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

FORM 10-Q


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

	For the quarterly period ended June 30, 2007

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

	For the transition period from __________ to __________

Commission File No. 0-23015

GREAT CHINA INTERNATIONAL HOLDINGS, INC.
(Exact name of small business issuer as specified in its charter)

Nevada		87-0450232
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

C Site 25-26F Presidential Building, No. 69 Heping North Street
Heping District, Shenyang 110003, Peoples Republic of China

(Address of Principal Executive Offices)

0086-24-22813888
(Issuer’s telephone number)

Not Applicable
(Former name, address and fiscal year, if changed since last report)

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

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

[ ] Large accelerated filer [ ] Accelerated filer [ X ] Non-accelerated filer

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]

State the number of shares outstanding of each of the issuer’s classes of common equity: As of June 30, 2007, there were 11,782,036 shares of common stock outstanding.

FORM 10-Q
GREAT CHINA INTERNATIONAL HOLDINGS, INC.

TABLE OF CONTENTS


		Page
PART I.	Item 1. Financial Information
	Balance Sheet as of June 30, 2007 (Unaudited) and December 31, 2006	3
	Statements of Operations for the Six Months Ended June 30, 2007 and 2006 (Unaudited)	5
	Statements of Operations for the Three Months Ended June 30, 2007 and 2006 (Unaudited)	6
	Statements of Cash Flows for the Six Months Ended June 30, 2007 and 2006 (Unaudited)	7
	Notes to the Financial Statements	8
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	29
	Item 4. Controls and Procedures	30
PART II.	Other Information	30
	Item 1A. Risk Factors	30
	Item 5. Other Information	30
	Item 6. Exhibits	31
	Signatures	31

GREAT CHINA INTERNATIONAL HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2007 AND DECEMBER 31, 2006

	2007			2006
	(Unaudited)

ASSETS
Current assets:
Cash and equivalents	$	2,866,409		$	1,769,744
Accounts receivable
Trade, net of allowance of $770,798 and $1,443,476, respectively		739,227			1,454,164
Advances to suppliers		4,868,122			1,089,048
Advances to employees		14,273			5,473
Deposits		3,274,629			1,636,942

Properties held for resale		9,545,386			10,620,550
Assets held for sale, net of impairment of $199,542 at June 30, 2007		6,816,875			9,372,189
Prepaid expenses		14,658			86,617


Total current assets		28,139,579			26,034,727

Property and equipment:
Land and buildings		55,454,560			49,988,841
Motor vehicles		697,286			679,453
Office furniture and equipment		466,468			340,618

		56,618,314			51,008,912
Less accumulated depreciation		(8,482,381	)		(7,114,334	)

		48,135,933			43,894,578

Total assets	$	76,275,512		$	69,929,305

See accompanying notes to the consolidated financial statements.

GREAT CHINA INTERNATIONAL HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2007 AND DECEMBER 31, 2006

	2007			2006
	(Unaudited)

LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	9,475,556		$	10,554,995
Deposits held		705,078			767,481
Advances from buyers		2,181,506			3,004,011
Amounts due to related companies		6,118			695,002
Taxes payable		3,354,441			1,083,765
Short-term loans		48,707,349			51,308,184
Current portion of long-term debt		664,574			428,076


Total current liabilities		65,094,622			67,841,514

Long term debt, net of current portion shown above		9,017,317			1,999,465


Total liabilities		74,111,939			69,840,979


Stockholders’ equity:
Common stock, $.001 par value 50,000,000 shares authorized,
11,782,036 issued and outstanding
at June 30, 2007 and December 31, 2006		11,783			11,783
Additional paid in capital		4,542,308			4,542,308
Retained deficit		(3,088,582	)		(4,934,109	)
Accumulated other comprehensive income		698,064			468,344


Total stockholders’ equity		2,163,573			88,326

Total liabilities and stockholders’ equity	$	76,275,512		$	69,929,305

See accompanying notes to the consolidated financial statements.

GREAT CHINA INTERNATIONAL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006
(UNAUDITED)

	2007			2006

Revenues
Sales	$	1,624,800		$	4,525,578
Rental and management fee income		2,862,234			2,557,353

Total revenues		4,487,034			7,082,931


Expenses
Cost of properties sold		1,690,952			3,404,100
Building management expenses		1,540,908			644,701
Operating and selling expenses		73,721			60,218
Administrative expenses		2,194,338			2,226,801
Depreciation and amortization		1,115,243			1,126,853


Total expenses		6,615,162			7,462,673


Income (loss) from operations		(2,128,127	)		(379,742	)


Other income (expense)
Other income		6,484,101			95,149
Impairment loss		(199,542	)		--
Interest and finance costs		(1,295,259	)		(2,213,443	)


Total other income (expense)		4,989,300			(2,118,294	)


Income (loss) before income taxes		2,861,172			(2,498,036	)

Provision for income taxes		1,015,645			--


Net income (loss)		1,845,527			(2,498,036	)

Other comprehensive income (loss):
Foreign currency translation adjustment		229,720			66,217


Total comprehensive income (loss)	$	2,075,247		$	(2,431,819	)


Basic and diluted net income (loss) per common share	$	0.16		$	(0.22	)


Weighted average basic and diluted shares outstanding		11,782,036			11,268,609

See accompanying notes to the consolidated financial statements.

GREAT CHINA INTERNATIONAL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2007 AND 2006
(UNAUDITED)

	2007			2006

Revenues
Sales	$	1,391,785		$	3,168,334
Rental and management fee income		1,503,961			1,231,527

Total revenues		2,895,746			4,399,861


Expenses
Cost of properties sold		1,477,679			2,049,553
Building management expenses		1,312,126			269,323
Operating and selling expenses		55,479			20,368
Administrative expenses		1,815,557			1,457,164
Depreciation and amortization		534,922			640,556


Total expenses		5,195,763			4,436,964


Income (loss) from operations		(2,300,017	)		(37,103	)


Other income (expense)
Other income		4,534,832			(23,117	)
Impairment loss		--			--
Interest and finance costs		(701,136	)		(882,266	)


Total other income (expense)		3,833,696			(905,383	)


Income (loss) before income taxes		1,533,679			(942,486	)

Provision for income taxes		537,557			--


Net income (loss)		996,122			(942,486	)

Other comprehensive income (loss):
Foreign currency translation adjustment		196,309			8,425


Total comprehensive income (loss)	$	1,192,431		$	(934,061	)


Basic and diluted net income (loss) per common share	$	0.08		$	(0.08	)


Weighted average basic and diluted shares outstanding		11,782,036			11,439,751

GREAT CHINA INTERNATIONAL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006
(UNAUDITED)

	2007			2006
Cash flows from operating activities:
Net income (loss)	$	1,845,527		$	(2,498,036	)
Adjustments to reconcile net income (loss) to operating activities -

Depreciation and amortization		1,181,407			1,126,853
Reduction in (provision for) doubtful accounts		(671,009	)		--
Gain on disposal of fixed assets		--			(103,043	)
Impairment loss		199,542			--
Non-cash stock compensation expense		--			377,875

Changes in assets and liabilities:
(Increase) decrease in -

Accounts receivable and other receivable		(260,541	)		(831,050	)
Advances to suppliers		(308,112	)		(771,533	)
Refunds due from contractors		--			3,536,692
Prepaid expenses		71,959			1,322,280
Accounts payable and other payables		(1,079,438	)		148,660
Deposits held		(62,403	)		--
Advances from buyers		(822,506	)		397,566
Properties held for resale		1,075,164			2,621,976
Restricted cash		--			482,548
Income and other taxes payable		2,270,676			(231,781	)


Net cash provided by (used in) operating activities		3,440,266			5,579,007


Cash flows from investing activities:
Construction in progress		(1,115,190	)		(71,303,978	)
Sales of fixed assets		--			198,511
Purchases of fixed assets		(5,422,762	)		(587,846	)


Net cash (used in) investing activities		(6,537,952	)		(71,693,313	)


Cash flows from financing activities:
Proceeds from stock issuance, net of offering costs		--			2,478,280
Loan proceeds		7,591,864			--
Loan repayments		(2,938,349	)		(6,285,860	)
Advances from (to) directors and affiliated companies		(688,884	)		60,079,856


Net cash (used in) financing activities		3,964,631			56,272,276


Effect of exchange differences		229,720			66,217

Net (decrease) in cash and cash equivalents		1,096,665			(9,775,813	)

Cash and cash equivalents, beginning of period		1,769,744			10,896,807


Cash and cash equivalents, end of period	$	2,866,409		$	1,120,994


Supplemental disclosures of Cash Flow information:
Interest paid, net of capitalized amounts	$	980,259		$	1,090,277

Income taxes paid	$	378,621		$	249,262

See accompanying notes to the consolidated financial statements.

GREAT CHINA INTERNATIONAL HOLDINGS, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2007

1. Description of business

Nature of organization

Great China International Holdings, Inc., (the “Company”) was incorporated in the State of Nevada on December 4, 1987, under the name of Quantus Capital, Inc., and in 1992, it changed its name to Red Horse Entertainment Corporation. Effective July 5, 2005, the Company completed the acquisition of Silverstrand International Holdings Limited (“Silverstrand”), a Hong Kong limited liability company, by issuing 10,102,333 shares of its common voting stock to the former stockholders of Silverstrand in exchange for all of the capital stock of Silverstrand. For financial reporting purposes the acquisition was treated as a recapitalization of Silverstrand. On September 15, 2005, the Company changed its name to Great China International Holdings, Inc. Prior to its acquisition of Silverstrand, the Company was not engaged in active business operations.

Silverstrand was incorporated on September 30, 2004 in Hong Kong Special Administrative Region, in the People’s Republic of China (“PRC”) with an authorized capital of $12,820,513 (HK$100,000,000) divided in 100 million ordinary shares of par value $0.12 per share.

During October of 2004, Silverstrand acquired all of the outstanding capital of Shenyang Maryland International Industry Co., Limited (Shenyang Maryland”) for $5,000,000, payable to its former owners as follows:


Ÿ	Jiang Fang as to $4,350,000;
Ÿ	Jiang Peng as to $500,000; and,
Ÿ	Pay $50,000 to each of Duan Jing Shi, Li Guang Hua and Wang Li Rong

This transaction was treated as a recapitalization of Shenyang Maryland for financial reporting purposes and the excess purchase was treated as dividends to shareholders.

On November 23, 2004 the Ministry of Commerce and Business Registration issued a business registration certificate approving Shenyang Maryland reclassification to a wholly owned foreign enterprise.

Pursuant to several agreements dated December 8, 2005 and December 28, 2005, the Company, through its subsidiaries, agreed to acquire in 2006 a 100 percent interest in the land use rights for the Xita Project. First, pursuant to a sale and purchase agreement dated December 8, 2005, subsequently amended on December 28, 2005, the Company agreed to acquire, through Shenyang Maryland, 70 percent of the equity interest in Shenyang Xinchao Development Co. Limited (“Xinchao”), a Sino-Foreign joint venture corporation that owns approximately 66 percent of the land use rights of the Xita Project, from Shenyang Yunfeng Real Estate Development Co., Limited (“Yunfeng”). The Company agreed to acquire the remaining 30 percent equity interest in Xinchao through Silverstrand from Sapphire Corporation Limited (formerly: I.R.E. Corporation Limited) (“Sapphire”), an unrelated Singapore corporation, pursuant an agreement dated December 28, 2005.

The remaining approximately 34% interest in the land use rights of the Xita Project is held by Shenyang Yindu Property Co., Limited (“Yindu”), also a Sino-Foreign joint venture. Pursuant to agreements dated December 28, 2005, Shenyang Maryland agreed to acquire a 70 percent interest in

Yindu from Yungfeng, and Silverstrand agreed to acquire a 30% interest in Yindu from Sapphire. Following the closing of these transactions, which is expected to occur in 2007, the Company held, through its subsidiaries, 100 percent interest in the land use rights comprising the Xita Project.

Shenyang Xin Chao Property Company Limited (“Xinchao”) was registered on August 16, 2005 in Shenyang, Liaoning Province, in the PRC with a registered capital of $12,330,456 (Rmb.100,000,000) and a defined period of existence of 11 years to August 15, 2016. Xin Chao was formed to develop a certain tract of property located in the Heping District of Shenyang, and will feature a construction area of almost 500,000 square meters with a linear site area of approximately 101,000 square meters.

Shenyang Yindu Property Company Limited (“Yindu”) was registered on August 16, 2005 in Shenyang, Liaoning Province, in the PRC with a registered capital of $6,615,228 (Rmb.50,000,000) and a defined period of existence of 11 years to August 15, 2006. Yindu was formed to develop a certain tract of property located in Xita District of Shenyang, China.

Shenyang Jitian Property Company Limited (“Jitian“) was registered on February 22, 2006 in Shenyang Liaoning Province, in the PRC with a registered capital of $616,523 (Rmb.5,000,000) and a defined period of existence of 15 years to February 22, 2021. On March 7, 2006, the registered capital increased to $20,000,000 from $616,523. Jitian was formed to develop a certain tract of property located in Chessboard Mountain Tourism Development District of Shenyang, China.

In December, 2006, Silverstrand completed an agreement for the sale of all of the outstanding equity interest in Shenyang Jitian Property Company, Ltd., (“Jitian”).

Under the agreement Beijing Capital Land Limited and Reco Ziyang Pte Limited purchased Jitian from Silverstrand in exchange for a total cash payment of $1,399,970 and assumption of all bank debt incurred by Jitian in connection with the acquisition of Galaxy Bay, which will result in a release of guaranties provided by Shenyang Maryland.

The Company engages in the development and sale of high quality private residential properties and commercial buildings for lease in the City of Shenyang, China. Shenyang Maryland, the Company’s indirect wholly-owned subsidiary, was one of the first private property developers and retailers in China, and, according to the statistical information on sales of construction area as published by Shenyang Statistical Authority, Shenyang Maryland was the ninth largest private property developer in Shenyang City in 2004.

2. Going concern

The Company was in default on $32,959,318 of bank loans as of June 30, 2007 (Note 8). As a result the Company also had a working capital deficit of $36,955,043 as of June 30, 2007. The Company’s ability to continue as a going concern is dependent on the ability to renegotiate an extension of the bank debt maturities and to continue to maintain a profitable level of operations. These issues raise doubts about the Company’s ability to continue as a going concern. Management is in the on-going process of attempting to raise additional capital through debt and equity offerings and is also negotiating a settlement of these delinquent debts (Note 11). On July 30, 2007, the Company entered into an agreement to purchase the auctioned delinquent debts totaling $24,636,535 (RMB 187,730,400), including interest in arrears of $1,834,698 (RMB 13,980,400) at a purchase consideration of $7,461,942 (RMB 56,860,000).

The financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in the normal course of business at amounts different from those reflected in these financial statements.

3. Summary of significant accounting policies

The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and the following is a summary of significant accounting policies:

Basis of presentation- The accompanying condensed consolidated financial statements have been prepared in compliance with Rule 10-01 of Regulation S-X and U.S. generally accepted accounting principles, but do not include all of the information and disclosures required for audited financial statements. These statements should be read in conjunction with the condensed consolidated financial statements and notes thereto included in the Company’s latest Annual Report on Form 10-K for the year ended December 31, 2006. In the opinion of management, these statements include all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of operations, financial position and cash flows for the interim periods presented. Operating results for the six months ended June 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.

The factors discussed in Footnote 2 above raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Consolidation policy – All significant inter-company transactions and balances within the Company are eliminated in consolidation.

Cash and equivalents – The Company considers all highly liquid debt instruments purchased with maturity period of three months or less to be cash equivalents. The carrying amounts reported in the accompanying consolidated balance sheet for cash and cash equivalents approximate their fair value. Substantially all of the Company’s cash is held in the PRC and is not protected by FDIC or any other form of insurance.

Accounts receivable- Provision is made against accounts receivable to the extent which they are considered to be doubtful. Accounts receivable in the balance sheet is stated net of such provision. As of June 30, 2007 and December 31, 2006, the provision for doubtful debts amounted to $718,582 and $1,443,476 respectively.

Related companies – A related company is a company in which a director has a beneficial interest in and in which the Company has significant influence.

Advances from buyers – Advances from buyers represents prepayments from buyers on properties on which sales revenues have not yet been recognized for financial reporting purposes.

Properties held for sale– Properties held for sale are comprised of properties held for sale and repossessed properties held for resale and are stated at the lower of cost or net realizable value. Cost includes acquisition costs of land use rights, development expenditures, interest costs and any overhead costs incurred in bringing the developed properties to their present location and condition. Net realizable value is determined by reference to management estimates based on prevailing market conditions. Management evaluates the market value of its properties on an annual basis by comparing selling prices of its properties with those of other equivalent properties in the vicinity offered by other developers.

Management reduces the estimated market value by anticipated selling expenses and associated taxes to derive the net realizable value.

Assets held for sale– Assets held for sale are comprised of land use rights and associated costs of development for the Xita project, which had previously been classified as construction in progress as of December 31, 2006. During 2007 the Company determined that the Company would cease development on this project and sell the associated assets. Based on the estimated fair value of the assets held for sale an impairment loss of $199,542 has been recorded during the six months ended June 30, 2007.

Shenyang Heping District Investment Promotion Bureau, the Agency overseeing the development of the Xita District, greatly expanded the magnitude and concept of the Xita Project. The Agency reached an agreement to compensate the Company $4,360,693 (RMB 33,228,480) to take possession of the land use rights to the Xita Project and reimburse the Company $1,620,102 (RMB 12,345,180) for expenses incurred on the project. On July 20, 2007, the local government approvals and procedures completed the transfer of the land use rights to the local government and the Company received compensation amounting to $4,360,693 (RMB 33,228,480) and the reimbursement of $1,620,102 (RMB 12,345,180) was received on July 31, 2007.

Property and equipment– Property and equipment is being depreciated over the estimated useful lives of the related assets. Depreciation is computed on the straight-line basis for both financial and income tax reporting purposes over useful lives as follows:


	Building and land use rights	8-26 years
	Leasehold improvements	20 years
	Equipment	5 years
	Motor vehicles	5 years
	Office furniture and fixtures	5 years

Depreciation expense for the six months ended June 30, 2007 and 2006 totaled $1,115,243 and $1,126,853 respectively.

Repairs and maintenance costs are normally charged to the statement of operations in the year in which they are incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the asset, the expenditure is capitalized as an additional cost of the asset.

Property and equipment are evaluated annually for any impairment in value. Where the recoverable amount of any property and equipment is determined to have declined below its carrying amount, the carrying amount is reduced to reflect the decline in value. There were no property and equipment impairments recognized during the years ended December 31, 2006, 2005 and 2004.

As of June 30, 2007 fixed assets totaling $44,202,455 have been pledged as securities to various banks in respect of borrowings totaling $53,956,693 and mortgage loans of $4,432,518.

Construction-in-progress – Properties currently under development are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including land rights cost, development expenditure, professional fees and the interest expenses capitalized during the course of construction for the purpose of financing the project. Upon completion and readiness for use of the project, the cost of construction-in-progress is to be transferred to properties held for sale.

Construction-In-Progress is valued at the lower of cost or market. Management evaluates the market value of its properties on a quarterly basis by comparing selling prices of its properties with those of other equivalent properties in the vicinity offered by other developers reduced by anticipated selling

costs and associated taxes. In the case of construction in progress, management takes into consideration the estimated cost to complete the project when making the lower of cost or market calculation.

Income Recognition– Revenue from the sale of properties is recognized when the following four criteria are met: (1) a sale is consummated (2) the buyers initial and continuing investments are adequate to demonstrate a commitment to pay for the property, (3) the seller’s receivable is not subject to future subordination and (4) the seller has transferred to the buyer the usual risks and rewards of ownership in a transaction that is in substance a sale and does not have a substantial continuing involvement with the property.

Rental and building management income comprises rental and building management income from Qiyun New Garden and President Building. Rental income is recognized on an accrual basis as the rents and management fees are earned.

Interest income is recognized when earned, taking into account the average principal amounts outstanding and the interest rates applicable.

Cost of sales– The cost of sales includes the carrying amount of the properties being sold and the business taxes paid by the Company in connection with the sales. Business taxes included in cost of sales were $1,816,218 and $398,796 for the six months ended June 30, 2007 and 2006, respectively.

Other income– Other income consists of primarily services performed on behalf of the purchasers of Jitian. These revenues are recognized when the services have been performed in accordance with the terms of the agreement.

Foreign currencies- The Company’s principal country of operations is in The People’s Republic of China. The financial position and results of operations of the Company are determined using the local currency (“Renminbi” or “Yuan”) as the functional currency. The results of operations denominated in foreign currency are translated at the average rate of exchange during the reporting period.

Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the market rate of exchange ruling at that date. The registered equity capital denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. All translation adjustments resulting from the translation of the financial statements into the reporting currency (“US Dollars”) are dealt with as an exchange fluctuation reserve in shareholders’ equity.

Historically the local currency’s exchange rate had been unofficially tied to the US Dollar at a rate of approximately 8.28 Yuan per US Dollar. Effective July 21, 2005, the Yuan was revalued to an effective exchange rate of approximately 8.11 Yuan per US Dollar. Subsequent to the revaluation the Yuan has been allowed to float within a specified range. As of June 30, 2007 the exchange rate was 7.62 Yuan per US Dollar.

Taxation– Taxation on overseas profits has been calculated on the estimated assessable profits for the year at the rates of taxation prevailing in the countries in which the Company operates. Provision for The People’s Republic of China enterprise income tax is calculated at the prevailing rate based on the estimated assessable profits less available tax relief for losses brought forward.

Enterprise income tax
Under the Provisional Regulations of The People’s Republic of China Concerning Income Tax on Enterprises promulgated by the State Council and which came into effect on January 1, 1994, income tax is payable by enterprises at a rate of 33% of their taxable income. Preferential tax treatment may, however, be granted pursuant to any law or regulations from time to time promulgated by the State Council.

Enterprise income tax (“EIT”) is provided on the basis of the statutory profit for financial reporting purposes, adjusted for income and expense items, which are not assessable or deductible for income tax purposes.

Value added tax
The Provisional Regulations of The People’s Republic of China Concerning Value Added Tax promulgated by the State Council came into effect on January 1, 1994. Under these regulations and the Implementing Rules of the Provisional Regulations of the PRC Concerning Value Added Tax, value added tax is imposed on goods sold in or imported into the PRC and on processing, repair and replacement services provided within the PRC.

Value added tax payable in The People’s Republic of China is charged on an aggregated basis at a rate of 13% or 17% (depending on the type of goods involved) on the full price collected for the goods sold or, in the case of taxable services provided, at a rate of 17% on the charges for the taxable services provided, but excluding, in respect of both goods and services, any amount paid in respect of value added tax included in the price or charges, and less any deductible value added tax already paid by the taxpayer on purchases of goods and services in the same financial year.

United States income tax
Great China International Holdings, Inc., the U.S. holding company, does not accrue income taxes on foreign earnings as there is no intention at the current time to transfer any of these earnings to the holding company. Should earnings be transferred to the U.S. holding company, they would be subject to U.S. Corporate income taxes at rates approximating 40%.

In 2006, the Financial Accounting Standards Board (FASB) issued FIN 48, which clarifies the application of SFAS 109 by defining a criterion that an individual income tax position must meet for any part of the benefit of that position to be recognized in an enterprise’s financial statements and provides guidance on measurement, derecognition, classification, accounting for interest and penalties, accounting in interim periods, disclosure and transition. In accordance with the transition provisions, the company adopted FIN 48 effective January 1, 2007.

The Company recognizes that virtually all tax positions in the PRC are not free of some degree of uncertainty due to tax law and policy changes by the state. However, the Company cannot reasonably quantify political risk factors and thus must depend on guidance issued by current state officials.

Based on all known facts and circumstances and current tax law, the company believes that the total amount of unrecognized tax benefits as of June 30, 2007, is not material to its results of operations, financial condition or cash flows. The company also believes that the total amount of unrecognized tax benefits as of June 30, 2007, if recognized, would not have a material effect on its effective tax rate. The Company further believes that there are no tax positions for which it is reasonably possible, based on current Chinese tax law and policy, that the unrecognized tax benefits will significantly increase or decrease over the next 12 months producing, individually or in the aggregate, a material effect on the company’s results of operations, financial condition or cash flows.

Earnings Per Share– Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares and dilutive potential common shares outstanding during the period.

As of June 30, 2007 and December 31, 2006, there were no outstanding securities or other contracts to issue common stock, such as options, warrants or conversion rights, which would have a dilutive effect on earnings per share as the effect of options outstanding at that time was anti- dilutive.

Fair value of financial instruments– The carrying amounts of certain financial instruments, including cash, accounts receivable, commercial notes receivable, other receivables, accounts payable, commercial notes payable, accrued expenses, and other payables approximate their fair values as at June 30, 2007 and December 31, 2006, because of the relatively short-term maturity of these instruments.

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

Stock based compensation– In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 123(R),Share-Based Payment. SFAS 123(R) replaces SFAS No. 123,Accounting for Stock-Based Compensation, and supersedesAccounting Principles Board(APB) Opinion No. 25,Accounting for Stock Issued to Employees. Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standard No. 123(R), Share-Based Payment, (“SFAS No. 123(R)”), using the modified prospective transition method. SFAS No. 123(R) requires equity-classified share-based payments to employees, including grants of employee stock options, to be valued at fair value on the date of grant and to be expensed over the applicable vesting period. Under the modified prospective transition method, share-based awards granted or modified on or after January 1, 2006, are recognized in compensation expense over the applicable vesting period. Also, any previously granted awards that are not fully vested as of January 1, 2006 are recognized as compensation expense over the remaining vesting period. No retroactive or cumulative effect adjustments were required upon The Company’s adoption of SFAS No. 123(R).

Prior to adopting SFAS No. 123(R), The Company accounted for its fixed-plan employee stock options using the intrinsic-value based method prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, (“APB No. 25”) and related interpretations. This method required compensation expense to be recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. Had the Company elected the fair value provisions of SFAS No. 123(R), The Company’s 2005 net earnings and net earnings per share would not have differed from the amounts actually reported as no share-based payments were made during this period.

The fair value of each option award is estimated on the date of grant using a Black Scholes option pricing model that uses the assumptions noted in the table below. Because Black Scholes option valuation models incorporate ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on implied volatilities from traded options on the Company’s stock, historical volatility of the Company’s stock, and other factors. The Company uses historical data to estimate option exercise and employee termination within the valuation model; separate groups of employees

that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding; the range given below results from certain groups of employees exhibiting different behavior. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.


	Expected volatility	25%
	Weighted-average volatility	25%
	Expected dividends	0%
	Expected term (in years)	1 to 5 years
	Risk-free rate	4.5%

A summary of option activity under the Plan as of June 30, 2007, and changes during the six months then ended is presented below:

Options	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at January 1, 2007		173,568	$	5.88		6.67	$	--
Granted		--	$	--
Exercised		--	$	--
Forfeited or expired		173,568	$	5.88		6.67	$	--
Outstanding at June 30, 2007		--	$	--			$	--
Exercisable at December 31, 2006		--	$	--			$	--

A summary of the status of the Company’s nonvested shares as of June 30, 2007, and changes during the six months then ended, is presented below:

Nonvested Shares	Shares		Weighted-Average Grant Date Fair Value
Nonvested at January 1, 2007		10,000		$ 1.08
Granted		--		$ --
Vested		--		$ --
Forfeited		(10,000)		$ 1.08
Nonvested at June 30, 2007		--		$ --

On March 3, 2006 the Company issued to its Chief Executive Officer options to purchase 572,491 shares of its common stock at a purchase price of $6.00 per share. The options vest in five equal increments beginning with the date of issuance in March 2006 and the following four anniversary dates. The options are exercisable over a term of five years from the date of vesting. In March 2007 the Chief Executive Officer left the Company and agreed to surrender 114,498 of vested option shares.

On March 15, 2006 the Company issued to an employee options to purchase 245,350 shares of its common stock at a purchase price of $6.00 per share. The options vest in five equal increments beginning with the date of issuance in March 2006 and the following four anniversary dates. The

options are exercisable over a term of five years from the date of vesting. In November 2006 the employee left the Company and during 2007 agreed to surrender 49,070 of vested options shares.

On May 18, 2006 the Company issued to its Chief Financial Officer options to purchase 10,000 shares of its common stock at a purchase price of $11.00 per share. The options vest immediately upon issuance and are exercisable over the one year period from the date of issuance. The Chief Financial Officer subsequently left the Company and has surrendered all options that were issued.

On October 1, 2006 the Company issued to an employee options to purchase 10,000 shares of its common stock at a purchase price of $7.00 per share. The options vest in one year from the date of issuance and are exercisable over the one year period from the date of issuance. These options were subsequently surrendered in February 2007.

Recent accounting pronouncements– In February 2006, the FASB issued Statement No. 155,“Accounting for Certain Hybrid Financial Instruments”(“SFAS No. 155”), which amends FASB Statements No. 133 and 140. This Statement permits fair value remeasurement for any hybrid financial instrument containing an embedded derivative that would otherwise require bifurcation, and broadens a Qualified Special Purpose Entity’s (“QSPE”) permitted holdings to include passive derivative financial instruments that pertain to other derivative financial instruments. This Statement is effective for all financial instruments acquired, issued or subject to a remeasurement event occurring after the beginning of an entity’s first fiscal year beginning after September 15, 2006. This Statement has no current applicability to the Company’s financial statements. Management plans to adopt this Statement on January 1, 2007 and it is anticipated that the initial adoption of this Statement will not have a material impact on the Company’s financial position, results of operations, or cash flows.

In March 2006, the FASB issued Statement No. 156,“Accounting for Servicing of Financial Assets – an amendment of FASB Statement No. 140”(“SFAS No. 156”). This Statement is effective for fiscal years beginning after September 15, 2006. This Statement requires that all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable. This Statement has no current applicability to the Company’s financial statements. Management plans to adopt this Statement on January 1, 2007 and it is anticipated that the initial adoption of this Statement will not have a material impact on the Company’s financial position, results of operations, or cash flows.

In June 2006, the FASB issued Interpretation 48,“Accounting for Uncertainty in Income Taxes”(“FIN 48”), an interpretation of FASB Statement No. 109,“Accounting for Income Taxes.”FIN 48 clarifies the accounting and reporting for income taxes where interpretation of the law is uncertain. FIN 48 prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of income tax uncertainties with respect to positions taken or expected to be taken in income tax returns. FIN 48 is effective for fiscal years beginning after December 15, 2006. This Statement has no current applicability to the Company’s financial statements. Management adopted this Statement on January 1, 2007 and the initial adoption of FIN 48 did not have a material impact on the Company’s financial position, results of operations, or cash flows.

In September 2006, the FASB issued Statement No. 157,“Fair Value Measurements”(“SFAS No. 157”). SFAS No. 157 addresses how companies should measure fair value when they are required to use a fair value measure for recognition or disclosure purposes under GAAP. SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value

measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, with earlier adoption permitted. Management is assessing the impact of the adoption of this Statement.

In September 2006, the FASB issued Statement No. 158,“Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans”(“SFAS No. 158”), an amendment of FASB Statements No. 87, 88, 106 and 132(R). SFAS No. 158 requires (a) recognition of the funded status (measured as the difference between the fair value of the plan assets and the benefit obligation) of a benefit plan as an asset or liability in the employer’s statement of financial position, (b) measurement of the funded status as of the employer’s fiscal year-end with limited exceptions, and (c) recognition of changes in the funded status in the year in which the changes occur through comprehensive income. The requirement to recognize the funded status of a benefit plan and the disclosure requirements are effective as of the end of the fiscal year ending after December 15, 2006. The requirement to measure the plan assets and benefit obligations as of the date of the employer’s fiscal year-end statement of financial position is effective for fiscal years ending after December 15, 2008. This Statement has no current applicability to the Company’s financial statements. Management plans to adopt this Statement on December 31, 2006 and it is anticipated the adoption of SFAS No. 158 will not have a material impact to the Company’s financial position, results of operations, or cash flows.

In September 2006, the Securities Exchange Commission issued Staff Accounting Bulletin No. 108 (“SAB No. 108”). SAB No. 108 addresses how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in current year financial statements. SAB No. 108 requires companies to quantify misstatements using a balance sheet and income statement approach and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors. When the effect of initial adoption is material, companies will record the effect as a cumulative effect adjustment to beginning of year retained earnings and disclose the nature and amount of each individual error being corrected in the cumulative adjustment. SAB No. 108 will be effective beginning January 1, 2007 and it is anticipated that the initial adoption of SAB No. 108 will not have a material impact on the Company’s financial position, results of operations, or cash flows.

In February 2007, the FASB issued Statement No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS 159). This statement permits companies to choose to measure many financial assets and liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently assessing the impact of SFAS 159 on its consolidated financial statements.

SFAS 154 “Accounting Changes and Error Corrections” calls in part for (1) the cumulative effect o correction of an error on periods prior to those presented to be reflected in the carrying amounts of assets and liabilities as of the beginning of the first period presented (2) An offsetting adjustment, if any, shall be made to the opening balance of retained earnings for that period and (3) financial statements for each individual prior period presented shall be adjusted to reflect correction of the period-specific effects of the error. During the current period, two major errors were detected, the effect of which will be rolled back to the appropriate reporting period in accordance with the requirements of this SFAS.

Reclassifications– Certain amounts in the 2006 financial statements have been reclassified to conform to the 2007 presentation. These reclassifications had on effect on previously reported results of operations or retained earnings.

4. Concentrations of business and credit risk

Substantially all of the Company’s bank accounts are in banks located in the PRC and are not covered by any type of protection similar to that provided by the FDIC on funds held in U.S. banks.

The Company provides credit in the normal course of business. The Company performs ongoing credit evaluations of its customers and clients and maintains allowances for doubtful accounts based on factors surrounding the credit risk of specific customers and clients, historical trends, and other information.

Substantially all of the Company's fixed assets and operations are located in the Peoples Republic of China.

Substantially all of the Company's profits are generated from operations in mainland China.

Payments of dividends may be subject to government restrictions.

5. Cash and equivalents

At June 30, 2007 the Company held no restricted cash balances. Pledged bank deposits, which are now unrestricted, bear interest at 0.06% per month and in accordance with the terms and conditions of the banking facilities agreed with banks to provide mortgage loan facilities to buyers of properties developed by the Company, the Company agreed to place guarantee fund deposits of not less than 5% to 10% of the total outstanding mortgage loans extended to property buyers and to guarantee the repayments of the mortgage loans. As of June 30, 2007, the bank had released the Company from its loan guarantees, and the formerly restricted funds have been transferred to an unrestricted bank account at the same bank.

Substantially all of the Company’s cash is held in financial institutions in the PRC and are not protected by FDIC insurance or any other form of guaranteed payment.

6. Properties held for resale

Properties held for resale at June 30, 2007 and December 31, 2006 by project are as follows:

	2007		2006
Qiyun New Village	$	1,791,801	$	1,795,644
Peacock Garden		266,692		312,584
Chenglong Garden		6,908,273		7,712,615
President Building		195,932		412,167
Maryland Building		240,472		234,322
Others		142,216		153,218

Total	$	9,545,386	$	10,620,550

As of June 30, 2007 the carrying values of stock of properties of $6,423,151 have been pledged as security for the Company’s bank loans and mortgage loans.

7. Amounts due from/(to) directors and related parties

The amounts due from/(to) directors and related parties at June 30, 2007 and December 31, 2006 are as follows:

Amounts due from/(to) directors	2007			2006
Frank Jiang Fang	$	(25,332	)	$	(418,708	)
Jiang Peng		17,258			--
Duan Jing Shi		1,969			--
Wang Li Rong		(13	)		--
Gong Wang Fu		--			(276,294	)

Amounts due from/(to) affiliates, net	$	(6,118	)	$	(695,002	)

Amounts due from/(to) related parties are unsecured, bear no interest, and have no fixed repayment terms.

8. Short-term loans

	2007		2006
Loans from Banks	$	15,748,031	$	15,658,006
Loans from Banks - delinquent		10,157,480		13,859,584
Bank loans purchased by asset management company		22,801,838		22,218,670

Total current notes payable	$	48,707,349	$	51,736,260

At December 31, 2006, all bank loans and those purchased by the asset management company were treated as short-term because all bank loans have matured and negotiations, while ongoing, are not settled as to an extension of the due dates of the bank loans.

The delinquent notes had due dates ranging from May of 2003 to December of 2006.

On June 22, 2006 the Company entered into a settlement agreement with a bank with respect to $8,202,100 of past due notes. In accordance with the terms of this settlement agreement, the Company has paid the balance of $8,202,100 as of June 3-0, 2007. According to the settlement, the bank has agreed to waive $1,181,102 in past due interest. The Company is still waiting for a confirmation of the waiver and will recognize the benefit of this interest waiver once it has received this confirmation.

There have been numerous instances of events of defaults arising from the non-payment of interest and principal in accordance with the terms of the loan agreements with two of the banks. No definitive demands have been made by the banks to foreclose on the secured borrowings. The Company is still in discussions with the banks to approve an extension of the terms and tenure of the secured and unsecured loans. Management expects that the bank negotiations will result in an extension to bank debt maturities.

The Company has not accrued any interest on the loans acquired by the asset management company since March 21, 2005 as the asset management company has agreed to waive interest on these acquired loans subsequent to that date.

Interest is accruing on all other past due loans at rates ranging from 6.0535% to 7.533%, the rates called for in the original loan agreements.

Substantially all of these loans were collaterialized, however, a significant portion of the properties held as collateral were subsequently sold by the Company.

9. Long-term debts – secured

	2006			2005
Long term debts:
Bank loan	$	5,249,344			--
Mortgage loans		4,432,518		$	2,427,541
Less: Current portion of long-term debts		(664,574	)		(428,076	)

Long-term debts	$	9,017,317		$	1,999,405

On June 18, 2007 the Company obtained a loan from a bank of $5,249,344 at 8.775% interest due on June 12, 2009. The loan is secured by fixed assets and land use rights.

On April 13, 2007 the Company obtained a ten year mortgage loan secured by fixed assets at 6.04356% with monthly payments of $26,277.

Maturities of long-term debt including mortgage loans for each of the next five years and thereafter are as follows:

	Amount
2007	$	664,574
2008		5,677,420
2009		743,400
2010		679,743
2011		201,731
Thereafter		1,714,994

	$	9,681,862

10. Commitments

As of June 30, 2007 the Company had $88,748,857 in commitments for capital expenditures for contractual agreements related to the development of the Xita project. The Company has reached an agreement to sell its interests in this development project, which would release the Company from these commitments. Additionally the Company has $4,480,874 of commitments for funding the registered capital of its subsidiaries.

On May 31, 2007, the Company entered into a letter of intent to acquire all of the issued share capital of Loyal Best Property Development Limited (“Loyal Best”), a Hong Kong limited company, from Gentle Knight Limited (“GKL”). None of Loyal Best or its directors is affiliated with the Company or Silverstrand.

Loyal Best is the sole owner of an entity called Shenyang Loyal Best Hunnan Property Development Limited (“Shenyang Loyal Best”), a wholly owned foreign enterprise that is a party to a Confirmation Letter of Auction with respect to a parcel of land located at the center area of Hunnan New Zone in the city of Shenyang, China (the “Project”). Shenyang Loyal Best paid a land transfer fee of US$20,000,000 for the Project.

Pursuant to the letter of intent, the parties entered into a definitive agreement for the acquisition on June 28, 2007. The definitive agreement provides for closing of the transaction by August 10, 2007. The principal terms of the agreement are:

The Company will purchase from GKL all of the outstanding shares of Loyal Best for $4,010,000, of which $2,580,000 was previously paid as a deposit and the remainder will be paid at the closing.

The Company will purchase from the directors of Loyal Best at a total price of $20,500,000, all of the director loan notes issued by Loyal Best in the aggregate principal amount of $20,000,000, which were used to partially finance Shenyang Loyal Best’s land transfer fee payment on the Project of $20,000,000.

GKL and the directors selling Loyal Best notes under the agreement can terminate the agreement at any time on or before July 20, 2007, by refunding to the Company the $2,580,000 deposit and paying to the Company an additional $2,580,000 as a break up fee.

After July 20, 2007, the parties are obligated to close by August 10, 2007. If for any reason the Company fails to close, it will forfeit the deposit. If for any reason GKL or the sellers of the Loyal Best director notes fail to close, they are obligated to refund to the Company the $2,580,000 deposit and pay to Silverstrand an additional $2,580,000.

11. Subsequent events

On July 20, 2007, the Company, through its indirect subsidiary Shenyang Maryland International Industry Co., Limited (“Shenyang Maryland”), received notice of approval and first payment under a compensation agreement that effects disposition of the Xita Project.

In December 2005, Shenyang Maryland and Silverstrand International Holdings, Limited acquired all of the registered capital of Shenyang Xinchao Property Company Limited and Shenyang Yindu Property Company Limited, which together hold 100% of the land use rights granted under the Xita Project confirmation letter issued by the Heping District Government in 2004. The confirmation letter, as subsequently amended, contemplated a 99,000 square meter project located in the Xi Ta area in the city of Shenyang. Under the confirmation letter we paid a land transfer fee of $4,097,223 (RMB 33,228,480).

On July 30, 2007, Great China International Holdings, Inc., through its indirect subsidiary Shenyang Maryland entered into an agreement to purchase the auctioned delinquent debts totaling $24,636,535 (RMB 187,730,400), including interest in arrears of $1,834,698 (RMB 13,980,400) at a purchase consideration of $7,461,942 (RMB 56,860,000).

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(1) Caution Regarding Forward-Looking Information

The following discussion and analysis should be read in conjunction with our consolidated financial statements prepared in accordance with accounting principles generally accepted in the USA. Unless otherwise indicated, references in this discussion to “we”,”our” and “us” are to Great China International Holdings, Inc., and its subsidiaries.

Any statements in this discussion that are not historical facts are forward-looking statements that involve risks and uncertainties; actual results may differ from the forward-looking statements. Sentences or phrases that use such words as “believes,” “anticipates,” “plans,” “may,” “hopes,” “can,” “will,” “expects,” “is designed to,” “with the intent,” “potential” and others indicate forward-looking statements, but their absence does not mean that a statement is not forward-looking. Factors that could have a material and adverse impact on actual results are described under the heading “Risk Factors” in our annual report on Form 10-K filed with the Securities and Exchange Commission on April 16, 2007, and under the caption “Item 1A. Risk Factors,” below. We do not undertake any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

(2) Executive Summary

Great China International Holdings, Inc., is a comprehensive real estate company with principal activities in real estate investment, development, sales and management. We conduct all our operation in the People’s Republic of China through our direct and indirect wholly owned subsidiaries; Shenyang Maryland International Industry Company Limited, Shenyang Jitian Property Company Limited, Shenyang Yindu Property Company Limited, Shenyang Xinchao Property Company Limited, Loyal Best Property Development Limited and Silverstrand International Holdings Company Limited.

Prior to June 30, 2006, Shenyang Maryland International Industry Company Limited (“Maryland”) has been the principal operating company and until 2005 owned five real estate projects.


	Ÿ	The President Building comprises three blocks of commercial towers located in the financial district, Heping Street, of Shenyang City. While the original intention was to sell the buildings, management subsequently decided to retain most of the properties for leasing purposes. The buildings maintain a high occupancy rate with tenants who are mostly international companies, 25 of them are Fortune 500 companies. Great China International’s head office is situated on the 25/F and 26/F of the President Building.

	Ÿ	Chenglong Garden, situated in Shenyang Huanggu District, comprises 12 blocks of modern apartments, a number of retail shops and ancillary facilities including basement car parking facilities and parks.


	Ÿ	Qiyun New Village is situated along the Nanyun Riverside and consists of 347 residential units, among which 323 units have been sold, and 2,186 square meters of commercial units.

	Ÿ	Peacock Garden is situated in Heping North Street, the commercial district of Shenyang. Construction was completed in November 2000 and Peacock Garden comprises 197 low-density residential apartments of which 193 have been sold.

	Ÿ	The Maryland Building consists of 12,858 square meters of commercial space among which 11,310 have been sold and other remaining 1,548 square meters are held for leasing purposes.

Great China International established Shenyang Jitian Property Company Limited (“Jitian”) on February 22, 2006, for a new project development, Chessboard Mountain Residential project. On February 27, 2006, Jitian was confirmed as the highest bidder in a public auction for a residential development project located in the Chessboard Mountain International Tourism Development District in Shenyang City. The total purchase price for the 420,317 square meters land use rights is approximately $56.7 million. On May 12, 2006, bank financing was obtained through a related third party. On May 16, 2006, Jitian obtained Planning Approval from the relevant local authority for the project with a total construction area of approximately 891,840 square meters (9.6 million square feet). On May 28, 2006, construction approval from the relevant local authority was obtained by Jitian after which it obtained all necessary documents to start construction. On June 28, 2006, construction began on the Chessboard Mountain Residential project to be known as Galaxy Bay. Subject to approvals from relevant local authority, the Company intends to pursue pre-sale of the residential properties before the end of 2006.

Effective July 3, 2006, Jitian entered into a loan agreement with the Shenyang City Commercial Bank whereby the Bank agreed to provide a loan of up to RMB 550,000,000, or approximately $68.7 million to Jitian for the purpose of acquiring the land use right for the Chessboard Mountain Project. The Loan Agreement has a term of three years, and any amounts advanced thereunder bear interest at a rate of 6.633% per annum and must be repaid by the end of the term of the Loan Agreement. Under the Loan Agreement, the Bank is entitled, in the event of certain events of default enumerated therein, to adjust the Loan amount under the agreement or to cancel the agreement and declare any amounts advanced thereunder due and owing. Shenyang Maryland International Industry Co., Ltd., a subsidiary of the Company, has agreed to guarantee all amounts owing by Jitian under the Loan Agreement, and Jitian has mortgaged its title to the Chessboard Mountain property to the Bank as security for performance of its obligations under the Loan Agreement. As part of the Bank’s terms and conditions and in further consideration for the extension of the Loan, Jitian entered into a Creditor’s Right Transfer Agreement with Hainan Hexing Industry Co., Limited, an unrelated third party, whereby Jitian, in exchange for the payment of RMB100 million (approximately $12.6 million) out of proceeds of the Loan, agreed to purchase certain creditors rights of Hexing to another unrelated entity, Shenyang Night Musical Palace. These credit rights were not believed to be of value and were the reduction in the loan proceeds was treated as a loan discount, which was consequently capitalized as construction-in-progress.

Effective July 19, 2006, Jitian entered into another loan agreement with Shenyang City Commercial Bank whereby the Bank agreed to provide a loan of RMB50,000,000 (approximately US$ 6.25

million) pursuant to a loan agreement dated for reference on June 28, 2006. The Loan Agreement has a term of three years, commencing July 19, 2006, and amounts advanced thereunder bear interest at a rate of 6.633% and are required to be repaid by the end of the term of the Loan Agreement. Under the Loan Agreement, the Bank is entitled, in the event of certain events of default enumerated therein, to cancel the agreement and declare any amounts advanced thereunder due and owing. Shenyang Maryland International Industry Co., Ltd. has agreed to guarantee all amounts owing by Jitian under the Loan Agreement, and Shenyang Maryland has also agreed to mortgage a portion of its property at the President Building project as security for performance of its obligations under the Loan Agreement.

In December, 2006, Silverstrand completed an agreement for the sale of all of the outstanding equity interest in Shenyang Jitian Property Company, Ltd., (“Jitian”).

Under the agreement Beijing Capital Land Limited and Reco Ziyang Pte Limited purchased Jitian from Silverstrand in exchange for a total cash payment of US$1,399,970 (the amount of Silverstrand’s invested capital in Jitian) and assumption of all bank debt incurred by Jitian in connection with the acquisition of Galaxy Bay, which will result in a release of guaranties provided by Shenyang Maryland International.

Shenyang Xinchao Property Company Limited (“Xinchao”) was established in August 16, 2005 for a mixed-use development, later called the Xita Urban Reconstruction Project. The Xita project occupies 83,071 square meters of land with an estimated construction area of 500,000 square meters. As of December 31, 2006, Xinchao holds 70% equity interest in the Xita Project and Shenyang Yindu Property Company Limited (“Yindu”), another subsidiary of Great China International, holds the other 30%. A preliminary plan of the Xita project area has been submitted to the district government for approval. Because the plan was highly appraised by the government, Xinchao and Yindu managed to negotiate an expansion of the total development area to about double the original size. The government has been following a detailed review process on this substantial project, so Xinchao and Yindu do not expect the final plan will be approved before December 2006, and may not be approved until 2007. Xinchao and Yindu are in negotiations with a prospective partner for a joint venture to develop this project. The formation of the joint venture will depend, in part, on the ability of the prospective partner to provide all necessary financing for the development. Xinchao and Yindu have not reached any agreement on the joint venture and cannot predict at this time whether an acceptable arrangement will be reached or the timing of any such agreement. During 2007 the Company determined that the Company would cease development on this project and sell the associated assets.

Shenyang Heping District Investment Promotion Bureau, which is the agency overseeing development of the Xita District is expanding the project and, as a consequence of the expansion, has reached an agreement with us to reacquire the land use rights for the Xita Project in exchange for refunding the land transfer fee of $4,360,693 (RMB 33,228,480), and reimbursing us for amounts expended on the development in the amount of $1,620,102 (RMB 12,345,180). On July 20, 2007, the local government approvals and procedures were completed for transferring the land use rights back to the local government and we received reimbursement of the land transfer fee of $4,360,693 (RMB 33,228,480) and the reimbursement of $1,620,102 (RMB 12,345,180) was received on July 31, 2007.

Great China International, through its wholly-owned subsidiary, Silverstrand International Holdings Limited, entered into a letter of intent dated May 31, 2007 to acquire for US$24,510,000 all of the issued share capital of Loyal Best Property Development Limited (“Loyal Best”), a Hong Kong

limited company, from Gentle Knight Limited (“GKL”), an unrelated third party. Loyal Best is the sole owner of an entity called Shenyang Loyal Best Hunnan Property Development Limited (“Shenyang Loyal Best”), a wholly owned foreign enterprise that is a party to a Confirmation Letter of Auction with respect to a parcel of land located at the center area of Hunnan New Zone in the city of Shenyang, China (the “Project”).

The parties subsequently entered into a definitive agreement with respect to the transaction dated June 28, 2007, pursuant to which Silverstrand agreed (a) to purchase from GKL all of the outstanding shares of Loyal Best for US$4,010,000, of which US$2,580,000 was previously paid as a deposit, and (b) to purchase from the directors of Loyal Best at a total price of US$20,500,000, all of the director loan notes issued by Loyal Best in the aggregate principal amount of US$20,000,000, which were used to make Shenyang Loyal Best’s land transfer fee payment on the Project of US$20,000,000.

Effective August 7, 2007, Silverstrand completed the acquisition of the Loyal Best shares from GKL in consideration for US$4,010,000, US$2,580,000 of which had previously been paid.

(3) Results of Operations

Comparison of operations for the three months ended June 30, 2007 with the three months ended June 30, 2006:

The Company generated net income of $996,122 for the three months ended June 30, 2007 compared to a net loss of $(942,486) for 2006, representing an increase of $1,938,608 or 206% quarter-on-quarter. Components of sales and expenses resulting in this increase in net income are discussed below.

Sales revenues decreased by $1,776,549 or 56% quarter-on-quarter to $1,391,785 for the three months ended June 30, 2007 compared to 2006 of $3,168,334. Rental and management fee income increased by $272,434 or 22% to $1,503,961 during the quarter ended June 30, 2007 from $1,231,527 for the comparable period in 2006. These changes are mainly attributable to:


	Ÿ	Significant decrease in sales of Qiyun New Village by $1,615,407 or 94.5%;
	Ÿ	Decreases in gross floor area sold by 3,742 square meters quarter-on-quarter to 1,723 square meters for the quarter ended June 30, 2007 compared to 5,465 square meters in 2006;
	Ÿ	The number of units sold decreased by 18 units or 55% quarter-on-quarter to 9 units for the quarter ended June 30, 2007 compared to 27 units in 2006;
	Ÿ	Increases in rental income by $214,400 or 26%;
	Ÿ	Increase in building management income by $67,459 or 17%; and
	Ÿ	No new development projects were introduced during 2007.

Cost of properties sold decreased by $571,874 or 28% quarter-on-quarter to $1,477,679 during the quarter ended June 30, 2007, as compared to the corresponding period in 2006 of $2,049,553. This was primarily attributable to a 55% decrease in the number of units sold as described above.

Operating and selling expenses increased by $35,111 or 172% to $55,479 for the quarter ended June 30, 2007 as compared to $20,368 for the quarter ended June 30, 2006. The increase is mainly due to an increase advertising expenses.

General and administrative expenses increased by $358,393 or 25% to $1,815,557 during the three months ended June 30, 2007 compared to $1,457,164 for the three months ended June 30, 2006. The increase was due to an increase in Directors’ fees of $231,972.

Depreciation expense decreased by $105,634 or 16% to $534,922 for the quarter ended June 30, 2007, compared to $640,556 for the corresponding period in 2006.

Other income/(expenses) increased to $4,534,832 in 2007 from $(23,117) in 2006 which was due primarily to a land excavation fee of $3,901,170.

Interest and financing costs decreased by $181,130 to $701,136 for the quarter ended June 30, 2007, as compared to $882,266 for the quarter ended June 30, 2006. The decrease was primarily due to loan repayments of bank borrowings.

Comparison of operations for the six months ended June 30, 2007 with the six months ended June 30, 2006:

The Company generated net income of $1,845,527 for the six months ended June 30, 2007 compared to a net loss of $(2,498,036) for 2006, representing an increase of $4,343,563 or 174% quarter on quarter. Components of sales and expenses resulting in this increase in net income are discussed below.

Sales revenues decreased by $2,900,778 or 64% to $1,624,800 for the six months ended June 30, 2007 compared to 2006 of $4,525,578. Rental and management fee income increased by $304,881 or 12% to $2,862,234 during the six months ended June 30, 2007 from $2,557,353 for the comparable period in 2006. These changes are mainly attributable to:


	Ÿ	Significant decrease in sales of Qiyun New Village by $1,746,971 or 95%;
	Ÿ	Decreases in gross floor area sold by 5,405 square meters to 1,881 square meters for the six months ended June 30, 2007 compared to 7,287 square meters in 2006;
	Ÿ	The number of units sold decreased by 24 units or 80% to 10 units for the six months ended June 30, 2007 compared to 34 units in 2006;
	Ÿ	Increases in rental income by $215,911 or 12%;
	Ÿ	Increase in building management income by $98,304 or 17%; and
	Ÿ	No new development projects were introduced during 2007.

Cost of properties sold decreased by $1,713,148 or 50% to $1,690,952 during the six months ended June 30, 2007, as compared to the corresponding period in 2006 of $3,404,100. This was primarily attributable to an 80% decrease in the number of units sold as described above.

Operating and selling expenses increased by $13,503 or 22% to $73,721 for the six months ended June 30, 2007 as compared to $60,218 for the six months ended June 30, 2006. The increase is mainly due to increased advertising expenses.

General and administrative expenses decreased by $32,463 or 1% to $2,194,338 during the six months ended June 30, 2007 compared to $2,226,801 for the six months ended June 30, 2006. The decrease is due to a decrease in consulting fees of $502,352 offset by increases in Directors’ fees of $231,934 and legal fees of $284,609.

Depreciation expense decreased by $11,610 or 1% to $1,115,243 for the six months ended June 30, 2007, compared to $1,126,853 for the corresponding period in 2006.

Other income increased to $6,484,101 in 2007 from $95,149 in 2006 due primarily to a land excavation fee of $5,834,160.

Interest and financing costs decreased by $918,184 to $1,295,259 for the six months ended June 30, 2007, as compared to $2,213,443 for the six months ended June 30, 2006. The decrease was primarily due to loan repayments of bank borrowings.

(4) Liquidity and Capital Resources

Net cash flows provided by (used in) operating activities for the six months ended June 30, 2007, and 2006 were $3,440,266 and $5,579,007, respectively. The increase in funds provided by was primarily due to increase in other revenue offset by an increase in taxes payable during the six months ended June 30, 2007.

Net cash flows used in investing activities for the six months ended June 30, 2007, was $6,537,952 compared to $71,693,313 for the six months ended June 30, 2006. The investing activity change was primarily completion of construction projects during 2006 and no new projects starting in 2007.

Net cash flows provided by (used in) financing activities for the six months ended June 30, 2007, was $3,964,631 compared to net cash provided by financing activities of $56,272,276 for the six months ended June 30, 2006 representing substantial advances from directors and affiliated companies in 2006 compared to 2007.

Current liabilities exceeded current assets by $36,955,043 as of June 30, 2007. The working capital deficit was incurred primarily due to $32,959,318 of bank loans currently in default.

Due to frequent changes in government fiscal and bank lending policies in the past 15 years as well as other administrative controls from time to time in China, it is not uncommon for many companies to find themselves unexpectedly holding overdue loans borrowed from the banks, although the

initial intention between the borrowers and lenders was for terms with longer maturity period. Under the circumstances, most lending banks had and have usually worked sympathetically and closely with borrowers for loan extension or restructuring for a shorter period within the administrative guidelines of the government. As State policies are issued outside the control of the banks in China and form part of the macro and micro-economic measures, many bankers and their customers are often stuck in the situation, thus they are generally more tolerant and supportive to overdue loans than their counterparts in Western economies; they will work hard to deal with the situation provided the borrowers are responsible and have good relationship with the lenders.

As of June 30, 2007, the Company’s subsidiary, Shenyang Maryland International Industry Co. Limited (“Maryland”), has on-going discussions with lending banks to renegotiate various matured bank loans totaling $48,707,349 with the following relevant banks:

1. The Bank of China: As of June 30, 2007, bank loans from the Bank of China totaled $7,874,016. The loans were originally extended for the development of the President Building in 2000. While the bank had originally agreed orally on a 10-year long-term loan period for the project, in 2002, owing to a change in lending policy, the Bank changed the terms of the loans into short-term development loans. Since the maturity of the various loans by December 31, 2004, Maryland commenced ongoing negotiation with the Bank of China for an extension of the loans. Due to the initial verbal agreement and a credible relationship over the years, the Bank has agreed to renegotiate a settlement term. As of December 2006, the Company agreed to a debt-restructuring plan to repay the loans over the next three years. Payments remaining on the schedule are:


	Ÿ	$1,968,504 in 2007;
	Ÿ	$2,624,672 in 2008; and,
	Ÿ	$3,280,840 in 2009.

2. The Agricultural Bank of China: As of June 30, 2007, bank loans from the Agricultural Bank of China totaled $2,283,464. The loans were originally extended for the development of Chenglong Garden. Since the loans matured on December 21, 2005, Maryland has commenced ongoing negotiation with the Agricultural Bank of China for a short-term loan extension for another one-year term.

3. The Industrial and Commercial Bank of China (ICBC): As of December 31, 2006, the bank loans from the ICBC totaled $25,032,300 and were originally extended for the development of the Chenglong Garden in 2001. Since the loans had matured at the end of 2003, Maryland has commenced ongoing negotiations for an extension of the loans. As part of the listing procedures on the Stock Exchange of Hong Kong, reorganization and restructuring, certain of the loans totaling $22,801,838 were sold to the Great Wall Asset Management Limited. On January 5, 2006, Great Wall Asset Management Limited issued a notification letter to Maryland that certain loans totaling $22,801,838 has been assigned from the ICBC. The Great Wall Asset Management Limited and Maryland are conducting ongoing negotiation on the terms and repayment schedules of the assigned loans. The terms and repayment schedules requires approval from various government bureaus, and, accordingly, Maryland believed the negotiation could be closed by the end of 2006, but negotiations are still ongoing. On June 22, 2006, Maryland has also negotiated a settlement repayment schedule with ICBC on the remaining loans totaling $7,992,326. Under the negotiated terms of the repayment schedule, Maryland will be required to make quarterly installment repayments commencing from June 30, 2006 until June 30, 2007. Maryland has fully the installment repayments before June 30, 2007 and is awaiting formal waiver of accrued accumulated interest totaling $1,181,102 ICBC. On

July 30, 2007, Great China International, through its indirect subsidiary Shenyang Maryland International Industry Co., Ltd., entered into an agreement to repurchase and effectively settle over $24,636,535 of the outstanding debt obligation, which includes interest in arrears of $1,834,698, for a total payment of approximately $7,461,942.

4. Shenyang City Commercial Bank: As of June 30, 2007, bank loan from the Shenyang City Commercial Bank amounted to $15,748,031 (RMB 120,000,000). The loan was intended to finance the renovation of the President Building and to finance the Company's operations. This bank borrowing will mature on November 6, 2007.

(5) Contractual Obligations

The following table is a summary of the Company’s contractual obligations as of June 30, 2007:

	Total		Less than one year		1-3 Years		Thereafter
Short-Term Debt	$	48,707,349	$	48,707,349	$	--	$	--
Long-Term Debt		9,681,891		664,547		7,100,563		1,916,781
Amounts due to related parties		6,118		6,118		--		--
Purchase commitments		24,510,000		24,510,000		--		--
Construction commitments		88,748,857		88,748,857		--		--

Total Contractual Cash Obligations	$	171,654,215	$	162,636,871	$	7,100,563	$	1,916,781

Item 3. Quantitative and Qualitative Disclosure About Market Risk

As an underpinning industry in China, real estate has developed into a crucial pulling force to the all-round growth of national economy with its long-term continuous speedy growth and positive momentum of both production and marketing thrive which have attracted extensive attention both in the domestic and from overseas. A lot of problems and risks arose with the real estate prosperity due to its over speedy development:

The national land is fully controlled by the government, and its price keeps rising in accordance with the supply-demand relationship, which resulted in the over-fast increase of the investment in real estate and the capital pressure. Meanwhile, the adjustment of lending rate increased the risk and pressure of capital operation.

The contradictions of real estate market structure in some regions emerged, among which the contradiction of commodity houses supply structure is conspicuous. On one hand, some large-area residences, high rises and premium projects emerged in endlessly, but they are unsuitable for sale; on the other hand, normal-sized commodity houses and economic and functional houses targeting the low and medium wages earners in the urban area are in short supply. The housing price still rises faster in some cities, the construction of living houses safeguard system lags behind in other cities, which resulted in the disharmony between supply and demand. So the order of real estate market is to be further standardized.

There still exist the phenomena of false advertisements, contract fraud and illegal actions in agent service and logistic administration, which are to be kept within limits in effect. It should not only rely on the self-restriction of real estate enterprises to address all these problems. The credit standing system of real estate market is to be perfected. The operation, supervision and control systems of real estate market are to be further improved.

Item 4. Controls and Procedures

As of June 30, 2007 an evaluation was performed under the supervision and with the participation of Great China's management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Great China's disclosure controls and procedures. Based on that evaluation, Great China's management, including the Chief Executive Officer and Chief Financial Officer, concluded that Great China's disclosure controls and procedures were effective. There have been no significant changes in Great China's internal controls or in other factors that could significantly affect internal controls subsequent to the date of the evaluation.

PART II. OTHER INFORMATION

Item 1A. Risk Factors

Any statements in this discussion that are not historical facts are forward-looking statements that involve risks and uncertainties; actual results may differ from the forward-looking statements. Sentences or phrases that use such words as “believes,” “anticipates,” “plans,” “may,” “hopes,” “can,” “will,” “expects,” “is designed to,” “with the intent,” “potential” and others indicate forward-looking statements, but their absence does not mean that a statement is not forward-looking. Forward-looking statements are based on current expectations, estimates, and projections as of the date of this report, and they are subject to a number of risks, uncertainties, and assumptions that could cause actual results to differ materially from those described in the forward-looking statements. Such forward-looking statements should, therefore, be considered in light of various important factors, including those set forth in this report and in our annual report on Form 10-K for the year ended December 31, 2006, under the caption “ITEM 1A. RISK FACTORS.” In particular, the matters discussed above under PART I, ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS should be viewed as creating substantial uncertainty about the Company and its prospects for the future. Any one or a combination of factors could materially affect our operations and financial condition.

Item 5. Other Information

On August 9, 2007, Great China International engaged Henny Wee & Co., as its new independent accountant. During the two most recent fiscal years and through the date hereof, neither Great China International nor any one on behalf of Great China International has consulted with Henny Wee & Co. regarding the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on Great China International’s financial statements, or any other matters or reportable events required to be disclosed under Items 304(a)(2)(i) and (ii) of Regulation S-K.

Item 6. Exhibits.

Exhibits: Copies of the following documents are included or furnished as exhibits to this report pursuant to Item 601 of Regulation S-K.

Exhibit No.	SEC Ref. No.	Title of Document
31.1	31	The certification of chief executive officer required by Rule 13a-14(a) or Rule 15d-14(a)
31.1	31	The certification of chief financial officer required by Rule 13a-14(a) or Rule 15d-14(a)
32.1	32	The certifications required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350

SIGNATURES

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

GREAT CHINA INTERNATIONAL HOLDINGS, INC.

Date: August 12, 2007		By:		/s/ Frank Jiang
				Frank Jiang, Chief Executive Officer (Principal Financial Officer)

Date: August 12, 2007		By:		/s/ Wang Li Rong
				Wang Li Rong, Chief Financial Officer (Principal Financial and Accounting Officer)

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HH Biotechnology (HHBT) Inactive 10-Q2007 Q2 Quarterly report

Content analysis

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

FORM 10-Q

HH Biotechnology (HHBT) Inactive 10-Q2007 Q2 Quarterly report

Content analysis

U.S. SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

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