UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

FORM 10-Q

_______________

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

For the quarterly period ended June 30, 2009

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

For the transition period from ______to______.

CHINA GROWTH DEVELOPMENT, INC.

(Exact name of registrant as specified in Charter)

DELAWARE		333-109458		13-4204191
(State or other jurisdiction of incorporation or organization)		(Commission File No.)		(IRS Employee Identification No.)

927 Canada Court City of Industry, CA 91748

(Address of Principal Executive Offices)

_______________

(626) 581-9098

(Issuer Telephone number)

_______________

(Former Name or Former Address if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days.

Yes o No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company 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 x

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.

Yes o No x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of August 13, 2009: 34,970,007 shares of Common Stock.

CHINA GROWTH DEVELOPMENT, INC.

FORM 10-Q

June 30, 2009

INDEX

PART I-- FINANCIAL INFORMATION

Item 1.	Financial Statements
Item 2.	Management’s Discussion and Analysis of Financial Condition
Item 3	Quantitative and Qualitative Disclosures About Market Risk
Item 4T.	Control and Procedures

PART II-- OTHER INFORMATION

Item 1	Legal Proceedings
Item 1A	Risk Factors
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.	Defaults Upon Senior Securities
Item 4.	Submission of Matters to a Vote of Security Holders
Item 5.	Other Information
Item 6.	Exhibits and Reports on Form 8-K

SIGNATURE

Item 1. Financial Information

CHINA GROWTH DEVELOPMENT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	June 30, 2009		December 31, 2008
	(Unaudited)		(Audited)
Assets
Current Assets
Cash and cash equivalents	$	1,707,156	$	1,543,816
Other receivables, net of allowance for doubtful accounts $0 and $4,397		565,707		657,911
Loan to related parties		3,366,075		2,647,049
Prepaid expenses		-		47,188
Advances to suppliers - related party		11,725,810		11,741,966
Assets from discontinued operations		-		46,280
Total Current Assets		17,364,748		16,684,210

Fixed assets, net		70,834,335		69,523,011
Deferred tax assets		359,762		360,258
Intangible assets, net		9,188,508		9,309,481

Total Assets	$	97,747,354	$	95,876,960


Liabilities and Equity

Current Liabilities
Accounts payable and accrued expenses	$	77,607	$	622,589
Loans payable		4,446,246		4,075,344
Due to related parties		1,053,880		146,574
Construction payable		3,467,241		2,714,705
Income tax payable		2,461,570		1,643,045
Other payable		1,718,247		695,417
Deferred revenue - current		7,633,068		8,233,393
Liabilities from discontinued operations		-		75,634
Total Current Liabilities		20,857,860		18,206,701

Long-term debt		47,693		-
Deferred revenue - non-current		32,242,257		35,299,821

Total Liabilities		53,147,810		53,506,521

Equity
Preferred stock - $.0001 par value; 10,000 shares authorized, 0 shares
issued and outstanding		-		-
Common stock - $.0001 par value; 200,000,000 shares authorized,
34,970,007 and 34,970,007 shares issued and outstanding		3,497		3,497
Additional paid-in capital		7,277,990		7,277,990
Other comprehensive income		3,061,379		2,813,503
Retained earnings		17,820,097		16,354,185
Total Stockholders' Equity		28,162,963		26,449,174
Noncontrolling interest		16,436,581		15,921,264
Total Equity		44,599,544		42,370,438

Total Liabilities and Equity	$	97,747,354	$	95,876,960

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

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CHINA GROWTH DEVELOPMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

	For The Three Months						For The Six Months
	Ended June 30,						Ended June 30,
	2009			2008			2009			2008

Net revenue	$	4,184,977		$	3,738,624		$	7,929,961		$	7,407,703

General, selling and administrative expenses
Depreciation expense		567,777			535,773			1,187,339			1,071,545
Other general, selling and administrative expenses		1,730,509			2,048,985			3,820,623			3,304,660
Total general, selling and administrative expenses		2,298,287			2,584,758			5,007,962			4,376,205

Operating income		1,886,691			1,153,866			2,921,999			3,031,498

Non-operating income (expenses)
Interest income		1,401			1,494			3,214			3,466
Interest expense		(59,013	)		(72,679	)		(174,521	)		(176,561	)
Other income (expenses)		282,379			(80,982	)		(70,753	)		(101,548	)
Total non-operating income (expenses)		224,767			(152,167	)		(242,060	)		(274,643	)

Income from continuing operations, before tax		2,111,457			1,001,699			2,679,939			2,756,855

Income tax expense		447,793			22,534			586,854			43,069

Income from continuing operations, net of tax		1,663,664			979,165			2,093,085			2,713,786

Gain on disposal of discontinued operations		-			-			25,974			-

Net income		1,663,664			979,165			2,119,059			2,713,786

Net income attributable to the noncontrolling interest		629,352			370,411			823,200			1,054,236

Net income attributable to the common stockholders	$	1,034,313		$	608,754		$	1,295,859		$	1,659,550

Earnings per share - basic and diluted:
Income from continuing operations attributable to common stockholders	$	0.03		$	0.02		$	0.04		$	0.05
Discontinued operations attributable to common stockholders		-			-			-			-
Net income attributable to common stockholders	$	0.03		$	0.02		$	0.04		$	0.05
Weighted average shares outstanding, basic and diluted		34,970,007			32,562,612			34,970,007			32,031,306

Amounts attributable to common stockholders:
Income from continuing operations, net of tax	$	1,034,313		$	608,754		$	1,269,885		$	1,659,550
Gain on disposal of discontinued operations		-			-			25,974			-
Net income	$	1,034,313		$	608,754		$	1,295,859		$	1,659,550

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

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CHINA GROWTH DEVELOPMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

	For The Six Months Ended June 30,
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,295,859		$	1,659,550
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation & amortization		1,295,577			1,182,313
Minority interest		823,200			1,054,236
Warrants issued for compensation		-			191,138
Warrants issued in reverse acquisition		-			689,347
Gain on disposal of discontinued operations		(25,974	)		-
Decrease (increase) in current assets:
Accounts receivable		-			8,883
Inventories		-			17,683
Other receivable		91,362			(29,653	)
Interest receivable from related parties		-			563
Advances to suppliers - related party		-			(74,853	)
Prepaid expenses		47,155			30,369
Increase (decrease) in liabilities:
Construction payable		(1,167,052	)		(765,553	)
Other payable		1,024,492			(62,080	)
Tax payable		825,440			25,605
Accrued expense		(374,564	)		(206,256	)
Deferred revenue		(3,600,468	)		(4,440,735	)
Net cash provided by (used in) operating activities		230,939			(719,443	)

CASH FLOWS FROM INVESTING ACTIVITIES
Cash surrendered in disposal of discontinued operations		(3,380	)		-
Cash acquired on reverse acquisition		-			3,742
Advances to related parties		(723,166	)		(53,086	)
Acquisition of property & equipment		(671,445	)		(229,055	)
Proceeds from loan receivables from employees		-			9,216
Net cash used in investing activities		(1,397,990	)		(269,183	)

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from loans from related parties		908,132			394,383
Net proceeds from short-term loans from others		424,495			369,320
Net cash provided by financing activities		1,332,627			763,703

EFFECT OF EXCHANGE RATE CHANGE ON CASH AND CASH EQUIVALENTS		(2,236	)		67,800

NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS		163,340			(157,123	)

CASH & CASH EQUIVALENTS, BEGINNING BALANCE		1,543,816			1,184,621

CASH & CASH EQUIVALENTS, ENDING BALANCE	$	1,707,156		$	1,027,498

SUPPLEMENTAL DISCLOSURES:
Interest paid	$	174,521		$	172,617
Income tax paid	$	1,465		$	-

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

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NOTE 1.

ORGANIZATION AND BASIS OF PRESENTATION

China Growth Development, Inc. (“CGDI”, or “the Company”), formerly known as Teeka Tan Products, Inc., is a Delaware corporation that was initially engaged in the business of marketing and retailing a broad line of high quality value-priced sun care products in Florida through its wholly owned subsidiary, Teeka Tan, Inc. CGDI was incorporated under the laws of the State of Delaware in April 2002, under the name IHealth, Inc. In December 2005, Ihealth, Inc. changed its name to Teeka Tan Products, Inc. On December 13, 2007, Teeka Tan Products, Inc. changed its name to China Growth Development, Inc.

On May 7, 2008, the reverse acquisition between CGDI and Taiyuan Rongan Business Trading Company, Limited (“TRBT”), a company incorporated under the laws of the People’s Republic of China (“PRC) was effected pursuant to the Stock for Stock Equivalent Exchange Agreement and Plan entered into by CGDI and TRBT on November 12, 2007. All of TRBT’s existing capital contributors assigned 80% of their capital contributions in TRBT to CGDI in exchange for an aggregate of 31,500,000 shares of CGDI’s common stock and common stock purchase warrants to purchase an aggregate of 1,400,000 shares of CGDI’s common stock at an exercise price of $0.50 per share. Upon the effectiveness of the reverse acquisition, TRBT has been in the process of preparing documents required by the various divisions of the Chinese government for approval or validation of the transaction.

TRBT was incorporated in Taiyuan City, Shanxi Province, China in December 2005 under the laws of the PRC. TRBT is engaged in the business of building and operation of commercial real estates in China. TRBT holds 76.1% of the issued and outstanding capital contributions of five subsidiaries organized in China that owns and operates shopping malls.

The five subsidiaries of TRBT, including Yudu Minpin Shopping Mall (“Yudu”), Xicheng Shopping Mall (“Xicheng”, also known as Taiyuan Clothing City), Jingpin Clothing City (“Jingpin”), Longma Shopping Mall (“Longma”), and Xindongcheng Clothing Distribution Mall (“Xindongcheng”) were owned initially by Taiyuan Clothing City Group (“TCCG”), the predecessor company of TRBT, prior to May, 2003. During the year 2003, these five shopping malls were acquired by individuals and incorporated as five separate business entities. In January, 2005, TCCG reacquired 51% ownership of each of five shopping malls from the individual shareholders and increased its ownerships to 76.1%.

In December 2005, TRBT, which is related to Taiyuan Clothing City Group (“TCCG”) through common ownership, was incorporated. In December 2005, TRBT acquired all the shares owned by TCCG for the five shopping malls. All five shopping malls are located in Taiyuan City, Shanxi Province, China. TRBT leases each shopping mall booth to commercial tenants conducting business in retail, wholesale and distribution of clothes, shoes, cosmetics, beddings, etc.

The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and generally accepted accounting principles for interim financial reporting. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for fair presentation have been included. Operating results for the six-month period ended June 30, 2009 are not necessarily indicative of the results that may be expected for the year ended December 31, 2009.

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NOTE 2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of consolidation

Under accounting principles generally accepted in the United States, the share exchange is considered to be a capital transaction in substance, rather than a business combination. That is, the share exchange is equivalent to the issuance of stock by CGDI for the net monetary assets of TRBT, accompanied by a recapitalization, and is accounted for as a change in capital structure. Accordingly, the accounting for the share exchange will be identical to that resulting from a reverse acquisition, except no goodwill will be recorded. Under reverse takeover accounting, the post reverse acquisition comparative historical financial statements of the legal acquirer, CGDI, are those of the legal acquiree which are considered to be the accounting acquirer, TRBT. Shares and per share amounts stated have been adjusted to reflect the merger.

Based upon the circumstance that TRBT is considered to have acquired CGDI in the reverse acquisition effective May 7, 2008, and that its capital contributors currently have voting control of CGDI, the accompanying financial statements and related disclosures in the notes to financial statements present the financial position as of December 31, 2008 and 2007, and the operations for the years then ended, of TRBT and its subsidiaries under the name of CGDI. The reverse acquisition has been recorded as a recapitalization of CGDI, with the consolidated net assets of TRBT and its subsidiaries, and net assets CGDI brought forward at their historical bases. The costs associated with the reverse acquisition have been expensed as incurred.

Intercompany accounts and transactions have been eliminated in consolidation. Certain data in the financial statements of the prior period has been reclassified to conform to the current period presentation.

Revenue recognition and deferred revenue

The Company's revenue recognition policies are in compliance with Staff Accounting Bulletin (SAB) 104. Revenue is recognized when services are rendered to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. The Company recognizes revenue net of an allowance for estimated returns, at the time the merchandise is sold or services performed. The allowance for sales returns is estimated based on the Company’s historical experience. Sales taxes are presented on a net basis (excluded from revenues and costs). If the Company had any merchandise on consignment, the related sales from merchandise on consignment would be recorded when the retailer sold such merchandise. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as deferred revenue.

The Company has two major sources of revenue from its shopping mall leasing business, including rental revenue and management services revenue. Rent covering the entire leasing period is generally collected up front from the tenants upon signing the lease agreements, and recorded as deferred revenue. Rental revenue is then recognized over the respective lease term, generally on a monthly basis. Deferred revenue is classified as current and non-current based on the length of maturities. In addition to rental revenue, the Company charges management services fee from its tenants based on the size of the leasing unit. Such management services fee is generally collected once a month, or once every two to three months at certain locations. Fees collected in advance to the months of services being performed will be deferred and recognized as income in the later period being earned.

As of June 30, 2009 and December 31, 2008, current deferred revenue was $7,633,068 and $8,233,393, whereas non-current deferred revenue was $32,242,257 and $35,299,821, respectively.

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Shipping and handling costs

Amounts billed to customers in sales transactions related to shipping and handling represent revenues earned for the goods provided and are included in sales. Costs of shipping and handling are included in the cost of goods sold.

Use of estimates

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

Cash and cash equivalents

Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.

Accounts receivable

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. If the financial condition of customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Inventories

The Company's inventories consist of purchased finished goods, labels and bottles. Inventories are stated at lower of cost or market. Cost is determined on the first-in, first-out basis.

Provision for slow moving and obsolete inventory

We write down our inventory for estimated unmarketable inventory or obsolescence equal to the difference between the cost of inventory and the estimated market value based on assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required.

Property and equipment

Machinery and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of automobiles is provided using the straight-line method over 5 to 20 years. Depreciation of furniture is provided using the straight-line method over 5 to 10 years. Depreciation of machinery and equipments is provided using the straight-line method over 3 to 30 years. Depreciation of building is provided using the straight-line method over 30 to 40 years.

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Impairment of long-lived assets

Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," and the accounting and reporting provisions of APB Opinion No. 30, "Reporting the Results of Operations for a Disposal of a Segment of a Business." The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with SFAS 144. SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal. Based on its review, the Company believes that as of June 30, 2009 and December 31, 2008, there was no significant impairment of its long-lived assets.

Intangible assets

SFAS No. 142, “Goodwill and Other Intangible Assets”, requires an initial impairment assessment involving a comparison of the fair value of trademarks, patents and other intangible assets to current value. Intangible assets determined to have finite lives are amortized over their useful lives. The Company tests intangible assets for impairment at least annually, or more frequently if events or circumstances indicate that an asset might be impaired. An impairment loss shall be recognized if the carrying amount of an intangible asset is not recoverable and its carrying amount exceeds its fair value. After an impairment loss is recognized, the adjusted carrying amount of the intangible asset shall be its new accounting basis. Subsequent reversal of a previously recognized impairment loss is prohibited.

For the year ended December, 31 2008, the Company performed an annual impairment test of intangible assets. The Company considered both the income and market approaches in determining the implied fair value of the intangible assets. While future estimated operating results and cash flows are considered, the Company eventually employed the market approach which required appraisal reports from third-party appraisers or comparable market data. As a result of this analysis, the Company concluded that the carrying amounts of intangible assets exceeded their appraised fair values and recorded an impairment charge of approximately $1,441,032 for the year ended December 31, 2008. Based on its review, the Company believes that as of June 30, 2009, there was no further impairment of its intangible assets.

Fair value of financial instruments

Statement of Financial Accounting Standard No. 107, “Disclosures about Fair Value of Financial Instruments”, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for current assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value.

Earnings per share

The Company has adopted SFAS No. 128, "Earnings per Share." Earnings per common share are computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the period. As of June 30, 2009 and December 31, 2008 the Company had common stock warrants that would have converted into 1,930,000 shares of common stock, respectively. The terms of the stock warrants allow the shares to be converted at a conversion price ranging from $0.50 to $7.00 per share, which was above the average closing price of the Company’s stock during the six months ended June 30, 2009. As such, it is more likely that the warrants would not be converted, which had no dilutive effect to the earnings per share.

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Stock-based compensation

Effective January 1, 2006 The Company adopted SFAS No. 123R "Share-Based Payment" ("SFAS 123R"), a revision to SFAS No. 123 "Accounting for Stock-Based Compensation" ("SFAS 123"). Prior to the adoption of SFAS 123R, the Company accounted for stock options in accordance with APB Opinion No. 25 "Accounting for Stock Issued to Employees" (the intrinsic value method), and accordingly, recognized no compensation expense for stock option grants.

Under the modified prospective approach, the provisions of SFAS 123R apply to new awards and to awards that were outstanding on January 1, 2006 that are subsequently modified, repurchased pr cancelled. Under the modified prospective approach, compensation cost recognized in the year ended December 31, 2006 includes compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant-date fair value estimated in accordance with the original provisions of SFAS 123, and the compensation costs for all share-based payments granted subsequent to January 31, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123R. Prior periods were not restated to reflect the impact of adopting the new standard.

Income taxes

The Company utilizes SFAS No. 109 (“SFAS 109”), "Accounting for Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), effective January 1, 2007. FIN 48 was issued to clarify the requirements of SFAS 109 relating to the recognition of income tax benefits. FIN 48 provides a two-step approach to recognizing and measuring tax benefits when the benefits’ realization is uncertain. The first step is to determine whether the benefit is to be recognized; the second step is to determine the amount to be recognized:

Income tax benefits should be recognized when, based on the technical merits of a tax position, the entity believes that if a dispute arose with the taxing authority and were taken to a court of last resort, it is more likely than not (i.e. a probability of greater than 50 percent) that the tax position would be sustained as filed; and

§	If a position is determined to be more likely than not of being sustained, the reporting enterprise should recognize the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with the taxing authority.

As a result of the implementation of FIN 48, the Company made a comprehensive review of its portfolio of tax positions in accordance with recognition standards established by FIN 48. The Company recognized no material adjustments to liabilities or stockholders’ equity in lieu of the implementation. The adoption of FIN 48 did not have a material impact on the Company’s financial statements.

-8-

Segment reporting

Statement of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure about Segments of an Enterprise and Related Information" requires use of the "management approach" model for segment reporting. The management approach model is based on the way a company's management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.

Foreign currency translation and comprehensive income

The Company accounts for foreign currency translation pursuant to SFAS No. 52, "Foreign Currency Translation" ("SFAS 52"). The functional currency of the Company’s shopping mall unit leasing business in China (TRBT) is the Chinese Yuan Renminbi (CNY). TRBT’s financial statements were maintained and presented in CNY, which were translated into U.S. Dollars (USD) in accordance with SFAS 52. Under SFAS 52, all assets and liabilities are translated at the current exchange rate at the end of each fiscal period, stockholders’ equity are translated at the historical rates, and income statement items are translated at the average exchange rates prevailing throughout the respective periods. Gains or losses on financial statement translation from foreign currency are recorded as separate components in the equity section of the balance sheet, under other comprehensive income in accordance with SFAS No. 130, “Reporting Comprehensive Income”.

Statement of cash flows

In accordance with Statement of Financial Accounting Standards No. 95, “Statement of Cash Flows,” cash flows from the Company’s operations are calculated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet.

Recent pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157 (“SFAS 157”), “Fair Value Measurements”, which is effective for fiscal years beginning after November 15, 2007 with earlier adoption encouraged. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. In February 2008, the FASB issued FASB Staff Position FAS 157-2, Effective Date of FASB Statement No. 157 which delayed the effective date of SFAS 157 for all non-financial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis, until January 1, 2009. The Company has not yet determined the impact the implementation of SFAS 157 will have on the Company’s non-financial assets and liabilities which are not recognized or disclosed on a recurring basis. However, the Company does not anticipate that the full adoption of SFAS 157 will significantly impact their consolidated financial statements.

In February 2007, FASB issued SFAS No. 159 (“SFAS 159”), “The Fair Value Option for Financial Assets and Financial Liabilities”. This Statement permits entities to choose, at specified election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. The objective of SFAS 159 is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The Company adopted SFAS 159 on January 1, 2008, but the implementation of SFAS 159 did not have a significant impact on the Company's financial position or results of operations.

-9-

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business Combinations” (“SFAS 141R). SFAS 141R changes how a reporting enterprise accounts for the acquisition of a business. SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141R is effective for fiscal years beginning on or after December 15, 2008 and early adoption and retrospective application is prohibited. The impact of adopting SFAS 141R will depend on the nature and terms of future acquisitions.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements”, which is an amendment of Accounting Research Bulletin (“ARB”) No. 51. This statement clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. This statement changes the way the consolidated income statement is presented, thus requiring consolidated net income to be reported at amounts that include the amounts attributable to both parent and the noncontrolling interest. This statement is effective for the fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The adoption of SFAS 160 has changed the financial statement presentation regarding non-controlling interests, but does not have significant impact on the Company's consolidated financial position, results of operations or cash flows.

In May 2008, FASB issued SFAS No. 162 (“SFAS 162”), “The Hierarchy of Generally Accepted Accounting Principles”. This Standard identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles. SFAS 162 directs the hierarchy to the entity, rather than the independent auditors, as the entity is responsible for selecting accounting principles for financial statements that are presented in conformity with generally accepted accounting principles. The Standard is effective 60 days following SEC approval of the Public Company Accounting Oversight Board amendments to remove the hierarchy of generally accepted accounting principles from the auditing standards. The Company does not believe this pronouncement will impact its financial statements.

In April 2008, the FASB issued FASB Staff Position (FSP) FAS 142-3, “Determination of the Useful Life of Intangible Assets”, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible Assets”. This Staff Position is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. Application of this FSP is not expected to have a significant impact on the financial statements.

In May 2008, the FASB issued FASB Staff Position (FSP) APB 14-1, “Accounting for Convertible Debt That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” ("FSP 14-1"). FSP 14-1 will be effective for financial statements issued for fiscal years beginning after December 15, 2008. The FSP includes guidance that convertible debt instruments that may be settled in cash upon conversion should be separated between the liability and equity components, with each component being accounted for in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods. FSP 14-1 is not currently applicable to the Company since the Company does not have convertible debt.

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In June 2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities”. This FSP provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The Company does not currently have any share-based awards that would qualify as participating securities. Therefore, application of this FSP is not expected to have an effect on the Company's financial reporting.

NOTE 3.

REVERSE ACQUISITION

On May 7, 2008, CGDI completed the acquisition of TRBT pursuant to the Stock for Stock Equivalent Exchange Agreement and Plan (the “Exchange Agreement”) among CGDI, TRBT, and each of the equity owners of TRBT (“TRBT Shareholders”). Pursuant to the Exchange Agreement, CGDI issued 31,500,000 shares of its common stock, representing 97.3% of CGDI's issued and outstanding common stock immediately following the acquisition and 1,400,000 warrants exercisable at the rate of one warrant for one common share at a price of $0.5 per share, in exchange of 80% equity interest in TRBT.

As TRBT Shareholders have become the majority shareholder of the consolidated entity comprising CGDI and TRBT, the acquisition has been accounted for as a reverse acquisition using the purchase method of accounting, where CGDI (the legal acquirer) is deemed to be the accounting acquiree and TRBT (the legal acquiree) to be the accounting acquirer. However, the acquisition is also considered to be a capital transaction in substance as TRBT (a private operating company) has been merged into CGDI (a public corporation with nominal non-monetary net assets) with the shareholders of CGDI, the former public corporation continuing only as passive investors. Hence, the cost of the acquisition has been measured at the carrying value of the net assets of CGDI with no goodwill or other intangible being recorded in accordance with the accounting interpretation and guidance issued by the SEC staff. The results of CGDI have been consolidated from the date of the acquisition.

NOTE 4.

ADVANCES TO SUPPLIER – RELATED PARTY

Advances to supplier amounted to $11,725,810 and $11,741,966 as of June 30, 2009 and December 31, 2008, respectively. The advances mainly included payments made to fund a building construction through Jingpin Clothing City. The building construction was completed in 2008 and operated under the name “Bin Bin Clothing Square”, which is owned and operated by the general manager of Jingpin Clothing City. On December 31, 2008, Jingpin Clothing City agreed to covert the outstanding balance of advances to supplier into a business loan to Bin Bin Clothing Square with principal amount up to $11,757,990. The loan will expire in one year, bearing no interest, and is secured by the land and building where Bin Bin Clothing Square is located and operated at.

NOTE 5.

PROPERTY AND EQUIPMENT

At June 30, 2009 and December 31, 2008, the following were the details of the property and equipment:

	June 30,			December 31,
	2009			2008
Automobiles	$	1,348,585		$	1,252,142
Machinery & equipment		4,349,694			4,330,214
Building		75,871,476			66,548,574
Construction in progress		1,988,728			8,963,826
Less: Accumulated depreciation		(12,724,148	)		(11,571,745	)
Net	$	70,834,335		$	69,523,011

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Depreciation expense for the three months ended June 30, 2009 and 2008 was $567,777 and $535,773, respectively. Depreciation expense for the six months ended June 30, 2009 and 2008 was $1,187,339 and $1,071,545, respectively.

NOTE 6.

INTANGIBLE ASSETS

The Company’s five shopping mall subsidiaries under TRBT are located in Taiyuan City, Shanxi Province, People’s Republic of China. At November, 2005, the five subsidiaries acquired the right to use the land from the Haozhuang Village government. Per the People's Republic of China's governmental regulations, the Government owns all land. The Company has recognized the amounts paid for the acquisition of rights to use land as intangible asset and amortizing over a period of 36 to 50 years.

Net intangible assets at June 30, 2009 and December 31, 2008 were as follows:

	June 30,			December 31,
	2009			2008
Rights to use land	$	11,485,162		$	11,500,986
Less: Accumulated amortization		(857,604	)		(750,473	)
		10,627,558			10,750,513
Less: Impairment charges		(1,439,050)			(1,441,032	)
Net intangible assets	$	9,188,508		$	9,309,481

Amortization expense for the Company’s intangible assets for the three months ended June 30, 2009 and 2008 was $54,135 and $55,401, respectively. Amortization expense for the six months ended June 30, 2009 and 2008 was $108,238 and 110,768.

Amortization expense for the Company’s intangible assets over the next five years is estimated to be:

June 30,
2010	$	216,477
2011		216,477
2012		216,477
2013		216,477
2014 and thereafter		8,322,600
	$	9,188,508

NOTE 7.

CONSTRUCTION PAYABLE

As of June 30, 2009 and December 31, 2008, construction payable amounted to $3,467,241 and $2,714,705, respectively. The Company’s construction payable consists primarily of amounts payable for the construction of shopping mall.

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NOTE 8.

LOANS PAYABLE

As of June 30, 2009 and December 31, 2008 loans payable consists the following:

	June 30, 2009					December 31, 2008
	Amount		Annual Interest Rate			Amount		Annual Interest Rate
Short-term:
Outside parties	$	4,007,130		0%-8.37	%	$	3,231,934		0%-8.37	%
Banks		439,117		13.05	%		843,410		1.05%-13.05	%
Related parties		1,053,880		0%-1.50	%		146,574		1.50	%
Total	$	5,500,126				$	4,221,918

Long-term:	$	47,693		5.31	%	$	-

Loans payable include the following items:

Loans payables to outside parties amounted to $4,007,130 and $3,231,934 at June 30, 2009 and December 31, 2008, respectively. These loans are due to unrelated parties with various expiration dates within one year, unsecured, and with annual interest rates of 0% - 8.37%.

Loans payable to related parties amounted to $1,053,880 and $146,574 at June 30, 2009 and December 31, 2008, respectively. These loans were payable to related parties due within one year, unsecured, with an annual interest rate of 0%-1.5%.

Loans payable to banks amounted to $439,117 and $843,410 at June 30, 2009 and December 31, 2008, respectively. These loans were due within one year, unsecured, bearing annual interest rates of 1.05-13.05%.

Long-term debt amounted to $47,693 and $0 as of June 30, 2009 and December 31, 2008. The loan was unsecured and due in January 2011.

NOTE 9.

EQUITY TRANSACTIONS

COMMON STOCK AND WARRANTS

On May 7, 2008, the Company completed the reverse acquisition of TRBT pursuant to the Stock for Stock Equivalent Exchange Agreement and Plan (the “Exchange Agreement”) among CGDI, TRBT, and each of the equity owners of TRBT (“TRBT Shareholders”). Pursuant to the Exchange Agreement, CGDI issued 31,500,000 shares of its common stock, representing 97.3% of CGDI's issued and outstanding common stock immediately following the acquisition and 1,400,000 warrants exercisable at the rate of one warrant for one common share at a price of $0.5 per share, in exchange of 80% equity interest in TRBT. The fair value of the warrants was estimated on the grant date using the Black-Scholes option pricing model as required under SFAS 123 and EITF-96-18 with the following weighted average assumptions: expected dividend yield 0%, volatility 157.56%, risk-free interest rate of 1.57%, and expected warrant life of twelve months. The Company fair valued these warrants at $689,347.

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In May 2008, in consideration for services provided, the Company issued to Mirador Consulting 500,000 warrants exercisable at the rate of one warrant for one share of its common stock at a price of $1.00 per share expiring on November 5, 2008. The fair value of the warrants was estimated on the grant date using the Black-Scholes option pricing model as required under SFAS 123 and EITF-96-18 with the following weighted average assumptions: expected dividend yield 0%, volatility 157.56%, risk-free interest rate of 1.57%, and expected warrant life of twelve months. The Company fair valued these warrants at $191,138.

In June 2008, the Company issued 2,590,934 shares of common stock for the settlement of the $200,000 convertible debenture previously issued on August 24, 2004 with interest accrued at 10% per annum amounting to $91,767.

NOTE 10.

RELATED PARTY TRANSACTIONS

The parties primarily refer to the original individual shareholders of TRBT and corporate entities related through one common shareholder, Mr. Aizhong An, CEO and Chairman of the Company, who is also a majority shareholder in those related corporate entities.

Loan to related parties

Total loan to related parties amounted to $3,366,075 and $2,647,049 as of June 30, 2009 and December 31, 2008, respectively, which included the following:

Loans to related parties amounted to $3,209,923 and $2,490,682 as of June 30, 2009 and December 31, 2008, respectively.

Notes receivable from related party amounted to $156,152 and $156,367 as of June 30, 2009 and December 31, 2008, respectively. Interest receivable associated with the notes and amounted to $9,780 and $8,153 as of June 30, 2009 and December 31, 2008, respectively.

Due to related parties

Loans from related parties amounted to $1,053,880 and $146,574 as of June 30, 2009 and December 31, 2008, respectively. Interest rates ranged from 0% to 1.05% per annum. All loans mature within one year.

Management Fee Expense

For the six months ended June 30, 2009 and 2008, management fee allocated from Taiyuan Clothing City Group, a related party of TRBT through common ownership, amounted to $476,933 and $0, respectively.

NOTE 11.

DISCONTINUED OPERATIONS

During the third quarter of 2008, the Company planned to exit the business of marketing and retailing sun care products operated at Teeka Tan, Inc. in Florida. On September 1, 2008, the Board of Directors of the Company decided and approved a resolution to discontinue such operations of the sun care product business. The Company intends to dispose all assets and settle all liabilities of the discontinued operation in the next twelve-month period.

On March 18, 2009, the Company entered into an Agreement of Assumption and Release with Brian S. John and Richard S. Miller, two former officers of the Company, to transfer all assets of Teeka Tan, Inc. to these two individuals, who have agreed to assume all liabilities relating to Teeka Tan, Inc., including, but not necessarily limited to, all amounts payable by the Company with respect to Teeka Tan, Inc. or all obligations, whether past, present or future of the Company with respect to Teeka Tan, Inc. A Bill of Sale was also signed on March 18, 2009 between the Company and the two individuals, and executed on the same day.

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The following gain on disposal of discontinued operations was recognized based on the assets transferred to and the liabilities assumed by the two individuals:

Cash surrendered	$	3,380
Current assets		43,247
Fixed assets, net		3,033
Current liabilities		(75,634	)

Gain on disposal of discontinued operations	$	(25,974	)

NOTE 12.

INCOME TAXES

The Company is registered in the State of Delaware and has operations in primarily two tax jurisdictions - the PRC and the United States. For certain operations in the U.S., the Company has incurred net accumulated operating losses for income tax purposes. The Company believes that it is more likely than not that these net accumulated operating losses will not be utilized in the future. Therefore, the Company has provided full valuation allowance for the deferred tax assets arising from the losses at these locations as of June 30, 2009 and December 31, 2008. Accordingly, the Company has no net deferred tax assets on the U.S. operations.

United States of America

The Company has significant income tax net operating losses (“NOL”) carried forward from prior years. Due to the change in ownership of more than fifty percent, the amount of NOL which may be used in any one year will be subject to a restriction under section 382 of the Internal Revenue Code. Due to the uncertainty of the realizability of the related deferred tax assets, a reserve equal to the amount of deferred income taxes has been established at June 30, 2009 and December 31, 2008. The Company has provided 100% valuation allowance to the deferred tax assets as of June 30, 2009 and December 31, 2008.

People’s Republic of China (PRC)

Under the Enterprise Income Tax (“EIT”) of the PRC, prior to 2007, Chinese enterprises are generally subject to an income tax at an effective rate of 33% (30% statutory income taxes plus 3% local income taxes) on income reported in the statutory financial statements after appropriate tax adjustments, unless the enterprise is located in a specially designated region for which more favorable effective tax rates are applicable. Beginning January 1, 2008, the new EIT law has replaced the existing laws for Domestic Enterprises (“DEs”) and Foreign Invested Enterprises (“FIEs”). The new standard EIT rate of 25% will replace the 33% rate previously applicable to both DES and FIEs. The two year tax exemption, six year 50% tax reduction and tax holiday for production-oriented FIEs will be eliminated. The Company is currently evaluating the effect of the new EIT law on its financial position.

The provision for income taxes from continuing operations on income consists of the following for the six months ended June 30, 2009 and 2008:

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	2009		2008

Income tax expense – current	$	586,854	$	43,069
Income tax expense – deferred		-		-
Total income tax expense	$	586,854	$	43,069

The following is a reconciliation of the statutory tax rate to the effective tax rate for the three months ended June 30, 2009 and 2008:

	2009			2008
U.S. Federal tax at statutory rate		34.0	%		-
U.S. State tax net of federal taxes		8.7	%		-
Valuation allowance		(42.7	%)		-
Foreign income tax – PRC		25	%		33	%
Net effect of non-taxable income/non-deductible expenses		(3.1	%)		(31.44	%)
Effective tax rate		21.90	%		1.56	%

Deferred taxes

The tax effect of temporary differences that give rise to the Company’s deferred tax asset as of June 30, 2009 and December 31, 2008 are as follows:

	June 30, 2009		December 31, 2008
Deferred tax asset – non-current
Impairment loss on intangible assets	$	359,762	$	360,258
Valuation allowance				-
Net deferred tax asset	$	359,762	$	360,258

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Caution Regarding Forward-Looking Information

Certain statements contained herein, including, without limitation, statements containing the words “believes”, “anticipates”, “expects” and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.

Given these uncertainties, readers of this prospectus and investors are cautioned not to place undue reliance on such forward-looking statements.

Overview

The following discussion is an overview of the important factors that management focuses on in evaluating our businesses, financial condition and operating performance and should be read in conjunction with the financial statements included in this Current Report on Form 8-K. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward looking statements as a result of any number of factors, including those set forth under the section entitled “Risk Factors” and elsewhere in this Current Report on Form 8-K.

Our Business

TRBT operates six (6) shopping malls all located in the Chaoyang Street area in the city of Taiyuan, Shanxi Province, China.

Principal Factors Affecting our Financial Performance

We believe that the following factors affect our financial performance:

·	Ability to successfully acquire new shopping malls and increase foot traffic to these locations;

·	Continue to attract consumers to our shopping malls; and

·	Attract profitable retailers to lease space in our shopping malls; and

·	Continue to keep a low debt to asset ratio.

In addition, the following “global” factor will have an affect on our financial performance:

·	Growth of the Economy in China

China’s economy has experience significant growth over the past few years and Chinese consumers have been continuing to spend money at a record breaking pace with no signs of a slowdown and TRBT expects this trend to continue.

Results of Operations

The following tables set forth key components of our results of operations for the periods indicated, in dollars, and key components of our revenue for the period indicated, in dollars.

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	For The Three Months Ended June 30,
	2009			2008			2009 vs. 2008

Net revenue	$	4,184,977		$	3,738,624		$	446,353		12	%

General, selling and administrative expenses
Depreciation expense		567,777			535,773			32,004		6	%
Other general, selling and administrative expenses		1,730,509			2,048,985			(318,476	)	-16	%
Total general, selling and administrative expenses		2,298,287			2,584,758			(286,471	)	-11	%

Operating income		1,886,691			1,153,866			732,825		64	%

Non-operating income (expenses)
Interest income		1,401			1,494			(93	)	-6	%
Interest expense		(59,013	)		(72,679	)		13,666		-19	%
Other income (expense)		282,379			(80,982	)		363,361		-449	%
Total non-operating income (expenses)		224,767			(152,167	)		376,934		-248	%

Income from continuing operations, before tax		2,111,457			1,001,699			1,109,758		111	%

Income tax expense		447,793			22,534			425,259		1887	%

Income from continuing operations, net of tax		1,663,664			979,165			684,499		70	%

Gain on disposal of discontinued operations		-			-			-		-

Net income		1,663,664			979,165			684,499		70	%

Net income attributable to the noncontrolling interest		629,352			370,411			258,941		70	%

Net income attributable to the common stockholders	$	1,034,313		$	608,754		$	425,558		70	%

Net Revenue:

Net revenue increased by $446,353 from $3.74 million for the quarter ended June 30, 2008 to $4.18 million for the quarter ended June 30, 2009, a 12% increase. The increase was mainly due to the expansion of Longma Shopping Mall being completed and starting to operate. The associated deferred revenue collected previously from commercial tenants started to amortize and recognize over the leasing period. Management service income collected from the new commercial tenants also increased revenue. In addition, management also increased the management service income per square meter at several clothing mall booths at Xicheng Shopping Mall. Those increases were partially offset by decrease in rental income at Jingpin Shopping Mall and Xicheng Shopping Mall, primarily affected by the economy downturn.

General, selling and administrative expenses:

Total general, selling and administrative expenses decreased by $286,471 from $2.58 million for the quarter ended June 30, 2008 to $2.30 million for the quarter ended June 30, 2009, an 11% decrease. The higher expense for the quarter ended June 30, 2008 was mainly due to a one-time charge of $880,485 incurred in the closing of the reverse acquisition, including the issuance of 1,400,000 warrants fair valued at $689,347, and 500,000 warrants fair valued at $191,138. Excluding the one-time charges, total general, selling and administrative expenses decreased by $562,009. The decreases were primarily incurred in electricity expense and heating expense. The higher amounts in those expenses in 2008 were driven by two major construction projects for Xicheng Shopping Mall Phase II and the Longma expansion. The increase was partially offset by the $32,004 increase in depreciation expense resulting from the expansion of the Company’s operating facilities.

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Income from continuing operations:

We observed an increase in income from continuing operations by $1.1 million, from $1.0 million for the quarter ended June 30, 2008 to $2.1 million for the quarter ended June 30, 2009, a 111% increase. Such increase was mainly attributable to increases in net revenue as stated above, as well as higher other income incurred during the current quarter. Other income increased by $363,361 from ($80,982) for the quarter ended June 30, 2008 to $282,379 for the quarter ended June 30, 2009. The increase was mainly resulted from reversing the donations made to Hao Zhuang Village during the first quarter of 2009 for construction of a community entertainment and cultural center, given that Hao Zhuang Village has agreed to pay back such donation.

Income tax expense:

Income tax expense increased by $447,793 from $22,534 for the quarter ended June 30, 2008 to $447,793 for the quarter ended June 30, 2009. The increase was mainly due to change in the effective tax rate to our operations in PRC, increasing from 2.25% for the second quarter of 2008 to 21.20% for the current quarter, due to the lack of favorable tax policy granted by local governments to the Company.

Net income attributable to the noncontrolling interest

Net Income attributable to the noncontrolling interest was $370,411 for the quarter ended June 30, 2008 and $629,352 for the quarter ended June 30, 2009, an increase of $258,941 or 70%. TRBT owns 76.1% of each of its five subsidiaries in China, leaving 23.9% noncontrolling interest. Pursuant to the reverse merger in May 2008, CGDI owns 80% of TRBT which added an additional 20% of noncontrolling interest out of the 76.1% ownership over TRBT’s five subsidiaries. Such ownership structure has not changed since then. The increase was substantially in line with the increase in net earnings during the current quarter.

Net income attributable to the common stockholders

Net income attributable to the common stockholders was $1,034,313 for the quarter ended June 30, 2009, compared to $608,754 for the quarter ended June 30, 2008, an increase of $425,558 or 70%. The higher net income for the current quarter was attributable to the increased net revenue and other income as described above.

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	For The Six Months Ended June 30,
	2009			2008			2009 vs. 2008

Net revenue	$	7,929,961		$	7,407,703		$	522,258		7	%

General, selling and administrative expenses
Depreciation expense		1,187,339			1,071,545			115,794		11	%
Other general, selling and administrative expenses		3,820,623			3,304,660			515,963		16	%
Total general, selling and administrative expenses		5,007,962			4,376,205			631,757		14	%

Operating income		2,921,999			3,031,498			(109,499	)	-4	%

Non-operating income (expenses)
Interest income		3,214			3,466			(252	)	-7	%
Interest expense		(174,521	)		(176,561	)		2,040		-1	%
Other expense		(70,753	)		(101,548	)		30,795		-30	%
Total non-operating expenses		(242,060	)		(274,643	)		32,583		-12	%

Income from continuing operations, before tax		2,679,939			2,756,855			(76,916	)	-3	%

Income tax expense		586,854			43,069			543,785		1263	%

Income from continuing operations, net of tax		2,093,085			2,713,786			(620,701	)	-23	%

Gain on disposal of discontinued operations		25,974			-			25,974		100	%

Net income		2,119,059			2,713,786			(594,727	)	-22	%

Net income attributable to the noncontrolling interest		823,200			1,054,236			(231,036	)	-22	%

Net income attributable to the common stockholders	$	1,295,859		$	1,659,550		$	(363,691	)	-22	%

Net Revenue:

Net revenue increased by $552,258 from $7.41 million for the six months ended June 30, 2008 to $7.93 million for the six months ended June 30, 2009, a 7% increase. The increase was mainly due to the expansion of Longma Shopping Mall being completed and starting to operate. The associated deferred revenue collected previously from commercial tenants started to amortize and recognize over the leasing period. Management service income collected from the new commercial tenants also increased revenue. In addition, management also increased the management service income per square meter at several clothing mall booths at Xicheng Shopping Mall. Those increases were partially offset by decrease in rental income at Jingpin Shopping Mall and Xicheng Shopping Mall, primarily affected by the economy downturn.

General, selling and administrative expenses:

Total general, selling and administrative expenses increased by $631,757 from $4.38 million for the six months ended June 30, 2008 to $5.01 million for the six months ended June 30, 2009, a 14% increase. The increase was primarily driven by increases in management fee expense, salaries and wages, maintenance and repair expense, and depreciation expense. Management fee expense increased to $476,933 for the period from $13,968 same quarter prior year. Such fee was allocated from and paid to Taiyuan Clothing City Group, a related party through common ownership of TRBT, for general management services provided to all affiliated companies. Increase in salaries and wages was mainly due to headcounts increased to support the expanded operations of the Company. Depreciation expense increased by $115,794 compared to the current period of the prior year. The increase was also triggered by the expansion of the Company’s operating facilities. The above increases were partially offset by decrease in electricity expense and heating expense. The higher amounts in those expenses in 2008 were driven by two major construction projects for Xicheng Shopping Mall Phase II and the Longma expansion.

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Income from continuing operations:

We observed a decrease in income from continuing operations by $76,916, from $2.76 million for the six months ended June 30, 2008 to $2.68 million for the six months ended June 30, 2009, a 3% decrease. Such decrease was primarily attributable to increases in general, selling and administrative expenses as discussed previously.

Income tax expense:

Income tax expense increased by $543,785 from $43,069 for the six months ended June 30, 2008 to $586,854 for the six months ended June 30, 2009. The increase was mainly due to change in the effective tax rate to our operations in PRC, increasing from 1.56% for the second quarter of 2008 to 21.90% for the current quarter, due to the lack of favorable tax policy granted by local governments to the Company.

Net income attributable to the noncontrolling interest

Net Income attributable to the noncontrolling interest was $1.05 million for the six months ended June 30, 2008 and $823,200 for the six months ended June 30, 2009, a decrease of $231,036 or 22%. TRBT owns 76.1% of each of its five subsidiaries in China, leaving 23.9% noncontrolling interest. Pursuant to the reverse merger in May 2008, CGDI owns 80% of TRBT which added an additional 20% of noncontrolling interest out of the 76.1% ownership over TRBT’s five subsidiaries. Such ownership structure has not changed since then. The decrease was substantially in line with the decrease in net earnings during the current period, which was triggered by higher income tax expense accrued.

Net income attributable to the common stockholders

Net income attributable to the common stockholders was $1.30 million for the six months ended June 30, 2009, compared to $1.66 million for the six months ended June 30, 2008, a decrease of $363,691 or 22%. The lower net income for the current period was attributable to the increased income tax expense accrued as described above.

LIQUIDITY AND CAPITAL RESOURCES

The Company currently generates its cash flow through operations which it believes will be sufficient to sustain current level operations for at least the next twelve months. In 2009, we intend to continue to work to expand our presence in the commercial real estate market, including the acquisition of another shopping mall.

To the extent we are successful in growing our business, identifying potential acquisition targets and negotiating the terms of such acquisition, and the purchase price includes a cash component, we plan to use our working capital and the proceeds of any financing to finance such acquisition costs. Our opinion concerning our liquidity is based on current information. If this information proves to be inaccurate, or if circumstances change, we may not be able to meet our liquidity needs.

2009 – 2010 Outlook

Over the course of the next few years, we intend to grow and expand our commercial real estate business. We expect to acquire an additional 2 shopping centers within the next three years. These acquisitions will be financed either through revenues of the Company or by financings and sales of the Company’s stock or other securities. In addition, TRBT expects to complete the acquisition of development rights to 3,000 square metric units of prime commercial land.

PLAN OF OPERATIONS

Critical Accounting Policies

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

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Our significant accounting policies are summarized in Note 1 of our financial statements. While all these significant accounting policies impact its financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations, financial position or liquidity for the periods presented in this report.

Recent Accounting Pronouncements

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Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for Smaller Reporting Companies.

Item 4T. Controls and Procedures

a) Evaluation of Disclosure Controls. Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors.

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

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 of Form 8-K.

(a) Exhibits

31.1 Certifications pursuant to Section 302 of Sarbanes Oxley Act of 2002

32.1 Certifications pursuant to Section 906 of Sarbanes Oxley Act of 2002

(b) Reports of Form 8-K

None.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CHINA GROWTH DEVELOPMENT, INC.

Date: August 13, 2009	By:	/s/ Aizhong An
		Aizhong An Chief Executive Officer

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CHINA GROWTH DEVELOPMENT, INC. 10-Q