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<SEC-DOCUMENT>0001145443-10-000197.txt : 20100405
<SEC-HEADER>0001145443-10-000197.hdr.sgml : 20100405
<ACCEPTANCE-DATETIME>20100126172146
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001145443-10-000197
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20100126

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Orient Paper Inc.
		CENTRAL INDEX KEY:			0001358190
		STANDARD INDUSTRIAL CLASSIFICATION:	CONVERTED PAPER & PAPERBOARD PRODS (NO CONTAINERS/BOXES) [2670]
		IRS NUMBER:				204158835
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0228

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		SUITE 100
		STREET 2:		202 NORTH CURRY STREET
		CITY:			CARSON CITY
		STATE:			NV
		ZIP:			89703-4121
		BUSINESS PHONE:		(775) 321-8243

	MAIL ADDRESS:	
		STREET 1:		SUITE 100
		STREET 2:		202 NORTH CURRY STREET
		CITY:			CARSON CITY
		STATE:			NV
		ZIP:			89703-4121

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CARLATERAL, INC.
		DATE OF NAME CHANGE:	20060403
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML>

<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>

<P ALIGN=CENTER><FONT SIZE=4><B>Orient Paper, Inc.<BR>
Science Park, Xushui County, Baoding City<BR>
Hebei Province, The People&#146;s Republic of China 072550</B></FONT></P>

<P ALIGN=RIGHT><FONT SIZE=2>January 26, 2010</FONT></P>

<P><FONT SIZE=2>United States Securities and Exchange Commission<BR>
100 F Street, N.E.<BR>
Washington, D.C. 20549-4631</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0  width=100%>
<TR style="font-size:1px">
<TD WIDTH="13%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="86%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Attention:</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Mr. John Reynolds, Assistant Director</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Mr. Ethan Horowitz, Accountant</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Ms. Angela Halac, Accounting Reviewer</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Ms. Janice McGuirk</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Ms. Pam Howell</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>RE:</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Orient
  Paper, Inc.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Form 10-K
  FYE 12/31/08</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Filed March
  27, 2009;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>File No.
  0-52639</FONT></P>
</TD>
</TR>
</table>

<P><FONT SIZE=2>Ladies and Gentlemen:</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Orient
Paper, Inc. (the &#147;Company&#148;) is in receipt of the staff&#146;s letter of comment
dated January 20, 2010 on the above-referenced filings. Set forth below are the
Company&#146;s responses to such comments. The numbers of the
responses in this letter correspond to the numbers of the staff&#146;s comments as
set forth in the comment letter. </FONT></P>

<P><FONT SIZE=2><U>Part 1</U></FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0  width=100%>
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>1.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>We reissue
  comment one of our letter dated December 15, 2009. Please confirm that you
  will include your supplemental response in an amendment to the Form 10-K.</FONT></P>
</TD>
</TR>
</table>

<P><FONT SIZE=2>Response:</FONT></P>

<P><FONT SIZE=2>We confirm
that we will include our supplemental response in an amendment to the Form
10-K.</FONT></P>

<P><FONT SIZE=2><U>Financial Statements</U></FONT><br>
<FONT SIZE=2><U>Notes to Financial Statements</U></FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P><FONT SIZE=2><U>Note 8 &#150; Income Taxes, F-17</U></FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0  width=100%>
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>2.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>We note your
  response to our prior comment six. As your response does not adequately
  address our prior comment, it will be re-issued. Please provide us with an
  analysis of the differences between your U.S. GAAP financial statements
  compared to those prepared in accordance with domestic tax regulations. Your
  response should focus on the material differences related to the recognition
  and measurement of assets, liabilities, equity, revenues, and expenses. Refer
  to FASB ASC 740-10.</FONT></P>
</TD>
</TR>
</table>

<P><FONT SIZE=2>Response:</FONT></P>

<P><FONT SIZE=2>Upon review of
our disclosure, we have revised Note 8, Income Taxes to include the followings:</FONT></P>

<P><FONT SIZE=2>Orient Paper,
Inc. is incorporated in the United States and accounts for income taxes under
ASC Topic 740, &#147;Income Taxes.&#146;&#146; ASC Topic 740 requires the recognition of
deferred tax assets and liabilities for both the expected impact of differences
between the financial statements and the tax basis of assets and liabilities,
and for the expected future tax benefit to be derived from tax losses and tax
credit carryforwards. ASC Topic 740 additionally requires the establishment of
a valuation allowance to reflect the likelihood of realization of deferred tax
assets. Realization of deferred tax assets, including those related to the U.S.
net operating loss (&#147;NOL&#148;) carryforwards, are dependent upon future earnings,
if any, of which the timing and amount are uncertain. Accordingly, the net
deferred tax asset related to the U.S. net operating loss carryforward has been
fully offset by a valuation allowance. </FONT></P>

<P><FONT SIZE=2>Not only is
the Company subject to the Internal Revenue Code of the United States, it is,
through its VIE, also governed by the Income Tax Law of the People&#146;s Republic
of China. In 2008 and 2007, under the Income Tax Laws of PRC, Chinese companies
are generally subject to an income tax at an effective rate of 25% and 33%,
respectively, on income reported in the statutory financial statements after
appropriate tax adjustments, if any. The Company&#146;s VIE and operating entity,
Heibei Baoding Orient Paper Milling Co., Ltd. (&#147;HBOP&#148;), is subject to these
statutory rates. In the case of HBOP, the tax accounting methods used for
computing taxable income are identical to those used for statutory financial
reporting purpose in the PRC, and with minor exceptions (e.g., permanent
differences on the deductibility of meals and entertainment expenses), similar
to the accounting methods used for U.S. GAAP. The amount of income before
income tax presented in the Company&#146;s income statement generally approximates
the amount of taxable income on the PRC corporate income tax returns for its
PRC VIE. Accordingly, for the years ended December 31, 2008 and 2007, there
were no temporary differences between pre-tax accounting income and taxable
income.</FONT></P>





<P><FONT SIZE=2>Because the
Company&#146;s operations are conducted wholly outside of the United States and the
Company does not plan to invest earnings in the United States, the Company has
not recognized any U.S. taxes. Nevertheless, Orient Paper, Inc. incurred
aggregate net </FONT></P>




<PAGE>

<P><FONT SIZE=2>operating losses of approximately $4,412 for U.S. income tax
purposes as of December 31, 2008. The $4,412 NOL is subject to the rules
of under Section 382 of the Internal Revenue Code, which places a limitation on
the amount of taxable income that can be offset by any NOL carryforward after a
change in ownership. The
NOL carries forward and may be available to reduce future years&#146; U.S. taxable
income. These carryforwards will expire, if not utilized, through 2026.
Management believes that the realization of the benefits from these losses
appears not more than likely due to the Company&#146;s limited operating history and
continuing losses for U.S. income tax purposes. Accordingly, the Company has
provided a 100% valuation allowance on the deferred tax asset benefit to reduce
the asset to zero. Management will review this valuation allowance periodically
and make adjustments as warranted. </FONT></P>

<P><FONT SIZE=2>For U.S.
income tax purposes, the Company has cumulative undistributed earnings and
profits of foreign subsidiaries of approximately $ 17,807,035 as of December
31, 2008,&nbsp;which are included in consolidated retained earnings and will
continue to be indefinitely reinvested in international operations.
Accordingly, no provision has been made for U.S. deferred taxes related to
future repatriation of these earnings, nor is it practicable to estimate the
amount of&nbsp;income taxes that would have to be provided if we concluded that
such earnings will be remitted to the U.S. in the future. As a result, there
were no unrecognized tax accruals for uncertain tax positions for the years
ended December 31, 2008 and 2007. </FONT></P>

<P><FONT SIZE=2>The provision
for income taxes for the year ended December 30, 2008 and 2007 was as follows:</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0  width=100%>
<TR style="font-size:1px">
<TD WIDTH="66%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>2008</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>2007</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR style="font-size:1 px">
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=2>Provision
  for Income Taxes</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2> Current Tax Provision &#150; National and local</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,924,806</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,000,596</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=2> Deferred Tax Provision</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR style="font-size:1 px">
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Total
  Provision for Income Taxes</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,924,806</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2,000,596</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR style="font-size:1 px">
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM style="border-bottom:double black 3px">&nbsp;

</TD>
<TD VALIGN=BOTTOM style="border-bottom:double black 3px">&nbsp;

</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM style="border-bottom:double black 3px">&nbsp;

</TD>
<TD VALIGN=BOTTOM style="border-bottom:double black 3px">&nbsp;

</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
</table>

<P><FONT SIZE=2>The following
table reconciles the China statutory rates to the Company&#146;s effective tax rate
as of December 31, 2008 and 2007: </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0  width=100%>
<TR style="font-size:1px">
<TD WIDTH="66%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>2008</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>2007</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR style="font-size:1 px">
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=2>China
  Statutory rate</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P ALIGN=RIGHT><FONT SIZE=2>25.0</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P ALIGN=RIGHT><FONT SIZE=2>33.0 </FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=2>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>US valuation
  allowance</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>0.0</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>0.0</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR style="font-size:1 px">
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=2>Total
  provision for income taxes</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P ALIGN=RIGHT><FONT SIZE=2>25.0</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P ALIGN=RIGHT><FONT SIZE=2>33.0 </FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#f0f8ff">
<P><FONT SIZE=2>%</FONT></P>
</TD>
</TR>
<TR style="font-size:1 px">
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM style="border-bottom:double black 3px">&nbsp;

</TD>
<TD VALIGN=BOTTOM style="border-bottom:double black 3px">&nbsp;

</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM style="border-bottom:double black 3px">&nbsp;

</TD>
<TD VALIGN=BOTTOM style="border-bottom:double black 3px">&nbsp;

</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
</table>

<P><FONT SIZE=2>Deferred tax assets and deferred tax
liabilities reflect the tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purpose. The following represents the
significant components of deferred tax assets and liabilities: </FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0  width=100%>
<TR style="font-size:1px">
<TD WIDTH="66%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>2008</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>2007</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR style="font-size:1 px">
<TD VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=TOP style="border-bottom:solid black 1px">&nbsp;

</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Deferred tax assets:</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2> Net
  operating loss carry forward</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,500</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR style="font-size:1 px">
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2> Total gross deferred tax assets</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,500</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2> Less valuation allowance</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(1,500</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR style="font-size:1 px">
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:25.9PT;TEXT-INDENT:-8.65PT'>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM style="border-bottom:solid black 1px">&nbsp;

</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Net deferred tax assets</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR style="font-size:1 px">
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM style="border-bottom:double black 3px">&nbsp;

</TD>
<TD VALIGN=BOTTOM style="border-bottom:double black 3px">&nbsp;

</TD>
<TD VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD VALIGN=BOTTOM style="border-bottom:double black 3px">&nbsp;

</TD>
<TD VALIGN=BOTTOM style="border-bottom:double black 3px">&nbsp;

</TD>
<TD VALIGN=BOTTOM>

<P>&nbsp;</P>
</TD>
</TR>
</TABLE>

<BR>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0  width=100%>
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>3.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>In
  connection with the preceding comment, please provide a detailed discussion
  on how the differences between your U.S. GAAP basis financial statements and
  your domestic tax basis financial statements are reflected in your balance
  sheet as of December 31, 2008 and 2007. For example, explain your
  consideration of deferred tax assets and liabilities resulting from permanent
  and temporary differences between these bases of accounting.</FONT></P>
</TD>
</TR>
</table>

<P><FONT SIZE=2>Response:</FONT></P>

<P><FONT SIZE=2>Please see our
revised Note 8 above. We will disclose that that the Company&#146;s tax accounting
methods used for computing taxable income are similar to those used for
financial reporting purposes under the U.S. GAAP. Accordingly, for the years
ended December 31, 2008 and 2007, there were no temporary differences between
pre-tax accounting income and taxable income. We will also disclose that no net
deferred tax asset or liability was recognized due to the fact that full
valuation allowance has been established for the insignificant amount of NOL
accumulated as of December 31, 2008 and 2007. </FONT></P>

<P><FONT SIZE=2><U>Item 9A(T) Controls and Procedures<BR>
Management&#146;s Report on Internal Control over Financial Reporting, page 52</U></FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0  width=100%>
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>4.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>We have
  reviewed your response to our prior comment eight noting your disclosure that
  &#147;based upon this evaluation and the material weakness described below&#148; your
  internal controls over financial reporting is effective. Please revise your
  disclosure to discuss the following in detail:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the nature
  of the material weakness identified.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>when the
  material weakness was identified, by whom it was identified and when the
  material weakness first began.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Management&#146;s
  current <U>specific</U> plans, if any, to remediate its weakness.</FONT></P>
</TD>
</TR>
</table>

<P><FONT SIZE=2>Response:</FONT></P>

<P><FONT SIZE=2>The
inadvertent &#147;disclosure&#148; of a material weakness was in error and should not
have been made. Instead, Item 9A(T) Controls and Procedures should have been
revised to </FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P><FONT SIZE=2>only conclude that our disclosure controls and procedures are also
effective to ensure that information required to be disclosed in the reports
that we file or submit under the Exchange Act is accumulated and communicated
to our management, including our chief executive officer and chief financial
officer, to allow timely decisions regarding required disclosure. Please see
the revised response to your prior comment eight below (which has been
underlined for your ease of reference): </FONT></P>

<P><FONT SIZE=2><B>Evaluation of Disclosure Controls and Procedures</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company maintains a set of disclosure controls and procedures designed to
ensure that information required to be disclosed by the Company in the reports
filed under the Securities Exchange Act, is recorded, processed, summarized and
reported within the time periods specified by the SEC&#146;s rules and forms.
Disclosure controls are also designed with the objective of ensuring that this
information is accumulated and communicated to the Company&#146;s management,
including the Company&#146;s chief executive officer and chief financial officer, as
appropriate, to allow timely decisions regarding required disclosure.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
upon their evaluation as of the end of the period covered by this report, the
Company&#146;s chief executive officer and chief financial officer concluded that,
the Company&#146;s disclosure controls and procedures are effective to ensure that
information required to be included in the Company&#146;s periodic SEC filings is
recorded, processed, summarized, and reported within the time periods specified
in the SEC rules and forms. <U>Our </U><U>chief executive officer and chief financial officer </U><U>also
concluded that our disclosure controls and procedures are effective to ensure
that information required to be disclosed in the reports required to be filed
or submitted under the Exchange Act is accumulated and communicated to the our
management, including our </U><U>chief
executive officer and chief financial officer</U><U>,
to allow timely decisions regarding required disclosure.</U></FONT></P>

<P><FONT SIZE=2><B>Management&#146;s Report on Internal Control over Financial Reporting</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
management is responsible for establishing and maintaining adequate internal
control over our financial reporting as defined in Rules 13a-15(f) and
15d-15(f) under the Securities Exchange Act. Our management is also required to
assess and report on the effectiveness of our internal control over financial
reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002
(&#147;Section 404&#148;). Internal control over financial reporting is a process to
provide reasonable assurance regarding the reliability of our financial
reporting for external purposes in accordance with generally accepted
accounting principles. Internal control over financial reporting includes
policies and procedures that: (i) pertain to maintaining records that in
reasonable detail accurately and fairly reflect our transactions; (ii) provide
reasonable assurance that transactions are recorded as necessary for
preparation of our financial statements and that receipts and expenditures of
company assets are made in accordance with management authorization; and (iii)
provide reasonable assurance that unauthorized acquisition, use or disposition
of company assets that could have a material effect on our financial statements
would be prevented or detected on a timely basis.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies and procedures may deteriorate.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
the fiscal year ended December 31, 2008, we carried out an evaluation of the
effectiveness of the design and operation of its disclosure controls and
procedures pursuant to Exchange Act Rule 13a-15(b). In making this assessment,
we used the criteria set forth by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO) in Internal Control &#150; Integrated Framework. This
evaluation was conducted by Zhenyong Liu, our chief executive officer, and Jing
Hao, our chief financial officer. Based upon this evaluation, the chief
executive officer and the chief financial officer concluded that our internal
control over financial reporting is effective based on those criteria.</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
annual report&nbsp;does not include&nbsp;an attestation report issued by our
registered independent accounting firm regarding our internal control over
financial reporting. The management&#146;s report was not subject to attestation by
our registered independent public accounting firm pursuant to temporary rules
of the Securities and Exchange Commission.</FONT></P>

<P><FONT SIZE=2><B>Changes in Internal Controls over Financial Reporting</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
were no changes in our internal controls over financial reporting during the
fiscal year ended December 31, 2008 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.</FONT></P>

<P><FONT SIZE=2><B>Limitations on Controls</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
does not expect that our disclosure controls and procedures or our internal
control over financial reporting will prevent or detect all error and fraud.
Any control system, no matter how well designed and operated, is based upon
certain assumptions and can provide only reasonable, not absolute, assurance
that its objectives will be met. Further, no evaluation of controls can provide
absolute assurance that misstatements due to error or fraud will not occur or
that all control issues and instances of fraud, if any, within the Company have
been detected. Our
disclosure controls and procedures are designed to provide reasonable assurance
of achieving their objectives and our chief executive officer and chief
financial officer have concluded that our disclosure controls and procedures
are effective at that reasonable assurance level.</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0  width=100%>
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>5.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>In addition,
  please tell us how this material weakness affected your conclusion that
  internal controls over financial reporting were effective or amend your Form
  10-K to disclose your revised conclusion on the effectiveness of your
  internal controls over financial reporting as of December 31, 2008.</FONT></P>
</TD>
</TR>
</table>

<P><FONT SIZE=2>Response:</FONT></P>

<P><FONT SIZE=2>We do not
believe that a response to this comment no. 5 is applicable since we did not
intend to disclose any material weakness in our internal controls over
financial reporting. Please see our response to comment 4 above.</FONT></P>

<P><FONT SIZE=2>In connection with the Company&#146;s responses to the above comments, the
Company hereby acknowledges that:</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0  width=100%>
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the Company
  is responsible for the adequacy and accuracy of the disclosure in the filing;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Staff
  comments or changes to disclosure in response to staff comments do not
  foreclose the Commission from taking any action with respect to the filing;
  and </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>The Company
  may not assert staff comments as a defense in any proceeding initiated by the
  Commission or any person under the federal securities laws of the United
  States.</FONT></P>
</TD>
</TR>
</table><br>


<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

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<P><FONT SIZE=1>&nbsp;</FONT></P>
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<P><FONT SIZE=2>Sincerely,</FONT></P>
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<P><FONT SIZE=1>&nbsp;</FONT></P>
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<P><FONT SIZE=2>/s/ Winston C. Yen</FONT></P>
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<P><FONT SIZE=2>Chief Financial Officer</FONT></P>
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<P><FONT SIZE=2>cc:           Greg Sichenzia, Esq.</FONT></P>
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