SecProbe.io

CORRESP
1
filename1.htm

Linda van Doorn

Jorge Bonilla

Securities and Exchange Commission

Division of Corporation Finance

Mail Stop 4561

450 Fifth Street, N.W.

Washington, D.C. 20549

RE:

Form 10-KSB for the year ended December 31, 2006

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

Date: February 4, 2008

Dear Ladies and Gentlemen,

On behalf of China Recycling Energy
Corporation (the "Company"), in connection with the above referenced reports, we
are hereby providing you the following responses to the comments in your letter
dated January 15, 2008:

Form 10-KSB

Financial Statements

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

Comment:

1. We have read and considered your response
to comment three. Please revise your statement of operations to reflect the
impairment loss on property and equipment and deposit for business acquisition
as a charge to earnings in accordance with paragraph 25 of SFAS 144. Also,
please note that paragraph 15 of SFAS 5, which was cited in support for your
accounting treatment, prohibits charging costs or losses to an appropriation of
retained earnings.

Response:

The financial statements for 2006 were
restated to reflect the impairment loss on property and equipment and deposit
for business acquisition as a charge to earnings in accordance with paragraph 25
of SFAS 144.

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

Financial Statements

Condensed Consolidated Balance Sheet

Comment:

2. We have read and considered your response
to comment six relating to the amount reported as "Due from a third party." We
noted this amount is trade related, due from a single debtor, unsecured and it
relates to the mobile phone distribution business that you discontinued in May
2007. Also, it appears it remained uncollected as of September 30, 2007. Please
explain to us how you determined that the collection of this receivable was
reasonably assured and accordingly, no allowance was necessary as of September
30, 2007.

Response:

1. We have reached a settlement agreement with
Shanghai Sifang Information Technology Co. and a copy of such is enclosed in
Appendix 1 for your reference.

Comment:

3. Also, explain to us how you evaluated the
risks due to this substantial asset concentration, and how you considered
providing audited financial statements of the debtor for an investor's financial
assessment of the Company.

Response:

We fully aware of the weighting of this "due
from a third party" in the overall balance sheet and we have done the followings
to procure its settlement:

    a)
    we ring their
    accounts department every week to urge for the settlement;

    b)
    we reach a
    settlement agreement with them

Shanghai Sifang Information Technology Co. is
not a public company and we are not assessable to their financial data. Should
they fail to follow the settlement agreement, we will take proper legal action
against them.

If you have any questions or comments
regarding the foregoing, please do not hesitate to contact me at telephone:
011-86-29-87651098 or fax: 011-86-29-87651099.

    /s/ Guangyu Wu

    Guangyu Wu

Chief Executive Officer

China Recycling Energy Corporation