Intangible assets consist of land use rights, patents and marketing network resources. All land in the People’s Republic of China is government owned and cannot be sold to any individual or company. However, the government grants the user a “land use right” (the Right) to use the land and the power line underneath. The Company leases two pieces of land from the PRC Government for a period from August 2003 to September 2043, on which the office and production facilities of Heilongjiang ZQPT are situated. In addition, the Company also leases two pieces of land from the PRC Government for a period from July 2003 to July 2053 and from September 2002 to June 2057 respectively, on which the office and production facilities of Wuxi ZQ are situated. The Company leases the power lines from the local government for a period from July 2003 to July 2013.

Rights to use land and power and patent rights are stated at fair market value less accumulated amortization. The Company amortizes the patents over a 3-10 year period. The Company evaluates finite-lived intangible assets for impairment, at least on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated future cash flows. Recoverability of intangible assets, other long-lived assets, and goodwill is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering a number of factors including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss. As of June 30, 2011 and December 31, 2010, no impairment of intangible assets has been recorded.

							Amortization
	Initial Book Value		Accumulated Amortization		Net Book Value		Period (Years)

Rights to use land and power	$	13,256,011	$	760,076	$	12,495,935	48.6
Patents		1,191,905		205,478		986,427	9
Marketing network resource		1,000,038		732,566		267,472	3
Software		75,290		5,336		69,954	10
Total	$	15,523,244	$	1,703,456	$	13,819,788

	Initial Book Value		Accumulated Amortization		Net Book Value		Amortization Period (Years)
Rights to use land and power	$	13,094,085	$	591,703	$	12,502,382	48.6
Patents		1,172,612		172,771		999,841	9
Marketing network resource		1,000,038		558,396		441,642	3
Software		16,097		2,457		13,640	10
Total	$	15,282,832	$	1,325,327	$	13,957,505

Amortization expense was $185,265 and $366,969 for the three and six months ended June 30, 2011, respectively. Amortization expense was $196,921 and $ $393,906 for the three and six months ended June 30, 2010, respectively.