SecProbe.io

October 3, 2007

Mail Stop 4561

By U.S. Mail and facsimile to 011 86 21 6336 0909

Mr. Guangyu Wu, Chief Executive Officer
China Recycling Energy Corporation
429 Guangdong Road
Shanghai, People’s Republic of China    200001

RE: China Recycling Energy Corporation
            File No.  000-12536
 Form 10-KSB for the year ended December 31, 2006
Forms 10-QSB for the quarters ended March 31, 2007 and June 30, 2007

Dear Mr. Wu:

We have reviewed the above referenced filings and have the following comments.
We have limited our review to only your fina ncial statements and related disclosures and
will make no further review of your documents.  As such, all persons who are responsible
for the adequacy and accuracy of the disclosu res are urged to be certain that they have
included all information required pursuant to  the Securities Exchange Act of 1934.

In our comments, we ask you to provide us with supplemental information so we
may better understand your disclosure.  Please be as detailed as necessary in your explanation. After reviewing this inform ation, we may or may not raise additional
comments.

Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.
We welcome any questions you may have about  our comment or on a ny other aspect of
our review.  Feel free to call us at the tele phone numbers listed at th e end of th is letter.

Form 10-KSB

Management's Discussion and Analysis

Critical Accounting Policies, page 12

1. In future filings, please revise the MD&A to address the role significant
accounting policies and estimates have in understanding the company's results.

China Recycling Energy Corporation
Page 2 of 4
Provide a comprehensive disc ussion of your critical acc ounting policies, including
the judgments and uncertainties affecting the application of th ose policies and the
likelihood that materially different am ounts would be reported under different
conditions or using different but reasonably plausible assumptions.  Refer to FR-60.

Financial Statements

Note 3 – Summary of Significant Accounting Policies

Foreign Currencies Translation, page 7

2. The note indicates that the functional currenc y of the Company is the U.S. dollar.
Please reconcile this assertion with the disclosure in note 17(a) on page 19 that
“…100% of the Company's assets were located in the PRC and 100% of the Company's revenues and purchases were derived from customers located in the PRC”, and with your disclosure in your 2005 Form 10-KSB. Explain to us how you considered paragraphs 5-10 of SFAS 52 in determining your functional currency. Also, tell us your acc ounting policy for foreign currency transaction
gains or losses.

Note 4 – Impairment Write Down Recognized  As A Result Of  Strategic Review of
Certain Operations, page 9

3. We noted that you charged additional pa id-in capital for the impairment relating
to property and equipment and deposit for business acquisition. Please explain to
us your basis in GAAP for this treatment.

Note 7 Property and Equipment, Net, page 10

4. It appears from the disclosure in the last paragraph of note 7 that the assets that
have been written down are pledged as secu rity for Sifang’s line of credit.  Please
clarify to us whether you gua rantee this line of credit.

Exhibit 31.1 and 31.2 - Certifications

5. We noted that the identification of the certifying indivi dual at the beginning of the
certification required by Exchange Act Rule  13a-14(a) included  in the 10-KSB
and Forms 10-QSB also includes the title of the certifying individual. Considering that the certifications must  be signed in a personal capacity, please confirm to us
that your officers signed such  certification in a persona l capacity. Also, confirm
that in future filings you will revise th e identification of the certifying individual
at the beginning of the certification so as not to include th e individual’s title.

China Recycling Energy Corporation
Page 3 of 4

Forms 10-QSB for the quarters ended March 31, 2007 and June 30, 2007

Financial Statements

Condensed Consolidated Balance Sheet

6. Please explain to us the transactions that gave rise to the amount reported as “Due
from a third party”, the nature of the c onsiderations exchanged and your basis in
GAAP for your accounting.

Note 2 – Organization and Business Background, page 9

7. We note that under the Joint-Operation Agreement with Yingfeng, TCH provides various forms of investments and properties into the Project and in return TCH becomes entitled to all the rights, benefits  and interests that Yingfeng originally
had under the Project Contract, includi ng but not limited to the cash payment
made by Xingtai on a regular basis and other property rights and interests. We also note your funding commitment related to a TRT System project disclosed in
note 14 on page 16. Please explain to us how you considered the guidance in FIN
46R with respect to your rights and ob ligations referenced above and your
relationship with Yingfeng.

Note 3 – Summary of Significant Accounting Policies

Revenue Recognition, page 11

8. The notes suggests that your basis for accounting your lease with Xingtai as direct financing lease is that the lease transfers substantially all benefits and risks of TRT system ownership to Xintai.  Please sp ecifically explain to us how this lease
meets the criteria in pa ragraph 6.b.ii. of SFAS 13.

As appropriate, please respond to these co mments within 10 business days or tell
us when you will provide us with a response.  Please submit a response letter on EDGAR that keys your responses to our comment s and provides any requested information.
Detailed response letters great ly facilitate our review.  Please understand that we may
have additional comments after review ing your responses to our comments.

 We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filings reviewed by the staff to be certain that they have provided all information investors require for an info rmed decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.

China Recycling Energy Corporation
Page 4 of 4

 In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:

• the company is responsible for the adequacy  and accuracy of the disclosure in the
filings;

• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filings; and

• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filings or in response to our comments on your filings.

You may contact Jorge L. Bonilla at ( 202) 551-3414 or me at (202) 551-3498 if
you have any questions,

                                                                                  Sincerely,

                                                                                  Linda van Doorn
                                                                                  Senior Assistant Chief Accountant