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<SEC-DOCUMENT>0001010549-07-000294.txt : 20070409
<SEC-HEADER>0001010549-07-000294.hdr.sgml : 20070409
<ACCEPTANCE-DATETIME>20070409143150
ACCESSION NUMBER:		0001010549-07-000294
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20070408
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20070409
DATE AS OF CHANGE:		20070409

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHINA RECYCLING ENERGY CORP
		CENTRAL INDEX KEY:			0000721693
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-BUSINESS SERVICES, NEC [7389]
		IRS NUMBER:				900093373
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-12536
		FILM NUMBER:		07755965

	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:	CHINA DIGITAL WIRELESS INC
		DATE OF NAME CHANGE:	20040810

	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>8-K
<SEQUENCE>1
<FILENAME>crec8k040807.txt
<TEXT>



                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 8-K


                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

                Date of Report (Date of earliest event reported):
                                 April 08, 2007

                       CHINA RECYCLING ENERGY CORPORATION
             (Exact name of registrant as specified in its charter)


           Nevada                      000-12536                  90-0093373
 (State or other jurisdiction   (Commission File Number)        (IRS Employer
      of incorporation)                                      Identification No.)

                         Services-Business Services, NEC
    0000721693                     [7389]                          06628887
(Central Index Key)         (Standard Industrial                (Film Number.)
                                Classification)


                               429 Guangdong Road
                                 Shanghai 200001
                           People's Republic of China
          (Address of principal executive offices, including zip code)

                                (86-21) 6336-8686
              (Registrant's telephone number, including area code)

                                 Not Applicable
         (Former name or former address, if changed since last report.)


Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

|_|  Written  communications  pursuant to Rule 425 under the  Securities Act (17
     CFR 230.425)

|_|  Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
     240.14a-12)

|_|  Pre-commencement   communications  pursuant  to  Rule  14d-2(b)  under  the
     Exchange Act (17 CFR 240.14d-2(b))

|_|  Pre-commencement   communications  pursuant  to  Rule  13e-4(c)  under  the
     Exchange Act (17 CFR 240.13e-4(c))


<PAGE>




Item 1.01 Entry into a Material Definitive Agreement.

On April 08, 2007, the Board of Directors of China Recycling Energy  Corporation
("Registrant")  approves  and  makes  effective  a TRT  Project  Joint-Operation
Agreement  ("Joint-Operation  Agreement",  please  see  Exhibit  10.1)  which is
conditionally  entered on February 01, 2007 between Shanghai TCH Data Technology
Co.,   Ltd.   ("TCH")   and  Xi'an   Yingfeng   Science  and   Technology   Co.,
Ltd.("Yingfeng").  TCH is a wholly owned sub-subsidiary of Registrant.  Yingfeng
is a Chinese company that is located in Xi'an,  Shaanxi Province,  China, and is
engaging in the business of designing,  selling,  installing,  and operating top
gas recovery  turbine system ("TRT") and other renewable  energy  products.  Its
primary  customers  are  steel  mills  and  companies.  TRT  is  an  electricity
generating  system that  utilizes the exhaust  pressure and heat produced in the
blast furnace of steel mill to generate electricity.

Under the Joint-Operation  Agreement, TCH and Yingfeng will jointly pursue a top
gas recovery turbine project ("Project") which is to design, construct,  install
and operate a TRT system in Xingtai Iron and Steel  Company,  Ltd.  ("Xingtai").
This project was originally  initiated by a Contract to Design and Construct TRT
System  ("Project  Contract"  Please see Exhibit  10.2)  entered by Yingfeng and
Xingtai on September  26, 2006.  Due to  Yingfeng's  lack of capital in pursuing
this Project  alone,  Yingfeng  sought TCH's  cooperation.  After  intensive and
substantial  inquiry  and  assessment,  TCH agreed to pursue this  project  with
Yingfeng in the joint-operation mode.

Under the terms of the Joint-Operation  Agreement, TCH provides various forms of
investments and properties into the Project including cash, hardware,  software,
equipments, major components and devices. In return, TCH becomes entitled to all
the rights,  titles,  benefits and interests that Yingfeng  originally had under
the Project  Contract,  including  but not limited to the cash  payment  made by
Xingtai on regular basis and other property rights and interests.

Yingfeng remains liable for providing all the manpower,  expertise and skills to
design, construct,  install, maintain and operate the TRT system under the terms
of the Project Contract and also takes  responsibility  to manage the properties
that TCH possesses in this Project. As for consideration,  TCH will make monthly
payment  of  30,000  RMB  Yuan   (approximately  US  $  3,900)  to  Yingfeng  as
compensation for their effort in managing TCH's properties.

Prior to the approval by the Board of  Registrant,  TCH and Yingfeng  have taken
several  preliminary actions in preparation for the full pursuit of the Project,
including  selecting and  purchasing  necessary  components and software for TRT
system,  organizing  and  training  the  technician  team  for the  Project  and
developing the construction and installation plan for the TRT system.


Item 9.01 Financial Statements and Exhibits
(d) Exhibits

Exhibit No.    Description
- --------------------------------------------------------------------------------

 10.1      TRT Project Joint-Operation Agreement between TCH and Yingfeng.

 10.2     Contract  to Design and  Construct  TRT System  between  Yingfeng  and
          Xingtai

<PAGE>




                                   SIGNATURES

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

                                              China Recycling Energy Corporation

Date: April 08, 2007

                                                              /s/Guohua Ku
                                                              ------------
                                                                 Guohua Ku
                                                          President and Chairman



                                  EXHIBIT INDEX

Exhibit No.    Description
- --------------------------------------------------------------------------------

  10.1    TRT Project Joint-Operation Agreement between TCH and Yingfeng.

  10.2    Contract  to Design and  Construct  TRT System  between  Yingfeng  and
          Xingtai






























</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>crec8kex101040807.txt
<TEXT>

FORM 8-K  Exhibit 10.1
- --------------------------------------------------------------------------------


                      TRT PROJECT JOINT-OPERATION AGREEMENT


THIS JOINT-OPERATION  AGREEMENT (hereinafter  "Agreement"),  is made and entered
into as of this First day of February, 2007, subject to the approval by Board of
Directors  of both  Parties and their mother  companies  if  applicable,  by and
between:

Shanghai TCH Data  Technology  Co. Ltd.  ("TCH"),  a company duly  organized and
existing  under  the laws of the  People's  Republic  of China  and  having  its
principal  executive office at Suite 301, No.689,  East Laoshan Road, Pudong New
District, Shanghai, People's Republic of China;

                                       And

Xi'an Yingfeng  Science and Technology  Co., Ltd. ( "Yingfeng"),  a company duly
organized  and  existing  under the laws of the  People's  Republic of China and
having its principal executive office at Chang'an International Square, Suite B,
Room 909, No. 88, Nan-Guan-Zheng Street, Xi'an City, Shaanxi Province,  People's
Republic of China, Postal Code: 710068;

          (TCH and Yingfeng shall individually be referred to as a "Party",  and
     collectively as the "Parties".)

                                   WITNESSETH:

WHEREAS,  Both  Parties  are  duly  organized  under  the  applicable  laws  and
regulations  and have full  authority and power to negotiate,  enter and execute
business contracts and agreements; and

WHEREAS, Both Parities have experiences and expertise in designing, constructing
and operating top gas recovery turbine systems ("TRT"); and

WHEREAS,  On September  26, 2006,  Yingfeng  entered the "Contract To Design and
Construct  TRT  Project"  ("Project  Contract")  with  Xingtai  Iron  and  Steel
Company.,Ltd.  ("Xingtai")  to design and  construct  a TRT  system for  Xingtai
(Please see Exhibit A to this Agreement or Exhibit 10.2 to this Form 8-K for the
full text of the Project Contract between Yingfeng and Xingtai); and

WHEREAS,  Yingfeng and TCH would jointly pursue the TRT Project specified in the
aforementioned  Project Contract. TCH would provide the necessary investment and
properties including cash, hardware, software, major components, and equipments;
Yingfeng  would  provide  the  expertise,  skills  and  manpower  in  designing,
installation, maintenance and operation of the TRT system; and

NOW, THEREFORE, intending to be bound, the Parties hereto agree as follows:


                        ARTICLE 1. RIGHTS AND OBLIGATIONS

<PAGE>


SECTION 1.01.
     TCH and  Yingfeng  agree  to  jointly  pursue  the  project  of  designing,
constructing,  installing,  maintaining  and  operating  TRT system for  Xingtai
("Joint Project").

SECTION 1.02 The Rights and Obligations of TCH.
     TCH provide the  investment  and  properties in the TRT Project,  including
cash, hardware, software, equipments, components, and devices that are set forth
in the Project  Contract as necessary and needed in  constructing  and operating
the TRT  system.  The  detailed  list  of the  hardware,  software,  equipments,
components, and devices to be invested by TCH will be presented in the "Property
Item List" recognized and confirmed by both Parties. The Property Item List will
be prepared by TCH and  submitted  for  approval  by both  Parties  prior to the
actual  construction and installation of the TRT system. The items listed in the
Property  Item List will  include,  but no limited to,  tangible and  intangible
properties.

     TCH shall also:

     (1)  Remain in possession of the titles to the  investment  and  properties
          such  as  hardware,  software,  equipments,  components,  and  devices
          invested  by  TCH  in the  Joint  Project,  which  are  listed  in the
          "Property  Item List".  TCH also has the right to transfer  and divide
          the aforementioned properties.
     (2)  Have all the rights,  titles,  benefits and  interests  that  Yingfeng
          originally had under the Project  Contract  including the payment made
          by Xingtai for the TRT system and other property  rights and interests
          specified in the Project  Contract,  except for those rights,  titles,
          benefits and interests set forth in Section 1.03 of this Agreement.
     (3)  Have  the  right  to  monitor  and  oversee  Yingfeng's   conducts  in
          designing, constructing, installing, maintaining and operating the TRT
          system.
     (4)  Have the ownership of all the patents and intellectual property rights
          that  developed  by  Yingfeng  in its  course  of  pursuing  the Joint
          Project.
     (5)  May terminate this Agreement if TCH obtains all the necessary  Chinese
          governmental  approval  and  certifications  required for pursuing TRT
          projects independently.
     (6)  Bear the risk of loss or damage to the properties and capital invested
          by TCH in the Joint Project.
     (7)  Make monthly  payment of Thirty  Thousand RMB Yuan (RMB (Y) 30,000.00)
          to Yingfeng as the  compensation  for  Yingfeng's  efforts in managing
          TCH's properties in the Joint Project.
     (8)  Reimburse  Yingfeng for the costs and expenses incurred in the regular
          maintenance  and operation of the Joint Project  within one week after
          receiving the expense invoice from Yingfeng.

     TCH shall not be required or obligated in any manner to observe, perform or
fulfill any of the conditions or  obligations  in the Project  Contract that are
not specifically imposed on TCH by this Section.

SECTION 1.03. The Rights and Obligations of Yingfeng.
     Yingfeng provides the technical and engineer team,  expertise,  skills, and
all the  manpower to design,  construct,  install,  maintain and operate the TRT
system specified in the Project Contract.

     Yingfeng shall:

     (1)  Undertake  necessary  steps and measures in maintaining  and upgrading
          the TRT system upon the written consent of TCH.

<PAGE>


     (2)  Enter and execute  supplemental  agreements and contracts with Xingtai
          for purpose of carrying out the Joint Project.
     (3)  Exercise the right and power to  designate or remove the  personnel on
          the  work  positions  in  the  Joint  Project,  choose  the  component
          suppliers  and vendors and take other  actions  necessary to carry out
          the Joint Project.
     (4)  Maintain the intactness and safety of the properties  that TCH invests
          and owns in the Joint Project and make reasonable  efforts to maintain
          and  manage  the  properties  invested  and  owned by TCH in the Joint
          Project.
     (5)  Have the  entitlement  to the monthly  payment of Thirty  Thousand RMB
          Yuan (RMB (Y) 30,000.00) made by TCH, as  compensation  for Yingfeng's
          efforts in managing TCH's properties in the Joint Project.
     (6)  Have the  rights  to be  reimbursed  by TCH for the cost and  expenses
          incurred in the regular maintenance and operation of the Joint Project
          within one week after TCH received the expense invoice from Yingfeng.
     (7)  Refrain  from  assigning,   delegating,  or  transfering  any  of  the
          obligations  or  rights  set  forth in this  Agreement  without  TCH's
          express consent.
     (8)  Transmit  to TCH all the  payments  made by Xingtai for the TRT system
          pursuant to the Project  Contract  within Two (2) days after receiving
          them from Xingtai if Xingtai directly wires the payments to Yingfeng's
          account.
     (9)  Provide to TCH a detailed  status report of the Joint Project  without
          concealing or misrepresent any material fact or incident.
     (10) Coordinate and address all the issues involving Xingtai in the pursuit
          of the Joint Project,  such as issues regarding suppliers and vendors,
          etc.
     (11) Pay the tax associated with the Joint Project.

     Yingfeng also remains  fully liable under the Project  Contract to observe,
perform and fulfill all other conditions and obligations in the Project Contract
that are not listed  above and are not  imposed  on TCH by Section  1.02 of this
Agreement.



                    ARTICLE 2. REPRESENTATIONS AND WARRANTIES

SECTION 2.01.
     TCH hereby represents,  warrants, and agrees that:
     (1)  It is duly organized under the applicable laws and regulation;
     (2)  It is in good standing;
     (3)  It has all the necessary power,  right and  authorization to enter and
          execute this Agreement.

SECTION 2.02.
     Yingfeng  hereby  also  represents,  warrants  and agrees  that the Project
Contract are in full force and effect.  Yingfeng further  represents,  warrants,
and agrees that:
     (1)  It is duly organized under the applicable laws and regulation;
     (2)  It is in good standing;
     (3)  It has all the necessary power,  right and  authorization to enter and
          execute this Agreement.


                         ARTICLE 3. TERM AND TERMINATION

<PAGE>


SECTION 3.01.Term.
     This  Agreement and the Joint Project will become fully  effective upon the
final  approval by the Board of Directors  of both Parties and will  continue in
effect thereafter until February 01, 2012, unless otherwise  terminated pursuant
to Section 3.02 of this  Agreement.  Both  Parties may take certain  preliminary
actions to make preparation for the Joint Project prior to the final approval by
the Board,  including selecting and purchasing necessary components and software
for TRT  system,  organizing  and  training  the  technician  team for the Joint
Project  and  developing  the  construction  and  installation  plan for the TRT
system.

SECTION 3.02. Termination.

     This Agreement may be terminated as follows:

     (1) In the event that Yingfeng  fails to perform its obligation to transmit
the payments to TCH as required in Section  1.03(8) of this  Agreement,  causing
TCH material  loss, and fails to make any remedy within two months after receipt
of written  notice  from TCH  specifying  such  failure,  Yingfeng  is deemed in
material breach of this Agreement and TCH may choose to terminate this Agreement
by  notifying  Yingfeng  in  writing  and  Yingfeng  shall be liable for all the
damages caused by its breach.
     (2) In the  event  that TCH fails to  perform  its  obligation  to make the
payment to Yingfeng as required in Section  1.02(7) of this  Agreement,  causing
Yingfeng  material  loss,  and fails to make any remedy  within two months after
receipt of written notice from Yingfeng  specifying such failure,  TCH is deemed
in material  breach of this  Agreement and Yingfeng may choose to terminate this
Agreement  by  notifying  TCH in  writing  and TCH shall be  liable  for all the
damages caused by its breach.
     (3) In the event that either Party fails in any material respect to observe
or perform its obligations  under this Agreement,  which failure is not remedied
in a  reasonable  time,  after  receipt of written  notice  from the other Party
specifying such failure, this Agreement shall automatically terminate.
     (4) Either  Party may,  at its option,  terminate  this  Agreement  without
cause,  effective at any time after the date first written above, upon giving at
least Thirty (30) days prior  written  notice of such  termination  to the other
Party.
     (5) Upon the  completion  of the Term  set  forth in  Section  3.01 of this
Agreement.

SECTION 3.03. Force Majeure.
     Notwithstanding  any other  provision of this  Agreement,  if either TCH or
Yingfeng  is delayed in or  prevented  from  fulfilling  any of its  obligations
hereunder by reason of any cause beyond its reasonable control  (including,  but
not  limited  to acts  of  God,  fire,  third  party  strike,  flood,  delay  of
transportation  or inability to obtain  necessary raw materials  through  normal
commercial  channels),  then that party will not be liable under this  Agreement
for  damages  resulting  from such delay or  failure.  Each Party will  promptly
notify the other upon  becoming  aware of the  occurrence  of any such cause and
will use its  reasonable  best  efforts to minimize  any  resulting  delay in or
interference with the performance of its obligations hereunder.


                          ARTCLE 4. MISCLEANOUS MATTERS

SECTION 4.01. Confidential Information and Publicity.
- -----------------------------------------------------
     From  time to time  during  the term of this  Agreement  either  Party  may
disclose or make available to the other  Confidential  Information in connection
with activities contemplated  hereunder.  Except as may be required by law or as
may be reasonably necessary to enforce rights hereunder,  each Party agrees that
during the term of this Agreement and  thereafter  (a) it will use  Confidential
Information  belonging to the other solely for the  purpose(s) of this Agreement

<PAGE>

and (b) it will not disclose Confidential  Information belonging to the other to
any third party  without the express  prior  written  consent of the  disclosing
party.  Each party  further  agrees  that  except as  reasonably  necessary  for
performance  hereunder  or  otherwise  expressly  required  by law,  it will not
publicly announce or otherwise  disclose any of the terms and conditions of this
Agreement without the express prior written consent of the other.

SECTION 4.02. Governing Law; Successors and Assigns.
- ---------------------------------------------------
     This Agreement  shall be governed and construed in accordance with the laws
of the People's Republic of China and shall be binding upon the heirs,  personal
representatives,  executors,  administrators,  successors  and  assigns  of  the
Parties

SECTION 4.03. Entire Agreement.
- -------------------------------
     This Agreement constitutes the entire agreement of the Parties with respect
to the subject matter hereof and supersedes and replaces any prior  agreement or
understanding  between the Parties with respect to the  Assignment.  No changes,
alterations or  modifications  hereto shall be effective  unless made in writing
and signed by all the Parties.

SECTION 4.04. Headings and Counterparts.
- ----------------------------------------
     The  headings of the Sections of this  Agreement  are for  convenience  and
shall not by themselves  determine the  interpretation  of this Agreement.  This
Agreement  may be executed  in any number of  counterpart  copies,  all of which
copies shall constitute one and the same instrument.

SECTION 4.05. Independent Counsel.
- ----------------------------------
     The Parties each  acknowledges  that this  Agreement  has been  prepared on
behalf of TCH by Bernard & Yam, LLP, counsel to TCH, and that Bernard & Yam, LLP
is not representing, and is not acting on behalf of, Yingfeng in connection with
this  Agreement.  Yingfeng has been provided with an opportunity to consult with
its own counsel and its own business,  securities  and tax advisors with respect
to this Agreement.


     IN WITNESS WHEREOF, the Parties hereto have signed this Agreement as of the
date first above written.

SIGNATURE

By:

- ----------------------------------------------------------------
                        /s/Hanqiao Zheng
                         Hanqiao Zheng
             Shanghai TCH Data Technology Co., Ltd.


By:

- ----------------------------------------------------------------
                         /s/Geyun Wang
                           Geyun Wang
        Xi'an Yingfeng Science and Technology Co., Ltd.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>crec8kex102040807.txt
<TEXT>

FORM 8-K  Exhibit 10.2
- --------------------------------------------------------------------------------


                   CONTRACT TO DESIGN AND CONSTRUCT TRT SYTEM

     This Contract to Design and Construct TRT System (`Contract") is entered on
this 26th Day of September, 2006 by and between
     Xingtai Iron and Steel Co., Ltd  ("Xingtai"),  locate at No.262 Steel South
Road,  Xingtai City, Hebei Province,  People's  Republic of China,  Postal Code:
054027                                 and
     Xi'an Yingfeng Science&Technology Co.,Ltd ("Yingfeng"), located at Chang'an
International  Square, Suite B, Room 909, No. 88,  Nan-Guan-Zheng  Street, Xi'an
City, Shaanxi Province, People's Republic of China, Postal Code: 710068

     (Xingtai and Yingfeng shall  individually be referred to as a "Party",  and
collectively as the "Parties".)

     In accordance  with the Contract Law of the People's  Republic of China and
other  pertinent  laws and  regulations  of China,  both Parties  enter into the
following  sections and terms on the  principles of equality and mutual  benefit
and through friendly negotiations:

Section 1. TRT Project
- ----------------------
     This is a Blast Furnace Top Gas Recovery Turbine Unit Project  (hereinafter
referred to as "TRT  Project")  and will be  constructed  based on No.4 and No.5
blast furnace owned by Xingtai.

Section 2. Cooperation Method
- -----------------------------
     (1) The fund for designing and  constructing the TRT Project will be raised
by Yingfeng.  A third party,  China Foreign Economy and Trade Trust & Investment
Co.,Ltd  ("FOTIC"),  which shall be capable of fulfilling the qualifications for
capital  lease,  will be invited by  Yingfeng.  FOTIC will  provide  the capital
leasing  service  for TRT  Project.  Xingtai  and FOTIC will enter a Contract of
Capital Lease.
     (2) Yingfeng  agrees to make  payments of deposit,  commission  charges and
other fees associated with the financial affairs of TRT Project.  Xingtai agrees
to pay the  monthly  rental to  Yingfeng  and FOTIC  after  the TRT  Project  is
completely constructed and relegated by Yingfeng.

Section 3. Technology Requirements
- ----------------------------------
     Yingfeng  designs the project  according to the  technology  documents  and
plans ("Plan") attached to this Contract signed by Xingtai and Yingfeng and such
design should be accepted by Xingtai.  Yingfeng constructs the project according
to the above-mentioned  Plan. The completed project should comply with such plan
and other  industrial  standards  and fulfill the  requirement  of connecting to
public  electrical  wire in XingTai.  The appendices to this  Contract,  such as
construction  technology  agreement  entered in  accordance  with the Plan,  are
integral parts of this Contract and equally effective.

Section 4. Necessary Condition
- ------------------------------
     Xingtai shall:
     (1)  Apply  for  and  acquire  all  the  necessary  license,  approval  and
certificates for land use and  construction of the TRT project.

<PAGE>



     (2)     Ensure     that     the      pipeline     of     Blast      Furnace
Gasi(cent)wateri(cent)nitrogen  and  eletricity  will be linked to  construction
site of the TRT Project.

Section 5. Fund and Payment
- ---------------------------

     (1) The total amount of fund for the TRT Project is Thirty Million RMB Yuan
     ((pound)*30,000,000),     which     include    the    cost    of    design,
     constructioni(cent)equipments and financial affairs.
     (2) Project  rental:  Base on the  investment  forecast,  Xingtai will make
     monthly rental payment of Nine Hundred Thousand RMB Yuan  ((pound)*900,000)
     to  Yingfeng  and FOTIC for total 60 months.  As the actual  investment  is
     confirmed  by  both  Parties,  monthly  rental  payment  will  be  adjusted
     accordingly.  The formula of adjustment is: Monthly Rental Payment(RMB Yuan
     in 10  Thousands)=(pound)*900,000  x  Actual  Investment  (RMB  Yuan  in 10
     Thousands)/(pound)*30,000,000.
     (3) Project fund payment: Yingfeng will relegate the TRT project to Xingtai
     when it is  completed  and under  working  order.  Xingtai  shall  make the
     monthly  rental  payment  set forth in  Section 5 (2) of this  Contract  to
     Yingfeng and FOTIC,  starting  from either the first day or the 16th day of
     the month following the  relegation.  Xingtai shall make the monthly rental
     payment to Yingfeng and FOTIC within three  business days following the end
     of the prior month.
     (4) Within the term of this  Contract,  Xingtai may redeem all the remanent
     payment of principal  under the  Contract.  If the Xingtai  terminates  the
     Contract for cause of redemption, at any time, Xingtai may purchase all the
     assets of TRT Project.  The amount of payment  should be discussed  between
     both Parties.

Section 6. Constructing Period
- ------------------------------
     Based  on the  plan  confirmed  by  Xingtai  in  writing,  Yingfeng  should
construct the project within Six (6) months following the effective date of this
Contract.  The period of construction  may be extended in the event of any delay
caused by Xingtai.  In the event of delay caused by Yingfeng,  Yingfeng will pay
the damages to Xingtai in the amount  equal to 5% of  Yingfeng's  total  revenue
earned from this TRT Project.

Section 7. Warranty Period
- --------------------------
     (1) The  warranty  period of TRT  Project is 18 months,  starting  from the
     first  payment  due date of monthly  rental  payment.  Within the  warranty
     period,  Yingfeng has the responsibility to maintain the working conditions
     of all TRT equipments  free of charge to Xingtai,  and promise to prescribe
     the servicing  solution  within 48 hours after receiving the repair notice.
     Yingfeng  will  compensate  Xingtai  for the loss  caused by the  technical
     problems  of the  equipments  if the  technical  problems  are not fixed up
     within 20 days.
     (2) Yingfeng should also maintain the operation within a reasonable  period
     for a reasonable  service fee charged to Xingtai after the warranty  period
     expires.

Section 8. Transfer of Possession of the TRT System
- ---------------------------------------------------
     After TRT Project is completed and has passed through 72-hours  full-loaded
output trial, Yingfeng will transfer the possession of the TRT system to Xingtai
for use. The entire  procedure of  possession  transfer  shall be completed in 2
days.

Section 9. Advanced Rental Payment
- ----------------------------------
     After this Contract  takes effect,  Xingtai  supplies to Yingfeng the steel
valued at Three Million RMB Yuan ((pound)*3,0000,000) as advanced rental payment
(the actual  delivery  date of the  aforementioned  steel is to be determined by
Yingfeng). The aforementioned steel (advanced payment) is counted into the total
rental  payment  payable to Yingfeng  and Xingtai is not  obligated to make cash


<PAGE>

payment until the aforementioned  steel (advanced payment) is used up as monthly
rental payment.

Section 10.Right and Obligation of Xingtai
- ------------------------------------------
     (1) Xingtai has the right to (a) supervise  the designing and  construction
process of TRT system; (b) participate in equipment stock bidding,  construction
bidding  and  selection  of the  designing  institutions.  Xingtai's  reasonable
suggestion will be adopted.
     (2) Xingtai has the  obligations to (a) assist Yingfeng to inspect and test
the  equipments;  (b) timely  make rental  payment to  Yingfeng  and FOTIC under
Section 5.(2); (c) furnish facility to Yingfeng for TRT system.

Section 11. Right and Obligation of Yingfeng
- --------------------------------------------
     (1)  Yingfeng  has the right to (a)  request  Xingtai's  payment;  (b) take
charge of the project designing,  plant side construction,  equipment  stocking,
installation, debugging and tech support;
     (2)  Yingfeng  has the  obligation  to (a)  hold  the  public  bidding  and
confirmation  for  suppliers  and  construction  teams  for TRT and  plant  side
construction.  These actions will be supervised by Xingtai. Yingfeng promises to
recommend more than 2 of the best suppliers and constructers; (b) take charge of
TRT equipment  installation and debugging and connect  supporting  facilities in
one meter  beyond TRT  Project  plant  side.  (c) offer  training  for staff and
workers within warranty period.

Section 12. Transfer of Project Ownership
- -----------------------------------------
     After  Xingtai  pays  off all  the  obligated  payment  set  forth  in this
Contract,   the   ownership   of  TRT  project   will  be  transfer  to  Xingtai
automatically. Yingfeng and FOTIC will cooperate in this matter unconditionally.

Section 13. Change to Contract
- ------------------------------
     Once this Contract takes effect,  either Party may not unilaterally  change
or rescind this  Contract.  Both Parties may enter  supplemental  contract  upon
mutual assents and negotiation.

Section 14. Breach of Contract and Liability
- --------------------------------------------
     (1) In the event  that  Xingtai  fails to make the  payment  within 10 days
grace  period  after  the due date of any  payment  Xingtai  obligated  to make,
Xingtai  shall pay daily  liquidated  damage to Yingfeng and FOTIC in the amount
equal to 0.03 percent of the delayed payment.
     (2) In the event that Yingfeng  fails to complete the TRT system by the due
date  prescribed  in  Section  6 of this  Contract,  Yingfeng  shall  pay  daily
liquidated  damage to Xingtai in the amount  equal to 0.03 percent of total cost
of the TRT project.
     (3) Notwithstanding any other provision of this Contract, if either Xingtai
or Yingfeng is delayed in or prevented from  fulfilling  any of its  obligations
hereunder by reason of any cause beyond its reasonable control  (including,  but
not  limited  to acts  of  God,  fire,  third  party  strike,  flood,  delay  of
transportation  or inability to obtain  necessary raw materials  through  normal
commercial channels), then that party will not be liable under this Contract for
damages resulting from such delay or failure.
     (4) Other breach of contract will be settled pursuant to contract law.

Section 15. Dispute Resolution
- ------------------------------
     In the event that any dispute  regarding the  performance  and execution of
this  Contract  arises,  both  Parties  shall try to negotiate on good faith the
settlement  for the dispute.  If both Parties fail to reach  settlement,  either
Party may bring  legal  action in the  courts  governing  the place  where  this
Contract is performed.

<PAGE>


Section 16. Execution of Contract
- ---------------------------------
     This  Contract  has been  signed and  executed  on  September  26,  2006 at
Xingtai's  executive  office in  Xingtai  City,  Hebei  Province,  the  People's
Republic of China.

Section 17. Appendix
- --------------------
     The  appendix to this  Contract  include:  engineering  design  plan,  cost
calculate  sheet,  shop drawing and  technology  appendices of TRT Project.  All
appendix to the Contract have equal effects.

Section 18. Unspecified Matters and S7upplemental Contract
- ----------------------------------------------------------
     In the course of performing  the contract,  if any matter that has not been
specified or needs more definitude  terms of right and obligation,  both Parties
will  enter  and  sign  supplemental  contracts  to  cover  those  matters.  The
supplemental contract has equal force and effect as appendix to this Contract.

     IN WITNESS WHEREOF,  the Parties hereto have signed this Contract as of the
date first above written.

SIGNATURE

By

- ----------------------------------------------------------------
                         /s/Geyun Wang
                           Geyun Wang
        Xi'an Yingfeng Science and Technology Co., Ltd.

By

- ----------------------------------------------------------------
                        /s/Shiqiang Yuan
                         Shiqiang Yuan
                Xingtai Iron and Steel Co., Ltd.







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