10QSB

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

(Mark One)

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

For the quarterly period ended September 30, 2005

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from _________________ to _________________

Commission file number 000-26119

CHINA WORLD TRADE CORPORATION

(Exact name of small business issuer as specified in its charter)

Nevada	87-0629754
(State or other jurisdiction of	(IRS Employer Identification No.)
incorporation or organization)

3rd Floor, Goldlion Digital Network Center

138 Tiyu Road East, Tianhe

Guangzhou, PRC

(Address of principal executive offices)

(011-8620) 3878 - 0286

(Issuer's telephone number)

(Former name, address and fiscal year, if changed since last report)

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As at September 30, 2005, there were 30,989,997 shares of common stock outstanding.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

INDEX TO FORM 10-QSB
	Page No.
PART I
Item 1. Financial Statements
Unaudited Condensed Consolidated Balance Sheet	4
- As of September 30, 2005
Unaudited Condensed Consolidated Statements of Operations	5
- Three-Month and Nine-Month Periods Ended September 30, 2005 and 2004
Unaudited Condensed Consolidated Statements of Cash Flows	6
- Nine-Month Period Ended September 30, 2005 and 2004
Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition And Results of Operations	16
Item 3. Controls and Procedures	24
PART II
Item 1. Legal Proceedings	25
Item 2. Changes in Securities	25
Item 3. Defaults Upon Senior Securities	25
Item 4. Submission of Matters to a Vote of Security Holders	25
Item 5. Other Information	25
Item 6. Exhibits	25

2

PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements.

Unaudited financial statements of China World Trade Corporation for the nine months ended September 30, 2005 and September 30, 2004.

China World Trade Corporation

- Unaudited Condensed Consolidated Balance Sheet as of September 30, 2005.

- Unaudited Condensed Consolidated Statements of Operations for the three-month and nine-month periods ended September 30, 2005 and 2004.

- Unaudited Condensed Consolidated Statements of Cash Flows for the nine-month period ended September 30, 2005 and 2004

- Notes to Unaudited Condensed Consolidated Financial Statements for the three-month and nine-month periods ended September 30, 2005 and 2004

3

Unaudited Condensed Consolidated Balance Sheet

As of September 30, 2005

				As of September 30, 2005
ASSETS	Note			US$
Current assets
Cash and cash equivalents					4,334,008
Trade and other receivables		3			4,698,411
Rental and other deposits					2,247,766
Prepayments					91,646
Available-for-sale securities		4			1,523,340
Inventories					132
Total current assets					12,895,303
Property use rights					1,582,405
Goodwill					11,279,314
Available-for-sale securities		4			255,000
Property, plant and equipment, net					1,128,911
Total assets					27,140,933
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Trade and other payables		5			8,169,687
Due to a shareholder		8(e	)		16,353
Deferred income					612,444
Short-term bank loan		6			1,234,980
Total current liabilities					10,033,464
Minority interest					2,192,657
Commitments and contingencies
Stockholders' equity
Preferred stock, par value of US$0.001 each; 10,000,000 shares authorized, none issued or outstanding
Common stock, par value of US$0.001 each; 50,000,000 shares authorized, 30,989,997 shares issued and outstanding at September 30, 2005					30,990
Additional paid-in capital					31,017,628
Accumulated other comprehensive income
- unrealized gain on available-for-sale securities					962,724
- foreign currency translation adjustment					20,015
Statutory reserve					147,608
Accumulated deficit					(17,264,153	)
Total stockholders' equity					14,914,812
Total liabilities and stockholders' equity					27,140,933

4

China World Trade Corporation

Unaudited Condensed Consolidated Statements of Operations

Three-month and nine-month periods ended September 30, 2005 and 2004

	Three-month period ended September 30,						Nine-month period ended September 30,
	2005			2004			2005			2004
	US$			US$			US$			US$
	Unaudited			Unaudited			Unaudited			Unaudited
Operating revenues
Club and business centre		159,805			176,831			710,666			338,115
Business traveling services		1,473,498			580,757			3,579,565			580,757
Business value-added services		254,644			-			871,413			11,651
Rental		3,462			184,169			218,161			527,014
Trading and others		236			1,769			122,109			125,329
		1,891,645			943,526			5,501,914			1,582,866
Operating costs and expenses
Club and business centre		(8,553	)		(29,315	)		(151,894	)		(49,552	)
Business traveling services		(261,674	)		(61,470	)		(381,466	)		(61,470	)
Business value-added services		(1,742,587	)		(1,836	)		(2,510,398	)		(1,836	)
Rental		-			(98,444	)		(98,762	)		(305,600	)
Trading and others		(135	)		-			(120,795	)		(120,153	)
		(2,012,949	)		(191,065	)		(3,263,315	)		(538,611	)
Impairment and depreciation		(74,751	)		(79,284	)		(200,891	)		(400,904	)
Selling, general and administrative expenses		(2,944,073	)		(1,258,157	)		(6,513,469	)		(3,438,582	)
		(3,018,824	)		(1,337,441	)		(6,714,360	)		(3,839,486	)
Loss from operations		(3,140,128	)		(584,980	)		(4,475,761	)		(2,795,231	)
Non-operating income (expenses)
Realized gains on sales of available-for-sale securities		4,260,761			-			6,079,960			-
Other income		3,862			27,733			44,170			129,883
Loss on disposal of leasehold land and buildings		-			-			(254,740	)		-
Interest expense		(25,775	)		(23,235	)		(90,397	)		(31,965	)
Other		(32	)		-			(1,177	)		-
Profit (Loss) before income taxes and minority interest		1,098,688			(580,482	)		1,302,055			(2,697,313	)
Provision for income taxes		(71,441	)		(15,836	)		(184,260	)		(15,836	)
Profit (Loss) before minority interest		1,027,247			(596,318	)		1,117,795			(2,713,149	)
Minority interest		(92,077	)		(162,095	)		(313,989	)		(161,467	)
Net profit (loss)		935,170			(758,413	)		803,806			(2,874,616	)
Other comprehensive income
Unrealized gains on available-for-sale securities
Unrealized holding (loss) gain arising for the period		(7,976	)		-			7,042,684			-
Less:Reclassification adjustment for gains or losses included in net profit (loss)		(4,260,761	)		-			(6,079,960	)		-
Foreign currencies translation adjustments		(20.015	)		-			(20,015	)		-
Comprehensive (loss) income		(3,353,582	)		(758,413	)		1,746,515			(2,874,616	)
Profit (Loss) per share of common stock - Basic and diluted		0.03			(0.03	)		0.03			(0.15	)
Weighted average number of shares of common stock outstanding		30,969,118			23,362,506			30,950,070			19,148,417
The financial statements should be read in conjunction with the accompanying notes.

5

China World Trade Corporation

Unaudited Condensed Consolidated Statements of Cash Flows

Nine-month period ended September 30, 2005

	Nine-month period ended September 30,
	2005			2004
	Unaudited			Unaudited
	US$			US$
Cash flows from operating activities:
Net profit (loss)		803,806			(2,874,616	)
Adjustments to reconcile net profit (loss) to net cash used in operating activities:
Loss on disposal of leasehold land and building		25,676			-
Realized gain on sale of available-for-sale securities		(6,079,960	)		-
Minority interest		313,989			161,467
Amortization of intangible assets		90,000			270,000
Stock issued for services		182,500			640,407
Available for sale securities received as income		(854,543	)		-
Depreciation and amortization		210,428			149,456
Impairment loss on goodwill		-			251,448
Decrease in deferred income		(19,736	)		(12,682	)
Changes in working capital:
Trade and other receivables		(843,133	)		(1,108,413	)
Rental and other deposits		(508,010	)		(722,766	)
Prepayments		(11,139	)		362,923
Inventories		170,888			64,795
Trade and other payables		1,470,429			726,645
Net cash used in operating activities		(5,048,805	)		(2,091,336	)
Cash flows from investing activities:
Acquisition of a subsidiary		-			(3,459,562	)
Acquisition of property, plant and equipment		(482,834	)		(63,707	)
Proceeds from disposal of intangible assets		1,320,000			-
Proceeds from disposal of property, plant and equipment		2,457,382			-
Proceeds from disposal of short-term investment		24,163			-
Proceeds from disposal of available-for-sale securities		6,728,020			-
Acquisition of available-for-sale securities Loan advance to a related company		(3,675 (1,111,461	) )		-
Purchase of investment securities		-			(11,840	)
Net cash provided by (used in) investing activities		8,931,571			(3,535,109	)
Cash flows from financing activities:
(Repayment to) Advance from a shareholder		(320,536	)		333,722
Repayment of amount borrowed		(1,052,494	)		(1,008,972	)
Issuance of new shares		-			4,302,378
Capital contribution from minority shareholder of a subsidiary		-			2,821,824
Net cash (used in) provided by financing activities		(1,373,030	)		6,448,952
Net increase in cash and cash equivalents		2,509,740			822,507
Cash and cash equivalents at beginning of period		1,824,268			314,771
Cash and cash equivalents at end of period		4,334,008			1,137,278
The financial statements should be read in conjunction with the accompanying notes.

6

China World Trade Corporation

Unaudited Condensed Consolidated Statements of Cash Flows

Nine-month period ended September 30, 2005

	Nine-month period ended September 30,
	2005		2004
	Unaudited		Unaudited
	US$		US$
Analysis of balances of cash and cash equivalents
Cash and bank balances		4,334,008		1,137,278
Supplemental disclosure information
Interest paid		92,676		39,866
Income taxes paid		42,740		18,052
Non-cash investing and financing activities
Common stocks issued for services		182,500		640,407
Available-for-sale securities received		854,543		-
Purchase of subsidiary by:
- issuance of common stock		-		7,703,768
- purchase consideration in arrear		-		70,000
The financial statements should be read in conjunction with the accompanying notes.

7

China World Trade Corporation

Notes to Unaudited Condensed Consolidated Financial Statements

Three-month and nine-month periods ended September 30, 2005 and 2004

1.BASIS OF PRESENTATION

The accompanying financial data as of September 30, 2005 and for the three-month and nine-month periods ended September 30, 2005 and 2004 have been prepared by the Company without audit.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s audited financial statements for the year ended December 31, 2004.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates.

In the opinion of the management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows as of September 30, 2005 and for the three-month and nine-month periods ended September 30, 2005 and 2004, have been made. The results of operations for the three-month and nine-month periods ended September 30, 2005 and 2004 are not necessarily indicative of the operating results for the full year.

2.RECENT ACCOUNTING PRONOUNCEMENTS

There are no new accounting pronouncements for which adoption is expected to have a material effect on our financial position or results of operations..

3.TRADE AND OTHER RECEIVABLES

				As of September 30, 2005
	Note			US$
Trade receivables					2,391,151
Due from related parties		8(c	)		2,021,401
Other receivables					285,860
					4,698,412

8

China World Trade Corporation

Notes to Unaudited Condensed Consolidated Financial Statements

Three-month and nine-month periods ended September 30, 2005 and 2004

4.AVAILABLE-FOR-SALE SECURITIES

Available-for-sale securities represent equity securities of which the aggregate cost, gross unrealized gains and losses and fair value are as follows:

	As of September 30, 2005
	Cost		Gross unrealized gains		Fair value
	US$		US$		US$
Available-for-sale:
Equity securities
Current assets		715,615		807,725		1,523,340
Non-current assets		100,000		155,000		255,000
		815,615		962,725		1,778,340

As of September 30, 2005, available-for-sale securities classified as non-current assets mainly consisted of restricted shares which were not disposable within one year.

5.TRADE AND OTHER PAYABLES

				As of September 30, 2005
	Note			US$
Trade payables					3,874,963
Accrued charges					765,881
Other payables					960,509
Tax payable					1,357,604
Tax payable - surcharge					1,026,680
Due to related parties		8(d	)		176,496
Deposits received					7,554
					8,169,687

6.SHORT-TERM BANK LOAN

The outstanding loan balance of US$1,234,980 as of September 30, 2005 borne interest at 7.254% per annum and is repayable within one year.

9

China World Trade Corporation

Notes to Unaudited Condensed Consolidated Financial Statements

Three-month and nine-month periods ended September 30, 2005 and 2004

7.STOCK-BASED COMPENSATION

The Company records compensation expense for stock-based employee compensation plans using the intrinsic value method in which compensation expense, if any, is measured as the excess of the market price of the stock over the exercise price of the award on the measurement date.

On December 31, 2003, the Board of Directors adopted a stock option plan (The 2003 Plan). The 2003 Plan allows the Board of Directors to grant stock options to various employees of the Company. 1,000,000 stock options were issued in accordance with the terms of the 2003 Plan on December 31, 2003 to certain officers and directors at an exercise price of US$0.673 per share. On February 20, 2004, the Company cancelled 95,000 options due to resignations and job repostings. The stock options will vest and become exercisable according to the following schedule:

On April 30, 2004:25%

On December 30, 2004:25%

Each quarter thereafter:6.25% (until fully vested)

As the exercise price of the options issued pursuant to the 2003 Plan is higher than the market price of the underlying stock on the date of grant, no compensation expense has been recognized for stock options granted.

Had compensation expenses for the same stock options been determined based on their fair values at the dates of grant and amortized over the period from the date of grant to the date that the awards vest, consistent with the provisions of SFAS No. 123, the Company's net profit (loss) and profit (loss) per share would have been reported as follows:

	Three-month period ended September 30,						Nine-month period ended September 30,
	2005			2004			2005			2004
	US$			US$			US$			US$
Net profit (loss) as reported		935,170			(758,413	)		803,806			(2,874,616	)
Total stock-based compensation expenses determined by the fair value method for all awards, net of tax		(46,629	)		(60,881	)		(139,887	)		(263,819	)
Pro forma		888,541			(819,294	)		663,919			(3,138,435	)
Profit (Loss) per share - Basic and diluted
As reported		0.03			(0.03	)		0.03			(0.15	)
Pro forma		0.03			(0.04	)		0.02			(0.16	)

10

China World Trade Corporation

Notes to Unaudited Condensed Consolidated Financial Statements

Three-month and nine-month periods ended September 30, 2005 and 2004

7. STOCK-BASED COMPENSATION (CONTINUED)

The fair value of the options granted is estimated on the date of the grant using a Black-Scholes option pricing model with the following weighted average assumptions used:

Expected dividend yieldNone

Risk-free interest rate2.1%

Expected stock price volatility224%

Contractual life3 years

The weighted average fair value per option granted at the date of grant was US$0.62. For purposes of pro forma disclosure, the estimated fair value of the options is amortized on a straight line basis to expense over the options’ vesting periods, i.e., 3 years as prescribed under the 2003 Plan.

8.RELATED PARTY TRANSACTIONS

(a)Names and relationship of related parties

	Existing relationships with the Company
Mr. Bernard Chan	An officer and a shareholder of the Company
Mr. Chan Chi Ming	A director and a shareholder of the Company
Mr. Luo Chao Ming	A director and a shareholder of the Company
Mr. John Hui	A director and a shareholder of the Company
Mr. Ringo Leung	A former director of the Company
Mr. William Tsang	A shareholder and director of the Company
Mr. Ho Chi Kin	An independent director of the Company
Mr. Chan Zeliang	A shareholder and director of the Company
Mr. Huang Zehua	A shareholder of a subsidiary
Ms. Suo Hongxia	A shareholder of a subsidiary
Mr. Chen De Xiong	A shareholder of a subsidiary
Mr. Li Jingping	A director of a subsidiary
Beijing Wanlong Economic Consultancy Corporation Ltd.	PRC partner of a subsidiary
Guangzhou City International Exhibition Co.	PRC partner of a subsidiary
Guangzhou Cyber Strategy Limited	A company in which a director of the Company has beneficial interest
Guangzhou Goldlion City Properties Co., Ltd.	A company controlled by close family members of a director
Guangzhou Goldlion Environmental Technology Co. Ltd.	A company controlled by close family members of a director

11

China World Trade Corporation

Notes to Unaudited Condensed Consolidated Financial Statements

Three-month and nine-month periods ended September 30, 2005 and 2004

8.RELATED PARTY TRANSACTIONS (CONTINUED)

(a)Names and relationship of related parties (Continued)

	Existing relationships with the Company
Goldlion Holding Limited	A company controlled by close family members of a director
Xelex Inc.	A company in which a shareholder of the Company has beneficial interest
Top Link Ventures Limited	A company in which a director of the Company has beneficial interest
Guangzhou Huahao Industries Group Co. Ltd.	A company controlled by a director of the Company
Guangzhou Sanranxin Travel Ltd.	A company in which a director of the Company has beneficial interest
Union East Consultants Limited	A company in which a former director of a subsidiary has beneficial interest
Chinamax International Limited	A shareholder of a subsidiary

(b)Summary of related party transactions

	Three-month period ended September 30,				Nine-month period ended September 30,
	2005		2004		2005		2004
	US$		US$		US$		US$
Consulting fee expenses to
Mr. Ringo Leung		-		-		-		5,128
Mr. Chan Chi Ming		19,266		-		66,521		-
Mr. Bernard Chan		19,231		-		63,009		2,564
Mr. John Hui		37,500		-		112,500		57,692
Mr. William Tsang		48,417		-		112,500		57,692
Mr. Luo Chao Ming		4,833		4,349		14,273		13,048
Mr. Ho Chi Kin		1,500		1,500		4,500		1,500
Mr. Chan Zeliang		8,620		-		16,268		-
Mr. Huang Zehua		3,429		-		5,005		-
Mr. Chen De Xiong		2,931		-		2,931		-
Ms. Suo Hongxia		1,382		-		1,836		-
Beijing Wanlong Economic Consultancy Corporation Ltd.		4,631		4,531		13,692		13,592
Guangzhou City International Exhibition Co.		4,631		4,531		13,692		13,592
Xelex Inc.		-		15,384		-		35,897
Top Link Ventures Limited		-		15,385		-		46,154
Guangzhou Cyber Strategy Limited		-		-		-		1,938

12

China World Trade Corporation

Notes to Unaudited Condensed Consolidated Financial Statements

Three-month and nine-month periods ended September 30, 2005 and 2004

8.RELATED PARTY TRANSACTIONS (CONTINUED)

(b)Summary of related party transactions (Continued)

	Three-month period ended September 30,				Nine-month period ended September 30,
	2005		2004		2005		2004
	US$		US$		US$		US$
Sponsorship expenses to
Goldion Holding Limited		-		-		4,643		-
Rent and related expenses to
Guangzhou Goldlion City Properties Co., Ltd.		53,172		116,607		203,143		337,526
Guangzhou Goldlion Environmental Technology Co. Ltd.		42,340		-		96,239		-
Guangzhou Huahao Industries Group Co. Ltd.		-		37,622		-		37,622
Rental compensation income from
Guangzhou Goldlion City Properties Co. Ltd.		-		-		3,854		-
Sale of leasehold land and buildings to
Guangzhou Goldlion Environmental Technology Co. Ltd.		-		-		2,457,382		-
Personal guarantee granted from
Mr. William Tsang		1,923		1,923		1,923		1,923
Intangible asset sold to
Mr. William Tsang		-		-		1,320,000		-
Membership fee income from
Union East Consultants Limited		-		-		-		16,008
Assets purchased from
Guangzhou Huahao Industries Group Co. Ltd.		-		451,970		-		451,970

13

China World Trade Corporation

Notes to Unaudited Condensed Consolidated Financial Statements

Three-month and nine-month periods ended September 30, 2005 and 2004

8.RELATED PARTY TRANSACTIONS (CONTINUED)

(c)   Due from related parties

	As of September 30, 2005
	US$
Guangzhou Huahao Industries Group Co. Ltd.		1,404,158
Mr. Li Jingping		909
Ms. Huang Zehua		245,761
Mr. Chen De Xiong		370,141
Guangzhou Sanranxin Travel Limited		432
		2,021,401

The amounts due from related parties represent unsecured advances which are interest-free and repayable on demand. The loan advanced to Guangzhou HuaHao Industries Group Co., Ltd. amounting to US$1,111,481 was settled subsequent to September 30, 2005.

(d)   Due to related parties

	As of September 30, 2005
	US$
Mr. Ringo Leung		1,094
Beijing Wanlong Economic Consultancy Corporation Limited		4,631
Guangzhou Goldlion City Properties Co., Ltd.		3,355
Guangzhou City International Exhibition Company		13,894
Ms. Suo Hongxia		25,317
Chinamax International Limited		128,205
Classified as current liabilities		176,496

The amounts due to related parties represent unsecured advances which are interest-free and repayable on demand.

(e)Due to a shareholder

	As of September 30, 2005
	US$
Mr. William Tsang		16,353

The amount due to a shareholder represents unsecured advances which is interest-free and repayable on demand.

14

China World Trade Corporation

Notes to Unaudited Condensed Consolidated Financial Statements

Three-month and nine-month periods ended September 30, 2005 and 2004

9.BUSINESS SEGMENT INFORMATION

	Three-month period ended September 30,						Nine-month period ended September 30,
	2005			2004			2005			2004
	US$			US$			US$			US$
Operating revenues
Club and business centre		159,805			176,831			710,666			338,115
Business traveling services		1,473,498			580,757			3,579,565			580,757
Business value-added service		254,644			-			871,413			11,651
Rental		3,462			184,169			218,161			527,014
Trading and others		236			1,769			122,109			125,329
		1,891,645			943,526			5,501,914			1,582,866
Profit (Loss) from operations
Club and business centre		(82,628	)		(222,106	)		(281,127	)		(726,285	)
Business traveling services		244,306			269,120			853,633			269,120
Business value-added service		(2,757,082	)		-			(3,427,815	)		-
Rental		(137,637	)		(25,266	)		(237,273	)		(111,009	)
Trading and others		(1,043	)		(3,121	)		(66,095	)		(31,111	)
		(2,734,084	)		18,627			(3,158,677	)		(599,285	)
Corporate expenses		(406,044	)		(603,607	)		(1,317,084	)		(2,195,946	)
Consolidated operating loss		(3,140,128	)		(584,980	)		(4,475,761	)		(2,795,231	)
Realized gains on available-for sale securities		4,260,761			-			6,079,960			-
Loss on disposal of leasehold land and buldings								(254,740	)
Other income		3,862			27,733			44,170			129,883
Interest expense		(25,775	)		(23,235	)		(90,397	)		(31,965	)
Other expenses		(32	)		-			(1,177	)		-
Consolidated loss before income taxes and minority interest		1,098,688			(580,482	)		1,302,055			(2,697,313	)

10.CONTINGENCIES

Prior to the acquisition by the Company, Guangdong New Generation Commercial Management Limited (“GNGCM”) had been paying Mainland China income tax based on a calculation which was not in accordance with the standard rates stipulated by the Mainland China tax law. The shortfall of the underpaid tax liabilities, related surcharges and penalties up to the date of acquisition by the Company has been fully accrued in the consolidated financial statements. However, GNGCM could potentially be liable for further surcharges for late payments and penalties, above the amount already accrued, for the period since the date of acquisition by the Company up to the balance sheet date. A shareholder of GNGCM has indemnified the Company against such shortfall and additional tax-related liabilities. As of September 30, 2005, the estimated further surcharges and penalties which GNGCM is potentially liable for amounted to US$324,956 and US$7,217,375 respectively. The estimated penalties are based on the highest assessable rate, which range from 50% and 500%.

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Item 2. Management's discussion and analysis of financial conditions and results of operation

PRELIMINARY NOTE REGARDING FORWARD LOOKING STATEMENTS

 This report contains certain forward-looking statements about our operations. The reader should understand that several factors govern whether any forward looking statement contained herein will be or can be achieved. Any one of those factors could cause actual results to differ materially from those projected herein. These forward looking statements include plans and objectives of management for future operations, including plans and objectives relating to the products and the future economic performance of the company. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, future business decisions, and the time and money required to successfully complete development projects, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the company. Although the company believes that the assumptions underlying the forward looking statements contained herein are reasonable, any of those assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in any of the forward looking statements contained herein will be realized. Based on actual experience and business development, the company may alter its marketing, capital expenditure plans or other budgets, which may in turn affect the company's results of operations. In light of the significant uncertainties inherent in the forward - looking statements included therein, the inclusion of any such statement should not be regarded as a representation by the company or any other person that the objectives or plans of the company will be achieved.

OVERVIEW

 We were incorporated in the State of Nevada in 1998 to engage in any lawful corporate undertaking. Our business objective is to open and operate business clubs in the major cities of China in association with the World Trade Center Association in order to position ourselves as the platform to facilitate trade between China and the world market. We currently operate two clubs, one in Guangzhou and the other in Beijing, PRC. Additionally, we expect to open clubs in Shanghai and Shenzhen, PRC in 2005. No assurances can be given, however, that we will be successful in our endeavors.

 Our growth and development as a business enterprise has been marked by a number of significant corporate events. Pursuant to a Share Exchange Agreement, dated as of August 10, 2000, between Virtual Edge Limited ("Virtual Edge") and Main Edge International Limited ("Main Edge"), Main Edge transferred all of the issued and outstanding shares of the capital stock of VEL to the Company in exchange of 1,961,175 shares of our pre-split common stock, representing approximately 75% of our outstanding shares of the common stock. According, we controlled the operations of Virtual Edge, and Main Edge became our majority stockholder. We then undertook an 8-for-1 forward split that was effective on 15th day of September 2000, which resulted in Main Edge owing 15,689,400 shares of our common stock. Then, five major developments occurred. These were: (i) the consummation of two private placement financings by Powertronic Holdings Limited ("Powertronic") in September 2002 and December 2002 in which it acquired shares of our common stock, (ii) an acquisition of all the issued and outstanding shares of General Business Network (Holdings) Ltd. in December 2002, (iii) a 1-for-30 reverse stock split that was effective on September 1, 2002. (iv) the assignment of the rights of the after tax rental income of certain premises from Mr. Tsang for a five year period in December 2003, and (v) the exercise of warrant for the shares of our common stock by Mr. Tsang and Powertronic in March 2004 and in July 2004, and further exercise of additional warrants in December 2004. Mr. Chi Hung Tsang currently is the beneficial owner of 16,045,948 shares of our common stock, representing 51.8% of the securities outstanding as of September 30, 2005, together with securities exercisable or convertible into shares of common stock within 60 days of September 26, 2005. Powertronic is the beneficial owner of 5,574,074 shares of our common stock, representing 18.0% of the securities outstanding as of September 30, 2005, together with securities exercisable or convertible into shares of common stock within 60 days of September 26, 2005. Mr. Chi Hung Tsang is also the President and Chairman of our Board of Directors.

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The aim of the Company is to continue to provide travel and trade agency businesses linking companies in China and the rest of the world. China World Trade Corporation ("China World Trade") has established its businesses into three distinct divisions, namely the club and business center; the business traveling services; and the business value-added services. The Club and Business Center Division is devoted to the building of the World Trade brand in China. Its objective is to open and operate business clubs in the major cities of China in order to position the company as the platform to facilitate trade between China and the world market. As mentioned above, China World Trade currently operates the Guangzhou World Trade Center Club, consisting of over 4,000 square meters, and The Beijing World Trade Center Club, which is located at 2nd Floor, Office Tower II, Landmark Towers Beijing, 8 North Dongsanhuan Road, Beijing PRC, and consisting of 730 square meters. In addition, since the acquisition of CEO Clubs China Limited ("CEO Clubs") in May 2004, CEO Clubs will complement China World Trade's offerings by targeting higher profile leadership from larger companies than those normally associated with China World Trade. The CEO Clubs family, of which each family members is operating independently of each other, has thirteen chapters in the US and China. It focuses on recruiting CEO's of companies with annual sales exceeding $2 million as members. The average club member has $20 million in annual sales.

Since the completion of the acquisition of majority stake of Guangdong New Generation Commercial Management Limited (the “New Generation Group” or “New Generation”) in August 2004, the Business Traveling Services Division will provide the necessary platform for China World Trade Corporation to focus on the high growth, travel related businesses. New Generation aims to be the pioneer and to become one of the market leaders in the travel agency businesses through the operations of its 6 subsidiaries in Southern China in ticketing sales for international and domestic flights as well as inbound business travel. Being one of the leading consolidators of hotel accommodations and airline tickets in China, New Generation has already acquired the necessary licenses to operate as a ticketing and travel agent in the PRC. These licenses include 26 licenses as a ticketing agent for international and domestic flights for both cargo and passengers issued by the Civil Aviation Administration of China and the International Air Transport Association and 3 licenses as a domestic and international travel agent issued by the Administrative Bureau of Tourism of China. In addition, New Generation is also an authorized/licensed insurance agent in China to provide, in particular, accidental and life insurances. New Generation also provides premium "red carpet" airport based services to prestigious clients and participates in the opening and continued development of the new Guangzhou Baiyun International Airport. New Generation is believed to contribute a superior revenue base to the Company.

The Business Value-Added Services Division concentrates on value-added services of credit cards and merchant related businesses as well as on consultancy services. Guangdong World Trade Link Information Service Limited ("WTC Link"), a subsidiary of China World Trade, cooperated with the Agricultural Bank of China to manage the Company's co-brand credit card project. WTC Link is also an active provider of customer relationship management solution and services in China. Its prior experiences include helping China Telecom to develop and manage the merchants' privilege VIP member services and working with China Unionpay to develop the royalty systems for bank card holders in Guangdong Province, China. In addition, this Division also provides consultancy services to China World Trade's members and clients in the financial services areas including mergers and acquisitions, corporate restructuring and financing.

RESULTS OF OPERATIONS

The following table shows the selected unaudited condensed consolidation income statement data of the Company and its subsidiaries for the three-month and nine-month periods ended September 30, 2005 and September 30, 2004. The data should be read in conjunction with the unaudited Consolidated Financial Statements of the Company for the three-month and nine-month periods ended September 30, 2005 and September 30, 2004 and related notes thereto.

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	3 months Ended September 30,												9 months Ended September 30,
				% of						% of						% of						% of
	2005			Rev.			2004			Rev.			2005			Rev.			2004			Rev.
(In US$ thousands except per share data)	(unaudited)						(unaudited)						(unaudited)						(unaudited)
Operating revenues
Club and business centre		160			8.5			177			18.8			711			12.9			338			21.4
Business traveling services		1,474			77.9			581			61.5			3,580			65.1			581			36.7
Business value-added services		255			13.5			--			0.0			871			15.8			12			0.8
Others		3			0.1			186			19.7			340			6.2			652			41.1
Total Operating Revenues		1,892			100.0			944			100.0			5,502			100.0			1,583			100.0
Gross Profit
Club and business centre		151			8.0			148			15.7			559			10.2			289			18.3
Business traveling services		1,212			64.1			519			55.0			3,198			58.1			519			32.8
Business value-added services		(1,488	)		(78.6	)		(2	)		(0.2	)		(1,639	)		(29.8	)		10			6.3
Others		4			0.2			88			9.3			121			2.2			227			14.3
Total Gross Profit		(121	)		(6.3	)		753			79.8			2,239			40.7			1,045			66.0
Impairment and depreciation		(75	)		(4.0	)		(80	)		(8.4	)		(201	)		(3.7	)		(401	)		(25.3	)
Selling, general and administrative exp		(2,944	)		(155.6	)		(1,258	)		(133.3	)		(6,513	)		(118.4			(3,439	)		(217.2	)
Loss from operations		(3,140	)		(166.0	)		(585	)		(62.0	)		(4,475	)		(81.3	)		(2,795	)		(176.6	)
Non-operating income (expenses)
Other income and realized gain		4,265			225.4			27			2.9			6,121			111.3			130			8.2
Interest expense		(26	)		(1.4	)		(23	)		(2.4	)		(90	)		(1.6	)		(32	)		(2.0	)
Loss on disposal of leasehold land and building		--			--			--			--			(255	)		(4.6	)		--			--
Profit (loss) before income taxes and minority interest		1,099			58.1			(581	)		(61.5	)		1,301			23.6			(2,697	)		(170.4	)
Income taxes		(72	)		(3.8	)		(15	)		(1.6	)		(184	)		(3.3	)		(16	)		(1.0	)
Profit (loss) before minority interest		1,027			54.3			(596	)		(63.1	)		1,117			20.3			(2,713	)		(171.4	)
Minority interest		(92	)		(4.9	)		(162	)		(17.2	)		(313	)		(5.7	)		(162	)		(10.2	)
Net profit (loss)		935			49.4			(758	)		(80.3	)		804			14.6			(2,875	)		(181.6	)

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THREE-MONTH PERIOD ENDED SEPETMBER 30, 2005 COMPARED TO THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2004

Operating Revenue

We have provided club and business center services through our subsidiary Guangzhou World Trade Center Club located in Guangzhou Province, the PRC since June 2002, and business value-added services and others business (trading) through a subsidiary of General Business Network (Holdings) Limited since March 2003. We have commenced our operation in the business travel business since our acquisition of New Generation in August 2004. Cattle hide trading and rental incomes are grouped under other operating revenues and others gross profit. Consolidated operating revenue for the three-month period ended September 30, 2005 was $1,892,000, compared to $944,000 for the same corresponding period in year 2004, an increase of $948,000 or 100.4%. The increase was mainly contributed by our business traveling services and our business value-added services. This increase was partially offset by the decrease in rental income and the discontinuation of our trading business.

Our mix of the operating revenues will continue to shift since our acquisition of the travel business and development of our business value-added services. We will continue to utilize the World Trade Center Clubs in various major cities in China to provide the necessary platform for the growth of our businesses. We believe that our revenue will continue to improve steadily under normal business circumstances.

Of the $1,892,000 revenue in the three-month period ended September 30, 2005, approximately $160,000 (8.5%) was generated from providing club related services by our Guangzhou World Trade Center Club and Beijing World Trade Center Club; $1,474,000 (77.9%) from business travel services; and $255,000 (13.5%) from business value-added services. The continuous development of our business traveling services and our business value-added services will contribute positively to our operating revenue.

For the three-month period ended September 30, 2005, New Generation, our business traveling services arm, sold a total of over 350,000 tickets, which translates to a total value of air-ticket fare of approximately $43.8 million. As compared to the same corresponding period in year 2004, ticket sold of New Generation increased by 86,000 tickets (or 32.6%) from approximately 264,000 tickets with value of air-ticket fare increased by $11.8 million (or 36.7%) from $32.0million.

Consolidated gross profit decreased by $874,000 or 116.1% for the three-month period ended September 30, 2005 over the same corresponding period in year 2004. The decrease was predominantly driven by our business value-added services and was the result of lower accounting revenues and higher costs in our various business consultancy business services. This decrease was offset by the increase in gross profit of our business traveling services As a percentage of total operating revenues, the consolidated gross profit margin of negative 6.3% for the three-month period ended September 30, 2005 decreased from 79.8% for the same corresponding period in 2004. Our profit margin was driven by a mix shift from lower margin trading business to higher margin business travel services. However, the lower profit margin as a percent of operating revenues for the 3 month period ended September 30, 2005 as compared to the same corresponding period in 2004 was primarily contributed by the negative margin from our business value-added services. We received common stock as compensation from the client for our services rendered. According to EITF Issue No. 00-8, we recognize our revenue in relation to a project using the share price of the common stock we received on the contract date. Subsequently, we subcontracted part of the services of the same project to an independent consultant at a later date and according to FAS 123, paragraph 8, we needed to record the compensation paid to non-employees in exchange of goods and services at fair value. The negative gross profit margin for the 3-month period ended September 30, 2005 of our consulting business was the result of the timing different between the dates of the contract with our client and the subcontracting during an upward trend of the share prices of the common stock we received for services rendered.

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Of the $121,000 total gross loss for the 3-month period ended September 30, 2005, approximately gross profit of $151,000 (or 8.0%) was generated from providing club and business center services, approximately $1,212,000 (or 64.1%) from business travel services, approximately gross loss of $1,488,000 (or negative 78.6%) from providing business value-added services. As compared to the same corresponding period in year 2004, the club and business center services represented a 15.7% (or $148,000) of the total gross profit; 55.0% (or $519,000) was generated from the business travel business, a negative 0.2% (or $2,000) from the business value-added services; and the remaining 9.3% (or $88,000) from other (rental and cattle hide trading) businesses. The shift in segmental distribution was primarily due to the increase in gross profit in the business travel services, resulting from the acquisition of the New Generation Group. We foresee that this segment mix will continue to change and balance out in years 2005 and 2006 upon further development in the business value-added services and the expected opening of other world trade center clubs as well as the cessation of our cattle hide trading business in July 2005.

Impairment Loss and Depreciation

Total impairment loss and depreciation were approximately $75,000 for the three-month period ended September 30, 2005, as compared to the same corresponding period in year 2004, a decrease of $5,000 or 6.3% from $80,000. The decrease was mainly due to the decrease in depreciation of our property in Guangzhou which was sold in the second quarter of 2005. Under normal circumstances, we will review the impairment of our assets at the year end or at the anniversary of such assets.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by approximately $1,686,000 or 134.0% to $2,944,000 for the three-month period ended September 30, 2005 from $1,258,000 for the same corresponding period in 2004. The increase was mainly due to (1) the increase in director and staff related costs predominantly resulting from our business traveling services operation in the amount of approximately $451,000; (2) the increase in various advertising expenses in the amount of approximately $137,000; and (3) the increase in share disposal expenses resulting from selling the shares we received as compensation for providing consulting services in the amount of approximately $888,000. We believe the selling, general and administrative will continue to increase steadily as our businesses continue to grow.

Other Income and Realized Gain

The other income and realized gain increased by approximately $4,238,000 for the three-month period ended September 30, 2005, as compared to the same corresponding period in 2004. The increase was primarily the result of the gain on disposal of securities during the reporting period for which we received as the compensation of our consultancy services rendered.

Interest Expenses, Net

Net Interest expenses were approximately the same in the amount of $26,000 for the three-month period ended September 30, 2005, as compared to the same corresponding period in year 2004. The interest expense incurred by the business traveling operations of New Generation in relation to a bank loan in the amount of RMB10,000,000 (approximately equals US$1.2 million).

Income Taxes

The Group is subject to income taxes on an equity basis on income arising in or derived from the tax jurisdiction in which it is domiciled and operates. The Hong Kong subsidiaries incurred losses for taxation purposes for the period and thus Hong Kong Profits Tax has not been provided. Several of our PRC subsidiaries are subject to PRC Enterprise Income Taxes (“EIT”) on an entity basis on income arising in and derived from the PRC. The applicable EIT rate is 33%.

20

Income taxes were $72,000 for the three-month period end September 30, 2005, as compared to $15,000 for the same corresponding period in year 2004, an increase of $57,000 (or 380.0%). The increase of income taxes was the result of the increase in our travel business’s operation revenue and net income during the reporting period.

Net Income

Net income was approximately $935,000 for the three-month period ended September 30, 2005, as compared to the net loss in the amount of $758,000 for the same corresponding period in year 2004, an increase of approximately $1,693,000. The increase in net income was the result of the recognition of the net gain from the disposal of securities which were received for compensation of our consultancy services. The increase was partially offset by the increase in loss from operations resulting from the increase in selling, general and administrative expenses of our business traveling services and consulting business within the business value-added services. The management believes that our operations will continue to improve and we do not foresee a trend of losses.

NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2005 COMPARED TO NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2004

Operating Revenue

Consolidated operating revenue for the nine-month period ended September 30, 2005 was $5,502,000, compared to $1,583,000 for the same corresponding period in year 2004, an increase of $3,919,000 or 247.6%. The increase was mainly contributed by our operations in the business traveling services; our business value-added services; and our club and business center services. This increase was partially offset by the decrease in rental income and the discontinuation of the cattle hide trading business.

Of the $5,502,000 revenue in the nine-month period ended September 30, 2005, approximately $711,000 (12.9%) was generated from providing club related services by Guangzhou World Trade Center Club and Beijing World Trade Center Club, $3,580,000 (65.1%) from business travel services, $871,000 (15.8%) from business value-added services, and the remaining $340,000 (or 6.2%) from other (rental and cattle hire trading) businesses. The acquisition of New Generation and the continuous development of our business value-added services will contribute positively to our operating revenue.

For the nine-month period ended September 30, 2005, New Generation sold a total of over 946,000 tickets, which translates to a total value of air-ticket fare of approximately $110.0 million. As compared to the same corresponding period in year 2004, ticket sold of New Generation increased by 236,000 tickets (or 33.2%) from approximately 710,000 tickets with value of air-ticket fare increased by $27.2 million (or 32.9%) from $82.8 million.

Consolidated gross profit increased by $1,194,000 or 75.4% for the nine-month period ended September 30, 2005 over the same corresponding period in year 2004. The increase was predominantly driven by our business travel services, and was offset by the decreased gross profit of our business value-added services, which decrease was required by applicable accounting standards. According to EITF Issue No. 00-8, we recognize our revenue in relation to a project using the share price of the common stock we received on the contract date. Subsequently, we subcontracted part of the services for the same project to an independent consultant at a later date and according to FAS 123, paragraph 8, we needed to record the compensation paid to non-employees in exchange of goods and services at fair value. The negative gross profit margin for the 9-month period ended September 30, 2005 of our consulting business was the result of the timing different between the dates of the contract with our client and the subcontracting dates during an upward trend of the share prices of the common stock we received for services rendered.

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Of the $2,239,000 total gross profit for the nine-month period ended September 30, 2005, approximately $559,000 (or 10.2%) was generated from providing club and business center services, approximately $3,198,000 (or 58.1%) from business travel services, approximately negative $1,639,000 (or negative 29.8%) from providing business value-added services, and the remaining approximately $121,000 (or 2.2%) from other (rental and cattle hide trading) businesses. As compared to the same corresponding period in year 2004, the club and business center services represented a 18.3% (or $289,000) of the total gross profit; approximately 32.8% (or $519,000) from the business travel business, a 6.3% (or $10,000) from the business value-added services; and the remaining 14.3% (or $227,000) from other (rental and cattle hide trading) businesses. The shift in segmental distribution was primarily due to the increase in gross profit in the business travel services, resulting from the acquisition of the New Generation Group. We foresee that this segment mix will continue to change and balance out in year 2005 and 2006 upon further development in our business value-added services and the expected opening of other world trade center clubs as well as the cessation of our cattle hide trading business in July 2005.

Impairment Loss and Depreciation

Total impairment loss and depreciation were approximately $201,000 for the nine-month period ended September 30, 2005, as compared to the same corresponding period in year 2004, a decrease of $200,000 or 49.9% from $401,000. The decrease was mainly due to the decrease in the impairment loss in the amount of approximately $251,000. There was no impairment loss recorded for the nine-month period ended September 30, 2005. This decrease of impairment loss was offset by the increase of depreciation and amortization in the amount of approximately $50,000 over the corresponding period in year 2004.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by approximately $3,074,000 or 89.4% to $6,513,000 for the nine-month period ended September 30, 2005 from $3,439,000 for the same corresponding period in 2004. The increase was mainly due to (1) the increase in director and staff related costs predominantly resulting from the consolidation of our business traveling services operation in the amount of approximately $1,352,000; (2) various advertising and entertainment expenses in the amount of $342,000 and (3) the increase in share disposal expenses resulting from selling the shares we received as compensation for providing consulting services in the amount of approximately $1,236,000. . We believe the selling, general and administrative will continue to increase steadily as our businesses continue to grow.

Other Income and Realized Gain

The other income and realized gain increased by approximately $5,944,000 for the nine-month period ended September 30, 2005. The increase was the result of the gain on disposal of securities during the reporting period which we received as compensation for our consultancy services rendered. These securities may be sold only when earned under the respective consulting agreements, and it is our intention to sell shares earned as promptly as practicable in order to generate income for the company, subject to compliance with federal securities laws.

Interest Income/(Expenses), Net

Interest expenses were approximately $90,000 for the nine-month period ended September 30, 2005, as compared to the same corresponding period in year 2004 in the amount of $32,000, an increase of $58,000. The majority of the increase was the result of a bank loan borrowed by our business traveling services operation arm, New Generation in the amount of RMB10,000,000 (approximately equals US$1.2 million).

Loss on Disposal of Leasehold Land and Buildings

The loss on disposal of leasehold land and building increased by approximately $255,000 for the nine-month period ended September 30, 2005, as compared to none for the same corresponding period in year 2004. The loss was primarily the result from the payment of PRC tax and levy in the amount of approximately $229,000 resulting from the disposal of our Guangzhou property in May 2005.

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Income Taxes

Income taxes were $184,000 for the nine-month period end September 30, 2005, as compared to $16,000 for the same corresponding period in year 2004, an increase of $168,000. The increase of income taxes was the result from our operations of the business traveling services.

Net Income

Net Income was approximately $804,000 for the nine-month period ended September 30, 2005, as compared to the same corresponding period in year 2004, an improvement of approximately $3,679,000 from the net loss in the amount of $2,875,000. The improvement in net income was the result of the recognition of the net gain from the disposal of securities which were received for compensation of our consultancy services. In addition, the improvement in loss from operations resulting from the improvement of our operations in the club and business center, business traveling services, as well as the business value-added services, together contributed to the decrease in net loss. The management believes that our operations will continue to improve and we do not foresee a trend of losses.

Liquidity and Capital Resources

As of September 30, 2005, cash and cash equivalents totaled $4,334,008, as compared to September 30, 2004 of $1,137,278, an increase of approximately $3.2 million. This increase in cash position in the amount of approximately $2.5 million during the nine-month period ended September 30, 2005 was the result of a combination of net cash provided by investing activities in the amount of approximately $8.9 million, offsetting by net cash used in operating activities of approximately $5.0 million and net cash used in financing activities of approximately $1.4 million. The increase in net cash provided by investing activities was mainly due to the proceeds from disposal of property (approximately $2.4 million) and intangible assets (approximately $1.3 million) and the proceeds from disposal of securities which were compensated for our consultancy services rendered in the amount of approximately $6.7 million, offset by the amount paid for the acquisition of equipment of approximately $482,000, and a loan advanced to a related company which was repaid subsequent to September 30, 2005 in the amount of approximately $1.1million. The net cash used in financing activities was contributed by the repayments of bank loans (approximately $1.1 million) and the non-interest bearing advance (approximately $320,000) from our Chairman and the major shareholder, Mr. Chi Hung Tsang. Mr. Tsang has made such loans to our company, from time to time, and without any obligation to do so, when the cash flow needs of the company require it. The company repays such loans without interest as soon as its liquidity permits such repayment.

Net cash used in operating activities in the amount of approximately $5.0 million was primarily contributed by the deduction of a non-cash accounting adjustment of realized gain on available-for-sale securities from net income in the amount of approximately $6.1 million.

During the reporting period of the nine-month ended September 30, 2005, 100,000 shares of our common stock were issued to Greentree Financial Group, Inc. for its services rendered and our total issued and outstanding shares of our common stock is 30,989,997 as of September 30, 2005.

We have not committed to any individual material capital expenditures related projects and we will primarily rely on the Cornell Captial’s Standby Equity Distribution Agreement financing, provided that it is declared effective by the Commission, as the external source of liquidity to fund our potential capital related projects. On the other hand, we rely on our internal sources of liquidity generated from our business travel services and business value-added services to fund immaterial capital projects, such as the potential acquisitions of 70% of Hao Shi Guang Agency and 70% of Kai Xuan Transport. In the event that we are unable to draw down capital funding from Cornell Capital’s committed capital or unable to fund project from our internally generated sources, we will seek other external sources of opportunities in a combination of debt and/or equity financings from potential investors or existing shareholders of the Company, although we have not committed any other external source besides Cornell Capital.

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We believe that the level of financial resources is a significant factor for our future development and accordingly may choose at any time to raise capital through private debt or equity financing to strengthen our financial position, facilitate growth and provide us with additional flexibility to take advantage of business opportunities. However, other than the offering contemplated by the Standby Equity financing provided by Cornell Capital Partners, LP, we do not have any immediate plan to pursue a public offering of our common stock.

OTHER SIGNIFICANT EVENTS

Guangdong New Generation Management Limited entered into a Cooperation Framework Agreement, dated July 29, 2005, as subsequently amended, providing for the acquisition of interests in each of Guangdong Hao Shi Guang Travel Agency and Guangdong Kaixuan Transportation Co., Ltd, both owned by Guangdong Rising Hotel Group Limited. The primary business of Kaixuan Transportation Co., Ltd. is to provide coach-hire services in Guangzhou and the primary business of Hai Shi Guang Agency is to provide packaged tour services mainly for corporate clients.

Pursuant to such agreement, we have agreed to purchase 22.68% of the share capital of the Travel Agency. We have further agreed to increase our purchase of the share capital of the Travel Agency until we own 70% of the outstanding share capital. The purchase price will be calculated based on the net assets of the Travel Agency as of June 30, 2005, as determined by an independent certified public accountant in the Peoples’ Republic of China.

We have additionally agreed to purchase 70% of the Transportation Company during the period August 1, 2005 through July 31, 2006. The purchase price is to be calculated based on its net assets as of June 30, 2005, as determined by an independent certified public accountant in the Peoples’ Republic of China. We paid an initial deposit of approximately US$60,000 upon execution of the agreement and are required to pay an additional US$69,000 by January 27, 2006, with both amounts being deducted from the final purchase price.

Upon payment of the US$60,000 in June, we were transferred full operating authority for the Transportation Company. If the closing of the full 70% is not consummated by July 31, 2006, due to reasons outside of our control, we are not entitled to the return of any amounts previously paid. However, the net profit of the Transportation Company earned during such one year period will be received and accounted for as our revenue, irrespective of the purchase of 70% of its share capital by us. Our arrangement operates as a subcontracting agreement in which we are entitled to the net profit during the subcontracting period (i.e. period during which we have the full operating authority) as a fee payment for the non-refundable deposit totaling $129,000. Upon consummation of the full 70% acquisition by July 31, 2006, then, we become a shareholder owning 70% interest.

CRITICAL ACCOUNTING POLICIES

In presenting our financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they pertain to future events. However, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavourable change to current conditions, it could result in a material adverse impact to our consolidated results of operations, financial position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time. Presented below are those accounting policies that we believe require subjective and complex judgments that could potentially affect reported results. However, the majority of our businesses operate in environments where we pay a fee for a service performed, and therefore the results of the majority of our recurring operations are recorded in our financial statements using accounting policies that are not particularly subjective, nor complex.

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Valuation of long-lived assets

We review our long-lived assets for impairment, including property, plant and equipment, and identifiable intangibles with definite lives, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine recoverability of our long-lived assets, we evaluate the probability that future undiscounted net cash flows will be greater than the carrying amount of our assets. Impairment is measured based on the difference between the carrying amount of our assets and their estimated fair value.

Allowance for Doubtful Accounts

We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer payment history and current creditworthiness. We continuously monitor collections and payments from our customers and maintain a provision for estimated credit losses based upon our historical experience and any specific customer collection issues that have been identified. While such credit losses have historically been within our expectations and the provisions established, we cannot guarantee that we will continue to experience credit loss rates similar to those we have experienced in the past. Measurement of such losses requires consideration of historical loss experience, including the need to adjust for current conditions, and judgments about the probable effects of relevant observable data, including present economic conditions such as delinquency rates and financial health of specific customers.

Goodwill on consolidation

Our long-lived assets include goodwill. SFAS No. 142 “Goodwill and Other Intangible Assets” requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests in certain circumstances. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit.

Item 3. Controls and Procedures.

Quarterly Evaluation of Controls

As of the end of the period covered by this quarterly report on Form 10-QSB, we evaluated the effectiveness of the design and operation of (i) our disclosure controls and procedures ("Disclosure Controls"), and (ii) our internal control over financial reporting ("Internal Controls"). This evaluation ("Evaluation") was performed by our President and Chief Executive Officer, John H.W. Hui ("CEO") and Bernard Chan, our Chief Financial Officer ("CFO"). In this section, we present the conclusions of our CEO and CFO based on and as of the date of the Evaluation, (i) with respect to the effectiveness of our Disclosure Controls, and (ii) with respect to any change in our Internal Controls that occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect our Internal Controls.

CEO and CFO Certifications

Attached to this annual report, as Exhibits 31.1 and 31.2, are certain certifications of the CEO and CFO, which are required in accordance with the Exchange Act and the Commission's rules implementing such section (the "Rule 13a-14(a)/15d-14(a) Certifications"). This section of the annual report contains the information concerning the Evaluation referred to in the Rule 13a-14(a)/15d-14(a) Certifications. This information should be read in conjunction with the Rule 13a-14(a)/15d-14(a) Certifications for a more complete understanding of the topic presented.

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Disclosure Controls and Internal Controls

Disclosure Controls are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed with the Commission under the Exchange Act, such as this annual report, is recorded, processed, summarized and reported within the time period specified in the Commission's rules and forms. Disclosure Controls are also designed with the objective of ensuring that material information relating to the Company is made known to the CEO and the CFO by others, particularly during the period in which the applicable report is being prepared. Internal Controls, on the other hand, are procedures which are designed with the objective of providing reasonable assurance that (i) our transactions are properly authorized, (ii) the Company's assets are safeguarded against unauthorized or improper use, and (iii) our transactions are properly recorded and reported, all to permit the preparation of complete and accurate financial statements in conformity with accounting principals generally accepted in the United States.

Limitations on the Effectiveness of Controls

Our management does not expect that our Disclosure Controls or our Internal Controls will prevent all error and all fraud. A control system, no matter how well developed and operated, can provide only reasonable, but not absolute assurance that the objectives of the control system are met. Further, the design of the control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances so of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision -making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of a system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated objectives under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or because the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Scope of the Evaluation

The CEO and CFO's evaluation of our Disclosure Controls and Internal Controls included a review of the controls' (i) objectives, (ii) design, (iii) implementation, and (iv) the effect of the controls on the information generated for use in this annual report. In the course of the Evaluation, the CEO and CFO sought to identify data errors, control problems, acts of fraud, and they sought to confirm that appropriate corrective action, including process improvements, was being undertaken. This type of evaluation is done on a quarterly basis so that the conclusions concerning the effectiveness of our controls can be reported in our quarterly reports on Form 10-QSB and annual reports on Form 10-KSB. The overall goals of these various evaluation activities are to monitor our Disclosure Controls and our Internal Controls, and to make modifications if and as necessary. Our external auditors also review Internal Controls in connection with their audit and review activities. Our intent in this regard is that the Disclosure Controls and the Internal Controls will be maintained as dynamic systems that change (including improvements and corrections) as conditions warrant.

Among other matters, we sought in our Evaluation to determine whether there were any significant deficiencies or material weaknesses in our Internal Controls, which are reasonably likely to adversely affect our ability to record, process, summarize and report financial information, or whether we had identified any acts of fraud, whether or not material, involving management or other employees who have a significant role in our Internal Controls. This information was important for both the Evaluation, generally, and because the Rule 13a-14(a)/15d-14(a) Certifications, Item 5, require that the CEO and CFO disclose that information to our Board (audit committee), and to our independent auditors, and to report on related matters in this section of the annual report. In the professional auditing literature, "significant deficiencies" are referred to as "reportable conditions". These are control issues that could have significant adverse affect on the ability to record, process, summarize and report financial data in the financial statements. A "material weakness" is defined in the auditing literature as a particularly serious reportable condition where the internal control does not reduce, to a relatively low level, the risk that misstatement cause by error or fraud may occur in amounts that would be material in relation to the financial statements and not be detected within a timely period by employee in the normal course of performing their assigned functions. We also sought to deal with other controls matters in the Evaluation, and in each case, if a problem was identified; we considered what revisions, improvements and/or corrections to make in accordance with our ongoing procedures.

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Conclusions

Based upon the Evaluation, our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives. Our CEO and CFO have concluded that our disclosure controls and procedures are effective at that reasonable assurance level to ensure that material information relating to we are made known to management, including the CEO and CFO, particularly during the period when our periodic reports are being prepared, and that our Internal Controls are effective at that assurance level to provide reasonable assurance that our financial statements are fairly presented inconformity with accounting principals generally accepted in the United States. Additionally, there has been no change in our Internal Controls that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to affect, our Internal Controls.

PART II -- OTHER INFORMATION

Item 1. Legal Proceedings.

We are not a party to any pending or to the best of our knowledge, any threatened legal proceedings, except as set forth below. No director, officer or affiliate, or owner of record of more than five percent (5%) of our securities, or any associate of any such director, officer or security holder is a party adverse to us or has a material interest adverse to ours in any pending litigation.

On December 10, 2004, Kenneth P. Silverman, Esq., as Trustee for the Estate of Chief Executive Officers Clubs, Inc. (the “Trustee”), filed a Complaint against CEO Clubs China Limited, China World Trade Corporation, Simon Guo and J.P. Li (the “Complaint”), which commenced an Adversary Proceeding relating to a Chapter 7 bankruptcy case pending in the U.S. Bankruptcy Court for the Southern District of New York, captioned as In Re: Chief Executive Officers Clubs, Inc., Debtor. The Complaint alleges, among other things, that certain assets of the Chief Executive Officers Clubs, Inc. bankruptcy estate were transferred to our Company in violation of Section 549 of the Bankruptcy Code. It requests that the Bankruptcy Court order, among other things, a return of such assets by our Company and/or seeks a judgment against us in the amount of not less than $480,000.00.

As previously disclosed, on May 7, 2004, the Company acquired 51% of the outstanding capital stock of CEO Clubs China Limited, a Hong Kong corporation (“CEO Clubs China”), through one of its wholly-owned subsidiaries, for a total consideration of cash and shares of common stock amounting to US$480,000. CEO Clubs China is an authorized chapter to operate under the “CEO Clubs” trademarks in the Greater China region, including the Peoples’ Republic of China, Hong Kong and Taiwan.

We have engaged counsel and are vigorously defending the Adversary Proceeding. We filed a Motion To Dismiss which was heard on March 22, 2005, and the judge ruled in favor of the Trustee by refusing to dismiss the case at this preliminary stage of the proceedings. Notwithstanding that decision, our primary defense is that we purchased the stock of CEO Clubs China, and did not acquire any assets of the Chief Executive Officers Clubs, Inc. bankruptcy estate. We believe that this defense will be meritorious should the matter ever come to trial.

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Item 2. Changes in Securities.

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders.

None

Item 5. Other Information.

None

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

(a) Exhibits:

3.1          Articles of incorporation are hereby incorporated by reference from our registration statement on Form 10-SB, filed with the Commission on September 9, 1999, SEC File No. 000-26119.

31.1	Rule 13a-14(a)/15d-14(a) Certifications of John H.W. Hui, Vice Chairman and CEO
31.2	Rule 13a-14(a)/15d-14(a) Certifications of Bernard Chan, Chief Financial Officer
32.1	Section 1350 Certifications of John H.W. Hui, Vice Chairman and CEO
32.2	Section 1350 Certifications of Bernard Chan, Chief Financial Officer

(b) Reports on Form 8-K;

None 

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SIGNATURES

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

	China World Trade Corporation (Registrant)
Date: November 11, 2005	By:	/s/ John H.W. Hui
		John H.W. Hui Chief Executive Officer

Date: November 11, 2005	By:	/s/ Bernard Chan
		Bernard Chan Chief Financial Officer

29

EX-31.1

Exhibit 31.1

RULE 13a-14(a)/15d-14(a) CERTIFICATIONS

I, John H.W. Hui, certify that:

1.I have reviewed this Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2005 of China World Trade Corporation (the "Registrant").

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15d-15(e) and 15d-15(e)) for the Registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidates subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Evaluated the effectiveness of the Registrant's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5.The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

	China World Trade Corporation (Registrant)
Date: November 11, 2005	By:	/s/ John H.W. Hui
		John H.W. Hui Chief Executive Officer

EX-31.2

Exhibit 31.2

RULE 13a-14(a)/15d-14(a) CERTIFICATIONS

I, Bernard Chan, certify that:

1.I have reviewed this Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2005 of China World Trade Corporation (the "Registrant").

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15d-15(e) and 15d-15(e)) for the Registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidates subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Evaluated the effectiveness of the Registrant's disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5.The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

	China World Trade Corporation (Registrant)
Date: November 11, 2005	By:	/s/ Bernard Chan
		Bernard Chan Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of China World Trade Corporation (the "Company") on Form 10-QSB for the period ended September 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John H.W. Hui, Chief Executive Officer of the Company, certifies, pursuant to 18 U.S.C. 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

	China World Trade Corporation (Registrant)
Date: November 11, 2005	By:	/s/ John H.W. Hui
		John H.W. Hui Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of China World Trade Corporation (the "Company") on Form 10-QSB for the period ended September 30, 2005 filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Bernard Chan, Chief Financial Officer of the Company, certifies, pursuant to 18 U.S.C. 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

	China World Trade Corporation (Registrant)
Date: November 11, 2005	By:	/s/ Bernard Chan
		Bernard Chan Chief Financial Officer