1331444--3/27/2009--CHINA_CLEAN_ENERGY

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{operation, international, foreign}

{stock, price, operating}

{acquisition, growth, future}

{customer, product, revenue}

{operation, natural, condition}

{gas, price, oil}

{stock, price, share}

{regulation, change, law}

{provision, law, control}

{interest, director, officer}

{property, intellectual, protect}

{cost, operation, labor}

{personnel, key, retain}

{control, financial, internal}

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{cost, regulation, environmental}

{cost, contract, operation}

Risks Related to Our Business We have a limited history of producing biodiesel, which makes it difficult to evaluate our business. Unanticipated problems in our engineering and construction operations may harm our business and viability. Our results of operations, financial position and business outlook will be highly dependent on commodity prices, which are subject to significant volatility and uncertainty, and the availability of supplies, so our results could fluctuate substantially. We may be unable to obtain the additional capital required to implement our business plan, which will negatively impact our ability to grow our business. Our reliance upon a limited number of feedstock suppliers may hinder our ability to be profitable. Price declines in petro-based diesel due to alternative energy discoveries or enhanced supply of oil could negatively impact demand for our biodiesel. Strategic relationships upon which we may rely are subject to change, leading to uncertainty and a negative impact on our business. A large portion of our sales is concentrated in a few major customers; loss of any of those customers would have a material adverse impact on our revenues. We are dependent on others for sales of a significant portion of our products, which may place us at a competitive disadvantage and reduce profitability. The success of our business depends upon the continuing contributions of our Chief Executive Officer and other key personnel and our ability to attract other employees to expand our business. We plan to grow very rapidly, which will place strains on management and other resources. Increases in our energy expenses will negatively impact operating results and financial condition. We may be unable to locate suitable properties and obtain the development rights needed to build and expand our business. The production, sale and distribution of biodiesel are dependent on the sufficiency of necessary infrastructure which may not occur on a timely basis, if at all, and our operations could be adversely affected by infrastructure disruptions. Our commercial success will depend in part on our ability to obtain and maintain protection of our intellectual property. We face significant competition, which may negatively impact our future growth. Our business is subject to local legal, political, and economic factors that are beyond our control. Our business will suffer if we cannot obtain or maintain necessary permits or licenses. Penalties we may incur could impair our business. We are subject to financial reporting and other requirements for which our accounting, internal audit and other management systems and resources may not be adequately prepared. Our operations are susceptible to interruption from natural disasters. Risks Related to Doing Business in the People s Republic of China We face the risk that changes in the policies of the government of the People s Republic of China could have a significant impact upon our business and profitability. The laws and regulations of the People s Republic of China governing our current business operations are sometimes vague and uncertain. Any changes in these laws and regulations may have a material and adverse effect on our business. A slowdown or other adverse developments in the economy of the People s Republic of China may materially and adversely affect our customers, demand for our products and our business. Inflation in the People s Republic of China could negatively affect our profitability and growth. Governmental control of currency conversion may affect the value of an investment in us. The fluctuation of the Renminbi may materially and adversely affect investments in us. Our current tax status is uncertain, exposing us to potential liability. Any recurrence of severe acute respiratory syndrome, or SARS, or another widespread public health problem, could adversely affect our operations. Because our principal assets are located outside of the U.S. and all of our directors and officers, except for Shannon Yan, reside outside of the U.S., it may be difficult for investors to enforce their rights based on U.S. federal securities laws against us and our officers and directors in the U.S. or to enforce a U.S. court judgment against us or them in the People s Republic of China. We may have difficulty establishing adequate management, legal and financial controls in the People s Republic of China. Risks Relating to Our Organization Our executive officers beneficially own a substantial percentage of our outstanding common stock, which gives them significant influence over certain major decisions on which our stockholders may vote, which may discourage an acquisition of us. Because we became public by means of a reverse merger, we may not be able to attract the attention of major brokerage firms. Risks Relating to Our Common Stock Our stock price may be volatile, so investors could lose their investment. There may be a limited market for our securities and we may fail to qualify for a listing on a national securities exchange such as the NASDAQ Stock Market or the NYSE Amex. Our common stock is currently deemed a penny stock, which could make it more difficult for investors to sell their shares. Provisions of our Certificate of Incorporation and Delaware law could deter a change of control, which could discourage or delay offers to acquire us. Our Certificate of Incorporation authorizes the board to create new series of preferred stock without further approval by stockholders, which could adversely affect the rights of the holders of common stock. Volatility in our common stock price may subject us to securities litigation. The elimination of monetary liability against our directors under Delaware law and the existence of indemnification rights to our directors may result in substantial expenditures by us and may discourage lawsuits against our directors.

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1331444--3/27/2009--CHINA_CLEAN_ENERGY_INC