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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0001026700-02-000174.txt : 20020712
<SEC-HEADER>0001026700-02-000174.hdr.sgml : 20020712
<ACCEPTANCE-DATETIME>20020712171632
ACCESSION NUMBER:		0001026700-02-000174
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20020207
ITEM INFORMATION:		Other events
ITEM INFORMATION:		Financial statements and exhibits
ITEM INFORMATION:		Change in fiscal year
FILED AS OF DATE:		20020712

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHINA GLOBAL DEVELOPMENT INC
		CENTRAL INDEX KEY:			0000846475
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
		IRS NUMBER:				870403828
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	033-26787-D
		FILM NUMBER:		02702252

	BUSINESS ADDRESS:	
		STREET 1:		440 LOUISIANA 475
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77002
		BUSINESS PHONE:		7135478900

	MAIL ADDRESS:	
		STREET 1:		SEVENTH DISTRIC NORTH
		STREET 2:		CHUNG PING REGION
		CITY:			BEIJING CHINA
		STATE:			F5
		ZIP:			00000

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MEDIA USA INC
		DATE OF NAME CHANGE:	19940209

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	VALIANT CORPORATION
		DATE OF NAME CHANGE:	19940209

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	LIFE MEDICAL TECHNOLOGIES INC /UT/
		DATE OF NAME CHANGE:	19960330

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	IBONZAI COM INC
		DATE OF NAME CHANGE:	20000814
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>subfm8k_2702.txt
<TEXT>
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 Current Report
                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

      Date of Report: (Date of earliest event reported) : February 7, 2002

                           Commission File No. 0-27323


                         CHINA GLOBAL DEVELOPMENT, INC.
   ---------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)



           Nevada                                         87-0403828
- -------------------------------                 --------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)



            Seventh District North, Chung-Ping Region, Beijing, China
           -----------------------------------------------------------
                    (Address of principal executive offices)

                                 86-10-697-56542
                     --------------------------------------
                            (Issuer telephone number)

                                Ibonzai.com, Inc.
                       6975 South Union Park Center, #600
                                Midvale, UT 84047
                   -------------------------------------------
                             Former Name and Address

<PAGE>

Item 5.   Other Events.


         On Februry  7,  2002,  the  registrant  acquired  all of the issued and
outstanding shares of Rainbow Light Global Corporation,  a company  incorporated
under the laws of the British Virgin  Islands in exchange for 15,000,000  shares
of its common stock. Rainbow Light Global Corporation owns 95% of Beijing Baxian
Real Estate Development Company Limited, (Beijing), a People's Republic of China
company  engaged  in  real  estate  development  and  marketing.  The  operating
company's  (Beijing)  functional  currency is the Renminbi  (RMB) which has been
converted  into U.S.  dollars at the rate of 8.2768 RMB to $1US.  In addition to
developing  properties for sale,  Beijing also has a limited portfolio of rental
properties.  The current  inventory of properties for sale consists of homes and
villas constructed by Beijing.

Item 7.  Financial Statements and Exhibits

         a)       Financial Statements of Business Acquired
                  The  financial   statements  of  Beijing  Baxian  Real  Estate
                  Development  Company Limited  (Beijing) are attached hereto on
                  pages F-1 - F-___.  The financial  statements of Rainbow Light
                  Global Corporation are omitted as its sole asset is 95% of the
                  issued and outstanding shares of Beijing.

         b)       No proforma  financial  information is being  furnished as the
                  sole asset of Rainbow  Light Global  Corporation  (Rainbow) is
                  its  holding  of shares of  Beijing  and the sole asset of the
                  Registrant is its holding of shares of Rainbow.

         c)       Exhibits
                  2.1  Exchange Agreement between China Global Development, Inc.
                  and Rainbow Light Global Corporation.

Item 8.  Change in Fiscal Year

         Because the  acquisition of Rainbow Light Global  Corporation  has been
accounted for as a reverse acquisition,  the fiscal year of Rainbow Light Global
Corporation  will be utilized.  Accordingly,  the fiscal year of the  registrant
will change from December 31 to September 30.

                                   Signatures

       Pursuant to the  requirement of the Securities  Exchange Act of 1934, the
  registrant  has duly  caused  this  report to be  signed on its  behalf by the
  undersigned thereunto duly authorized.


                                               CHINA GLOBAL DEVELOPMENT, INC.

 June 27, 2002
                                               /s/ Michael Zheng
                                               ---------------------------------
                                               Michael Zheng
                                               Chief Executive Officer
<PAGE>

                          Index to Financial Statements


                                                                       Pages

BEIJING BAXIAN REAL ESTATE DEVELOPMENT COMPANY LIMITED

    Report of Independent Auditors                                         F-1

    Balance Sheets as of September 30, 2001 and September 30, 2000         F-2

    Statements of Income
       for the years ended September 30, 2001 and September 30, 2000       F-3

    Statements of Changes in Owners' Equity
       for the years ended September 30, 2001 and September 30, 2000       F-4

    Statements of Cash Flows
       for the years ended September 30, 2001 and September 30, 2000       F-5

    Notes to Financial Statements                                     F-6 - 18



<PAGE>

Report of Independent Auditors
To the directors and shareholders of
BEIJING BAXIAN REAL ESTATE DEVELOPMENT COMPANY LIMITED
(Registered in the People's Republic of China with limited liability)


We have audited the  accompanying  balance  sheets of Beijing Baxian Real Estate
Development Company Limited (the "Company"),  as of September 30, 2001 and 2000,
and the  related  statements  of income,  Owners'  equity and cash flows for the
years then ended.  These  financial  statements  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Beijing  Baxian Real Estate
Development  Company  Limited at September 30, 2001 and 2000, and the results of
its operations and its cash flows for the years then ended,  in conformity  with
accounting principles generally accepted in the United States of America.





Hong Kong
January 31, 2002


<PAGE>



BEIJING BAXIAN REAL ESTATE DEVELOPMENT COMPANY LIMITED

BALANCE SHEETS

AS OF SEPTEMBER 30, 2001 AND 2000

<TABLE>

                                                                                2001         2001        2000
                                                                             ---------    ----------   ---------
                                                              Notes              US$          RMB         RMB
                                                                                 ---          ---         ---
ASSETS                                                                                   (In thousands)
<S>                                                            <C>         <C>             <C>          <C>


Properties                                                      4             18,286       151,356      120,287
Accounts receivable, net                                        5              3,924        32,479       31,635
Prepayments and other receivables, net                                         1,896        15,700       12,423
Deferred tax                                                   11                 22           179            -
Due from owners                                                 7                129         1,068        2,814
Due from a related company                                      8                620         5,131        7,379
Cash and cash equivalents                                                        314         2,602        8,462
                                                                          ----------    ----------    ---------

TOTAL ASSETS                                                                  25,191       208,515      183,000
                                                                          ==========    ==========    =========

LIABILITIES AND OWNERS' EQUITY

Liabilities:
Short term bank loan                                            9              2,416        20,000       10,000
Deposits received on sale of properties                                          366         3,030       16,228
Accounts payable                                                6              3,991        33,021       28,488
Income taxes payable                                                             505         4,180        1,969
Other payables and accrued expenses                                            3,329        27,564       23,141
Advance from a customer in relation to construction
   contracts                                                                       -             -        9,493
Due to a director                                              10                 72           595
                                                                                                          -
Due to owners                                                   7              2,694        22,304        7,966
Due to an owner for project interest                            7              1,460        12,084            -
Due to related companies                                        8              1,197         9,909       20,969
Deferred tax                                                   11                  -             -          490
                                                                          ----------    ----------    ---------

TOTAL LIABILITIES                                                             16,030       132,687      118,744
                                                                          ----------    ----------    ---------

Commitments and Contingencies                                  16

Owners' equity:
Paid-in capital                                                12              6,041        50,000       50,000
Capitalization in excess of contributed capital                               (4,229)     (35,000)      (35,000)
Statutory reserves                                             13                359         2,974          699
Retained profits                                                               6,990        57,854       48,557
                                                                          ----------    ----------    ---------
Total owners' equity                                                           9,161        75,828       64,256
                                                                          ----------    ----------    ---------

TOTAL LIABILITIES AND OWNERS' EQUITY                                          25,191       208,515      183,000
                                                                          ==========    ==========    =========

</TABLE>


The accompanying notes form an integral part of the financial statements.

                                      F-2
<PAGE>


BEIJING BAXIAN REAL ESTATE DEVELOPMENT COMPANY LIMITED

INCOME STATEMENTS

YEARS ENDED SEPTEMBER 30, 2001 AND 2000

<TABLE>

                                                                   2001         2001            2000
                                                                ---------    ----------     ----------
                                                 Notes              US$          RMB            RMB
                                                                    ---          ---            ---
                                                                                (In thousands)
<S>                                               <C>            <C>          <C>              <C>
Revenue and other income
    Home sales, net                                14
       -to third parties                                             6,350        52,561          62,602
       -to related parties                                             172         1,425           3,052
                                                               -----------    ----------    ------------
                                                                     6,522        53,986          65,654

    Construction contract revenue                                    6,238        51,631          25,415
    Rental income from a related party                                  37           307               -
     Other income                                                       52           428              44
                                                               -----------    ----------    ------------
                                                                    12,849       106,352          91,113
                                                               -----------    ----------    ------------

Cost and expenses
    Cost of home sales                                              (4,524)      (37,448)        (34,982)
    Cost of construction contract revenue                           (5,609)      (46,423)        (22,886)
    Selling, general and administrative                             (1,129)       (9,348)         (8,112)
    Provision for doubtful debts                   15                    -             -          (2,600)
                                                               -----------    ----------    ------------
                                                                   (11,262)      (93,219)        (68,580)
                                                               -----------    ----------    ------------

Income before income taxes                                           1,587        13,133          22,533

Income taxes                                       11                 (188)       (1,561)         (2,459)
                                                               -----------    ----------    ------------
Net income                                                           1,399        11,572          20,074
                                                               ===========    ==========    ============

</TABLE>


The accompanying notes form an integral part of the financial statements.

                                      F-3
<PAGE>


BEIJING BAXIAN REAL ESTATE DEVELOPMENT COMPANY LIMITED

STATEMENTS OF OWNERS' EQUITY

Changes in Owners'  equity for the two years ended  September  30, 2001 and 2000
were as follows:
<TABLE>


                                                                Capitalisation       Statutory        Retained             Total
                                                                  in excess of
                                                   Paid-in         contributed
                                                   Capital             capital        reserves         Profits
                                                       RMB                 RMB             RMB             RMB               RMB
                                           ----------------  ------------------   -------------    ------------     -------------
                                                                                  (In thousands)
<S>                                          <C>               <C>                <C>               <C>               <C>


Balance at September 30, 1999                       10,000                   -               -         29,182             39,182

Capitalisation                                      35,000            (35,000)               -               -                 -

Additional paid-in capital                           5,000                   -               -               -             5,000

Net income                                               -                   -               -          20,074            20,074

Profit appropriation                                     -                   -             699           (699)                 -
                                           ----------------  ------------------   -------------    ------------     -------------

Balance at September 30, 2000                       50,000            (35,000)             699          48,557            64,256

Net income                                               -                   -               -          11,572            11,572


Profit appropriation                                     -                   -           2,275       (2,275)                   -
                                           ----------------  ------------------   -------------    ------------     -------------

Balance at September 30, 2001                       50,000            (35,000)           2,974          57,854            75,828
                                           ================  =================    =============    ============     =============


</TABLE>


The accompanying notes form an integral part of the financial statements.

                                      F-4
<PAGE>



BEIJING BAXIAN REAL ESTATE DEVELOPMENT COMPANY LIMITED

STATEMENTS OF CASH FLOWS

YEARS ENDED SEPTEMBER 30, 2001 AND 2000
<TABLE>


                                                                                           2001           2001            2000
                                                                                      -----------      ----------      ---------
                                                                                           US$            RMB             RMB
                                                                                           ---            ---             ---
                                                                                                      (In thousands)
<S>                                                                                    <C>             <C>               <C>

Cash Flows From Operating Activities
    Net income                                                                              1,399         11,572          20,074
    Adjustments to reconcile net income to
       net cash provided by operating activities:
         Depreciation                                                                         119            973             536
         Provision for doubtful debt                                                            -              -           2,600
         Deferred income taxes                                                                (81)          (669)            490
    Changes in operating assets and liabilities:
         Increase in accounts receivable                                                     (102)          (844)         (6,082)
       Decrease /(increase) in properties held for sales and development
                                                                                           (2,219)       (18,343)         19,642
         Decrease /(increase) in prepayments and other receivables                           (397)        (3,277)          3,730
          Decrease/(increase) in amounts due from owners                                      320          2,645            (955)
          Increase in amounts due to owners                                                 1,733         14,338              42
       Decrease/(increase) in amounts due from related companies                              271          2,248          (7,379)
       Decrease in amounts due to related companies                                        (1,335)       (11,060)        (22,525)
         Increase in amount due to a director                                                  72            595               -
         Increase in accounts payable                                                         550          4,533           2,617
          Increase/(decrease) in deposits received on sale of properties
                                                                                           (1,594)       (13,198)         10,016
         Increase/(decrease) in income taxes payable                                          267          2,211          (3,041)
       Increase/(decrease) in other payables and accrued expenses
                                                                                              534          4,423         (21,529)
         Decrease in advance from a customer in relation to construction
           contracts                                                                       (1,147)        (9,493)           (129)
                                                                                      -----------    -----------     -----------
Net cash used by operating activities                                                      (1,610)       (13,346)         (1,893)
                                                                                      -----------    -----------     -----------

Cash Flows From Investing Activities
    Purchases of properties held for long term purposes                                      (306)        (2,514)           (140)
                                                                                      -----------    -----------     -----------
Net cash used by investing activities                                                        (306)        (2,514)           (140)
                                                                                      -----------    -----------     -----------

Cash Flows From Financing activities
    Principle from short term bank loan                                                     1,208         10,000              -
    Capital contribution                                                                        -              -          5,000
                                                                                      -----------    -----------     -----------
Net cash provided by financing activities                                                   1,208         10,000          5,000
                                                                                      -----------    -----------     -----------

Net increase (decrease) in cash and cash equivalents                                         (708)        (5,860)         2,967
Cash and cash equivalents at beginning of year                                              1,022          8,462          5,495
                                                                                      -----------    -----------     -----------
Cash and cash equivalents at end of year                                                      314          2,602          8,462
                                                                                      ===========    ===========     ===========

Supplemental Data Cash paid during the year for:
    Interest                                                                                  207         1,716             661
                                                                                      ===========    ===========     ===========
    Income taxes                                                                                2            19                -
                                                                                      ===========    ===========     ===========
Non cash transaction:
    Contribution of properties by owner                                                    1,351         11,185                -
                                                                                      ===========    ===========     ===========
</TABLE>


The accompanying notes form an integral part of the financial statements.

                                      F-5
<PAGE>



BEIJING BAXIAN REAL ESTATE DEVELOPMENT COMPANY LIMITED

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED SEPTEMBER 30, 2001 AND 2000


1.   ORGANIZATIONAND PRINCIPAL ACTIVITIES

Beijing  Baxian Real Estate  Development  Company  Limited (the  "Company")  was
registered in the People's Republic of China (the "PRC") on November 15, 1992 as
a collectively owned enterprise in the name of +/-+/-3/4(C)E-DOnE-o ?u0(2)u?(a)o
(cent)(1)<<E3/4(Beijing Yushen Real Estate Development Company). On December 22,
1997,  the  name  of the  Company  was  changed  to  +/-+/-3/4(C)E-D(degree)EIEo
?u0(2)u?(a)o  (cent)(1)<<E3/4  (Beijing Baxian Real Estate Development Company).
Pursuant to an equity identification  process, on November 24, 1999, the Company
was  reorganized  as a limited  company  and the name of the Company was changed
to+/-+/-3/4(C)E-D(degree)EIEo   ?u0(2)u?(a)o  (cent)O-DI(1)<<E3/4  (Beijing
Baxian Real Estate Development Company Limited).

The  Company's  business  license as approved by the  Administrative  Bureau for
Industry and Commerce in the PRC is valid until December 14, 2019.

The  principal   activities  of  the  Company  are  property   development   and
construction.  There were no significant  changes in these activities during the
years ended  September 30, 2001 and 2000.  During the two years ended  September
30,  2001  and  2000,  the  Company's   property   development   activities  and
construction business were conducted in the PRC and Yemen, respectively.


2.   BASIS OF PRESENTATION

The  financial  statements  have been  prepared in  accordance  with  accounting
principles generally accepted in the United States of America ("US GAAP").

The  functional  currency of the Company is the Renminbi  ("RMB"),  the national
currency of the PRC. The financial  statements  have been translated into United
States dollars  ("US$") solely for the  convenience of the reader at the rate of
RMB8.2768  to  US$1,  the  prevailing  rate at the  People's  Bank of  China  on
September  30, 2001.  No  representation  is made that any or all of the amounts
shown could be converted into US$ at this or any other rate.


3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)  Revenue recognition

     (i)  Revenue from the sale of properties  is  recognised  using the accrual
          method when  certain  conditions  are met.  These  conditions  include
          adequate   initial  and  continuing   investment  by  the  buyers  and
          reasonable assurance the related receivable is collectible.  Sales not
          qualifying for full recognition at the time of sales are accounted for
          under other appropriate deferral methods, including the deposit method
          and  installment  method.  The Company  uses the  deposit  method when
          properties are sold before construction is completed,  the revenue and
          profit is  recognized  upon  completion of  construction.  Deposit and
          subsequent  payment are recorded as  liabilities.  When the continuing
          investments  are not adequate to meet the condition of accrual method,
          the company uses the installment method.  Under the installment method
          the Company records the entire contract price and related costs at the
          time the transaction is recognized as a sale. Concurrently,  the gross
          profit  on the sale is  deferred  and is  subsequently  recognized  as
          revenue  in the income  statement  as  payments  are  received  on the
          related contract receivable.

                                      F-6
<PAGE>

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     (a)   Revenue recognition (Continued)
           -------------------

     (ii) Construction    contract    revenues    are    recognized    on    the
          percentage-of-completion  method  based on the costs  incurred to date
          relative to estimated  total costs after giving effect to estimates of
          costs to complete based upon most recent information.  Further details
          on  contract  revenue  are  explained  on the  accounting  policy  for
          "Construction contracts" below;

     (iii)Rental  income  from  properties  leased  under  operating  leases  is
          recognized on the straight-line basis over the lease terms; and

     (iv) Interest  income from bank  deposits  is accrued on a time  proportion
          basis taking into account the principle outstanding and the applicable
          interest rate.

     (b)   Construction contracts

     Construction  contracts  are accounted for in the balance sheet as contract
     costs incurred plus recognised profits, less recognised losses and progress
     billings.  Contract  revenue  comprises  the  agreed  contract  amount  and
     appropriate  amounts from variation orders,  claims and incentive payments.
     Contract costs incurred  comprise  direct  materials,  direct labour costs,
     subcontracting charges, other direct expenses and an appropriate proportion
     of  construction   overheads.   Provision  is  made  for  losses  based  on
     management's estimates.

     Where  contract  costs  incurred  to  date  plus  recognised  profits  less
     recognised  losses  exceeds  progress  billings,  the surplus is treated as
     amounts due from contract customers.

     Whereprogress   billings  exceed  contract  costs  incurred  to  date  plus
     recognised  profits  less  recognised  losses,  the  surplus  is treated as
     amounts due to contract customers.

     (c)   Properties

     Property  and  equipment,   other  than   properties   held  for  sale  and
     development, are stated at cost less accumulated depreciation. Expenditures
     for major  renewals and  improvements  that extend the life of an asset are
     capitalized.  For buildings and properties held for long-term investment, a
     write-down  to  estimated  fair  value  is  recognized  when  a  property's
     estimated undiscounted future cash flows, before interest charges, are less
     than its book value.

     Depreciation  is computed using the  straight-line  method to write off the
     cost of each assets,  other than properties held for sale and  development,
     over their estimated useful lives,  after taking into account the estimated
     residual value of 0-3% of the cost.

     The estimated useful lives are as follows:

          Buildings                                                 50 years
          Rental properties                                         50 years
          Furniture and equipment                                    5 years

                                      F-7
<PAGE>

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     (c)   Properties (Continued)
           -----------

           Properties  held for sale and  development are stated at the lower of
           cost or estimated  fair value less cost to sell. For real estate held
           for sale and  development,  a write-down  to estimated  fair value is
           recorded when the Company  determines  that the carrying cost exceeds
           the estimated  selling price,  less cost to sell.  This evaluation is
           made by management on a property-by-property basis. The evaluation of
           fair value and future cash flows from individual  properties requires
           significant  judgment.  It is  reasonably  possible  that a change in
           estimate could occur.

           The cost of real estate held for sale and development includes direct
           land  acquisition,  land  development  and home  construction  costs,
           interest,  real estate  taxes and direct  overhead  costs  related to
           development and construction.

           Land,  land  development  and related  costs are allocated to cost of
           home sales based upon the total areas of homes to be  constructed  in
           each community.  Home  construction and related costs are included in
           cost of home sales under the  specific  identification  and  relative
           sales areas methods.

     (d)   Cash and Cash equivalents

           The Company  considers  all highly liquid  investments  with original
           maturity  of  three  months  or  less  when   purchased  to  be  cash
           equivalents.

     (e)   Income taxes

           The Company uses the asset and  liability  method of  accounting  for
           income  taxes.  Under the asset and  liability  method,  deferred tax
           assets and  liabilities  are recognized for the estimated  future tax
           consequences   attributable  to  differences  between  the  financial
           statement  carrying  amounts of existing  assets and  liabilities and
           their respective tax bases. This method also requires the recognition
           of future tax benefits such as net operating loss carry forwards,  to
           the extent that realization of such benefits is more likely than not.
           Deferred tax assets and  liabilities  are measured  using enacted tax
           rates expected to apply to taxable income in the years in which those
           temporary differences are expected to be recovered or settled.

     (f)   Related parties

           Parties are  considered  to be related if one party has the  ability,
           directly  or  indirectly,  to control  the other  party,  or exercise
           significant  influence  over the other party in making  financial and
           operating  decisions.  Parties are also  considered  to be related if
           they are subject to common control or common significant influence.

     (g)   Foreign currency transactions

           Foreign currency transactions denominated in foreign currencies other
           than RMB are recorded at the applicable  rates of exchange  ruling at
           the transaction dates. Monetary assets and liabilities denominated in
           foreign  currencies at the balance sheet date are translated into RMB
           at the applicable rate of exchange ruling at that date.

           The resulting  exchange  gains or losses are  recorded  in the income
           statement in the period in which they occur.

                                      F-8
<PAGE>

     3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     (h)   Use of estimates

          The  preparation  of financial  statements in conformity  with US GAAP
          requires  management to make estimates and assumptions that affect the
          amounts reported in the financial  statements and accompanying  notes.
          Actual results could differ from those estimates.

      (i)    Operating leases

           Leases where  substantially all the rewards and risks of ownership of
           assets remain with the leasing company are accounted for as operating
           leases.

     (j)   Advertising costs

           The Company  expenses  advertising  costs when incurred.  The Company
           recorded  advertising  expense for the two years ended  September 30,
           2001  and  2000  of   RMB1,001,000   (US$121,000)   and   RMB997,000,
           respectively.


4.   PROPERTIES

     Book value by property type consisted of the following:
<TABLE>


                                                                    September 30,
                                                          2001          2001           2000
                                                      -----------    ---------      --------
                                                          US$           RMB            RMB
                                                          ---           ---            ---
                                                                  (In thousands)
     <S>                                             <C>            <C>           <C>

     Properties held for sale and development
        Real estate held for sale and development        5,356        44,329         54,595
        Construction in progress                         8,922        73,836         45,227
                                                    -----------    ----------    -----------
                                                        14,278      118,165          99,822
                                                    -----------    ----------    -----------
      Properties held for long term purposes
        Rental properties                                1,858        15,383          4,198
        Buildings                                        2,001        16,572         16,572
        Furniture and equipment                            528         4,371          1,857
        Less:  accumulated depreciation                   (379)       (3,135)        (2,162)
                                                    -----------    ----------    -----------
                                                         4,008        33,191         20,465
                                                    -----------    ----------    -----------
                                                         18,286      151,356        120,287
                                                    ===========    ==========    ===========
</TABLE>


     Construction  in progress  includes  the cost of homes under  construction,
     land and land  development  costs and the  carrying  cost of lots that have
     been substantially improved.

     At September  30, 2001,  certain real estate held for sale and  development
     with a  carrying  amount of  approximately  RMB2,600,000  (US$314,000)  was
     pledged  for an amount  due to the local  government  for land use right of
     approximately RMB1,315,000 (US$159,000).

                                       F-9
<PAGE>

4.   PROPERTIES (Continued)

     The Company's  rental  properties  and buildings are located in the PRC and
     the land on  which  the  Company's  rental  properties  and  buildings  are
     situated is  state-owned.  As of September 30, 2001, the Company was in the
     process of obtaining the property  certificates  for rental  properties and
     buildings with a carrying value  amounting to  approximately  RMB 3,967,000
     (US$479,000) and RMB 15,628,000 (US$1,888,000), respectively.

     Interest  incurred and  capitalized  on the  properties  held for sale and
     development   for  the  years  ended  September  30,  2001  and  2000  were
     approximately RMB2,148,000 (US$259,000) and RMB 2,311,000, respectively.


5.   ACCOUNTS RECEIVABLE, NET

     Accounts receivable, net are analyzed as follows:
<TABLE>

                                                                  September 30,
                                                         2001         2001           2000
                                                      ---------     --------       --------
                                                         US$          RMB             RMB
                                                         ---          ---             ---
                                                                 (In thousands)
     <S>                                             <C>             <C>           <C>


     Accounts receivable                                  6,460         53,471        36,302
     Less: deferred gain on installment sales            (3,826)       (31,666)      (13,682)
                                                      -----------    ----------    -----------
                                                          2,634         21,805        22,620
                                                      -----------    ----------    -----------
      Retentions  held by  customers  in  relation to       977          8,086         3,498
          construction contracts

         Cost and  estimated  earnings  in  excess of
          billings on uncompleted contracts                 313          2,588         5,517
                                                      -----------    ----------    -----------
                                                          3,924         32,479        31,635
                                                      ===========    ==========    ===========
</TABLE>


6.       ACCOUNTS PAYABLE

     Accounts   payable   include  amounts  due  to   subcontractors,   totaling
     approximately  RMB 853,000 (US$  103,000) and RMB 862,000 at September  30,
     2001 and 2000,  respectively,  which have been retained pending  completion
     and acceptance of jobs.

                                      F-10
<PAGE>


7.   BALANCES WITH OWNERS

     The amounts due from owners were as follows:
<TABLE>

                                                             September 30,
                                                     2001         2001        2000
                                                  ---------    ---------   ----------
                                                     US$          RMB           RMB
                                                     ---          ---           ---
                                                             (In thousands)
     <S>                                        <C>            <C>           <C>

     Ms. Zhang Jing                                   28          229           229
     Mr. Zhang Zhao                                  243        2,015             -
     Baxian Club                                       -            -         2,702
                                                ---------    ---------    ----------
                                                     271        2,244         2,931
                                                ---------    ---------    ----------

     Less: deferred gain on installment sales       (142)      (1,176)         (117)
                                                ---------    ---------    ----------
                                                     129        1,068         2,814
                                                =========    =========    ==========
</TABLE>


     The amount due from Baxian Club represents  expenses paid by the Company on
     behalf of Baxian  Club of  approximately  RMB3,601,000  less the  excess of
     consideration  paid over the value of the  property  transferred  to Baxian
     Club as detailed in note 18(iii) to the financial statements.

     The amounts due to owners were as follows:
                                                September 30,
                                        2001         2001       2000
                                      --------    ---------   ---------
                                        US$          RMB           RMB
                                        ---          ---           ---
                                                (In thousands)
     Mr. Zhang Yuchen                   1,401       11,597         7,966
     Baxian Club                        1,293       10,707
                                                                       -
                                     ---------    ---------    ----------
                                        2,694       22,304         7,966
                                     =========    =========    ==========

     The  amount  due to Mr.  Zhang  Yuchen  represents  development  costs  and
     construction costs paid by Mr. Zhang Yuchen on behalf of the Company.

     The amount due to Baxian Club includes the development  cost or expenses of
     approximately  RMB1,814,000  (US$219,000)  paid by Baxian Club on behalf of
     the  Company  and  an  operating   loan  of   approximately   RMB10,099,000
     (US$1,220,000)  less the  rental  income  receivable  from  Baxian  Club of
     approximately  RMB307,000  (US$  37,000) as detailed in note 18(vii) to the
     financial statements.

     The amount due to an owner for project interest  includes  investment costs
     paid by Baxian Club of approximately RMB12,084,000  (US$1,460,000) pursuant
     to the  cooperative  agreement with the Company as detailed in noted 18(iv)
     to the financial statements .

     The balances  with owners are  unsecured,  interest-free  and have no fixed
     terms of repayment.
                                      F-11
<PAGE>


8.   BALANCES WITH RELATED COMPANIES

     The amount due from a related company represented an advancement made to or
     expenses paid on behalf of Beijing Yuchen  Properties  Management Co., Ltd.
     ("BYPM"), a company beneficially owned by Mr. Zhang Yuchen.

     The amounts due to related companies were analyzed as follows:
<TABLE>


                                                                           September 30,
                                                                   2001        2001         2000
                                                                 ---------  ---------    ----------
                                                                    US$       RMB           RMB
                                                                    ---       ---           ---
                                                                         (In thousands)
  <S>                                                            <C>         <C>           <C>

   BYPM                                                                -            -         7,000
   Beijing Baxian Villa Property Management Co., Ltd.("BBVPM")     1,197        9,909        13,969
                                                                 ---------   ---------    ---------
                                                                   1,197        9,909        20,969
                                                                 =========   =========    =========
</TABLE>


     The amount due to BYPM as of September  30, 2000  primarily  represents  an
     operating  loan.  The amount was unsecured,  interest-bearing  at 6.44% per
     annum and was fully repaid during the year ended September 30, 2001.

     The amount due to BBVPM at September 30, 2001 and 2000  includes  operating
     loans of RMB8,200,000  (US$991,000)  and RMB 13,200,000,  respectively  and
     construction  costs paid by BBVPM on behalf of the Company of approximately
     RMB1,709,000  (US$206,000)  and RMB769,000 ,  respectively.  Except for the
     amount of RMB 5,000,000  (US$604,000) and RMB10,000,000 as of September 30,
     2001 and 2000,  respectively which bear interest at a weighted average rate
     of 9% and 12% per annum,  respectively,  all the amounts are  unsecured and
     interest free.


 9.  SHORT TERM BANK LOAN

     Short-term bank loan bears interest at a weighted  average rate of 6.7% and
     6.5%  per  annum  for  the  years  ended   September  30,  2001  and  2000,
     respectively.


10. DUE TO A DIRECTOR

     The balance represented an amount due to Ms. Zhou Jianming,  a director and
a beneficial owner of Baxian Club.


                                      F-12
<PAGE>



11.  TAX

     In  accordance  with PRC  income  tax laws,  the  Company  is  subject to a
     statutory  income tax rate of 33%.  From  October 1, 1999 to  December  31,
     1999, taxable income for home sales was determined based on pre-tax income.
     Beginning on January 1, 2000,  the basis on which  taxable  income for home
     sales  was  determined  was  changed  by the tax  authority,  subsequently,
     taxable income for home sales was  calculated  based on 5% of the home sale
     revenue of the Company.  The Company  incurred a net deferred tax liability
     of approximately  RMB500,000 due to the change in the method of calculating
     taxable income.  Taxable income for the construction  business was based on
     pre-tax income,  however the tax authority is in the process of considering
     alternative bases on which to determine taxable income for the construction
     business. A change in existing tax law may have a significant impact on the
     Company's  deferred  tax  assets  and  liabilities  and  future  income tax
     expenses.

     Significant components of the provision for income taxes attributable to
     income before income taxes are as follows:

                                                    2001       2001        2000
                                                  --------   -------      ------
                                                     US$        RMB         RMB
                                                     ---        ---         ---
                                                           (In thousands)

     Current tax expense                             269       2,230       1,969
     Deferred tax expense (benefit)                  (81)       (669)        490
                                                 -------     --------    -------
                                                     188       1,561       2,459
                                                 =======     ========    =======


     The  reconciliation  of income tax computed at the PRC statutory income tax
     rate of 33% (2000: 33%) to income is as follows:
<TABLE>


                                                                                     2001        2001         2000
                                                                                 -------- -- -------- -- ---------
                                                                                      US$         RMB          RMB
                                                                                      ---         ---          ---
                                                                                            (In thousands)
  <S>                                                                            <C>            <C>           <C>

   Book income tax expense based on the statutory rate                                524       4,333        7,436
   Impact of the bases on which taxable income is calculated                         (336)                 (5,219)
                                                                                               (2,772)
   Additional sales for tax purposes (transaction with owner)                           -           -          242
                                                                                 --------    --------    ---------
                                                                                      188       1,561        2,459
                                                                                 ========    ========    =========
</TABLE>

     Significant components of the company's deferred tax assets and liabilities
     as of September 30, 2000 and 2001 consisted of the following:
<TABLE>

                                                                           2001        2001         2000
                                                                       -------- -- -------- -- ---------
                                                                            US$         RMB          RMB
                                                                            ---         ---          ---
                                                                                 (In thousands)
<S>                                                                     <C>        <C>           <C>

   Deferred tax assets:
        Accumulated deferred gain on installment sales                       65         542          228
   Deferred tax liabilities:
        Excess of revenue recognized under installment sales method          43         363          718
                                                                       --------    --------    ---------
   Net deferred tax asset (liability)                                        22         179         (490)
                                                                       ========    ========    =========
</TABLE>

                                      F-13

<PAGE>


12. PAID-IN CAPITAL

     As of September 30,1999, the capital of the Company registered with the PRC
     government  ("registered  capital") was RMB10,000,000 and was fully paid in
     cash. Pursuant to a capital verification report dated December 7, 1999, the
     Company's   registered   capital  was  increased  from   RMB10,000,000   to
     RMB50,000,000.  The  increase  in  capital  is  comprised  of  RMB5,000,000
     received  from the sale of  additional  equity  interest in the Company and
     RMB35,000,000 related to equity revaluations permitted under PRC law, which
     are not permitted under US generally accepted  accounting  principles.  The
     excess of  registered  capital over cash  contributions  is  classified  as
     capitalization in excess of contributed capital.

     Subsequent to the balance sheet date on December 19, 2001,  the  registered
     capital of the Company was increased from RMB 50 million to RMB 80 million.
     The new registered capital of RMB 30 million was fully paid in cash.


13.  STATUTORY RESERVE

     In  accordance  with the Company Law of the PRC, the Company is required to
     transfer  part of the profit  after tax, as  reported in the PRC  statutory
     accounts, to the statutory surplus reserve and the statutory public welfare
     fund. These represented approximately 10% and 5% of the profit after tax of
     the Company's PRC statutory  accounts.  The statutory reserve  appropriated
     from retained  earnings for  September  30, 2001 and 2000 was  RMB2,275,000
     (US$275,000)  and  RMB699,000,  respectively.  In  addition,  the  board of
     directors may determine to appropriate  part of the profit after tax to the
     discretionary  surplus  reserve.  As of  September  30,  2001 and 2000,  no
     discretionary surplus reserve was appropriated.

     These reserves are not distributable and are created for specific purposes.
     The board of directors has the sole  discretion over the application of the
     funds.
                                      F-14
<PAGE>


14.      HOME SALES

     Gross profit of home sales is summarised as follows:
<TABLE>

                                                             2001           2001           2000
                                                          ----------     ---------      ---------
                                                              US$            RMB            RMB
                                                              ---            ---            ---
                                                                        (In thousands)
<S>                                                       <C>             <C>          <C>


     Home sales                                               9,327          77,196       77,395
     Less:  sales tax                                          (503)         (4,168)      (4,973)
                                                          ----------    -----------    -----------
                                                              8,824          73,028       72,422
     Cost of home sales                                      (4,524)        (37,448)     (34,982)
                                                          ----------    -----------    -----------
                                                              4,300          35,580       37,440

     Less:  deferred gross profit on installment sales       (2,804)        (23,198)     (12,221)
                                                          ----------    -----------    -----------
     Realised gross profit on sales                           1,496          12,382       25,219

     Add:  gross profit realised on installment sales of
           prior years                                          502           4,156        5,453

                                                          ----------    -----------    -----------
     Gross profit realised this year                          1,998          16,538       30,672
                                                          ==========    ===========    ===========

     Home sales, net is summarised as follows:

                                                               2001           2001           2000
                                                            ---------       --------       --------
                                                                US$            RMB            RMB
                                                                ---            ---            ---
                                                                         (In thousands)

     Home sales                                                9,327         77,196         77,395

     Less:  sales tax                                           (503)        (4,168)        (4,973)

           deferred gross profit on
               installment sales                              (2,804)       (23,198)       (12,221)

     Add:   gross profit realised on
           installment      sales of prior years                 502          4,156          5,453
                                                          ----------    -----------    -----------
                                                               6,522         53,986         65,654
                                                          ==========    ===========    ===========

</TABLE>
                                      F-15
<PAGE>


15. LEASES

     The Company,  as lessor,  has entered into  noncancelable  operating leases
     expiring at various  dates  through 2006 with Baxian Club.  Rental  revenue
     under these leases totaled RMB 307,000 (US$37,000) in 2001 and nil in 2000.
     Future minimum rental revenue under existing noncancelable operating leases
     as of September 30, 2001, is summarized as follows:

                                                        US$          RMB
                                                        ---          ---
                                                         (In thousands)

         2002                                             81          670
         2003                                             81          670
         2004                                             56          468
         2005                                             48          400
         2006                                             12          100
                                                     --------    ---------
         Total                                           278        2,308
                                                     ========    =========

     The book value of the Company's  properties  under operating leases or held
     for  rental  purpose  summarized  below  has been  included  in the  rental
     properties (note 4):

                                                       September 30,
                                              2001          2001         2000
                                            --------      --------     --------
                                               US$          RMB          RMB
                                               ---          ---          ---
                                                       (In thousands)

          Rental properties                  1,858       15,383        4,198
          Less: accumulated depreciation       (28)        (231)        (147)
                                          ----------    ---------    ---------
                                             1,830       15,152        4,051
                                          ==========    =========    =========

     The Company,  as lessee, has entered into  non-cancelable  operating leases
     expiring at various dates through 2027.  Rental  expense under these leases
     was approximately RMB720,000 (US$87,000) and RMB181,000 for the years ended
     September 30, 2001 and 2000, respectively. Future minimum lease payments as
     of September 30, 2001, are summarized as follows:

                                                        US$          RMB
                                                         (In thousands)
         2002                                           103          854
         2003                                           103          854
         2004                                           104          860
         2005                                           105          872
         2006                                           105          872
         Thereafter                                   3,512       29,065
                                                    --------    ---------
         Total                                        4,032       33,377
                                                    ========    =========

                                      F-16
<PAGE>

16.  COMMITMENTS AND CONTINGENCIES

(a)      As of September 30, 2001,  the Company had  agreements to purchase land
         for future development with purchase prices  aggregating  approximately
         RMB 50,330,000  (US$6,082,000) of which RMB 2,000,000  (US$242,000) has
         been  paid  or  deposited.  The  remaining  balances  repayable  in the
         following years are as follows:

                                                      2001            2001
                                                    --------        -------
                                                       US$            RMB
                                                       ---            ---
                                                          (In thousands)
         2002                                          1,873           15,499
         2003                                          1,591           13,166
         2004                                          1,047            8,666
         2005                                          1,571           12,999
                                                    ---------       ----------
         Total minimum payments                        6,082           50,330
                                                    =========       ==========

           Obtaining the proper legal title of the land is  contingent  upon the
           payment  of the  consideration  and  the  approval  of  the  relevant
           government authority.

     (b)   Pursuant  to  an  agreement   entered  between  the  Company  and  an
           independent  third  party on May 10,  2001,  the  Company  agreed  to
           replace the  independent  third party in an application  for the land
           use  right  of  land  with  an  aggregate  area  of  48,006  M2.  The
           consideration of the land use right was not specified. However, based
           on the prevailing land use fee applicable in Beijing,  the total land
           use  fee  is   estimated   to  be   approximately   RMB18,000,000(US$
           2,175,000).   The  Company  is  in  the  process  of  replacing   the
           independent  third  party in  applying  for the land  use  right.  No
           consideration has been paid in this respect.

     (c)   On October 28,  2000,  the Company  entered  into a land  improvement
           contract with an independent  third party.  The contract  amounted to
           RMB19,500,000  (US$ 2,356,000) of which RMB 8,500,000  (US$1,027,000)
           has been paid and included in  construction in progress (note 4). The
           balance  of the  contract  sum has to be  settled  in 2002  when  the
           construction is expected to be completed.

(d)        As of  September  30,  2001,  the  Company  had  agreements  of  sale
           outstanding  to deliver 4 villas  with an  aggregate  sales  value of
           approximately RMB7,112,000 (US$859,000). The apartments were still in
           the progress of development  and the deposit  received in this regard
           was approximately RMB 3,030,000 (US$366,000) at September 30, 2001.

17.   RETIREMENT PLAN

      As stipulated by the PRC government regulations,  the Company participates
      in a defined  contribution  retirement  plan  organized by  government  of
      Beijing,  the PRC.  All  permanent  employees  are  entitled  to an annual
      pension  which is equal to a fixed  proportion of their final basic salary
      at their  retirement  date.  The Company and its employees are required to
      make  contributions  to the retirement  plan at rates of 19% and 5% of the
      employees'  basic  salary,  respectively.  Payment  is made,  on a monthly
      basis, to a PRC insurance company  organized by the PRC government,  which
      is responsible for the payments of pension benefits to retired  employees.
      The Company has no obligations for the pension  benefits beyond the annual
      contributions  as  described  above.  The  pension  costs  expensed by the
      Company during the years ended September 30, 2001 and 2000 amounted to RMB
      199,000 (US$24,000) and RMB 192,000, respectively.

                                      F-17
<PAGE>

18.   RELATED PARTY TRANSACTIONS

       (i)  As of September  30, 2000,  the amount due to BYPM of  approximately
            RMB7,000,000  bore interest at 6.44% per annum. The amount was fully
            settled during the year ended September 30, 2001. The total interest
            paid and payable to BYPM for the year ended  September  30, 2001 and
            2000 was  approximately  RMB179,000  (US$22,000)  and  RMB450,000  ,
            respectively.  The  beneficial  equity  holder of BYPM is Mr.  Zhang
            Yuchen.

       (ii) As of  September  30,  2001 and 2000,  the  amount  due to BBVPM was
            approximately  RMB  9,909,000  (US$1,197,000)  and RMB  13,969,000 ,
            respectively. Of the amount due to BBVPM, approximately RMB5,000,000
            and RMB10,000,000 at September 30, 2001 and 2000,  respectively bore
            interest  at a  weighted  average  rates  of 9% and  12%  per  annum
            respectively.  The total  interest paid and payable to BBVPM for the
            year ended September 30, 2001 and 2000 was approximately  RMB793,000
            (US$96,000) and RMB 1,201,000 , respectively.  The beneficial equity
            holder of BBVPM is Mr. Zhang Yuchen.

      (iii) During the period from  October  1999 to January  2000,  the Company
            transferred  10  apartments  and 5  villas  to  Baxian  Club  for an
            aggregate consideration of approximately RMB14,714,000, RMB9,467,000
            in cash and a receivable of RMB5,247,000. The difference between the
            carrying  value  of the  property  and the  consideration  received,
            RMB899,000  was applied as a reduction  to  outstanding  amounts due
            from owners.

      (iv)  On May 28, 2001,  Baxian Club contributed 10 apartments and 9 villas
            to the Company in exchange  for a 10%  interest in Century Star City
            Project,  which is currently under  construction.  The  contribution
            included 4 villas  that were sold to Baxian  Club in prior years and
            the  Company  accounted  for as  sales.  The  Company  recorded  the
            contribution of the 4 villas at Baxian Club's cost less accumulation
            depreciation of  approximately  RMB2,960,000 as "due to an owner for
            project  interest".  The Company recorded the contribution of the 10
            apartments and 5 other villas at the original construction cost less
            accumulated  depreciation  of  approximately  RMB8,225,000  plus the
            excess of cash paid greater than the original  construction  cost of
            approximately RMB899,000 as "due to an owner for project interest".

      (v)   On January 25, 2000, the Company entered into a sales agreement with
            Ms. Zhang Jing.  According to the  agreement,  the Company agreed to
            sell a villa to Ms. Zhang Jing for a consideration  of approximately
            RMB729,000.  As of September 30, 2001, the amount due from Ms. Zhang
            Jing in respect of this  transaction was  approximately  RMB 229,000
            (US$28,000).

      (vi)  On March 10, 2000 and October 27,  2000,  the Company  entered  into
            sales agreements with Mr. Zhang Zhao for the sales of two villas for
            approximately    RMB2,360,000    (US$285,000)    and    RMB2,615,000
            (US$316,000), respectively. As of September 30, 2001, the amount due
            from  Mr.  Zhang  Zhao  in  respect  of the  villas  sold to him was
            approximately RMB2,015,000 (US$243,000).

      (vii) On June 30,  2001,  the  Company  entered  into an  operating  lease
            agreement  with  Baxian  Club.  According  to  the  operating  lease
            agreement,  the Company agreed to lease properties with the carrying
            value of approximately  RMB15,152,000  (US$1,830,000) to Baxian Club
            for 3 to 5 years for minimum rental income as detailed in note 15 to
            the financial  statements.  The total rental income received in this
            respect was RMB307,000  (US$37,000) for the year ended September 30,
            2001.

19.   FINANCIAL INSTRUMENTS

      Financial  instruments that potentially subject the Company to significant
      concentration of credit risk consist principally of accounts receivable.

      Concentrations  of credit  risk with  respect to accounts  receivable  are
      limited  due to the large  number of  entities  comprising  the  Company's
      customer  base.  The Company  does not  require  collateral  for  accounts
      receivable  but generally,  could  re-seize the properties  when customers
      default.

      The carrying value of the financial instruments of the Company approximate
      fair value.


20.   SEGMENT INFORMATION

      Home sales and construction comprise the separate industry segments of the
      Company.

      Total   revenue  and  other   income,   operating   income,   income  tax,
      depreciation,  total assets and properties  held for long term purposes by
      industry segment for 2001 and 2000 are set forth below:
<TABLE>

      Revenue and other income                       2001           2001           2000
                                                 ----------    -----------    -----------
                                                    US$            RMB            RMB
                                                    ---            ---            ---
                                                             (In thousands)
       <S>                                         <C>            <C>           <C>
       Home sales
           - to third party                         6,350           52,561         62,602
           - to related party                         172            1,425          3,052
       Construction                                 6,238           51,631         25,415
       Others                                          89              735             44
                                                 ----------    -----------    -----------
                                                   12,849          106,352         91,113
                                                 ==========    ===========    ===========


     Operating income                               2001           2001           2000
                                                 ----------    -----------    -----------
                                                     US$            RMB            RMB
                                                     ---            ---            ---
                                                               (In thousands)
       Home sales                                     1,289         10,659         23,257
       Construction                                     220          1,823          1,979
       Others                                            78            651         (2,703)
                                                 ----------    -----------    -----------
                                                      1,587         13,133         22,533
                                                 ==========    ===========    ===========

                                                         September 30,
     Total assets                                   2001           2001           2000
                                                 ----------    -----------    -----------
                                                     US$            RMB            RMB
                                                     ---            ---            ---
                                                                (In thousands)
       Home sales                                    19,216        159,050        145,194
       Construction                                   1,870         15,482         13,953
       Others                                         4,105         33,983         23,853
                                                 ----------    -----------    -----------
                                                     25,191        208,515        183,000
                                                 ==========    ===========    ===========
                                                      6,522         53,986         65,654

    Construction contract revenue                     6,238         51,631         25,415
    Rental income from a related party                   37            307              -
     Other income                                        52            428             44
                                                 -----------    ----------    ------------
                                                     12,849        106,352         91,113
                                                 -----------    ----------    ------------
Cost and expenses
    Cost of home sales                               (4,524)      (37,448)        (34,982)
    Cost of construction contract revenue
</TABLE>
                                      F-18





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>3
<FILENAME>ex21_8k.txt
<TEXT>
EXCHANGE AGREEMENT


                                     Between

                         CHINA GLOBAL DEVELOPMENT, INC.

                                       and

                        RAINBOW LIGHT GLOBAL CORPORATION




                             Dated February 7, 2001




<PAGE>


                                TABLE OF CONTENTS


ARTICLE  I   REPRESENTATIONS,   COVENANTS,   AND   WARRANTIES  OF  CHINA  GLOBAL
             DEVELOPMENT, INC.

 1.01         Organization                                                    1
 1.02         Capitalization                                                  1
 1.03         Subsidiaries and Predecessor Corporations                       1
 1.04         Financial Statements                                            1
 1.05         Information                                                     2
 1.06         Options and Warrants                                            2
 1.07         Absence of Certain Changes or Events                            2
 1.08         Title and Related Matters                                       3
 1.09         Litigation and Proceedings                                      3
 1.10         Contracts                                                       3
 1.11         Material Contract Defaults                                      4
 1.12         No Conflict With Other Instruments                              4
 1.13         Governmental Authorizations                                     4
 1.14         Compliance With Laws and Regulations                            4
 1.15         Insurance                                                       4
 1.16         Approval of Agreement                                           4
 1.17         Material Transactions or Affiliations                           4
 1.18         Labor Relations                                                 4
 1.19         CHINA GLOBAL Schedules                                          5
 1.20         Bank Accounts; Power of Attorney                                5
 1.21         Valid Obligation                                                6

ARTICLE  II   REPRESENTATIONS,   COVENANTS,   AND  WARRANTIES  OF  CHINA  GLOBAL
              DEVELOPMENT, INC.

 2.01         Organization                                                    6
 2.02         Capitalization                                                  6
 2.03         Subsidiaries and Predecessor Corporations                       6
 2.04         Securities Filings; Financial Statements                        6
 2.05         Information                                                     7
 2.06         Options and Warrants                                            7
 2.07         Absence of Certain Changes or Events                            7
 2.08         Title and Related Matters                                       8
 2.09         Litigation and Proceedings                                      8
 2.10         Contracts                                                       8
 2.11         Material Contract Defaults                                      9
 2.12         No Conflict With Other Instruments                              9
 2.13         Governmental Authorizations                                     9
 2.14         Compliance With Laws and Regulations                            9
 2.15         Insurance                                                       9
 2.16         Approval of Agreement                                           9
 2.17         Continuity of Business Enterprises                              9
 2.18         Material Transactions or Affiliations                           9
 2.19         Labor Relations                                                 9
 2.20         Tropical Schedules                                             10
 2.21         Bank Accounts; Power of Attorney                               10
 2.22         Valid Obligation                                               11

ARTICLE III  PLAN OF EXCHANGE

 3.01         The Exchange                                                  11
 3.02         Anti-Dilution                                                 11
 3.03         Closing                                                       11
 3.04         Closing Events                                                11
 3.05         Termination                                                   11

ARTICLE IV    SPECIAL COVENANTS

  4.01        Access to Properties and Records                              13
  4.02        Delivery of Books and Records                                 13
  4.03        Third Party Consents and Certificates                         13
  4.04        Name Change and Increase in Authorized Capital                13
  4.05        Tropical Shareholder Meeting                                  13
  4.06        Consent of CHINA GLOBAL Shareholders                          13
  4.07        Designation of Directors and Officers                         13
  4.08        Exclusive Dealing Rights                                      13
  4.09        Actions Prior to Closing                                      14
  4.10        Sales Under Rule 144 or 145, If Applicable                    15
  4.11        Indemnification                                               16

ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF CHINA GLOBAL

  5.01         Accuracy of Representations and Performance of Covenants    16
  5.02         Officer's Certificates                                      16
  5.03         No Material Adverse Change                                  16
  5.04         Good Standing                                               16
  5.05         Approval by CHINA GLOBAL Shareholders                       16
  5.06         No Governmental Prohibitions                                16
  5.07         Consents                                                    16
  5.08         Other Items                                                 17

ARTICLE VI  CONDITIONS  PRECEDENT  TO  OBLIGATIONS  OF NCC AND THE
            CHINA GLOBAL SHAREHOLDERS

  6.01         Accuracy of Representations and Performance of Covenants    17
  6.02         Officer's Certificate                                       17
  6.03         No Material Adverse Change                                  17
  6.04         Good Standing                                               17
  6.05         No Governmental Prohibition                                 17
  6.06         Consents                                                    18
  6.07         Other Items                                                 18

ARTICLE VII  MISCELLANEOUS

   7.01         Brokers                                                    18
   7.02         Governing Law                                              18
   7.03         Notices                                                    18
   7.04         Attorney's Fees                                            18
   7.05         Confidentiality                                            18
   7.06         Public Announcements and Filings                           19
   7.07         Schedules; Knowledge                                       19
   7.08         Third Party Beneficiaries                                  19
   7.09         Expenses                                                   19
   7.10         Entire Agreement                                           19
   7.11         Survival; Termination                                      19
   7.12         Counterparts                                               19
   7.13         Amendment or Waiver                                        19
   7.14         Best Efforts                                               19


<PAGE>

                               EXCHANGE AGREEMENT


     THIS EXCHANGE  AGREEMENT  (hereinafter  referred to as this "Agreement") is
entered  into as of this 7th day of February  2001 by and between  CHINA  GLOBAL
DEVELOPMENT,  INC. a Nevada corporation (hereinafter referred to as "Global")and
RAINBOW  LIGHT  GLOBAL   CORPORATION,   a  British  Virgin  Islands  corporation
(hereinafter referred to as ("Rainbow") upon the following premises:

                                    Premises

     WHEREAS,  Global is a publicly held corporation organized under the laws of
the State of Nevada;

     WHEREAS,  Rainbow is a privately held corporation  organized under the laws
of the British Virgin Islands;

     WHEREAS, management of the constituent corporations have determined that it
is in the best  interest of the parties  that Global  acquire 100% of the issued
and  outstanding  securities  of Rainbow in exchange for the issuance of certain
shares of Global (the  "Exchange") and Rainbow agreed to use its best efforts to
cause its shareholders (the "Rainbow Shareholders") to exchange their securities
of Rainbow on the terms described herein; and

     WHEREAS,  Global and Rainbow desire to set forth the terms of the Exchange,
which is  intended  to  constitute  a tax-free  reorganization  pursuant  to the
provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986.

                                    Agreement

     NOW THEREFORE,  on the stated premises and for and in  consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the parties to be derived herefrom, it is hereby agreed as follows:

                                    ARTICLE I

              REPRESENTATIONS, COVENANTS, AND WARRANTIES OF Rainbow

     As an  inducement  to, and to obtain the reliance of Global,  except as set
forth on the Rainbow Schedules (as hereinafter defined),  Rainbow represents and
warrants as follows:

     Section 1.01 Organization. Rainbow is a corporation duly organized, validly
existing,  and in good standing under the laws of the British Virgin Islands and
has the  corporate  power and is duly  authorized,  qualified,  franchised,  and
licensed  under all  applicable  laws,  regulations,  ordinances,  and orders of
public  authorities  to own all of its properties and assets and to carry on its
business  in all  material  respects  as it is now  being  conducted,  including
qualification to do business as a foreign corporation in the states or countries
in which the  character  and location of the assets owned by it or the nature of
the business transacted by it requires qualification, except where failure to be
so qualified would not have a material adverse effect on its business.  Included
in the Rainbow  Schedules  are  complete  and correct  copies of the articles of
incorporation,  and  bylaws of  Rainbow  as in effect  on the date  hereof.  The
execution and delivery of this Agreement does not, and the  consummation  of the
transactions  contemplated  hereby will not,  violate any  provision of Rainbow'
articles of incorporation  or bylaws.  Rainbow has taken all actions required by
law, its articles of incorporation,  or otherwise to authorize the execution and
delivery of this Agreement.  Rainbow has full power, authority,  and legal right
and has taken all action  required by law,  its articles of  incorporation,  and
otherwise to consummate the transactions herein contemplated.

     Section  1.02  Capitalization.  The  authorized  capitalization  of Rainbow
consists of 50,000shares  of common stock,  $1.00 par value, of which 100 shares
are currently  issued and  outstanding.  All issued and  outstanding  shares are
legally issued,  fully paid, and  non-assessable  and not issued in violation of
the preemptive or other rights of any person.

     Section 1.03  Subsidiaries and Predecessor  Corporations.  Rainbow does not
have  any  predecessor  corporation(s)  or  subsidiaries,   and  does  not  own,
beneficially  or of  record,  any  shares  of any other  corporation,  except as
disclosed in Schedule 1.03. For purposes  hereinafter,  the term " Rainbow" also
includes those subsidiaries, if any, set forth on Schedule 1.03.


<PAGE>

Section 1.04 Financial Statements.

     (a) Included in the Rainbow  Schedules  are the audited  balance  sheets of
     Rainbow's  95% owned  subsidiary  Beijing  Baxian Real  Estate  Development
     Company Limited  ("Beijing")  (hereinafter  Rainbow and Beijing are jointly
     referred to as Rainbow) as successor  in interest as of September  30, 2000
     and 2001, and the related audited  statements of operations,  stockholders'
     equity and cash flows for the two fiscal years ended September 30, 2000 and
     2001 together with the notes to such  statements and the opinion of Ernst &
     Young LLP, independent certified public accountants, with respect thereto.

     (b) All such  financial  statements  have been prepared in accordance  with
     generally  accepted  accounting  principles.  The  Rainbow  balance  sheets
     present a true and fair view as of the dates of such balance  sheets of the
     financial  condition of Rainbow.  Rainbow did not have,  as of the dates of
     such  balance  sheets,  except as and to the extent  reflected  or reserved
     against  therein,  any liabilities or obligations  (absolute or contingent)
     which  should be  reflected  in the  balance  sheets or the notes  thereto,
     prepared in accordance with generally accepted accounting  principles,  and
     all assets reflected  therein are properly  reported and present fairly the
     value of the  assets of  Rainbow  in  accordance  with  generally  accepted
     accounting principles.

     (c) Rainbow has no liabilities  with respect to the payment of any federal,
     state, county,  local or other taxes (including any deficiencies,  interest
     or penalties), except for taxes accrued but not yet due and payable.

     (d) Rainbow has filed all state,  federal or local income and/or  franchise
     tax returns  required to be filed by it from  inception to the date hereof.
     Each of such  income  tax  returns  reflects  the taxes due for the  period
     covered  thereby,   except  for  amounts  which,  in  the  aggregate,   are
     immaterial.

     (e) The books and records,  financial and otherwise,  of Rainbow are in all
     material  respects  complete  and  correct  and  have  been  maintained  in
     accordance with good business and accounting practices.

     (f) All of Rainbow' assets are reflected on its financial statements,  and,
     except as set forth in the Rainbow Schedules or the financial statements of
     Rainbow or the notes thereto,  Rainbow has no material liabilities,  direct
     or indirect, matured or unmatured, contingent or otherwise.

         Section 1.05 Information.  The information concerning Rainbow set forth
in this  Agreement and in the Rainbow  Schedules is complete and accurate in all
material  respects and does not contain any untrue  statement of a material fact
or omit to state a material fact required to make the statements  made, in light
of the  circumstances  under which they were made, not misleading.  In addition,
Rainbow has fully  disclosed in writing to Global (through this Agreement or the
Rainbow Schedules) all information  relating to matters involving Rainbow or its
assets or its present or past  operations or  activities  which (i) indicated or
may  indicate,  in the  aggregate,  the  existence  of a  greater  than  $25,000
liability or  diminution  in value,  (ii) have led or may lead to a  competitive
disadvantage on the part of Rainbow or (iii) either alone or in aggregation with
other information  covered by this Section,  otherwise have led or may lead to a
material adverse effect on the transactions  contemplated  herein or on Rainbow,
its assets,  or its  operations  or  activities  as  presently  conducted  or as
contemplated to be conducted after the Closing Date, including,  but not limited
to, information relating to governmental,  employee,  environmental,  litigation
and securities matters and transactions with affiliates.

         Section  1.06  Options  or  Warrants.  There are no  existing  options,
warrants,  calls, or commitments of any character relating to the authorized and
unissued Rainbow common stock, except options,  warrants,  calls or commitments,
if any, to which Rainbow is not a party and by which it is not bound.

         Section 1.07    Absence of Certain Changes or Events.  Except as set
forth in this Agreement or the Rainbow Schedules, since September 30, 2001:

         (a) there has not been (i) any material adverse change in the business,
         operations,  properties,  assets,  or  condition of Rainbow or (ii) any
         damage,  destruction,  or loss to Rainbow  (whether  or not  covered by
         insurance) materially and adversely affecting the business, operations,
         properties, assets, or condition of Rainbow;

         (b)  Rainbow  has  not  (i)  amended  its  memorandum  or  articles  of
         association;  (ii) declared or made, or agreed to declare or make,  any
         payment  of  dividends  or  distributions  of any  assets  of any  kind
         whatsoever  to  stockholders  or purchased  or  redeemed,  or agreed to
         purchase or redeem,  any of its capital stock;  (iii) waived any rights
         of value which in the aggregate  are outside of the ordinary  course of
         business or material considering the business of Rainbow; (iv) made any
         material  change in its method of management,  operation or accounting;
         (v) entered into any other material transaction other than sales in the
         ordinary  course of its business;  (vi) made any accrual or arrangement
         for  payment  of bonuses  or  special  compensation  of any kind or any
         severance  or  termination  pay to any  present  or former  officer  or
         employee; (vii) increased the rate of compensation payable or to become
         payable  by it to  any  of  its  officers  or  directors  or any of its
         salaried employees whose monthly compensation exceeds $1,000; or (viii)
         made any increase in any profit sharing,  bonus, deferred compensation,
         insurance,   pension,  retirement,  or  other  employee  benefit  plan,
         payment, or arrangement made to, for, or with its officers,  directors,
         or employees;

                                       2
<PAGE>

         (c)  Rainbow  has not (i)  borrowed  or agreed  to borrow  any funds or
         incurred,  or become  subject to, any material  obligation or liability
         (absolute  or  contingent)   except  as  disclosed  herein  and  except
         liabilities  incurred in the ordinary course of business;  (ii) paid or
         agreed  to pay any  material  obligations  or  liability  (absolute  or
         contingent) other than current liabilities reflected in or shown on the
         most recent Rainbow  balance sheet,  and current  liabilities  incurred
         since that date in the ordinary course of business and professional and
         other fees and  expenses in  connection  with the  preparation  of this
         Agreement and the consummation of the transactions contemplated hereby;
         (iii) sold or  transferred,  or agreed to sell or transfer,  any of its
         assets, properties, or rights (except assets, properties, or rights not
         used or useful in its business  which, in the aggregate have a value of
         less than  $1,000),  or  canceled,  or agreed to  cancel,  any debts or
         claims (except debts or claims which in the aggregate are of a value of
         less than $1,000);  (iv) made or permitted any amendment or termination
         of any contract,  agreement,  or license to which it is a party if such
         amendment  or  termination  is  material,  considering  the business of
         Rainbow;  or (v) issued,  delivered,  or agreed to issue or deliver any
         stock,  bonds  or  other  corporate   securities  including  debentures
         (whether authorized and unissued or held as treasury stock); and

         (d) to the best knowledge of Rainbow, Rainbow has not become subject to
         any law or regulation which materially and adversely affects, or in the
         future may  adversely  affect  the  business,  operations,  properties,
         assets, or condition of Rainbow.

         Section 1.08 Title and Related Matters. Rainbow has good and marketable
title to all of its properties,  inventory, interests in properties, and assets,
real and personal,  which are reflected in the most recent Rainbow balance sheet
or  acquired  after  that  date  (except  properties,  inventory,  interests  in
properties,  and assets  sold or  otherwise  disposed  of since such date in the
ordinary course of business) free and clear of all liens,  pledges,  charges, or
encumbrances  except (a) statutory liens or claims not yet delinquent;  (b) such
imperfections  of title and easements as do not and will not materially  detract
from or  interfere  with the present or proposed use of the  properties  subject
thereto or affected  thereby or otherwise  materially  impair  present  business
operations on such  properties;  and (c) as described in the Rainbow  Schedules.
Except as set forth in the Rainbow  Schedules,  Rainbow owns,  free and clear of
any liens,  claims,  encumbrances,  royalty interests,  or other restrictions or
limitations  of any nature  whatsoever,  any and all  products  it is  currently
manufacturing, including the underlying technology and data, and all procedures,
techniques,  marketing plans,  business plans,  methods of management,  or other
information  utilized in connection with Rainbow' business.  Except as set forth
in the Rainbow  Schedules,  no third party has any right to, and Rainbow has not
received  any notice of  infringement  of or conflict  with  asserted  rights of
others with respect to any product,  technology,  data, trade secrets, know-how,
propriety  techniques,  trademarks,  service marks,  trade names,  or copyrights
which,  individually  or in the  aggregate,  if the  subject  of an  unfavorable
decision,  ruling or  finding,  would have a  materially  adverse  effect on the
business,  operations,  financial  condition,  income, or business  prospects of
Rainbow or any material portion of its properties, assets, or rights.

         Section 1.09  Litigation  and  Proceedings.  Except as set forth in the
Rainbow Schedules,  there are no actions, suits, proceedings,  or investigations
pending  or,  to  the  knowledge  of  Rainbow  after  reasonable  investigation,
threatened by or against Rainbow or affecting Rainbow or its properties,  at law
or in equity,  before any court or other governmental agency or instrumentality,
domestic or foreign, or before any arbitrator of any kind. Rainbow does not have
any knowledge of any material  default on its part with respect to any judgment,
order, injunction,  decree, award, rule, or regulation of any court, arbitrator,
or governmental  agency or instrumentality or of any circumstances  which, after
reasonable investigation, would result in the discovery of such a default.

          Section 1.10     Contracts.
                           ---------

         (a) Except as included or described in the Rainbow Schedules, there are
         no "material" contracts,  agreements,  franchises,  license agreements,
         debt instruments or other commitments to which Rainbow is a party or by
         which it or any of its assets, products,  technology, or properties are
         bound other than those incurred in the ordinary  course of business (as
         used in this Agreement,  a "material" contract,  agreement,  franchise,
         license agreement,  debt instrument or commitment is one which (i) will
         remain in effect  for more than six (6)  months  after the date of this
         Agreement  or (ii)  involves  aggregate  obligations  of at least fifty
         thousand dollars ($50,000));

                                       3
<PAGE>

         (b) All contracts,  agreements,  franchises,  license  agreements,  and
         other  commitments  to  which  Rainbow  is a  party  or  by  which  its
         properties  are  bound  and which are  material  to the  operations  of
         Rainbow  taken as a whole are valid and  enforceable  by Rainbow in all
         respects,  except as limited by bankruptcy and  insolvency  laws and by
         other laws affecting the rights of creditors generally;

         (c)  Rainbow  is not a party  to or bound  by,  and the  properties  of
         Rainbow are not subject to any contract, agreement, other commitment or
         instrument;  any  charter  or  other  corporate  restriction;   or  any
         judgment,  order, writ,  injunction,  decree, or award which materially
         and adversely affects, the business operations,  properties, assets, or
         condition of Rainbow; and

         (d)  Except as  included  or  described  in the  Rainbow  Schedules  or
         reflected in the most recent Rainbow  balance  sheet,  Rainbow is not a
         party to any oral or written (i)  contract  for the  employment  of any
         officer or employee which is not terminable on 30 days, or less notice;
         (ii)  profit  sharing,  bonus,  deferred  compensation,  stock  option,
         severance pay,  pension benefit or retirement  plan,  (iii)  agreement,
         contract,  or  indenture  relating  to the  borrowing  of  money,  (iv)
         guaranty  of any  obligation,  other  than  one on which  Rainbow  is a
         primary  obligor,  for the borrowing of money or  otherwise,  excluding
         endorsements  made for collection  and other  guaranties of obligations
         which,  in the  aggregate do not exceed more than one year or providing
         for  payments in excess of $25,000 in the  aggregate;  (vi)  collective
         bargaining  agreement;  or (vii)  agreement  with any present or former
         officer or director of Rainbow.

         Section 1.11 Material Contract  Defaults.  Rainbow is not in default in
any material  respect under the terms of any  outstanding  contract,  agreement,
lease,  or other  commitment  which is  material  to the  business,  operations,
properties,  assets or  condition of Rainbow and there is no event of default in
any  material  respect  under  any such  contract,  agreement,  lease,  or other
commitment in respect of which Rainbow has not taken  adequate  steps to prevent
such a default from occurring.

         Section 1.12 No Conflict With Other Instruments.  The execution of this
Agreement  and  the  consummation  of  the  transactions  contemplated  by  this
Agreement will not result in the breach of any term or provision of,  constitute
an event of default under,  or terminate,  accelerate or modify the terms of any
material  indenture,  mortgage,  deed of  trust,  or  other  material  contract,
agreement,  or  instrument  to which  Rainbow  is a party or to which any of its
properties or operations are subject.

         Section 1.13  Governmental  Authorizations.  Except as set forth in the
Rainbow  Schedules,  Rainbow has all licenses,  franchises,  permits,  and other
governmental  authorizations  that are legally  required to enable it to conduct
its  business in all material  respects as conducted on the date hereof.  Except
for  compliance  with federal and state  securities  and  corporation  laws,  as
hereinafter  provided,  no  authorization,  approval,  consent,  or order of, or
registration,  declaration, or filing with, any court or other governmental body
is required in  connection  with the  execution  and delivery by Rainbow of this
Agreement  and the  consummation  by  Rainbow of the  transactions  contemplated
hereby.

         Section 1.14 Compliance With Laws and Regulations.  Except as set forth
in the Rainbow Schedules, to the best of its knowledge Rainbow has complied with
all  applicable  statutes  and  regulations  of any  federal,  state,  or  other
governmental  entity or agency thereof,  except to the extent that noncompliance
would not materially and adversely affect the business, operations,  properties,
assets, or condition of Rainbow or except to the extent that noncompliance would
not result in the occurrence of any material liability for Rainbow.

         Section 1.15 Insurance.  All of the properties of Rainbow are fully
insured for their full replacement cost.

         Section 1.16 Approval of  Agreement.  The board of directors of Rainbow
has  authorized  the execution and delivery of this Agreement by Rainbow and has
approved  this  Agreement and the  transactions  contemplated  hereby,  and will
recommend to the Rainbow Shareholders that the Exchange be accepted by them.

         Section 1.17 Material  Transactions or  Affiliations.  Set forth in the
Rainbow Schedules is a description of every contract,  agreement, or arrangement
between  Rainbow and any  predecessor and any person who was at the time of such
contract,  agreement,  or arrangement an officer,  director, or person owning of
record,  or known by Rainbow to own  beneficially,  5% or more of the issued and
outstanding  common stock of Rainbow and which is to be performed in whole or in
part after the date hereof or which was  entered  into not more than three years
prior to the date  hereof.  Except as  disclosed  in the  Rainbow  Schedules  or
otherwise disclosed herein, no officer,  director,  or 5% shareholder of Rainbow
has,  or has had since  inception  of  Rainbow,  any known  interest,  direct or
indirect,  in any transaction with Rainbow which was material to the business of
Rainbow.  There are no commitments by Rainbow,  whether written or oral, to lend
any funds,  or to borrow  any money  from,  or enter into any other  transaction
with, any such affiliated person.

                                       4
<PAGE>

         Section  1.18  Labor  Relations.  Rainbow  has  not had  work  stoppage
resulting from labor  problems.  To the knowledge of Rainbow,  no union or other
collective  bargaining  organization is organizing or attempting to organize any
employee of Rainbow.

         Section 1.19 The Rainbow Schedules. Rainbow has delivered to Global the
following  schedules,  which  are  collectively  referred  to as  the "  Rainbow
Schedules"  and which  consist  of  separate  schedules  dated as of the date of
execution of this  Agreement,  all certified by the chief  executive  officer of
Rainbow as complete,  true,  and correct as of the date of this Agreement in all
material respects:

          (a) a schedule  containing complete and correct copies of the articles
     of  incorporation,  and  bylaws of Rainbow in effect as of the date of this
     Agreement;

          (b)  a  schedule  containing  the  financial   statements  of  Rainbow
     identified in paragraph 1.04(a);

          (c) a  Schedule  1.19(c)  containing  a list  indicating  the name and
     address of each  shareholder of Rainbow  together with the number of shares
     owned by him, her or it;

          (d) a schedule  containing a description of all real property owned by
     Rainbow,  together with a  description  of every  mortgage,  deed of trust,
     pledge,  lien,  agreement,  encumbrance,  claim,  or equity interest of any
     nature whatsoever in such real property;

          (e)  copies  of  all  licenses,   permits,   and  other   governmental
     authorizations  (or requests or  applications  therefor)  pursuant to which
     Rainbow  carries on or  proposes  to carry on its  business  (except  those
     which, in the aggregate, are immaterial to the present or proposed business
     of Rainbow);

          (f) a schedule  listing the  accounts  receivable  and notes and other
     obligations  receivable  of Rainbow as of September 30, 2001, or thereafter
     other than in the ordinary  course of business of Rainbow,  indicating  the
     debtor and amount,  and  classifying  the  accounts  to show in  reasonable
     detail the length of time,  if any,  overdue,  and  stating  the nature and
     amount  of any  refunds,  set  offs,  reimbursements,  discounts,  or other
     adjustments,  which are in the aggregate  material and due to or claimed by
     such debtor;

          (g) a  schedule  listing  the  accounts  payable  and  notes and other
     obligations  payable of Rainbow as of  September  30,  2001,  or that arose
     thereafter  other than in the  ordinary  course of the business of Rainbow,
     indicating  the  creditor and amount,  classifying  the accounts to show in
     reasonable  detail the length of time,  if any,  overdue,  and  stating the
     nature and amount of any refunds, set offs,  reimbursements,  discounts, or
     other  adjustments,  which  in the  aggregate  are  material  and due to or
     claimed by Rainbow respecting such obligations;

          (h) a schedule  setting  forth a description  of any material  adverse
     change  in  the  business,  operations,  property,  inventory,  assets,  or
     condition of Rainbow  since  September  30,  2001,  required to be provided
     pursuant to section 1.07 hereof; and

          (i) a schedule setting forth any other information,  together with any
     required  copies of  documents,  required  to be  disclosed  in the Rainbow
     Schedules by Sections 1.01 through 1.18.

          Rainbow shall cause the Rainbow Schedules and the instruments and data
delivered to Global hereunder to be promptly updated after the date hereof up to
and including the Closing Date.

         It is understood  and agreed that not all of the schedules  referred to
above have been  completed or are available to be furnished by Rainbow.  Rainbow
shall have until January 31, 2002 to provide such  schedules.  If Rainbow cannot
or fails to do so, or if Global acting  reasonably  finds any such  schedules or
updates  provided  after the date  hereof to be  unacceptable  according  to the
criteria set forth below,  Global may terminate this Agreement by giving written
notice to Rainbow  within five (5) days after the  schedules or updates were due
to be produced or were  provided.  For  purposes  of the  foregoing,  Global may
consider a disclosure in the Rainbow Schedules to be "unacceptable" only if that
item would have a material adverse impact on the financial  statements listed in
Section 1.04(a), taken as a whole.

                                       5
<PAGE>

         Section 1.20 Bank  Accounts;  Power of Attorney.  Set forth in Schedule
1.20 is a true and complete  list of (a) all accounts  with banks,  money market
mutual funds or securities or other financial institutions maintained by Rainbow
within the past twelve (12) months, the account numbers thereof, and all persons
authorized  to sign or act on behalf of Rainbow,  (b) all safe deposit boxes and
other  similar  custodial  arrangements  maintained  by Rainbow  within the past
twelve (12) months,  and (c) the names of all persons holding powers of attorney
from Rainbow or who are  otherwise  authorized  to act on behalf of Rainbow with
respect to any matter,  other than its officers and directors,  and a summary of
the terms of such powers or authorizations.

         Section 1.21 Valid  Obligation.  This  Agreement and all agreements and
other documents executed by Rainbow in connection  herewith constitute the valid
and binding  obligation of Rainbow,  enforceable in accordance with its or their
terms, except as may be limited by bankruptcy,  insolvency,  moratorium or other
similar laws  affecting  the  enforcement  of  creditors'  rights  generally and
subject to the  qualification  that the  availability  of equitable  remedies is
subject to the discretion of the court before which any proceeding  therefor may
be brought.

                                   ARTICLE II

              REPRESENTATIONS, COVENANTS, AND WARRANTIES OF GLOBAL

         As an  inducement  to, and to obtain the  reliance  of Rainbow  and the
Rainbow  Shareholders,   except  as  set  forth  in  the  Global  Schedules  (as
hereinafter defined), Global represents and warrants as follows:

         Section 2.01  Organization.  Global is a  corporation  duly  organized,
validly existing, and in good standing under the laws of the State of Nevada and
has the  corporate  power and is duly  authorized,  qualified,  franchised,  and
licensed  under all  applicable  laws,  regulations,  ordinances,  and orders of
public  authorities  to own all of its  properties  and assets,  to carry on its
business in all material respects as it is now being conducted, and except where
failure  to be so  qualified  would not have a  material  adverse  effect on its
business,  there is no  jurisdiction  in which it is not  qualified in which the
character  and  location of the assets owned by it or the nature of the business
transacted by it requires  qualification.  Included in the Global  Schedules are
complete and correct copies of the  certificate of  incorporation  and bylaws of
Global as in effect on the date  hereof.  The  execution  and  delivery  of this
Agreement does not, and the consummation of the transactions contemplated hereby
will not,  violate any provision of Global's  certificate  of  incorporation  or
bylaws.  Global  has  taken all  action  required  by law,  its  certificate  of
incorporation,  its bylaws, or otherwise to authorize the execution and delivery
of this Agreement, and Global has full power, authority, and legal right and has
taken all action required by law, its certificate of  incorporation,  bylaws, or
otherwise to consummate the transactions herein contemplated.

         Section  2.02   Capitalization.   Global's  authorized   capitalization
consists  of  50,000,000  shares  of  common  stock,  par  value  $.001 of which
2,106,248  shares are issued and outstanding  and 5,000,000  shares of preferred
stock  $.001 par value of which  none are issued and  outstanding  (the  "Global
Shares").  All issued and outstanding shares are legally issued, fully paid, and
non-assessable  and not issued in violation of the preemptive or other rights of
any person.

         Section 2.03 Subsidiaries and Predecessor Corporations. Global does not
have  any  predecessor  corporation(s)  or  subsidiaries,   and  does  not  own,
beneficially  or of  record,  any  shares  of any other  corporation,  except as
disclosed in Schedule  2.03.  For purposes  hereinafter,  the term "Global" also
includes those subsidiaries, if any, set forth on Schedule 2.03.

         Section 2.04      Securities Filings; Financial Statements.

         (a) For at least the past  twelve  months  Global has timely  filed all
         forms,  reports and documents  required to be filed with the Securities
         and Exchange  Commission,  and has heretofore  delivered to Rainbow, in
         the form  filed  with the  Commission,  (i) all  quarterly  and  annual
         reports on Forms 10-QSB and 10-KSB filed since December 31, 1999,  (ii)
         all other  reports  filed by Global with the  Securities  and  Exchange
         Commission  since December 31, 1999  (collectively,  the "SEC Reports")
         and  (iii)  all  comment  letters  from  the  Securities  and  Exchange
         Commission  with respect to the SEC  Reports.  The SEC Reports (i) were
         prepared in accordance with the requirements of the Securities Exchange
         Act of 1934 or the Securities Act of 1933, as appropriate, and (ii) did
         not contain any untrue  statement of a material fact or omit to state a
         material  fact  required to be stated  therein or necessary in order to
         make the statements  therein,  in the light of the circumstances  under
         which they were made, not misleading.

                                       6
<PAGE>

         (b)  Included in the Global  Schedules  are (i) the  unaudited  balance
         sheets of Global and the  related  statements  of  operations  and cash
         flows as of and for the nine months ended  September  30, 2001 and (ii)
         the audited  balance sheets of Global as of December 31, 1999 and 2000,
         and the related audited statements of operations,  stockholders' equity
         and cash flows for the two fiscal  years  ended  December  31, 1999 and
         December 31, 2000,  together with the notes to such  statements and the
         opinion the CPA Networks LLC independent  certified public accountants,
         with respect thereto, all as set forth in the SEC Reports.

         (c) All such financial statements have been prepared in accordance with
         generally   accepted   accounting   principles   consistently   applied
         throughout  the periods  involved.  The Global  balance  sheets present
         fairly as of their respective dates the financial  condition of Global.
         As of the date of such  balance  sheets,  except  as and to the  extent
         reflected or reserved  against  therein,  Global had no  liabilities or
         obligations  (absolute or contingent)  which should be reflected in the
         balance  sheets  or the  notes  thereto  prepared  in  accordance  with
         generally  accepted  accounting  principles,  and all assets  reflected
         therein  are  properly  reported  and  present  fairly the value of the
         assets of Global,  in accordance  with  generally  accepted  accounting
         principles. The statements of operations, stockholders' equity and cash
         flows reflect fairly the  information  required to be set forth therein
         by generally accepted accounting principles.

         (d)  Global  has no  liabilities  with  respect  to the  payment of any
         federal,   state,   county,   local  or  other  taxes   (including  any
         deficiencies,  interest or penalties), except for taxes accrued but not
         yet due and payable.

         (e) Global has timely filed all state,  federal or local income  and/or
         franchise tax returns  required to be filed by it from inception to the
         date hereof. Each of such income tax returns reflects the taxes due for
         the period covered thereby, except for amounts which, in the aggregate,
         are immaterial.

         (f) The books and records,  financial and  otherwise,  of Global are in
         all material  aspects  complete and correct and have been maintained in
         accordance with good business and accounting practices.

         (g) All of Global's  assets are reflected on its financial  statements,
         and,  except  as set forth in the  Global  Schedules  or the  financial
         statements  of Global  or the notes  thereto,  Global  has no  material
         liabilities,  direct or indirect,  matured or unmatured,  contingent or
         otherwise.

         Section 2.05 Information.  The information  concerning Global set forth
in this  Agreement  and the Global  Schedules  is complete  and  accurate in all
material  respects and does not contain any untrue statements of a material fact
or omit to state a material fact required to make the statements  made, in light
of the  circumstances  under which they were made, not misleading.  In addition,
Global has fully disclosed in writing to Rainbow  (through this Agreement or the
Global  Schedules) all information  relating to matters  involving Global or its
assets or its present or past  operations or  activities  which (i) indicated or
may  indicate,  in the  aggregate,  the  existence  of a  greater  than  $25,000
liability or  diminution  in value,  (ii) have led or may lead to a  competitive
disadvantage on the part of Global or (iii) either alone or in aggregation  with
other information  covered by this Section,  otherwise have led or may lead to a
material  adverse effect on the transactions  contemplated  herein or on Global,
its assets,  or its  operations  or  activities  as  presently  conducted  or as
contemplated to be conducted after the Closing Date, including,  but not limited
to, information relating to governmental,  employee,  environmental,  litigation
and securities matters and transactions with affiliates.

         Section  2.06  Options or  Warrants.  There  are no  existing  options,
warrants, calls, or commitments of any character relating to the authorized and
unissued stock of Global.

         Section 2.07 Absence of Certain Changes or Events.  Except as disclosed
in Exhibit 2.07, or permitted in writing by Rainbow,  since the date of the most
recent Global balance sheet:

         (a) there has not been (i) any material adverse change in the business,
         operations,  properties,  assets  or  condition  of  Global or (ii) any
         damage,  destruction  or loss to  Global  (whether  or not  covered  by
         insurance) materially and adversely affecting the business, operations,
         properties, assets or condition of Global;

         (b) Global has not (i)  amended its  certificate  of  incorporation  or
         bylaws; (ii) declared or made, or agreed to declare or make any payment
         of dividends or  distributions  of any assets of any kind whatsoever to
         stockholders or purchased or redeemed, or agreed to purchase or redeem,
         any of its capital stock; (iii) waived any rights of value which in the
         aggregate  are outside of the  ordinary  course of business or material
         considering  the business of Global;  (iv) made any material  change in
         its method of management,  operation,  or accounting;  (v) entered into
         any  transactions  or agreements  other than in the ordinary  course of
         business;  (vi) made any  accrual  or  arrangement  for or  payment  of
         bonuses  or  special  compensation  of any  kind  or any  severance  or
         termination  pay to any present or former  officer or  employee;  (vii)
         increased the rate of  compensation  payable or to become payable by it
         to any of its officers or  directors  or any of its salaried  employees
         whose monthly  compensation  exceed $1,000; or (viii) made any increase
         in  any  profit  sharing,  bonus,  deferred  compensation,   insurance,
         pension,  retirement,  or other  employee  benefit  plan,  payment,  or
         arrangement,   made  to,  for  or  with  its  officers,  directors,  or
         employees;

                                       7
<PAGE>

         (c)  Global  has not (i)  granted  or  agreed  to  grant  any  options,
         warrants,  or other  rights for its stock,  bonds,  or other  corporate
         securities calling for the issuance thereof; (ii) borrowed or agreed to
         borrow  any funds or  incurred,  or become  subject  to,  any  material
         obligation or liability  (absolute or  contingent)  except  liabilities
         incurred in the ordinary  course of  business;  (iii) paid or agreed to
         pay any material  obligations or  liabilities  (absolute or contingent)
         other than current liabilities reflected in or shown on the most recent
         Global balance sheet and current  liabilities  incurred since that date
         in the ordinary course of business and  professional and other fees and
         expenses in connection  with the  preparation of this Agreement and the
         consummation  of the  transaction  contemplated  hereby;  (iv)  sold or
         transferred,  or  agreed  to  sell  or  transfer,  any of  its  assets,
         properties, or rights (except assets, properties, or rights not used or
         useful in its business  which,  in the  aggregate  have a value of less
         than  $1000),  or  canceled,  or agreed to cancel,  any debts or claims
         (except debts or claims which in the aggregate are of a value less than
         $1000);  (v) made or  permitted  any  amendment or  termination  of any
         contract,  agreement,  or  license  to  which  it is a  party  if  such
         amendment  or  termination  is  material,  considering  the business of
         Global;  or (vi) issued,  delivered or agreed to issue or deliver,  any
         stock,  bonds,  or  other  corporate  securities  including  debentures
         (whether authorized and unissued or held as treasury stock),  except in
         connection with this Agreement; and

         (d) to the best  knowledge of Global,  it has not become subject to any
         law or regulation  which  materially and adversely  affects,  or in the
         future,  may adversely affect,  the business,  operations,  properties,
         assets or condition of Global.

         Section 2.08 Title and Related Matters.  Global has good and marketable
title to all of its properties,  inventory,  interest in properties, and assets,
real and personal,  which are reflected in the most recent Global  balance sheet
or  acquired  after  that  date  (except  properties,   inventory,  interest  in
properties,  and assets  sold or  otherwise  disposed  of since such date in the
ordinary course of business),  free and clear of all liens, pledges, charges, or
encumbrances  except (a) statutory liens or claims not yet delinquent;  (b) such
imperfections  of title and easements as do not and will not materially  detract
from or  interfere  with the present or proposed use of the  properties  subject
thereto or affected  thereby or otherwise  materially  impair  present  business
operations  on such  properties;  and (c) as described in the Global  Schedules.
Except as set forth in the Global Schedules,  Global owns, free and clear of any
liens,  claims,  encumbrances,  royalty  interests,  or  other  restrictions  or
limitations  of any nature  whatsoever,  any and all  products  it is  currently
manufacturing, including the underlying technology and data, and all procedures,
techniques,  marketing plans,  business plans,  methods of management,  or other
information  utilized in connection with Global's business.  Except as set forth
in the  Global  Schedules,  no third  party has any right to, and Global has not
received  any notice of  infringement  of or conflict  with  asserted  rights of
others with respect to any product,  technology,  data, trade secrets, know-how,
propriety  techniques,  trademarks,  service marks,  trade names,  or copyrights
which,  individually  or in the  aggregate,  if the  subject  of an  unfavorable
decision,  ruling or  finding,  would have a  materially  adverse  effect on the
business,  operations,  financial  condition,  income, or business  prospects of
Global or any material portion of its properties, assets, or rights.

         Section 2.09 Litigation and Proceedings.  There are no actions,  suits,
proceedings  or  investigations  pending  or,  to  the  knowledge  Global  after
reasonable investigation, threatened by or against Global or affecting Global or
its  properties,  at law or in equity,  before  any court or other  governmental
agency or instrumentality,  domestic or foreign, or before any arbitrator of any
kind  except as  disclosed  in Schedule  2.09.  Global has no  knowledge  of any
default on its part with  respect to any  judgement,  order,  writ,  injunction,
decree,  award,  rule or regulation of any court,  arbitrator,  or  governmental
agency  or   instrumentality   or  any   circumstance   which  after  reasonable
investigation would result in the discovery of such default.

         Section 2.10      Contracts.
                           ----------

         (a) Global is not a party to, and its assets, products,  technology and
         properties are not bound by, any material contract,  franchise, license
         agreement, agreement, debt instrument or other commitments whether such
         agreement is in writing or oral, except as disclosed in Schedule 2.10.

                                       8
<PAGE>

         (b) All contracts,  agreements,  franchises,  license  agreements,  and
         other commitments to which Global is a party or by which its properties
         are bound and which are material to the operations of Global taken as a
         whole are valid and  enforceable  by Global in all respects,  except as
         limited by bankruptcy and  insolvency  laws and by other laws affecting
         the rights of creditors generally;

         (c) Global is not a party to or bound by, and the  properties of Global
         are  not  subject  to any  contract,  agreement,  other  commitment  or
         instrument;  any  charter  or  other  corporate  restriction;   or  any
         judgment,  order, writ,  injunction,  decree, or award which materially
         and adversely affects, the business operations,  properties, assets, or
         condition of Global; and

         (d)  Except  as  included  or  described  in the  Global  Schedules  or
         reflected  in the most recent  Global  balance  sheet,  Global is not a
         party to any oral or written (i)  contract  for the  employment  of any
         officer or employee which is not terminable on 30 days, or less notice;
         (ii)  profit  sharing,  bonus,  deferred  compensation,  stock  option,
         severance pay,  pension benefit or retirement  plan,  (iii)  agreement,
         contract,  or  indenture  relating  to the  borrowing  of  money,  (iv)
         guaranty of any obligation, other than one on which Global is a primary
         obligor,   for  the   borrowing  of  money  or   otherwise,   excluding
         endorsements  made for collection  and other  guaranties of obligations
         which,  in the  aggregate do not exceed more than one year or providing
         for  payments in excess of $25,000 in the  aggregate;  (vi)  collective
         bargaining  agreement;  or (vii)  agreement  with any present or former
         officer or director of Global.

         Section 2.11 Material  Contract  Defaults.  Global is not in default in
any material  respect under the terms of any  outstanding  contract,  agreement,
lease,  or other  commitment  which is  material  to the  business,  operations,
properties,  assets or  condition  of Global and there is no event of default in
any  material  respect  under  any such  contract,  agreement,  lease,  or other
commitment  in respect of which Global has not taken  adequate  steps to prevent
such a default from occurring.

         Section 2.12 No Conflict With Other Instruments.  The execution of this
Agreement  and  the  consummation  of  the  transactions  contemplated  by  this
Agreement will not result in the breach of any term or provision of,  constitute
a default under, or terminate, accelerate or modify the terms of, any indenture,
mortgage,  deed of trust,  or other  material  agreement or  instrument to which
Global is a party or to which any of its assets or operations are subject.

         Section  2.13  Governmental  Authorizations.  Global has all  licenses,
franchises,  permits,  and other governmental  authorizations,  that are legally
required  to  enable it to  conduct  its  business  operations  in all  material
respects as conducted on the date hereof. Except for compliance with federal and
state securities or corporation laws, as hereinafter provided, no authorization,
approval, consent or order of, of registration,  declaration or filing with, any
court or other  governmental  body is required in connection  with the execution
and delivery by Global of this Agreement and the  consummation  by Global of the
transactions contemplated hereby.

         Section 2.14 Compliance With Laws and  Regulations.  To the best of its
knowledge,  Global has complied with all applicable  statutes and regulations of
any federal,  state, or other applicable  governmental entity or agency thereof,
except to the extent  that  noncompliance  would not  materially  and  adversely
affect the business,  operations,  properties,  assets or condition of Global or
except to the extent that  noncompliance  would not result in the  occurrence of
any material  liability.  This compliance  includes,  but is not limited to, the
filing of all reports to date with federal and state securities authorities.

         Section 2.15 Insurance.  All of the properties of Global are fully
insured for their full replacement cost.

         Section 2.16  Approval of  Agreement.  The board of directors of Global
has  authorized  the execution and delivery of this  Agreement by Global and has
approved  this  Agreement  and the  transactions  contemplated  hereby  and will
recommend  to  its  shareholders  that  they  approve  this  Agreement  and  the
transactions contemplated hereby.

         Section  2.17  Continuity  of  Business  Enterprises.   Global  has  no
commitment  or present  intention  to  liquidate  Rainbow  or sell or  otherwise
dispose of a material  portion of  Rainbow'  business  or assets  following  the
consummation of the transactions contemplated hereby.


                                       9
<PAGE>

         Section 2.18 Material Transactions or Affiliations. Except as disclosed
herein and in the Global  Schedules,  there  exists no  contract,  agreement  or
arrangement  between  Global and any  predecessor  and any person who was at the
time of such contract,  agreement or arrangement an officer, director, or person
owning  of record  or known by  Global  to own  beneficially,  5% or more of the
issued and  outstanding  common  stock of Global and which is to be performed in
whole or in part after the date hereof or was  entered  into not more than three
years  prior  to  the  date  hereof.  Neither  any  officer,  director,  nor  5%
shareholder  of Global  has,  or has had since  inception  of Global,  any known
interest,  direct or  indirect,  in any such  transaction  with Global which was
material to the business of Global. Global has no commitment, whether written or
oral,  to lend any funds to,  borrow  any money  from,  or enter  into any other
transaction with, any such affiliated person.

         Section  2.19  Labor  Relations.  Global  has  not  had  work  stoppage
resulting  from labor  problems.  To the knowledge of Global,  no union or other
collective  bargaining  organization is organizing or attempting to organize any
employee of Global.

         Section  2.20 Global  Schedules.  Global has  delivered  to Rainbow the
following  schedules,   which  are  collectively  referred  to  as  the  "Global
Schedules" and which consist of separate schedules,  which are dated the date of
this  Agreement,  all certified by the chief  executive  officer of Global to be
complete,  true,  and accurate in all  material  respects as of the date of this
Agreement:

     (a)  a schedule  containing complete and accurate copies of the certificate
          of  incorporation  and bylaws of Global as in effect as of the date of
          this Agreement;

     (b)  a schedule containing the financial statements of Global identified in
          paragraph 2.04(b);

     (c)  a Schedule  2.20(c)  containing a list indicating the name and address
          of each shareholder of Global together with the number of shares owned
          by him, her or it;

     (d)  a schedule  containing a  description  of all real  property  owned by
          Global,  together with a description of every mortgage, deed of trust,
          pledge, lien, agreement, encumbrance, claim, or equity interest of any
          nature whatsoever in such real property;

     (e)  copies of all licenses, permits, and other governmental authorizations
          (or  requests  or  applications  therefor)  pursuant  to which  Global
          carries on or proposes to carry on its business  (except  those which,
          in the aggregate,  are immaterial to the present or proposed  business
          of Global);

     (f)  a  schedule  listing  the  accounts  receivable  and  notes  and other
          obligations  receivable  of  Global  as  of  September  30,  2001,  or
          thereafter  other than in the  ordinary  course of business of Global,
          indicating the debtor and amount, and classifying the accounts to show
          in reasonable detail the length of time, if any, overdue,  and stating
          the  nature  and  amount of any  refunds,  set  offs,  reimbursements,
          discounts,  or other adjustments  which are in the aggregate  material
          and due to or claimed by such debtor;

     (g)  a  schedule   listing  the  accounts   payable  and  notes  and  other
          obligations  payable of Global as of September 30, 2001, or that arose
          thereafter  other  than in the  ordinary  course  of the  business  of
          Global,  indicating the creditor and amount,  classifying the accounts
          to show in reasonable detail the length of time, if any, overdue,  and
          stating   the   nature   and   amount  of  any   refunds,   set  offs,
          reimbursements,   discounts,  or  other  adjustments,   which  in  the
          aggregate are material and due to or claimed by Global respecting such
          obligations;

     (h)  a schedule  setting forth a description of any material adverse change
          in the business, operations, property, inventory, assets, or condition
          of Global since September 30, 2001 required to be provided pursuant to
          section 2.07 hereof; and

     (i)  a schedule  setting  forth any other  information,  together  with any
          required  copies of documents,  required to be disclosed in the Global
          Schedules by Sections 2.01 through 2.19.

         Global shall cause the Global  Schedules and the  instruments  and data
delivered to Rainbow  hereunder to be promptly  updated after the date hereof up
to and including the Closing Date.


                                       10
<PAGE>

         It is understood  and agreed that not all of the schedules  referred to
above have been  completed or are  available  to be furnished by Global.  Global
shall have until January 31, 2002 to provide such schedules. If Global cannot or
fails to do so, or if Rainbow  acting  reasonably  finds any such  schedules  or
updates  provided  after the date  hereof to be  unacceptable  according  to the
criteria set forth below, Rainbow may terminate this Agreement by giving written
notice to Global within five (5) days after the schedules or updates were due to
be  produced  or were  provided.  For  purposes  of the  foregoing,  Rainbow may
consider a disclosure in the Global Schedules to be "unacceptable"  only if that
item would have a material adverse impact on the financial  statements listed in
Section 2.04(b), taken as a whole.

         Section 2.21 Bank  Accounts;  Power of Attorney.  Set forth in Schedule
2.21 is a true and complete  list of (a) all accounts  with banks,  money market
mutual funds or securities or other financial institutions  maintained by Global
within the past twelve (12) months, the account numbers thereof, and all persons
authorized  to sign or act on behalf of Global,  (b) all safe deposit  boxes and
other similar custodial arrangements maintained by Global within the past twelve
(12) months,  and (c) the names of all persons  holding  powers of attorney from
Global or who are  otherwise  authorized to act on behalf of Global with respect
to any matter, other than its officers and directors, and a summary of the terms
of such powers or authorizations.

         Section 2.22 Valid  Obligation.  This  Agreement and all agreements and
other documents executed by Global in connection  herewith  constitute the valid
and binding  obligation of Global,  enforceable in accordance  with its or their
terms, except as may be limited by bankruptcy,  insolvency,  moratorium or other
similar laws  affecting  the  enforcement  of  creditors'  rights  generally and
subject to the  qualification  that the  availability  of equitable  remedies is
subject to the discretion of the court before which any proceeding  therefor may
be brought.

                                   ARTICLE III

                                PLAN OF EXCHANGE

         Section 3.01 The Exchange.  On the terms and subject to the  conditions
set forth in this  Agreement,  on the Closing Date (as defined in Section 3.03),
each Rainbow  Shareholder who shall elect to accept the exchange offer described
herein (the "Accepting Shareholders"),  shall assign, transfer and deliver, free
and clear of all liens, pledges,  encumbrances,  charges,  restrictions or known
claims of any kind, nature, or description, the number of shares of common stock
of Rainbow set forth on  Schedule  1.19(c)  attached  hereto,  in the  aggregate
constituting  100% of the  issued  and  outstanding  shares of  common  stock of
Rainbow held by each of such shareholders;  the objective of such Exchange being
the acquisition by Global of 100% of the issued and outstanding  common stock of
Rainbow.  In  exchange  for the  transfer  of  such  securities  by the  Rainbow
Shareholders, Global shall issue to the Rainbow Shareholders (1) an aggregate of
15,000,000 of common stock of Global. At the Closing,  each Rainbow  Shareholder
shall, on surrender of his certificate or certificates representing such Rainbow
shares to Global or its  registrar or transfer  agent,  be entitled to receive a
certificate or certificates evidencing his proportionate interest in the Initial
Shares.  Upon  consummation of the  transaction  contemplated  herein,  assuming
participation by all of the Rainbow  Shareholders,  all of the shares of capital
stock of Rainbow shall be held by Global.

         Section 3.02 Anti-Dilution. The number of shares of Global common stock
issuable upon exchange pursuant to Section 3.01 shall be appropriately  adjusted
to take into account any other stock split, stock dividend, reverse stock split,
recapitalization,  or similar  change in the Global common stock which may occur
(i) between the date of the execution of this Agreement and the Closing Date, as
to the  Initial  Shares,  and (ii)  between  the date of the  execution  of this
Agreement and the release date, as to the Additional Shares.

         Section  3.03  Closing.  The closing  ("Closing")  of the  transactions
contemplated  by this  Agreement  shall  be on a date  and at  such  time as the
parties may agree ("Closing Date") but not later than December 31, 2001, subject
to the right of Global  or  Rainbow  to  extend  such  Closing  Date by up to an
additional  sixty  (60)  days.  Such  Closing  shall  take  place at a  mutually
agreeable time and place.

         Section 3.04 Closing Events. At the Closing,  Global,  Rainbow and each
of the Accepting Shareholders shall execute,  acknowledge, and deliver (or shall
ensure to be executed,  acknowledged,  and delivered) any and all  certificates,
opinions, financial statements,  schedules, agreements,  resolutions, rulings or
other  instruments  required by this Agreement to be so delivered at or prior to
the Closing,  together with such other items as may be  reasonably  requested by
the parties hereto and their  respective legal counsel in order to effectuate or
evidence the transactions  contemplated hereby. Among other things, Global shall
provide  an  opinion of  counsel  acceptable  to  Rainbow as to such  matters as
Rainbow may reasonably  request,  which shall include,  but not be limited to, a
statement,  to the  effect  that (i) to such  counsel's  best  knowledge,  after
reasonable  investigation,  from  inception  until the Closing Date,  Global has
complied with all applicable statutes and regulations of any federal,  state, or
other  applicable  governmental  entity or agency thereof,  except to the extent
that  noncompliance  would not  materially  and  adversely  affect the business,
operations,  properties,  assets or  condition of Global or except to the extent
that noncompliance  would not result in the occurrence of any material liability
(such compliance including,  but not being limited to, the filing of all reports
to date with  federal  and state  securities  authorities)  and (ii)  based on a
summary  of the  facts  and  applicable  law,  such  counsel  believes  that the
Placement  described in Section 4.08 below is not subject to "integration"  with
the  offering  being  made  pursuant  to the  Registration  Statement  ( Rainbow
acknowledges that "integration" is a highly factual issue not susceptible to the
rendering of a legal  opinion and that the  statement to be delivered  hereunder
shall  merely  constitute  a summary of the  reasoning  which  counsel to Global
believes would apply if a third party were to assert that such offerings  should
be integrated).

                                       11
<PAGE>

         Section 3.05      Termination.

     (a)  This  Agreement  may be terminated by the board of directors of either
          Global or Rainbow at any time prior to the Closing Date if:

          (i)  there  shall be any  actual or  threatened  action or  proceeding
               before any court or any  governmental  body  which  shall seek to
               restrain,  prohibit, or invalidate the transactions  contemplated
               by this  Agreement  and which,  in the judgement of such board of
               directors,  made in good  faith and based  upon the advice of its
               legal counsel, makes it inadvisable to proceed with the Exchange;
               or

          (ii) any of the  transactions  contemplated  hereby are disapproved by
               any regulatory authority whose approval is required to consummate
               such  transactions  (which does not include  the  Securities  and
               Exchange  Commission)  or in  the  judgement  of  such  board  of
               directors, made in good faith and based on the advice of counsel,
               there is substantial  likelihood  that any such approval will not
               be obtained or will be obtained only on a condition or conditions
               which  would be  unduly  burdensome,  making  it  inadvisable  to
               proceed with the Exchange.

         In the event of  termination  pursuant to this paragraph (a) of Section
         3.05, no obligation, right or liability shall arise hereunder, and each
         party shall bear all of the expenses  incurred by it in connection with
         the  negotiation,  drafting,  and  execution of this  Agreement and the
         transactions herein contemplated in accordance with the Expense Sharing
         Agreement attached hereto as Exhibit "B".

          (b)  This  Agreement  may be  terminated  by the board of directors of
               Global at any time prior to the Closing Date if:

          (i)  there  shall  have been any  change  after the date of the latest
               balance sheet of Rainbow in the assets, properties,  business, or
               financial  condition  of Rainbow,  which could have a  materially
               adverse  effect on the financial  statements of Rainbow listed in
               Section 1.04(a) taken as a whole, except any changes disclosed in
               the Rainbow Schedules;

          (ii) the board of  directors of Global  determines  in good faith that
               one or more of Global's  conditions  to Closing has not occurred,
               through no fault of Global.

          (iii)Global takes the termination  action specified in Section 1.18 as
               a result of Rainbow  Schedules  or updates  thereto  which Global
               finds unacceptable;

          (iv) on or  beforeJanuary  31,  2002,  Global  notifies  Rainbow  that
               Global's   investigation  pursuant  to  Section  4.01  below  has
               uncovered  information  which it finds  unacceptable  by the same
               criteria set forth in Section 1.19; or

          (v)  Rainbow shall fail to comply in any material  respect with any of
               its covenants or agreements contained in this Agreement or if any
               of the  representations or warranties of Rainbow contained herein
               shall  be  inaccurate  in  any  material   respect,   where  such
               noncompliance  or  inaccuracy  has not been cured within ten (10)
               days after written notice thereof.

         If this  Agreement  is  terminated  pursuant to this  paragraph  (b) of
         Section 3.05,  this  Agreement  shall be of no further force or effect,
         and no obligation,  right or liability  shall arise  hereunder,  except
         that Rainbow shall bear its own costs as well as the  reasonable  costs
         of  Global  in  connection  with  the  negotiation,   preparation,  and
         execution  of this  Agreement  and  qualifying  the  offer  and sale of
         securities  to  be  issued  in  the  Exchange  under  the  registration
         requirements, or exemption from the registration requirements, of state
         and federal securities laws.

                                       12
<PAGE>

          (c)  This  Agreement  may be  terminated  by the board of directors of
               Rainbow at any time prior to the Closing Date if:

          (i)  there  shall  have been any  change  after the date of the latest
               balance  sheet of Global in the assets,  properties,  business or
               financial  condition  of  Global,  which  could  have a  material
               adverse  effect on the  financial  statements of Global listed in
               Section 2.04(b) taken as a whole, except any changes disclosed in
               the Global Schedules;

          (ii) the board of directors of Rainbow  determines  in good faith that
               one or more of Rainbow'  conditions  to Closing has not occurred,
               through no fault of Rainbow;


          (iii)Rainbow takes the  termination  action  specified in Section 2.20
               as a result of Global  Schedules or updates thereto which Rainbow
               finds unacceptable;

          (iv) on or before  January  31,  2002,  Rainbow  notifies  Global that
               Rainbow'   investigation  pursuant  to  Section  4.01  below  has
               uncovered  information  which it finds  unacceptable  by the same
               criteria set forth in Section 2.20; or

          (v)  Global shall fail to comply in any  material  respect with any of
               its covenants or agreements contained in this Agreement or if any
               of the  representations  or warranties of Global contained herein
               shall  be  inaccurate  in  any  material   respect,   where  such
               noncompliance  or  inaccuracy  has not been cured within ten (10)
               days after written notice thereof.

         If this  Agreement  is  terminated  pursuant to this  paragraph  (c) of
         Section 3.05,  this  Agreement  shall be of no further force or effect,
         and no obligation,  right or liability  shall arise  hereunder,  except
         that Global shall bear its own costs as well as the reasonable costs of
         Rainbow and its principal  shareholders incurred in connection with the
         negotiation, preparation and execution of this Agreement.

                                   ARTICLE IV

                                SPECIAL COVENANTS

         Section 4.01 Access to Properties and Records.  Global and Rainbow will
each afford to the officers  and  authorized  representatives  of the other full
access to the  properties,  books and records of Global or Rainbow,  as the case
may be, in order that each may have a full  opportunity to make such  reasonable
investigation  as it shall desire to make of the affairs of the other,  and each
will furnish the other with such  additional  financial and  operating  data and
other information as to the business and properties of Global or Rainbow, as the
case may be, as the other shall from time to time  reasonably  request.  Without
limiting  the  foregoing,  as soon as  practicable  after the end of each fiscal
quarter (and in any event  through the last fiscal  quarter prior to the Closing
Date), each party shall provide the other with quarterly internally prepared and
unaudited financial statements.

         Section  4.02  Delivery of Books and Records.  At the Closing,  Rainbow
shall deliver to Global the originals of the  corporate  minute books,  books of
account, contracts,  records, and all other books or documents of Rainbow now in
the possession of Rainbow or its representatives.

         Section 4.03 Third Party Consents and Certificates.  Global and Rainbow
agree to cooperate  with each other in order to obtain any required  third party
consents to this Agreement and the transactions herein contemplated.

         Section 4.04 Name  Change.  At or prior to the Closing  Date,  Global's
Board of  Directors  shall have  approved an  amendment  to the  certificate  of
incorporation to change the name of Global to "China Global  Development,  Inc."
Such  amendment  shall be carried out promptly  upon approval of the same by the
shareholders of Global.

         Section 4.05 Global  Shareholder  Meeting.  Global shall call a special
shareholders meeting to be held on or prior to the Closing Date at which meeting
the shareholders of Global shall be requested to approve,  and Global's Board of
Directors  shall recommend  approval of, the terms of this Agreement,  including
the name change and increase in authorized capital described in Section 4.04 and
such other matters as shall require shareholder approval hereunder.

                                       13
<PAGE>

     Section 4.06 Consent of Rainbow  Shareholders.  Rainbow  shall use its best
efforts to obtain the consent of all Rainbow  Shareholders to participate in the
Exchange.

     Section  4.07  Designation  of  Directors  and  Officers.  On or before the
Closing Date, Global shall increase its board of directors to three (3) persons.
Michael Zheng shall be designated as Chairman of the Board of Global and Yu-Chen
Zhang & Baldwin Young , shall be designated as additional board members.

     Section 4.08 Exclusive  Dealing Rights.  Until 5:00 P.M.  Eastern  Daylight
Time on January 31, 2002.

         (a) In recognition of the substantial  time and effort which Global has
         spent  and will  continue  to spend in  investigating  Rainbow  and its
         business  and in  addressing  the matters  related to the  transactions
         contemplated   herein,  each  of  which  may  preempt  or  delay  other
         management  activities,  neither  Rainbow,  nor  any of  its  officers,
         employees,  representatives  or  agents  will  directly  or  indirectly
         solicit or initiate any  discussions or  negotiations  with, or, except
         where required by fiduciary obligations under applicable law as advised
         by  counsel,  participate  in any  negotiations  with  or  provide  any
         information  to or  otherwise  cooperate  in any  other  way  with,  or
         facilitate  or  encourage  any effort or attempt  by, any  corporation,
         partnership, person or other entity or group (other than Global and its
         directors, officers, employees,  representatives and agents) concerning
         any  merger,  sale of  substantial  assets,  sale of shares of  capital
         stock, (including without limitation, any public or private offering of
         the common stock of Rainbow) or similar transactions  involving Rainbow
         (all such  transactions  being  referred  to as "  Rainbow  Acquisition
         Transactions").  If Rainbow  receives  any  proposal  with respect to a
         Rainbow  Acquisition  Transaction,  it will immediately  communicate to
         Global the fact that it has received  such  proposal and the  principal
         terms thereof.

         (b) In recognition of the substantial time and effort which Rainbow has
         spent  and  will  continue  to spend in  investigating  Global  and its
         business  and in  addressing  the matters  related to the  transactions
         contemplated   herein,  each  of  which  may  preempt  or  delay  other
         management  activities,  neither  Global,  nor  any  of  its  officers,
         employees,  representatives  or  agents  will  directly  or  indirectly
         solicit or initiate any  discussions or  negotiations  with, or, except
         where required by fiduciary obligations under applicable law as advised
         by  counsel,  participate  in any  negotiations  with  or  provide  any
         information  to or  otherwise  cooperate  in any  other  way  with,  or
         facilitate  or  encourage  any effort or attempt  by, any  corporation,
         partnership,  person or other  entity or group  (other than Rainbow and
         its  directors,   officers,  employees,   representatives  and  agents)
         concerning any merger,  sale of substantial  assets,  sale of shares of
         capital stock,  (including  without  limitation,  any public or private
         offering  of  the  common  stock  of  Global  or  similar  transactions
         involving  Global (all such  transactions  being referred to as "Global
         Acquisition  Transactions").  If  Global  receives  any  proposal  with
         respect  to a  Global  Acquisition  Transaction,  it  will  immediately
         communicate  to Rainbow the fact that it has received such proposal and
         the principal terms thereof.

         Section 4.09      Actions Prior to Closing.

         (a) From and after the date of this  Agreement  until the Closing  Date
         and except as set forth in the Global Schedules or Rainbow Schedules or
         as permitted or  contemplated  by this  Agreement,  Global  (subject to
         paragraph (d) below) and Rainbow respectively, will each:

          (i)  carry on its business in substantially  the same manner as it has
               heretofore;

          (ii) maintain  and keep its  properties  in states of good  repair and
               condition as at present,  except for depreciation due to ordinary
               wear and tear and damage due to casualty;

          (iii)maintain in full force and effect insurance  comparable in amount
               and in scope of coverage to that now maintained by it;

          (iv) perform in all  material  respects all of its  obligations  under
               material  contracts,  leases,  and  instruments  relating  to  or
               affecting its assets, properties, and business;

                                       14
<PAGE>

          (v)  use its best  efforts  to  maintain  and  preserve  its  business
               organization intact, to retain its key employees, and to maintain
               its relationship with its material suppliers and customers; and

          (vi) fully  comply  with and  perform  in all  material  respects  all
               obligations  and duties  imposed on it by all  federal  and state
               laws and all rules, regulations, and orders imposed by federal or
               state governmental authorities.

     (b)  From and after the date of this  Agreement  until  the  Closing  Date,
          neither Global nor Rainbow will:

          (i)  make  any   changes  in  their   articles   or   certificate   of
               incorporation or bylaws;

          (ii) take any action described in Section 1.07 in the case of Rainbow,
               or in  Section  2.07,  in the  case  of  Global  (all  except  as
               permitted  therein  or as  disclosed  in the  applicable  party's
               schedules);

          (iii)enter into or amend any contract,  agreement, or other instrument
               of any of the types described in such party's  schedules,  except
               that a party may enter into or amend any contract,  agreement, or
               other instrument in the ordinary course of business involving the
               sale of goods or services; or

          (iv) sell any assets or  discontinue  any  operations  (other than the
               Divestiture),  sell any shares of capital  stock  (other  than as
               contemplated  in  Sections  4.07 and 4.08  hereof and the sale of
               securities  underlying existing warrants or options of Global) or
               conduct  any  similar  transactions  other  than in the  ordinary
               course of business.

     (C)  In light of the fact that Rainbow' shareholders will control Global as
          a result of the  Exchange,  from and after the date of this  Agreement
          until the Closing Date,  Global shall take no action which is material
          to its business without the prior written  approval of Rainbow,  which
          Rainbow may give or withhold in its sole discretion after consultation
          with Global.

                                       15
<PAGE>

         Section 4.10      Sales Under Rule 144 or 145,If Applicable.

         (a) Global  will use its best  efforts to at all times  comply with the
         reporting  requirements  of the  Securities  Exchange  Act of 1934,  as
         amended (the "Exchange  Act"),  including timely filing of all periodic
         reports required under the provisions of the Exchange Act and the rules
         and regulations promulgated thereunder.

         (b)  Upon  being  informed  in  writing  by  any  such  person  holding
         restricted  stock of Global that such person intends to sell any shares
         under  Rule  144,  Rule  145 or  Regulation  S  promulgated  under  the
         Securities  Act  (including  any  rule  adopted  in   substitution   or
         replacement  thereof),  Global  will  certify in writing to such person
         that it has filed all of the  reports  required to be filed by it under
         the Exchange Act to enable such person to sell such person's restricted
         stock under Rule 144, 145 or  Regulation S, as may be applicable in the
         circumstances,  or will inform  such person in writing  that it has not
         filed any such report or reports.

         (c) If any  certificate  representing  any  such  restricted  stock  is
         presented to Global's  transfer agent for  registration  of transfer in
         connection  with any sale  theretofore  made  under  Rule  144,  145 or
         Regulation S, provided such  certificate  is duly endorsed for transfer
         by the  appropriate  person(s) or accompanied by a separate stock power
         duly executed by the appropriate person(s) in each case with reasonable
         assurances  that such  endorsements  are genuine and effective,  and is
         accompanied  by an opinion of  counsel  satisfactory  to Global and its
         counsel that the stock transfer has complied with the  requirements  of
         Rule 144, 145 or Regulation S, as the case may be, Global will promptly
         instruct its transfer agent to register such shares and to issue one or
         more new certificates  representing  such shares to the transferee and,
         if  appropriate  under the provisions of Rule 144, 145 or Regulation S,
         as the case  may be,  free of any stop  transfer  order or  restrictive
         legend.  The  provisions of this Section 4.11 shall survive the Closing
         and  the  consummation  of  the   transactions   contemplated  by  this
         Agreement.

         Section 4.11      Indemnification.

         (a) Rainbow hereby agrees to indemnify Global and each of the officers,
         agents  and  directors  of Global as of the date of  execution  of this
         Agreement  against  any loss,  liability,  claim,  damage,  or  expense
         (including,  but  not  limited  to,  any  and  all  expense  whatsoever
         reasonably incurred in investigating,  preparing,  or defending against
         any litigation,  commenced or threatened, or any claim whatsoever),  to
         which  it or they may  become  subject  arising  out of or based on any
         inaccuracy appearing in or  misrepresentations  made under Article I of
         this  Agreement.  The  indemnification  provided for in this  paragraph
         shall  survive  the  Closing  and   consummation  of  the  transactions
         contemplated hereby and termination of this Agreement.

         (b) Global hereby agrees to indemnify Rainbow and each of the officers,
         agents,  and directors of Rainbow and each of the Rainbow  Shareholders
         as of the  date  of  execution  of this  Agreement  against  any  loss,
         liability,  claim,  damage, or expense (including,  but not limited to,
         any and all expense  whatsoever  reasonably  incurred in investigating,
         preparing,   or  defending   against  any   litigation,   commenced  or
         threatened,  or any claim  whatsoever),  to which it or they may become
         subject  arising  out of or based  on any  inaccuracy  appearing  in or
         misrepresentation  made  under  Article  II  of  this  Agreement.   The
         indemnification  provided  for in  this  paragraph  shall  survive  the
         Closing and  consummation of the transactions  contemplated  hereby and
         termination of this Agreement.

                                    ARTICLE V

                  CONDITIONS PRECEDENT TO OBLIGATIONS OF GLOBAL

         The  obligations  of Global  under this  Agreement  are  subject to the
satisfaction, at or before the Closing Date, of the following conditions:

         Section 5.01 Accuracy of Representations  and Performance of Covenants.
The  representations  and warranties made by Rainbow in this Agreement were true
when made and shall be true at the  Closing  Date with the same force and effect
as if such  representations  and  warranties  were made at and as of the Closing
Date (except for changes  therein  permitted by this  Agreement).  Rainbow shall
have  performed or complied with all covenants and  conditions  required by this
Agreement  to be  performed  or  complied  with by  Rainbow  prior  to or at the
Closing.  Global  shall  be  furnished  with  a  certificate,  signed  by a duly
authorized  executive  officer of Rainbow  and dated the  Closing  Date,  to the
foregoing effect.

         Section 5.02  Officer's  Certificate.  Global shall have been furnished
with a  certificate  dated the  Closing  Date and  signed  by a duly  authorized
officer of Rainbow to the effect that no litigation, proceeding,  investigation,
or inquiry is pending,  or to the best  knowledge of Rainbow  threatened,  which
might  result  in an  action  to  enjoin  or  prevent  the  consummation  of the
transactions  contemplated by this Agreement, or, to the extent not disclosed in
the Rainbow Schedules, by or against Rainbow, which might result in any material
adverse  change in any of the assets,  properties,  business,  or  operations of
Rainbow.

         Section 5.03 No Material  Adverse  Change.  Prior to the Closing  Date,
there shall not have occurred any change in the financial  condition,  business,
or operations of Rainbow nor shall any event have occurred which, with the lapse
of time or the giving of notice,  is  determined  to be  unacceptable  using the
criteria set forth in Section 1.19.

         Section 5.04 Good Standing. Global shall have received a certificate of
good standing  from the British  Virgin  Islands,  dated as of a date within ten
days prior to the Closing Date  certifying that Rainbow is in good standing as a
corporation in the British Virgin Islands.

         Section 5.05 Approval by Rainbow Shareholders.  The Exchange shall have
been  approved,  and shares  delivered in  accordance  with Section 3.01, by the
holders of not less than ninety percent (90%) of the outstanding common stock of
Rainbow, unless a lesser number is agreed to by Global.

         Section 5.06 No  Governmental  Prohibition.  No order,  statute,  rule,
regulation,  executive order, injunction,  stay, decree, judgment or restraining
order shall have been enacted, entered,  promulgated or enforced by any court or
governmental  or regulatory  authority or  instrumentality  which  prohibits the
consummation of the transactions contemplated hereby.

                                       16
<PAGE>

         Section 5.07 Consents. All consents,  approvals,  waivers or amendments
pursuant to all contracts,  licenses,  permits, trademarks and other intangibles
in connection with the transactions  contemplated  herein,  or for the continued
operation of Global and Rainbow after the Closing Date on the basis as presently
operated shall have been obtained.

         Section 5.08      Other Items.
                           ------------

         (a)  Global  shall  have  received  a  list  of  Rainbow'  shareholders
         containing the name, address, and number of shares held by each Rainbow
         shareholder  as of the  date  of  Closing,  certified  by an  executive
         officer of Rainbow as being true, complete and accurate; and

         (b) Global  shall  have  received  such  further  opinions,  documents,
         certificates or instruments  relating to the transactions  contemplated
         hereby as Global may reasonably request.

                                   ARTICLE VI

                 CONDITIONS PRECEDENT TO OBLIGATIONS OF Rainbow
                          AND THE Rainbow SHAREHOLDERS

         The  obligations  of Rainbow  and the Rainbow  Shareholders  under this
Agreement are subject to the satisfaction, at or before the Closing Date, of the
following conditions:

         Section 6.01 Accuracy of Representations  and Performance of Covenants.
The  representations  and warranties  made by Global in this Agreement were true
when made and shall be true as of the Closing Date  (except for changes  therein
permitted  by  this  Agreement)  with  the  same  force  and  effect  as if such
representations  and  warranties  were  made  at  and as of  the  Closing  Date.
Additionally,  Global shall have  performed  and complied with all covenants and
conditions required by this Agreement to be performed or complied with by Global
and shall have  satisfied  the  conditions  described  below  prior to or at the
Closing:

         (a) Immediately prior to the Closing, Global shall have no more than an
         aggregate of 4,590,127 shares of common stock issued and outstanding or
         issuable  pursuant to outstanding  warrants and options,  excluding any
         shares and warrants issuable pursuant to the Exchange or the Placement.

         (b) The shareholders of Global shall have approved the Exchange and the
          related transactions described herein.

Rainbow shall have been furnished with certificates,  signed by duly authorized
executive  officers  of Global  and dated the  Closing  Date,  to the  foregoing
effect.

         Section 6.02 Officer's  Certificate.  Rainbow shall have been furnished
with certificates dated the Closing Date and signed by duly authorized executive
officers of Global, to the effect that no litigation, proceeding,  investigation
or inquiry is pending,  or to the best  knowledge  of Global  threatened,  which
might  result  in an  action  to  enjoin  or  prevent  the  consummation  of the
transactions  contemplated  by this Agreement or, to the extent not disclosed in
the Global Schedules,  by or against Global,  which might result in any material
adverse change in any of the assets, properties or operations of Global.

         Section 6.03 No Material  Adverse  Change.  Prior to the Closing  Date,
there shall not have occurred any change in the financial condition, business or
operations of Global nor shall any event have occurred which,  with the lapse of
time or the  giving  of  notice,  is  determined  to be  unacceptable  using the
criteria set forth in Section 2.20.

         Section 6.04 Good Standing. Global shall have received a certificate of
good  standing  from the  Secretary  of State of the  State of  Nevada  or other
appropriate office, dated as of a date within ten days prior to the Closing Date
certifying  that  Global is in good  standing as a  corporation  in the State of
Nevada and has filed all tax  returns  required to have been filed by it to date
and has paid all taxes reported as due thereon.

         Section 6.05 No  Governmental  Prohibition.  No order,  statute,  rule,
regulation,  executive order, injunction,  stay, decree, judgment or restraining
order shall have been enacted, entered,  promulgated or enforced by any court or
governmental  or regulatory  authority or  instrumentality  which  prohibits the
consummation of the transactions contemplated hereby.

                                       17
<PAGE>

         Section 6.06 Consents. All consents,  approvals,  waivers or amendments
pursuant to all contracts,  licenses,  permits, trademarks and other intangibles
in connection with the transactions  contemplated  herein,  or for the continued
operation of Global and Rainbow after the Closing Date on the basis as presently
operated shall have been obtained.

         Section 6.07 Other Items. Rainbow shall have received further opinions,
documents,   certificates,   or   instruments   relating  to  the   transactions
contemplated hereby as Rainbow may reasonably request.

                                   ARTICLE VII

                                  MISCELLANEOUS

         Section 7.01 Brokers.  Global and Rainbow agree that, except as set out
on Schedule 7.01 attached  hereto,  there were no finders or brokers involved in
bringing  the parties  together  or who were  instrumental  in the  negotiation,
execution or consummation  of this  Agreement.  Global and Rainbow each agree to
indemnify  the other  against  any claim by any third  person  other  than those
described above for any commission,  brokerage, or finder's fee arising from the
transactions contemplated hereby based on any alleged agreement or understanding
between the indemnifying party and such third person, whether express or implied
from the actions of the indemnifying party.

         Section  7.02  Governing  Law.  This  Agreement  shall be governed  by,
enforced,  and  construed  under and in  accordance  with the laws of the United
States of America and,  with respect to the matters of state law,  with the laws
of the State of Nevada  without  giving effect to principles of conflicts of law
thereunder.  Each of the parties (a)  irrevocably  consents  and agrees that any
legal or equitable  action or  proceedings  arising under or in connection  with
this Agreement shall be brought  exclusively in the federal courts of the United
States, (b) by execution and delivery of this Agreement,  irrevocably submits to
and  accepts,  with  respect to any such  action or  proceeding,  generally  and
unconditionally, the jurisdiction of the aforesaid court, and irrevocably waives
any and all  rights  such  party  may now or  hereafter  have to  object to such
jurisdiction.

         Section 7.03 Notices.  Any notice or other  communications  required or
permitted  hereunder  shall be in  writing  and shall be  sufficiently  given if
personally delivered to it or sent by telecopy,  overnight courier or registered
mail or certified mail, postage prepaid, addressed as follows:

         If to Global, to:                  China Global Development, Inc.
                                            1400 Quail Street, #138
                                            Newport Beach, CA 92660

         With copies to:                    Vanderkam & Sanders
                                            1600 Smith, Suite 4900
                                            Houston, Texas 77002

         If to  Rainbow Light Global
         Corporation:                       Rainbow Light Global Corporation
                                            Seventh District North
                                            Chung-Ping Region
                                            Beijing, PRC

or such other  addresses  as shall be  furnished  in writing by any party in the
manner for giving notices hereunder,  and any such notice or communication shall
be deemed to have been given (i) upon receipt, if personally delivered,  (ii) on
the day after dispatch,  if sent by overnight courier,  (iii) upon dispatch,  if
transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3)
days after mailing, if sent by registered or certified mail.

         Section 7.04 Attorney's Fees. In the event that either party institutes
any  action or suit to  enforce  this  Agreement  or to secure  relief  from any
default hereunder or breach hereof,  the prevailing party shall be reimbursed by
the losing party for all costs,  including reasonable  attorney's fees, incurred
in connection  therewith and in enforcing or collecting  any judgement  rendered
therein.

         Section 7.05  Confidentiality.  Each party hereto agrees with the other
that, unless and until the transactions contemplated by this Agreement have been
consummated,  it and its representatives will hold in strict confidence all data
and information obtained with respect to another party or any subsidiary thereof
from any  representative,  officer,  director or employee,  or from any books or
records or from personal inspection, of such other party, and shall not use such
data or  information  or disclose  the same to others,  except (i) to the extent
such data or information is published,  is a matter of public  knowledge,  or is
required  by law to be  published;  or  (ii) to the  extent  that  such  data or
information  must be used or disclosed in order to consummate  the  transactions
contemplated  by  this  Agreement.  In the  event  of the  termination  of  this
Agreement,  each party shall return to the other party all  documents  and other
materials obtained by it or on its behalf and shall destroy all copies, digests,
work papers,  abstracts or other materials relating thereto, and each party will
continue to comply with the confidentiality provisions set forth herein.

                                       18
<PAGE>

         Section  7.06 Public  Announcements  and  Filings.  Unless  required by
applicable  law or  regulatory  authority,  none of the  parties  will issue any
report,  statement or press release to the general public,  to the trade, to the
general trade or trade press, or to any third party (other than its advisors and
representatives in connection with the transactions contemplated hereby) or file
any  document,  relating to this  Agreement  and the  transactions  contemplated
hereby,  except as may be  mutually  agreed by the  parties.  Copies of any such
filings,  public  announcements or disclosures,  including any  announcements or
disclosures  mandated by law or  regulatory  authorities,  shall be delivered to
each party at least one (1) business day prior to the release thereof.

         Section 7.07 Schedules;  Knowledge. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules  delivered
pursuant to this Agreement.

         Section  7.08 Third  Party  Beneficiaries.  This  contract  is strictly
between Global and Rainbow,  and, except as specifically  provided, no director,
officer,  stockholder (other than the Rainbow  Shareholders),  employee,  agent,
independent  contractor  or any other  person or entity  shall be deemed to be a
third party beneficiary of this Agreement.

         Section 7.09 Expenses. Subject to Sections 3.05 and 7.04 above, whether
or not the Exchange is  consummated,  each of Global and Rainbow will bear their
own respective  expenses,  including legal,  accounting and  professional  fees,
incurred  in  connection  with the  Exchange  or any of the  other  transactions
contemplated hereby.

         Section 7.10 Entire  Agreement.  This  Agreement  represents the entire
agreement  between  the  parties  relating  to the  subject  matter  thereof and
supersedes all prior agreements,  understandings  and  negotiations,  written or
oral, with respect to such subject matter.

         Section 7.11 Survival;  Termination.  The representations,  warranties,
and covenants of the  respective  parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of two years.

         Section 7.12  Counterparts.  This Agreement may be executed in multiple
counterparts,  each of which shall be deemed an original  and all of which taken
together shall be but a single instrument.

         Section  7.13  Amendment  or Waiver.  Every  right and remedy  provided
herein shall be cumulative with every other right and remedy,  whether conferred
herein, at law, or in equity, and may be enforced concurrently  herewith, and no
waiver by any party of the  performance  of any obligation by the other shall be
construed as a waiver of the same or any other  default  then,  theretofore,  or
thereafter  occurring or existing.  At any time prior to the Closing Date,  this
Agreement may by amended by a writing signed by all parties hereto, with respect
to any of the  terms  contained  herein,  and  any  term  or  condition  of this
Agreement may be waived or the time for performance may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.

         Section 7.14 Best Efforts.  Subject to the terms and conditions  herein
provided,  each party  shall use its best  efforts  to  perform  or fulfill  all
conditions  and  obligations  to be  performed  or  fulfilled  by it under  this
Agreement so that the transactions  contemplated  hereby shall be consummated as
soon as  practicable.  Each party also agrees that it shall use its best efforts
to take, or cause to be taken,  all actions and to do, or cause to be done,  all
things  necessary,  proper or advisable under applicable laws and regulations to
consummate and make effective this Agreement and the  transactions  contemplated
herein.

         IN WITNESS  WHEREOF,  the  corporate  parties  hereto  have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
as of the date first-above written.

                                       19
<PAGE>



ATTEST:                                      China Global Development, Inc.

/s/ Baldwin Yung                             BY: /s/ Sheng Bao Hua
- ----------------                                ------------------
Secretary or Assistant Secretary                  President


ATTEST:                                       Rainbow LIGHT GLOBAL CORPORATION


BY:
Secretary or Assistant Secretary                  President

         The undersigned shareholders of Rainbow LIGHT GLOBAL CORPORATION hereby
agree to  participate  in the Exchange on the terms set forth above.  Subject to
Section 7.11 above,  each of the undersigned  hereby represents and affirms that
he has read each of the  representations  and warranties of Rainbow LIGHT GLOBAL
CORPORATION  set out in Article I hereof and that, to the best of his knowledge,
all of such representations and warranties are true and correct.



                                             ------------------,individually



                                             ------------------,individually



                                             ------------------,individually


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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