<SEC-DOCUMENT>0001144204-14-053138.txt : 20141023
<SEC-HEADER>0001144204-14-053138.hdr.sgml : 20141023
<ACCEPTANCE-DATETIME>20140828210654
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001144204-14-053138
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20140828

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DAQO NEW ENERGY CORP.
		CENTRAL INDEX KEY:			0001477641
		STANDARD INDUSTRIAL CLASSIFICATION:	SEMICONDUCTORS & RELATED DEVICES [3674]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			E9
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		666 LONGDU AVENUE
		CITY:			WANZHOU, CHONGQING
		STATE:			F4
		ZIP:			404000
		BUSINESS PHONE:		(86-23) 6486-6666

	MAIL ADDRESS:	
		STREET 1:		666 LONGDU AVENUE
		CITY:			WANZHOU, CHONGQING
		STATE:			F4
		ZIP:			404000
</SEC-HEADER>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[Letterhead of Daqo New Energy Corp.]</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.35pt 0pt 0.75in; text-align: right; text-indent: 0.5in">666 Longdu
Avenue</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.35pt 0pt 0.75in; text-align: right; text-indent: 0.5in">Wanzhou,
Chongqing F4 404000</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.35pt 0pt 0.75in; text-align: right">The People&rsquo;s Republic
of China</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">August 28, 2014</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>VIA EDGAR</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Martin James, Senior Assistant Chief Accountant</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Brian Soares</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Kate Tillan, Assistant Chief Accountant</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Li Xiao, Staff Accountant</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Division of Corporation Finance</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Securities and Exchange Commission</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">100 F Street, N.E.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Washington, D.C. 20549</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><B>Re:</B></TD><TD STYLE="border-bottom: Black 1pt solid"><B>Daqo New Energy Corp. (the &ldquo;Company&rdquo;)</B><BR>
                                         <B>Form 20-F for the fiscal year ended December 31, 2013 (the &ldquo;2013 20-F&rdquo;)</B><BR>
                                         <B>Filed April 14, 2014</B><BR>
                                         <B>Form 6-K dated May 12, 2014 (the &ldquo;May 12 6-K&rdquo;)</B><BR>
                                         <B>Filed May 12, 2014</B><BR>
                                         <B>File No. 001-34602</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dear Mr. James, Mr. Soares, Ms. Tillan and Ms. Xiao:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">This letter sets forth the Company&rsquo;s
response to the comments contained in the letter dated August 1, 2014 from the staff (the &ldquo;<B>Staff</B>&rdquo;) of the Securities
and Exchange Commission (the &ldquo;<B>Commission</B>&rdquo;) regarding the 2013 20-F and the May 12 6-K. The Staff&rsquo;s comments
are repeated below in bold and followed by the response thereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Form 20-F for the Fiscal Year Ended December 31, 2013
</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Item 5. Operating and Financial Review and Prospects </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Critical Accounting Policies, page 51</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>1.</B></TD><TD><B>We note the impairment of your wafer assets in 2012 and the continued losses of your wafer segment in 2013 as shown on page
F-37. Please tell us whether you performed an impairment test for the long-lived assets of the wafer business in 2013. Tell us
how you considered FASB ASC 360-10-35-21.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

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<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">The Company respectfully advises
the Staff that during each reporting period, the Company evaluated under ASC 360-10-35-21 whether there were events or changes
in circumstances which indicated that the carrying amount of the Company&rsquo;s wafer asset group may not be recoverable (&ldquo;Triggering
Events&rdquo;). Such Triggering Events may include, but are not limited to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>A significant decrease in the market price of a long-lived asset (asset group);</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>A significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical
condition;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset
(asset group), including an adverse action or assessment by a regulator;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a
long-lived asset (asset group);</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast
that demonstrates continuing losses associated with the use of a long-lived asset (asset group); and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>A current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly
before the end of its previously estimated useful life.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">As of June 30, 2013, the Company
determined that the relocation plan for the polysilicon operations located in Chongqing represented a Triggering Event, as the
plan constituted a change in the extent and manner in which the related long-lived assets were being used, such that the carrying
amount of the long lived assets may not be recoverable. As such, the Company performed an impairment test for the long-lived asset
groups for both the polysilicon and wafer segments as of June 30, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">Furthermore, as of December 31,
2013, the Company had incurred an operating loss of $17.3 million for the year then ended, combined with a recent history of operating
losses. Additionally, the Company forecasted that financial results of the wafer segment in 2014 indicated a likely small continuation
of losses associated with the related long-lived asset group. As such, the Company performed an impairment test of the wafer segment's
long-lived asset group as of December 31, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">At each point in time noted above,
the Company concluded, in accordance with the guidance in ASC 360-10-35-17 that the estimated sum of the undiscounted cash flows
expected to result from the use and eventual disposition of the wafer asset group exceeded the carrying amount, and was therefore
recoverable. As such, no impairment loss was recognized in the wafer asset group during the year ended December 31, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>F. Tabular Disclosure of Contractual Obligations, page
62</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>2.</B></TD><TD><B>We note that you exclude the interest payments on your debt from the table. Please explain how you considered Item 5.F.1
of Form 20-F.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">The Company acknowledges the Staff&rsquo;s
comments, and proposes to include in the Company&rsquo;s Form 20-F for the year ending December&nbsp;31, 2014 an expanded tabular
disclosure of contractual obligations showing estimated future contractual interest payments related to long-term debt and the
Company&rsquo;s assumptions regarding how variable interest payments are determined.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Related Party Transactions, page 73 </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>3.</B></TD><TD><B>We note your disclosure on page 59 that Daqo Group and its subsidiaries provided you with &quot;$85 million&quot;; however,
the related party transactions you disclose beginning on page 73 do not appear to correspond to that amount. Please advise. Also,
in future filings, please clearly identify the nature of the related party relationship between the parties named in this section.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">The Company respectfully advises
the Staff that the $85 million referred to on page 59 of the 2013 20-F is the aggregate balance, which includes advance payments
and financial support from Daqo Solar and Xinjinag Daqo Investment both in 2012 and 2013. Related party transactions summarized
on page 73 of the 2013 20-F represent the total related party transactions incurred in 2013 only. Therefore, the numbers on page
59 of the 2013 20-F are not directly comparable to numbers on page 73 of the 2013 20-F.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">The Company proposes to identify
in its future Form 20-Fs the nature of the related party relationship between the parties named in this section more clearly in
accordance with the Staff&rsquo;s comment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Item 15. Controls and Procedures</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Management's Report on Internal Control Over Financial
Reporting, page 88</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>4.</B></TD><TD><B>We note that management's report does not identify the version of the COSO Integrated Framework used to perform its assessment.
Please identify for us the version of the COSO Integrated Framework you used in your assessment - i.e., did management use COSO's
1992 Framework or its updated Internal Control Integrated Framework issued in 2013. Explain to us how your report complies with
Item 15(b)(2) of Form 20-F.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">The Company respectfully advises
the Staff that the Company used Committee of Sponsoring Organizations of the Treadway Commission (&ldquo;<B>COSO&quot;)</B>&rsquo;s
1992 framework in making the assessment of the effectiveness of the Company&rsquo;s internal control over financial reporting as
of December 31, 2013. The Company will adopt COSO&rsquo;s 2013 Framework in making the assessment of the effectiveness of the Company's
internal control over financial reporting from December 15, 2014. In the Company&rsquo;s Form 20-F for the year ending December
31, 2014, the Company will clearly disclose the version of the COSO Integrated Framework the Company uses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Item 18. Financial Statements</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Consolidated Statements of Cash Flows, page F-8</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>5.</B></TD><TD><B>We note from page F-3 that your interest expense was $19 3 million in 2013 while your interest paid was only $3.2 million
in 2013 as shown on page F-9. Please explain why your interest payable is only $305,087 as of December 31, 2013 as shown on page
F-24. Provide us with a rollforward of your interest payable account for 2013.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">The Company respectfully advises
the Staff that the interest paid as disclosed on page F-9 of the 2013 20-F was incorrect. The Company has concluded that this does
not represent a material disclosure error, and will correct the disclosure in the Company&rsquo;s Form 20-F for the year ending
December&nbsp;31, 2014 to reflect the $19.7 million actually paid during 2013. The rollforward of the interest payable account
is set out as below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 90%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 19%; border: Black 1pt solid; padding: 12pt 5.4pt; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 19%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: center">December 31, 2012 <BR>
(US$)</td>
    <TD STYLE="width: 24%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: center">Interest accrued <BR>
(US$)</td>
    <TD STYLE="width: 20%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: center">Interest paid <BR>
(US$)</td>
    <TD STYLE="width: 18%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: center">December 31, 2013 <BR>
(US$)</td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding: 12pt 5.4pt; text-indent: 0in">Interest payable</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: right">612,968</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: right">19,349,190</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: right">(19,657,071)</td>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: right">305,087</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Note 13. Income Taxes, page F-27</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>6.</B></TD><TD><B>Please tell us how you considered the disclosures required by FASB ASC 740-10-50-2 regarding your valuation allowance for
all periods presented.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">The Company respectfully advises
the Staff that the Company disclosed the total of all deferred tax assets and the total valuation allowance recognized for deferred
tax assets in accordance with the disclosures requirement in ASC 740-10-50-2. The Company did not have any deferred tax liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">The Company acknowledges the Staff&rsquo;s
comment and will include the below table in the Company&rsquo;s Form 20-F for the year ending December&nbsp;31, 2014 to disclose
the changes in the total valuation allowance during the years presented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Years Ended December 31,</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">US$</font></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">US$</font></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">US$</font></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 61%; font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Beginning balance</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font: 10pt Times New Roman, Times, Serif; text-align: right">37,682,733</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Additions</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">37,238,701</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">56,697,096</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Deconsolidation</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(39,357,744</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Foreign exchange effect</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">444,032</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,611,782</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Ending balance</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">37,682,733</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">56,633,867</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><B><U>Note 7. Property, Plant and Equipment,
Net, page F-22</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>7.</B></TD><TD><B>We note that you recognized an impairment of $158.4 million in 2013. Please respond to the following:</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><B>For each category of fixed asset impaired, tell us the carrying amount prior to recognition of the impairment loss and the
impairment amount.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><B>Tell us how you applied FASB ASC 360-10-35 in determining the amount of the impairment loss.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><B>If the assets were fully impaired, please tell us why.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">The Company respectfully advises
the Staff that the carrying amount prior to recognition of the impairment loss and the impairment amount for each category of the
fixed asset impaired is set out as below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 90%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 32%; border: Black 1pt solid; padding: 12pt 5.4pt; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 24%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: center"><font style="font-size: 10pt">Carrying amount prior to impairment</font></td>
    <TD STYLE="width: 22%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: center"><font style="font-size: 10pt">Less: impairment</font></td>
    <TD STYLE="width: 22%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: center"><font style="font-size: 10pt">Carrying amount after impairment </font></td></tr>
<tr>
    <td style="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding: 12pt 5.4pt; text-indent: 0in"><font style="font-size: 10pt">Buildings and plant</font></td>
    <td style="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: right; text-indent: 0in"><font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$448,201,002 </font></td>
    <td style="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: right; text-indent: 0in"><font style="font-size: 10pt">$(154,937,347)</font></td>
    <td style="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: right; text-indent: 0in"><font style="font-size: 10pt">$293,263,655</font></td></tr>
<tr>
    <td style="vertical-align: top; border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding: 12pt 5.4pt; text-indent: 0in"><font style="font-size: 10pt">Machinery and equipment</font></td>
    <td style="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: right; text-indent: 0in"><font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$363,598,281</font></td>
    <td style="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: right; text-indent: 0in"><font style="font-size: 10pt">$(3,487,480)</font></td>
    <td style="vertical-align: bottom; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: right; text-indent: 0in"><font style="font-size: 10pt">$360,110,801</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">The Company determined that the
relocation plan of the polysilicon operations in Chongqing and related changes in the Company&rsquo;s polysilicon segment were
triggering events contemplated under ASC 360-10-35-21 that potentially indicate that the carrying amount of the long lived assets
may not be recoverable. As such, the Company performed an impairment test for the long-lived assets of the polysilicon segment
in the second quarter of 2013. Please see the Company&rsquo;s response to the Staff&rsquo;s comment 1 above for discussion of wafer
asset group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">The Company had considered FASB
ASC 360-10-35 and performed the following steps to determine whether the asset groups carrying amount was recoverable:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Grouped long-lived assets at the lowest level for which there were identifiable and independent cash flows.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Estimated the future undiscounted cash flows expected to be generated from the use and eventual disposition of the asset group;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Compared the estimated undiscounted cash flows to the carrying value of the asset group;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Determined the fair market value of the land, building and idle machinery and equipment of Chongqing Daqo for polysilicon business;
and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Compared the fair market value of the land, building and idle machinery and equipment to the carrying value of the land, building,
machinery and equipment of Chongqing Daqo for polysilicon business.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

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<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-indent: 0in"><U>Assets group:</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-indent: 0in">The Company identified the following
three &ldquo;asset groups,&rdquo; as defined by ASC 360-10-20:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Polysilicon asset group, including all the assets in the Company&rsquo;s Xinjiang facility, and machinery and equipment utilized
for the polysilicon business located at Chongqing facility, which is being transferred to the Company&rsquo;s Xinjiang facility
(discussed herein);</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Wafer asset group, including all the assets for wafer business located at Chongqing (which was discussed above in the Company&rsquo;s
response to the Staff&rsquo;s comment 1 above); and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Land, building and idle machinery and equipment in the polysilicon business located at Chongqing (discussed herein).</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-indent: 0in">The reasons are set out as below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>The Company managed its business at segment level (wafer and polysilicon), which is the lowest level for which identifiable
cash flows are largely independent of the cash flows of other groups of assets and liabilities.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>The Company, as disclosed in Note 3(b) on page F-21 of the 2013 20-F, decided to relocate its machinery and equipment associated
with the polysilicon business located at Chongqing to Xinjiang as part of its polysilicon business expansion plan.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>The land, building and certain machinery and equipment for polysilicon business located in Chongqing cannot be relocated to
Xinjiang. As a result of the relocation plan, the Company has no current plans to utilize these assets in either the polysilicon
or wafer segment.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in"><U>Polysilicon assets group and
wafer asset group -- net undiscounted cash flows</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">The Company estimated future cash
flows to test the recoverability of the polysilicon and wafer asset groups by forecasting the future cash flows using certain significant
assumptions such as future selling price, production cost, and projected sales volume. The Company estimated such significant assumptions
with reference to the historical records, industry analysis reports, current indications of customer demand and management&rsquo;s
experience. Based on this analysis, the Company concluded that for the polysilicon asset group (and the wafer asset group as discussed
in response to the Staff&rsquo;s comment 1 above), the estimated sum of the undiscounted cash flows expected to result from the
use and eventual disposition of the asset group exceeded the carrying amount, and was therefore recoverable. As such, no impairment
loss was recognized during the year ended December 31, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in"><U>Fair market value </U>&ndash;
land, building and idle machinery and equipment<U> </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">For the land and building for
polysilicon business and idle machinery and equipment located at Chongqing, the Company estimated the fair value using direct comparison
method under the market approach and the cash flows expected to result from eventual disposition of assets, with the assistance
of a third party independent appraiser. The direct comparison method is a set of procedures in which a value indication is derived
by comparing the real estate being appraised to similar real estate that have been sold recently. Then applying appropriate units
of comparison and making adjustments to the sale prices of the comparable based on the elements of comparison such as differences
in location, size, decoration and year of completion, etc. to derive at the fair value. As a result of this analysis, an impairment
loss of $158 million, associated with land, building and idle machinery and equipment, was recognized during the year ended December
31, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">Among the impairment loss of $158
million, $155 million was allocated to the buildings and plant with the remaining $3 million allocated to the idle machinery and
equipment on a pro rata basis using the relative carrying amounts of those assets, except that the loss allocated to an individual
long-lived asset of the group would not reduce the carrying amount of that asset below its fair value whenever that fair value
was determinable without undue cost and effort.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">No assets were fully impaired as of December
31, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Note 19. Segment Information, page F-37</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>8.</B></TD><TD><B>We note that you only present revenues, costs and gross profit for each segment. Please tell us how you considered the other
items for disclosure in FASB ASC 280-10-50-22, including total assets.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company notes that ASC 280-10-50-22
states:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0in">A public entity shall report a measure
of profit or loss and total assets for each reportable segment. A public entity also shall disclose all of the following about
each reportable <B>segment if the specified amounts are included in the measure of segment profit or loss reviewed by the chief
operating decision maker or are otherwise regularly provided to the chief operating decision maker</B>, even if not included in
that measure of segment profit or loss [Emphasis added]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">The Company respectfully advises
the Staff that the Company only has financial information of revenues, costs and gross profits by segment, which are provided to
the chief executive officer of the Company, who is the chief operating decision maker, as defined in ASC 280, for his review. Other
items on the statement of operations and the balance sheet information by segment are not available.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Form 6-K dated May 12, 2014</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>9.</B></TD><TD><B>We note that in Q1 2014, you revised your estimates of the expected useful lives of machinery and equipment from 10 years
to 15 years and buildings and structures from 20 years to 30 years. Please respond to the following:</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><B>Please tell us your accounting policy for evaluating the estimated useful lives of long-lived assets. Include a discussion
of how you consider FASB ASC 360-10-35-3 and 360-10-35-22.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

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<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><B>Please tell us the trigging events, if any, for the evaluation performed in Q1 2014.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><B>With respect to the assets for which you revised the expected useful life, please tell us the nature of the significant
assets and their total carrying value as of December 31, 2013.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><B>Please explain to us why the benefit period of the assets increased.</B></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">The Company respectfully advises
the Staff that the Company reassesses the reasonableness of the estimates of useful lives and residual values of long-lived assets
when events or changes in circumstances indicate that the useful lives and residual values of a major asset or a major category
of assets may not be reasonable. Factors that the Company considers in deciding when to perform an analysis of useful lives and
residual values of long-lived assets include, but are not limited to, significant variance of a business or product line in relation
to expectations, significant deviation from industry or economic trends, and significant changes or planned changes in the use
of the assets. The analysis will be performed at the asset or asset category with the reference to the assets&rsquo; conditions,
current technologies, market, and future plan of usage and the useful lives of major competitors. The Company would determine the
revised useful lives with the assistance of the technical staff, industry expert or appraisal, if significant change, such as the
one recorded in the first quarter of 2014, were contemplated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">When applying FASB ASC 360-10-35-3
and 360-10-35-22, the Company considered the reasonableness of the useful lives of long-lived assets during the Company&rsquo;s
assessment of its fixed assets for purposes of the impairment analysis as well as its determination to relocate the assets of the
polysilicon plant to Xinjiang. The Company reviewed the remaining useful lives of the primary assets (machineries) by evaluating
the actual conditions of the assets, technology upgrades, market and other relevant information. However, when the Company performed
the impairment analysis in 2013, as disclosed in the above response, the Company utilized the useful lives of long-lived assets
before the revision, which is shorter than the revised useful lives in the first quarter of 2014. Consequently, the change of useful
lives in the first quarter of 2014 did not impact the conclusion of the impairment analysis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">The Company started its polysilicon
manufacturing in Chongqing in July 2008, and later began to operate the Xinjiang polysilicon plant in September 2012. The Company
entered into wafer manufacturing in 2011. Due to the Company&rsquo;s limited experience and short history in the polysilicon and
wafer manufacturing business, after evaluating several depreciation policies of peer companies, the Company decided to adopt a
relatively conservative depreciation policy and of 10 years for the useful lives for its machinery and equipment, and 20 years
as the useful lives of its buildings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">As discussed in Note 3(b) on page
F-21 of the 2013 20-F, the Company made the decision to relocate a majority of Chongqing&rsquo;s polysilicon assets to Xinjiang.
At the time, Chongqing polysilicon assets had been depreciated for four years on average. The relocation plan will take approximately
one to one and a half years to complete, including, relocation, preparation of the site, and installation. As part of the decision
to make significant investment to relocate the assets, the Company revisited the expectation as to the useful lives of these assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">Based on this review, the Company
determined that the condition of its major machineries, having now been in operations for a meaningful percentage of the original
estimated lives, were in better condition, than the original useful life expectation had predicted, accordingly, the Company engaged
an independent valuation firm to assist in reassessing the remaining economic useful life of the polysilicon assets in both Chongqing
and Xinjiang. The analysis was completed in the first quarter of 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">In the first quarter of 2014,
the Company substantially completed the re-evaluation process. In accordance with ASC 270-10-45-15, which states:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0in">Whenever possible, entities should
adopt any accounting changes during the first interim period of a fiscal year. Changes in accounting principles and practices adopted
after the first interim period in a fiscal year tend to obscure operating results and complicate disclosure of interim financial
information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">The Company revised the estimates
of expected useful lives of long-lived assets. The useful lives of machinery and equipment were expended from 10 years to 15 years,
while buildings and structures were expended from 20 years to 30 years. No changes were made to furniture, fixtures and equipment,
or motor vehicles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">Further, the Company notes that
ASC 270-10-45-14 and ASC 250-10-50-4 state:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0in">The effect of a change in an accounting
estimate, including a change in the estimated effective annual tax rate, shall be accounted for in the period in which the change
in estimate is made. No restatement of previously reported interim information shall be made for changes in estimates, but the
effect on earnings of a change in estimate made in a current interim period shall be reported in the current and subsequent interim
periods, if material in relation to any period presented and shall continue to be reported in the interim financial information
of the subsequent year for as many periods as necessary to avoid misleading comparisons. Such disclosure shall conform with paragraph
250-10-50-4.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0in">The effect on income from continuing
operations, net income (or other appropriate captions of changes in the applicable net assets or performance indicator), and any
related per-share amounts of the current period shall be disclosed for a change in estimate that affects several future periods,
such as a change in service lives of depreciable assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">The Company respectfully advises
the Staff although such disclosure requirements are not required for a Form 6-K, the Company followed ASC 250-10-50-4 in its May
12 6-K in order to provide transparent disclosure to the readers about the effects of such change.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">The nature and carrying value
of the assets for which the Company revised the expected useful life as of December 31, 2013 is set out as below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 46%; border: Black 1pt solid; padding: 12pt 5.4pt; text-align: center; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 54%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">Carrying value related
        to <BR>
changes of useful</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">(in $)</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P></td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding: 12pt 5.4pt; text-indent: 0in"><font style="font-size: 10pt">Buildings and plant</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: right; text-indent: 0in"><font style="font-size: 10pt">220,329,062</font></td></tr>
<tr style="vertical-align: top">
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding: 12pt 5.4pt; text-indent: 0in"><font style="font-size: 10pt">Machinery and equipment</font></td>
    <td style="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding: 12pt 5.4pt; text-align: right; text-indent: 0in"><font style="font-size: 10pt">231,084,578*</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 1in; text-indent: 0in; text-align: justify">*
The expected useful life of certain equipment of $2,598,963 included in the carrying value presented here was temporarily used
during the relocation and was disposed in 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company hereby acknowledges that</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the Company is responsible for the adequacy and accuracy of the disclosure in the filing;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action
with respect to the filing; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 63.35pt">If you have any additional questions or
comments regarding the 2013 20-F or the May 12 6-K, please contact the undersigned at (86 23) 6486-6666 or cfosunbing@daqo.com.
Thank you.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 63.35pt">&nbsp;</P>

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    <TD STYLE="vertical-align: top; width: 50%">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; width: 50%">Very truly yours,</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; border-bottom: Black 1pt solid">/s/ Bing Sun</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">Bing Sun</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">Chief Financial Officer</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 63.35pt">&nbsp;</P>

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<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left">cc:</TD><TD STYLE="text-align: justify">Gongda Yao, Director and Chief Executive Officer, Daqo
New Energy Corp.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Z. Julie Gao, Esq., Partner, Skadden, Arps,
Slate, Meagher &amp; Flom LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Will H. Cai, Esq., Partner, Skadden, Arps, Slate,
Meagher &amp; Flom LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Christy Liu, Partner, Deloitte Touche Tohmatsu Certified
Public Accountants LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



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