residential and commercial  units under  construction and
     units  completed.  Construction in progress  includes costs  associated in
development and construction of the      Xita project Real estate held for
 development  or sale is stated at cost or estimated net realizable  value,  whichever is
     lower. Costs include land and land improvements,  direct  construction costs and
development costs,  including      predevelopment  costs,  interest on  indebtedness,
 real estate taxes,  insurance,  construction  overhead and      indirect  project costs.
 Selling and  advertising  costs are expensed as incurred.  Total  estimated costs of
     multi-unit developments are allocated to individual units based upon specific
identification methods. If the real estate is
 determined  to be  impaired,  it will be written  down to its fair market  value.  Real
     estate held for  development  or sale costs  include the cost of land use rights,
 land  development  and home      construction  costs,  engineering  costs,  insurance
costs,  wages, real estate taxes, and interest related to      development  and
 construction.  All costs are  accumulated by specific  projects and allocated to
residential      and commercial  units within the respective  projects.  The Company
leases the land for the  residential  unit      sites under land use rights with  various
 terms from the  government  of the PRC. The Company  evaluates  the      carrying  value
for  impairment  based on the  undiscounted  future cash flows of the assets.
 Write-downs  of      inventory deemed impaired would be recorded as adjustments to the
cost basis. No depreciation is
provided for construction in progress. 9




Capitalization of
Interest In  accordance  with
SFAS 34,  interest  incurred  during  construction  is  capitalized  to  construction  in
     progress.  All other  interest is expensed as incurred.  During the three month
 periods ended March 31, 2008,      the Company did not have any construction therefore
no interest was capitalized. Other income Other income consists
of land leveling  income,  which was one-time  service  performed which was requested by
     our  customers  and gain on  settlement of debt.  These  revenues are  recognized
 when the services have been      performed and the settled amount has been paid in
accordance with the terms of the agreement. 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 year- end exchange  rates,  while
revenues and      expenses  have been  translated at average  exchange  rates in effect
 during the year.  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. 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. 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 10




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: a.   A brief
description of the provisions of this Statement b.   The date
that adoption is required c.   The date
the employer plans to adopt the recognition provisions of this Statement, if earlier. 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 December  2007,
 the FASB  issued  SFAS No. 160,  Noncontrolling  Interests  in  Consolidated  Financial
     Statements.  This  Statement  amends  ARB 51 to  establish  accounting  and
 reporting  standards  for  the      noncontrolling  (minority)  interest  in a
 subsidiary  and  for the  deconsolidation  of a  subsidiary.  It      clarifies  that a
 noncontrolling  interest in a  subsidiary  is an ownership  interest in the
 consolidated      entity  that  should be  reported  as equity  in the  consolidated
 financial  statements.  SFAS No.  160 is      effective for the Companys fiscal year
beginning  October 1, 2009.  Management is currently  evaluating the      effect of this
pronouncement on financial statements. In March 2008, the
FASB issued FASB Statement No. 161, Disclosures about Derivative  Instruments and Hedging
     Activities.  The new standard is intended to improve  financial  reporting about
derivative  instruments and      hedging activities by requiring enhanced  disclosures to
enable investors to better understand their effects      on an entitys  financial
 position,  financial  performance,  and cash flows. It is effective for financial
     statements  issued for fiscal years and interim  periods  beginning  after  November
 15,  2008,  with early      application  encouraged.  The new  standard  also  improves
 transparency  about the location and amounts of      derivative  instruments in an entitys
financial statements;  how derivative  instruments and related hedged      items are
accounted for under Statement 133; and how derivative  instruments and related hedged
items affect      its financial  position,  financial  performance,  and cash flows.
 Management is currently  evaluating  the      effect of this pronouncement on financial
statements. In December 2007, the
FASB issued SFAS No. 141(R),  Business  Combinations.  This Statement  replaces SFAS
     No. 141, Business  Combinations.  This Statement retains the fundamental
 requirements in Statement 141 that      the  acquisition  method of  accounting  (which
 Statement  141 called the purchase  method) be used for all      business  combinations
 and for an acquirer to be identified for each business  combination.  This Statement
     also  establishes  principles  and  requirements  for how the acquirer:  a)
 recognizes  and measures in its      financial  statements the identifiable  assets
acquired,  the liabilities  assumed,  and any  noncontrolling      interest in the
acquiree;  b) recognizes and measures the goodwill acquired in the business combination
or a      gain from a  bargain  purchase  and c)  determines  what  information  to
 disclose  to enable  users of the      financial  statements to evaluate the nature and
 financial  effects of the business  combination.  SFAS No.      141(R) will apply
 prospectively  to business  combinations  for which the  acquisition  date is on or
after      Companys fiscal year beginning  October 1, 2009. While the Company has not
yet evaluated this statement for      the impact,  if any, that SFAS No. 141(R) will have
on its consolidated  financial  statements,  the Company      will be required to expense
costs related to any  acquisitions  after  September 30, 2009. The management is
     currently evaluating the effect of this pronouncement on financial statements. 11




Reclassifications   Certain
 amounts in the 2007 financial  statements  have been  reclassified to conform to
     the 2008 presentation.  These  reclassifications had on effect on previously
reported results of operations or      retained earnings. 3.
Receivable
on disposal of subsidiaries  The amount of
 receivable  on disposal of  subsidiaries  as of March 31, 2008 and December 31, 2007 are
$0 and      $30,701,957,  respectively.  The receivable balance was non interest bearing,
unsecured and due on demand. The      Company  received the entire  balance on disposal
of subsidiary  amounting  $30,701,957 in of the period ended      March 31, 2008. 4.
Properties
held for resale  Properties held for
resale at March 31, 2008 and December 31, 2007 by project is as follows: 3-31-2008
        
     12-31-2007Qiyun New Village
     
     
     $
        1,660,795
        

     $
        1,595,366Peacock Garden
     240,727
        

     231,244Chenglong Garden
     5,174,663
        

     5,250,960President Building
     213,200
        

     204,801Maryland Building
     261,667
        

     251,358Others
     169,179
        

     162,708Total
     $7,720,231
        

     $7,696,437 The Company
 introduced a Five-year Trial  Accommodation  Scheme (the Scheme) to attract
 potential buyers      when initial sales at the project did not meet expectations.
 Under the Scheme,  property buyers were required      to pay a 10%  refundable  deposit
 based on the sale price of the property or $6,039  (RMB50,000)  and another      20%,
based on the sale price of the property which is  non-refundable,  over 5 years by
monthly  installments,      totaling 30%  throughout  the trial period.  The remaining
70% of the  consideration  shall be due and payable      immediately  after the trial
period when the property  buyers exercise their option whether or not to complete
     the  purchase.  If the buyer  chooses  not to buy the  property,  the 10%
 refundable  deposit or $6,039  (RMB      50,000) will be refunded to the buyers (less
any unpaid  rental due) and monthly  installments  received  over      the 5-year  trial
period will have been  recognized  as rental  income in the year in which they arose.  As
of      March 31, 2008 and December 31, 2007,  $852,215 and $733,774  worth of
 properties  held for sale in Qiyun New      Village were occupied by individuals  who
agreed to buy the properties  without having fully paid the purchase      consideration.
 $232,706  and  $196,103  was  included in advance  from buyers for this Scheme as of
March 31,      2008 and December 31, 2007. 5.
Accounts
payable and accrued expenses  Accounts payable and
accrued expenses comprised of following as of March 31, 2008 and December 31, 2007: 3-31-2008

     12-31-2007Accounts payable
     
     
     $
        4,223,710
        

     $
        6,090,281Payroll and welfare payable
     107,935
        

     71,090Interest and other accrued expenses
     2,574,460
        

     2,454,044Total
     $6,906,105
        

     $8,615,415 12




6.
Tax
payables  Tax payables consist
of the following as of March 31, 2008 and December 31, 2007: 3-31-2008
        
     12-31-2007Income tax payable
     
     
     $
        5,981,270
        
        
     $
        5,944,954Business tax
     512,903
        

     519,634Land appreciate payable
     2,144,003
        

     2,069,781Other levies
     288
        

     17,947Total
     $8,638,464
        

     $8,552,316  7.
Short-term
loans  3-31-2008

     12-31-2007Loans from Banks  In default$7,854,000
        

     $9,931,413Loans from bank  due within 12 months15,422,400
        

     15,345,270Mortgage loans
     --
        

     485,069Total current loans payable
        
        
     $
        23,276,400
        

     $25,231,297  The Company acted as
an agent and borrowed mortgage loans amounting $485,069 as of December 31, 2007 under
     its employees name using properties held by the Company. All balances of mortgage
loans were cleared as of      March 31, 2008 and the pledged assets were released too. As
of March 31, 2008 and December 31, 2007, the      carrying values of stock of properties
of $$0 and $484,764 have been pledged for the Companys mortgage      loans. On June 22, 2006 the
Company entered into a settlement agreement with a bank with respect to $8,230,453
     ($7,854,000 as of March 31, 2008) of past due notes.  In accordance with the terms
of this settlement      agreement, $1,228,163 loan interest accrued as of December 31,
2007 may be waived if the Company repays the      loan principle per the installments
schedule. The Company is required to pay back the loan principal in a      three step
installments started with the first payment amounting $685,871 due on December 20, 2007
according      to the agreement.  The Company paid the first installment on time as of
December 31, 2007. The 2nd and 3rd      instalments are approximately $5 million (RMB 35
million) is due in June, 2008 and $2.86 million (RMB 20      million) is due on September
2008. Assets of the Company are pledged against these bank loans. Subsequently      on
April 15, 2008, the Company paid the loan principle off amounting to $5,712,000 (RMB
40,000,000). On February 4th,
2008, the Company paid off $2,386,831 bank loan which was in default as of December 31,
     2007. As of March 31, 2008
and 2007, the Company incurred interest expense amounting $792,530 and $701,502
     respectively. The Company had a
default loan amounting to $23,166,667 with due dates in 2003 and 2004. The defaulted
loans      borrowed from Industrial and Commercial Bank of China was assigned to a third
party. The Company entered      into an agreement with the third party on July 30, 2007
to buy back the loans for $7,581,333.  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 amounting to
$439,014 was also forgiven 13




as of December 31,
2007. The assets pledged with the loan were released before the year ended 2007. As of
     December 31, 2007, the Company realized gain on settlement of debt amounted to
$11,115,201. 8.
Long-term
debts  secured  3-31-2008
     
        12-31-2007Long term debts:Bank loans
     $  5,712,000
        
     $  5,486,968 On June 18,  2007 the
 Company  obtained  a loan from a bank for  $5,486,968  at an  interest  rate of 8.775%
      before  September  15, 2007 and 9.711% after  September  15, 2007,  and is due on
June 12, 2009.  The loan is       secured by fixed assets and land use rights the Company
owned. The long-term debt is due on June 12, 2009. 9.
Statutory
Reserve  In  accordance  with
the Chinese  Company  Law,  the Company  has  established  a policy to reserve 10% of its
     annual net income as statutory  reserve.  The Company  reserved  $11,491 and
$638,128 as of March 31, 2008 and      December 31, 2007 respectively. 10.
Gain
on Settlement of Debt  In January 2008, the
Company received the final judgment from Liaoning Province Peoples Superior Court 2007
     (No. 97) dated on December 21, 2007 regarding the law suit between Shenyang Normal
College, Shenyang      Maryland (a wholly owned subsidiary of the Company) and Jiansu
Province Suzhong Construction Group, Ltd. The      final judgment stated that Shenyang
Maryland should pay Shenyang Normal College RMB 5,210,454 along with the      interest
calculated from June 2, 2000 to the payment date using the interest rate of six-month
loan per      Peoples Bank of China. The interest payable calculated was RMB 2,152,262
as of March 31, 2008.  As of      December 31, 2007, the payable to Shenyang Normal
College was RMB 14,561,185 (approximately $1,997,510). The      gain on settlement of
debt as of March 31, 2008 was calculated as follows: Amount  Debt recorded as of December 31, 2007
     
     
     
        RMB
        

     
        14,561,185Minus: Amount should pay per final judgment
        
        


     
        (5,210,454
        )Interest calculated per final judgment
        
       


     
        (2,152,262
        )Gain on settlement of debt as of March 31, 2008
        
        
     
        RMB
        

     
        7,198,469US$
        

     
        1,006,130 11.
Stock
Options  On January 31, 2008,
 the Company  issued a  non-incentive  stock option for 10,000 shares to a  non-employee
      director  with an  exercise  price of $0.65 that will  expire on January 31,  2010.
 The  options  vested and       became  exercisable  over a term of two  years.
 Compensation  expense  as of March 31,  2008  related to the       outstanding stock
options was $3,301. Risk-free interest rate
     2.00%Expected life of the options
     2 yearExpected volatility
     121.79%Expected dividend yield
     0 %  14




On January 31, 2007,
 the Company  issued a  non-incentive  stock option for 10,000 shares to a  non-employee
      director  with an  exercise  price of $4.65 which will expire on January  31,
 2009.  The options  vested and       became  exercisable  over a term of two  years.
 Compensation  expense  as of March 31,  2007  related to the       outstanding stock
options was $20,524. Risk-free interest rate
     2.00%Expected life of the options
     2 yearExpected volatility
     83.76%Expected dividend yield
     0 %  Options outstanding
at March 31, 2007 and related weighted average price and intrinsic value is as follows: ExercisePrices

     TotalOptionsOutstanding

     WeightedAverageRemainingLife(Years)

     TotalWeightedAverageExercise Price

     OptionsExercisable

     WeightedAverageExercise Price

     AggregateIntrinsicValue$
        4.65
        
        
     
        10,000
        

     
        0.42
        

     $
        2.33
        

     
        5,833
        

     $
        2.33
        

     
        --$
        0.65
        

     
        10,000
        

     
        0.92
        

     $
        0.33
        

     
        833
        

     $
        0.33
        

$
        5,200 A summary of option
activity as of March 31, 2008, and changes during the periods then ended is presented
     below: Options
     SharesOutstanding at January 1, 2007
     173,568Granted
     10,000Exercised
     --173,568Forfeited or expiredOutstanding at December 31, 2007
     10,000Granted
     10,000Exercised
     --Forfeited or expired
     --Outstanding at March 31, 2008
     20,000Exercisable at March 31, 2008
     6,666  12.
Income
Tax The Company is
registered in the State of Nevada and has  operations in primarily  three tax
 jurisdictions       the Peoples  Republic of China,  Hong Kong and the United  States.
 For  operation in the US, the Company has      incurred net  accumulated  operating
 losses for income tax  purposes.  The Company  believes  that it is more      likely
than not that these net  accumulated  operating  losses will not be utilized in the
future.  Therefore,      the Company has provided  full  valuation  allowance  for the
 deferred tax assets  arising from the losses at      these locations as of March 31,
2008. Accordingly, the Company has no net deferred tax assets. 15




The provision for
income taxes from  continuing  operations on income  consists of the following for the
years      ended March 31, 2008 and 2007: 3-31-2008
     3-31-2007US current income tax expense (benefit)
     --
     --Federal
     $              
              --
     $              
              --State
     --
     --HK current income tax expense
     --
     --PRC current income tax expense
     38,303
     478,088Total provision for income tax
     $       38,303
     $       
                     478,088 The following is a
reconciliation of the provision for income taxes at the U.S. federal income tax rate to
     the income taxes reflected in the Statement of Operations: 3-31-2008
     3-31-2007Tax expense (credit) at statutory rate - federal
     34%
     34%State tax expense net of federal tax
     6%
     6%Changes in valuation allowance
     (40%)
     (40%)Foreign income tax - HK
     0%
     0%Foreign income tax - PRC
     25%
     30%Tax expense at actual rate
     25%
     30% United States of
America As of March 31, 2008,
 the Company in the United States had  approximately  $25,284 in net operating loss carry
     forwards  available to offset future  taxable  income.  Federal net operating
 losses can generally be carried      forward 20 years.  The deferred tax assets for the
United States  entities at March 31, 2008  consists  mainly      of net operating  loss
carry  forwards and were fully  reserved as the  management  believes it is more likely
     than not that these assets will not be realized in the future. The  following  table
sets forth the  significant  components  of the net deferred tax assets for operation in
     the US as of March 31, 2008 and December 31, 2007. 3-31-2008
     12-31-2007Net operation loss (gain) carry forward
     $           (25,284)
     $        (278,840)Total deferred tax assets
     129,455
     121,111Less: valuation allowance
     (129,455)
     (121,111)Net deferred tax assets
     $           
      --
     $           
      --  13.
Other
comprehensive income  Balances of related
after-tax components comprising accumulated other comprehensive income (loss), included
     in stockholders equity, at March 31, 2008 and December 31, 2007 are as follows: 2007Balance as of December 31, 2006
     $              468,344Change for 2007
     1,000,202Balance as of December 31, 2007
     1,468,546Change in 2008
     668,047Balance as of March 31, 2008
     $           2,136,593  16




14.
Segment
Information  Statement  of
 Financial  Accounting  Standards  No.  131  ("SFAS  131"),  "Disclosure  About  Segments
 of an      Enterprise and Related  Information"  requires use of the "management
 approach" model for segment  reporting.      The  management  approach  model is based
on the way a  company's  management  organizes  segments  within the      company for
making operating  decisions and assessing  performance.  Reportable segments are based on
products      and services,  geography,  legal  structure,  management  structure,  or
any other manner in which  management      disaggregates a company. During the years
ended March 31, 2008 and December 31, 2007,  the Company is organized  into two main
business      segments:  (1) Property for sale, (2) Rental income and (3) Income of
management fee of commercial  buildings.      The  following  table  presents  a summary
 of  operating  information  and  certain  year-end  balance  sheet      information for
the years ended March 31, 2008 and December 31, 2007: 3-31-2008
               
     12-31-2007Revenues from unafiliated customers:Selling of properties
        
        
     $1,453,855
        
     
     $4,378,993Rental income
     1,003,502
        
     
     3,733,241Management fee
     418,792
        
     
     1,563,394Consolidated
     $2,876,149
        
     
     $9,675,627Operating income (loss):Selling of properties
     $1,118,463
        
     
     $708,291Rental income
     608,690
        
     
     518,957Management fee
     208,307
        
     
     (23,969
        )Corporation (1)
     (2,125,701
        )
     
     (7,098,244
        )Consolidated
     $(190,241
        )
     
     $(5,894,965
        )Net income (loss) before taxes:Selling of properties
     $1,118,463
        
     
     $2,637,332Rental income
     608,690
        
     
     518,957Management fee
     208,307
        
     
     (23,969
        )Corporation (1)
     (2,090,835
        )
     
     (1,177,571
        )Consolidated
     $(155,375
        )
     
     $1,954,749Identifiable assets:Selling of properties
     $7,652,134
        
     
     $5,350,282Rental & management fee
     51,631,064
        
     
     49,953,769Corporation (1)
     19,301,639
        
     
     45,167,178Consolidated
     $78,584,837
        
     
     $100,471,229Depreciation and amortization:Selling of properties
     $--
        
     
     $--Rental & management fee
     691,355
        
     
     2,325,938Corporation (1)
     27,563
        
     
     17,703Consolidated
     $718,918
        
     
     $2,343,721Capital expenditures:Selling of properties
     $--
        
     
     $79,187Rental & management fee
     --
        
     
     5,765,432Corporation (1)
     29,638
        
     
     4,878,509Consolidated
     $29,638
        
     
     $10,723,128 (1).
Unallocated loss from Operating income (loss) and Net income (loss) before taxes are
primarily related to general         corporate expenses. 17




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 the Company,  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  and Silverstrand International
Holdings Company Limited. Great China Holdings has five completed real estate
 projects  located in the city of Shenyang in which it has been selling and/or leasing
units: 
     President  Building  comprises  three blocks of commercial  buildings,  including two  commercial  towers,
         situated in Shenyang City,  Heping North Street,  which is the financial  district of Shenyang.  While the
         original  intention was to sell a majority of the office  buildings,  management  subsequently  decided to
         retain most of the  properties  for leasing  purposes.  The buildings  maintain a high occupancy rate with
         tenants that are primarily  international  companies,  25 of which are Fortune 500 companies.  Great China
         Holdings head office is situated on the 25th and 26th Floors of President Building.
     Chenglong  Garden,  situated  in  Shenyang  Huanggu  District,  comprises  12 blocks of modern  apartments
         consisting of 865  residential  apartments,  a number of retail shops and ancillary  facilities  including
         basement  car parking  facilities  and parks.  As of December 31,  2007,  853 units had been sold,  and 12
         residential units and 3197.78 square meters of commercial space remained available for sale and lease.
     Qiyun New Village is situated along the Nanyun  Riverside and consists of 347  residential  units,  326 of
         which had been sold as of December 31, 2007.
     Peacock  Garden is situated in Shenyang  City,  Heping  North  Street,  is in the  commercial  district of
         Shenyang and is  comprised of 197  low-density  residential  apartments,  194 of which had been sold as of
         December 31, 2007.
     The Maryland Building consists of 12,858 square meters of commercial space. 18




New/Proposed
Projects Xi Ta
Project. In December 2005, we, through our subsidiaries Silverstrand and Shenyang
Maryland International, acquired Shenyang Xinchao Property Company and Shenyang Yindu
Property Company, which together held 100% of the rights granted for a mixed-use
development located in the Heping District of Shenyang known as the Xita Urban
Reconstruction Project the Xita Project confirmation letter issued by the Heping District
Government in 2004. The confirmation letter, as subsequently amended, contemplated a
99,000 square meter project located in the Xi Ta area in the city of Shenyang. Under the
confirmation letter we paid a land transfer fee of RMB 33,228,480. Shenyang Heping
District Investment Promotion Bureau, which is the agency overseeing development of the
Xi Ta area decided to expand the project and, as a consequence of the expansion, 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 (approximately $4,437,397), and
reimbursing us for amounts expended on the development in the amount of RMB 12,345,180
(approximately $1,646,024). In July 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. We received the
remaining RMB 12,345,180 in August 2007. We incurred a net loss on the terminated Xi Ta
Project of $1,504,604. Chessboard
Mountain. Our subsidiary, Shenyang Jitian Property Company Limited, was established on
February 22, 2006 for a new project development known as Chessboard Mountain Residential
project located in the Chessboard Mountain International Tourism Development District in
Shenyang City. In February 2006, Shenyang Jitian Property Company was confirmed as the
highest bidder in a public auction for the Chessboard Mountain Residential project. The
total purchase price for the 420,317 square meters land use rights was approximately
$56.7 million, which was obtained through bank financing. In December 2006, we completed
the sale of Shenyang Jitian Property Company to two unrelated companies in exchange for a
total cash payment of $1,399,970 (the amount of our invested capital in Shenyang Jitian
Property Company) and assumption of all bank debt incurred in connection with the
acquisition of the Chessboard Mountain Residential project. In connection with the sale,
Great Chinas subsidiary, Shengyang Maryland International Industry Company Limited,
entered into a Land Consolidation and Development Agreement with respect to the
Chessboard Mountain Residential Project. Under the development agreement, Shenyang
Maryland was engaged to arrange for necessary permitting, site preparation and
installation of development infrastructure. As the developer/contractor, the contract
provides for Shenyang Maryland to be paid a total of approximately RMB 104 million ($13.3
million) in staged amounts upon completion of different aspects of the development work
provided for by the agreement. As of December 31, 2007, Shenyang Maryland had been paid a
total of approximately RMB53.98 million ($7.4 million) under the development agreement. Loyal Best.
On August 7, 2007, Silverstrand completed the acquisition of all of the issued share
capital of Loyal Best Property Development Limited (Loyal Best), a Hong Kong limited
company. Loyal Best was 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 LB
Project). Silverstrand paid US$4,010,000 to acquire the share capital of Loyal Best and
paid and an additional US$20,500,000 to satisfy all director loan notes issued by Loyal
Best, which funds were used to make Shenyang Loyal Bests land transfer fee payment on
the project of US$20,000,000. In September 2007, Shenyang Loyal Best closed funding under
a bridge loan agreement with Shenyang Huahai International Investment Co., Ltd. (Shenyang
Huahai) whereby Shenyang Huahai loaned RMB 450,000,000, or approximately US$60 million,
to Shenyang Loyal Best for use in connection with development of the LB Project. In
December 2007, Silverstrand completed the sale of all of the share capital of Loyal Best
to an unrelated third party in exchange for cash consideration of 360 million Chinese
yuan (approximately US$48.7 million) and the assumption by the purchaser of the loan from
Shenyang Huahai for development of the LB Project. Of the cash sales price, Silverstrand
had received $18 million by December 31, 2007. The balance of approximately $30.7 million
was reflected on our year-end financial statements as a receivable and was received by us
as of the end of March 2008. In connection with the sale of Loyal Best, we agreed to pay
a finders fee to an unrelated third party of approximately $8.9 million. Junhui
Development Agreement. In November 2007, our indirect subsidiary, Shenyang Xinchao
Property Co., Ltd. (Xinchao), entered into a joint development agreement with Beijing
Century Junhui Investment Ltd. 19




(Junhui), an unrelated third party, pursuant to which
each of Xinchao and Junhui agreed to invest RMB 40 million (approximately $US5.4 million)
as share capital in a newly-formed entity whose purpose shall be to jointly develop a
commercial and residential project in Nanjing Street, Heping District, Shenyang, China.
Subsequent to entering into the joint development agreement, Junhui and Xinchao were
unsuccessful in obtaining the property for the project and, in accordance with the terms
of the joint development agreement, the amount of Xinchaos investment was refunded. (3)
Results
of Operations Comparison of
operations for March 31, 2008 with March 31, 2007: The Company  incurred
net income of $(193,678) for the  three-month  period March 31, 2008 compared to a net
income of $849,405 for the similar period in 2007,  representing  an decrease of
$1,043,083 or 122.80% quarter on quarter. Components of sales and expenses resulting in
this decrease in net income are discussed below. Sales revenues
 increased by $1,220,840 or 523.93%  year-on-year to $1,453,855 for the quarter ended
March 31, 2008 compared to $233,015 for the same period in 2007.  Rental and management
 fee income  increased by $64,021 or 4.71% to $1,422,294  during March 31, 2008 from
 $1,358,273 for the comparable  period in 2007.  These changes are mainly attributable to
the increased sales volume of the remaining building units. Cost of  properties
 sold  increased by $497,647 or 112.58%  during the three month period ended March 31,
2008, as compared to the  corresponding  period in 2007.  This was primarily
 attributable  to the increase in the number of units sold as described above. Operating  and
 selling  expenses  increased  by $26,397 or 144.7% to $44,639 for the March 31, 2008 as
compared to $18,242 for the year ended December 31, 2007. The increase is demanded for
business development. General and
 administrative  expenses  increased by $984,350 or 259.87% to $1,363,131 during the
three month period ended March 31, 2008 compared to $378,781 for the three month period
ended March 31, 2007. Total  depreciation
 expense  increased by $138,597 or 23.88% to $718,918 for March 31, 2008,  compared to
$580,321 for the  corresponding  period  in 2007,  since  the  growth  of fixed  assets
 held by the  company  for  business expansion. Other income
 decreased  $1,120,738  or 96.98% to $34,866 in 2008 from  $1,155,604 in 2007 due
primarily to several non-routine transactions, for transferred from account payable which
neednt paid. Interest and
 financing  costs  increased  by $194,106 to $788,229 for March 31, 2008,  as compared to
$594,123 for March 31, 2007. The increase was primarily due to subsequent repayments of
outstanding loans. (4)
Cash
Flow Discussion Net  cash  flows
 provided  by  operating  activities  for  the  quarters  ended  March  31,  2008  and
 2007  were $11,213,001and  $655,890,  respectively.  The increase in funds  provided by
was  primarily  due to the disposal of Loyal Best. Net cash flows used
in  investing  activities  for the  quarter  ended  March 31,  2008,  was  $29,638
 compared to $664,304 of cash flow  provided  during the  quarter  ended  March 31,
 2007.  The  investing  activity  change was primarily due to receivable on purchases of
property and equipment of $29,638. Net cash flows used
in  financing  activities  for the  three-month  period  ended  March 31,  2008 was
 $2,926,247 compared to net cash used in financing  activities of $1,152,963  for the
quarter ended March 31, 2007,  the change could be mostly explained by repayments of
loans and borrowings to various banks totaling $2,926,247 . (5)
Liquidity
and Capital Resources Current  liabilities
 exceeded  current assets by $20,380,202 as of March 31, 2008. The working capital
deficit was incurred  primarily  due to Short Term  Loans of $  23,276,400.  It is has
become  common  practice  in China,  for banks 20




and  companies  to
 renegotiate  loan  extensions  on an annual  basis.  This is driven by the ever
 changing banking regulatory environment and a situation where banks are becoming more
conservative. 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 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. Overdue Loans As  of  March  31,
 2008,  the  Companys  subsidiary,   Shenyang  Maryland   International  Industry  Co.
 Limited (Maryland),  had one  overdue  bank  loan in  Bank of  China  Zhongshan
 Branch,  totaling  $7,854,000  , loan in Agricultural Bank of China have been fully
repaid as of February  2008. Contractual Obligations The following table
is a summary of the Companys contractual obligations as of March 31, 2008: Total

     Less thanone year

     1-3 Years

     ThereafterShort-Term Debt
     
     
     $
        23,276,400
        

     $
        23,276,400
        

     $
        --
        

     $
        --Long-Term Debt
     5,712,000
        

     --
        

     5,712,000
        

     --Amounts due to related parties
     --
        
     --
        
     --
        
     --Construction commitments
        
        
     
        --
        
     --
        
     --
        
     --Total Contractual Cash Obligations
     $28,988,400
        
     $23,276,400
        
     $5,712,000
        
     $-- 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 21




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. Item 4T.  Controls and Procedures As of March 31,  2008
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 1.  Legal Proceedings In January 2008, the
Company received the final judgment from Liaoning Province Peoples Superior Court
2007 (No. 97) dated on December 21, 2007 regarding a law suit between Shenyang Normal
College, Shenyang Maryland (a wholly owned subsidiary of the Company) and Jiansu Province
Suzhong Construction Group, Ltd. The final judgment stated that Shenyang Maryland should
pay Shenyang Normal College RMB 5,210,454 along with the interest calculated from June 2,
2000 to the payment date using the interest rate of six-month loan per Peoples Bank
of China. The interest payable calculated was RMB 2,152,262 as of March 31, 2008.  As of
December 31, 2007, the payable to Shenyang Normal College was RMB 14,561,185
(approximately $1,997,510). Item 1A.  Risk Factors Item 6.  Exhibits Copies of the
following documents are included or furnished as exhibits to this report pursuant to Item
601 of Regulation S-K. Exhibit No.
     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 22




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: May 15, 2008
        
     By:
     
     /s/ Frank JiangFrank Jiang, Chief Executive Officer(Principal Executive Officer)   Date: May 15, 2008
     
     By:
     
     /s/ Wang Li RongWang Li Rong, Chief Financial Officer(Principal Financial and Accounting Officer) 23