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<SEC-DOCUMENT>0001010549-04-000536.txt : 20040823
<SEC-HEADER>0001010549-04-000536.hdr.sgml : 20040823
<ACCEPTANCE-DATETIME>20040820174529
ACCESSION NUMBER:		0001010549-04-000536
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		10
CONFORMED PERIOD OF REPORT:	20040630
FILED AS OF DATE:		20040823

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHINA DIGITAL WIRELESS INC
		CENTRAL INDEX KEY:			0000721693
		STANDARD INDUSTRIAL CLASSIFICATION:	MALT BEVERAGES [2082]
		IRS NUMBER:				900093373
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-12536
		FILM NUMBER:		04989802

	BUSINESS ADDRESS:	
		STREET 1:		429 GUANGDONG ROAD
		CITY:			SHANGHAI
		STATE:			F4
		ZIP:			200001
		BUSINESS PHONE:		86-21 6336-8686

	MAIL ADDRESS:	
		STREET 1:		429 GUANGDONG ROAD
		CITY:			SHANGHAI
		STATE:			F4
		ZIP:			200001

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BOULDER ACQUISITIONS  INC
		DATE OF NAME CHANGE:	20020430

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BOULDER BREWING CO
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>chinadig10qsb063004.txt
<TEXT>

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


                                   FORM 10-QSB


[X]      QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934

                  For the quarterly period ended: June 30, 2004

[_]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                           Commission File No. 0-12536

                          China Digital Wireless, Inc.
        (Exact name of Small Business Issuer as Specified in Its Charter)


            Nevada                                              90-0093373
(State or Other Jurisdiction of                              (I.R.S. Employer
 Incorporation or Organization)                           Identification Number)

                               429 Guangdong Road
                   Shanghai, People's Republic of China 200001
                    (Address of Principal Executive Offices)
                                (86-21) 6336-8686
                           (Issuer's Telephone Number)

                           Boulder Acquisitions, Inc.
                   (Former Name, if Changed Since Last Report)


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


As of August 11, 2004,  17,018,692 shares of the Issuer's $.001 par value common
stock were outstanding.

Transitional Small Business Disclosure Format
                          Yes  [ ]              No  [X]



<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

Consolidated Balance Sheet as of June 30, 2004 (Unaudited)...................F-1

Consolidated Statements of Operations and Comprehensive Income for the
   three months and six months ended June 30, 2004 and 2003 (Unaudited)......F-2

Consolidated Statements of Shareholders' Equity (Unaudited)..................F-3

Consolidated Statements of Cash Flows for the six months ended
        June 30, 2004 and 2003 (Unaudited)...................................F-4

Notes to the Consolidated Financial Statements...............................F-5





<PAGE>
<TABLE>
<CAPTION>

                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                                                                     December 31,     June 30,
                                                                         2003           2004
                                                                     ------------   ------------
                                                                                    (Unaudited)
<S>                                                                  <C>            <C>
ASSETS

Current assets:
   Cash and cash equivalents                                         $  1,713,748   $  3,125,268
  Accounts receivable, net of allowance for doubtful accounts by
      $25,651 and $28,157                                               2,363,327      1,499,923
  Trade receivable from a related party                                      --          812,550
  Advances to employees, net of allowance for doubtful accounts
      by $659 and $2,411                                                   12,525         45,802
   Advances to vendors                                                     76,891        200,704
   VAT recoverable                                                         83,414           --
   Inventories                                                          1,591,223        532,796
   Deposits and prepaids                                                  248,288        305,682
   Deferred tax assets                                                      4,955          8,408
                                                                     ------------   ------------

Total current assets                                                    6,094,371      6,531,133
                                                                     ------------   ------------

Loan receivable from a related party                                         --        1,449,871
Escrow receivable                                                            --        1,500,000
Property and equipment, net                                             1,354,238      1,257,716
                                                                     ------------   ------------

Total assets                                                         $  7,448,609   $ 10,738,720
                                                                     ============   ============


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                  $    111,569   $      6,526
   Deferred revenue                                                       537,046        520,804
   Employee welfare payable                                                67,240         76,061
   VAT payable                                                               --          184,930
   Accrued liabilities                                                     49,090         61,529
                                                                     ------------   ------------

Total current liabilities                                                 764,945        849,850
                                                                     ------------   ------------

Total liabilities                                                         764,945        849,850
                                                                     ------------   ------------

Redeemable common stock, 0.001 par value; 1,482,456 shares
issued and outstanding, with a redemption price of $1.14 per share           --        1,690,000

Commitments

Stockholders' equity:
  Common stock - $0.001 par value, 100,000,000 shares
      authorized, 13,782,636 shares and 15,536,236 shares issued
      and outstanding                                                      13,783         15,537
   Additional paid-in capital                                           1,436,217      2,541,456
   Retained earnings                                                    5,233,652      5,641,713
  Accumulated other comprehensive income (loss) - translation
      adjustments                                                              12            164
                                                                     ------------   ------------

Total stockholder's equity                                              6,683,664      8,198,870
                                                                     ------------   ------------

Total liabilities and stockholders' equity                           $  7,448,609   $ 10,738,720
                                                                     ============   ============
</TABLE>


                 See accompanying notes to financial statements.

                                      F-1

<PAGE>
<TABLE>
<CAPTION>

                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                            AND COMPREHENSIVE INCOME

                                                         hree Months Ended              Six Months Ended
                                                             June 30,                       June 30,
                                                  ----------------------------    ----------------------------
                                                      2003            2004            2003            2004
                                                  ------------    ------------    ------------    ------------
                                                   (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)
<S>                                               <C>             <C>             <C>             <C>
Revenues:
   Mobile phone distribution                      $  3,374,437    $  2,788,455    $  7,784,498    $  4,914,465
   Mobile phone sales to a related party                  --         2,498,019            --         4,273,019
   Service revenue, net                                969,257         837,992       1,692,010       1,688,271
                                                  ------------    ------------    ------------    ------------
Total revenues                                       4,343,694       6,124,466       9,476,508      10,875,755

Cost of goods sold                                   3,107,222       2,586,342       7,026,158       4,526,396
Cost of goods sold to a related party                     --         2,266,305            --         4,005,730
Cost of service                                        218,509         236,136         451,754         463,909
                                                  ------------    ------------    ------------    ------------

Gross profit                                         1,017,963       1,035,683       1,998,596       1,879,720

Operating expenses:
   Selling                                              33,376          48,849          75,471          85,085
   General and administrative                           27,117       1,124,014         204,051       1,284,829
                                                  ------------    ------------    ------------    ------------

Total operating expenses                                60,493       1,172,863         279,522       1,369,914
                                                  ------------    ------------    ------------    ------------

Income from operations                                 957,470        (137,180)      1,719,074         509,806

Interest income (expense)                               (2,416)         13,592          (9,665)         13,592
                                                  ------------    ------------    ------------    ------------

Income (loss) before income taxes                      955,054        (123,588)      1,709,409         523,398

Income taxes                                            71,629          66,813         128,206         115,337
                                                  ------------    ------------    ------------    ------------

Net income (loss)                                 $    883,425    $   (190,401)   $  1,581,203    $    408,061
                                                  ============    ============    ============    ============

Other comprehensive income (loss):
   Translation adjustments                                (195)            482            (102)            152
                                                  ============    ============    ============    ============


Comprehensive income (loss)                       $    883,230    $   (189,919)   $  1,581,101    $    408,213
                                                  ============    ============    ============    ============


Basic earnings (loss) per share                   $       0.06    $      (0.01)   $       0.11    $       0.03
                                                  ============    ============    ============    ============

Weighted average common shares outstanding          13,782,636      13,959,267      13,782,636      13,871,440
                                                  ============    ============    ============    ============
</TABLE>



          See accompanying notes to consolidated financial statements.

                                      F-2
<PAGE>
<TABLE>
<CAPTION>

                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                      (In U.S. dollars, except share data)

                                                                  Additional                        Other            Total
                                         Common Stock              Paid-in         Retained      Comprehensive   Shareholders
                                    Shares         Amount          Capital         Earnings      Income (Loss)      Equity
                                -------------   -------------   -------------    -------------   -------------   -------------
<S>                             <C>             <C>             <C>              <C>             <C>             <C>
Balance at December 31, 2003       13,782,636   $      13,783   $   1,436,217    $   5,233,652   $          12   $   6,683,664

Recapitalization and
reorganization                      1,585,705           1,586         308,465             --              --           310,051

Shares issued for consulting
expense (unaudited)                   167,895             168         604,254             --              --           604,422

Shares issued for proceeds of
$190,000 (unaudited) *                166,667            --           410,001             --              --           410,001

Shares issued for proceeds of
$1.5 million (unaudited) *          1,315,789            --              --               --              --              --

Offset by issuing cost
(unaudited)                              --              --          (217,481)            --              --          (217,481)

Net income (unaudited)                   --              --              --            408,061            --           408,061

Translation adjustment
(unaudited)                              --              --              --               --               152             152
                                -------------   -------------   -------------    -------------   -------------   -------------

Balance at June 30, 2004
(unaudited)                        17,018,692   $      15,537   $   2,541,456    $   5,641,713   $         164   $   8,198,870
                                =============   =============   =============    =============   =============   =============

</TABLE>



*  According  to  Topic  D-98  from  SEC,  "Classification  and  Measurement  of
Redeemable  Securities,"  the  Company  believed  that  these  shares  should be
presented outside the permanent equity section,  however, these shares should be
considered to be included in determine  basic earning per share as there were no
contingency   surrounding   these   underlying   shares.   See  Note  3  "Equity
Transaction"."

          See accompanying notes to consolidated financial statements.

                                      F-3
<PAGE>
<TABLE>
<CAPTION>

                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                Increase (Decrease) in Cash and Cash Equivalents


                                                              Six Months Ended
                                                                  June 30,
                                                         --------------------------
                                                             2003           2004
                                                         -----------    -----------
                                                         (Unaudited)    (Unaudited)
<S>                                                      <C>            <C>
Cash flows from operating activities:
   Net income                                            $ 1,581,203    $   408,061
   Adjustments to reconcile net income to net cash
    provided by operating activities:
     Depreciation and amortization                           110,654        138,845
     Bad debt expenses                                         8,507          4,257
     Stock compensation                                         --        1,014,423
     Deferred tax assets                                        (131)        (3,453)
     Changes in operating assets and liabilities:
        Accounts receivables and advances to employees    (1,011,689)        13,319
        Prepaids and deposit                                  17,244        (57,394)
        Advance to vendors                                  (126,851)      (123,813)
        Inventories                                       (1,216,588)     1,058,427
        Accounts payable                                     140,197       (105,043)
        Deferred revenue                                     469,886        (16,242)
        Employee welfare payable                              12,548          8,821
        VAT recoverable                                      (76,549)        83,414
        VAT payable                                             --          184,930
        Accrued liabilities                                    3,396         12,439
                                                         -----------    -----------

Net cash provided by operating activities                    (88,173)     2,620,992
                                                         -----------    -----------

Cash flows from investing activities:
   Purchase of property, equipment, and software            (113,009)       (42,333)
   Decease (Increase) in due from parent                        --       (1,449,871)
                                                         -----------    -----------
Net cash provided by (used in) investing activities         (113,009)    (1,492,204)
                                                         -----------    -----------

Cash flows from financing activities:

   Recapitalization and reorganization                          --          310,051
   Proceeds from issuing redeemable common stock                --        1,690,000
   Escrow receivable                                            --       (1,500,000)
   Offset offering expenses                                     --         (217,481)
   Increase (Decrease) in due to parent                     (604,062)          --
                                                         -----------    -----------

Net cash provided by (used in) financing activities         (604,062)       282,570
                                                         -----------    -----------

Impact of changes in foreign exchange rates                      (95)           162
                                                         -----------    -----------

Net increase in cash and cash equivalents                   (805,339)     1,411,520

Cash and cash equivalents, beginning of the period         1,193,690      1,713,748
                                                         -----------    -----------

Cash and cash equivalents, end of the period             $   388,351    $ 3,125,268
                                                         ===========    ===========

Supplemental disclosure of cash flow information:
   Cash paid during the year for:
     Interest                                            $     9,665    $      --
     Income taxes                                            128,338        118,790
                                                         ===========    ===========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       F-4

<PAGE>

                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - Summary of Significant Accounting Policies

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial information and with the instructions to Form 10-QSB and Article 10 of
Regulation  S-X.  Accordingly,  they  do not  include  all the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring adjustments) considered necessary for fair presentation have
been included.  Operating  results for the six-month  period ended June 30, 2004
are not necessarily  indicative of the results that may be expected for the year
ending December 31, 2004.

Foreign Currency Translations and Transactions

The Renminbi  ("RMB"),  the national currency of PRC, is the primary currency of
the economic  environment  in which the  operations  of TCH are  conducted.  The
Company uses the United States dollar ("U.S.  dollars") for financial  reporting
purposes.

The Company  translates TCH's assets and liabilities into U.S. dollars using the
rate of exchange  prevailing  at the balance  sheet date,  and the  statement of
income is translated at average rates during the reporting  period.  Adjustments
resulting from the translation of TCH's financial  statements from RMB into U.S.
dollars  are   recorded  in   stockholders'   equity  as  part  of   accumulated
comprehensive  loss - translation  adjustments.  Gains or losses  resulting from
transactions  in  currencies  other than RMB are  reflected in the  statement of
income for the reporting periods.

Revenue Recognition

Revenues  generated from sales of mobile phones are recognized  when  persuasive
evidence of an  arrangement  exists,  delivery  of the  products  has  occurred,
customer  acceptance has been obtained,  which means the  significant  risks and
rewards of the ownership  have been  transferred  to the customer,  the price is
fixed or determinable and collectibility is reasonably assured.

The  Company,  through  TCH,  provides  wireless  receiver  users with access to
certain financial information provided by stock exchanges, comments and analyses
on stock market provided by certain reputable security  investment  companies in
China,  lottery  information,  weather forecast,  etc. through signing a monthly
subscription  agreement or buying a pre-charged  service card. TCH purchases the
aforementioned  information  from  respective  vendors and  reformats it through
decoding and recoding  and  transmits  the  reformatted  information  via Sifang
Information  into pager users constantly and stores them in the Company's server
in order for mobile phone users to dial in via China Mobile or China Unicom.  By
signing a monthly subscription  agreement,  wireless receiver users need to make
payments  for three- to  six-month  subscription  in  advance.  TCH  records the
proceeds as  deferred  revenue  and  amortizes  the  deferred  revenue  over the
subscription  period. When customers buy a pre-charged service card, the Company
records the  proceeds as deferred  revenue.  When a customer  starts to use this
card to access to the  Company's  server and starts to use a pager to access the
aforementioned  information,  the Company identifies the subscription period and
amortizes the deferred revenue over the subscription period.

In response to a retailer's request, the Company has an installing agent install
the Company's  software on mobile phones,  which are owned by the retailer.  The
retailer  sells  these  phones  for a premium  covering  a fee to be paid to the
installing agent and pre-charged  six-month  subscription fees to be paid to the
Company. After a customer using such a phone dials into the server to access the
desired information, the server records a unique identification number installed
on the mobile phone which indicates that a specific phone user starts his or her
subscription  period.  After  the  Company  receives  a  detailed  list from the
installing  agent  regarding the number of phones that have been  installed with
the Company's  software,  the Company matches this  information  with a detailed
list from the retailer  setting forth how many such phones have been sold. Based
on the number of such phones sold, the Company records  accounts  receivable and
deferred revenue correspondingly. At the date on which a customer starts to dial
into the  server,  the  six-month  subscription  period  begins and the  Company
amortizes deferred revenue accordingly.


                                      F-5
<PAGE>

                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Revenue Recognition (Continued)

Since April 2004,  the revenue  generated  from  selling  pre-charged  cards has
gradually  decreased while the revenue  generated  through monthly  subscription
with China Mobile  and/or China Unicom  (collectively  "Mobile  Operators")  has
gradually increased as the Mobile Operators' billing systems have been enhanced.
The Company's  affiliates,  Sifang  Information and Shanghai  Tianci  Industrial
Group  Co.,  Ltd.  ("Tianci"),  contract  with  the  Mobile  Operators  for  the
transmission  of the  Company's  value-added  information  service.  The  Mobile
Operators  bill and  collect  from  customers  and then pass  those fees (net of
billing and collection  service fees charged by the Mobile  Operators) to Sifang
Information  and Tianci who in turn pass those fees to the Company.  The Company
recognizes  net revenues  based on the total amount paid by its  customers,  for
which the Mobile Operators bill and collect on behalf of the Company. There is a
time lag  ranging  from 10 days to 45 days  between  the  date on which  service
period was  cut-off  and the date the Mobile  Operators  send out their  billing
statements due to the segregated billing systems of each provincial subsidiaries
of the Mobile  Operators.  For the six months ended June 30, 2004,  about 10% of
the  Company's  service  revenue from mobile phone user is  recognized  based on
monthly billing statements prepared by the provincial subsidiaries of the Mobile
Operators.  The Company has not recognized  service revenue based on the records
provided by its own server.  In addition,  the Mobile Operators charge a network
usage fee based on a fixed per message fee  multiplied by the excess of messages
sent over  messages  received  (This type  service  is not  covered by a monthly
service  subscription  and the Company  has no control  whether it will incur or
not.). These network usage fees charged by the Mobile Operators are reflected as
a part of cost of  services  in the  financial  statements.  Network  usage fees
charged by the Mobile Operators are reduced for messages received by the Company
because  the  Mobile  Operators  separately  charge  the  sender a fee for these
transmissions.

The Company  currently  records the mobile phone  service  revenue  based on the
amounts paid by its customers  netting of the Mobile  Operators'  service charge
for billing and collection on behalf of the Company. According to EITF Issue No.
99-19,  recognizing  revenue on a net basis in this  situation is appropriate if
the Company does not act as a principal, in connection with the provision of its
services. Factors which support a conclusion that the Company is not acting as a
principal include:

     o    limited ability to adjust the cost of services by adjusting the design
          or marketing of the service,
     o    limited ability to determine prices, the Company must follow the price
          policy within ranges prescribed by Mobile Operators, and
     o    limited ability to assume risk of non-payment by customers.

The Company has very limited ability to adjust the ratio of our revenues to cost
of services  (which include the Mobile  Operators'  network usage fee, and other
fees, if any). In addition,  the majority of service revenue derived from mobile
phone users are subject to the floor price for monthly service set by the Mobile
Operators  and the  Company  does  no have an  ability  to  negotiate  with  its
customers.  The Mobile  Operators will normally make payments within the 30 days
after the Company receives the billing  statement  because it takes time for the
Mobile Operators to collect payments from the Company's customers. Consequently,
the Company  bears  actually  less risk of  non-payments  by customers as Mobile
Operators need to take care of their  collections  first.  Only about 10% of the
total  service  revenue  derived from mobile phone users in the six months ended
June 30, 2004 was billed through the Mobile Operators' billing systems. Whereas,
there are three items of mobile phone  services with which the Company does have
an  ability to  determine  prices  and the  portion of this type of revenue  was
immaterial  in the six months  ended June 30, 2004.  Therefore,  the Company has
concluded  that  reporting  net revenue  billed  through  the Mobile  Operators'
billing systems is appropriate.

Cash and Cash Equivalents

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

Accounts Receivable, Employees Receivable, and Concentration of Credit Risk

During the normal course of business,  the Company extends  unsecured  credit to
its retail  customers  who are mainly  located in  Shanghai  metropolitan  area.


                                       F-6
<PAGE>

                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Typically,  credit terms require  payment to be made within 30 days of the sale.
The  Company  does not  require  collateral  from  its  customers.  The  Company
maintains its cash accounts at credit worthy financial institutions.

The Company  regularly  evaluates  and  monitors  the  creditworthiness  of each
customer on a case-by-case basis. The Company includes any account balances that
are determined to be uncollectible, along with a general reserve, in the overall
allowance for doubtful accounts. After all attempts to collect a receivable have
failed,  the  receivable  is written  off against  the  allowance.  Based on the
information available to management, the Company believes that its allowance for
doubtful  accounts  was adequate as of June 30, 2003 and 2004.  However,  actual
write-offs might exceed the recorded allowance.

The Company advances cash to sales people for their travel and business activity
needs. Under certain circumstances, the advances to employees might not be fully
recovered by the Company.  Accordingly,  the Company  also  provides  allowances
against any doubtful  accounts.  The following table presents combined allowance
activities in accounts receivable and advances to employees.

                                                                 June 30
                                                         -----------------------
                                                            2003         2004
                                                         ----------   ----------

Beginning balance                                        $   30,143   $   26,310
Additions charged to expense                                  8,507        4,258
Recovered                                                      --           --
Actual write off                                               --           --
                                                         ----------   ----------
Ending balance                                           $   38,650   $   30,568
                                                         ==========   ==========


Inventories

Inventories  consist  principally  of mobile phones  manufactured  by name brand
manufactures  with  various  features  and  are  stated  at the  lower  of  cost
(first-in, first-out) or market.

Rebates and Credits Receivable

In 2004 the Company's  major vendor began providing sales rebates and credits if
the Company can fulfill  certain sales volume  prescribed by the vendor in order
to attract  its  distributors  to sell more of its  products.  As a result,  the
Company is entitled  to receive  certain  rebates and credits for the  inventory
held and sold by the Company  within the specified  period of time as defined by
its vendor through submitting the necessary  application forms. In general, once
the vendor approves these  applications the amounts of these rebates and credits
will be deducted from the Company's  accounts payable to its vendor and decrease
the cost of goods sold or inventory held correspondingly.

Capitalization of Software Costs

The  Company's  software is  developed by an  independent  third party to enable
pager users to accept certain  recoded  information  which is transmitted by the
Company and enable  mobile phone users to dial into the  Company's  server.  The
software is for internal use and gives the Company the ability to provide  value
added information services. In accordance with SOP 98-1, the Company capitalizes
the  external  cost  incurred  to  develop  this  internal-use  software  by  an
engineering company at the application development stage and amortizes that cost
over the  estimated  economic life of the software (two or three years) which is
consistent with the expected life of a particular type of mobile phone.

Property and equipment

Properties  and equipment are recorded at cost and are stated net of accumulated
depreciation.  Depreciation expense is determined using the straight-line method
over the shorter of the estimated useful lives of the assets as follows:

     Buildings                                                     20 years
     Software                                                      2-3 years
     Vehicles and other equipment                                  2-5 years


                                       F-7

<PAGE>

                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Maintenance  and repairs are charged  directly to expense as  incurred,  whereas
betterment and renewals are generally  capitalized in their respective  property
accounts.  When an item is  retired  or  otherwise  disposed  of,  the  cost and
applicable  accumulated  depreciation are removed and the resulting gain or loss
is recognized and reflected as an item before operating income (loss).

Impairment of Long-Lived Assets

The Company applies the provisions of Statement of Financial Accounting Standard
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
No. 144"), issued by the Financial Accounting Standards Board ("FASB"). SFAS No.
144 requires that long-lived  assets be reviewed for impairment  whenever events
or changes in  circumstances  indicate that the carrying  amount of an asset may
not be  recoverable  through the estimated  undiscounted  cash flows expected to
result from the use and eventual  disposition  of the assets.  Whenever any such
impairment exists, an impairment loss will be recognized for the amount by which
the carrying value exceeds the fair value. There was no impairment of long-lived
assets in the six months ended June 30, 2003 and 2004.

Fair Value of Financial Instruments

The  carrying  amount of cash,  notes  receivable,  accounts  receivable,  other
receivables,  advances to vendor,  accounts payable and accrued  liabilities are
reasonable  estimates of their fair value because of the short maturity of these
items.  Loan receivable from a related party bear interest at 5% per annum which
is similar to the market interest rate in China as of June 30, 3004.

Value Added Tax

TCH is subject to value added tax ("VAT")  imposed by the PRC on TCH's  domestic
product sales. The output VAT is charged to customers who purchase mobile phones
from TCH and the input VAT is paid when TCH  purchases  mobile  phones  from its
vendors. The VAT rate ranges from 13% to 17%, in general, depending on the types
of products  purchased and sold.  The input VAT can be offset against the output
VAT. The VAT payable or receivable  balance  presented on the Company's  balance
sheets  represents the input VAT either less than or larger than the output VAT.
The debit balance  represents a credit against  future  collection of output VAT
instead of a real receivable.

Employee Welfare and Retirement Benefits

The PRC has been  undergoing  significant  reforms  with regard to its  employee
welfare and fringe benefits administration.  Any enterprise operating in the PRC
is  subject to  government-mandated  employee  welfare  and  retirement  benefit
contribution  as a part of operating  expense to State  Administration  of Labor
Affairs.  In accordance  with PRC laws and  regulations,  TCH  participates in a
multi-employer  defined  contribution  plan pursuant to which TCH is required to
provide  employees with certain  retirement,  medical and other fringe benefits.
PRC  regulations  require  TCH to pay the local  labor  administration  bureau a
monthly  contribution at a stated  contribution  rate based on the monthly basic
compensation  of qualified  employees.  The local labor  administration  bureau,
which manages various  investment funds, will take care of employee  retirement,
medical and other fringe  benefits.  TCH has no further  commitments  beyond its
monthly  contribution.  TCH contributed a total of $23,781, and $29,273 to these
funds as part of selling, general and administrative expenses for the six months
ended June 30, 2003 and 2004, respectively.

Income Taxes

The Company  accounts for income taxes in accordance with Statement of Financial
Accounting  Standards No 109,  "Accounting  for Income  Taxes" ("SFAS No. 109").
SFAS No. 109  requires  an entity to  recognize  deferred  tax  liabilities  and
assets.  Deferred tax assets and  liabilities  are recognized for the future tax
consequence  attributable to the difference  between the tax bases of assets and
liabilities and their reported amounts in the financial statements. Deferred tax
assets and liabilities are measured using the enacted tax rate expected to apply
to taxable income in the years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities of
a change in tax rates is  recognized  in income in the period that  included the
enactment date.


                                      F-8

<PAGE>

                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


The  Company's  Chinese  subsidiary  TCH is  registered  at Pudong  District  in
Shanghai and subject to a favorable  income tax rate of 15% compared to a normal
income  tax rate of 33% (30% for the  central  government  and 3% for the  local
government) under current PRC tax laws. However,  Sifang Information  registered
in the Shanghai  downtown  and area has been  treated by the Shanghai  Municipal
Administration   of  Labor  as  an  enterprise  that  provides   unemployed  and
handicapped people with jobs. Accordingly,  Sifang Information is entitled to be
subject  to a  favorable  income  tax rate of 15% and  qualifies  for income tax
exemption for three years from January 1, 2000 to December 31, 2002,  and 50% of
income tax  reduction for three years from January 1, 2003 to December 31, 2005.
The income tax provisions  presented on the Company's  financial  statements are
based on the  historical  actual income tax rates of Sifang  Information at 7.5%
for the six months  ended June 30, 2003 and 2004.  The  deferred  tax assets are
determined  based on the  historical  income tax rates  applicable at the Sifang
Information level.

There  is  no  income  tax  for  companies  domiciled  in  the  Cayman  Islands.
Accordingly,  the Company's  financial  statements do not present any income tax
provisions related to Cayman Islands tax jurisdiction.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting  period.  Actual results could differ materially from those
estimates.

Comprehensive Income (Loss)

The  Company  adopted  Statement  of  Financial  Accounting  Standard  No.  130,
"Reporting  Comprehensive Income" ("SFAS No. 130"), issued by the FASB. SFAS No.
130 establishes standards for reporting and presentation of comprehensive income
(loss) and its components in a full set of general-purpose financial statements.
The Company has chosen to report  comprehensive  income (loss) in the statements
of income and comprehensive income.  Comprehensive income (loss) is comprised of
net  income  and  all  changes  to  stockholders'  equity  except  those  due to
investments by owners and distributions to owners.

Earnings (Loss) Per Share

The Company  presents  earnings per share in  accordance  with the  Statement of
Financial  Accounting  Standards No. 128, "Earnings per Share" ("SFAS No. 128").
The statement  replaces the  calculation  of primary and fully diluted  earnings
(loss) per share  with  basic and  diluted  earnings  (loss)  per  share.  Basic
earnings  (loss) per share  includes  no  dilution  and is  computed by dividing
income (loss) available to common shareholders by the weighted average number of
shares outstanding during the period. Diluted earnings (loss) per share reflects
the  potential  dilution of  securities  that could share in the  earnings of an
entity,  similar to fully diluted  earnings (loss) per share. The Company has no
any potential common share equivalents as of June 30, 2004.

NOTE 2 - Recapitalization and Reorganization

On June 23, 2004, Boulder Acquisitions, Inc. (Boulder Acquisitions) entered into
a stock exchange  agreement with Sifang Holdings Co. Ltd.  Pursuant to the stock
exchange agreement,  Boulder Acquisitions issued 13,782,636 shares of its common
stock in exchange of 100% equity  interest in Sifang  Holdings Co. Ltd.,  making
Sifang Holdings a wholly owned subsidiary of Boulder Acquisitions.

Boulder Acquisitions was incorporated under the laws of the State of Colorado on
May 8, 1980 as Boulder Brewing Company  (Boulder  Brewing).  Boulder Brewing was
the  successor  to a  general  partnership  formed  in 1979.  From  the  initial
inception of the original  partnership  through 1990, Boulder Brewing was in the
business  of  operating a  microbrewery  (generally  defined as a brewery  which
produces less than 15,000 barrels per year) in Boulder,  Colorado.  During 1990,
as a result of various debt defaults,  Boulder  Brewing's assets were foreclosed
upon and the  Company  ceased  all  business  operations.  Boulder  Brewing  has
effectively had no operations, assets or liabilities since its fiscal year ended
December 31, 1990.


                                      F-9

<PAGE>

                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


In September  2001,  Boulder  Brewing  changed its state of  Incorporation  from
Colorado  to Nevada  by means of a merger  with and into  Boulder  Acquisitions,
Inc., a Nevada corporation formed on September 6, 2001 solely for the purpose of
effecting the  reincorporation.  The Articles of Incorporation and Bylaws of the
Nevada corporation are the Articles of Incorporation and Bylaws of the surviving
corporation. Such Articles of Incorporation eliminated the provision for Boulder
Acquisitions to issue preferred stock.

Sifang Holdings Co. Ltd. (Sifang  Holdings) was  incorporated  under the laws of
the  Cayman  Islands on March 8, 2004 for the  purpose of holding a 100%  equity
interest in TCH Data  Technology  Co. Ltd.  ("TCH").  TCH was  established  as a
foreign investment enterprise in Shanghai under the laws of People's Republic of
China ("PRC") on May 25, 2004 with a registered capital of $7.2 million.

The above stock exchange  transaction  resulted in those  shareholders of Sifang
Holdings obtaining a majority voting interest in Boulder Acquisitions. Generally
accepted  accounting  principles  require  that the company  whose  shareholders
retain the majority  interest in a combined  business be treated as the acquirer
for accounting purposes.  Consequently,  the stock exchange transaction has been
accounted for as a  recapitalization  of Sifang  Holdings as Sifang Holdings has
acquired  controlling  equity interest in Boulder  Acquisitions,  as of June 23,
2004. The reverse  acquisition process utilizes the capital structure of Boulder
Acquisitions  and the assets and  liabilities of Sifang Holdings are recorded at
historical cost.

Sifang  Holdings is the  continuing  operating  entity for  financial  reporting
purposes,  and the financial  statements prior to June 23, 2004 represent Sifang
Holdings'  financial  position and results of  operations.  As of June 23, 2004,
Boulder  Acquisitions  had only cash of $310,051,  and  stockholders'  equity of
$310,051 with 1,585,705  shares of common stock  outstanding,  all of which were
included in the consolidated financial statements of Sifang Holdings. Please see
the unaudited stockholders' equity statement for the period from January 1, 2004
to June 30,  2004.  Although  Sifang  Holdings  is  deemed  to be the  acquiring
corporation for financial accounting and reporting purposes, the legal status of
Boulder Acquisitions as the surviving corporation did not change.  Subsequent to
June 30, 2004,  Boulder  Acquisitions,  Inc.  changed its name to China  Digital
Wireless, Inc.

NOTE 3 - Equity Transactions

On June 23,  2004 the  Company  issued  167,895  share of its common  stock to a
consultant in lieu of cash payment. The trading price on June 23, 2004 was $3.60
per share, accordingly, the fair value of 167,895 shares was $604,422.

On June 23, 2004,  the Company  issued  166,667  share of its common stock to an
existing  stockholder  at a price  of $1.14  per  share in  exchange  for  gross
proceeds of $190,000 based on a stock purchase agreement. Pursuant to the signed
stock purchase  Agreement,  the Company  granted to the existing  stockholder an
option which requires the Company to purchase up to the  aforementioned  166,667
shares  of  common  stock at a price of  $1.14  per  share,  such  option  being
exercisable  at any time  after the date that is six  months  after the  company
files a registration statement on Form SB-2 with the SEC, registering the shares
purchased by the existing  stockholder,  up to and  including the earlier of the
date that such  registration  statement is declared  effective by the SEC or the
existing  stockholder's  shares are eligible for resale under Rule 144 under the
Securities Act of 1933.  According to Topic D-98 from SEC,  "Classification  and
Measurement of Redeemable  Securities,"  the Company  believed that these shares
should be presented outside the permanent equity section,  however, these shares
should be  considered  to be included in  determine  basic  earning per share as
there were no contingency  surrounding  these  underlying  shares.  In the above
transaction  of issuing  166,667  shares  incurred on June 23, 2004, the trading
price on that day was $3.60 per share. Due to the nature of insider transaction,
the  difference  between the price of $1.14 per share and the price of $3.60 per
share  was  recorded  as  deemed  compensation  to an  existing  stockholder  by
presenting  the  increase  of  $410,001 in  additional  paid-in  capital and the
increase of $410,001 in general and administrative expenses.

On June 28, 2004,  the Company  issued,  in  aggregate,  1,315,789 of its common
stock to three  investors  at a price of $1.14 per share in  exchange  for gross
proceeds of  $1,500,000  based on a stock  purchase  agreement.  Pursuant to the
signed stock purchase Agreement,  the Company granted to each of three investors
an option  which  requires  the  Company to  purchase  up to the  aforementioned
1,315,789 shares,  in aggregate,  of common stock at a price of $1.14 per share,


                                      F-10

<PAGE>

                   CHINA DIGITAL WIRELESS INC. AND SUBSIDIARY

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


such  option  being  exercisable  at any time  after the date that is six months
after the  company  files a  registration  statement  on Form SB-2 with the SEC,
registering  the  shares  purchased  by  the  existing  stockholder,  up to  and
including the earlier of the date that such  registration  statement is declared
effective  by the SEC or the  existing  stockholder's  shares are  eligible  for
resale under Rule 144 under the Securities Act of 1933. As of June 30, 2004, the
proceeds  of  $1.5  million  were  kept  in an  escrow  which  is  related  to a
stockholder. Due to the uncertainty when a Form SB-2 will be declared effective,
the Company treated this escrow  receivable a long-term assets instead a current
asset.  According to Topic D-98 from SEC,  "Classification  and  Measurement  of
Redeemable  Securities,"  the  Company  believed  that  these  shares  should be
presented outside the permanent equity section,  however, these shares should be
considered to be included in determine  basic earning per share as there were no
contingency surrounding these underlying shares.

The  Company  incurred  issuing  expense  of  $217,481  (mainly  audit and legal
expense) and accounted it for a reduction to additional paid-in capital.

NOTE 4 - Related Party Transactions

During  the six  months  ended  June  30,  2004,  the  Company  paid  to  Sifang
Information the amount of $283,919 for transmitting  value-added  information to
pager users pursuant to an information service and cooperation agreement between
the Company and Sifang Information.

On June 30, 2004 TCH signed an agreement  with Sifang  Information  Co. Ltd. for
developing  a smart  card  information  system  related  to  citizen  health and
exercise.  This  project  is  approved  by the  Shanghai  Municipal  Government.
Pursuant to the signed  agreement,  Sifang  Information  will develop smart card
information  system  in  terms  of  the  specifications   contained  the  design
blueprint.  This  card  can be used  for  accessing  gym  facilities  and  other
approved,  related health  facilities under the program.  In accordance with the
financial terms on the signed  agreement,  Sifang  Information will take care of
expenses related to the smart card marketing and related  customer  after-market
services.  TCH will take care of  expenses  related to the  detailed  smart card
information  system design and development,  hardware and software  maintenance,
and related  information  service.  In return,  TCH is entitled to share a major
portion of the future revenue  generated by this smart card information  system.
In order to initiate this project,  TCH gave Sifang Information a line of credit
up to  RMB20,000,000  (equivalent  approximately  $2,418,000)  for financing its
market promotion and penetration and deployment,  with an interest rate based on
the market  interest rate (at June 30, 2004 the interest rate was 5%),  interest
payable  monthly and principal  shall be repaid by Sifang  Information  no later
than June 30, 2006  resulting in an  estimated  total  expense of  RMB40,000,000
(equivalent  of $2.8  million).  The  aforementioned  $2.4 million  includes the
outstanding  balance of amounts  due from  Sifang of  $1,449,871  as of June 30,
2004. The interest income  incurred on the  outstanding  balance due from Sifang
Information  for the six months ended June 30, 2004 was $12,082,  based on 5% as
the annual interest rate.

During the six months  ended June 30, 2004,  TCH sold Samsung GSM mobile  phones
valued  at  $4,273,019   including  a  6%  mark-up  to  the  Shanghai   Shantian
Telecommunication  Technology  Inc.  (Shantian),  a related party,  where Sifang
Information  holds  51%  equity  interest.  As of June  30,  2004  the  accounts
receivable (trade) balance due from Shantian was $812,550.



                                      F-11

<PAGE>

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

Caution Concerning Forward-Looking Statements/Risk Factors
- ----------------------------------------------------------

The  following  discussion  should  be read in  conjunction  with the  Company's
financial  statements and the notes thereto and the other financial  information
appearing elsewhere in this document. In addition to historical information, the
following   discussion  and  other  parts  of  this  document   contain  certain
forward-looking information. When used in this discussion, the words "believes,"
"anticipates,"  "expects,"  and  similar  expressions  are  intended to identify
forward-looking  statements.  Such  statements  are subject to certain risks and
uncertainties,  which could cause actual results to differ materially from those
projected  due to a number of factors  beyond our control.  The Company does not
undertake  to publicly  update or revise any of its  forward-looking  statements
even if experience or future  changes show that the indicated  results or events
will not be realized.  You are  cautioned  not to place undue  reliance on these
forward-looking statements, which speak only as of the date hereof. You are also
urged to carefully  review and consider our  discussions  regarding  the various
factors,  which affect our  business,  included in this section and elsewhere in
this report.

Factors that might cause actual  results,  performance or achievements to differ
materially  from those projected or implied in such  forward-looking  statements
include,  among  other  things:  (i) the impact of  competitive  products;  (ii)
changes in law and  regulations;  (iii) adequacy and  availability  of insurance
coverage;  (iv)  limitations on future  financing;  (v) increases in the cost of
borrowings  and  unavailability  of debt or equity  capital;  (vi) the effect of
adverse publicity regarding our products;  (vii) the inability of the Company to
gain and/or hold market share;  (viii)  exposure to and expense of resolving and
defending  product   liability  claims  and  other  litigation;   (ix)  consumer
acceptance of the Company's products;  (x) managing and maintaining growth; (xi)
customer  demands;  (xii) market and industry  conditions  including pricing and
demand for products,  (xiii) the success of product  development and new product
introductions  into the  marketplace;  (xiv) the  departure  of key  members  of
management;  (xv) the ability of the Company to efficiently market its products;
as well as other risks and uncertainties that are described from time to time in
the Company's filings with the Securities and Exchange Commission.

Overview of Business Background

Sifang  Holdings  Co. Ltd.  ("Sifang")  was  incorporated  under the laws of the
Cayman Islands on March 8, 2004 for the purpose of holding 100% equity  interest
in TCH Data  Technology  Co.  Ltd.  ("TCH").  TCH was  established  as a foreign
investment  enterprise  in Shanghai  under the laws of the PRC on May 25,  2004,
with a registered capital of $7.2 million.

Sifang   Information   Technology   Co.  Ltd.   ("Sifang   Information")   is  a
Shanghai-based  privately owned enterprise established under the laws of the PRC
on August 14, 1998.  Sifang  Information is engaged in the business of pager and
mobile phone  distribution and provides value added information  services to the
customers in the Shanghai  metropolitan areas. In March 2004, Sifang Information
spun off its pager and mobile  phone  distribution  business and the majority of
its value added  information  services business by presenting a set of carve-out
financial  statements  for the years ended  December 31, 2002 and 2003 and three
months ended March 31, 2004 as if the spun-off  business had been a  stand-alone
company for two years and one  quarter.  On March 31,  2004  Sifang  Information
transferred the spun-off  business into TCH. Being a receiving  entity under the
common  control,  TCH  initially  recognized  all  the  assets  and  liabilities
transferred at their carrying  amounts in the accounts of Sifang  Information at
the date of transfer under the guidance of SFAS No. 141,  Appendix D. On May 26,
2004  Sifang  Information  transferred  its 100% of  equity  interest  in TCH in
exchange for 100% of equity  interest in Sifang.  Because the ultimate owners of
the three entities are the same group of owners and the three entities are under
the common control,  the transaction of exchanging ownership is accounted for at
historical  costs under the  guidance of SFAS No. 141,  Appendix D. Prior to May
26,  2004 there were no  activities  in Sifang.  As a result of  exchanging  the
ownership between TCH and Sifang,  TCH's historical  financial statements become
the historical financial statements of Sifang.


<PAGE>

Sifang  Information  operates in a business  segment  that is subject to certain
restrictions  imposed  by  the  government  of  the  PRC,  for  example,  paging
facilities,  radio  transmitting  stations and  transmitting  equipment owned by
Sifang Information are not allowed to be owned by foreign investment enterprises
in accordance with PRC government  regulations.  Therefore,  Sifang  Information
still keeps a small part of its business  and paging  facilities  in  compliance
with the relevant regulations and laws in PRC.

As a result of the  spin-off,  TCH is engaged in the  business  of mobile  phone
distribution  and  provides  pager  and  mobile  phone  (collectively  "wireless
receiver")  users with access to certain  information  reformatted  by TCH.  TCH
purchases  mobile  phone  products  from  first tier  distributors  and sells to
retailers with a mark-up.  In the process of providing  value-added  information
services  through  entering into monthly  subscription  agreements  with various
users, TCH purchases trading activity information from stock exchanges, comments
and analysis on PRC stock  markets  provided by certain  reputable  security and
investment companies, lottery information,  weather forecast, etc. and reformats
the  aforementioned  information  through decoding and recoding and then has the
reformatted   information   transmitted  by  Sifang  Information,   via  service
contracts,  to pager users.  The information is constantly saved in TCH's server
in order for mobile phone users to dial in via China Mobile or China Unicom.  By
signing  a  monthly  subscription  agreement,  wireless  users are asked to make
advance payments for either three- or six-month subscription periods.

Critical Accounting Policies

The Company  prepares its consolidated  financial  statements in accordance with
accounting  principles  generally accepted in the United States of America.  The
preparation  of these  financial  statements  requires the use of estimates  and
assumptions  that affect the reported  amounts of assets and liabilities and the
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period.  Management  periodically  evaluates the  estimates and judgments  made.
Management  bases its estimates and  judgments on historical  experience  and on
various  factors that are  believed to be  reasonable  under the  circumstances.
Actual  results  may  differ  from  these  estimates  as a result  of  different
assumptions or conditions.

The following critical accounting policies affect the more significant judgments
and estimates used in the  preparation of the Company's  consolidated  financial
statements.

Revenue Recognition

Revenues  generated from sales of mobile phones are recognized  when  persuasive
evidence of an  arrangement  exists,  delivery  of the  products  has  occurred,
customer  acceptance has been obtained,  which means the  significant  risks and
rewards of the ownership  have been  transferred  to the customer,  the price is
fixed or determinable and collectibility is reasonably assured.

The  Company,  through  TCH,  provides  wireless  receiver  users with access to
certain financial information provided by stock exchanges, comments and analyses
on stock market provided by certain reputable security  investment  companies in
China,  lottery  information,  weather forecast,  etc. through signing a monthly
subscription  agreement or buying a pre-charged  service card. TCH purchases the
aforementioned  information  from  respective  vendors and  reformats it through
decoding and recoding  and  transmits  the  reformatted  information  via Sifang
Information  into pager users  constantly and stores them in the TCH's server in
order for mobile  phone users to dial in via China  Mobile or China  Unicom.  By
signing a monthly subscription  agreement,  wireless receiver users need to make
payments for three- to six-month  subscription  in advance.  The Company records
the proceeds as deferred  revenue and  amortizes  the deferred  revenue over the
subscription  period. When customers buy a pre-charged service card, the Company
records the  proceeds as deferred  revenue.  When a customer  starts to use this
card to access to the  Company's  server and starts to use a pager to access the
aforementioned  information,  the Company identifies the subscription period and
amortizes the deferred revenue over the subscription period.

In response to a retailer's request, the Company has an installing agent install
the Company's  software on mobile phones,  which are owned by the retailer.  The
retailer  sells  these  phones  for a premium  covering  a fee to be paid to the
installing agent and pre-charged  six-month  subscription fees to be paid to the
Company. After a customer using such a phone dials into the server to access the
desired information, the server records a unique identification number installed
on the mobile phone which indicates that a specific phone user starts his or her
subscription  period.  After  the  Company  receives  a  detailed  list from the
installing  agent  regarding the number of phones that have been  installed with
the Company's  software,  the Company matches this  information  with a detailed

<PAGE>

list from the retailer  setting forth how many such phones have been sold. Based
on the number of such phones sold, the Company records  accounts  receivable and
deferred revenue correspondingly. At the date on which a customer starts to dial
into the  server,  the  six-month  subscription  period  begins and the  Company
amortizes deferred revenue accordingly.

Since April 2004,  the revenue  generated  from  selling  pre-charged  cards has
gradually  decreased while the revenue  generated  through monthly  subscription
with China Mobile  and/or China Unicom  (collectively  "Mobile  Operators")  has
gradually increased as the Mobile Operators' billing systems have been enhanced.
The Company's  affiliates,  Sifang  Information and Shanghai  Tianci  Industrial
Group  Co.,  Ltd.  ("Tianci"),  contract  with  the  Mobile  Operators  for  the
transmission  of the  Company's  value-added  information  service.  The  Mobile
Operators  bill and  collect  from  customers  and then pass  those fees (net of
billing and collection  service fees charged by the Mobile  Operators) to Sifang
Information  and Tianci who in turn pass those fees to the Company.  The Company
recognizes  net revenues  based on the total amount paid by its  customers,  for
which the Mobile Operators bill and collect on behalf of the Company. There is a
time lag  ranging  from 10 days to 45 days  between  the  date on which  service
period was  cut-off  and the date the Mobile  Operators  send out their  billing
statements due to the segregated billing systems of each provincial subsidiaries
of the Mobile  Operators.  For the six months ended June 30, 2004,  about 10% of
the  Company's  service  revenue from mobile phone user is  recognized  based on
monthly billing statements prepared by the provincial subsidiaries of the Mobile
Operators.  The Company has not recognized  service revenue based on the records
provided by its own server.  In addition,  the Mobile Operators charge a network
usage fee based on a fixed per message fee  multiplied by the excess of messages
sent over  messages  received  (This type  service  is not  covered by a monthly
service  subscription  and the Company  has no control  whether it will incur or
not.). These network usage fees charged by the Mobile Operators are reflected as
a part of cost of  services  in the  financial  statements.  Network  usage fees
charged by the Mobile Operators are reduced for messages received by the Company
because  the  Mobile  Operators  separately  charge  the  sender a fee for these
transmissions.

The Company  currently  records the mobile phone  service  revenue  based on the
amounts paid by its customers  netting of the Mobile  Operators'  service charge
for billing and collection on behalf of the Company. According to EITF Issue No.
99-19,  recognizing  revenue on a net basis in this  situation is appropriate if
the Company does not act as a principal, in connection with the provision of its
services. Factors which support a conclusion that the Company is not acting as a
principal include:

     o    limited ability to adjust the cost of services by adjusting the design
          or marketing of the service,
     o    limited ability to determine prices, the Company must follow the price
          policy within ranges prescribed by Mobile Operators, and
     o    limited ability to assume risk of non-payment by customers.

The Company has very limited ability to adjust the ratio of our revenues to cost
of services  (which include the Mobile  Operators'  network usage fee, and other
fees, if any). In addition,  the majority of service revenue derived from mobile
phone users are subject to the floor price for monthly service set by the Mobile
Operators  and the  Company  does  no have an  ability  to  negotiate  with  its
customers.  The Mobile  Operators will normally make payments within the 30 days
after the Company receives the billing  statement  because it takes time for the
Mobile Operators to collect payments from the Company's customers. Consequently,
the Company  bears  actually  less risk of  non-payments  by customers as Mobile
Operators need to take care of their  collections  first.  Only about 10% of the
total  service  revenue  derived from mobile phone users in the six months ended
June 30, 2004 was billed through the Mobile Operators' billing systems. Whereas,
there are three items of mobile phone  services with which the Company does have
an  ability to  determine  prices  and the  portion of this type of revenue  was
immaterial  in the six months  ended June 30, 2004.  Therefore,  the Company has
concluded  that  reporting  net revenue  billed  through  the Mobile  Operators'
billing systems is appropriate.

Accounts Receivable, Employees Receivable, and Allowance for Doubtful Accounts

During the normal course of business,  the Company extends  unsecured  credit to
its retail  customers  who are mainly  located in  Shanghai  metropolitan  area.
Typically  credit terms  require  payment to be made within 30 days of the sale.
The  Company  does not  require  collateral  from  its  customers.  The  Company
maintains its cash accounts at credit worthy financial institutions.


<PAGE>

The Company  regularly  evaluates  and  monitors  the  creditworthiness  of each
customer on a case-by-case basis. The Company includes any account balances that
are determined to be uncollectible, along with a general reserve, in the overall
allowance for doubtful accounts. After all attempts to collect a receivable have
failed,  the  receivable  is written  off against  the  allowance.  Based on the
information available to management, the Company believes that its allowance for
doubtful  accounts  was adequate as of June 30, 2003 and 2004.  However,  actual
write-offs might exceed the recorded allowance.

The Company advances cash to sales people for their travel and business activity
needs. Under certain circumstances, the advances to employees might not be fully
recovered by the Company.  Accordingly,  the Company  also  provides  allowances
against any doubtful accounts.

Inventories

Inventories  consist  principally  of mobile phones  manufactured  by name brand
manufactures  with  various  features  and  are  stated  at the  lower  of  cost
(first-in, first-out) or market.

Rebates and Credits Receivable

In 2004 the Company's  major vendor began providing sales rebates and credits if
the Company  fulfilled certain sales volume prescribed by the vendor in order to
attract its distributors to sell more of its products.  As a result, the Company
is entitled to receive  certain  rebates and credits for the inventory  held and
sold by the Company within the specified period of time as defined by its vendor
through submitting the necessary  application forms. In general, once the vendor
approves  these  applications  the amounts of these  rebates and credits will be
deducted from the Company's accounts payable to its vendor and decrease the cost
of goods sold or inventory held correspondingly.

Impairment of Long-Lived Assets

The Company applies the provisions of Statement of Financial Accounting Standard
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
No. 144"), issued by the Financial Accounting Standards Board ("FASB"). SFAS No.
144 requires that long-lived  assets be reviewed for impairment  whenever events
or changes in  circumstances  indicate that the carrying  amount of an asset may
not be  recoverable  through the estimated  undiscounted  cash flows expected to
result from the use and eventual  disposition  of the assets.  Whenever any such
impairment exists, an impairment loss will be recognized for the amount by which
the carrying value exceeds the fair value. There was no impairment of long-lived
assets in the six months ended June 30, 2003 and 2004.

Income Taxes

The Company  accounts for income taxes in accordance with Statement of Financial
Accounting  Standards No 109,  "Accounting  for Income  Taxes" ("SFAS No. 109").
SFAS No. 109  requires  an entity to  recognize  deferred  tax  liabilities  and
assets.  Deferred tax assets and  liabilities  are recognized for the future tax
consequence  attributable to the difference  between the tax bases of assets and
liabilities and their reported amounts in the financial statements. Deferred tax
assets and liabilities are measured using the enacted tax rate expected to apply
to taxable income in the years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities of
a change in tax rates is  recognized  in income in the period that  included the
enactment date.

TCH is  registered  at Pudong  District in  Shanghai  and subject to a favorable
income tax rate of 15% compared to a normal  income tax rate of 33% (30% for the
central  government and 3% for the local government) under current PRC tax laws.
However,  Sifang  Information  registered in the Shanghai  downtown and area has
been treated by the Shanghai Municipal  Administration of Labor as an enterprise
that provides unemployed and handicapped people with jobs.  Accordingly,  Sifang
Information is entitled to be subject to a favorable  income tax rate of 15% and
qualifies  for  income tax  exemption  for three  years from  January 1, 2000 to
December 31, 2002,  and 50% of income tax reduction for three years from January
1, 2003 to  December  31,  2005.  The income  tax  provisions  presented  on the
Company's  financial  statements are based on the  historical  actual income tax
rates of Sifang  Information  at 7.5% for the six months ended June 30, 2003 and
2004. The deferred tax assets are determined based on the historical  income tax
rates applicable at the Sifang Information level.


<PAGE>

There  is  no  income  tax  for  companies  domiciled  in  the  Cayman  Islands.
Accordingly,  the Company's  financial  statements do not present any income tax
provisions related to Cayman Islands tax jurisdiction.


Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting  period.  Actual results could differ materially from those
estimates.

Discussion and Analysis of Operating Results

Six Months Ended June 30, 2004 Comparing to Six Months Ended June 30, 2003

Revenue

Mobile phone distribution

The Company's  mobile phone  distribution  in the six months ended June 30, 2004
increased  by  approximately  $1,403,000,   representing  an  18%  increase,  to
approximately  $9,187,000  including  product sales to a related party (Shanghai
Shantian) as compared to $7,784,000  for the same period of the prior year.  The
increase  was  due  mainly  to  the  Company's   marketing  effort  and  further
facilitated by Samsung's marketing promotion.  For the six months ended June 30,
2004, Samsung's mobile phones accounted for about 95% of total product sales and
the other name brands mobile phones  accounted for the remaining 5%. Compared to
the six months ended June 30, 2003, Samsung's mobile phones accounted for 99% of
total  product  sales  and  other  brands  accounted  for  the  balance.  Market
competition  for mobile phone sales is so intensive  that the Company  decreased
its  overall  mark-up  ratio to 7% in order to  maintain  its  market  position,
compared to the mark-up ratio of 10% for the same period the prior year.

Mobile phone sales to a related party

Before  January 1, 2004 the Company only  distributed  CDMA mobile phones in the
Shanghai area. Beginning in January 2004 the Company entered into the GSM mobile
phone  distribution  business.  Because the retail market channel related to the
Company's GSM mobile phone distribution was developed and maintained by Shanghai
Shantian  Telecommunication  Technology  Inc.  ("Shantian"),   in  which  Sifang
Information holds a 51% equity interest, all of the Company's Samsung GSM mobile
phones were sold to  Shantian,  which made  Shantian the  Company's  second tier
distributor.  During  the six months  ended  June 30,  2004,  the  Company  sold
approximately  $4,273,000  of mobile  phones with a reasonable  mark-up of 6% as
compared to the  aggregate  mark-up  ratio of 7% for the products  sold to third
party customers. Comparing the mark-up ratio of 2% in the first quarter of 2004,
the increase in mark-up ratio was due to the fact that two types of products had
high  market  acceptance  and  that TCH kept a part of the  credit  and  rebates
received  from  vendors  while all  credits  and  rebates  received in the first
quarter of 2004 were  distributed to Shantian in order to support start-up stage
of Shantian's business

Service revenue, net

Total  service  revenue net of the related  business tax and  surcharge  for six
months ended June 30, 2004  decreased by  approximately  $4,000,  representing a
0.2% decrease,  to $1,688,000  compared to $1,692,000 for the same period of the
prior year.


<PAGE>
<TABLE>
<CAPTION>

Although  the total  service  revenue for the six months ended June 30, 2004 did
not  significantly  change as compared to the total service revenue for the same
period  of  the  prior  year,   the  components  of  service   revenue   changed
significantly.  Service revenue from mobile phone users for the six months ended
June 30, 2004 increased by approximately  $675,000 to $1,079,000 (of which about
$960,000  was  derived  from  an  independent   installing  agent)  compared  to
approximately  $404,000 for the same period of the prior year,  representing  an
increase of 167%.

Service  revenue  from  pager  users  for the six  months  ended  June 30,  2004
decreased by $679,000 to $609,000  compared to $1,288,000 for the same period of
the prior year,  representing a 53% decrease.  The Company believes that service
revenue  from  pager  users  will  continue  to  decrease  given  the  increased
popularity  of mobile  phones over  beepers and pagers.  The decrease in service
revenue  from pager users will likely  plateau at a certain  level as most lower
income pager users still like to use pagers to access the Company's  information
services.

Cost of goods sold

The cost of goods  sold for the six  months  ended June 30,  2004  increased  by
approximately  $1,506,000  to  $8,532,000  compared to  $7,026,000  for the same
period of the prior  year,  representing  an  approximately  21%  increase.  The
increase was consistent with the increases in revenue from product sales.

Cost of service

The cost of service for the six months ended June 30, 2004  increased by $12,000
to  $464,000  compared  to  $452,000  for the same  period  of the  prior  year,
representing  an  approximately  3%  increase.  The cost for  pager  value-added
information  service did not materially  change.  The increase was due mainly to
the increase in service fees charged by Mobile Operators along with the increase
in mobile phone users for  value-added  information  service and the increase in
purchasing costs related to more information  content.  The Company is intending
to expand the contents  included in its  value-added  service within the current
fee-charge  level  and  trying  to  establish  collaborative   relationships  or
partnerships with certain information content providers.  If this effort results
in any success, the increase in cost of service will be expected.

Gross profit

After  considering  the cost of goods sold and cost of  service,  the  Company's
gross profit for the six months ended June 30, 2004  decreased by  approximately
$119,000 to approximately $1,880,000, representing an approximately 6% decrease,
compared to the gross profit of approximately  $1,999,000 for the same period of
the prior year.  The  percentage  of gross profit over the total revenue for the
six months ended June 30, 2004 was approximately 17.3% compared to 21.1% for the
same period of the prior year,  representing  an 18% decrease.  The decrease was
attributable to:  (i)service  revenue generated in the six months ended June 30,
2004 accounted for only 15.5% of the total revenue  whereas the service  revenue
generated  in the same  period of the prior  year  accounted  for 17.9% of total
revenue and service revenue is more  profitable  than mobile phone  distribution
revenue; and (ii) the mark-up ratio for the mobile phone distribution  decreased
from 10% to 7% in order to  maintain  the  Company's  position  in the  Shanghai
market.

The  following  table  presents in summary  certain  information  related to the
various  components  of  revenue  in  a  manner  similar  to  segment  reporting
information.

                                                      Information    Information
                                     Mobile Phone      Service -       Service -
                                     Distribution    Mobile Phone       Pager           Total
                                     ------------    ------------    ------------    ------------
<S>                                  <C>             <C>             <C>             <C>
For six months ended June 30, 2004

Revenue                              $  9,187,484    $  1,079,440    $    608,831    $ 10,875,755
Cost                                    8,532,126         109,211         354,698       8,996,035
Gross profit                              655,358         970,229         254,133       1,879,720
Gross profit ratio                              7%             90%             42%             17%


<PAGE>

For six months ended June 30, 2003

Revenue                              $  7,784,498    $    404,208    $  1,287,802    $  9,476,508
Cost                                    7,026,158          97,365         354,389       7,477,912
Gross profit                              758,340         306,843         933,413       1,998,596
Gross profit ratio                             10%             76%             72%             21%
</TABLE>

Selling expenses

Selling   expenses  for  the  six  months  ended  June  30,  2004  increased  by
approximately  $10,000 to $85,000 compared to $75,000 for the same period of the
prior year,  representing an approximately 13% increase. The increase was due to
promotion expenses for value-added  information  service related to mobile phone
users


General and administrative expenses

General  and  administrative  expenses  for the six months  ended June 30,  2004
increased by approximately $1,081,000 to $1,285,000 compared to $204,000 for the
same period of the prior year,  representing an approximately 530% increase. The
increase   was  due  mainly  to  the   stock-based   compensation   expenses  of
approximately  $1,014,000  incurred  in US and a $24,000  increase  in  software
amortization  expenses  from  $46,000 to $70,000.  In  addition,  office  rental
expense  increased  by  approximately  $21,000 and  payroll  expense and related
employee  retirement  and fringe  benefit  expense  increased  by  approximately
$10,000  at the  TCH  level  in the  six  months  ended  June  30,  2004.  Other
miscellaneous  items accounted for the remaining increase of $12,000 for the six
months ended June 31, 2004. The increase was related to the Company's  expansion
at the TCH level.

The above  stock-based  compensation  for the six months ended June 30, 2004 was
approximately  $1,014,000  of which  $604,000  was the fair value of the 167,895
shares issued for a consultant in lieu of cash payment,  and other  $410,000 was
total  premium  difference  between the trading  price ($3.60 per share) and the
stock  purchase  price  ($1.14  per share) per a stock  purchase  agreement  for
issuing 166,667 redeemable shares.

Interest income (expense)

For the six months ended June 30, 2004,  the interest  income was  approximately
$14,000,  which was mainly derived from the amount due from Sifang  Information.
For the six months  ended June 30,  2003,  interest  expense  was  approximately
$10,000, which was paid to Sifang Information for temporary money borrowing used
for mobile phone distribution business.

Income tax

The Company's  Chinese  subsidiary is subject to taxation  under the laws of the
PRC,  and the  statutory  income tax rate for the six months ended June 30, 2003
and 2004 was 7.5%. In the six months ended of June 30, 2003 and 2004, income tax
expense was approximately $128,000 and $115,000,  respectively,  based on pretax
income of $1,709,000  and $523,000  (which  included the stock  compensation  of
$1,014,000 incurred in the U.S.).  Because the loss of approximately  $1,014,000
incurred in the U.S. did not offset the taxable income in China,  the income tax
expense  of  $115,000  incurred  in China  was  based on the  taxable  income of
approximately $1,537,000.

Net income

The Company  recorded  net income of $408,000  for the six months ended June 30,
2004, a $1,173,000 decrease in net income compared to a net income of $1,581,000
for the same period of the prior year, representing a 74% decrease. The decrease
in  net  income  was   attributable   to:  (i)  the   increase  in  general  and
administrative  expenses  for the six months  ended June 30,  2004  compared  to
general and  administrative  expenses for the same period of the prior year, and
(ii) the decrease of the gross profit  generated from mobile phone  distribution
business.

<PAGE>

Earnings per share

The earnings per share for the six months ended June 30, 2004 decreased by $0.08
to $0.03  compared to $0.11 for the same period of the prior year,  representing
an  approximately  73% decrease.  The decrease was due mainly to the decrease in
the  Company's  net income and the increase in the total  outstanding  shares of
common  stock  as  the  weighted  average  number  of  shares  of  common  stock
outstanding  for the six months ended June 30, 2004  increased by  approximately
0.6%,  compared the weighted average number of common stock  outstanding for the
same period of the prior year.

The Three Months Ended June 30, 2004 Compared to The three Months Ended June 30,
2003

Revenue

Mobile phone distribution

The Company's mobile phone  distribution in the three months ended June 30, 2004
increased by approximately  $1,912,000  (including sales to Shanghai Shantian, a
related  party),   representing  an  approximately  57%  increase,  compared  to
$3,374,000 for the same period of the prior year. The increase was due mainly to
the Company's  marketing effort and further  facilitated by Samsung's  marketing
efforts. In addition, the Company entered into the GSM mobile phone distribution
business  resulted in an increase in product sales  revenue.  Regarding  mark-up
ratios,  there was  little  change in the  mark-up  ratio of about 8% during the
three months ended June 30, 2003 and 2004.  Compared to the six months'  mark-up
ratio,  the slight  fluctuation  was mainly due to different  mark-up ratios for
different  mobile  phone  models in terms of the market  reaction  to  different
models of mobile phone.

Mobile phone sales to a related party

Before January 1, 2004, the Company had only  distributed  CDMA mobile phones in
the Shanghai area.  Beginning in January 2004, the Company  entered into the GSM
mobile phone distribution business. Since the retailer market channel related to
the Company's  GSM mobile phone  distribution  was  developed and  maintained by
Shanghai Shantian Telecommunication  Technology Inc. (Shantian), a related party
in which Sifang  Information  holds a 51% equity interest,  all of the Company's
Samsung  GSM  mobile  phones  were sold to  Shantian,  which made  Shantian  the
Company's second tier distributor.  During the three months ended June 30, 2004,
the Company sold  $2,498,000  in mobile  phones that  included a 6% mark-up as a
result of credit and rebates received at the TCH level.

Service revenue, net

Total  service  revenue net of related  business  tax and  surcharges  for three
months ended June 30, 2004 decreased by approximately  $131,000 to $838,000,  as
compared to $969,000 for the same period of the prior year, representing a 13.5%
decrease. The overall decrease was due primarily because the decrease of service
revenue  for pager users was higher  than the  increase  of service  revenue for
mobile  phone  users.  Service  revenue for mobile  phone users for three months
ended June 30, 2004 increased by approximately  $260,000 to $566,000 compared to
$306,000  for the same period of the prior year,  representing  a 85%  increase.
Service  revenue for pager users for three months ended June 30, 2004  decreased
by $391,000 to  $273,000  compared to $664,000  for the same period of the prior
year. The Company  believes that service  revenue from pager users will continue
to decrease along with the increased popularity of mobile phones over pagers.

<PAGE>
<TABLE>
<CAPTION>

Cost of goods sold

The cost of goods sold for the three  months  ended June 30, 2004  increased  by
approximately  $1,746,000 to  $4,853,000 as compared to $3,107,000  for the same
period of the prior  year,  representing  an  approximately  56%  increase.  The
increase was consistent with the increase in revenue from mobile phones.

Cost of service

The cost of service  for the three  months  ended  June 30,  2004  increased  by
approximately  $17,000 to $236,000  compared to $219,000  for the same period of
the prior year,  representing an approximately 8% increase. The increase was due
mainly to the increase in service fees  charged by Mobile  Operators  along with
the increase in mobile phone users for value-added  information  service and the
increase in purchasing costs related to more information content. The Company is
intending to expand the contents included in its value-added services within the
current fee-charge level and trying to establish collaborative  relationships or
partnerships with certain information content providers.  If this effort results
in any success, an increase in cost of service will be expected.

Gross profit

After  considering  the cost of goods sold and cost of  service,  the  Company's
gross profit for the three months ended June 30, 2004 increased by approximately
$18,000,  representing an approximately 2% increase, to approximately $1,036,000
as compared a the gross profit of  approximately  $1,018,000 for the same period
of the prior year. The percentage of gross profit over the total revenue for the
three months ended June 30, 2004 was only approximately  16.9% compared to 23.4%
for the same period of the prior year, representing a 28% decrease. The decrease
was due to the fact that the service revenue generated in the three months ended
June 30,  2004  accounted  for only  approximately  13.7% of the  total  revenue
whereas the more profitable  service revenue generated in the same period of the
prior year accounted for 22.3% of the total revenue.

The  following  table  presents in summary  certain  information  related to the
various  components  of  revenue  in  a  manner  similar  to  segment  reporting
information.

                                                       Information     Information
                                       Mobile Phone      Service -       Service -
                                       Distribution    Mobile Phone        Pager           Total
                                       ------------    ------------    ------------    ------------
<S>                                    <C>             <C>             <C>             <C>
For three months ended June 30, 2004

Revenue                                $  5,286,474    $    566,269    $    271,723    $  6,124,466
Cost                                      4,852,647          63,244         172,892       5,088,783
Gross profit                                433,827         503,025          98,831       1,035,683
Gross profit ratio                                8%             89%             36%             17%

For three months ended June 30, 2003

Revenue                                $  3,374,437    $    305,671    $    663,586    $  4,343,694
Cost                                      3,107,222          46,999         171,510       3,325,731
Gross profit                                267,215         258,672         492,076       1,017,963
Gross profit ratio                                8%             85%             74%             23%
</TABLE>


Selling expenses

Selling  expenses  for the  three  months  ended  June  30,  2004  increased  by
approximately  $16,000 to $49,000 compared to $33,000 for the same period of the
prior year,  representing an approximately 46% increase. The increase was due to
promotion expenses for mobile phone value-added services.


<PAGE>

General and administrative expenses

General and  administrative  expenses  for the three  months ended June 30, 2004
increased by approximately  $1,097,000 to $1,124,000 compared to $27,000 for the
same period of the prior year,  representing a material  increase.  The increase
was  due  mainly  to the  stock-based  compensation  expenses  of  approximately
$1,014,000   incurred  in  the  U.S.  For  comparison,   the  Company  recovered
approximately  $19,000 in bad debts that offset the  general and  administrative
expenses in the three months  ended June 30, 2004  whereas  there was $49,000 of
such recovery in the same period of the prior year, which  represented a $30,000
expenses  increase  for the three  months  ended  June 30,  2004.  In  addition,
software  amortization  expense  increased  by  approximately  $8,000 to $35,000
compared to approximately $27,000 incurred in the same period of the prior year.
Furthermore,  payroll expense and related employee retirement and fringe benefit
expenses   increased  by   approximately   $10,000  at  the  TCH  level.   Other
miscellaneous  items,  which mainly included rental,  utilities,  entertainment,
post and telephone expenses, accounted for the remaining increase of $35,000 for
the three months ended June 31, 2004.  The increase was related to the Company's
expansion at the TCH level.

The above stock-based  compensation for the three months ended June 30, 2004 was
approximately  $1,014,000  of which  $604,000  was the fair value of the 167,895
shares issued for a consultant in lieu of cash payment,  and other  $410,000 was
total  premium  difference  between the trading  price ($3.60 per share) and the
stock  purchase  price  ($1.14  per share) per a stock  purchase  agreement  for
issuing 166,667 redeemable shares.

Interest income (expense)

For the three  months  ended June 30, 2004,  interest  income was  approximately
$14,000, which was mainly derived from money lent to Sifang Information. For the
three  months  ended June 30, 2003,  the  interest  expenses  was  approximately
$2,000,  which was paid to Sifang  Information for temporary money borrowing for
mobile phone distribution business.

Income tax

The Company's  Chinese  subsidiary is subject to taxation  under the laws of the
PRC, and the statutory  income tax rate for the three months ended June 30, 2003
and 2004 was 7.5%.  In the three months ended of June 30, 2003 and 2004,  income
tax expense was approximately $72,000 and $67,000, respectively, based on pretax
income  of  $955,000  and  pretax  loss  $124,000   (which  included  the  stock
compensation  of  $1,014,000  incurred  in  the  U.S.).   Because  the  loss  of
approximately  $1,014,000 incurred in the U.S. did not offset the taxable income
in China,  the income tax expense of $67,000  incurred in China was based on the
taxable income of approximately $890,000.

Net income (loss)

The Company  recorded a net loss of $190,000 for the three months ended June 30,
2004, a $1,073,000  decrease in net income  compared to a net income of $883,000
for the same  period  of the  prior  year,  representing  a 122%  decrease.  The
decrease in net income was mainly  attributable  to the  increase in general and
administrative  expenses for the three  months  ended June 30, 2004  compared to
general and administrative expenses for the same period of the prior year.

Earnings (loss) per share

The earnings (loss) per share for the three months ended June 30, 2004 decreased
by $0.07 to loss per share $0.01  compared  to earnings  per share $0.06 for the
same period of the prior year,  representing an approximately 117% decrease. The
decrease  was due mainly to the  decrease in net income and the  increase in the
total outstanding  shares of common stock because the weighted average number of
shares of common  stock  outstanding  for the three  months  ended June 30, 2004
increased by approximately 1.3%, comparing the weighted average number of shares
of common stock outstanding for the same period of the prior year.

<PAGE>

Liquidity and Capital Resources

The  Company's  cash  balance   increased  by   approximately   $2,737,000  from
approximately  $388,000 as of June 30, 2003 to  approximately  $3,125,000  as of
June 30,  2004.  This  increase  in cash was due  primarily  to the  decrease in
inventory  and  accounts  receivable,  and the cash  proceeds  obtained  through
issuing shares of its common stock.

The cash flow provided by operating activities for the six months ended June 30,
2004 increased by approximately $2,709,000 to approximately $2,621,0000 compared
to the cash used in operating  activities of approximately  negative $88,000 for
the same period of the prior year,  representing  a  significant  increase.  The
Company  believes  that the  increase  was due mainly to the cash of  $1,058,000
generated in inventory  compared to the net cash used of  $1,217,000 in the same
period of the prior year, representing a change of $2,275,000.  In addition, the
cash of $13,000 generated in accounts receivable and advance to employees in the
six months ended June 30, 2004  compared to the net cash used of  $1,012,000  in
the same  period of the prior  year,  represented  a change of  $1,025,000.  VAT
recoverable  in the  six  months  ended  June  30,  2004  was a  cash  generator
representing a positive change of approximately $160,000 compared to that in the
same period of the prior year.  However,  deferred  revenue and accounts payable
were in a net  cash  used  position  in the six  months  ended  June  30,  2004,
representing  a  negative  change of  approximately  $290,000  and  $486,000  as
compared in the same period of the prior year.

The cash flow used in  investing  activities  for the six months  ended June 30,
2004 increased by $1,379,000 to  approximately  $1,492,000  compared to $113,000
for the same period of the prior year,  representing a significant increase. The
increase in cash used in investing  activities was due mainly to the increase in
loan receivables from Sifang Information,  the parent company before the reverse
acquisition. See our Note 4, "Related Party Transactions".

The cash flow  provided by  financing  activities  for six months ended June 30,
2004 increased by approximately  $887,000 to approximately  $283,000 compared to
the  negative  cash flow of  approximately  $604,000  for the same period of the
prior year,  representing a significant increase.  The Company believes that the
increase  was due  mainly to the  proceeds  from  issuing  its  common  stock in
addition to the fact that the Company did not have any payment for amount due to
Sifang Information in the six month period ended June 30, 2004.

Management  estimates  that the Company will continue to have positive cash flow
provided  by  operating  activities  in the  remaining  six months of 2004.  The
Company may continue to lend money to Sifang  Information on an as-needed basis.
However,  management  expects  to  collect  certain  part of the amount due form
Sifang Information in the second half year of 2004.

Management believes that current cash balance and cash flows from operations, if
any, will be sufficient to meet present growth  strategies  and related  working
capital.  In regards to the capital  expenditures,  the  Company had  sufficient
funds to expand its  operations.  The Company plans to utilize a combination  of
internally  generated  funds from  operations  with potential debt and/or equity
financings  to fund its  longer-term  growth over a period of two to five years.
The availability of future financings will depend on market conditions. There is
no assurance that the future funding will be available.

The  forecast  of the  period  of time  through  which the  Company's  financial
resources will be adequate to support operations is a forward-looking  statement
that involves  risks and  uncertainties.  The actual  funding  requirements  may
differ  materially from this as a result of a number of factors  including plans
to fully support the Company's expansion.

Recent Accounting Pronouncements

In  January  2003,  the  FASB  issued  FASB  Interpretation  No.  46  (FIN  46),
"Consolidation of Variable Interest  Entities." FIN 46, as amended by FIN 46(R),
issued in January  2003,  requires an investor  with a majority of the  variable
interests  in a  variable  interest  entity to  consolidate  the entity and also
requires majority and significant variable interest investors to provide certain
disclosures.  A  variable  interest  entity is an  entity  in which  the  equity
investors do not have a controlling  financial interest or the equity investment
at risk is insufficient  to finance the entity's  activities  without  receiving
additional  subordinated financial support from other parties. The provisions of
FIN 46(R) are  applicable  for fiscal years ending after  December 15, 2004. The
Company does not have any variable interest entities that must be consolidated.


<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

Under the supervision and with the  participation  of our management,  including
our Chief Executive Officer and Chief Financial  Officer,  we have evaluated the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures  pursuant to Exchange Act Rule  13a-14(c) as of the end of the period
covered by this report.  Based on that evaluation,  the Chief Executive  Officer
and Chief Financial  Officer have concluded that these  disclosure  controls and
procedures  are  effective.  There were no changes in our internal  control over
financial  reporting during the quarter ended June 30, 2004 that have materially
affected,  or are reasonably likely to materially  affect, our internal controls
over financial reporting.

















<PAGE>

PART II  - OTHER INFORMATION

ITEM 2. CHANGES IN  SECURITIES  AND SMALL  BUSINESS  ISSUER  PURCHASES OF EQUITY
SECURITIES

On June 23, 2004, the Company  completed a stock exchange  transaction  with the
shareholders of Sifang Holdings Co., Ltd., an exempted  company  incorporated in
the Cayman Islands with limited liability ("Sifang Holdings").  The exchange was
consummated under Nevada and Cayman Islands law and pursuant to the terms of the
Securities Exchange Agreement dated effective as of June 23, 2004 (the "Exchange
Agreement").

Pursuant to the Exchange Agreement,  the Company issued 13,782,636 shares of its
common stock to the shareholders of Sifang Holdings,  representing approximately
89.7% of its issued and  outstanding  common stock,  in exchange for 100% of the
outstanding  capital  stock of  Sifang  Holdings.  After  giving  effect  to the
exchange,  the  Company  had  15,368,341  shares  of common  stock  outstanding.
Pursuant to the exchange,  Sifang Holdings  became a wholly-owned  subsidiary of
the Company.

The  shares of  common  stock  issued to  stockholders  of  Sifang  Holdings  in
connection  with the exchange were not  registered  under the  Securities Act of
1933, as amended (the "Securities  Act") in reliance upon Section 4(2) under the
Act and, as a result,  are  "restricted  securities"  that may not be offered or
sold in the United States absent  registration  or an applicable  exemption from
registration requirements.

On June 23,  2004 the Company  issued  167,895  shares of its common  stock to a
consultant  in lieu of a cash  payment for the  services  provided.  The trading
price of the Company's common stock on June 23, 2004, the date of issuance,  was
$3.60 per  share,  accordingly,  the fair  value of the  securities  issued  was
$604,422.  The shares were issued in reliance on the exemption from registration
afforded under Section 4(2) of the Act.

On June 28, 2004, the Company  concluded a private  placement of an aggregate of
1,482,456   restricted  shares  of  common  stock  for  aggregate   proceeds  of
$1,690,000,  or $1.14 per share  sold.  The  initial  sale of 166,667  shares of
common stock occurred on June 23, 2004. The shares were purchased by an existing
shareholder of the Company pursuant to a written Stock Purchase  Agreement.  The
offering was closed on June 28, 2004  following the sale of 1,315,789  shares of
common stock to three purchasers (the "Second Tranche Purchasers") for aggregate
proceeds of $1,500,000.  Participants  in the offering were granted an option to
require  the Company to  re-purchase  all of their  respective  shares of common
stock at the original  offering price, with such option being exercisable at any
time after the date that is six months  after the Company  files a  registration
statement on Form SB-2 with the SEC, registering the shares purchased, up to and
including the earlier of the date that such  registration  statement is declared
effective  by the SEC or the shares are eligible for resale under Rule 144 under
the Securities Act. The Company and the Second Tranche  Purchasers  entered into
an Escrow Agreement  pursuant to which the $1,500,000  invested by them will not
be released to the  Company  until a  registration  statement,  registering  all
1,315,789 shares of common stock purchased by said investors,  has been declared
effective by the SEC. The shares of common stock issued in connection  with this
offering were purchased by accredited  investors and were not  registered  under
the  Securities  Act in reliance  upon the  exemption  afforded by Section  4(2)
thereunder.

In the above  transaction of issuing  166,667 shares  incurred on June 23, 2004,
the trading price on that day was $3.60 per share.  Due to the nature of insider
transaction,  the difference  between the price of $1.14 per share and the price
of  $3.60  per  share  was  recorded  as  deemed  compensation  to  an  existing
stockholder by presenting the increase of $410,001 in additional paid-in capital
and the increase of $410,001 in stock compensation.


<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

         10.1     Information  Service and  Cooperation  Agreement  by and among
                  Shanghai Sifang  Information  Technology Co. Ltd. and Shanghai
                  TCH Data Technology Co. Ltd. dated as of June 1, 2004.

         10.2     Information  Service and  Cooperation  Agreement  by and among
                  Shanghai Sifang  Information  Technology Co. Ltd. and Shanghai
                  TCH Data Technology Co. Ltd. dated as of June 1, 2004.

         10.3     Information  Service and  Cooperation  Agreement  by and among
                  Shanghai  Sifang  Information  Technology  Co. Ltd.,  Shanghai
                  Chengao  Industrial Co. Ltd. and Shanghai TCH Data  Technology
                  Co. Ltd. dated as of June 1, 2004.

         10.4     Information  Service and  Cooperation  Agreement  by and among
                  Shanghai Tianci Industrial (Group),  Co. Ltd. and Shanghai TCH
                  Data Technology Co. Ltd. dated as of June 1, 2004.

         10.5     Business  and  Related  Assets  Transfer   Agreement   between
                  Shanghai Sifang  Information  Technology Co. Ltd. and Shanghai
                  TCH Data Technology Co. Ltd. dated as of May 26, 2004.

         31.1     Chief  Executive  Officer   Certification  filed  pursuant  to
                  Section 302 of the Sarbanes-Oxley Act of 2002

         31.2     Chief  Financial  Officer   Certification  filed  pursuant  to
                  Section 302 of the Sarbanes-Oxley Act of 2002

         32.1     Chief Executive Officer  Certification  furnished  pursuant to
                  Section 906 of the Sarbanes Oxley Act of 2002

         32.2     Chief Financial Officer  Certification  furnished  pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K
         None



<PAGE>

                                   SIGNATURES

In accordance  with the  requirements  of the Exchange Act, the  registrant  has
caused this report to be signed on its behalf by the undersigned  thereunto duly
authorized.

                                            CHINA DIGITAL WIRELESS, INC.



Date: August 20, 2004             /s/ Tai Caihua
                                 -----------------------------------------------
                                 Tai Caihua, Chairman of the Board and President


Date: August 20, 2004             /s/ Lu Qin
                                 -----------------------------------------------
                                 Chief Financial Officer











</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>chinadig10qsbex101063004.txt
<DESCRIPTION>INFORMATION SERVICE AND COOPERATION AGREEMENT
<TEXT>



                       INFORMATION SERVICE AND COOPERATION
                                    AGREEMENT


                                  by and among

                Shanghai Sifang Information Technology Co. Ltd.,

                                       and

                      Shanghai TCH Data Technology Co. Ltd.





<PAGE>


                  INFORMATION SERVICE AND COOPERATION AGREEMENT

     THIS INFORMATION  SERVICE AND COOPERATION  AGREEMENT ("this  Agreement") is
entered  into on this  1st  day of  June,  2004  by and  among  Shanghai  Sifang
Information  Technology  Co. Ltd.  ("Party A"), a  domestically  funded  company
limited  by  shares,  organized  and  existing  under  the laws of the  People's
Republic of China (the "PRC"), and Shanghai TCH Data Technology Co. Ltd. ("Party
B"), a wholly foreign-owned  enterprise organized and existing under the laws of
the PRC. Each of Party A and Party B shall hereinafter  individually be referred
to as a "Party" and collectively as the "Parties".

WHEREAS:

     (1) Party A engages in such  business  as wireless  telecommunications  and
wireless information business in the PRC (the "Business"), and Party B possesses
expertise  and  resources  on  information  decoding,  formatting,  sorting  and
processing of various types of information (the "information services") involved
in the Business;

     (2) The Parties desire to cooperate so as to take advantage of each other's
strengths; and

     (3) Party A intends to entrust Party B to provide the information services,
and Party B intends to retain  Party A to  provide  transmission  services  (the
"transmission services").

NOW THEREFORE, the Parties hereby agree as follows:

                         ARTICLE 1 SERVICE AND PAYMENT

     1. Information and Cooperation

The Parties hereby agree to the following:

          A. appoint Party B, effective as of the date of this Agreement, as the
     provider of information  service  relating to the Business as agreed by the
     Parties from time to time:

          B. appoint Party A, effective as of the date of this Agreement, as the
     provider of transmission services,  relating to the information reformatted
     and processed by Party B, to paging machine users, as agreed by the Parties
     from time to time;

          C. based on the information  services  provided by Party B, Party B is
     entitled  to  independently  settle  information  services  fees  with  the
     terminal paging machine users.

          D. in consideration for the transmission services provided by Party A,
     Party B shall pay to Party A an annual  fee,  which fee shall be based upon
     the costs associated with the transmission services.

     2. Party B agrees to provide the relevant  information  services  listed in
the Schedules and required by Part A.


                                       2
<PAGE>


     3. Party A agrees to provide the relevant  transmission  services listed in
Schedule B and required by Part B.

     4. Unless otherwise agreed by both Parties in writing,  neither Party shall
retain any third party to provide any of the services  listed in Schedules A and
B hereof

                    ARTICLE 2 TERM, TERMINATION AND SURVIVAL

     1. Term.

This  Agreement   shall  be  effective  upon  execution   hereof  by  authorized
representatives  of the Parties and shall remain  effective  for a period of ten
(10) years,  which will be  automatically  renewed for another one (1) year upon
expiry of each term  unless  Party B notifies  Party A of its  intention  not to
renew  thirty  (30) days before the current  term  expires.  Party A and Party B
shall not terminate this Agreement within the term of this Agreement.

     2. No Further Obligations.

Upon termination of this Agreement,  Party C shall have no further obligation to
render any service hereunder to Party A and Party B.

     3. Survival.

Termination  of this Agreement  shall be without  prejudice to any obligation by
one Party to another Party which shall have accrued prior to such termination.

                     ARTICLE 3 INTELLECTUAL property rights

Party B shall be the sole and exclusive owner of all rights, title and interests
to any and all intellectual property rights arising from the performance of this
Agreement,  including but not limited to, any copyrights,  patents, know-how and
otherwise,  whether  developed  by  Party  A or  Party  B  based  on  Party  B's
intellectual property.

                           ARTICLE 4 confidentiality

Party A  agrees  to use  all  reasonable  means  to  protect  and  maintain  the
confidentiality of Party's B's confidential data and information acknowledged or
received by Party A by accepting the exclusive information services from Party B
(collectively  the  "Confidential  Information").  Party A shall not disclose or
transfer any Confidential Information to any third party without Party B's prior
written  consent.  Upon  termination  or expiration of this  Agreement,  Party A
shall,  at Party  B's  option,  return  all and any  documents,  information  or
software  containing any of such Confidential  Information to Party B or destroy
or delete all of such Confidential  Information from any and all memory devices,
and cease to use the same.  This  Section  shall  survive  after any  amendment,
expiration or termination of this Agreement.


                                       3
<PAGE>

                            ARTICLE 5 MISCELLANEOUS

     1. Entire Agreement.

This Agreement  constitutes  the entire  agreement among the Parties hereto with
respect to the  subject  matter  hereof  and  supersedes  all prior  agreements,
understandings or arrangements, oral or written, between the parties hereto with
respect to the subject matter hereof

     2. Amendment.

No variation of or supplement to this  Agreement  shall be effective  unless the
Parties  have  agreed in writing and have  respectively  obtained  the  required
authorizations and approvals  (including an approval from the board of directors
of the overseas holding company).

     3. Waiver.

Any waiver on the part of any Party hereto of any rights or interests under this
Agreement  shall not constitute the waiver of any other right or interest or any
subsequent  waiver of such right or  interest.  The  failure of any Party at any
time to require  performance of any provision of this Agreement shall not affect
the  right  of such  Party  to  require  full  performance  thereof  at any time
thereafter.

     4. Assignment; Obligations of Transferees.

This  Agreement  shall be binding upon the Parties  hereto and their  respective
successors  and  permitted  transferees  and assigns.  Without the prior written
consent of the other Party  hereto,  neither  Party shall assign or transfer any
rights or obligations that it may have under this Agreement,

     5. Governing Law.

The execution,  interpretation,  performance  and  termination of this Agreement
shall be governed by and construed in accordance with the laws of the PRC.

     6. Notice.

Any  notice,  request  or other  communication  to be given or made  under  this
Agreement shall be in writing.  Any such communication may be delivered by hand,
airmail,  facsimile  or  established  courier  service  to the  Party's  address
specified  below or at such other  address as such Party  notifies  to the other
Party from time to time, and will be effective upon receipt (if a  communication
is delivered by facsimile, the time of the receipt of the facsimile shall be the
time when the sender receives a confirmed transmittal receipt).

For Party A:
Shanghai Sifang Information Technology Co. Ltd.,
Attention:
Fax:


For Party B:
Shanghai TCH Data Technology Co. Ltd.
Attention:
Fax:


                                       4
<PAGE>


     7. Severability.

The  invalidity,  illegality  or  unenforceability  of  any  provision  of  this
Agreement shall not affect the validity, legality or enforceability of any other
provision. This Agreement shall continue in full force and effect except for any
such invalid, illegal or unenforceable provision.

     8. Headings.

The headings  throughout  this  Agreement are for  convenience  only and are not
intended to limit or be used in the  interpretation  of the  provisions  of this
Agreement.

     9. Language and Counterparts.

This  Agreement  shall  be in the  Chinese  language.  This  Agreement  and  any
amendment hereto may be executed by the Parties in separate  counterparts,  each
and all of which shall be original and all of which  together  shall  constitute
one and the same instrument.

     10. Dispute Resolution.

All disputes arising from the execution of, or in connection with this Agreement
shall be settled  through  amicable  consultation  between  the  Parties.  If no
settlement can be reached through  consultation,  the dispute shall be submitted
to the China  International  Economic and Trade Arbitration  Commission  (CIETAC
Shanghai  Commission for arbitration,  in accordance with its arbitration  rules
then in effect. There shall be three arbitrators.  The arbitration shall be held
in Shanghai.  The language of the arbitration shall be in Chinese.  The arbitral
award shall be final and binding on both Parties.  The costs of the  arbitration
shall be borne by the losing  Party,  unless the  arbitration  award  stipulates
otherwise.

     IN WITNESS  WHEREOF,  the Parties have caused this Agreement to be executed
by their  respective  duly  authorized  signatories as of the day and year first
written above.

     [Remainder of the page intentionally left blank]





                                       5
<PAGE>




         [Execution Page]










Party A: Shanghai Sifang Information Technology Co. Ltd.,







[Executed pursuant to corporate seal]


Authorized representative




Party B: Shanghai TCH Data Technology Co. Ltd.




[Executed pursuant to corporate seal]


Authorized representative






                                       6
<PAGE>



                                   Schedule A
                                   ----------
                         Contents of Information Service
                         -------------------------------

     Within the scope that is  permitted by the law,  the  information  services
provided by Party B shall include:

     1.   decoding,  formatting,  sorting,  processing, etc. of various types of
          information,  which  information  shall  include but not be limited to
          financial information;

     2.   compilation of financial information;

     3.   maintenance of servers,  exchanges,  firewall and related  network and
          equipment;

     4.   test and installation of servers;

     5.   networking security consulting



                                   Schedule B
                                   ----------
                        Contents of Transmission Services
                        ---------------------------------

     Within the scope that is permitted by the law,  the  transmission  services
provided by Party A shall include:

     1.   providing of information sending platform;

     2.   sending of information services, and

     3.   searching and confirmation of information services sent.





                                       7


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>chinadig10qsbex102063004.txt
<DESCRIPTION>INFORMATION SERVICE AND COOPERATION AGREEMENT
<TEXT>



                       INFORMATION SERVICE AND COOPERATION
                                    AGREEMENT


                                  by and among

                Shanghai Sifang Information Technology Co. Ltd.,

                                       and

                      Shanghai Chengao Industrial Co. Ltd.

                                       and

                      Shanghai TCH Data Technology Co. Ltd.









<PAGE>


                  INFORMATION SERVICE AND COOPERATION AGREEMENT

     THIS INFORMATION  SERVICE AND COOPERATION  AGREEMENT ("this  Agreement") is
entered  into on this  1st  day of  June,  2004  by and  among  Shanghai  Sifang
Information  Technology  Co. Ltd.  ("Party A"), a  domestically  funded  company
limited  by  shares,  organized  and  existing  under  the laws of the  People's
Republic of China (the "PRC"), Shanghai Chengao Industrial Co. Ltd. ("Party B"),
a limited  liability  company  organized and existing under the laws of the PRC,
and Shanghai TCH Data  Technology  Co. Ltd.  ("Party C"), a wholly foreign owned
enterprise  organized  and existing  under the laws of the PRC. Each of Party A,
Party B and Party C shall  hereinafter  individually be referred to as a "Party"
and collectively as the "Parties".

     WHEREAS:

     (1) Party A engages in such  business  as wireless  telecommunications  and
wireless  information  business in the PRC (the  "Business"),  Party B possesses
technology  foundation and rich  experience in developing  various  customer end
software relating to mobile communications,  and Party C possesses expertise and
resources on information  decoding,  formatting,  sorting,  processing,  etc. of
various  kinds of  information  (the  "information  services")  involved  in the
Business.

     (2) The Parties desire to cooperate so as to take advantage of each other's
strengths;

     (3) Party A intends to retain Party B to pre-install  customer end software
relating  to  financial  information  services  on mobile  phones  sold by third
parties; and

     (4) Party A intends to retain Party C to provide the  information  services
relating  to the  Business  and Party C intends  to  retain  Party A to  provide
transmission services (the "transmission services");

NOW THEREFORE, the Parties hereby agree as follows:.

                         ARTICLE 1 SERVICE AND PAYMENT

     1. Information and Cooperation

The Parties hereby agree as follows:

          A. appoint Party B, effective as of the date of this Agreement, as the
     provider of financial information system pre-installing service relating to
     the Business as agreed to by the Parties from time to time;

          B. appoint Party C, effective as of the date of this Agreement, as the
     provider of information  services  relating to the Business as agreed to by
     the Parties from time to time;

          C. appoint Party A, effective as of the date of this Agreement, as the
     provider of transmission services,  relating to the information reformatted
     and processed by Party C, to mobile phone users through  mobile  operators,
     as agreed to by the Parties from time to time.

                                       2
<PAGE>


          D.  based on the  services  provided  under this  Agreement,  terminal
     customers  shall be charged by the third party mobile  phone  sellers a six
     month  information  service fee equal to RMB 108. The entire fee under this
     section  shall  become due and  payable,  and shall be charged by the third
     party mobile phone sellers at the time a mobile phone is  purchased.  After
     the expiry of the above mentioned  period,  if the terminal customer agrees
     to continue the information  service, the information service fees shall be
     settled by Party A with China  Mobile  Telecommunication  Co. Ltd.  ("China
     Mobile") and other  operators with whom Party A has  agreements.  Upon such
     settlement,  Party A shall transfer all the service fees collected by Party
     A to Party C. In consideration  for the transmission  services  provided by
     Party A,  Party C shall  pay to Party A an annual  fee,  which fee shall be
     based upon the costs associated with the transmission services.

          E.  Party  B  is  entitled  to  independently   settle  the  financial
     information software pre-installing service fee with the third party mobile
     phone sellers.  Upon  settlement with the third party mobile phone sellers,
     Party B shall  confirm  the  pre-installation  service  fees that  shall be
     received by Party B.

     2.  Pursuant to this  Agreement,  the Parties  hereby agree that each Party
shall  respectively  provide  relevant  services  listed in Schedules A, B and C
hereof.

     3. Unless otherwise agreed by all Parties in writing, no Party shall retain
any third party to provide the services listed in Schedule A hereof.

                    ARTICLE 2 TERM, TERMINATION AND SURVIVAL

     1. Term.

     This  Agreement  shall be effective  upon  execution  hereof by  authorized
representatives  of the Parties and shall remain  effective  for a period of ten
(10) years,  which will  automatically  be renewed for another one (1) year upon
expiry of each term unless Party C notifies Party A and Party B of its intention
not to renew thirty (30) days before the current term expires. Party A and Party
B shall not terminate this Agreement within the term of this Agreement.

     2. No Further Obligations.

     Upon  termination  of  this  Agreement,  Party  C  shall  have  no  further
obligation to render any service hereunder to Party A and Party B.

     3. Survival.

     Termination of this Agreement shall be without  prejudice to any obligation
by  one  Party  to  another  Party  which  shall  have  accrued  prior  to  such
termination.


                                       3
<PAGE>



                     ARTICLE 3 Intellectual property rights

     Party C shall be the sole and  exclusive  owner of all  rights,  title  and
interests  to  any  and  all  intellectual  property  rights  arising  from  the
performance of the information  service under this Agreement,  including but not
limited to, any copyrights,  patents, know-how and otherwise,  whether developed
by Party A, Party B or Party C based on Party C's intellectual property.

                           ARTICLE 4 Confidentiality

     Party A and  Party B agree  to use all  reasonable  means  to  protect  and
maintain the  confidentiality  of Party C's  confidential  data and  information
acknowledged  or  received  by Party A or  Party B by  accepting  the  exclusive
information services from Party C (collectively the "Confidential Information").
Party A and Party B shall not disclose or transfer any Confidential  Information
to any third party without Party C's prior written consent.  Upon termination or
expiration of this  Agreement,  Party A and Party B shall,  at Party C's option,
return all and any  documents,  information  or software  containing any of such
Confidential   Information  to  Party  C  or  destroy  or  delete  all  of  such
Confidential  Information from any and all memory devices,  and cease to use the
same. This Article shall survive after any amendment,  expiration or termination
of this Agreement.

                            ARTICLE 5 miscellaneous

     1. Entire Agreement.

This Agreement  constitutes  the entire  agreement among the Parties hereto with
respect to the  subject  matter  hereof  and  supersedes  all prior  agreements,
understandings or arrangements, oral or written, between the parties hereto with
respect to the subject matter hereof

     2. Amendment.

No waiver of or  supplement  to this  Agreement  shall be  effective  unless all
Parties  have  agreed in writing and have  respectively  obtained  the  required
authorizations and approvals  (including an approval from the board of directors
of the overseas holding company).

     3. Waiver.

Any waiver on the part of any Party hereto of any rights or interests under this
Agreement  shall not constitute the Waiver of any other right or interest or any
subsequent  waiver of such right or  interest.  The  failure of any Party at any
time to require  performance of any provision of this Agreement shall not affect
the  right  of such  Party  to  require  full  performance  thereof  at any time
thereafter.

     4. Assignment; Obligations of Transferees.

This  Agreement  shall be binding upon the Parties  hereto and their  respective
successors  and  permitted  transferees  and assigns.  Without the prior written
consent of all other  Parties  hereto,  no Party shall  assign or  transfer  any
rights or obligations that it may have under this Agreement.


                                       4
<PAGE>


     5. Governing Law.

The execution,  interpretation,  performance  and  termination of this Agreement
shall be governed by and construed in accordance with the laws of the PRC.

     6. Notice.

Any  notice,  request  or other  communication  to be given or made  under  this
Agreement shall be in writing.  Any such communication may be delivered by hand,
airmail,  facsimile  or  established  courier  service  to the  Party's  address
specified  below or at such other  address as such Party  notifies  to the other
Party from time to time, and will be effective upon receipt (if a  communication
is delivered by facsimile, the time of the receipt of the facsimile shall be the
time when the sender receives a confirmed transmittal receipt).

For Party A:
Shanghai Sifang Information Technology Co. Ltd.,
Attention:
Fax:

For Party B:
Shanghai Chengao Industrial Co. Ltd.
Attention:
Fax:

For Party C:
Shanghai TCH Data Technology Co. Ltd.
Attention:
Fax:


     7. Severability.

The  invalidity,  illegality  or  unenforceability  of  any  provision  of  this
Agreement shall not affect the validity, legality or enforceability of any other
provision. This Agreement shall continue in full force and effect except for any
such invalid, illegal or unenforceable provision.

     8. Headings.

The headings  throughout  this  Agreement are for  convenience  only and are not
intended to limit or be used in the  interpretation  of the  provisions  of this
Agreement.

     9. Language and Counterparts.

This  Agreement  shall  be in the  Chinese  language.  This  Agreement  and  any
amendment hereto may be executed by the Parties in separate  counterparts,  each
and all of which shall be original and all of which  together  shall  constitute
one and the same instrument.


                                       5
<PAGE>


     10. Dispute Resolution.

All disputes arising from the execution of, or in connection with this Agreement
shall be settled  through  amicable  consultation  between  the  Parties.  If no
settlement can be reached through  Consultation,  the dispute shall be submitted
to the China  International  Economic and Trade Arbitration  Commission (CIETAC)
Shanghai  Commission for arbitration,  in accordance with its arbitration  rules
then in effect, There shall be three arbitrators.  The arbitration shall be held
in Shanghai.  The language of the arbitration shall be in Chinese.  The arbitral
award shall be final and binding on both Parties.  The costs of the  arbitration
shall be home by the losing  Party,  unless  the  arbitration  award  stipulates
otherwise.

         IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their respective duty authorized signatories as of the day and year
first written above.

                [Remainder of the page intentionally tell blank]




                                       6
<PAGE>



         [Execution Page]










Party A: Shanghai Sifang Information Technology Co. Ltd.,







[Executed pursuant to corporate seal]


Authorized representative




Party B: Shanghai Chengao Industrial Co. Ltd.




[Executed pursuant to corporate seal]


Authorized representative


Party C: Shanghai TCH Data Technology Co. Ltd.




[Executed pursuant to corporate seal]


Authorized representative






                                       7
<PAGE>



                                   Schedule A
                                   ----------
                         Contents of Information Service
                         -------------------------------

     Within the scope that is  permitted by the law,  the  information  services
provided by Party C shall include:

     Decoding, formatting, sorting, processing, etc. of financial information.

                                   Schedule B
                                   ----------
         Contents of Financial Information System Pre-Installing Service
         ---------------------------------------------------------------


     Within the scope that is permitted by law, the financial information system
pre-installing service provided by Party B are:

     1.   pre-installation of financial information system;

     2.   providing  propaganda  materials of the customer terminal software and
          user's manual;

     3.   providing software updates and related software; and

     4.   enforcing periodic technical instructing and quality examination.


                                   Schedule C
                                   ----------
                        Contents of Transmission Service
                        --------------------------------

     Within the scope that is permitted by the law,  the  transmission  services
provided by Party A are:

     1.   providing of mobile information sending platform; and

     2.   coordination with mobile business operators.




                                       8


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>chinadig10qsbex103063004.txt
<DESCRIPTION>INFORMATION SERVICE AND COOPERATION AGREEMENT
<TEXT>





                  INFORMATION SERVICE AND COOPERATION AGREEMENT


                                  by and among

                Shanghai Sifang Information Technology Co. Ltd.,

                                       and

                      Shanghai TCH Data Technology Co. Ltd.







<PAGE>


                  INFORMATION SERVICE AND COOPERATION AGREEMENT

     THIS INFORMATION  SERVICE AND COOPERATION  AGREEMENT ("this  Agreement") is
entered  into on this  1st day of  June,  2004 by and  between  Shanghai  Sifang
Information  Technology  Co. Ltd.  ("Party A"), a  domestically  funded  company
limited  by  shares,  organized  and  existing  under  the laws of the  People's
Republic of China (the "PRC"), and Shanghai TCH Data Technology Co. Ltd. ("Party
B"), a wholly foreign-owned  enterprise organized and existing under the laws of
the PRC. Each of Party A and Party B shall hereinafter  individually be referred
to as a "Party" and collectively as the "Parties".

WHEREAS:

     (1) Party A engages in such  business  as wireless  telecommunications  and
wireless  information  business  in the PRC (the  "Business"),  and  Party A has
entered  into  cooperation  agreements  regarding,  among  other  things,  short
messaging  service  with  China  Mobile  Telecommunication  Co.,  Ltd.  ('"China
Mobile") ;

     (2) Party B possesses  expertise  and  resources on  decoding,  formatting,
sorting,  processing,  etc. of various types of  information  (the  "information
services") involved in the Business;

     (3) The Parties desire to cooperate so as to take advantage of each other's
strengths; and

     (4) Party A intends to retain Party B to provide the  information  services
and Party B intends to retain  Party A to  provide  transmission  services  (the
"transmission services").

NOW THEREFORE, the Parties hereby agree as follows:

                         ARTICLE 1 SERVICE AND PAYMENT

     1. Information Services and Cooperation

     The Parties hereby agree to:

          A. appoint Party B, effective as of the date of this Agreement, as the
     provider of information  services  relating to the Business as agreed to by
     the Parties from time to time; and

          B. appoint Party A, effective as of the date of this Agreement, as the
     provider of transmission services,  relating to the information reformatted
     and  processed by Party B, to mobile phone users  through  China Mobile and
     other mobile operators, as agreed by the Parties from time to time.

     2.  Based on the  services  hereunder,  Party A is  entitled  to settle the
services  fees with  China  Mobile  and other  operators  with whom  Party A has
agreements.  Upon such  settlement,  Party A shall transfer all the service fees
collected by Party A to Party B. In consideration for the transmission  services
provided by Party A, Party B shall pay to Party A an annual fee, which fee shall
be based upon the costs associated with the transmission services.


                                       2
<PAGE>


     3. Party A agrees to provide the relevant  transmission  services listed in
Schedule B and required by Part B.

     4. Party B agrees to provide the relevant  information  services  listed in
the Schedules and required by Part A.

     5. Unless otherwise agreed by both Parties in writing,  neither Party shall
retain any third party to provide any of the services  listed in Schedules A and
B hereof.

     6. Should  Party A enter into any service and  cooperation  agreement  with
respect to wireless  telecommunications  or wireless  information  business with
China Mobile,  China Unicom or any other mobile  telecommunications  operator in
the future,  any service  concerning  information  services listed in Schedule A
shall be delivered,  in the manner of cooperation as stipulated herein, to Party
B to provide corresponding  information  services.  Party A hereby confirms that
the said undertaking shall be irrevocable within the term or this Agreement.

                    ARTICLE 2 TERM, TERMINATION AND SURVIVAL

     1. Term.

This  Agreement   shall  be  effective  upon  execution   hereof  by  authorized
representatives  of the Parties and shall remain  effective  for a period of ten
(10) years,  which will be  automatically  renewed for another one (1) year upon
expiry of each term  unless  Party B notifies  Party A of its  intention  not to
renew  thirty  (30) days before the current  term  expires.  Party A and Party B
shall not terminate this Agreement within the term of this Agreement.

     2. No Further Obligations.

Upon termination of this Agreement,  Party B shall have no further obligation to
render any service hereunder to Party A.

     3. Survival.

Termination  of this Agreement  shall be without  prejudice to any obligation by
one Party to another Party which shall have accrued prior to such termination.

                     ARTICLE 3 INTELLECTUAL property rights

Party B shall be the sole and exclusive owner of all rights, title and interests
to any and all intellectual property rights arising from the performance of this
Agreement,  including but not limited to, any copyrights,  patents, know-how and
otherwise,  whether  developed  by  Party  A or  Party  B  based  on  Party  B's
intellectual property.


                                       3
<PAGE>


                           ARTICLE 4 confidentiality

Party A  agrees  to use  all  reasonable  means  to  protect  and  maintain  the
confidentiality of Party's B's confidential data and information acknowledged or
received by Party A by accepting the exclusive information services from Party B
(collectively  the  "Confidential  Information").  Party A shall not disclose or
transfer any Confidential Information to any third party without Party B's prior
written  consent.  Upon  termination  or expiration of this  Agreement,  Party A
shall,  at Party  B's  option,  return  all and any  documents,  information  or
software  containing any of such Confidential  Information to Party B or destroy
or delete all of such Confidential  Information from any and all memory devices,
and cease to use the same.  This  Section  shall  survive  after any  amendment,
expiration or termination of this Agreement.

                            ARTICLE 5 MISCELLANEOUS

     1. Entire Agreement.

This Agreement  constitutes  the entire  agreement among the Parties hereto with
respect to the  subject  matter  hereof  and  supersedes  all prior  agreements,
understandings or arrangements, oral or written, between the parties hereto with
respect to the subject matter hereof.

     2. Amendment.

No variation of or supplement to this Agreement  shall be effective  unless both
Parties  have  agreed in writing and have  respectively  obtained  the  required
authorizations and approvals  (including an approval from the board of directors
of the overseas holding company).

     3. Waiver.

Any waiver on the part of any Party hereto of any rights or interests under this
Agreement  shall not constitute the waiver of any other right or interest or any
subsequent  waiver of such right or  interest.  The  failure of any Party at any
time to require  performance of any provision of this Agreement shall not affect
the  right  of such  Party  to  require  full  performance  thereof  at any time
thereafter.

     4. Assignment; Obligations of Transferees.

This  Agreement  shall be binding upon the Parties  hereto and their  respective
successors and t, permitted  transferees and assigns.  Without the prior written
consent of the other Party  hereto,  neither  Party shall assign or transfer any
rights or obligations that it may have under this Agreement.

     5. Governing Law.

The execution,  interpretation,  performance  and  termination of this Agreement
shall be governed by and construed in accordance with the laws of the PRC.


                                       4
<PAGE>


     6. Notice.

Any  notice,  request  or other  communication  to be given or made  under  this
Agreement shall be in writing.  Any such communication may be delivered by hand,
airmail,  facsimile  or  established  courier  service  to the  Party's  address
specified  below or at such other  address as such Party  notifies  to the other
Party from time to time, and will be effective upon receipt (if a  communication
is delivered by facsimile, the time of the receipt of the facsimile shall be the
time when the sender receives a confirmed transmittal receipt).

For Party A:
Shanghai Sifang Information Technology Co. Ltd.,
Attention:
Fax:


For Party B:
Shanghai TCH Data Technology Co. Ltd.
Attention:
Fax:


     7. Severability.

The  invalidity,  illegality  or  unenforceability  of  any  provision  of  this
Agreement shall not affect the validity, legality or enforceability of any other
provision. This Agreement shall continue in full force and effect except for any
such invalid, illegal or unenforceable provision.

     8. Headings.

The headings  throughout  this  Agreement are for  convenience  only and are not
intended to limit or be used in the  interpretation  of the  provisions  of this
Agreement.

     9. Language and Counterparts.

This  Agreement  shall  be in the  Chinese  language.  This  Agreement  and  any
amendment hereto may be executed by the Parties in separate  counterparts,  each
and all of which shall be original and all of which  together  shall  constitute
one and the same instrument.

     10. Dispute Resolution.

All disputes arising from the execution of, or in connection with this Agreement
shall be settled  through  amicable  consultation  between  the  Parties.  If no
settlement can be reached through  consultation,  the dispute shall be submitted
to the China  International  Economic and Trade Arbitration  Commission (CIETAC)
Shanghai  Commission for arbitration,  in accordance with its arbitration  rules
then in effect. There shall be three arbitrators.  The arbitration shall be held
in Shanghai.  The language of the arbitration shall be in Chinese.  The arbitral
award shall be final and binding on both Parties.  The costs of the  arbitration
shall be borne by the losing  Party,  unless the  arbitration  award  stipulates
otherwise.


                                       5
<PAGE>


     IN WITNESS  WHEREOF,  the Parties have caused this Agreement to be executed
by their  respective  duly  authorized  signatories as of the day and year first
written above.

                [Remainder of the page intentionally left blank]





                                       6
<PAGE>




         [Execution Page]










 Party A: Shanghai Sifang Information Technology Co. Ltd.,







[Executed pursuant to corporate seal]


Authorized representative



Party B: Shanghai TCH Data Technology Co. Ltd.




[Executed pursuant to corporate seal]


Authorized representative





                                       7
<PAGE>



                                   Schedule A
                                   ----------
                        Contents of Information Services
                        --------------------------------

     Within  the  scope  that is  permitted  by law,  the  information  services
provided by Party B shall include:

     Decoding,  formatting,  sorting,  processing,  etc.  of  various  types  of
information,  which  information  shall  include but not be limited to financial
information.



                                   Schedule B
                                   ----------
                        Contents of Transmission Services
                        ---------------------------------

     Within  the  scope  that is  permitted  by the  law,  the  contents  of the
transmission services provided by Party A shall include:

          1.   Providing mobile information sending platform;

          2.   Providing sales network; and

          3.   Coordinating with mobile services operators.



                                       8






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>chinadig10qsbex104063004.txt
<DESCRIPTION>INFORMATION SERVICE AND COOPERATION AGREEMENT
<TEXT>



                       INFORMATION SERVICE AND COOPERATION

                                    AGREEMENT



                                 by and between

                  Shanghai Tianci Industrial (Group), Co. Ltd.,



                                       and



                      Shanghai TCH Data Technology Co. Ltd.















<PAGE>


                  INFORMATION SERVICE AND COOPERATION AGREEMENT

THIS INFORMATION SERVICE AND COOPERATION AGREEMENT ("this Agreement") is entered
into on this 1st day of June,  2004 by and between  Shanghai  Tianci  Industrial
(Group) Co. Ltd.  ("Party A"), a domestically  funded company limited by shares,
organized  and existing  under the laws of the  People's  Republic of China (the
"PRC"),  and  Shanghai  TCH Data  Technology  Co.  Ltd.  ("Party  B"),  a wholly
foreign-owned  enterprise organized and existing under the laws of the PRC. Each
of  Party A and  Party B shall  hereinafter  individually  be  referred  to as a
"Party" and collectively as the "Parties".

WHEREAS:

     (1) Party A engages in such  business  as wireless  telecommunications  and
wireless  information  business  in the PRC (the  "Business"),  and  Party A has
entered  into  cooperation  agreements  regarding,  among  other  things,  short
messaging  services  with  China  Unicom  Telecommunication  Co.,  Ltd.  ("China
Unicom") ;

     (2) Party B possesses  expertise  and  resources on  decoding,  formatting,
sorting,  processing,  etc. of various kinds of  information  (the  "information
services") involved in the Business.

     (3) The Parties desire to cooperate so as to take advantage of each other's
strengths;

     (4) Party A intends to retain Party B to provide the  information  services
and Party B intends to retain  Party A to  provide  transmission  services  (the
"transmission  services"). It is acknowledged by Party B that Party A may engage
third  parties  for the  provision  of the  transmission  services  contemplated
herein.

NOW THEREFORE, the Parties hereby agree as follows:

                         ARTICLE 1 SERVICE AND PAYMENT


     1. Information Services and Cooperation

The Parties hereby agree to:

          A. appoint Party B, effective as of the date of this Agreement, as the
     provider of information  services  relating to the Business as agreed to by
     the Parties from time to time; and

          B. appoint Party A, effective as of the date of this Agreement, as the
     provider of transmission services,  relating to the information reformatted
     and  processed by Party B, to mobile phone users  through  China Unicom and
     other mobile operators, as agreed by the Parties from time to time.

     2.  Based on the  services  hereunder,  Party A is  entitled  to settle the
services  fees with  China  Unicom  and other  operators  with whom  Party A has
agreements.  Upon such  settlement,  Party A shall transfer all the service fees
collected by Party A to Party B. In consideration for the transmission  services
provided by Party A, Party B shall pay to Party A an annual fee, which fee shall
be based upon the costs  associated with the  transmission  services.  Except as
otherwise agreed to by the Parties, Party A shall be responsible for all amounts
owed to third parties for the provision of  transmission  services  provided for
the benefit of Party B.


                                       2
<PAGE>


     3.  Pursuant to this  Agreement,  the Parties  hereby agree that each Party
shall  respectively  provide  relevant  information  services or message sending
services listed in Schedules A and B hereof.

     4.  Unless  otherwise  agreed by both  Parties in  writing,  no Party shall
retain any third party to provide any of the services  listed in Schedules A and
B hereof.

     5. Should  Party A enter into any service and  cooperation  agreement  with
respect to wireless  telecommunications  or wireless  information  business with
China Mobile,  China Unicom or any other mobile  telecommunications  operator in
the future, any service concerning the information services listed in Schedule A
shall be delivered,  in the manner of cooperation as stipulated herein, by Party
B to  Party A to  provide  corresponding  information  services.  Party A hereby
confirms that the said undertaking shall be irrevocable  within the term of this
Agreement.

                    ARTICLE 2 TERM, TERMINATION AND SURVIVAL


     1. Term.

This  Agreement   shall  be  effective  upon  execution   hereof  by  authorized
representatives  of the Parties and shall remain  effective  for a period of ten
(10) years,  which will be  automatically  renewed for another one (1) year upon
expiry of each term  unless  Party B notifies  Party A of its  intention  not to
renew  thirty  (30) days before the current  term  expires.  Party A and Party B
shall not terminate this Agreement within the term of this Agreement.

     2. No Further Obligations.

Upon termination of this Agreement,  Party B shall have no further obligation to
render any service hereunder to Party A.

     3. Survival.

Termination  of this Agreement  shall be without  prejudice to any obligation by
one Party to another Party which shall have accrued prior to such termination.

                     ARTICLE 3 Intellectual property rights


Party B shall be the sole and exclusive owner of all rights, title and interests
to any and all intellectual property rights arising from the performance of this
Agreement,  including but not limited to, any copyrights,  patents, know-how and
otherwise,  whether  developed  by  Party  A or  Party  B  based  on  Party  B's
intellectual property.


                                       3
<PAGE>


                           ARTICLE 4 Confidentiality


Party A  agrees  to use  all  reasonable  means  to  protect  and  maintain  the
confidentiality of Party's B's confidential data and information acknowledged or
received by Party A by accepting the exclusive information services from Party B
(collectively  the  "Confidential  Information").  Party A shall not disclose or
transfer any Confidential Information to any third party without Party B's prior
written  consent.  Upon  termination  or expiration of this  Agreement,  Party A
shall,  at Party  B's  option,  return  all and any  documents,  information  or
software  containing any of such Confidential  Information to Party B or destroy
or delete all of such Confidential  Information from any and all memory devices,
and cease to use the same.  This  Section  shall  survive  after any  amendment,
expiration or termination of this Agreement.

                            ARTICLE 5 MISCELLANEOUS


     1. Entire Agreement.

This Agreement  constitutes  the entire  agreement among the Parties hereto with
respect to the  subject  matter  hereof  and  supersedes  all prior  agreements,
understandings or arrangements, oral or written, between the parties hereto with
respect to the subject matter hereof.

     2. Amendment.

No variation of or supplement to this Agreement  shall be effective  unless both
Parties  have  agreed in writing and have  respectively  obtained  the  required
authorizations and approvals  (including an approval from the board of directors
of the overseas holding company).

     3. Waiver.

Any waiver on the part of any Party hereto of any rights or interests under this
Agreement  shall not constitute the waiver of any other right or interest or any
subsequent  waiver of such right or  interest.  The  failure of any Party at any
time to require  performance of any provision of this Agreement shall not affect
the  right  of such  Party  to  require  full  performance  thereof  at any time
thereafter.

     4. Assignment; Obligations of Transferees.

This  Agreement  shall be binding upon the Parties  hereto and their  respective
successors and permitted  transferees  and assigns.  Except as provided  herein,
neither  Party shall  assign or transfer any rights or  obligations  that it may
have under this Agreement  without the prior written  consent of the other Party
hereto.

     5. Governing Law.

The execution,  interpretation,  performance  and  termination of this Agreement
shall be governed by and construed in accordance with the laws of the PRC.


                                       4
<PAGE>


     6. Notice.

Any  notice,  request  or other  communication  to be given or made  under  this
Agreement shall be in writing.  Any such communication may be delivered by hand,
airmail,  facsimile  or  established  courier  service  to the  Party's  address
specified  below or at such other  address as such Party  notifies  to the other
Party from time to time, and will be effective upon receipt (if a  communication
is delivered by facsimile, the time of the receipt of the facsimile shall be the
time when the sender receives a confirmed transmittal receipt).

For Party A:
Shanghai Shanghai Tianci Industrial Group Co. Ltd.,
Attention:
Fax:


For Party B:
Shanghai TCH Data Technology Co. Ltd.
Attention:
Fax:

          7.   Severability.

The  invalidity,  illegality  or  unenforceability  of  any  provision  of  this
Agreement shall not affect the validity, legality or enforceability of any other
provision. This Agreement shall continue in full force and effect except for any
such invalid, illegal or unenforceable provision.

          8.   Headings.

The headings  throughout  this  Agreement are for  convenience  only and are not
intended to limit or be used in the  interpretation  of the  provisions  of this
Agreement.

          9.   Language and Counterparts.

This  Agreement  shall  be in the  Chinese  language.  This  Agreement  and  any
amendment hereto may be executed by the Parties in separate  counterparts,  each
and all of which shall be original and all of which  together  shall  constitute
one and the same instrument.

          10.  Dispute Resolution.

All disputes arising from the execution of, or in connection with this Agreement
shall be settled  through  amicable  consultation  between  the  Parties.  If no
settlement can be reached through  consultation,  the dispute shall be submitted
to the China  International  Economic and Trade Arbitration  Commission (CIETAC)
Shanghai  Commission for arbitration,  in accordance with its arbitration  rules
then in effect. There shall be three arbitrators.  The arbitration shall be held
in Shanghai.  The language of the arbitration shall be in Chinese.  The arbitral
award shall be final and binding on both Parties.  The costs of the  arbitration
shall be borne by the losing  Party,  unless the  arbitration  award  stipulates
otherwise.


                                       5
<PAGE>


         IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their respective duly authorized signatories as of the day and year
first written above.

                [Remainder of the page intentionally left blank]




                                       6
<PAGE>



[Execution Page]









Party A: Shanghai Tianci Industrial (Group) Co. Ltd.,







[Executed pursuant to corporate seal]


Authorized representative




Party B: Shanghai TCH Data Technology Co. Ltd.




[Executed pursuant to corporate seal]


Authorized representative




                                       7
<PAGE>



                                   Schedule A
                                   ----------
                         Contents of Information Service
                         -------------------------------

     Within  the  scope  that is  permitted  by law,  the  information  services
provided by Party B shall include:

     Decoding,  formatting,  sorting and  processing,  etc, of various  kinds of
information,  which  information  shall  include but not be limited to financial
information.




                                   Schedule B
                                   ----------
                        Contents of Transmission Services
                        ---------------------------------

     Within the scope that is permitted  by law,  the  contents of  transmission
services provided by Party A shall include:

          1.   Providing mobile information sending platform;

          2.   Providing sales network; and

          3.   Coordinating with mobile service operators.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>6
<FILENAME>chinadig10qsbex105063004.txt
<DESCRIPTION>BUSINESS AND RELATED ASSETS TRANSFER AGREEMENT
<TEXT>




                BUSINESSES AND RELATED ASSETS TRANSFER AGREEMENT





                                     Between





                SHANGHAI SIFANG INFORMATION TECHNOLOGY CO., LTD.





                                       and





                     SHANGHAI TCH DATA TECHNOLOGY CO., LTD.

<PAGE>


                BUSINESSES AND RELATED ASSETS TRANSFER AGREEMENT

                                     Between

                SHANGHAI SIFANG INFORMATION TECHNOLOGY CO., LTD.

                                       and

                     SHANGHAI TCH DATA TECHNOLOGY CO., LTD.

THIS  AGREEMENT  is made in Shanghai  Municipality,  People's  Republic of China
("PRC") on this 26th day of May, 2004 by and between

(1)  SHANGHAI SIFANG INFORMATION TECHNOLOGY CO., LTD., with its legal address at
     No. 689,  Lao Shan Dong Road,  Pudong New  District,  Shanghai,  PRC;  (the
     "Transferor")

and

(2)  SHANGHAI TCH DATA  TECHNOLOGY CO., LTD., with its legal address at No. 689,
     Lao Shan Dong Road, Pudong New District, Shanghai, PRC. (the "Transferee")

WHEREAS:

(A)  The Transferor is a domestic limited  liability company by shares primarily
     engaged  in the  operation  of  telecom  value-added  service  and  related
     Businesses,  including but not limited to pager paging service, pager stock
     information  providing service,  mobile phone message providing service and
     sales of pagers and mobile phones;

(B)  The Transferee is a wholly foreign-owned company;

(C)  The Transferor  agrees to transfer the Businesses and their related assets,
     equities  and  corresponding  liabilities  listed  in  Appendix  I  to  the
     Transferee,  and the Transferee agrees to accept the aforesaid  transfer of
     Businesses   and  their   related   assets,   equities  and   corresponding
     liabilities.

THEREFORE, THE PARTIES HEREBY AGREE as follows:

1.   DEFINITIONS

Unless the  context  requires  otherwise,  the  following  terms  shall have the
meanings given to them below when used in this Agreement:

"Businesses" means the businesses listed in Section (1) of Appendix I, which are
operated by the  Transferor  on the signing day of This  Agreement  and shall be
transferred to the Transferee by the Transferor according to This Agreement.


                                       2
<PAGE>


"Assets" means all the listed  assets,  equities and  corresponding  liabilities
related to the  Businesses  in Section (2) of Appendix I, which are owned by the
Transferor on the signing day of This  Agreement and shall be transferred to the
Transferor according to this agreement.

"Parties"  means both the  Transferor  and the  Transferee,  and a "Party" means
either one of them.

2.       TRANSFER OF BUSINESSES AND RELATED ASSETS

2.1      The  Transferor  hereby agrees to transfer to the  Transferee,  and the
Transferee  hereby  agrees to acquire  the  Businesses  in  accordance  with the
provisions of This Agreement.

2.2      The  Transferor  hereby agrees to transfer to the  Transferee,  and the
Transferee hereby agrees to acquire the Assets that related to the Businesses in
accordance with the provisions of this  Agreement.  The Assets listed in Section
(2) of Appendix I shall be  determined  by the  principle  of  necessity  to the
Businesses or the principle of financial matching.

2.3      The Parties agree that the Assets to be  transferred  by the Transferor
to the  Transferee  under This  Agreement  shall include all  intangible  assets
besides  those listed in Section 2 of Annex 1 which are owned by the  Transferor
and related to the  Business,  including  but not  limited to, the client  data,
contract  relationship,  business  information and trade secrets etc. of various
types.

2.4      The Parties agree that the  transferring  price for the  Businesses and
Assets under this  Agreement  shall be  determined  by the net book value of the
aforesaid  Assets,  which is  55,433,284.00  RMB  equivalence of 6,678,709.00 US
dollars.

2.5      The  Transferee  shall have the right of  pre-emption  to purchase  the
Transferee's  remaining business and related assets if the law permits. Once the
law permits, the Transferor shall, upon Transferee's  request,  transfer them to
the  Transferee,  with the price  determined  by the net book value or appraisal
value.

3.       DELIVERY OF BUSINESSES AND ASSETS AND PAYMENT OF TRANSFERRING PRICE

3.1      The Businesses shall be delivered to the Transferee from the Transferor
at the signing date of this Agreement.

     The delivery of the Assets  related to the  Businesses  shall be handled by
the parties in accordance with Section 3.3 of this Agreement.  Before the Assets
being delivered,  the Transferor  shall operate the Businesses  continuously and
the profits,  loses and risks as well shall be during this period shall be taken
or burdened by the Transferee.

3.2      After the delivery of the aforesaid Businesses,  the Transferor commits
that it shall not operate businesses competitive or potentially competitive with
aforesaid Businesses.

     After the delivery of the  aforesaid  Businesses,  under the  circumstances
that  services  within the scale of  Businesses  are to be provided by the third
parties to the Transferor for its own business operation,  these services should
be  provided  by the  Transferee.  And the parties  shall  therefore  enter into
agreements concerning the providing of the above services.


                                       3
<PAGE>


3.3      The  Transferor  shall be  responsible  for  completing  all procedures
relating to ownership transfer, registration or confirmation for the transfer of
the Businesses and the related Assets.  within Sixty (60) days after the signing
date of this Agreement,  the Transferor shall close the delivery of all relevant
Assets hereunder with the Transferee, and thereafter, the Parties shall sign the
Closing  Acknowledgement Letter as attached in Appendix II hereof evidencing the
completion of the assets delivery.

     The Transferor  shall hand over all the financial,  businesses  operational
and related technical materials  concerning the Assets to the Transferee.  Under
the circumstances that any material,  for its nature,  cannot be delivered,  the
Transferor  shall  take  good  care of  these  items  and  keep  them in a place
convenient for the Transferee to look up, photocopy and use otherwise for free.

3.4      The Transferee shall pay to the Transferor  33,259,970.40  RMB, namely,
60% of the transferring  price within six (6) months after the execution of This
Agreement and delivery of the Business and Related Assets to the Transferee. The
rest amount of the transferring price,  namely,  22,173,313.60 RMB shall be paid
within one year from the above date.

4.       REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR

The Transferor  represents  and warrants to the Transferee  that, on the signing
date of this Agreement:

     a.   It is a company duly organized and existing under the PRC laws and has
          good title,  use right and/or other rights to the  Businesses  and the
          Assets,  and all the  Businesses  and  Related  Assets are free of any
          lease, lien, mortgage, pledge or other encumbrances;

     b.   It has all  corporate  powers  and  authorizations  and has  taken all
          corporate actions necessary for the transfer of the Businesses and the
          Assets hereunder;

     c.   The Businesses and the Assets to be transferred from the Transferor to
          the Transferee are transferable under PRC laws.

     d.   The  Transferor  has not  committed  any acts that violate any laws or
          regulations and may cause any significant damage to the Transferee.

     e.   The  Transferor has not committed any acts that infringe third party's
          patent, copyright,  know-how,  design,  trademarks,  goodwill or other
          intellectual  property  protected by law and may cause any significant
          damage to the Transferor.

     f.   The Transferor is not involved as claimant or defendant or other party
          in any material or primary lawsuit, arbitration,  claim or other legal
          procedures,  ongoing,  pending or threatening as such,  concerning the
          Businesses and Assets,  which have significant and/or primary negative


                                       4
<PAGE>

          influence  to the Business  and the Assets of the  Transferee.  Nor is
          there any claims with significant negative influence to the Businesses
          and/or  the Assets of the  Transferee  or any other  facts  which will
          cause the aforesaid claim.

     The Transferor further undertakes to the Transferee that:

     a.   Between  the date of This  Agreement  and the  completing  date of the
          delivery of the Assets, it shall operate, manage, use and maintain the
          Assets in a normal manner in the ordinary course of the Businesses.

     b.   Between  the date of This  Agreement  and the  completing  date of the
          delivery  of the  Assets,  it shall  not  lease,  mortgage,  pledge or
          otherwise encumber any of the Businesses or the Assets;

     c.   Between  the date of This  Agreement  and the  completing  date of the
          delivery of the Assets,  it will not make any  commitments  concerning
          the Businesses  and/or the Assets,  whether  contractual or otherwise,
          other than those necessary for the Transferor to operate the Assets in
          the ordinary course of its Businesses.

     d.   Without the Transferee's consent, the Transferor shall not transfer to
          any third party any of the remaining  Assets which are not transferred
          from the Transferor to the Transferee under this Agreement.

5.        INDEMNIFICATION

The  Transferor  agrees  that,  if it is  found  to be in  breach  of any of the
representations  and warranties set forth in Article 4 hereof, it will indemnify
the Transferee in full for and against all losses,  liabilities,  costs, charges
and expenses incurred by the Transferee due to such breach.

6.        WAIVER

A Party's  failure to insist on strict and timely  performance  of any provision
hereunder  shall  not  constitute  a waiver of such  right,  nor shall a Party's
waiver of such right  constitute a waiver with respect to  subsequent  breaches,
similar or otherwise.

7.        SEVERABILITY

If  for  any  reason  any  provision  of  This  Agreement   becomes  invalid  or
unenforceable  in full or in part,  or is in violation of any  applicable  laws,
such provision shall be deemed to have been deleted herefrom,  and to the extent
permitted  under the law and  considered by the Parties at the time of executing
the Agreement,  replaced by an appropriate provision that is closest to what the
Parties  would  have  desired  according  to  the  meaning  and  purpose  of the
Agreement.  The  remaining  provisions  of this  Agreement  shall be  valid  and
binding.

8.        NOTICE

Notices  and other  communications  between  the  Parties  shall be  prepared in
Chinese in writing, and sent to the following addresses:


                                       5
<PAGE>


  Shanghai Sifang Information Technology Co., Ltd.
  Address: No. 689, Lao Shan Dong Road, Pudong New District, Shanghai,
  PRC.
  Attention:  Joe Zhou
  Fax:  8621-63360909

  Shanghai TCH Data Technology Co., Ltd.
  Address: Room 304, No. 689, Lao Shan Dong Road, Pudong New District, Shanghai,
  PRC.
  Attention:  Fu Sixing
  Fax:

9.        LANGUAGE

This Agreement is executed in Chinese.  This Agreement and any amendment  hereto
may be executed by both Parties in separate counterparts,  each and all of which
shall be original and all of which  together  shall  constitute one and the same
instrument.

10.       GOVERNING LAW AND SETTLEMENT OF DISPUTES

10.1      This Agreement  shall be governed by and construed in accordance  with
the published laws of the mainland area of PRC.

10.2      All disputes arising from the execution of, or in connection with this
Agreement shall be settled through friendly consultation between the Parties. If
no  settlement  can be  reached  through  consultation,  the  dispute  shall  be
submitted to the China International  Economic and Trade Arbitration  Commission
(CIETAC) Shanghai  Commission for arbitration in accordance with its arbitration
rules then in effect. There shall be three arbitrators. The arbitration shall be
held in Shanghai. The language of the arbitration shall be Chinese. The arbitral
award shall be final and binding on both Parties.  The costs of the  arbitration
shall be borne by the losing  Party,  unless the  arbitration  award  stipulates
otherwise.

11.      PREVIOUS AGREEMENTS

This Agreement  shall  supercede all  memorandums,  agreements and  arrangements
previously entered into between the Parties on the subject matter hereof and all
such memorandums, agreements and arrangements shall become void from the date of
the execution of this Agreement.

12.       COUNTERPARTS AND EFFECTIVENESS

12.1      This Agreement may be executed by the Parties separately in one or any
number of  counterparts,  each of which  will be an  original,  but all of which
together shall constitute one and the same agreement.  All counterparts shall be
identical.

12.2      This  Agreement  shall become  effective  after it is duly executed by
authorized representatives of the Parties.


                                       6
<PAGE>


13.       AMENDMENTS

13.1      Any amendment to this Agreement shall be made in writing and signed by
the authorized  representatives of both Parties. When necessary, an amendment to
this Agreement shall become effective upon approval of the relevant  examination
and approval authority.

13.2      Matters not covered in this  Agreement  shall be handled in accordance
with the laws of the PRC.

IN  WITNESS  WHEREOF,   the  Parties,   acting  through  their  duly  authorized
representatives,  have executed this  Agreement in Shanghai,  the PRC, as of the
date first written above.



TRANSFEROR: Shanghai Sifang Information Technology Co., Ltd.



[Executed pursuant to corporate seal]
- -------------------------------------
Authorized representative





TRANSFEREE: Shanghai TCH Technology Co., Ltd.



[Executed pursuant to corporate seal]
- -------------------------------------
Authorized representative




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>7
<FILENAME>chinadig10qsbex311063004.txt
<DESCRIPTION>CERTIFICATION OF PRESIDENT UNDER SECTION 302
<TEXT>

                                  EXHIBIT 31.1

                      CHIEF EXECUTIVE OFFICER CERTIFICATION
                       AS ADOPTED PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002

I, Tai Caihua, certify that:

1.       I have reviewed this  quarterly  report on Form 10-QSB of China Digital
         Wireless, Inc.;

2.       Based on my  knowledge,  this  quarterly  report  does not  contain any
         untrue  statement of a material  fact or omit to state a material  fact
         necessary to make the  statements  made, in light of the  circumstances
         under which such  statements  were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge,  the financial  statements,  and other financial
         information  included in this quarterly  report,  fairly present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this quarterly report;

4.       The  registrant's  other  certifying  officer and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for  the
         registrant and have:

         a.       designed  such  disclosure  controls and  procedures or caused
                  such  disclosure  controls and procedures to be designed under
                  our supervision to ensure that material  information  relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during  the  period in which  this  quarterly  report is being
                  prepared;

         b.       evaluated the  effectiveness  of the  registrant's  disclosure
                  controls  and  procedures  and  presented  in this  report our
                  conclusions about the effectiveness of the disclosure controls
                  and  procedures,  as of the end of the period  covered by this
                  report based on such evaluation; and

         c.       disclosed  in  this  report  any  change  in the  registrant's
                  internal control over financial reporting that occurred during
                  the registrant's  most recent fiscal quarter (the registrant's
                  fourth  fiscal  quarter in the case of an annual  report) that
                  has materially affected, or is reasonably likely to materially
                  affect,  the  registrant's  internal  control  over  financial
                  reporting; and

5.       The registrant's other certifying  officer and I have disclosed,  based
         on our most  recent  evaluation  of  internal  control  over  financial
         reporting,  to the registrant's auditors and the audit committee of the
         registrant's  board of directors (or persons  performing the equivalent
         functions):

         a.       all significant  deficiencies  and material  weaknesses in the
                  design  or  operation  of  internal   control  over  financial
                  reporting which are reasonably  likely to adversely affect the
                  registrant's ability to record, process,  summarize and report
                  financial information; and

         b.       any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  the
                  registrant's internal control over financial information.

Date:    August 20, 2004
                                                        By: /s/ Tai Caihua
                                                           ---------------------
                                                           Tai Caihua, President




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>8
<FILENAME>chinadig10qsbex312063004.txt
<DESCRIPTION>CERTIFICATION OF CFO UNDER SECTION 302
<TEXT>

                                  EXHIBIT 31.2

                      CHIEF FINANCIAL OFFICER CERTIFICATION
                       AS ADOPTED PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002

I, Lu Qin, certify that:

1.       I have reviewed this  quarterly  report on Form 10-QSB of China Digital
         Wireless, Inc.;

2.       Based on my  knowledge,  this  quarterly  report  does not  contain any
         untrue  statement of a material  fact or omit to state a material  fact
         necessary to make the  statements  made, in light of the  circumstances
         under which such  statements  were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge,  the financial  statements  and other  financial
         information  included in this  quarterly  report fairly  present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this quarterly report;

4.       The  registrant's  other  certifying  officer and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined  in  Exchange  Act  Rules  13a-15(e)  and  15d-15(e))  for  the
         registrant and have:

         a.       designed  such  disclosure  controls and  procedures or caused
                  such  disclosure  controls and procedures to be designed under
                  our supervision to ensure that material  information  relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during  the  period in which  this  quarterly  report is being
                  prepared;

         b.       evaluated the  effectiveness  of the  registrant's  disclosure
                  controls  and  procedures  and  presented  in this  report our
                  conclusions about the effectiveness of the disclosure controls
                  and  procedures,  as of the end of the period  covered by this
                  report based on such evaluation; and

         c.       disclosed  in  this  report  any  change  in the  registrant's
                  internal control over financial reporting that occurred during
                  the registrant's  most recent fiscal quarter (the registrant's
                  fourth  fiscal  quarter in the case of an annual  report) that
                  has materially affected, or is reasonably likely to materially
                  affect,  the  registrant's  internal  control  over  financial
                  reporting; and

5.       The registrant's other certifying  officer and I have disclosed,  based
         on our most  recent  evaluation  of  internal  control  over  financial
         reporting,  to the registrant's auditors and the audit committee of the
         registrant's  board of directors (or persons  performing the equivalent
         functions):

         a.       all significant  deficiencies  and material  weaknesses in the
                  design  or  operation  of  internal   control  over  financial
                  reporting which are reasonably  likely to adversely affect the
                  registrant's ability to record, process,  summarize and report
                  financial information; and

         b.       any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  the
                  registrant's internal control over financial information.

Date:  August 20, 2004

                                              By: /s/ Lu Qin
                                                 -------------------------------
                                                 Lu Qin, Chief Financial Officer





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>9
<FILENAME>chinadig10qsbex321063004.txt
<DESCRIPTION>CERTIFICATION OF PRESIDENT UNDER SECTION 906
<TEXT>

                                  EXHIBIT 32.1

           CERTIFICATION FURNISHED PURSUANT TO 18 U.S.C. SECTION 1350,
                       AS ADOPTED PURSUANT TO SECTION 906
                        OF THE SARBANES-OXLEY ACT OF 2002

         In connection with the Quarterly Report of China Digital Wireless, Inc.
(the "Company") on Form 10-QSB for the three-month period ended June 30, 2004 as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"),  I, Tai Caihua,  President  of the Company,  certify,  pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:

         1. The Report fully complies with the  requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

         2. The  information  contained in the Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company.

Date:  August 20, 2004

                                                        By: /s/ Tai Caihua
                                                           ---------------------
                                                           Tai Caihua, President


         A signed original of this written statement required by Section 906 has
been  provided to China  Digital  Wireless,  Inc.  and will be retained by China
Digital Wireless,  Inc. and furnished to the Securities and Exchange  Commission
or its staff upon request.  The foregoing  certificate is being furnished solely
pursuant to 18 U.S.C.  Section 1350 and is not being filed as part of the Report
or as a separate disclosure document.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>10
<FILENAME>chinadig10qsbex322063004.txt
<DESCRIPTION>CERTIFICATION OF CFO UNDER SECTION 906
<TEXT>

                                  EXHIBIT 32.2

           CERTIFICATION FURNISHED PURSUANT TO 18 U.S.C. SECTION 1350,
                       AS ADOPTED PURSUANT TO SECTION 906
                        OF THE SARBANES-OXLEY ACT OF 2002

         In connection with the Quarterly Report of China Digital Wireless, Inc.
(the "Company") on Form 10-QSB for the three-month period ended June 30, 2004 as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"), I, Lu Qin, Chief Financial Officer of the Company,  certify, pursuant
to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that:

         1. The Report fully complies with the  requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

         2. The  information  contained in the Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company.

Date:  August 20, 2004

                                              By: /s/ Lu Qin
                                                 -------------------------------
                                                 Lu Qin, Chief Financial Officer


         A signed original of this written statement required by Section 906 has
been  provided to China  Digital  Wireless,  Inc.  and will be retained by China
Digital Wireless,  Inc. and furnished to the Securities and Exchange  Commission
or its staff upon request.  The foregoing  certificate is being furnished solely
pursuant to 18 U.S.C.  Section 1350 and is not being filed as part of the Report
or as a separate disclosure document.




</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
