UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

þ ANNUAL REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ~~For the fiscal year ended July 31, 2009~~

~~ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~ For the ~~transition~~fiscal ~~period~~year ~~from~~ended ~~___________~~July to31, ~~___________.~~2010

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

For the transition period from ___________ to ___________.

Commission file number 000-53480

CHINA WIND ENERGY INC.

(Exact name of registrant as specified in its charter)

Nevada		None
(State or Other Jurisdiction of Incorporation of Organization)		(I.R.S. Employer Identification No.)
No.2 Haibin Road, Binxi Developing Area Heilongjiang Province, China		+86 451 56150071
(Address of principal executive offices) (ZIP Code)		(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section12 (g) of the Act: Common Stock, $0.0001 par value

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

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 shorter period that the registrant as required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark ifwhether ~~disclosure~~the ofregistration ~~delinquent~~has ~~filers~~submitted ~~pursuant~~electronically toand ~~Item~~posted ~~405~~on ofits ~~Regulation~~corporate ~~S-K~~Website, (§if ~~229.405~~any, ofevery ~~this~~Interactive ~~chapter)~~Data isFile ~~not~~required ~~contained~~to ~~herein,~~be submitted and ~~will~~posted ~~not~~pursuant ~~be contained,~~ to ~~the~~Rule ~~best~~405 of ~~registrant’s~~Regulation ~~knowledge,~~S-T in(§232.405 ~~definitive~~of ~~proxy~~this orchapter) ~~information~~during ~~statements~~the ~~incorporated~~preceding by12 ~~reference~~months in(or ~~Part~~for ~~III~~such ofshorter ~~this~~period ~~Form~~that ~~10-K~~he orregistrant ~~any~~was ~~amendment~~ required to ~~this~~submit ~~Form~~and ~~10-K.~~post ~~Yes~~such files). Yes o No þo

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes o No þ

~~Aggregate~~State the aggregate market value of ~~the~~ voting ~~stock~~and ofnon-voting ~~the~~common ~~registrant~~equity held by non-affiliates ~~of the registrant (~~computed by reference to the ~~closing~~price at which the common equity was last sold, or the average bid and ask price of ~~$0.41~~such ~~per~~common ~~share~~equity, as of the last business day of the registrant’s most recently completed second fiscal quarter~~): $16,559,299~~.

~~Number~~The aggregate market value of ~~common~~Common ~~shares~~Stock ~~outstanding~~held atby ~~October~~non-affiliates 29of the Registrant was $24,233,120 ~~2009:~~based on a $0.60 closing price for the Common Stock on January 27, 2010. 51For purposes of this computation,~~902~~ all executive officers and directors have been deemed to be affiliates. Such determination should not be deemed to be an admission that such executive officers and directors are,~~250~~ in fact, affiliates of the Registrant.

Number of common shares outstanding at December 7, 2010: 51,902,250

TABLE OF CONTENTS

PART I	2
Item 1. Description of Business	3
Item 1. Business	2
Item 1A. Risk Factors	8
Item 1B. Unresolved Staff Comments	8
Item 2. Properties	98
Item 3. Legal Proceedings	98
Item 4. Submission of Matters to a Vote of Security Holders	9
Item 4. [Removed and Reserved]	8
PART II	9
Item 5. Market for Common Equity and Related Stockholder Matters	10
Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	9
Item 6. Selected Financial Data	1110
Item 7. Management's Discussion and Analysis or Plan of Operation	11
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	10
Item 7A. Quantitative and Qualitative Disclosures about Market Risk	15
Item 7A. Qualitative and Qualitative Disclosures about Market Risk	14
Item 8. Financial Statements and Supplementary Data	1614
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	1715
Item 9A. Controls and Procedures	1715
Item 9B. Other Information	1716
PART III	17
Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act	18
Item 10. Directors, Executive Officers and Corporate Governance	17
Item 11. Executive Compensation	20
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	2122
Item 13. Certain Relationships, Related Transactions and Director Independence	23
Item 13. Certain Relationships and Related Transactions, and Director Independence	23
Item 14. Principal Accountant Fees and Services	24
PART IV	25
Item 15. Exhibits and Financial Statement Schedules	25
Item 15. Exhibits, Financial Statement Schedules	25
SIGNATURES	26

PART I

Item 1. ~~Description of~~ Business

Forward-looking Statements

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable laws, including the securities laws of the United States, we do not intend to update any of the forward-looking statements so as to conform these statements to actual results.

As used in this annual report, the terms "we", "us", "our", “~~the~~our ~~Company~~company”, and "China Wind" mean China Wind Energy Inc. and all of our subsidiaries, unless otherwise indicated.

All dollar amounts refer to US dollars unless otherwise indicated.

Overview and Recent Business Developments

We were incorporated in Nevada on May 8, 2006. Prior to November 20, 2007 we were a shell company with nominal assets and operations. On November 20, 2007 we completed a reverse merger transaction with China Wind Energy Ltd., a Hong Kong company (“China Wind HK”). The closing of this reverse takeover transaction resulted in the acquisition of China Wind HK, and its wholly owned subsidiary XingYe Wind Energy Technology Limited (“XingYe”), becoming our wholly owned subsidiary. Xing Ye was in the business of providing management, consulting and administrative services to Harbin SQ Wind Power Ltd. (“Harbin SQ”), a manufacturer of wind turbines in China.

On December 5, 2007 we filed a certificate of change to effect a 5 for 1 forward split of our common stock. This forward split increased our issued common shares and authorized common stock, on a basis of five new common shares for every one existing common share and resulted in an increase from 7,377,450 issued and outstanding common shares to 36,887,250 issued and outstanding common shares. It also increased our authorized common stock from 80,000,000 to 400,000,000 shares.

On May 16, 2008 we entered into a share exchange agreement with Power Profit Technology Development Limited, a Hong Kong company (“Power Profit”), and Wan Yi Tse, the holder of 100% of the issued and outstanding share capital of Power Profit. The closing of this share exchange agreement on May 26, 2008 resulted in:

a)	the acquisition of 100% of the equity interests of Power Profit;

b)	the acquisition of 82.14% of the equity interests of Power Profit’s majority owned subsidiary, Harbin SQ

c)	Wan Yi Tse’s designees becoming the holders of 29% of all of our issued and outstanding common stock;

d)	Power Profit becoming our wholly owned subsidiary and Harbin SQ becoming our majority-owned subsidiary;

e)	the termination of an agreement for the provision of management, consulting and administrative services by XingYe, our subsidiary, to Harbin SQ; and

f)	the appointment of Shouquan Sun as our President, Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Secretary, Treasurer, and director to replace Jian Ren who resigned from all of his positions with us.

In the first half of 2010, we signed a ten-year wind turbine blade supply agreement with Xu Ji Wind Energy Technology Company (“Xu Ji”), a subsidiary to State Grid Corporation of China (“State Grid”). Pursuant to the terms of the agreement, we agreed to supply blades for wind turbines rated at 2.0 MW and above with a length of 45.3 meters. We are now developing and producing the required blade moulds to satisfy this order.

Description of Business

Harbin SQ, our majority-owned subsidiary, focuses primarily on the production of wind turbine blades and combine harvesters. Our primary product is a blade for wind turbine generators which allows for variable pitch and speed. Different from other blades of the 600KW and 750KW type produced in China, our blade products provide variable speed and pitch adjustments to achieve high efficiency. We have 5 individual patents on our wind turbine blades.

Organizational Structure

Our current organizational structure is summarized by the illustration below:

Sales of Blades

We have currently generated revenue only from the sale of combine harvesters which we were previously in the business of manufacturing. We anticipate that we will begin producing and selling our wind turbine product shortly and we anticipate that we will generate revenues from sales of our wind turbine blades to customers who install turbines and other equipment in wind farms.

Factors that may affect sales volumes for our wind turbine blades include:

·o world gross domestic product growth;

·o the availability of alternative sources of energy; and

·o the growth in demand for wind powered energy.

Factors that may affect the prices for our wind turbine blades include:

·o world economic environment;

·o industry operating rate, which is based on the supply and demand; and

·o relative strength of the Chinese currency.

The Market for Wind Turbine Blades

Wind energy is considered a “green” energy that does not pollute the environment, and is attractive to many countries in the world. China has a shortage of energy resources. The Chinese wind energy industry, while in its infancy, could grow to be an important source of energy production. On the eve of the 2005 Beijing International Renewable Energy Conference, a report released by the Chinese Renewable Energy Industries Association and sponsored by Greenpeace and the European Wind Energy Association showed that China could at least double its current wind production by 2020.

Wind energy is a rapidly growing market segment for the composites industry and is a fast growing energy sector. According to ~~researchandmarkets.com,~~related onresearch ~~average~~report, ~~the global wind energy market has grown at a rate of 23% per year for the last ten years. According to the German Engineering Federation~~38,310 ~~worldwide,~~MW ~~15,200 megawatts~~ of new wind generating capacity was installed in ~~2006~~2009, ~~with about 15 billion Euros (US$19.5 billion) invested,~~ an increase of 3231.6 percent compared to the previous year. One third of the new wind generating capacity is made in China. We are initially focusing on the domestic market in China, but will be looking to distribute our products throughout the world, with a focus on Europe.

Raw Materials

~~Our manufacturing facilities are located at 2 Haibin Road, Binxi Development, Heilongjiang Province, China, which is also our principal executive office.~~ We ~~will continue to operate at these facilities until our growth requires additional capacity and equipment. We~~ source our raw materials from various metal smelting and electronics manufacturers in our local vicinity. Although we have not been subject to shortages of any of the components used in the fabrication of our wind turbines, we may be subject to cutbacks and price increases as we do not currently have any long term contracts with our supplies. In the ~~even~~event that prices do increase; we may not be able to pass these increases on to our customers.

Competition

The table below contains a description of our principal competitors in mainland China.

No	Enterprises	Form	Shareholders	Location	Date of Establishment	Output and Scale
1	LM Fiber Reinforced Plastics (Tianjin) Ltd	Foreign Capital	Denmark LM Co.	Wuqing Development, Tientsin	August 2001	600 Sets per year
2	LM Urumchi Blade Works	Joint Venture using Chinese and foreign investment	Denmark LM Co. and Sinkiang Jinfeng Stock-joint Co.	Urumchi	Started production in August 2007	Supply products for Sinkiang Jinfeng joint venture.
3	Denmark VESTAS Wind Energy Electricity Equipment Limited	Foreign Capital	Denmark VESTAS Limited	West District in Tientsin Development	May 2005	1.5MW 200 sets of blades per year
4	SUZLON Resource Limited (Tientsin)	Foreign Capital	India SUZLON	HuaYuan Technology Development, Tientsin Development	2006	300-500 sets of blades per year
5	Tientsin Dongqi Wind Energy Blade Engineering Co.	Joint-stock	Orient Electric Group	Chemic Industry Garden in Tientsin Development	August 2006	Invested 279,000,000 RMB in first period, 1.5MW600 per year
6	Baoding China Air Huiteng Wind Power Equipment Limited	Joint-Venture using Chinese and Foreign Investment	NORDEX German Co.	Baoding New High-technology Development	August 2005	1.3MW Blades and provide to customers of Nordex in China

Competitive Advantages and Strategy

We believe that our unique technology, price points, relationships, infrastructure, proven quality control standards, and reputation represent substantial competitive advantages. We are currently able to maintain lower costs of manufacturing than competitors based in the United States and Europe. Furthermore, our competitive advantage in China is protected by our significant knowledge of government regulations, business practices, strong relationships, and patent protection.

We have been developing and plan to implement the following strategies to aide in the growth of our business:

1.	Management and Innovation Strategies

We have implemented a scientific approach to blade manufacture which relies on innovation. We also have a rigorous quality control program in place.

2.	Broaden Development Strategies

We have improved the reputation of our products by developing and implementing a marketing plan which will allow us to increase the value of our brand.

3.	Optimize Work Environment

We have implemented standardized safety procedures for our employees. Together with our quality control program, we hope this will result in high quality products for our customers.

4.	Cost Strategies

We plan to implement cost control measures in order to be more competitive in our domestic markets.

5.	Grow Capacity

We anticipate growing demand and have prepared to increase our production capacity in our current facility as well considered offsite manufacturing possibilities.

6.	Widen Sales Channels

We are actively seeking distribution contracts and increased sales through international channels.

Intellectual Property

We have received five patents in the wind energy industry from the China Patent and Trademark Office:

ZL200620021590.7 - This patent relates to a belt drive accelerator which is fitted to wind power electricity equipment. This patent was obtained in 2006 and expires in 2016. The belt drive accelerator is especially important to us because it speeds up the blades in a dynamotor. This patent lowers the cost and increases the useful life of our blades.

2.	ZL200520020555.9 - This patent relates to a frame structure tower for wind energy equipment. The patent was obtained in 2005 and expires in 2015.

3.	ZL200220020019.9 - This patent relates to an integer-stand wind energy dynamotor. This patent was obtained in 2002 and expires in 2012.

4.	ZL200220020018.4 - This patent relates to a super-high-binding and auto-rising tower crane for the wind energy dynamotor. This patent was obtained in 2002 and expires in 2012.

5.	ZL200520020020.1 – This patent relates to equipment for motional wind energy blade production. This patent was obtained in 2005 and expires in 2015.

Products

In 2010, the price of blades of below 1.5 MW wind turbine went down; providing low profit margin. Therefore, we suspended the preparations for the production of blades of such specifications in 2010.

In the first half of 2010, we signed a ten-year blade supply agreement with Xu Ji Pursuant to the terms of the agreement, we agreed to supply blades for wind turbines rated at 2.0 MW and above with a length of 45.3 meters. We are now developing and producing the required blade moulds to satisfy this order. We expect to supply 100 sets of blades to Xu Ji in the second half of 2011.

In 2010, we began research and production of an intelligent blade monitor system. The service life of turbine blade is twenty years. Exposed to wind, frog, rain, the damage to them is inevitable. At present, the damage to blades can only be found when it causes the shutdown of turbines. We believe that our intelligent blade monitor system will aid in monitoring blade damage, dynamic balancing, ice covering, turbine and gear case temperature and turbine tower column inclination. Our targeted customers are turbine blade producers, wind turbine generator producers and wind field operators. We anticipate that the products will enter the market in November or December 2010 with commercial levels of production in March of 2011.

In 2010 we also we engaged in the upgrading of combine harvesters. We have been manufacturing combine harvesters for over ten years. In the light of market demand, our backpack type harvesters will be upgraded to self-walking harvesters, which can harvest soybeans, wheat, rice and maize. They are now in small-scale trial production stage. We expect to produce 100 sets in 2011.

Customers

For the year ~~ending~~ended July 31, ~~2009~~2010, we generated revenues of $82194,~~308~~069. These revenues resulted from the sales of combine harvesters as our wind turbine products are not yet ready for sale. We plan to distribute our products to various customers including private companies as well as government -backed entities. As of ~~October~~December 296, ~~2009~~ 2010 we have not sold any of our wind turbines or related products.

A significant percentage of our revenues for the year ~~ending~~ended July 31, ~~2009~~2010 came from a small number of customers and we anticipate this will continue as we begin to produce and sell our wind turbine products due to the cost and nature of the product.

In light of the blade market change in 2010, we made those who are in need of blades of 2.0 MW and above turbines as our main targeted customers.

Customers

For the year ended July 31, 2010, we generated revenues of $194,069. These revenues resulted from the sales of combine harvesters as our wind turbine products are not yet ready for sale. We plan to distribute our products to various customers including private companies as well as government-backed entities. As of December 7, 2010 we have not sold any of our wind turbines or related products.

A significant percentage of our revenues for the year ended July 31, 2010 came from a small number of customers and we anticipate this will continue as we begin to produce and sell our wind turbine products due to the cost and nature of the product.

In light of the blade market change in 2010, we made those who are in need of blades of 2.0 MW and above turbines as our main targeted customers.

Employees

As of ~~October~~December 297, ~~2009~~2010 we had ~~140~~400 employees. ~~all~~All employed full time, one of which is Shouquan Sun, our President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and director. Mr. Sun provides us with services in the areas of management, administration and business development. We also engage consultants in the areas of business development consulting, legal and accounting.

Government Regulations

We are subject to environmental regulation by both the Chinese central government and by provincial or local government agencies in China. Since our inception we have been in compliance with all applicable regulations.

Our manufacturing processes generate noise, wastewater, gaseous and other industrial wastes, and we use, generate and discharge toxic, volatile and otherwise hazardous chemicals and wastes in our operations. As a result, we are required to comply with all national and local regulations regarding protection of the environment. Our operations are subject to regulations promulgated by China’s Environmental Protection Administration, as well as local pollution regulations. We are also subject to periodic monitoring by local environmental protection authorities in Harbin. We believe that our manufacturing facilities and equipment are in substantial compliance with all applicable environmental regulations. Based on the requirements of present law, additional measures to maintain compliance are not expected to materially affect our capital expenditures, competitive position, financial position or results of operations.

The Chinese government has expressed concern about pollution and other environmental hazards. Although we believe that we comply with current national and local government regulations, if it is determined that we are in violation of these regulations, we can be subject to financial penalties as well as the loss of our business license, in which event we would be unable to continue in business. Further, if the national or local government adopts more stringent regulations, we may incur significant costs in complying with such regulations. If we fail to comply with present or future environmental regulations, we may be required to pay substantial fines, suspend production or cease operations. Any failure by us to control the use of, or to restrict adequately the discharge of, hazardous substances could subject us to potentially significant monetary damages and fines or suspensions of our business operations.

Regulations Governing Electrical Equipment

Our products are subject to regulations that pertain to electrical equipment, which may materially adversely affect our business. These regulations influence the design, components or operation of our products. New regulations and changes to current regulations are always possible and, in some jurisdictions, regulations may be introduced with little or no time to bring related products into compliance with these regulations. Our failure to comply with these regulations may restrict our ability to sell our products in China. In addition, these regulations may increase our cost of supplying the products by forcing us to redesign existing products or to use more expensive designs or components. In these cases, we may experience unexpected disruptions in our ability to supply customers with products, or we may incur unexpected costs or operational complexities to bring products into compliance. This could have an adverse effect on our revenues, gross profit margins and results of operations and increase the volatility of our financial results.

Business License

We, and all of our subsidiaries, have been issued business licenses with the appropriate municipal and provincial governments which specifically authorize the companies to operate their respective businesses. All of these business licenses, which are subject to annual review by the issuing agencies, are current as of the date of this report.

Beneficial Regulations

In ~~its current 5-Year Plan (covering 2006-2011) and in the National Science Mid to Long-Term Development Plan (2006-2020)~~2010, ~~the~~we ~~Chinese~~have ~~government~~been ~~identified~~qualified ~~wind power~~ as a ~~viable~~scientific ~~“green”~~and ~~energy~~technological ~~technology~~enterprise ~~that~~by ~~will~~our ~~reduce~~provincial ~~emissions while increasing the energy supply~~government. ~~The~~This ~~central~~provides ~~government’s~~us ~~official~~with ~~recognition~~a ofpreferential ~~the~~income ~~value~~tax oflevied ~~wind power~~at ~~has~~a ~~created~~reduced ~~substantial~~tax ~~interest~~rate inof ~~the market~~15%.

In its current 5-Year Plan (covering 2006-2011) and in the National Science Mid to Long-Term Development Plan (2006-2020), the Chinese government identified wind power as a viable “green” energy technology that will reduce emissions while increasing the energy supply.

Reports to Security Holders

We intend to furnish our shareholders annual reports containing financial statements audited by our independent auditors and to make available quarterly reports containing unaudited financial statements for each of the first three quarters of each year.

The public may read and copy any materials that we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that site is www.sec.gov.

Item 1A. Risk Factors

~~Not~~As ~~Applicable~~a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 1B. Unresolved Staff Comments

~~None~~As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 2. Properties

Our principal executive offices are located at 2 Haibin Road, Binxi Development, Harbin, Heilongjiang Province, China, where we carry out the management of our manufacturing factory. We own this property through our majority owned subsidiary: Harbin SQ. The property consists of a factory of 63,638 square meters (approximately 208,787 square feet) and an office building of 20,000 square meters (approximately 65,616 square feet). Harbin SQ carries out the manufacturing of our wind turbine blades at this location.

Item 3. Legal Proceedings

Our majority owned subsidiary, Harbin SQ, was named as a defendant in a lawsuit in which the plaintiffs alleged that illegal transfers and misleading promotion of Harbin SQ’s shares to the public occurred through securities brokers. The plaintiffs, 51 current stockholders representing 1,018,000 outstanding shares, acquired Harbin SQ’s shares through securities brokers from Harbin SQ’s initial stockholders and sought monetary damages from Harbin SQ, including the costs of acquiring the shares, expenses and imputed interest.

In September 2008 the claims of the plaintiffs were refuted in a judgment of the Court of Bin County, Heilongjiang Province. On May 25, 2009, 48 individual plaintiffs appealed the decision to a higher court. ~~The~~All ~~appeal~~appeals ofhave ~~13 plaintiffs has~~ been rejected by the ~~court~~courts and ~~the~~we ~~remaining~~do 35not ~~have~~anticipate ~~yet~~any tofurther ~~have~~liability ~~their~~from ~~hearing~~these proceedings.

We know of no other material, active or pending legal proceedings against us, our subsidiaries or our property, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholders are an adverse party or have a material interest adverse to us.

Item 4. ~~Submission~~ [Removed ofand ~~Matters to a Vote of Security Holders~~Reserved]

~~None.~~8

PART II

Item 5. Market for Common Equity, ~~and~~ Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

There is a limited public market for our common shares. Our common shares are quoted for trading on the OTC Bulletin Board under the symbol “CWEY”. The market for our stock is highly volatile. We cannot assure you that there will be a market in the future for our common stock. OTC Bulletin Board securities are not listed and traded on the floor of an organized national or regional stock exchange. Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Bulletin Board stocks are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.

Our common shares became eligible for quotation on the OTC Bulletin Board on August 2, 2007, but no trades were made until September 11, 2007.

The following table shows the high and low prices of our common shares on the OTC Bulletin Board. The following quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions:

Period	High	Low
May 1, 2010 – July 31, 2010	$0.55	$0.0722
February 1, 2010 – April 30, 2010	$0.55	$0.051
November 1, 2009 – January 31, 2010	$0.99	$0.20
August 1, 2009 – October 31, 2009	$1.08	$0.05
May 1, 2009 – July 31, 2009	$0.91	$0.51
February 1, 2009 – April 30, 2009	$0.91	$0.52
November 1, 2008 – January 31, 2009	$0.55	$0.41
August 1, 2008 – October 31, 2008	$1.30	$0.51
May 1, 2008 – July 31, 2008	$1.60	$0.90
February 1, 2008 – April 30, 2008	$1.75	$1.15
November 1, 2007 – January 31, 2008	$1.25	$0.85
August 2, 2007 – October 31, 2007	$0.08	$0.05

We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future.

Holders

As of ~~October~~December 297, ~~2009~~2010, there were 3,~~488~~360 holders of record of our common stock.

Dividends

Holders of our common stock are entitled to dividends if declared by the Board of Directors out of funds legally available therefore. As of ~~October~~December 297, ~~2009~~2010 no cash dividends have been declared.

We do not intend to issue any cash or stock dividends in the near future. We intend to retain earnings, if any, to finance the development and expansion of our business. Our future dividend policy will be subject to the discretion of the Board of Directors and will be contingent upon future earnings, if any, our financial condition, capital requirements, general business conditions and other factors.

Equity Compensation Plans

As of ~~October~~December 297, ~~2009~~2010, we did not have any equity compensation plans.

Recent Sales of Unregistered Securities

We have not made any previously unreported sales from August 1, 2008 to July 31, ~~2009~~2010.

Recent Purchases of Equity Securities by us and our Affiliated Purchases

We have not repurchased any of our common stock and have no publicly announced repurchase plans or programs as of ~~October~~December 297, ~~2009~~2010.

Item 6. Selected Financial Data

~~Not~~As ~~applicable~~a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 7. Management's Discussion and Analysis or Plan of Operation

We are a development stage company with limited operations and revenues from our business operations. Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional financing to fund our operations. Our only source of cash at this time is investments by others in our company.

Forward-Looking Statements

This report contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including, "could" "may", "~~will", "~~should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this Prospectus.

Liquidity and Capital Resources

AsAt of July 31, 2010 and 2009 we had cash of $65257,~~233,~~620 ~~total current assets of $1,730,951, total current liabilities of $4,365,158~~ and ~~a working capital deficit of~~ $265,~~634,207~~233 ~~compared to a working capital deficit of $7,002,730 as of July 31, 2008~~respectively. The decrease in working capital deficit was due to an increase in accounts receivable associated with the transfer of our land use rights in Harbin City, together with a decrease in liabilities due to the elimination of $7,603,673 in advance receipts associated with the transfer of our land use rights in Harbin City. The decrease in liabilities due to the elimination of advance receipts was partially balanced out by an increase of $1,623,646 in accounts payable and accrued liabilities as well as an increase of $1,914,959 in short term loans.

OnSince November 627, ~~2007,~~2006 we(inception) ~~signed~~to aJuly ~~contract~~31, ~~with~~2010, ~~Heilongjiang~~our ~~Nongkentaixing~~accumulated ~~Real~~deficit ~~Estate~~was ~~Development Co~~$13,853,487. ~~Ltd~~We toare ~~sell~~dependent ~~our~~on ~~land~~the ~~use~~funds ~~rights~~raised inthrough ~~Harbin~~our ~~City.~~equity ~~The~~or ~~total~~debt ~~contract~~financing, ~~price~~investing ~~is approximately $10~~activities,~~308,827.~~ Weand ~~were~~revenue ~~obligated~~generated tothrough ~~clear~~ the ~~original~~sales ~~buildings~~of onour ~~the~~products ~~land~~to ~~before~~fund ~~the~~our ~~transfer~~operations. The ability of ~~the~~our ~~land~~Company ~~use~~to ~~rights~~continue ~~can~~as bea ~~completed.~~going Asconcern ofis ~~July~~dependent ~~31,~~upon ~~2008,~~our ~~we had~~ability ~~completed~~to ~~the~~successfully ~~clearance~~accomplish ofour ~~the~~business ~~original~~plans ~~buildings on the land~~ and ~~all~~eventually ~~costs~~secure ~~related~~other tosources ~~the clearance~~ of ~~the~~financing ~~buildings~~and ~~had~~attain ~~been~~profitable ~~incurred~~operations. We Asanticipate ofthat ~~July 31, 2008,~~ we ~~had~~will ~~received~~incur ~~net~~substantial ~~proceeds~~losses ofover ~~$7,603,673 from this sale. Since~~ the ~~legal~~next ~~process~~year ~~for~~and ~~title~~our ~~transfer~~ability ~~has~~to ~~not~~generate ~~been~~any ~~completed,~~revenues in the ~~proceeds~~next ~~were~~12 ~~recorded~~months ascontinues ~~other~~to ~~advance~~be ~~receipts~~uncertain.

InAs ~~October~~of ~~2008~~July 31, ~~the~~2010 ~~title~~we ~~transfer~~had ~~was~~total ~~approved~~assets byof ~~the~~$12,553,642 ~~government~~compared ~~and~~to by$22,002,466 as of July 31, 2009,. The wedecrease ~~had~~in ~~received~~total ~~net~~assets ~~proceeds~~was ofdue ~~$7,694,925.~~to ~~The~~goodwill ~~remaining~~impairment ~~proceeds~~charge ~~net~~upon ofour ~~sales~~annual ~~tax~~goodwill ~~for~~impairment ~~the~~test. Our ~~amount~~total assets as of ~~$882~~July 31,~~351~~ ~~was~~2010 ~~included~~were asprimarily ~~accounts~~made ~~receivable~~up atof ~~July 31~~property, ~~2009~~equipment and intangible assets. Our ~~Loss~~total onliabilities ~~the~~increased ~~disposal~~from $4,365,158 as of ~~land~~July ~~use~~31, ~~rights~~2009 ~~for~~to ~~the~~$6,156,213 ~~amount~~as of ~~$1.7~~July ~~million~~31, ~~was~~2010 ~~recognized~~due ~~for~~to ~~the~~an ~~year ended~~increase ~~July~~in ~~31,~~short ~~2009~~term loans.

~~Since~~We ~~November~~used ~~27,~~net ~~2006~~cash ~~(inception)~~of ~~to July 31, 2009, our accumulated deficit was~~ $41,~~478~~234,~~842.~~010 Wein ~~are~~operating ~~dependent~~activities onfor the ~~funds~~year ~~raised~~ended ~~through~~July ~~our~~31, ~~equity~~2010 oras ~~debt~~compared ~~financing~~to $1,642,454 ~~investing~~for ~~activities,~~the ~~and~~year ~~revenue~~ended ~~generated~~July ~~through~~31, ~~the~~2009 ~~sales~~and of$3,300,771 ~~our~~from ~~products~~inception to ~~fund~~July ~~our~~31, ~~operations~~2010. WeThe ~~anticipate~~decrease ~~that~~in wecash ~~will~~used ~~incur~~in ~~substantial~~operating ~~losses~~activities ~~over~~for the ~~next~~ year ~~and~~ ~~our~~ended ~~ability~~is tomainly ~~generate~~attributed ~~any~~to ~~revenues~~decrease in ~~the~~accounts ~~next 12 months continues to be uncertain~~receivable.

AsWe ofused ~~July~~net ~~31,~~cash ~~2009 we had total assets~~ of $2231,~~002,466~~221 ~~compared~~in toinvesting ~~$30,865,947~~activities asfor ofthe year ended July 31, ~~2008. The~~2010 ~~decrease~~including $319,896 in ~~total~~purchase ~~assets~~of ~~was~~property, ~~due~~offset toby a$288,675 ~~decrease~~ in ~~intangible~~collection ~~assets upon the sale~~ of ~~our~~loans ~~land~~made ~~use~~to ~~rights~~related ~~in Harbin City~~parties. ~~Our~~ ~~total~~This ~~liabilities~~compares ~~decreased~~to ~~from~~ $8303,~~274,345~~599 asused ofin ~~July~~investing ~~31,~~activities ~~2008~~for tothe ~~$4,365,158~~year asended of July 31, 2009 ~~due~~ toincluding a$799,738 ~~decrease~~ in ~~advance~~purchases ~~receipts~~of ~~associated~~property ~~with~~and ~~the~~equipment ~~Harbin~~and ~~City~~$398,558 ~~land~~in ~~use~~cash ~~rights. Once~~paid ~~these~~for ~~were fully transferred~~construction, ~~the~~offset ~~asset~~by ~~and~~$723,541 ~~associated~~collection ~~liability were removed from our balance sheet. Our total assets as~~ of ~~July~~loans ~~31, 2009 were primarily~~ made upto ofrelated ~~property, equipment and goodwill~~parties.

We used net cash of $1,642,454 in operating activities for the year ended July 31, 2009, $403,041 for the year ended July 31, 2008 and $2,066,762 from inception to July 31, 2009. The large increase in cash used in operating activities for the year ended July 31, 2009 is attributed to an increase in operations in preparation for the production and sale of our wind turbine products.10

We ~~used~~received net cash of $~~303~~1,~~599~~455,906 infrom ~~investing~~financing activities for the year ended July 31, ~~2009~~2010, including $~~799~~4,~~738 in purchases of property and equipment and $398~~382,~~558~~386 infrom ~~cash~~short ~~paid~~term ~~for construction~~loans, offset by ~~$723~~2,~~541~~926,480 ~~collection~~repayments of ~~loans~~short ~~made~~term toloans. ~~related~~We ~~parties. This~~received ~~compares~~net tocash of $~~110~~1,~~638~~934,109 ~~provided~~from byfinancing ~~investing~~ activities for the year ended July 31, ~~2008~~2009, ~~comprised~~ ~~primarily~~including of$19,614 ~~purchases~~as ofproceeds ~~property~~from related party loans and ~~equipment~~$2,462,936 ~~offset~~from byother ~~the~~short ~~cash~~term ~~acquired~~loans. We onalso ~~acquisition~~repaid ~~and~~$548,441 ~~collection~~towards ofshort term loans ~~made~~during tothe ~~related~~year ~~parties~~ended July 31, 2009.

WeOur ~~received~~cash ~~net~~position ~~cash~~increased ofby $1192,~~934,109~~387 ~~from~~during ~~financing activities for~~ the year ended July 31, ~~2009,~~2010 ~~including~~compared ~~$19,614~~to asa ~~proceeds~~decrease ~~from~~of ~~related party loans and~~ $215,~~462,936~~115 ~~from other short term loans. We also repaid $548,441 towards short term loans~~ during the year ended July 31, 2009. During the year ended July 31, 2008 we received $172,040 from financing activities, including $100,000 from the issuance of our common stock and $44,999 from short term loans. From our inception to July 31, 2009 we received a total of $2,128,814 from investing activities.

~~Our~~During ~~cash position decreased by $15,115 during~~ the year ended July 31, ~~2009~~2010 ~~compared~~we tosecured anshort ~~increase~~term ofloans ~~$79,070~~from ~~during~~an ~~the~~institutions ~~year~~and ~~ended~~individuals ~~July 31, 2008. This is due in part~~ to ameet ~~decrease~~our ofongoing ~~$3,171 in~~ cash ~~due~~requirements. Below tois ~~the~~a ~~effect~~table of ~~exchange~~these ~~rates~~loans ~~during~~at ~~the year ended~~ July 31, ~~2009~~2010 ~~compared~~and ~~to an increase of $199,433 during the year ended July 31, 2008~~2009.

	2010		2009
Bank loan 2010	$	2,217,000	$	-
Bank loan 2009		-		1,465,700
Loans from individuals		677,160		645,805
Short term loan	$	2,894,160	$	2,111,505

~~During~~Not ~~the~~all ~~year~~of ~~ended~~the ~~July~~loans ~~31,~~from ~~2009~~individuals weare ~~secured~~interest-bearing. ~~short~~For ~~term~~interest bearing loans, ~~from~~the aninterest ~~institutions~~rate ~~and~~is ~~individuals~~ranging tofrom ~~meet~~14% ~~our~~to ~~ongoing~~40% ~~cash~~per ~~requirements~~annum. ~~Below~~ isInterest aexpenses ~~table~~for ofshort ~~these~~term loans atwere $648,436 for the year ended July 31, ~~2009~~2010 and ~~2008~~$239,141 for the year ended July 31, 2009.

	July 31,
	2009		2008
12-month Bank Loan bearing interest at 5.841% per annum
and maturing in February 2010	$	1,465,700	$	-
Loans from individuals		645,805		196,546
Total short term loans	$	2,111,505	$	196,546

Our subsidiary, Harbin SQ provided a loan to Shouquan. Sun, our President, prior to us acquiring it. No monies have been loaned to Mr. Sun since our acquisition of Harbin SQ. As of July 31, 2010, Mr. Sun and the company under his control owed us $8,890 compared to $297,097 as of July 31, 2009. From April 30, 2008 to July 31, 2010, Mr. Sun has repaid a total of $1,271,147 on the loans. We hope to have the remaining funds settled with Mr. Sun in the near future.

Not all of the loans from individuals are interest-bearing. For interest bearing loans, the interest rate is ranging from 14% to 40% per annum. Interest expenses for short term loans were $239,141 for the year ended July 31, 2009 and $8,738 for the year ended July 31, 2008.

Our subsidiary, Harbin SQ provided a loan to Shouquan. Sun, our President, prior to us acquiring it. No monies have been loaned to Mr. Sun since our acquisition of Harbin SQ. As of July 31, 2009, Mr. Sun owed us $297,097. From April 30, 2008 to July 31, 2009, Mr. Sun has repaid a total of $1,616,859 on the original loan. We hope to have the remaining funds settled with Mr. Sun in the near future.

We expect that our total expenses will increase over the next year as we increase our business operations through Harbin SQ, our majority owned subsidiary. We have not been able to reach the break-even point since our inception and have had to rely on outside capital resources. Over the next 12 months, we plan to begin manufacturing and selling of our wind turbines. However, we do not anticipate that we will generate sufficient revenues to fund our proposed operations.

Our approximate monthly cash requirement during the year ended July 31, ~~2009~~2010 was $5149,~~031~~065 compared to $3351,~~587~~031 during the year ended July 31, ~~2008~~2009. AtWe ~~the moment, we do not have sufficient cash to cover our expenses for even one month. Additionally, we~~ expect to require approximately $2,~~635~~374,~~161~~323 in financing to fund our business operations over the next 12 months (beginning November ~~2009~~2010), as follows:

Description	Estimated expenses $
Research and development of wind turbines		732,064
Marketing		117,130
Salaries		585,652
Equipment maintenance		29,283
Development of distribution chain		146,413
Utilities		219,619
Professional Fees		220,000
General and administrative expenses		585,000
Total		2,635,161

At present, our cash requirements for the next 12 months outweigh the funds available to maintain or develop our operations. Of the $2,635,161 that we require for the next 12 months, we had $65,233 in cash as of July 31, 2009. In order to improve our liquidity, we intend to pursue additional equity financing from private investors or possibly a registered public offering. We currently do not have any arrangements in place for the completion of any further private placement financings and there is no assurance that we will be successful in completing any further private placement financings. If we are unable to achieve the necessary additional financing, then we plan to reduce the amounts that we spend on our business activities and administrative expenses in order to be within the amount of capital resources that are available to us.

Description	Estimated expenses

Research and development of wind turbines	$	538,460
Marketing		104,130
Salaries		565,432
Equipment maintenance		20,288
Development of distribution chain		140,413
Utilities		200,600
Professional Fees		220,000
General and administrative expenses		585,000
Total	$	2,374,323

13At present, our cash requirements for the next 12 months outweigh the funds available to maintain or develop our operations. Of the $2,374,323 that we require for the next 12 months, we had $257,620 in cash as of July 31, 2010. In order to improve our liquidity, we intend to apply for short term mortgage loan from bank. If we are unable to achieve the necessary additional financing, then we plan to reduce the amounts that we spend on our business activities and administrative expenses in order to be within the amount of capital resources that are available

Results of Operations

Revenues

Since our inception to July 31, ~~2009~~2010 we have generated gross revenues of $~~230~~424,~~691~~760 from the sale of combine harvesters manufactured by us. We generated $82194,~~308~~069 during the year ended July 31, ~~2009~~2010 and $~~148~~82,~~383~~308 during the year ended July 31, ~~2008~~2009. Our cost of goods sold was $~~631~~887,~~507~~682 for the year ended July 31, ~~2009~~2010 and $~~127~~631,~~438~~507 for the year ended July 31, 2008. Cost of goods is calculated as the difference in inventory at the beginning of the year compared to the end of the year. The reason that the cost of goods was so high was due to much of our combine harvester inventory being marked down on obsolescence as of July 31, 2009 ~~due to a change in manufacturing focus from combine harvesters to wind turbines~~. .

Expenses

For the year ended July 31, ~~2009~~2010, we have total operating expenses of $410,~~334~~142,~~680~~669, including $~~101~~39,~~351~~311 in selling expenses, $21,~~581~~992,~~395~~398 in general and administrative and $18,~~651~~110,~~934~~960 ~~in loss~~ of ~~disposal~~goodwill ofimpairment ~~assets~~loss. By comparison, for the year ended July 31, ~~2008~~2009, we ~~had~~have total operating expenses of $~~408~~4,~~954~~334,680, ~~which~~including ~~were~~$101,351 ~~made~~in upselling ofexpenses, $~~405~~2,~~169~~581,395 in general and administrative ~~costs~~ and $31,~~785~~651,934 in ~~selling~~loss ~~expenses~~on disposal of assets. For the period from inception to July 31, ~~2009~~2010 our total operating expenses were $414,~~781~~924,~~451~~118.

The main reason for the increase in expenses is due to the significant increase in the activity of the company due to the acquisition of Harbin SQ and the preparation for production and sales of our wind turbine product.

Net Loss

Since our inception on November 27, 2006 to July 31, ~~2009~~2010, we incurred ~~net~~ a net loss of $416,~~478~~808,~~842~~386. For the year ended July 31, ~~2009~~2010, we incurred net loss of $4 11,~~077~~413,~~218~~008 compared to $~~363~~4,~~807~~961,009 for the year ended July 31, ~~2008~~2009. Our net loss per share was $0.0818 for the year ended July 31, ~~2009~~2010 and $0.0108 for the year ended July 31, ~~2008~~2009.

Our net loss for the year ended July 31, ~~2009~~2010 was the result of limited revenue of $82194,~~308~~069 counted against $~~631~~887,~~507~~682 in cost of goods sold, $~~101~~39,~~351~~311 in selling expenses, $21,~~581~~992,~~395~~398 in general and administrative expenses and $18,~~651~~110,~~934~~960 inof ~~loss~~goodwill onimpairment ~~disposal of assets~~loss. Comparatively, during the year ended July 311, ~~2008~~2009 we generated ~~revenues~~revenue of $~~148~~82,~~383~~308 counted against $~~127~~631,507 ~~438~~ in cost of goods sold, $3101,~~785~~351 in selling expenses, ~~and~~ $~~405~~2,~~169~~581,395 in general and administrative expenses~~. The~~ ~~increases in general~~ and ~~administrative~~$1,651,934 ~~expenses~~in asloss ~~well~~on asdisposal ~~the cost~~ of ~~goods sold and selling expenses was due to the change of focus from the sale of combine harvesters to wind turbines~~assets.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

Inflation

The effect of inflation on our revenue and operating results has not been significant.

Critical Accounting Policies

Our financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in note 3 of the notes to our financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by management.

~~Basis~~Impairment of ~~Presentation~~Long-Lived ~~and Use of Estimates~~Assets

~~The~~Long-lived ~~consolidated~~assets, ~~financial~~including ~~statements~~property, ~~include~~plant ~~our~~and ~~accounts~~equipment, identifiable intangible assets and ~~our~~capitalized ~~majority~~software costs are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the long-~~owned~~lived ~~subsidiaries~~asset ~~after~~may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the ~~elimination~~sum of ~~intercompany~~the ~~accounts~~undiscounted cash flows expected to result from the use and ~~transactions~~eventual disposition of the asset. ~~Our~~If ~~fiscal~~it ~~year~~is ~~ends~~determined onthat ~~July~~an 31impairment loss has occurred, the loss is measured as the amount by which the carrying amount of the long-lived asset exceeds its fair value.

~~The~~Goodwill ~~preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates~~ and ~~assumptions~~Other ~~that~~Intangible affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from these estimates. We regularly evaluate estimates and assumptions related to obsolete inventory, useful life and recoverability of long lived assets, and goodwill. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by us may differ materially and adversely from our estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.Assets

Goodwill is not subject to amortization but is tested for impairment on an annual basis (or more frequently if impairment indicators arise). Impairment losses are calculated at the reporting unit level, and represent the excess of the carrying value of reporting unit goodwill over its implied fair value. The implied fair value of goodwill is determined by a two-step process. The first compares the fair value of the reporting unit (measured as the present value of expected future cash flows) to its carrying amount. If the fair value of the reporting unit is less than its carrying amount, a second step is performed. In this step, the fair value of the reporting unit is allocated to its assets and liabilities to determine the implied fair value of goodwill, which is used to measure the impairment loss.

The Company’s evaluation of goodwill completed during the year ended July 31, 2010 resulted in $8,110,960 impairment loss.

Our intangible assets comprised of land use rights and are being amortized on a straight-line basis over their estimated useful life which is 40 years. None of our acquired intangible assets have indefinite lives. Land use rights are related to the land the Company occupies in Heilongjiang Province, PRC.

Property and Equipment

Property and equipment are initially recorded at cost. Gains or losses on disposals are reflected as gain or loss in the period of disposal. The cost of improvements that extend the life of plant and equipment are capitalized. These capitalized costs may include structural improvements, equipment and fixtures. All ordinary repairs and maintenance costs are expensed as incurred.

Depreciation for financial reporting purposes is provided using the straight-line method over the estimated useful lives of the assets:

Buildings	20 years
Machinery and equipment	14 years
Transportation equipment	12 years
Office equipment	10 years

~~Goodwill~~Item 7A. Qualitative and Qualitative Disclosures about Market Risk

WeAs ~~periodically~~a review the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist. Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (“~~FAS~~smaller 142”) requires that goodwill and certain intangible assets be assessed annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting ~~unit with its carrying amount~~company”, ~~including~~we ~~goodwill. The estimates of fair value of a reporting unit~~ are determined using various valuation techniques with the primary technique being a discounted cash flow analysis. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based on our budget and long-term plans. Discount rate assumptions are based on an assessment of the risk inherent in the respective reporting units. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not ~~impaired~~required ~~and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed~~ to ~~measure~~provide the ~~amount~~information ofrequired ~~impairment~~by ~~loss,~~this ~~if any~~Item. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. Our evaluation of goodwill completed during the year ended July 31, 2009 and 2008 resulted in no impairment losses.

Item 7A. Qualitative Disclosures about Market Risk

Not Applicable.

Item 8. Financial Statements and Supplementary Data

CHINA WIND ENERGY INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

INDEX

PAGE F-1~2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-1
CONSOLIDATED BALANCE SHEETS	F-2
CONSOLIDATED STATEMENTS OF OPERATIONS	F-3
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY	F-4
CONSOLIDATED STATEMENTS OF CASH FLOWS	F-5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	F-6

~~PAGE F-3 CONSOLIDATED BALANCE SHEETS~~14

~~PAGE F-4 CONSOLIDATED~~REPORT ~~STATEMENTS~~ OF ~~OPERATIONS~~INDEPENDENT REGISTER PUBLIC ACCOUNTING FIRM

PAGE F-5 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

PAGE F-6 CONSOLIDATED STATEMENTS OF CASH FLOWS

PAGE F-7~20 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

China Wind Energy Inc. and Subsidiaries

(A development stage company)

We have audited the accompanying consolidated balance ~~sheet~~sheets of China Wind Energy Inc. and subsidiaries (a development stage company) as of July 31, 2010 and 2009 and the related consolidated ~~statement~~statements of operations, changes in stockholders’ equity ~~(deficit)~~ and cash flows for the ~~year~~years ~~ended~~then ~~July 31, 2009~~ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our ~~audit~~audits. The statements of operations, changes in stockholders’ equity ~~(deficit)~~ and cash flows from November 27, 2006 (date of inception) to July 31, 2007 were audited by other auditors whose report dated August 31, 2007 expressed an unqualified opinion, with an explanatory paragraph discussing the Company’s ability to continue as a going-concern. In addition, the statements of operations, changes in stockholders’ equity ~~(deficit)~~ and cash flows from August 1, 2007 to July 31, 2008 were audited by other auditors whose report dated October 9, 2008 expressed an unqualified opinion, with an explanatory paragraph discussing the Company’s ability to continue as a going-concern. Our opinion on the statements of operations, changes in stockholders’ equity ~~(deficit)~~ and cash flows from inception to July 31, ~~2009~~2010, insofar as it relates to amounts for prior periods through July 31, 2008, is solely based on the reports of other auditors.

We conducted our ~~audit~~audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required at this time, to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our ~~audit~~audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our ~~audit~~audits provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of China Wind Energy Inc. and subsidiaries at July 31, 2010 and 2009 and the consolidated results of its operations and its cash flows for the ~~year~~years ~~ended~~then ~~July 31~~ended, ~~2009,~~ and for the period from November 27, 2006 (date of inception) to July 31, ~~2009~~2010 in conformity with accounting principles generally accepted in the United States of America.

~~The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.~~ As discussed in Note 3 2of to the ~~financial~~Notes ~~statements,~~to the ~~Company~~consolidated ~~has~~financial ~~incurred accumulated deficits of $4~~statements,~~478,842~~ aseffective ofAugust ~~July 31~~1, 2009 ~~that include losses of $4~~,~~077,218~~ ~~for~~ the ~~year ended July 31, 2009. The~~ Company ~~also~~applied ~~had~~new aaccounting ~~working capital~~standards ~~deficiency~~related ~~of $2,634,207 as of July 31, 2009. These factors raise substantial doubt about its ability~~ to noncontrolling ~~continue~~interests ~~as a going concern. Management’s plans concerning this matter are also described~~ in ~~Note 2~~subsidiaries. ~~The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.~~

~~/s/~~The ~~Malone~~accompanying &financial ~~Bailey~~statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the Notes to the consolidated financial statements, PCthe Company has suffered losses from operations and has a working capital deficit. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning this matter are also described in Note 2. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MaloneBailey, LLP

MaloneBailey, LLP

www.malone-bailey.com

Houston, Texas

~~October~~December 296, ~~2009~~2010

F-1

~~REPORT~~China OFWind ~~INDEPENDENT~~Energy ~~REGISTERED~~Inc. ~~PUBLIC~~And ~~ACCOUNTING FIRM~~Subsidiaries

~~Board~~(A ofDevelopment ~~Directors~~Stage Company)

~~China~~Consolidated ~~Wind~~Balance ~~Energy Inc. and Subsidiaries~~Sheets

(A development stage company)

	July 31,			July 31,
	2010			2009
ASSETS
Current Assets
Cash and cash equivalents	$	257,620		$	65,233
Accounts receivable, net		1,092			891,776
Inventories, net		639,740			648,043
Prepaid expenses		58,767			125,899
Total current assets		957,219			1,730,951

Prepayment and deposit		7,966			10,945
Due from related parties		10,691			298,884
Property and equipment, net		9,628,603			9,214,594
Construction in progress		156,503			797,016
Goodwill		-			8,110,960
Intangible assets, net		1,792,660			1,839,116

Total Assets	$	12,553,642		$	22,002,466

Liabilities & Stockholders' Equity
Current Liabilities
Accounts payable and accrued liabilities	$	2,386,509		$	2,177,545
Short term loans		2,894,160			2,111,505
Due to related parties		875,544			76,108
Total current liabilities		6,156,213			4,365,158
Stockholders' Equity
Common stock; 400,000,000 shares authorized; 0.0001 par value; 51,902,250 shares issued and outstanding, respectively		5,191			5,191
Additional paid-in capital		20,335,701			20,335,701
Accumulated other comprehensive income		190,715			50,301
Accumulated deficit during development stage		(13,853,487	)		(4,478,842	)
Total China Wind Energy Inc. stockholders' equity		6,678,120			15,912,351
Non-controlling interest		(280,691	)		1,724,957
Total Stockholders' Equity		6,397,429			17,637,308
Total Liabilities & Stockholders' Equity	$	12,553,642		$	22,002,466

WeThe ~~have audited the~~ accompanying ~~consolidated~~notes balance sheets of China Wind Energy Inc. and subsidiaries as of July 31, 2008 and the related consolidated statements of operations, changes in stockholders’ equity (deficit) and cash flows for the year ended July 31, 2008, and for the period from November 27, 2006 (date of inception) to July 31, 2008. These financial statements are ~~the responsibility of the Company's management. Our responsibility is to express~~ an ~~opinion~~integral onpart of these financial statements based on our audit. The Company’s financial statements for the period from November 27, 2006 (date of inception) to July 31, 2007 were audited by other auditors who expressed an unqualified opinion, with an explanatory paragraph discussing the Company’s ability to continue as a going-concern in their report dated on August 31, 2007. The other auditors’ report has been furnished to us, and our opinion, insofar as it relates to amounts included for such prior period, is based solely on the report of such other auditors.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required at this time, to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of China Wind Energy Inc. and subsidiaries at July 31, 2008 and the consolidated results of its operations and its cash flows for the year ended July 31, 2008, and for the period from November 27, 2006 (date of inception) to July 31, 2008 in conformity with accounting principles generally accepted in the in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred accumulated deficits of $401,624 as of July 31, 2008 that include losses of $363,807 for the year ended July 31, 2008. The Company also had a working capital deficiency of $7,002,730 as of July 31, 2008. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning this matter are also described in Note 2. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Yichien Yeh, CPA

Yichien Yeh, CPA

Rego Park, New York

October 9, 2008

F-2

China Wind Energy Inc. And Subsidiaries
(A Development Stage Company)
Consolidated Balance Sheets
	July 31, 2009			July 31, 2008
Assets
Current Assets
Cash and cash equivalents	$	65,233		$	80,348
Accounts receivable, net of allowance for doubtful account of $- and $-, respectively		891,776			28,970
Inventories, net of allowance for obsolescence of $1,021,028 and $563,851, respectively		648,043			563,851
Prepaid expenses		125,899			598,446
Total current assets		1,730,951			1,271,615
Prepayment and deposit		10,945			1,064,710
Due from related parties		298,884			1,020,049
Property and equipment, net of accumulated depreciation of $549,659 and $83,503, respectively		9,214,594			982,443
Construction in progress		797,016			6,243,097
Goodwill		8,110,960			8,110,960
Intangible assets, net of accumulated amortization of $66,902 and $51,319, respectively		1,839,116			12,173,073
Total Assets	$	22,002,466		$	30,865,947
Liabilities & Stockholders' Equity
Current Liabilities
Accounts payable and accrued liabilities	$	1,962,075		$	338,429
Customer deposit		131,333			11,676
Other payables		18,056			40,672
Short term loans		2,111,505			196,546
Due to related parties		76,108			56,363
Wages payable		66,081			26,986
Other advance receipts		-			7,603,673
Total current liabilities		4,365,158			8,274,345
Minority Interests		1,724,957			2,607,965
Stockholders' Equity
Common stock; 400,000,000 shares authorized; 0.0001 par value; 51,902,250 shares issued and outstanding, respectively		5,191			5,191
Additional paid-in capital		20,335,701			20,335,701
Accumulated other comprehensive income		50,301			44,369
Accumulated deficit during development stage		(4,478,842	)		(401,624	)
Total Stockholders' Equity		15,912,351			19,983,637
Total Liabilities & Stockholders' Equity	$	22,002,466		$	30,865,947

China Wind Energy Inc. And Subsidiaries

~~The~~(A ~~accompanying~~Development ~~notes~~Stage ~~are an integral part of these financial statements.~~Company)

Consolidated Statement of Operations

							Nov.27 2006
	Year Ended			Year Ended			(Inception) to
	July 31,2010			July 31,2009			July 31,2010

Revenue	$	194,069		$	82,308		$	424,760
Cost of goods sold		(887,682	)		(631,507	)		(1,646,627	)
Gross loss		(693,613	)		(549,199	)		(1,221,867	)

Operating Expenses
Selling expenses		39,311			101,351			144,447
General and administrative		1,992,398			2,581,395			5,016,777
Loss on goodwill impairment		8,110,960			-			8,110,960
Loss on disposal of assets		-			1,651,934			1,651,934

Total operating expenses		10,142,669			4,334,680			14,924,118

Loss from operations		(10,836,282	)		(4,883,879	)		(16,145,985	)

Other income (expenses)
Interest income		255			806			1,255
Interest expenses		(648,435	)		(239,141	)		(896,315	)
Government subsidy income		71,454			161,205			232,659

Total other (expenses)		(576,726	)		(77,130	)		(662,401	)

Loss before income taxes		(11,413,008	)		(4,961,009	)		(16,808,386	)
Income taxes		-			-			-
Net loss		(11,413,008	)		(4,961,009	)		(16,808,386	)
Less: net loss attributable to the non-controlling interest		2,038,363			883,791			2,954,899
Net loss attributable to China Wind Energy Inc.		(9,374,645	)		(4,077,218	)		(13,853,487	)

Other comprehensive loss
Foreign currency translation		( 173,129	)		( 5,932	)		(223,430	)
Total omprehensive loss	$	(11,239,879	)		(4,955,077	)	$	(16,584,956	)
Comprehensive loss attributable to the non- controlling interest		(2,005,649	)		(883.008	)		(280,691	)
Comprehensive loss attributable to China Wind Energy Inc.		(9,234,230	)		(4,072,069	)		(16,304,265	)
Net Loss Per Share, Basic and Diluted		(0.18	)		(0.08	)
Weighted Average Shares Outstanding, Basic and Diluted		51,902,250			51,902,250

The accompanying notes are an integral part of these financial statements

F-3

China Wind Energy Inc. And Subsidiaries (A Development Stage Company) Consolidated Statements of Operations
	Year Ended July 31, 2009			Year Ended July 31, 2008			Nov. 27, 2006 (Inception) to July 31, 2009
Revenue	$	82,308		$	148,383		$	230,691
Cost of Goods Sold		(631,507	)		(127,438	)		(758,945	)
Gross Profit (Loss)		(549,199	)		20,945			(528,254	)
Operating Expenses
Selling Expenses		101,351			3,785			105,136
General and administrative		2,581,395			405,169			3,024,381
Loss on disposal of assets		1,651,934			-			1,651,934
Total operating expenses		4,334,680			408,954			4,781,451
Loss from operations		(4,883,879	)		(388,009	)		(5,309,705	)
Other income (expenses)
Interest income		806			194			1,000
Interest expense		(239,141	)		(8,738	)		(247,879	)
Government subsidy income		161,205			-			161,205
Total other income (expenses)		(77,130	)		(8,544	)		(85,674	)
Loss before income taxes and minority interests		(4,961,009	)		(396,553	)		(5,395,379	)
Income taxes		-			-			-
Minority interests		883,791			32,746			916,537
Net Loss		(4,077,218	)		(363,807	)		(4,478,842	)
Other Comprehensive Income
Foreign currency translation		5,932			44,489			50,301
Comprehensive loss	$	(4,071,286	)	$	(319,318	)	$	(4,428,541	)
Net Loss Per Share, Basic and Diluted	$	(0.08	)	$	(0.01	)
Weighted Average Shares Outstanding, Basic and Diluted		51,902,250			27,606,000

China Wind Energy Inc. And Subsidiaries

~~The~~(A ~~accompanying~~Development ~~notes~~Stage ~~are an integral part of these financial statements.~~Company)

Consolidated Statement of Changes in Stockholders' Equity

For the period from November 27, 2006 (Date of Inception) to July 31, 2010

	Common stock				Additional Paid-in		Accumulated Other Comprehensive		Accumulated Deficit During the Development			Non- controlling			Total Stockholders'
	Shares		Amount		Capital		Income		Stage			Interest			Equity
Balance at July 31, 2008		51,902,250		5,191		20,335,701		44,369		(401,624	)		2,607,965			22,591,602
Foreign Currency Translation		-		-		-		5,932		-			783			6,715
Net loss for the period		-		-		-		-		(4,077,218	)		(883,791	)		(4,961,009	)
Balance at July 31, 2009		51,902,250		5,191		20,335,701		50,301		(4,478,842	)		1,724,957			17,637,308
Foreign Currency Translation		-		-		-		140,414		-			32,715			173,129
Net loss for the period		-		-		-		-		(9,374,645	)		(2,038,363	)		(11,413,008	)
Balance at July 31, 2010		51,902,250	$	5,191	$	20,335,701	$	190,715	$	(13,853,487	)	$	(280,691	)	$	6,397,429

The accompanying notes are an integral part of these financial statements

F-4

China Wind Energy Inc. And Subsidiaries

(A Development Stage Company)

Consolidated Statements of ~~Changes~~Cash ~~in Stockholders' Equity (Deficit)~~Flows

For the period from November 27, 2006 (Date of Inception) to July 31, 2009

							Nov. 27, 2006
	Year Ended			Year Ended			(Inception)
	July 31, 2010			July 31, 2009			to July 31, 2010

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(11,413,008	)	$	(4,961,009	)	$	(16,808,386	)
Adjustments to reconcile net income to net cash
used for operating activities:
Depreciation		634,471			475,342			1,124,295
Provision for inventory		668,317			-			564,051
Amortization		41,419			48,334			141,072
Loss on disposal of assets		-			1,651,934			1,651,934
Loss(Gain) on physical count of inventories		-			-			26,831
Loss on goodwill impairment		8,110,960			-			8,110,960
Common stock issued for services		-			-			17,850
Changes in operating assets and liabilities
Accounts receivable		891,908			19,614			911,096
Prepaid expenses		(961	)		317,646			265,343
Inventories		(526,502	)		(204,767	)		(558,680	)
Advance to Suppliers		68,643			-			68,643
Prepayment and deposit		3,821			738,204			561,571
Accounts payable & accrued liabilities		286,922			272,248			622,649
NET CASH USED IN OPERATING ACTIVITIES		(1,234,010	)		(1,642,454	)		(3,300,771	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(319,896	)		(799,738	)		(1,593,670	)
Cash paid for construction in progress		-			(398,558	)		(398,558	)
Proceeds from sale of land use right		-			73,285			73,285
Proceeds from sale of fixed assets		-			99,278			99,278
Cash paid to acquire intangibles		-			(1,407	)		(1,407	)
Collection of loans made to related parties		288,675			723,541			1,282,176
cash acquired on acquisition		-			-			314,713
CASH USED FOR INVESTING ACTIVITIES		(31,211	)		(303,599	)		(224,183	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from related party loans		-			19,614			69,319
Proceeds from short term loans		4,382,386			2,462,936			6,890,321
Repayment of related party loans		-			-			-
Repayment of short term loans		(2,926,480	)		(548,441	)		(3,474,921	)
Proceeds from issuance of common stock		-			-			100,001
CASH PROVIDED BY FINANCING ACTIVITIES		1,455,906			1,934,109			3,584,720

Effect of exchange rate changes on cash		1,712			(3,171	)		197,854
NET INCREASE (DECREASE) IN CASH		192,387			(15,115	)		257,620
Cash and cash equivalents, beginning of period		65,233			80,348			-
Cash and cash equivalents, end of period	$	257,620		$	65,233		$	257,620

Supplemental disclosure information
Interest expense paid	$	447,657		$	29,065
Non-Cash Financing and Investing Activities:
Increase of accounts receivable related to the sale of land use right	$	-		$	882,351
Increase of accounts payable related to accrual of PP&E additions	$	-		$	1,549,467

	Common Stock				Additional Paid-in Capital			Stock Subscriptions Receivable			Accumulated Other Comprehensive Income			Accumulated Deficit During the Development Stage			Total Stockholders' Equity
	Shares		Amt
Balance at November 27, 2006 (Date of Inception)		-	$	-	$	-		$	-		$	-		$	-		$	-
Issuance of common stock for cash		1		1		100,000			(100,000	)		-			-			1
Foreign Currency Translation		-		-		-			-			(120	)		-			(120	)
Net loss for the period		-		-		-			-			-			(37,817	)		(37,817	)
Balance at July 31, 2007		1		1		100,000			(100,000	)		(120	)		(37,817	)		(37,936	)
Proceeds from issuance of common stock		-		-		-			100,000			-			-			100,000
Adjustment to number of shares of common stock issued and outstanding as a result of reverse merger take over of China Wind Energy Ltd.
Recapitalization related to reverse merger		36,887,249		3,688		(3,688	)		-			-			-			-
Net assets acquired in reverse merger		-		-		3,041			-			-			-			3,041
Issuance of common shares for services		15,000		2		17,848			-			-			-			17,850
Issuance of common shares for acquisition		15,000,000		1,500		20,218,500			-			-			-			20,220,000
Foreign Currency Translation		-		-		-			-			44,489			-			44,489
Net loss for the period		-		-		-			-			-			(363,807	)		(363,807	)
Balance at July 31, 2008		51,902,250		5,191		20,335,701			-			44,369			(401,624	)		19,983,637
Foreign Currency Translation		-		-		-			-			5,932			-			5,932
Net loss for the period		-		-		-			-			-			(4,077,218	)		(4,077,218	)
Balance at July 31, 2009		51,902,250	$	5,191	$	20,335,701			-			50,301		$	(4,478,842	)	$	15,912,351

The accompanying notes are an integral part of these financial statements

The accompanying notes are an integral part of these financial statements.

F-5

China Wind Energy Inc. And Subsidiaries (A Development Stage Company) Consolidated Statements of Cash Flows Year Ended July 31, 2009 Year Ended July 31, 2008 Nov. 27, 2006 (Inception) to July 31, 2009 Cash Flows From Operating Activities Net Loss $ (4,077,218 ) $ (363,807 ) $ (4,478,842 ) Adjustments to reconcile net loss to net cash used in operating activities: Minority interests (883,791 ) (32,746 ) (916,537 ) Depreciation 475,342 14,483 489,825 Amortization 48,334 51,319 99,653 Loss on disposal of assets 1,651,934 - 1,651,934 Loss(Gain) on physical count of inventories - 26,831 26,831 Provision(Reversal) on allowance of obsolescence - (104,266 ) (104,266 ) Common stock issued for services - 17,850 17,850 Changes in operating assets and liabilities: Accounts receivable, net 19,614 (426 ) 19,188 Prepaid expenses 317,646 (51,342 ) 266,304 Inventories (204,767 ) 172,589 (32,178 ) Prepayment and deposit 738,204 (160,658 ) 557,750 Accounts payable and accrued liabilities 136,300 31,612 204,258 Customer deposit 119,629 (36,702 ) 82,927 Other payables (22,713 ) 5,236 (17,477 ) Wages payable 39,032 26,986 66,018 Net cash used in operating activities (1,642,454 ) (403,041 ) (2,066,762 ) Cash Flows From Investing Activities Purchases of property and equipment (799,738 ) (474,036 ) (1,273,774 ) Cash paid for construction in progress (398,558 ) - (398,558 ) Proceeds from sale of land use right 73,285 - 73,285 Proceeds from sale of fixed assets 99,278 - 99,278 Cash paid to acquire intangibles (1,407 ) - (1,407 ) Collection of loans made to related parties 723,541 269,961 993,502 Cash acquired on acquisition - 314,713 314,713 Net cash provided by (used in) investing activities (303,599 ) 110,638 (192,961 ) Cash Flows From Financing Activities Proceeds from related party loans 19,614 27,041 69,319 Proceeds from short term loans 2,462,936 44,999 2,507,935 Repayment of short term loans (548,441 ) - (548,441 ) Proceeds from issuance of common stock - 100,000 100,001 Net cash provided by financing activities 1,934,109 172,040 2,128,814 Effect of exchange rate changes on cash (3,171 ) 199,433 196,142 Net increase (decrease) in cash and cash equivalents (15,115 ) 79,070 65,233 Cash and cash equivalents, beginning of period 80,348 1,278 - Cash and cash equivalents, end of period $ 65,233 $ 80,348 $ 65,233 Supplemental disclosure information: Interest expense paid $ 29,065 $ 8,738 $ 37,803 Income taxes paid $ - $ - $ - Non-Cash Financing and Investing Activities: Increase of accounts receivable related to the sale of land use right 882,351 Increase of accounts payable related to accrual of PP&E additions 1,549,467 The accompanying notes are an integral part of these financial statements. F-6

China Wind Energy Inc. And Subsidiaries

Notes to Consolidated Financial Statements

1. ORGANIZATION AND BUSINESS BACKGROUND

The Company was incorporated in Nevada on May 8, 2006, under the name Pooch Pal Beverages Inc., and changed its name to K-Care Nutritional Products Inc. On November 29, 2007, the Company changed its name to China Wind Energy Inc.

On November 20, 2007, the former President of the Company entered into a Stock Purchase Agreement with Jian Ren, a resident and citizen of the Hong Kong SAR of the People’s Republic of China (the “Purchaser”), pursuant to which the Purchaser agreed to purchase 5,950,000 shares of the Company’s common stock, $0.0001 par value, from the former President of the Company for $50,000. These shares represented 81% of the issued and outstanding common stock of the Company. The Stock Purchase Agreement closed on November 27, 2007.

Also, on November 20, 2007, the Company entered into an Acquisition Agreement with the Purchaser, who is the owner of all of the share capital of China Wind Energy Limited, a corporation organized and existing under the laws of the Hong Kong SAR of the People’s Republic of China, pursuant to which the Purchaser agreed to transfer all of his share capital in China Wind Energy Limited to the Company for $1. Upon closing of the Acquisition agreement on November 27, 2007, China Wind Energy Limited became a wholly owned subsidiary of the Company. China Wind Energy Limited has one wholly owned subsidiary, Harbin XingYe Wind Energy Technology Limited (“XingYe”), a company established under the Law of the People’s Republic of China (“PRC”).

The Acquisition was accounted for as a reverse merger, since the Purchaser owned a majority of the outstanding shares of the Company’s common stock immediately following the Acquisition. China Wind Energy Limited is deemed to be the acquirer in the merger. Consequently, the assets and liabilities and the historical operations that are reflected in the financial statements prior to the Acquisition are those of China Wind Energy Limited and are recorded at the historical cost basis of China Wind Energy Limited, whereas, the consolidated financial statements after completion of the Acquisition will include the assets and liabilities of the Company and China Wind Energy Limited, the historical operations of China Wind Energy Limited, and the Company’s operations from the closing date of the Acquisition.

On May 16, 2008, the Company entered into a Share Exchange Agreement with Power Profit Technology Development Limited, a company incorporated under the laws of Hong Kong, People’s Republic of China (“Power Profit”), and Wan Yi Tse, the holder of 100% of the issued and outstanding registered share capital of Power Profit.

Pursuant to the share exchange agreement, on May 26, 2008, the Company completed the acquisition of 100% of the equity interests of Power Profit and 82.14% of the equity interests of its subsidiary, Harbin SQ Wind Power Co., Ltd. (formerly Harbin Sanye Wind Energy Technology Co., Ltd.) (“Harbin SQ”). Harbin SQ is a company incorporated under the laws of the People’s Republic of China, engaged in the business of harvesters and blades for wind generators. Together, Power Profit and Harbin SQ become the subsidiaries of the Company. Power Profit becomes the Company’s wholly owned subsidiary and Harbin SQ becomes the Company’s majority owned subsidiary.

The Company has not yet generated significant revenues from planned principal operations and is considered a ~~Development~~development ~~Stage~~stage ~~Company, as defined by Statement of Financial Accounting Standard (“SFAS”) No~~company.~~7 “Accounting and Reporting for Development Stage Enterprises”.~~

F-6

2. GOING CONCERN

As reflected in the accompanying ~~combined~~consolidated financial statements, the Company has accumulated deficits of $413,~~478~~853,~~842~~487 and $~~401~~4,~~624~~478,842 at July 31, ~~2009~~2010 and ~~2008~~2009, respectively that include losses of $411,~~077~~413,~~218~~008 and $~~363~~4,~~807~~961,009 for the ~~year~~years ended July 31, ~~2009~~2010 and ~~2008~~2009, respectively. The Company also had a working capital deficiency of $25,~~634~~210,~~207~~ 101 and $72,~~002~~634,~~730~~207 as of July 31, ~~2009~~2010 and ~~2008~~2009. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements have been prepared on a going basis and do not include any adjustments that might result from outcome of this uncertainty.

At July 31, ~~2009~~2010, the Company has suffered losses from development stage activities to date. Although management is currently attempting to implement its business plan, and is seeking additional sources of equity or debt financing, there is no assurance these activities will be successful.

~~F-7~~3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~ a. Basis of Presentation and Use of Estimates

The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries after the elimination of intercompany accounts and transactions. The Company’s fiscal year ends on July 31.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from these estimates. The Company regularly evaluates estimates and assumptions related to obsolete inventory, useful life and recoverability of long lived assets, and goodwill. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

b. Principles ~~Fair values~~ of ~~financial instruments~~ Consolidation

The accompanying consolidated financial statements of the Company include the accounts of its wholly and majority-owned subsidiaries. All material intercompany accounts and transactions have been eliminated.

c. Fair values of financial instruments

The carrying amount reported in the balance sheet for cash, accounts receivable, inventory, accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments.

cd. Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits with banks and liquid investments with an original maturity of three months or less. Cash deposits with banks are held in financial institutions in China, which has no federally insured deposit protection. Accordingly, the Company has a concentration of credit risk related to these uninsured deposits.

de. Accounts Receivable

Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollected amounts through a charge to earnings and a credit to an allowance for bad debts based on its assessment of the current status of individual accounts. Balances ~~that~~those are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for bad debts and a credit to accounts receivable.

~~e. Inventories~~F-7

f. Inventories

Inventories are stated at the lower of cost, as determined on a weighted average basis, or market. Costs of inventories include purchase and related costs incurred in bringing the products to their present location and condition. Market value is determined by reference to selling prices after the balance sheet date or to management’s estimates based on prevailing market conditions. The management writes down the inventories to market value if market value is below cost. The management also regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine if a valuation allowance is required.

fg. Property and Equipment

F-8

Depreciation for financial reporting purposes is provided using the straight-line method over the estimated useful lives of the assets:

Buildings	20 years
Machinery and equipment	14 years
Transportation equipment	12 years
Office equipment	10 years

gh. Construction in ~~progress~~Progress

Construction in progress represents direct costs of construction or acquisition and design fees incurred. Capitalization of these costs ceases and the construction in progress is transferred to property and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed.

hi. Impairment of Long-Lived Assets

~~The~~Long-lived ~~Company~~assets, ~~accounts~~including ~~for impairment of~~ property, plant and equipment, ~~and~~identifiable ~~amortizable~~ intangible assets inand ~~accordance~~capitalized ~~with~~software ~~SFAS~~costs ~~No.~~are ~~144,~~reviewed ~~“Accounting~~ for ~~Impairment~~impairment ofwhenever ~~Long-Lived~~events ~~Assets~~or ~~and~~changes ~~Long-Lived~~in ~~Assets~~circumstances toindicate bethat ~~Disposed~~the ~~Of”,~~carrying ~~which~~amount ~~requires~~of the ~~Company to evaluate a~~ long-lived asset ~~for recoverability when there is event or circumstance that indicate the carrying value of the asset~~ may not be recoverable. AnThe ~~impairment loss is recognized when the~~ carrying amount of a long-lived asset ~~or asset group~~ is not recoverable ~~(when~~if ~~carrying~~it ~~amount~~ exceeds the ~~gross,~~sum of the undiscounted cash flows expected to result from the use and eventual disposition) ~~and~~of the asset. If it is determined that an impairment loss has occurred, the loss is measured as the ~~excess~~amount ofby which the carrying amount ~~over~~of the ~~asset’s~~long-lived ~~(or~~ asset ~~group’s)~~exceeds its fair value.

ij. Goodwill and Other Intangible Assets

~~The~~Goodwill ~~Company’s~~is ~~intangible~~not ~~assets~~subject to amortization but is tested for impairment on an annual basis (or more frequently if impairment indicators arise). Impairment losses are ~~stated~~calculated at ~~cost~~the ~~less~~reporting ~~accumulated~~unit ~~amortization~~level, and ~~are~~represent ~~mainly~~the ~~comprised~~excess of ~~land~~the ~~use~~carrying ~~rights~~value of reporting unit goodwill over its implied fair value. ~~Land~~ ~~use~~The ~~rights~~implied ~~are~~fair ~~related~~value of goodwill is determined by a two-step process. The first compares the fair value of the reporting unit (measured as the present value of expected future cash flows) to ~~land~~its carrying amount. If the ~~Company~~fair ~~occupies~~value inof ~~Heilongjiang~~the ~~Province,~~reporting ~~PRC~~unit ~~and~~is ~~are~~less ~~being~~than ~~amortized~~its oncarrying amount, a ~~straight-line~~second ~~basis~~step ~~over~~is aperformed. ~~period~~In this step, the fair value of 40the ~~years~~reporting unit is allocated to its assets and liabilities to determine the implied fair value of goodwill, which is used to measure the impairment loss.

jThe Company’s evaluation of goodwill completed during the year ended July 31, 2010 resulted in $8,110,960 impairment loss. ~~Goodwill~~

~~The~~Our ~~Company periodically reviews the carrying value of~~ intangible assets ~~not~~consist ~~subject~~primarily ~~to amortization, including goodwill, to determine whether impairment may exist. Statement~~ of ~~Financial~~land ~~Accounting~~use ~~Standards No~~right. ~~142,~~intellectual ~~Goodwill~~property ~~and Other Intangible Assets (“FAS 142”) requires~~ that ~~goodwill~~has ~~and~~been ~~certain~~internally ~~intangible~~developed ~~assets be assessed annually,~~ or ~~when certain triggering events occur, for impairment using fair value measurement techniques~~purchased. Intangible ~~These~~assets events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The estimates of fair value of a reporting unit are ~~determined~~amortized using ~~various valuation techniques with~~ the primary technique being a discounted cash flow analysis. A discounted cash flow analysis requires one to make various judgmental assumptions including assumptions about future cash flows, growth rates, and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s budget and longstraight-~~term~~line ~~plans.~~method ~~Discount~~over ~~rate~~estimated ~~assumptions are~~useful ~~based on an assessment of the risk inherent in the respective reporting units~~lives. IfNone ~~the fair value~~ of aour ~~reporting~~acquired ~~unit~~intangible ~~exceeds~~assets ~~its~~have ~~carrying~~indefinite ~~amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary~~lives. IfLand ~~the~~use ~~carrying~~rights ~~amount~~are ofrelated ~~a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed~~ to ~~measure~~ the ~~amount~~land ~~of impairment loss, if any. The second step of~~ the ~~goodwill~~Company ~~impairment~~occupies test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in anHeilongjiang ~~amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is~~Province, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unitPRC. ~~The Company’s evaluation of goodwill completed during the year ended July 31, 2009 and 2008 resulted in no impairment losses.~~

F-98

k. Comprehensive income

~~SFAS~~ASC ~~No.130~~220, “Reporting Comprehensive Income”, requires disclosure of all components of comprehensive income and loss on an annual and interim basis. Comprehensive income and loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Company’s other comprehensive income arose from the effect of foreign currency translation adjustments.

l. Revenue recognition

The Company generates revenues from the sales of harvesters. Sales are recognized when the following four revenue criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable, and collectability is reasonably assured. Sales are presented net of value added tax (VAT). No return allowance is made as products returns are insignificant based on historical experience.

m. Research and development costs

Research and development costs are expensed to operations as incurred.

n. Income taxes

The Company accounts for income taxes in accordance with ~~SFAS~~FASB ~~No.~~ASC ~~109~~740, "~~Accounting for~~ Income Taxes." ~~SFAS~~FASB ~~No.~~ASC ~~109~~ 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

o. Foreign exchange and currency translation

The Company’s functional currency is Chinese currency Renminbi (“RMB”) and its reporting currency is the U.S. dollar. Transactions denominated in foreign currencies are translated into U.S. dollar at exchange rate in effect on the date of the transactions. Exchange gains or losses on transactions are included in earnings.

The financial statements of the Company are translated into United States dollars in accordance with ~~Statement~~ASC ~~of Financial Accounts Standards (“SFAS”) No. 52~~830, “Foreign Currency ~~Translation~~Matters”, using year-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for the equity. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income. At July 31, 2009 and 2008, the cumulative translation adjustment of $50,301 and $44,369 were classified as an item of accumulated other comprehensive income in the stockholders’ equity section of the balance sheet respectively. For the year ended July 31, 2009 and 2008, other comprehensive income was $5,932 and $44,489, respectively.

~~The~~At ~~exchange~~July ~~rates~~31, ~~used~~2010 toand ~~translate~~2009, ~~amounts in RMB into U.S. Dollars for~~ the ~~purposes~~cumulative oftranslation ~~preparing~~adjustment ~~the financial statements were as follows: As~~ of ~~July 31~~$223,430 ~~2009~~ and ~~2008~~$50,301 ~~the~~were ~~Company~~classified ~~used~~as ~~the~~an ~~period-end~~item ~~rates~~ of ~~exchange~~accumulated ~~for~~other ~~assets~~comprehensive ~~and~~income ~~liabilities~~in ofthe $1stockholders’ toequity ~~RMB6.823~~section ~~and~~of $1the tobalance ~~RMB6.839~~sheet respectively. For the ~~years~~year ended July 31, ~~2009~~2010 and ~~2008,~~ ~~the Company used the period’s average rate of exchange to convert revenues~~2009, ~~costs,~~other ~~and~~comprehensive ~~expenses~~loss ofwas $1173,129 ~~to RMB6.82361~~ and $~~1 to RMB7.209939~~5,932, respectively. ~~The Company used historical rates for equity.~~

FThe exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the financial statements were as follows: As of July 31, 2010 and 2009, the Company used the period-10end rates of exchange for assets and liabilities of $1 to RMB 6.765 and $1 to RMB 6.823 respectively. For the years ended July 31, 2010 and 2009, the Company used the period’s average rate of exchange to convert revenues, costs, and expenses of$1 to RMB 6.81338 and $1 to RMB 6.82361, respectively. The Company used historical rates for equity and goodwill.

F-9

p. Related parties

A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

q. Net ~~Earnings~~loss per share

Basic loss per share is computed by dividing net loss by weighted average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. At July 31, ~~2009~~2010 and ~~2008~~2009, respectively, the Company had no common stock equivalents that could potentially dilute future earnings per share; however, if present, a separate computation of diluted loss per share would not have been presented, as these common stock equivalents would have been anti-dilutive due to the Company’s net loss.

r. Recent ~~Reclassifications~~accounting pronouncements

~~Certain~~In ~~prior~~December ~~year~~2007, ~~amounts~~the ~~have~~FASB ~~been~~issued ~~reclassified~~SFAS toNo. ~~conform~~160, "Noncontrolling Interests in Consolidated Financial Statements”, an amendment of Accounting Research Bulletin No. 51 (SFAS 160) which was codified into ASC Topic 810 “Consolidation”, (ASC 810). This guidance introduces significant changes in the accounting and reporting for business acquisitions and noncontrolling interest in a subsidiary. It also changes the accounting and reporting for the deconsolidation of a subsidiary. The standard requires retrospective adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of the standard will be applied prospectively. Companies are required to adopt the new standard for fiscal years beginning after January 1, 2009. ~~presentation~~Effective August 1, 2009, the Company adopted this guidance and changed the accounting and reporting for minority interests, which were recharacterized as noncontrolling interests and classified as a component of equity. There was no impact on our consolidated financial position, results of operations or cash flows.

sIn January 2010, the FASB issued authoritative guidance which requires additional disclosures about transfers between Levels 1 and 2 of the fair value hierarchy and disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements. This ~~Recently~~guidance ~~adopted~~was ~~accounting~~effective ~~principles~~for the Company January 1, 2010, except for the Level 3 activity disclosures, which are effective for fiscal years beginning after December 15, 2010. The adoption of this guidance, which is related to disclosure only, did not have a material impact on the Company’s financial position or results of operations.

In ~~September~~June ~~2006~~2009, the FASB issued ~~SFAS~~an ~~157,~~amendment ~~“Fair~~to ~~Value~~the ~~Measurements”~~accounting ~~(“SFAS~~and ~~157”). SFAS~~disclosure ~~157~~requirements ~~defines~~for ~~fair~~the ~~value,~~consolidation ~~establishes~~of aVIEs. This ~~framework~~amendment ~~for~~requires ~~measuring~~an ~~fair~~analysis ~~value,~~to ~~and~~determine ~~expands~~whether ~~disclosures~~a ~~about~~variable ~~fair~~interest ~~value~~gives ~~measurements. In February 2008,~~ the ~~FASB~~entity ~~issued~~a ~~FASB~~controlling ~~Staff~~financial ~~Positions~~interest ~~(“FSP”) 157-1,~~in ~~which~~a ~~amends~~variable ~~SFAS~~interest ~~157~~entity tofor ~~remove~~financial ~~leasing~~reporting ~~transactions~~purposes. ~~accounted~~The ~~for~~amendment ~~under~~requires ~~SFAS~~an ~~13,~~ongoing ~~“Accounting~~reassessment ~~for Leases”~~ and ~~FSP~~eliminates ~~157-2, which deferred~~ the ~~effective~~quantitative ~~date~~approach ofpreviously ~~SFAS~~required ~~157~~ for ~~all~~determining ~~non-financial~~whether ~~assets~~an ~~and~~entity ~~non-financial~~is ~~liabilities~~the ~~that~~primary ~~are~~beneficiary. ~~recognized~~This oramendment ~~disclosed~~is ateffective ~~fair~~for ~~value in~~ the ~~financial~~Company ~~statements on a nonrecurring basis to fiscal years~~ beginning ~~after~~August ~~November 15~~1, ~~2008~~2010. The Company ~~does~~adopted ~~not believe~~ the ~~adoption~~amendment ofAugust ~~SFAS~~1, ~~157~~2010 ~~for nonfinancial assets~~ and ~~liabilities~~it ~~will~~did not have aany ~~material~~ impact on ~~its~~the ~~consolidated~~Company’s financial position, or results of operations ~~or cash flows~~.

In ~~April~~ October 2009, the FASB issued ~~FSP 157-4,~~authoritative ~~“Determining~~guidance ~~Fair~~about ~~Value When~~ the ~~Volume~~accounting ~~and Level of Activity~~ for ~~the~~revenue ~~Asset~~contracts orcontaining ~~Liability~~multiple ~~Have~~elements, ~~Significantly~~allowing ~~Decreased~~the ~~and~~use ~~Identifying~~of ~~Transactions~~companies’ ~~That~~estimated ~~Are~~selling ~~Not~~prices ~~Orderly~~as ”the ~~(“FSP 157-4”).~~value ~~FSP 157-4~~for ~~amends~~deliverable ~~SFAS~~elements ~~157,~~under ~~“Fair~~certain ~~Value~~circumstances ~~Measurements”~~and to ~~provide additional~~eliminate ~~guidance on estimating fair value when~~ the ~~volume~~use ~~and level~~ of ~~activity~~the ~~for~~residual anmethod ~~asset or liability significantly decreased in relation to market activity~~ for ~~the~~allocation ~~asset~~of ordeliverable ~~liability~~elements. This ~~The FSP also provides additional~~ guidance ~~on circumstances that may indicate that a transaction~~ is ~~not orderly. FSP 157-4 is~~ effective for ~~interim~~the ~~and~~Company ~~annual~~beginning ~~periods~~January ~~ending after June 15~~1, ~~2009 with early application permitted for periods ending after March 15, 2009~~2011. The Company’s ~~adoption~~is ofcurrently ~~FSP~~evaluating ~~157-4,~~the ~~effective July~~impact ~~31,~~this ~~2009,~~standard ~~did~~will ~~not~~ have ~~a material impact~~ on its ~~consolidated~~ financial ~~position, results of operations or cash flows.~~statements

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115”, which is effective for fiscal years beginning after November 15, 2007. SFAS No. 159 is an elective standard which permits an entity to choose to measure many financial instruments and certain other items at fair value (Fair Value Option). Election of the Fair Value Option is made on an instrument-by-instrument basis and is irrevocable. At the adoption date, unrealized gains and losses on financial assets and liabilities for which the Fair Value Option has been elected would be reported as a cumulative adjustment to beginning retained earnings. Following the election of the Fair Value Option for certain financial assets and liabilities, the Company would report unrealized gains and losses due to changes in fair value in earnings at each subsequent reporting date. The Company adopted SFAS159 effective August 1, 2008 which did not have a material impact on the Company’s operating results, financial position or cash flows as the Company did not elected the Fair Value Option for any of its financial assets or liabilities.

In April 2009, the FASB issued FSP 115-2, “Recognition and Presentation of Other-Than-Temporary Impairments” (“FSP 115-2”). FSP 115-2 provides new guidance on the recognition of Other-Than-Temporary-Impairments (“OTTI”) and provides some new disclosure requirements. FSP 115-2 is effective for interim and annual periods ending after June 15, 2009 with early application permitted for periods ending after March 15, 2009. The Company’s adoption of FSP 115-2, effective July 31, 2009, did not have a material impact on its consolidated financial position, results of operations or cash flows.

F-11

In May 2009, the FASB issued SFAS 165, “Subsequent Events” (“SFAS 165”). SFAS 165 provides general standards for the accounting and reporting of subsequent events that occur between the balance sheet date and issuance of financial statements. SFAS 165 requires the issuer to recognize the effects, if material, of subsequent events in the financial statements if the subsequent event provides additional evidence about conditions that existed as of the balance sheet date. The issuer must also disclose the date through which subsequent events have been evaluated and the nature of any non-recognized subsequent events. Non-recognized subsequent events include events that provide evidence about conditions that did not exist as of the balance sheet date, but which are of such a nature that they must be disclosed to keep the financial statements from being misleading. FAS 165 is effective for interim and annual periods ending after June 15, 2009. The Company adopted SFAS 165 effective July 31, 2009. Since FAS 165 at most requires additional disclosures, the Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.

t. Recent accounting pronouncements

On December 4, 2007, the FASB issued SFAS No. 160, “Noncontrolling interest in Consolidated Financial Statements”. SFAS No. 160 requires all entities to report noncontrolling (minority) interests in subsidiaries as equity in the consolidated financial statements. The statement establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation and expands disclosures in the consolidated financial statements. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. The Company does not expect the adoption of SFAS 160 will have a material impact on its consolidated financial position, results of operations or cash flows.

On December 4, 2007, the FASB issued SFAS No.141R, “Business Combinations”. SFAS No. 141R requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed, establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to expand disclosures about the nature and financial effect of the business combination. SFAS No. 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company does not expect the adoption of SFAS 160 will have a material impact on its consolidated financial position, results of operations or cash flows.

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (“SFAS 167”). This statement amends certain requirements of FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities”. Among other accounting and disclosure requirements, SFAS 167 replaces the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity and the obligation to absorb losses of the entity or the right to receive benefits from the entity. SFAS 167 becomes effective for interim and annual periods beginning after November 15, 2009. The Company does not expect the adoption of SFAS 167 to have a material impact on its consolidated financial position, results of operations or cash flows.

Effective July 1, 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162” (“ASC”), which became the single official source of authoritative, nongovernmental GAAP. The historical GAAP hierarchy was eliminated and the ASC became the only level of authoritative GAAP, other than guidance issued by the SEC. All other literature became non-authoritative. ASC is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company does not expect the adoption of the ASC to have a material impact on its consolidated financial position, results of operations or cash flows.

4. CONCENTRATION OF CREDIT RISK

Financial instruments which potentially expose the Company to concentrations of credit risk, consist of cash and accounts receivable as of July 31, ~~2009~~2010 and ~~2008~~2009. The Company performs ongoing evaluations of its cash position and credit evaluations to ensure collections and minimize losses.

A portion of the Company’s cash at July 31, ~~2009~~2010 and ~~2008~~2009 is maintained at various financial institutions in the PRC which do not provide insurance for amounts on deposit. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk in this area.

For the years ended July 31, ~~2009~~2010 and ~~2008~~2009, the Company’s sales were mainly made to customers located in the PRC. In addition, total accounts receivables as of July 31, ~~2009~~2010 and ~~2008~~2009 also arose from customers located in the PRC.

A significant percentage of the Company’s business is generated from a small number of customers. However, due to the immaterial amount of revenue generated, the Company does not believe they are exposed to significant concentration of credit risk in this area.

F-1210

5. ~~PREPAID EXPENSES~~ INVENTORIES

Prepaid expenses are mainly for deposit in advance for purchase of raw materials. The term of the advances is from 30 days to 180 days.

6. INVENTORIES

Inventories consist of the following:

	July 31,
	2009			2008
	2010			2009
Raw material	$	~~499~~521,~~610~~126		$	~~357~~499,~~696~~610
Work-in-progress		1,~~054~~556,~~871~~799			~~635~~1,~~457~~054,871
Finished goods		~~114~~264,~~590~~419			114,~~320~~590
Others		-			20,229
		2,342,344			1,669,071
		1,669,071			1,127,702
Less: Allowance for obsolescence		(1,702,604	)		(1,021,028	)
Less: Allowance for obsolescence		(1,021,028	)		(563,851	)
Inventory, net	$	639,740		$	648,043
Inventory, net	$	648,043		$	563,851

76. DUE FROM RELATED PARTIES

Due from related parties consist of the following:

	July 31,
Name and Description of Related Parties	~~2009~~2010		~~2008~~2009
Sun, Shouquan - CEO; Stockholder	$	-	$	650,917
Sun, Shouquan - CEO; Stockholder and companies under his contol	$	8,890	$	297,097
Sun, Shouan - Sun, Shouquan's brother; Stockholder		-		18,366
Wang, Guangyu - Stockholder		1,801		1,787
Wang, Guangyu - Stockholder		1,787		1,782
Total	$	10,691	$	298,884
Zhang, Luming - Stockholder		-		52,586
Mudanjiang Sanye Wind Energy Power Co., Ltd. - A company controlled by Sun, Shouan		161,227		160,847
Harbin New World Real Estate Co., Ltd. - A company controlled by Sun, Shouquan		135,870		135,551
Total	$	298,884	$	1,020,049

F"Due from related parties" represents loans that are unsecured, non-13interest bearing and have no fixed terms of repayment, and therefore are not considered current assets.

~~"Due from related parties" represents loans that are unsecured, non-interest bearing and have no fixed terms of repayment, and therefore are not considered current assets.~~ The balance owed by Shouquan Sun, the President and CEO, and the company under his control, totaled $~~297~~8,~~097~~890 and $~~947~~297,~~315~~097 as of July 31, ~~2009~~2010 and ~~2008~~2009, respectively. The ~~loans were made by Harbin SQ before the acquisition of Harbin SQ by the~~ Company ~~and there~~ has ~~been no material modification or renewal of the loan after the date of acquisition. The Company has~~ changed its related policy and procedures in line with the prohibition on personal loans to executives contained in Section 402 of the Sarbanes-Oxley Act of 2002. ~~Since~~ April 30, 2008 to July 31, 2008, the Company’s President and CEO had repaid $965,942 of the original loan ($269,961 since the acquisition of Harbin SQ by the Company). During the fiscal year ended July 31, 2009, the Company’s President and CEO paid $650,917. The Company plans to settle all outstanding ~~balance~~balances of ~~this loan~~the loans in the near future.

~~8. PROPERTY AND EQUIPMENT~~F-11

7. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	July 31,
	2009			2008
	2010			2009
Buildings	$	8,~~665~~878,~~104~~375		$	-8,665,104
Machinery and equipment		523,771			468,051
Machinery and equipmen		1,350,455			523,771
Transportation equipment		~~433~~437,~~600~~239			~~467~~433,~~538~~600
Office equipment		~~141~~148,~~778~~926			~~130~~141,~~357~~778
		9,764,253			1,065,946
Total costs		10,814,995			9,764,253
Less: Accumulated depreciation		(549,659	)		(83,503	)
Less: accumulated depreciation		(1,186,392	)		(549,659	)
Property and equipments, net	$	9,~~214~~628,~~594~~603		$	~~982~~9,~~443~~214,594
Construction in progress	$	156,503		$	797,016

~~Construction~~The indepreciation ~~progress~~expense $was ~~797~~$631,~~016~~471 and $475,342 6for the years ended July 31,~~243~~ 2010 and 2009,~~097~~ respectively.

~~The construction in progress at July 31, 2008 is related to construction of manufacturing facility and office building which were completed and put into use at the beginning of the current fiscal year~~8. ~~The construction in progress at July 31, 2009 is related to an unfinished module for wind turbine blade.~~ GOODWILL

~~The~~Goodwill ~~depreciation~~represents ~~expense~~the ~~was~~excess ~~$475,342~~of the purchase price of an acquired business over the fair value of the identifiable assets acquired and ~~$14,483~~liabilities assumed. The Company evaluates its goodwill for impairment on an annual basis, or whenever events or changes in circumstances indicate that the ~~year~~carrying ~~ended~~value of a reporting unit may exceed its fair value. Management has elected July 31 as the annual assessment date. The Company only has one reporting unit whch is Harbin SQ. The Company performed its annual impairment test as of July 31, ~~2009~~2010. In performing goodwill impairment testing, the Company determines the fair value of reporting unit using a discounted cash flow (“DCF”) approach. In applying the DCF approach, management forecasts cash flows over a five year period using assumptions of current economic conditions and ~~2008~~future expectations of earnings. This analysis requires the exercise of significant judgment, ~~respectively~~including judgments about appropriate discount rates based on the assessment of risks inherent in the amount and timing of projected future cash flows. The ~~They~~derived ~~are~~discount ~~broken~~rate ~~down~~may fluctuate from period to period as ~~follows:~~it is based on external market conditions. All of these assumptions are highly subjective and based on unobservable level 3 inputs. Updates to these assumptions in future periods, particularly changes in discount rates and growth rates, could result in different results of goodwill impairment tests and it is possible that such differences could have a material impact on our financial statements. Based on the analysis, the Company detemined that goodwill related to its Harbin SQ reporting unit was fully impaired resulted from an anticipated declines in sales and future operating performance and cash flows. As a result, the Company recorded a non-cash impairment charge of $8,110,960 during the fiscal year ended July 31, 2010.

	Year Ended July 31, 2009		Year Ended July 31, 2008
Cost of sales	$	39,240	$	5,422
Operating expenses		436,102		9,061
Total	$	475,342	$	14,483

F-12

F9. LONG-14LIVED ASSETS AND OTHER INTANGIBLE ASSETS

9. ACQUISITION

On May 26, 2008, the Company completed the acquisition of 100% of the equity interests of Power Profit Technology Development Limited (“Power Profit”) and 82.14% of the equity interests of its subsidiary, Harbin SQ Wind Power Co., Ltd. (formerly Harbin Sanye Wind Energy Technology Co., Ltd.)(“Harbin SQ”). The results of operation of Power Profit and Harbin SQ have been included in the consolidated financial statements since that date.

Power Profit is a company incorporated under the laws of Hong Kong, People’s Republic of China. Harbin SQ, located in Harbin, Heilongjiang Province, is a company incorporated under the laws of the People’s Republic of China and principally engaged in the business of harvesters and blades for wind generators. As a result of the acquisition, the Company has placed itself at the forefront of an emerging industry in an emerging market. The Company anticipates that the acquisition of a revenue producing, sustainable energy company will facilitate its growth and expansion.

The aggregate purchase price was the Company’s 15,000,000 common shares which was valued at $20,220,000 based upon the Company’s average common stock price of $1.348. The average stock price was based upon the average closing prices of the Company’s common stock during the five business days commencing two days before the acquisition was announced.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

	May 26, 2008
Current assets	$	1,543,803
Prepayment and deposit		884,256
Due from related parties		1,290,010
Property and equipment		6,812,281
Goodwill		8,110,960
Intangible assets		12,207,135
Deferred charges		6,195
Total assets acquired		30,854,640
Current liabilities		8,001,469
Total liabilities assumed		8,001,469
Net assets acquired	$	22,853,171

The $22,853,171 Power Profit net assets acquired included $2,633,171 minority interest at the acquisition date May 26, 2008. The reconciliation between the aggregate purchase price of $20,220,000 and the $22,853,171 Power Profit net assets acquired is as follows:

Fair value of Harbin SQ’s net assets on May 26, 2008 (acquisition date)	$	14,743,398
Share % of minority interest		17.86	%
Fair value of net assets in Harbin SQ belonging to minority interest	$	2,633,171
Add: Aggregate purchase price		20,220,000
Net assets acquired	$	22,853,171

F-15

The $8,110,960 of goodwill represents the excess of the purchase price over the fair market value of acquired net assets. Goodwill was assigned to only one industry segment the Company operates and is not deductible for tax purposes. At July 31, 2009, the Company performed their annual test of goodwill for impairment. The goodwill was tested by performing the two-step goodwill impairment test. For the year ended July 31, 2009, no impairments were recorded.

On the May 26, 2008 acquisition date, the balance of the land use rights was $12,207,135, comprised of the land use right in Binxi County ($1,898,308) and the land user right in Harbin City ($10,308,827). For the Harbin City land use right, the fair value was determined using the total $10,308,827 price of the underlying sales agreement (equivalent to 70,500,000 in Chinese currency). For the Binxi County land user right, the fair value of $1,898,308 was calculated based on the size of the land and the unit price based on government regulated price.

The land use rights have a weighted-average useful life of 40 years with no residual value. The Harbin City land use right was sold at the end of the current fiscal year. See Note 10.

The following consolidated pro forma financial information presents the combined results of operations of the Company and Power Profit for the year ended July 31, 2008 as if the acquisition had occurred at August 1, 2007.

	Year Ended July 31, 2008
Revenue	$	446,409
Net Loss		926,100
Basic and diluted loss per common share	$	(0.02	)

The amounts of revenue and net loss of Power Profit since the acquisition date of May 26, 2008 included in the consolidated statement of operation for the year ended July 31, 2008 are $148,383 and $151,601 respectively.

10. INTANGIBLE ASSETS

Intangible assets consist of the following:

	July 31,
	2009			2008
	2010			2009
Land Use Rights – Binxi County	$	1,~~898~~899,~~308~~423		$	1,898,308
Land Use Rights – Harbin City					10,319,796
Trademarks		1,419			1,407
Trademarks		1,407			-
Software		6,355			6,303
Software		6,303			6,288
		1,907,197			1,906,018
		1,906,018			12,224,392
Less: Accumulated amortization		(114,537	)		(66,902	)
Less: Accumulated amortization		(66,902	)		(51,319	)
Intangible assets, net	$	1,792,660		$	1,839,116
Intangible assets, net	$	1,839,116		$	12,173,073

Valuation of Long-lived Assets and Other Intangible Assets. Long-lived assets consist primarily of our property, plant, and equipment. Our intangible assets consist primarily of land use right. intellectual property that has been internally developed or purchased. Intangible assets are amortized using the straight-line method over estimated useful lives. The ~~amortization~~Company ~~expense~~reviews ~~was~~long-lived ~~$48~~assets and other intangible assets for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. Our impairment testing consists of determining whether the carrying amount of the long-lived asset (asset group) is recoverable. That is,~~334~~ whether the sum of the future undiscounted cash flows expected to result from the use and ~~$51~~eventual disposition of the asset (asset group) exceeds its carrying amount. In making this determination,~~319~~ ~~for~~the Company uses certain assumptions, including estimates of future cash flows expected to be generated by these assets, which are based on additional assumptions such as asset utilization, the ~~year~~length ~~ended~~of service that assets will be used in our operations, and estimated salvage values. As of July 31, ~~2009~~2010, due to changes in estimates of future operating performance and ~~2008~~cash flows that occurred during the quarter, ~~respectively~~the Company tested for impairment of its long-lived assets and other intangible assets and based on that analysis, determined that no impairment existed. Based upon revised operational and cash flow forecasts, total future undiscounted cash flows still exceeded carrying value by over 33%, therefore the Company believes the carrying amount of its long-lived assets and other intangible assets is recoverable. However, if the Company is unable to achieve its projected cash flows, management may be required to perform additional impairment tests of its remaining long-lived assets and other intangible assets. The outcome of these additional tests may result in the Company recording additional impairment charges.

OnAmortization ~~November~~expense 6,related ~~2007, the Company signed a contract with Heilongjiang Nongkentaixing Real Estate Development Co. Ltd~~ to ~~sell~~intangible ~~the~~assets ~~Company’s land use rights in Harbin City. The total contract price~~ is ~~approximately~~generally ~~$10,308,827~~included ~~(equivalent to 70,500,000~~ in ~~Chinese~~SG&A ~~currency RMB). The Company did not reclassify the Harbin City land use right asset as “hold for sale”~~ on the ~~consolidated~~statements ~~balance sheet as~~ of ~~July 31, 2008 because the sale of the land use right requires regulatory approval from the Chinese government~~operations. Since the land use right is within the area subject to urban planning restrictions in Harbin City, the government will not process the transfer of this right until the whole identified area complies with the use regulated by urban planning. Since the area subject to urban planning restrictions is quite large, the Company expect this process to take a long time and the delay in the transfer of the land use right demonstrates that the Company cannot immediately sell this right. Therefore, as of July 31, 2008, the sales proceeds received is recorded as “Other Advance Receipts” (see Note 13) and the land use right in Harbin City remains on balance sheet as intangible assets.

~~During~~Amortization ~~the~~expense ~~current~~was ~~fiscal year~~$41,419 ~~the~~and ~~urban~~$48,334 ~~planning~~for ~~restriction is removed and~~ the ~~sales~~years ~~transaction~~ended isJuly ~~completed.~~31, ~~This~~2010 ~~sales~~and ~~transaction~~2009, ~~resulted in a total $1~~respectively.~~7 million loss on sales of assets. (Note 13)~~

~~F-16~~12. Sale of Land Use Rights

11On November 6, 2007, the Company signed a contract with Heilongjiang Nongkentaixing Real Estate Development Co. ~~SHORT~~Ltd ~~TERM~~to ~~LOAN~~sell the Company’s land use rights in Harbin City. The total contract price is approximately $10,308,827. The Company is obligated to clear the original buildings on the land before the transfer of the land use rights can be completed.

In October 2008, the title transfer was approved by the government and by July 31, 2009, the company had received net proceeds of $7,694,925. The remaining proceeds net of sales tax for the amount of $882,351 were included as accounts receivable at July 31, 2009. By January 31, 2010, the Company had received the proceeds. Loss on the disposal of land use rights for the amount of $1.7 million was recognized for the year ended July 31, 2009.

F-13

13. SHORT TERM LOAN

Short term loans consist of the following:

	July 31,
	2010		2009
	2009		2008
Bank loan 2010	$	2,217,000	$	-
12-month Bank Loan bearing interest at 5.841% per annum
Bank loan 2009		-		1,465,700
and maturing in February 2010	$	1,465,700	$	-
Loans from individuals		677,160		645,805
Loans from individuals		645,805		196,546
Short term loan		2,894,160		2,111,505
Short term loan	$	2,111,505	$	196,546

The Company pledged the building and land located in Binxi city as collateral of the bank loan.

Loans from individuals were made by individuals to cover the Company’s temporary cash shortages. The short term loans are unsecured and due onupon demand. Not all of the loans are interest-bearing. For interest bearing loans, the interest rate is ranging from 14% to 40% per annum.

~~Interest~~In ~~expenses~~June ~~for~~2010, the Company entered a 12-month short term ~~loans~~loan ~~are~~agreement with a bank. The principal amount is $~~239~~2,~~141~~217,000 and ~~$8,738~~the ~~for~~bearing interest in 6.903% per annum. The loan is guaranteed by the ~~year~~third ~~ended~~party ~~July~~guarantor ~~31,~~and ~~2009~~collateralized by the building and ~~2008,~~land ~~respectively~~use right of the Company.

In February of 2010, the Company matured a 12-month short term loan with a bank. ~~DUE~~ TOThe ~~RELATED~~principal ~~PARTIES~~amount was $1,465,700 and the interest was 5.841% per annum.

Interest expenses for short term loans are $648,435 and $239,141 for the years ended July 31, 2010 and 2009, respectively.

14. DUE TO RELATED PARTIES

Due to related parties consist of the following:

	July 31,
Name and Description of Related Parties	~~2009~~2010		~~2008~~2009
Ren, Jian – Prior CEO	$	51,980	$	51,859
Due to shareholders of Power Profit	$	2,447	$	-
Zhang, Luhui - Stockholder		3,418		4,504
Due to shareholders of China Wind Energy		49,953		-
Sun, Shouan - Sun, Shouquan's brother; Stockholder		19,999		-
Ren, Jian – Prior CEO		-		51,980
Sun, Shouquan - CEO; Stockholder		711		-
Zhang, Luhui - Stockholder		3,447		3,418
Total	$	76,108	$	56,363
Sun, Shouan - Sun, Shouquan's brother; Stockholder		20,167		19,999
Sun, Shouquan - CEO; Stockholder		-		711
Sun, Yulian		326,113		-
Sun, Weizhen		353,321		-
Zheng, Liping		120,096		-
Total	$	875,544	$	76,108

"Due to related parties" represents loans payable that are unsecured, non-interest bearing and have no fixed terms of repayment, and are therefore, deemed payable on demand.

~~13. OTHER ADVANCE RECEIPTS~~F-14

On November 6, 2007, the Company signed a contract with Heilongjiang Nongkentaixing Real Estate Development Co. Ltd to sell the Company’s land use rights in Harbin City. The total contract price is approximately $10,308,827. The Company is obligated to clear the original buildings on the land before the transfer of the land use rights can be completed. As of July 31, 2008, the Company had completed the clearance of the original buildings on the land and all costs related to the clearance of the buildings had been incurred.

As of July 31, 2008, the Company had received net proceeds of $7,603,673 from this sale. Since the legal process for title transfer has not been completed, the proceeds were recorded as other advance receipts.

In October 2008, the title transfer was approved by the government and by July 31, 2009, the company had received net proceeds of $7,694,925. The remaining proceeds net of sales tax for the amount of $882,351 was included as accounts receivable at July 31, 2009. Loss on the disposal of land use rights for the amount of $1.7 million was recognized for the year ended July 31, 2009. See Note 10.

F-17

14. GERNERAL AND ADMINISTRATIVE

The amount of general and administrative expenses mainly composed of the following:

	Year EndedJuly 31, 2009		Year Ended July 31, 2008		Nov. 27, 2006 (Inception) to July 31, 2009
Professional fees	$	308,495	$	179,106	$	522,678
Office expenses		70,120		8,155		78,275
Salary and wages		417,082		76,837		495,222
Employee insurance		72,376		1,392		73,768
Utilities		61,550		709		62,259
Research and development		82,650		-		82,650
Amortization		48,334		51,319		99,653
Depreciation		436,102		9,061		445,163
Write-off prepaids, prepayment and payables etc.		1,017,628		-		1,017,628
Others		67,058		78,590		147,085
	$	2,581,395	$	405,169	$	3,024,381

15. CHINA CONTRIBUTION PLAN

Full time employees of the Company participate in a government-mandated multi-employer defined contribution plan pursuant to which certain retirement, medical and other welfare benefits are provided to employees. Chinese labor regulations require the Company’s subsidiaries to pay to the local labor bureau a monthly contribution at a stated contribution rate based on the monthly basic compensation of qualified employees. The relevant local labor bureau is responsible for meeting all retirement benefit obligations; the Company has no further commitments beyond its monthly contribution.

The Company made the provisions based on the number of qualified employees and the rate and base regulated by the government. However, the Company did not make full monthly contribution to these funds. In the event that any current or former employee files a complaint with the PRC government, the Company may be subject to administrative fines. As the Company believes that these fines would not be material, no accrual for such fines has been made in this regard.

16. STATUTORY RESERVES

Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC ("PRC GAAP") at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). The Company did not make any appropriations to the reserve funds mentioned above due to lack of profit after tax since commencement of operations.

F-18

17. INCOME TAX

The Company accounts for income taxes ~~pursuant~~under toFASB ~~Statement of Financial Accounting Standard No. 109~~S, Accounting for Income Taxes, which requires recognition of deferred income tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns.

~~Prior~~The ~~to January 1, 2008, the~~ Company was ~~governed~~rewarded byhigh ~~the~~technology ~~Income~~entity ~~Tax~~in ~~Law~~fiscal ofyear ~~the~~2010 ~~People’s Republic of China concerning Foreign Investment Enterprises~~ and ~~Foreign Enterprises and local income tax laws (~~the ~~previous income~~ tax ~~laws and rules). Pursuant to the previous income tax laws and rules, wholly-owned foreign enterprises were subject to tax at a statutory~~ rate ofwill ~~33%~~be ~~(30~~15% ~~state~~when ~~income~~it ~~tax~~makes ~~plus 3% local income tax)~~profit.

InDue ~~March~~to ~~2007,~~ the ~~Chinese~~Company’s ~~government~~net ~~enacted~~loss ~~the~~position ~~Corporate~~there ~~Income~~was ~~Tax~~no ~~Law,~~provision ~~and~~for ~~promulgated~~income ~~related regulations, which were effective January 1, 2008~~taxes. The ~~Corporate~~Company’s ~~Income~~effective ~~Tax Law, among other things, imposes a unified income~~ tax rate ~~of 25%~~ for ~~both~~the ~~domestic~~year ~~and~~ended ~~foreign~~July ~~invested~~31, ~~enterprises.~~2010 ~~The previous income tax laws~~ and ~~rules,~~2009 ~~which~~was ~~stipulated income~~0% ~~tax rates for domestic~~ and ~~foreign~~0% ~~invested~~due ~~enterprises~~to atvaluation ~~different~~allowance ~~rates, expired upon the effectiveness~~ of ~~the~~net ~~Corporate~~operating ~~Income Tax Law~~loss.

Due to the Company’s net loss, there was no provision for income taxes. The Company’s effective tax rate for the year ended July 31, 2009 and 2008 was 0% and 0% due to the net loss position in both years.

The Company’s taxes were subject to a full valuation allowance as follows:

	Year Ended July 31, 2009			Year Ended July 31, 2008
	Year Ended			Year Ended
Computed tax benefit at statutory rate	$	(1,019,304	)	$	(90,952	)
	July 31, 2010			July 31, 2009
Change in valuation allowance		1,019,304			90,952
Computed tax benefit at statutory rate	$	(732,549	)	$	(553,567	)
Income tax expense (benefit)	$	-		$	-
Change in valuation allowance		732,549			553,567
Income tax expense (benefit)		-			-

The net deferred tax asset generated by the loss carry-forward has been fully reserved due to the uncertainly of its realizability.

The tax authority of the PRC Government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises had completed their relevant tax filings, hence the Company’s tax filings may not be finalized. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company’s tax filings which may lead to additional tax liabilities.

The Company has no United States corporate income tax liability as of July 31, ~~2009~~2010 and ~~2008~~2009.

~~18. SEGMENT INFORMATION~~F-15

~~The Company operates in one industry segment – research~~18. CONTINGENCIES, ~~development,~~RISKS ~~manufacture,~~AND ~~marketing and sales of harvesters. Substantially all of the Company’s identifiable assets and operations for all periods presented were located in the PRC.~~UNCERTAINTIES

F-19

19. CONTINGENCIES, RISKS AND UNCERTAINTIES

Country Risk

The Company has significant investments in the PRC. The operating results of the Company may be adversely affected by changes in the political and social conditions in the PRC and by changes in Chinese government policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. The Company can give no assurance that those changes in political and other conditions will not result in have a material adverse effect upon the Company’s business and financial condition.

Source of Supply

The Company purchases components for its products from a number of suppliers. However, on occasion, a customer’s specifications may require us to purchase components from a specific supplier. The Company does not have any long term contracts with any of its suppliers, and the Company believes that alternative suppliers are available. Although the Company has not been subject to shortages for any of its components, since it does not have long-term contracts, the Company may be subject to cutbacks and price increases which it may not be able to pass on to its customers in the event that the demand for components generally exceeds the capacity of its suppliers.

Loan to Officer

Prior to the acquisition by the Company, Harbin SQ forwarded a loan to Shouquan Sun, the Company’s President and CEO. The balance owed by the President and CEO, and the ~~real estate~~ company under his control, totaled $~~297~~8,~~097~~890 and $~~947~~297,~~315~~097 as of July 31, ~~2009~~2010 and ~~2008~~2009, respectively. Section 402 of the ~~Sarbanese~~Sarbanes-Oxley Act of 2002 prohibits loans or the extension of credit to officers and directors of a publicly traded company or any of its subsidiaries. The Company is currently in contravention of these provisions and faces possible regulatory action by the SEC.

The Company’s management believes that the following will ~~militate~~mitigate against potential action by the SEC:

- The loan was provided to Mr. Sun prior to its acquisition by the Company; - no monies have been forwarded to the Company’s President since he became an officer and director of the Company; - from April 30, 2008 to July 31, 2008 a total of $965,942 of the outstanding balance of the loan has been repaid by the Company’s President; and $650,917 were paid back to the Company from August 1, 2008 to July 31, 2009. The Company plans to settle all outstanding balance of this loan in the near future.

~~20.~~- ~~SUBSEQUENT~~No ~~EVENTS~~more fund have been forwarded to Shouquan Sun since he became the President and CEOof the Company;

- The ~~Company~~outstanding ~~has~~balance ~~evaluated~~of ~~subsequent~~the ~~events~~loan ~~through October 29, 2009, which~~ is ~~the~~immaterial ~~date~~as ~~the~~of ~~financial~~July ~~statements were issued~~31, ~~and~~2010. ~~has~~The ~~concluded~~Company ~~that~~plans noto ~~such~~settle ~~events~~all oroutstanding ~~transactions~~balance ~~took~~of ~~place~~this ~~which~~loan ~~would~~in ~~require~~the ~~disclosure~~near ~~herein~~future.

F-2016

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

There were no disagreements or reportable events in connection with any changes in accountants undertaken by us.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of July 31, ~~2009~~2010. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.

Management Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of our management, including our Chief Executive Officer, ~~the~~and ~~Company~~Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting asbased ofon ~~July 31, 2009 using~~ the ~~criteria~~framework ~~established~~ in Internal Control— – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the evaluation performed, our management concluded there is a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

AThe material weakness isrelates ato ~~deficiency,~~the orlack ~~combination~~ of ~~deficiencies,~~personnel inwith ~~internal~~the ~~control~~appropriate ~~over~~knowledge ~~financial reporting, such that there is a reasonable possibility that a material misstatement~~ of ~~our~~generally ~~annual~~accepted oraccounting ~~interim~~principles ~~financial~~(GAAP) ~~statements~~and ~~will~~the ~~not~~SEC bereporting ~~prevented~~experience, orcoupled ~~detected~~with on a ~~timely~~lack ~~basis.~~of Insegregation ~~our assessment~~ of ~~the~~duties ~~effectiveness~~and ofminimal ~~internal~~staffing. To ~~control~~remedy ~~over financial~~this ~~reporting~~material asweakness, ofmanagement ~~July~~is ~~31,~~actively ~~2009,~~searching wefor ~~determined~~competent ~~that~~candidate ~~control~~and ~~deficiencies~~working ~~existed~~with ~~that~~outside ~~constituted~~consultants ~~material~~in ~~weaknesses,~~the asfinancial ~~described~~reporting ~~below~~process.

1.This Weannual ~~have~~report nodoes ~~audit~~not ~~committee~~include asan ~~none~~attestation report of ~~our~~the ~~directors~~Company’s isregistered ~~considered~~public ~~independent~~accounting asfirm ~~each~~regarding isinternal ~~also~~control anover ~~officer~~financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the rules of usthe orSEC ~~our~~that ~~subsidiaries.~~permit the Company to provide only management’s report in this annual report

~~2. There is a risk of management override given that our officers have a high degree of involvement in our day to day operations.~~15

3.Changes ~~There~~in isInternal noControl ~~policy~~Over onFinancial ~~fraud and no code of ethics at this time, though we plan to implement such policies in fiscal 2009.~~Reporting

4.During Wethe dofourth ~~not~~quarter ~~have~~of ~~sufficient~~2010, ~~executive~~we ~~personnel~~implemented the following measures to ~~implement~~improve ~~effective~~our ~~segregation~~internal ofcontrol ~~duties.~~over financial reporting:

~~Management~~(1) Engaged isoutside ~~currently~~consultants ~~evaluating~~to ~~remediation~~assist ~~plans~~in ~~for~~our assessment of the ~~above~~effectiveness ~~control~~of ~~deficiencies.~~the company’s internal controls over financial reporting; and

~~Accordingly,~~(2) Developed weand ~~concluded~~instituted ~~that~~new ~~these~~internal control ~~deficiencies~~procedures to ~~resulted~~strengthen inour amonth-end ~~reasonable~~close ~~possibility~~and ~~that a material misstatement of the annual or interim~~ financial ~~statements~~reporting ~~will not be prevented or detected on a timely basis by the company’s internal controls.~~processes;

AsWe abelieve ~~result~~these ofmeasures ~~the~~have ~~material~~strengthened ~~weaknesses~~our ~~described above, management has concluded that the Company did not maintain effective~~ internal control over financial reporting asand ofdisclosure ~~July~~controls ~~31,~~and ~~2009 based on criteria established in Internal Control—Integrated Framework issued by COSO~~procedures.

~~Malone~~Our &senior ~~Bailey,~~executives ~~PC,~~and anour ~~independent~~Board ~~registered~~of ~~public~~Directors ~~accounting~~are ~~firm,~~committed ~~was~~to ~~not~~achieving ~~required~~and tomaintaining a strong control environment, high ethical standards, and ~~has~~financial ~~not~~reporting ~~issued~~integrity. aThis ~~report~~commitment ~~concerning~~has ~~the~~been ~~effectiveness~~and ofwill ~~our~~continue ~~internal~~to ~~control~~be ~~over~~communicated ~~financial~~to ~~reporting~~and asreinforced ofwith ~~July~~our ~~31,~~employees ~~2009~~and to external stakeholders.

~~Changes~~In inaddition, ~~Internal~~under ~~Controls~~the direction of the Board of Directors, management will continue to review and make changes to the overall design of our internal control environment, as well as policies and procedures to improve the overall effectiveness of internal control over financial reporting and our disclosure controls and procedures.

~~During~~Except for the ~~quarter~~changes ~~ended~~discussed ~~July 31~~above, ~~2009~~ there ~~were~~was no ~~changes~~change in our internal control over financial reporting that occurred during the fourth quarter of 2010 that has materially affected, or ~~are~~is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

1716

PART III

Item 10. Directors, Executive Officers, ~~Promoters~~ and ~~Control~~Corporate ~~Persons; Compliance with Section 16(a) of the Exchange Act.~~Governance

The following table sets forth the name, age, and position of our executive officers and directors of as of ~~October~~December 297, ~~2009~~2010.

Name	Age	Position
Shouquan Sun	5152	President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Treasurer, Secretary and Director President and director of Harbin SQ, our majority owned subsidiary.
Xiya Sun	2223	Director Director of XingYe, our wholly owned subsidiary
Huaiwen Zheng	2824	Director

The directors will serve as directors until our next annual shareholder meeting or until a successor is elected who accepts the position. Officers hold their positions at the will of the Board of Directors, absent any employment agreement. There are no arrangements, agreements or understandings between non-management shareholders and management under which non-management shareholders may directly or indirectly participate in or influence the management of our affairs.

Biographies

Shouquan Sun, President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director

Shouquan Sun has been our President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and director since May 26, 2008. Mr. Sun founded Harbin SQ in 2000 and has been Chairman, Chief Executive Officer and director of Harbin SQ from its inception to the present. Mr. Sun has over 19 years experience in business development and management. Mr. Sun is also the inventor, or co-inventor, of several patents secured by Harbin SQ relating to our wind turbine blades. Mr. Sun was also awarded two national-level scientific technology honors in 1992: the Provincial Technology Leader and National Expert with Outstanding Contribution entitled to Government Special Allowance for life in 1995. Shouquan Sun holds no other directorships in other public companies.

Xiya Sun, Director

Xiya Sun was appointed as our director on November 29, 2007. In April 2007, Ms. Sun was appointed as a director of XingYe, one of our subsidiaries. Ms. Sun obtained a bachelor degree from Northeast Agriculture University in Harbin, which she attended from 2002 to 2006. During her time there, Ms. Sun received a number of scholarships and awards. She followed up her degree with training in administrative skills, including human resource management and organizational structures, management training, rewarding and performance; and recruitment schedule planning from 2006 to April 2007.

Huaiwen Zheng, Director

We appointed Huaiwen Zheng as our director on November 29, 2007. Mr. Zheng attended Harbin Industrial University in Harbin from September 1998 to July 2002, where he received a degree in engineering. Thereafter, from July 2002 to July 2006, he worked at XingYe, one of our subsidiaries, where he played a key role in the quality control of blade designing and three-dimensional sculpting of the blades, as well as supervising the blade shaking analysis, module tire processing and production, and blade production and testing. From July 2006 to April 2007, he completed an administrative skills training course in human resource management and organization structure, management training, rewarding and performance; and recruitment schedule planning. In April 2007, he became the assistant head engineer at XingYe, overseeing blade design.

1817

Board of Directors and Director Nominees

Our Board of Directors met in person or via telephone occasionally during our fiscal year ended July 31, ~~2009~~2010.

We do not have a nominating committee. The Board of Directors, sitting as a Board, selects individuals to stand for election as members of the Board. Since the Board of Directors does not include a majority of independent directors, the decision of the Board as to director nominees is made by persons who have an interest in the outcome of the determination. The Board will consider candidates for directors proposed by security holders, although no formal procedures for submitting candidates have been adopted. Unless otherwise determined, not less than 90 days prior to the next annual Board of Directors' meeting at which the slate of Board nominees is adopted, the Board will accept written submissions of proposed nominees that include the name, address and telephone number of the proposed nominee; a brief statement of the nominee’s qualifications to serve as a director; and a statement as to why the shareholder submitting the proposed nominee believes that the nomination would be in the best interests of shareholders. If the proposed nominee is not the same person as the shareholder submitting the name of the nominee, a letter from the nominee agreeing to the submission of his or her name for consideration should be provided at the time of submission. The letter should be accompanied by a résumé supporting the nominee's qualifications to serve on the Board of Directors, as well as a list of references.

The Board identifies director nominees through a combination of referrals from different people, including management, existing Board members and security holders. Once a candidate has been identified, the Board reviews the individual's experience and background and may discuss the proposed nominee with the source of the recommendation. If the Board believes it to be appropriate, Board members may meet with the proposed nominee before making a final determination whether to include the proposed nominee as a member of management's slate of director nominees submitted to shareholders for election to the Board.

Among the factors that the Board considers when evaluating proposed nominees are their knowledge of, and experience in business matters, finance, capital markets and mergers and acquisitions. The Board may request additional information from the candidate prior to reaching a determination. The Board is under no obligation to formally respond to all recommendations, although as a matter of practice, it will endeavor to do so.

Director Independence

Our securities are quoted on the OTC Bulletin Board which does not have any director independence requirements. Once we engage further directors and officers, we will develop a definition of independence and scrutinize our Board of Directors with regard to this definition.

Audit Committee

The functions of the Audit Committee are currently carried out by our Board of Directors. Our Board of Directors has determined that we do not have an audit committee financial expert on our Board of Directors carrying out the duties of the Audit Committee. The Board of Directors has determined that the cost of hiring a financial expert to act as a director of us and to be a member of the Audit Committee or otherwise perform Audit Committee functions outweighs the benefits of having a financial expert on the Audit Committee.

Significant Employees

Other than the directors and officer described above, we do not expect any other individuals to make a significant contribution to our business.

Family Relationships

There are no family relationships among our officers or directors.

~~Legal Proceedings~~18

~~None~~Involvement ~~of our directors, executive officers, promoters or control persons have been involved~~ in ~~any~~Certain ofLegal ~~the following events during the past five years:~~Proceedings

·To ~~any~~the ~~bankruptcy~~best ~~petition~~of ~~filed~~our byknowledge, ornone ~~against any business~~ of ~~which~~our ~~such~~directors ~~person was a general partner~~ or executive ~~officer~~officers ~~either~~has, atduring the ~~time~~past often ~~the bankruptcy or within two~~ years ~~prior to that time;~~:

·● ~~any~~been ~~conviction~~convicted in a criminal proceeding or ~~being~~been subject to a pending criminal proceeding (excluding traffic violations and other minor ~~offenses~~offences);

·● ~~being~~had ~~subject~~any tobankruptcy ~~any~~petition ~~order,~~filed ~~judgment,~~by or ~~decree,~~against ~~not~~the ~~subsequently~~business ~~reversed,~~or ~~suspended~~property orof ~~vacated~~the person, or of any ~~court~~partnership, corporation or business association of ~~competent~~which ~~jurisdiction,~~he ~~permanently~~was a general partner or ~~temporarily~~executive ~~enjoining~~officer, ~~barring,~~either ~~suspending~~at orthe ~~otherwise~~time ~~limiting~~of ~~his~~the ~~involvement~~bankruptcy infiling ~~any~~or ~~type~~within oftwo ~~business,~~years ~~securities~~prior orto ~~banking~~that ~~activities~~time; or

·● ~~being~~been ~~found~~subject byto aany order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction ~~(in~~or afederal ~~civil~~or ~~action)~~state authority, ~~the~~permanently ~~SEC~~ or ~~the~~temporarily ~~Commodity~~enjoining, ~~Futures~~barring, ~~Trading~~suspending ~~Commission~~or tootherwise ~~have~~limiting, ~~violated~~his ainvolvement ~~federal~~in orany ~~state~~type of business, securities, orfutures, commodities, ~~law~~investment, ~~and~~banking, ~~the~~savings ~~judgment~~and ~~has~~loan, ~~not~~or ~~been~~insurance ~~reversed~~activities, ~~suspended,~~ or ~~vacated.~~to be associated with persons engaged in any such activity;

19● been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

●

been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

●

been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Except as set forth in our discussion below in “Certain Relationships and Related Transactions, and Director Independence – Transactions with Related Persons,” none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

Section 16(a) Beneficial Ownership Compliance Reporting

Section 16(a) of the Securities Exchange Act requires aour ~~company’s~~executive ~~directors~~officers and ~~officers~~directors, and persons who own more than ~~ten-percent (~~10%) of ~~the~~our ~~company’s~~ common stock, to file ~~with the Securities and Exchange Commission~~ reports ofregarding ownership onof, ~~Form~~and 3transactions ~~and~~in, ~~reports~~our ofsecurities ~~change~~with inthe ~~ownership~~Securities onand ~~Forms~~Exchange 4Commission and 5to ifprovide ~~the~~us ~~company~~with ~~has~~copies aof ~~class~~those offilings. Based ~~securities~~solely ~~registered under~~on ~~Section~~our 12review of the ~~Exchange~~copies ~~Act. We~~of ~~did~~such ~~not~~forms ~~have~~received aby ~~class~~us, ofor ~~securities~~written ~~registered~~representations ~~under~~from ~~Section~~certain 12reporting ofpersons, ~~the~~we ~~Exchange~~believe ~~Act~~that during the year ended July 31, ~~2008~~2010, ~~and~~all asfiling ~~such~~requirements ~~none~~applicable ofto ~~our~~its officers, directors orand greater than 10% ~~shareholders~~percent ~~were~~beneficial ~~required~~owners towere ~~file~~complied ~~ownership reports~~with.

On October 30, 2008 we filed a Form 8-A to register our common shares under Section 12 of the Exchange Act. This event triggered the requirement under Section 16(a) of the Exchange Act for the company’s directors and officers, and persons who own more than ten-percent (10%) of our common stock, to file with the Securities and Exchange Commission reports of ownership on Form 3 and reports of change in ownership on Forms 4 and 5.19

Code of Ethics

WeEffective ~~have~~October ~~not~~1, ~~yet~~2010, our company's board of directors adopted a ~~code~~Code of ~~ethics~~Business Conduct and Ethics that applies to, among other persons, members of our ~~principal~~board of directors, our company's officers including our president, chief executive officer, ~~principal~~and chief financial officer, ~~principal~~employees, ~~accounting~~consultants ~~officer~~and oradvisors. ~~controller~~As adopted, orour ~~persons~~Code ~~performing~~of ~~similar~~Business ~~functions~~Conduct ~~because~~and weEthics ~~have~~sets ~~not~~forth ~~yet~~written ~~finalized~~standards ~~the~~that ~~content~~are ofdesigned ~~such~~to adeter ~~code.~~wrongdoing and to promote:

1.	honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

2.	full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by us;

3.	compliance with applicable governmental laws, rules and regulations;

4.	the prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or persons identified in the Code of Business Conduct and Ethics; and

5.	accountability for adherence to the Code of Business Conduct and Ethics.

Our Code of Business Conduct and Ethics requires, among other things, that all of our company's Senior Officers commit to timely, accurate and consistent disclosure of information; that they maintain confidential information; and that they act with honesty and integrity.

In addition, our Code of Business Conduct and Ethics emphasizes that all employees, and particularly Senior Officers, have a responsibility for maintaining financial integrity within our company, consistent with generally accepted accounting principles, and federal and state securities laws. Any Senior Officer who becomes aware of any incidents involving financial or accounting manipulation or other irregularities, whether by witnessing the incident or being told of it, must report it to our company. Any failure to report such inappropriate or irregular conduct of others is to be treated as a severe disciplinary matter. It is against our company policy to retaliate against any individual who reports in good faith the violation or potential violation of our company's Code of Business Conduct and Ethics by another.

Our Code of Business Conduct and Ethics is being filed with the Securities and Exchange Commission as Exhibit 14.1 to our annual report for the year ended January 31, 2009. We will provide a copy of the Code of Business Conduct and Ethics to any person without charge, upon request. Requests can be sent to: China Wind Energy Inc., No. 2 Haibin Road, Developing Area, Heilongjian Province, China.

Item 11. Executive Compensation

The ~~following~~particulars ~~table sets forth, as~~ of ~~July 31, 2009,~~ the compensation paid to ~~our President and Chief Executive Officer and our Chief Financial Officer during~~ the ~~last~~following ~~three completed fiscal years. No other officers or directors received annual compensation in excess of $100,000 during the last three complete fiscal years.~~persons:

Summary Compensation Table (1)
Name and Principal Position	Year	Salary ($)	Other	Total ($)
Jian Ren (2)	2008	3,329		3,329
Shouquan Sun (3)	2008	5,243	(4)	5,243
	2009	124,956	(4)	124,956

●	our principal executive officer;

~~(1)~~● ~~Pursuant~~each toof ~~Item~~our ~~402(5)~~two ofmost ~~Regulation~~highly ~~S-K~~compensated ~~tables~~executive ~~and~~officers ~~columns~~who ~~have~~were ~~been~~serving ~~omitted~~as ~~where~~executive noofficers ~~compensation~~at ~~has~~the ~~been~~end ~~awarded.~~of the years ended July 31, 2010 and 2009; and

● up to two additional individuals for whom disclosure would have been provided under (2b) ~~Jian~~but ~~Ren~~for ~~was~~the ~~our~~fact ~~director,~~that ~~President,~~the ~~Chief~~individual ~~Executive~~was ~~Officer,~~not ~~Chief~~serving ~~Financial~~as ~~Officer,~~our ~~Secretary~~executive ~~and~~officer ~~Treasurer~~at ~~from~~the ~~November~~end ~~29,~~of ~~2007~~the toyears ~~May~~ended 26July 31, ~~2008.~~2010 and 2009,

(3) Shouquan Sun was appointed as our director, President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer on May 26, 2008. We did not enter into any management or consulting agreements with Shouquan Sun, but Harbin SQ, our subsidiary, agreed to pay Shouquan Sun $10,413 per month as consideration for his management services.

(4) Shouquan Sun, our director and sole officer, as well as a real estate company under his control, were provided the benefit of a loan by our majority owned subsidiary, Harbin SQ before our acquisition of Harbin SQ. As of July 31, 2009 $135,870 was the outstanding balance of this loan. We plan to settle all outstanding balance on this loan as soon as possible.

We made no grants of stock options or stock appreciation rights since our inception to July 31, 2009.

who we will collectively refer to as the named executive officers of our company, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year:

Summary Compensation Table (1)
Name and Principal Position	Year	Salary ($)	Other	Total ($)

Shouquan Sun (2)	2010	5,243	(3)	5,243
Shouquan Sun (2)	2009	124,956	(3)	124,956

(1)	Pursuant to Item 402(5) of Regulation S-K tables and columns have been omitted where no compensation has been awarded.

(2)

Shouquan Sun was appointed as our director, President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer on May 26, 2008. We did not enter into any management or consulting agreements with Shouquan Sun, but Harbin SQ, our subsidiary, agreed to pay Shouquan Sun $10,413 per month as consideration for his management services.

(3)	Shouquan Sun, our director and sole officer, as well as a real estate company under his control, were provided the benefit of a loan by our majority owned subsidiary, Harbin SQ before our acquisition of Harbin SQ.

We made no grants of stock options or stock appreciation rights since our inception to July 31, 2010.

Pension, Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.

Compensation Committee

We currently do not have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.

Compensation of Directors

We reimburse our directors for expenses incurred in connection with attending board meetings but did not pay director's fees or other cash compensation for services rendered as a director in the year ended July 31, ~~2009~~2010.

We have no standard arrangement pursuant to which our directors are compensated for their services in their capacity as directors. The Board of Directors may award special remuneration to any director undertaking any special services on behalf of our company other than services ordinarily required of a director. No director received and/or accrued any compensation for his services as a director, including committee participation and/or special assignments.

Compensation Committee

We do not currently have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.

Change of Control

As of ~~October~~December 297, ~~2009~~2010 we had no pension plans or compensatory plans or other arrangements which provide compensation on the event of termination of employment or change in control of us.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of October 29, 2009 by: (i) each of our directors, (ii) each of our named executive officers and (iii) owners of 5% or more of our common shares. There was no other person or group known by us to beneficially own more than 5% of our outstanding shares of common stock. Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own. All persons named have sole voting and investment power with respect to the shares, except as otherwise noted. The number of shares described below includes shares which the beneficial owner described has the right to acquire within 60 days of the date of this Annual Report on Form 10-K.

Title of Class	Name & address of beneficial owner	Number of Shares of Common Stock (1)	Percentage of Common Stock (%) (2)
Common Stock	Shouquan Sun (3) No2, Haibin Road Binxi Economy Development Harbin, China	5,000,000	10
Common Stock	Xiya Sun (4) No2, Haibin Road Binxi Economy Development Harbin, China	100,440	(5)
Common Stock	Huaiwen Zheng (6) No2, Haibin Road Binxi Economy Development Harbin, China	0	0
All Officers and Directors as a Group		5,100,440	10
Common Stock	Luming Zhang No. 4 4ZU, 8WEI Luobei County, Heilongjiang Province, Fengxiang Town, China	3,513,276	6.8
Common Stock	Shitian Wu Team 39 Suibin Farm Suibin County, Heilongjiang Province, China	2,900,000	5.6

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of December 7, 2010 by: (i) each of our directors, (ii) each of our named executive officers and (iii) owners of 5% or more of our common shares. There was no other person or group known by us to beneficially own more than 5% of our outstanding shares of common stock. Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own. All persons named have sole voting and investment power with respect to the shares, except as otherwise noted. The number of shares described below includes shares which the beneficial owner described has the right to acquire within 60 days of the date of this Annual Report on Form 10-K.

Title of Class	Name & address of beneficial owner	Number of Shares of Common Stock(1)	Percentage of Common Stock(2)
Common Stock	Shouquan Sun (3) No2, Haibin Road Binxi Economy Development Harbin, China	5,000,000	9.6%
Common Stock	Xiya Sun (4) No2, Haibin Road Binxi Economy Development Harbin, China	100,440	*(5)
Common Stock	Huaiwen Zheng (6) No2, Haibin Road Binxi Economy Development Harbin, China	Nil	0%
All Officers and Directors as a Group		5,100,440	9.6%
Common Stock	Luming Zhang No. 4 4ZU, 8WEI Luobei County, Heilongjiang Province, Fengxiang Town, China	3,513,276	6.8
Common Stock	Shitian Wu Team 39 Suibin Farm Suibin County, Heilongjiang Province, China	2,900,000	5.6

(1)

The number and percentage of shares beneficially owned is determined under rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days through the exercise of any stock option or other right. The persons named in the table have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table.

(2) Based on 51,902,250 issued and outstanding shares of common stock as of ~~October~~December 297, ~~2009~~2010.

(3)	Shouquan Sun is our director, President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer.

(4)	Xiya Sun is our director.

(5)	Less than 1%

(6)	Huaiwen Zheng is our director.

Item 13. Certain Relationships, and Related Transactions, and Director Independence

We owed the following amounts to the following related parties as at July 31, ~~2008~~2009 and ~~2009~~2010:

	July 31,
Name and Description of Related Parties	~~2009~~2010		~~2008~~2009
Ren, Jian – Prior CEO	$	51,980	$	51,859
Due to shareholders of Power Profit	$	2,447	$	-
Zhang, Luhui - Stockholder		3,418		4,504
Due to shareholders of China Wind Energy		49,953		-
Sun, Shouan - Sun, Shouquan's brother; Stockholder		19,999		-
Ren, Jian – Prior CEO		-		51,980
Sun, Shouquan - CEO; Stockholder		711		-
Zhang, Luhui - Stockholder		3,447		3,418
Total	$	76,108	$	56,363
Sun, Shouan - Sun, Shouquan's brother; Stockholder		20,167		19,999
Sun, Shouquan - CEO; Stockholder		-		711
Sun, Yulian		326,113		-
Sun, Weizhen		353,321		-
Zheng, Liping		120,096		-
Total	$	875,544	$	76,108

These loans payable that are unsecured, non-interest bearing and have no fixed terms of repayment, and are therefore, deemed payable on demand.

Additionally, we had the following amounts owing to us by related parties as at July 31, ~~2008~~2009 and ~~2009~~2010:

	July 31,
Name and Description of Related Parties	~~2009~~2010		~~2008~~2009
Sun, Shouquan - CEO; Stockholder	$	-	$	650,917
Sun, Shouquan - CEO; Stockholder and companies under his contol	$	8,890	$	297,097
Sun, Shouan - Sun, Shouquan's brother; Stockholder		-		18,366
Wang, Guangyu - Stockholder		1,801		1,787
Wang, Guangyu - Stockholder		1,787		1,782
Total	$	10,691	$	298,884
Zhang, Luming - Stockholder		-		52,586
Harbin New World Real Estate Co., Ltd. - A company controlled by Sun, Shouquan		135,870		135,551
Mudanjiang Sanye Wind Energy Power Co., Ltd. - A company controlled by Sun, Shouan		161,227		160,847
Total	$	298,884	$	1,020,049

These loans are unsecured, non-interest bearing and have no fixed terms of repayment, and therefore are not considered current assets.

We have not entered into any transactions with our officers, directors, persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of these persons wherein the amount involved in the transaction or a series of similar transactions exceeded the lesser of $120,000 or 1% of the average of our total assets for the last three fiscal years.

Item 14. Principal Accountant Fees and Services.

Audit and Non-Audit Fees

The ~~following~~aggregate ~~table represents~~ fees billed for the ~~professional~~most ~~audit~~recently ~~services~~completed fiscal year ended July 31, 2010 and ~~fees~~for ~~billed~~fiscal year ended July 31, 2009 for ~~other~~professional services rendered by ~~our~~the ~~auditors~~principal accountant for the audit of our annual financial statements ~~for~~and review of the ~~years~~financial ~~ended~~statements ~~July~~included ~~31,~~in ~~2008~~our ~~and~~quarterly ~~July~~reports ~~31,~~on ~~2009~~Form 10-Q and ~~any~~services ~~other~~that ~~fees~~are ~~billed~~normally ~~for~~provided ~~other~~by ~~services~~the ~~rendered~~accountant byin ~~our~~connection ~~auditors~~with ~~during~~statutory and regulatory filings or engagements for these fiscal periods. were as follows:

Yichien Yeh, CPA
	Year Ended July 31
Period from July 31, 2007 to July 31, 2008
	2010 ($)		2009 ($)
Audit fees	$	35,000
Audit Fees		65,000		40,000
Audit-related fees	$	0
Audit Related Fees	Nil		Nil
Tax fees	$	0
Tax Fees	Nil		Nil
All other fees	$	0
All Other Fees	Nil		Nil
Total	$	3565,000		40,000

Malone & Bailey, PC
Period from August 1, 2008 to July 31, 2009
Audit fees	$	40,000
Audit-related fees	$	0
Tax fees	$	0
All other fees	$	0
Total	$	40,000

Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.

~~Since~~Our ~~our~~board ~~inception,~~of ~~our~~directors ~~Board~~has ofconsidered ~~Directors,~~the ~~performing~~nature ~~the~~and ~~duties~~amount of ~~the~~fees ~~Audit~~billed ~~Committee,~~by ~~reviews~~our ~~all~~independent ~~audit~~auditors and ~~non-audit~~believes ~~related~~that ~~fees~~the atprovision ~~least~~of ~~annually.~~services ~~The~~for ~~Board~~activities ofunrelated ~~Directors~~to as the ~~Audit Committee pre-approved all~~ audit ~~related~~is ~~services~~compatible inwith ~~the~~maintaining ~~year~~our ~~ended~~independent ~~July~~auditors’ ~~31, 2009~~independence.

PART IV

Item 15. Exhibits, ~~and~~ Financial Statement Schedules

(a) (1) Financial Statements

See “Index to Consolidated Financial Statements” set forth on page F-1.

(a) (2) Financial Statement Schedules

None. The financial statement schedules are omitted because they are inapplicable or the requested information is shown in our financial statements or related notes thereto.

Exhibits

Exhibit Number	Exhibit Description
10.1	Cooperation Agreement with Xu Ji Wind Energy Technology Company
21.1	List of Subsidiaries
	China Wind Energy Ltd. (HK), incorporated in Hong Kong
	Harbin XingYe Wind Energy Technology Limited, incorporated in China
	Power Profit Technology Development Limited, incorporated in Hong Kong
	Harbin SQ Wind Energy Technology Co., Ltd., incorporated in China
31.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

	CHINA WIND ENERGY INC.
Date: October 29, 2009	By:	/s/ Shouquan Sun
Date: December 8, 2010	By:	/s/ Shouquan Sun
		Shouquan Sun
		Director, President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer

Pursuant to the requirements of the Exchange Act this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

SIGNATURES	TITLE	DATE
/s/ Shouquan Sun		~~October~~December 298, ~~2009~~2010
Shouquan Sun	Director, President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer
/s/ Xiya Sun		~~October~~December 298, ~~2009~~2010
Xiya Sun	Director
/s/ Huaiwen Zheng		December 8, 2010
Huaiwen Zheng	Director

Filing Compare · China Wind Energy Inc.