SecProbe.io

September 22, 2010
 Xinyu Peng Chief Financial Officer and Secretary China Recycling Energy Corporation 12/F, Tower A, Chang An International Building No. 88 Nan Guan Zheng Jie Xi An City, Shan Xi Province, China 710068

Re:  China Recycling Energy Corporation
Form 10-K for the Fiscal Year Ended December 31, 2009
Filed March 16, 2010 Form 10-Q for the Quarterly Period Ended June 30, 2010 Filed August 16, 2010 File No. 001-34625
 Dear Mr. Peng:
We have reviewed your response letter da ted August 31, 2010 and have the following
comments.  In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
 Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.
 Form 10-K for Fiscal Year Ended December 31, 2009

 Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 15
 Results of Operations, page 22

1. We reviewed your proposed disclosure in response to comment four in our letter dated August 3, 2010.  As previously re quested, please include a comparative
analysis and discussion of the effective tax rate for each year presented.  The
discussion should describe the reasons for changes in the eff ective tax rate.

Xinyu Peng
China Recycling Energy Corporation
September 22, 2010 Page 2

 Item 8.  Financial Statements and Supplementary Data, page 26

 Report of Independent Registered Public Accounting Firm, page 26

2. We reviewed your response to comment nine in our letter dated August 3, 2010.
Please confirm to us that you received a signed copy of the report issued by your
independent accountant and intend to incl ude the conformed signature of your
independent accountant in future filings and/or amendments.
 Consolidated Statements of Cash Flows, page 30

3. We reviewed your response and the analysis  provided in the appendix to comment 11
in our letter dated August 3, 2010.  It appears that you reported the profit on sales-type leases as a reduction of cash flows fr om investing activities rather than as a
reduction to cash flows from operating activit ies in the adjustments to reconcile net
income (loss) to net cash provided by operati ng activities.  It al so appears that you
netted cash outflows for construction in pr ogress against proceeds from sales-type
leases in cash flows from i nvesting activities, which resu lted in a net cash outflow
rather than a cash inflow from sales-type leases.  Please review your classification of
cash flows for these items and tell us whether we have interpreted your analysis
correctly.  If our understa nding is correct, tell us how  you would revise your
presentation to comply with the guid ance in ASC 230.  If our understanding is
incorrect, tell us how you classified the pr ofit from sales-type leases and why cash
flows from your gross investment in sales-t ype leases resulted in  a net cash outflow
for each year presented.

Notes to Consolidated Financial Statements, page 31

 Note 17.  Loan Payable – Collect ive Capital Trust Plan, page 44

4. We reviewed your response comment 21 in our letter dated August 3, 2010.  As previously requested, please provide the disclosures required  by ASC 810-10-50-8
through ASC 810-10-50-19 to the extent appli cable.  In addition, please expand your
disclosure to describe the terms of the agreement to share the benefits from the Clean Development Mechanism under the Kyoto Protocol  equally with Beijing Trust and to
pay the management stimulation profit (or ince ntive benefit) as discussed in Form 8-
K filed December 8, 2009.

Xinyu Peng
China Recycling Energy Corporation
September 22, 2010 Page 2

Note. 18.  Convertible Notes Payable and Revolving Financing Agreement, page 45

5. We reviewed your proposed disclosure in response to comment 24 in our letter dated August 3, 2010.  Please provide the disc losures required by ASC 825-20-50-1b, 825-
20-50-1c and 825-20-50-1d or tell us why these disclosures are not required.
 Note 19.  Stock-Based Compensation, page 47

6. We reviewed your response to comment 26 in our letter dated August 3, 2010.  Please
tell us in more detail the basis for your determination that the measurement date for
the warrants issued to non-employees was th e same as the grant date.  Refer to the
guidance in ASC 505-50-30-11 through ASC 505-50-30-17 and discuss why you
believe: (i) performance was complete on the grant date or (ii) a performance commitment to earn the equity  instruments was probable on the grant date because of
sufficiently large disincentives for nonperforma nce.  With respect to the latter, please
explain in detail the sufficiently la rge disincentives for nonperformance.

Item 9A.  Controls a nd Procedures, page 51

Internal Control Over Financial Reporting, page 51

7. We reviewed your response to comment 27 in our letter dated August 3, 2010 and the
sentence inadvertently omitted from the disclosure.  Please provide the omitted
disclosure in an amendment.  Refe r to Exchange Act Rule 12b-15.
 Changes in Internal Control Over Financial Reporting, page 52

8. We reviewed your response to comment 28 in our letter dated August 3, 2010.  Please
provide the disclosure require d by Item 308T(b) of Regulation S-K in an amendment.
Refer to Exchange Act Rule 12b-15.
 Item 15.  Exhibits, Financial Statement Schedules, page 52

9. We reviewed your response to comment 29 in our letter dated August 3, 2010.  Please
file the written consent of your independe nt accountant is acc ordance with Item
601(b)(23) of Regulation S-K in an amendmen t.  Refer to Exchange Act Rule 12b-15.
 Signatures, page 54

10. We reviewed your response to comment 30 in our letter dated August 3, 2010.  Please
include the signature of your principal fina ncial officer and accounting officer in the
second signature section in an amendment.   Refer to Exchange Act Rule 12b-15.

Xinyu Peng
China Recycling Energy Corporation September 22, 2010 Page 2

 Form 10-Q for Quarterly Period Ended June 30, 2010

 Part I. Financial Information, page 3

 Item 1. Financial Statements, page 3

 Consolidated Balance Sheets, page 3

11. Please tell us your basis in GAAP for classifying shares to  be issued as temporary
equity in the mezzanine section.  Please reference the authoritative literature you
applied.

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filings to be certain that the filings incl ude the information the Secu rities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
You may contact Adam Phippen at 202-551-3336 if you have any questions.  In his
absence you may contact me at (202) 551-3344.

Sincerely,

William H. Thompson
        A c c o u n t i n g  B r a n c h  C h i e f