
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


(Mark One)

 X       QUARTERLY  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF 
                 THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended August 31, 1997

                                       OR

         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
                 THE SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number: 0-23148


                          AES CHINA GENERATING CO. LTD.
             (Exact name of registrant as specified in its charter)

            Bermuda                                         98-0152612
 (State or other jurisdiction of                          (IRS Employer
  incorporation or organization)                        Identification No.)

                           3/F(W), Golden Bridge Plaza
                          No. 1(A) Jianguomenwai Avenue
                   Beijing 100020, People's Republic of China
                     (Address of principal executive office)

                        Telephone Number (86 10) 65089619
              (Registrant's telephone number, including area code)


         Indicate  by check  mark  whether  the  registrant:  (1) has  filed all
reports  required to be filed by Section 13 or 15(d) of the Securities  Exchange
Act of 1934 during the preceding 12 months (or for such 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

   Indicate the number of shares outstanding of the registrant's Common Stock,
                             as of October 15, 1997.

            12,000 shares of Common Stock, par value $1.00 per share


<PAGE>


                          AES CHINA GENERATING CO. LTD.


                                      INDEX





                    PART I.    FINANCIAL INFORMATION               Page No.

Item 1.      Consolidated Financial Statements:

             Consolidated Statements of Operations .................   3

             Consolidated Balance Sheets ...........................   5

             Consolidated Statements of Cash Flows .................   7

             Notes to Consolidated Financial Statements ............   8

Item 2.      Discussion and Analysis of Financial Condition
               and Results of Operations ...........................   11

Item 3.      Quantitative and Qualitative Disclosures
               About Market Risk ..............................   Not Applicable

                    PART II.    OTHER INFORMATION

Item 1.      Legal Proceedings ................................   Not Applicable

Item 2.      Changes in Securities and Use of Proceeds ........   Not Applicable

Item 3.      Defaults Upon Senior Securities ..................   Not Applicable

Item 4.      Submission of Matters to a Vote of Security Holders  Not Applicable

Item 5.      Other Information .................................  Not Applicable

Item 6.      Exhibits and Reports on Form 8-K ......................   17

             Signatures ............................................   18


                                       2

<PAGE>


                                     PART I

Item 1.  Consolidated Financial Statements

                          AES CHINA GENERATING CO. LTD.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)

<TABLE>
<CAPTION>

                                                                                 Three Months Ended
                                                                     August 31, 1997             August 31, 1996
                                                                  --------------------------------------------------
                                                                                     (unaudited)

<S>                                                                               <C>                         <C>

REVENUES:
    Electricity sales                                         US$                 4,503    US$                4,106
    Construction delay fee                                                           --                          (3)
                                                                  ----------------------       ---------------------
    Total revenues                                                                4,503                       4,103

OPERATING COSTS AND EXPENSES:
    Costs of sales                                                                3,123                       1,870
    Development, selling, general and
    administrative expenses                                                         406                       1,824
                                                                  ----------------------       ---------------------

    Total operating costs and expenses                                            3,529                       3,694
                                                                  ----------------------       ---------------------

OPERATING INCOME                                                                    974                        409

OTHER INCOME/(EXPENSES):
   Interest income                                                                3,249                       1,286
   Interest expense                                                              (1,737)                       (357)
   Equity in earnings of an affiliate                                               162                         189
   Amalgamation cost                                                               (221)                         --
                                                                  ----------------------       ---------------------

INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST                                                             2,427                       1,527

    Income taxes                                                                    105                         253
    Minority interest                                                                22                         237
                                                                  ----------------------       ---------------------

NET INCOME                                                   US$                  2,300                 US$   1,037
                                                                  ======================        ====================
NET INCOME PER SHARE                                         US$                191.67     US$               86.42
                                                                  ======================        ====================

</TABLE>

                 See Notes to Consolidated Financial Statements

                                       3

<PAGE>


                          AES CHINA GENERATING CO. LTD.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)

<TABLE>
<CAPTION>

                                                                                  Nine Months Ended
                                                                     August 31, 1997             August 31, 1996
                                                                  --------------------------------------------------
                                                                                     (unaudited)
<S>                                                                              <C>                          <C>

REVENUES:
    Electricity sales                                         US$                9,576     US$                6,553
    Construction delay fee                                                          --                          400
                                                                  ----------------------       ---------------------
    Total revenues                                                               9,576                        6,953

OPERATING COSTS AND EXPENSES:
    Costs of sales                                                               6,413                        3,867
    Development, selling, general and
    administrative expenses                                                      3,741                        5,229
                                                                  ----------------------       ---------------------

    Total operating costs and expenses                                          10,154                        9,096
                                                                  ----------------------       ---------------------

OPERATING LOSS                                                                    (578)                      (2,143)

OTHER INCOME/(EXPENSES):
   Interest income                                                               9,827                        5,001
   Interest expense                                                             (3,989)                        (679)
   Equity in earnings of an affiliate                                              370                          441
    Amalgamation cost                                                             (397)                          --
                                                                  ----------------------       ---------------------

INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST                                                            5,233                        2,620

    Income taxes                                                                   159                          455
    Minority interest                                                             (102)                         218
                                                                  ----------------------       ---------------------

NET INCOME                                                   US$                 5,176    US$                 1,947
                                                                  ======================       =====================
NET INCOME PER SHARE                                         US$               431.33     US$               162.25
                                                                  ======================       =====================

</TABLE>

                 See Notes to Consolidated Financial Statements

                                       4

<PAGE>


                          AES CHINA GENERATING CO. LTD.

                           CONSOLIDATED BALANCE SHEETS
               (In thousands, except par values and share amounts)

<TABLE>
<CAPTION>

                                                                            As of                      As of
                                                                        August 31, 1997           November 30, 1996
                                                                      --------------------      ----------------------
                                                                          (unaudited)

<S>                                                                               <C>                         <C>

ASSETS

Current Assets:
    Cash and cash equivalents                                   US$               89,047   US$                56,200
    Debt service reserves                                                         18,225                          --
    Investments - held-to-maturity                                                20,932                       8,995
    Investments - available-for-sale                                               6,771                          --
    Accounts receivable - The AES Corporation                                        804                          --
    Accounts receivable from related parties                                       7,674                       6,809
    Interest receivable                                                            1,488                         286
    Inventory                                                                      1,854                         765
    Prepaid expenses and other current assets                                      5,654                         874
                                                                      --------------------      ----------------------

    Total current assets                                                         152,449                      73,929

Property, Plant and Equipment:
    Electric generating facilities                                               177,159                      64,185
    Equipment, furniture and leasehold improvements                                3,363                       2,646
    Accumulated depreciation and amortization                                     (6,140)                     (3,143)
    Construction in progress                                                      78,179                      98,912
                                                                      --------------------      ----------------------

    Total property, plant and equipment, net                                     252,561                     162,600

Other Assets:
    Deferred costs, net                                                            5,679                         407
    Project development costs                                                         --                       3,352
    Investments in and advances to affiliates                                     67,589                      33,202
    Note receivable                                                                8,204                       6,626
    Debt service reserves                                                          9,113                          --
    Deposits and other assets                                                        722                         582
                                                                      --------------------      ----------------------

    Total other assets                                                            91,307                      44,169
                                                                      --------------------      ----------------------

TOTAL                                                           US$              496,317   US$               280,698
                                                                      ====================      ======================

</TABLE>


                 See Notes to Consolidated Financial Statements

                                       5

<PAGE>


                          AES CHINA GENERATING CO. LTD.

                           CONSOLIDATED BALANCE SHEETS
               (In thousands, except par values and share amounts)

<TABLE>
<CAPTION>

                                                                               As of                       As of
                                                                           August 31, 1997           November 30, 1996
                                                                         ---------------------      ---------------------
                                                                             (unaudited)
<S>                                                                                 <C>                          <C>

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
    Accounts payable - The AES Corporation                         US$                  --     US$                1,185
    Accounts payable                                                                 4,920                        2,199
    Accounts payable for construction                                               12,507                           --
    Accrued liabilities                                                              5,498                        2,618
    Accrued liabilities for construction                                             4,366                        4,259
    Loans from minority shareholders - current portion                               3,995                        1,365
    Bank loans                                                                       2,991                        2,861
                                                                         ---------------------      ---------------------

    Total current liabilities                                                       34,277                       14,487

Long-Term Liabilities:
    Notes payable, net                                                             179,839                           --
    Bank loan                                                                        7,000                           --
    Deferred income taxes                                                              546                          387
    Loans from minority shareholders                                                34,837                       34,933
                                                                         ---------------------      ---------------------

    Total long-term liabilities                                                    222,222                       35,320

Minority Interest                                                                   43,936                       40,536

Shareholders' Equity:
    Common  Stock  -  par  value  $1.00  per  share,  (Authorized,   issued  and
      outstanding shares:
        1997 - 12,000; 1996 - N/A)                                                      12                           --
    Class A Common Stock - par value $0.01 per share,
      (1997 - N/A; 1996 - 50,000,000 shares authorized; issued
        and outstanding shares:  8,134,100)                                              --                           81
    Class B Common Stock - par value $0.01 per share,
      (1997 - N/A; 1996 - 50,000,000 shares authorized; issued
        and outstanding shares:  7,500,000)                                             --                           75
    Additional paid-in capital                                                     184,348                      183,980
    Retained earnings                                                               11,083                        5,907
    Cumulative translation adjustment                                                  439                          312
                                                                         ---------------------      ---------------------

    Total shareholders' equity                                                     195,882                      190,355
                                                                         ---------------------      ---------------------

TOTAL                                                              US$             496,317     US$              280,698
                                                                         =====================      =====================
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       6

<PAGE>


                          AES CHINA GENERATING CO. LTD.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>


                                                                                        Nine Months Ended
                                                                           August 31, 1997              August 31, 1996
                                                                         ------------------------------------------------
                                                                                          (unaudited)
<S>                                                                                  <C>                         <C>

   Net cash used in operating activities                          US$                (10,646)   US$                 (267)

   CASH FLOWS FROM FINANCING ACTIVITIES:
   Net proceeds from issuance of notes                                               174,100                          --
   Contributions and loans from minority shareholders                                  3,438                       1,117
   Repayment of loans from minority shareholders                                      (1,361)                         --
   Proceeds from bank loans                                                            8,810                         481
   Repayment of bank loans                                                            (1,680)                     (1,000)
   Sale of Class A common stock                                                          224                          --
   Repurchase of Class A common stock                                                     --                     (11,443)
                                                                         --------------------        --------------------
          Net cash provided by/(used in)  financing activities                       183,531                     (10,845)

   CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to property and construction in progress                                (61,905)                    (37,552)
   Purchase of investments - held-to-maturity                                        (27,600)                    (15,534)
   Purchase of investments - available-for-sale                                      (17,636)                    (22,548)
   Proceeds from maturity of investments - held-to-maturity                           16,982                      51,976
   Proceeds from sales of investments - available-for-sale                            11,037                      16,969
   Investments in and advances to affiliates                                         (31,128)                     (8,500)
   Recoupment of investment in affiliate                                                 322                          79
   Project development costs and other assets                                         (1,245)                     (3,205)
   Deposit to debt service reserves                                                  (27,287)                         --
   Investment in note receivable                                                      (1,578)                     (4,214)
                                                                         --------------------        --------------------
          Net cash used in investing activities                                     (140,038)                    (22,529)
                                                                         --------------------        --------------------

          Increase/(decrease) in cash and cash equivalents                            32,847                     (33,641)

   CASH AND CASH EQUIVALENTS,
     Beginning of period                                                              56,200                     125,684
                                                                         --------------------        --------------------

     End of period                                                US$                 89,047    US$               92,043
                                                                         ====================        ====================
</TABLE>


                 See Notes to Consolidated Financial Statements

                                       7

<PAGE>


                          AES CHINA GENERATING CO. LTD.


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

1.       General and Basis of Presentation

AES China  Generating  Co.  Ltd.  ("AES  Chigen"  or the  "Company"),  a Bermuda
company,  was  incorporated on December 7, 1993, to develop,  acquire,  finance,
construct,  own and manage electric power generation  facilities in the People's
Republic  of  China  (the  "PRC").  On  May  8,  1997,  the  amalgamation  of  a
wholly-owned  subsidiary of The AES Corporation ("AES") with and into AES Chigen
(the "Amalgamation") was completed. The Company became a wholly-owned subsidiary
of AES.  Prior to the  Amalgamation,  the Company was a controlled  affiliate of
AES,  which  owned  approximately  48% of the  outstanding  common  stock of the
Company.

The consolidated  financial  statements  include the accounts of AES Chigen, its
subsidiaries  and  controlled  affiliates.  Investments  in  50% or  less  owned
affiliates  over  which the  Company  has the  ability to  exercise  significant
influence,  but  not  control,  are  accounted  for  using  the  equity  method.
Intercompany transactions and balances have been eliminated.

The number of shares used in computing net income per share for the three months
and nine months ended August 31, 1997 and August 31, 1996 was 12,000.

In the Company's opinion,  all adjustments  necessary for a fair presentation of
the  unaudited  results of  operations  for the three months and the nine months
ended August 31, 1997 and August 31, 1996 are included. All such adjustments are
accruals of a normal and recurring  nature.  The results of  operations  for the
periods are not necessarily indicative of the results of operations for the full
year. The financial statements are unaudited.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at August 31, 1997 and November 30, 1996 and
the reported  amounts of revenues  and expenses  during the three months and the
nine months ended August 31, 1997 and August 31, 1996.
Actual results could differ from those estimates.

Information concerning the organization and business of the Company,  accounting
policies  followed by the Company and other  information  are  contained  in the
notes to the  Company's  financial  statements  filed  as part of the  Company's
Annual  Report on Form 10-K for the fiscal  year ended  November  30,  1996 (the
"Annual  Report").  This  Quarterly  Report  on  Form  10-Q  should  be  read in
conjunction with such Annual Report.

                                       8

<PAGE>



2.       Notes Payable

As of August 31, 1997, notes payable  consisted of $180 million principal amount
Notes due on December 15, 2006 (the "2006 Notes").  The 2006 Notes bear interest
at the rate of 10 1/8% per annum. Interest is payable on June 15 and December 15
of each year,  commencing  on June 15,  1997.  The 2006 Notes rank at least pari
passu  in  right of  payment  with all  existing  and  future  senior  unsecured
indebtedness  of the  Company.  The  holders  of the 2006  Notes have a claim to
amounts on deposit in debt service and interim reserve accounts that is prior to
the claims of other  creditors of the Company.  The 2006 Notes are redeemable at
the  Company's  option,  in whole or in part,  beginning  December  15,  2001 at
redemption prices in excess of par and are redeemable at par beginning  December
15, 2003.

The terms of the 2006 Notes contain certain covenants and restrictions. The most
restrictive  of these  covenants  include  a  requirement  to  maintain  certain
reserves  and  limitations  on the payment of  dividends,  redemption  of equity
interests,   redemption  of   subordinated   indebtedness,   making  of  certain
investments,  incurrence of certain  indebtedness,  certain assets sales and the
incurrence  of  indebtedness  to refinance  existing  indebtedness,  among other
things.


3.       Bank Loan

As of August 31, 1997, a long-term bank loan of $7.0 million to Anhui Liyuan-AES
Power Company Ltd., a joint venture of the Company, was outstanding. The loan is
unsecured  and bears  interest at the  prevailing  lending rates in the PRC. The
interest rate for the nine months ended August 31, 1997 was  approximately  7.8%
per annum.
Scheduled maturities of the bank loan as of August 31, 1997 are as follows:


                                 (in thousands)
                  1998     $                 --
                  1999                    1,000
                  2000                    2,000
                  2001                    2,500
                  2002                    1,500
                           ----------------------
                           $              7,000
                           ======================


4.       Shareholders' Equity

Since May 8, 1997,  the effective date of the  Amalgamation,  the capital of the
Company has consisted of 12,000  authorized,  issued and  outstanding  shares of
Common Stock, par value $1.00 per share.

                                       9

<PAGE>



Upon the effectiveness of the Amalgamation, each issued and outstanding share of
Class A common stock of the Company was canceled in  consideration  of the right
to  receive  0.29 of a share  of  common  stock  of AES and  cash in lieu of any
fractional shares (the "Consideration"). All such shares of Class A common stock
are no longer outstanding and were automatically canceled and retired and ceased
to exist and each holder of a certificate  representing any such shares of Class
A common stock ceased to have any rights with respect thereto,  except the right
to receive the Consideration, without interest.

Upon the  effectiveness  of the  Amalgamation,  each share of the Class B Common
Stock was  automatically  canceled and ceased to exist and no consideration  was
delivered in exchange therefor.

Upon the effectiveness of the Amalgamation, all outstanding options issued under
the AES Chigen Incentive Stock Option Plan (the "Option Plan") automatically and
without any action on the part of the holders  thereof became options for shares
of AES common stock. The Option Plan remains in full force and effect.


5.       Commitments and Contingencies

Since the  commencement of operations,  the Company has entered into commitments
to  invest  a total  of  approximately  $357.8  million  in the  form of  equity
contributions and loans to its joint ventures.  As of August 31, 1997, the total
outstanding commitments to its joint ventures was $142.0 million.

Pursuant to the Payment and Milestone  Schedule  agreed  between  Sichuan Fuling
Aixi Power Company Ltd. and Shanghai Electric Corporation ("Shanghai Electric"),
a portion of the price of the Engineering, Procurement and Construction Services
Contract (the "EPC  Contract") for the Aixi Heart River project can be deferred.
Interest shall accrue on the amount of the deferred payments as set forth in the
Payment and Milestone  Schedule.  AES Chigen guaranteed to pay Shanghai Electric
up to $19.2 million, representing 60% of the price of the EPC Contract, plus the
interest  accrued  thereon.  As of August 31,  1997,  the amount of the deferred
payment with interest accrued thereon was $12.5 million.

The Company has initialed or signed several joint venture contracts which become
effective under Chinese law following receipt of certain  government  approvals.
These joint venture  contracts are also subject to the satisfaction or waiver of
certain conditions precedent specified in the joint venture contracts. Until the
appropriate  governmental  approvals  have  been  obtained  and  all  conditions
precedent have been satisfied or waived,  the Company  regards the initialing or
signing  of a  joint  venture  contract  as  being  a  preliminary  step  in the
development  of an electric  power  generation  project and  therefore  does not
recognize amounts under these joint venture contracts as commitments.

                                       10

<PAGE>



Item 2.  Discussion and Analysis of Financial Condition and Results of 
         Operations

Introduction

The  Company,  directly  and through  its  wholly-owned  offshore  subsidiaries,
engages in the  development,  construction,  operation and ownership of electric
power  generating  facilities in the PRC by means of its  participation in joint
ventures.  The Company  currently owns interests in the nine power plants listed
in the table below (the "Current Projects") with an aggregate nameplate capacity
of approximately 2,918MW.

In June 1997,  the Company  announced the investment of a total of $98.2 million
in the form of an equity  contribution in Yangcheng  International Power Company
("Yangcheng  Power").  Yangcheng Power, a 20-year cooperative joint venture, was
organized to build,  own and operate a 6 x 350MW  mine-mouth,  coal-fired  power
plant in the Shanxi  Province.  The total investment in Yangcheng Power approved
by the State Planning  Commission  ("SPC") is  approximately  $1.6 billion.  The
registered capital approved by the SPC is 25% of the total investment, or $392.9
million.  The respective  ownership  interests of the  shareholders in Yangcheng
Power are as follows:  AES China Corp., a wholly owned subsidiary of the Company
(25%); North China Electric Power (Group)  Corporation  (25%);  Jiangsu Province
Investment  Corporation (20%);  Shanxi Energy Enterprises (Group) Company (16%);
Shanxi  Provincial  Power Company (10%);  and Jiangsu  Provincial  Power Company
(4%). The difference of $1.21 billion between the total investment and the total
registered  capital of the joint  venture is financed by the China  Construction
Bank, China State Development Bank, US Export-Import  Bank and Kreditanstalt fur
Wiederaufbau  (KfW). The project is being  constructed over a 60-month period by
the Shanxi Provincial Power Company under a fixed price,  fixed-schedule turnkey
contract.  The first unit is scheduled to be in operation within 35 months.  The
turbines and generators will be provided by Siemens and boilers will be provided
by Foster  Wheeler  Energy  Corporation.  Electric  power from the plant will be
transmitted over a 730 kilometer  transmission  line to Jiangsu Power in Jiangsu
Province, on the eastern coast of China.

                                       11

<PAGE>



                   Projects in Operation or Under Construction

<TABLE>
<CAPTION>

                                                           Company       Company
                              Location     Capacity        Interest     Ownership
Joint Venture(s)             (Province)      (MW)            (MW)          (%)         Fuel     Status
----------------             ----------      ----            ----          ---         ----     ------
<S>                            <C>          <C>              <C>            <C>        <C>      <C>

Yangcheng                      Shanxi       2,100            525            25         Coal     Under construction
International                                                                                   (first unit scheduled
Power  Company                                                                                  to be in operation by
("Yangcheng Sun                                                                                 second quarter of 2000;
City")                                                                                          last unit scheduled to
                                                                                                be
                                                                                                in operation by the
                                                                                                second quarter of 2002)

Jiaozuo Wan Fang Power          Henan        250             175            70         Coal     First unit commenced
Company Ltd. ("Jiaozuo                                                                          commercial operation on
Aluminum Power")                                                                                August 17, 1997; second
                                                                                                unit scheduled to be in
                                                                                                operation by the second
                                                                                                quarter of 1998

Wuhu Shaoda                     Anhui        250             62.5           25         Coal     In operation
Electric Power
Development
Company Ltd.
("Wuhu Grassy Lake")

Anhui Liyuan-AES Power          Anhui       115.2            80.6           70          Oil     Simple cycle unit
Company Ltd. and Hefei                                                                          commenced commercial
Zhongli Energy Company                                                                          operation on August 1,
Ltd. ("Hefei Prosperity                                                                         1997; combined cycle
Lake")                                                                                          unit scheduled to be in
                                                                                                operation in the second
                                                                                                quarter of 1998

Wuxi-AES-CAREC                 Jiangsu        63             34.7           55          Oil     In operation
Gas Turbine Power
Company Ltd. and
Wuxi-AES-
Zhonghang Power
Company Ltd.
("Wuxi Tin Hill")

Sichuan Fuling Aixi            Sichuan        50              35            70         Coal     Under construction
Power Company                                                                                   (scheduled to be in
Ltd.                                                                                            operation in April
("Aixi Heart River")                                                                            1998)


Chengdu AES-Kaihua           Sichuan          48             16.8           35        Natural   Commenced
Gas Turbine Power                                                                       Gas     commercial operation
Company Ltd.                                                                                    on July 5, 1997
("Chengdu Lotus
City")

                                       12

<PAGE>

Hunan Xiangci-AES               Hunan        26.2            13.4           51         Hydro    In operation
Hydro Power
Company Ltd.
("Cili Misty Mountain")

Yangchun Fuyang               Guangdong      15.1            3.8            25          Oil     In operation
Diesel Engine Power
Company Ltd.
("Yangchun Sun
Spring")
                                           ----------    -------------

Total                                       2,917.5          946.8
                                           ==========    =============
</TABLE>



The  Company is  currently  pursuing a number of other  projects in the PRC (the
"Potential Projects").

The Company and AES entered into an Amended and Restated  Agreement  and Plan of
Amalgamation,  dated as of November 12, 1996,  pursuant to which a  wholly-owned
subsidiary  of AES,  AES  Acquisition  Co. Ltd.  ("AES Sub"),  amalgamated  (the
"Amalgamation")  with and into the Company and each share of the Company's Class
A common stock outstanding prior to the Amalgamation  thereafter represented the
right to receive shares of AES common stock. The Company's shareholders approved
the  Amalgamation  at a Special  Class  Meeting of holders of the Class A common
stock and a Special General Meeting of the shareholders of the Company,  both of
which were held on April 10, 1997. The Amalgamation was completed on May 8, 1997
after certain  regulatory  filings were made with,  and certain  approvals  were
obtained from, Bermuda authorities.

In March 1997, the Wuxi Tin Hill joint venture reached  agreement with the power
purchaser on the amount of payment for required  minimum  offtake of electricity
for 1996, which was in dispute.  The agreement  included the deferral of certain
amounts  scheduled to be paid in 1996 and a corresponding  adjustment  upward of
future scheduled payments of capital return.

On March 17,  1997,  the second unit of the Wuhu  Grassy Lake 250 MW  coal-fired
facility passed its output  performance test. During the second quarter of 1997,
approvals for electricity  tariff to be paid to the joint venture were obtained.
However,  the approved  tariff is less than  expected,  and the joint venture is
negotiating  with Anhui  Provincial  Electric  Power,  the Operation and Offtake
Contractor,  about its operation  cost and  management  fee charged to the joint
venture.  Due to the  uncertainty  related to the operation  cost and management
fee, no amount for the Company's  equity in the earnings of the Wuhu Grassy Lake
project has been recognized in the statement of operations.

                                       13

<PAGE>



In June 1997,  construction commenced on a 36-kilometer low voltage transmission
line to  connect  the  Cili  Misty  Mountain  26.2 MW  hydroelectric  generating
facility with the Hunan provincial grid. It is expected that construction of the
transmission  line will be completed in the fourth  quarter of 1997 and that the
facility will serve a larger market as a result.


Results of Operations

Revenues

Total revenues  increased from  approximately  $4.1 million to $4.5 million from
the third  quarter  of 1996 to the  third  quarter  of 1997.  The  increase  was
attributable to the  commencement of operation of Unit 1 of the Jiaozuo Aluminum
Power facility and the simple cycle unit of the Hefei Prosperity Lake facility.

Total revenues  increased from  approximately  $7.0 million to $9.6 million from
the nine months  ended August 31, 1996 to the nine months ended August 31, 1997.
The increase was primarily due to the  commencement of operation of the Wuxi Tin
Hill facility,  Units 2 and 3 of the Cili Misty Mountain facility, Unit 1 of the
Jiaozuo  Aluminum  Power  facility  and  the  simple  cycle  unit  of the  Hefei
Prosperity Lake facility.

Costs of Sales

Costs of sales, which include fuel,  operations,  and maintenance  expenses, and
depreciation and  amortization,  increased $1.2 million to $3.1 million from the
third  quarter of 1996 to the third  quarter of 1997.  The  increase in costs of
sales  was  primarily  due to the  commencement  of  operation  of Unit 1 of the
Jiaozuo  Aluminum  Power  facility  and  the  simple  cycle  unit  of the  Hefei
Prosperity Lake facility.

Costs of sales  increased from $3.9 million to $6.4 million from the nine months
ended August 31, 1996 to the nine months ended August 31, 1997.  The increase in
costs of sales was  primarily due to the  commencement  of operation of the Wuxi
Tin Hill facility,  Units 2 and 3 of the Cili Misty Mountain facility, Unit 1 of
the  Jiaozuo  Aluminum  Power  facility  and the simple  cycle unit of the Hefei
Prosperity Lake facility.

Development, Selling, General and Administrative Expenses

Development,  selling,  general and administrative  expenses decreased from $1.8
million to $0.4 million from the third  quarter of 1996 to the third  quarter of
1997 and decreased  from $5.2 million to $3.7 million from the nine months ended
August 31, 1996 to the nine months  ended August 31, 1997.  The  decreases  were
primarily due to a reduction in the costs associated with development activities
and a corresponding increase in costs associated with the operational management
of the Company's existing projects in China.

                                       14

<PAGE>



Interest Income

Interest  income  increased  from $1.3  million to $3.2  million  from the third
quarter of 1996 to the third quarter of 1997 and increased  from $5.0 million to
$9.8 million from the nine months ended August 31, 1996 to the nine months ended
August 31, 1997. The increases were primarily due to the proceeds  received from
the public offering of the Company's 2006 notes in December 1996 being available
for investment in marketable securities for the three months and the nine months
ended August 31, 1997.

Interest Expense

Interest  expense  increased  from $0.4  million to $1.7  million from the third
quarter of 1996 to the third quarter of 1997 and increased  from $0.7 million to
$4.0 million from the nine months ended August 31, 1996 to the nine months ended
August 31, 1997. The increases  were  primarily due to (i) the interest  expense
and  amortization  of costs  associated  with the  issuance of the 2006 Notes in
December of 1996,  offset in part by  capitalization of interest incurred during
the development and construction of the Company's projects, and (ii) an increase
in  interest on two  minority  shareholder  loans to Wuxi Tin Hill,  interest on
minority  shareholder loan to Jiaozuo Aluminum Power and interest on a bank loan
to Hefei Prosperity Lake.  Capitalized  interest was approximately  $3.7 million
for the third quarter of 1997 and $10.6 million for the nine months ended August
31, 1997.

Amalgamation Cost

Amalgamation  costs of  approximately  $0.4  million for the nine  months  ended
August  31,  1997  related  to  expenses   incurred  in   connection   with  the
Amalgamation.


Liquidity and Capital Resources

The Company's business has required substantial  investment  associated with the
development,  acquisition and  construction of electric power plants and related
facilities through its joint ventures.  Since commencing  business,  the Company
has entered into commitments to invest a total of  approximately  $357.8 million
in the form of equity  contributions  and loans to its joint ventures  including
approximately  $18.0 million of interest during  construction  and provision for
potential  cost  overruns,  of which  $219.3  million  has been  invested  as of
September  30, 1997.  As of September  30, 1997,  the Company had  approximately
$92.7 million  available in cash and cash equivalents and marketable  securities
and  expects  to  generate  cash flow  from  operations  over the  course of the
anticipated  investment period to fund any such  commitments.  In the event of a
shortfall  between the amount of the  Company's  commitments  and the  foregoing
sources of funds, the shortfall may be made up by loans or equity  contributions
from  AES,  but  AES is not  obligated  to  provide  any  such  loan  or  equity
contribution  for such purpose and there are no assurances that AES would decide
to provide any such loan or equity contribution.

As a result of the Amalgamation,  the Company is subject to covenants  contained
in various  AES debt  agreements  (the "AES Debt  Covenants"),  including  those
contained in the documents  governing AES's 10 1/4% Subordinated Notes due 2006,
8-3/8% Senior  Subordinated  Notes due 2007 and $425 million credit facility due
1999.  Due to the recent amendments to the terms of the


                                       15

<PAGE>
AES Debt Covenants, certain material restrictions previously applicable to AES
Chigen, including a prohibition on direct investments in future projects, are no
longer applicable. However, no assurance can be given that AES Chigen will
invest in any additional future projects.

Both the AES Debt Covenants and the covenants contained in the Indenture for AES
Chigen's  2006 Notes  require the  repayment or purchase of  indebtedness  under
specified  circumstances  involving  asset  dispositions.  Insofar  as  separate
repayments  are  required  at the AES and the Company  levels with  respect to a
single  asset sale,  this  covenant may tend to cause the Company not to make an
asset sale under circumstances where it otherwise would.

The Company is permitted, pursuant to the terms of the Indenture under which its
2006 Notes were  issued,  to pay  dividends  to AES,  provided  that the Company
satisfies certain conditions.

One  of  the  results  of the  Amalgamation  has  been  the  termination  of the
Non-Competition and Non-Disclosure Agreement,  dated as of December 29, 1993 and
amended and  restated as of February 1, 1994 (the  "Non-Competition  Agreement")
between the Company and AES, which,  among other things,  prohibited the Company
from developing,  constructing,  owning,  managing and operating  electric power
generation  projects  in any part of Asia  other than  China.  The  Company  may
consider investing through its subsidiaries in power projects outside of China.


Cash from Operations

Net cash used in operating  activities for the nine months ended August 31, 1997
totaled  $10.6  million as compared to $0.3 million for the same period in 1996.
The increase in 1997 was primarily due to a high  proportion of interest  income
accrued from  affiliates and an increase in the  components of working  capital.
These factors offset a significant increase in net income before depreciation as
compared with the corresponding period in 1996.

Cash from Investing Activities

Net cash used in investing  activities  totaled  $140.0  million during the nine
months ended August 31, 1997 as compared to $22.5 million during the same period
of 1996. The 1997 amount primarily reflected the purchase of property, plant and
equipment and other project related  investments of $95.5 million,  the purchase
of  short-term  investments  (net of any  proceeds  from the maturity or sale of
short-term  investments) of $17.2 million and the deposit (net of withdrawal) of
$27.3 million in debt service reserves.

Cash from Financing Activities

Net cash  provided by financing  activities  during the nine months ended August
31,  1997  aggregated  $183.5  million  as  compared  to $10.8  million  used in
financing  activities  during the same  period of 1996.  During the nine  months
ended  August 31,  1997,  the Company  received  proceeds,  net of  underwriting
discounts  and  commissions  and  offering  costs,  of $174.1  million  from the
issuance of the 2006 Notes,  proceeds of $8.8 million from bank loans  available
to subsidiaries and $3.4 million of loans and contributions made to subsidiaries
by minority shareholders, which were partially offset by repayment of bank loans
of  $1.7  million  and   repayment  of  $1.3  million  of  loans  from  minority
shareholders.

                                       16

<PAGE>


                           PART II - OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits

     Exhibit
     Number           Document


        10.5*     Joint Venture Contract,  dated August 1996, by and among North
                  China  Electric  Power  Group  Corporation,  Jiangsu  Province
                  Investment  Corporation,   Shanxi  Energy  Enterprise  (Group)
                  Company,  Jiangsu  Provincial Power Company  ("Jiangsu Power")
                  and the Company to  establish  Yangcheng  International  Power
                  Generating Company Limited ("Yangcheng Power").

        10.49*    On-lending  Agreement on Using US Export Credit by Yangcheng
                  International  Power  Company  Ltd. by and  between  Yangcheng
                  Power,   as  the   borrower,   and  Shanxi   Branch  of  China
                  Construction Bank, as the lender.

       10.50*     On-lending  Agreement on Using German  Export  Credit by
                  Yangcheng International Power Company Ltd. (the "German Export
                  Loan  Contract")  by  and  between  Yangcheng  Power,  as  the
                  borrower, and Shanxi Branch of China Construction Bank, as the
                  lender.

       10.51*     On-Lending  Agreement  by and  between  Shanxi  Branch of the
                  China  Construction  Bank, as the lender, and Yangcheng Power,
                  as the borrower

      10.52*      RMB  Fund  Loan  Contract  of  State  Development  Bank by and
                  between  the  State  Development  Bank,  as  the  lender,  and
                  Yangcheng Power, as the borrower.

      10.53*      Power Purchase Contract between Yangcheng Power and Jiangsu 
                  Power.

         27       Financial Data Schedule.

       99.1       Statement Re:  Computation of Fixed Charge Coverage Ratio.




* The Company has requested confidential treatment for certain information
  identified in this exhibit.


(b)  Reports on Form 8-K

                      None.

                                       17


<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 thereunto duly authorized.




                                          AES China Generating Co. Ltd.
                                                  (Registrant)



Date:  October 15, 1997                   /s/ Jeffery A. Safford
                                          ----------------------
                                          Jeffery A. Safford
                                          Vice President,
                                          Chief Financial Officer and Secretary

                                       18


<PAGE>


EXHIBIT INDEX

<TABLE>
<CAPTION>

Exhibit                                                                       Sequentially
Number            Document                                                   Numbered Page
------            --------                                                   -------------
<S>               <C>                                                       <C>

10.5*             Joint Venture Contract, dated August 1996, by and
                  among North China Electric Power Group
                  Corporation, Jiangsu Province Investment
                  Corporation, Shanxi Energy Enterprise (Group)
                  Company, Jiangsu Provincial Power Company
                  ("Jiangsu Power") and the Company to establish
                  Yangcheng International Power Generating 
                  Company Limited ("Yangcheng Power").

10.49*            On-lending Agreement on Using US Export Credit 
                  by Yangcheng International Power Company Ltd.
                  by and between Yangcheng Power, as the borrower,
                  and Shanxi Branch of China Construction Bank, as
                  the lender.

10.50*            On-lending Agreement on Using German Export
                  Credit by Yangcheng International Power Company
                  Ltd. (the "German Export Loan Contract") by and
                  between Yangcheng Power, as the borrower, and
                  Shanxi Branch of China Construction Bank, as the
                  lender.

10.51*            On-Lending Agreement by and between Shanxi
                  Branch of the China Construction Bank, as the
                  lender, and Yangcheng Power, as the borrower.

10.52*            RMB Fund Loan Contract of State Development
                  Bank by and between the State Development Bank,
                  as the lender, and Yangcheng Power, as the 
                  borrower.

10.53*            Power Purchase Contract between Yangcheng
                  Power and Jiangsu Power.

27                Financial Data Schedule.

99.1              Statement Re: Computation of Fixed Charge
                  Coverage Ratio.

</TABLE>


*  The Company has requested confidential treatment for certain information
   identified in this exhibit.

                                       19

