SecProbe.io

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								May 18, 2005
Mail Stop 0305

Via U.S. Mail and Facsimile

Carl Yuen
Chief Financial Officer
Fantatech Inc.
Unit B, 11/F, Vienna Mansion
55 Paterson Street
Causeway Bay, Hong Kong

RE:	Fantatech Inc. (the "Company")
	Form 10-KSB for the fiscal year ended December 31, 2004
	File No. 0-24374

Dear Mr. Yuen:

Based upon an examination restricted solely to considerations of
the
Financial Statements, Management`s Discussion and Analysis, and
Selected Financial Data, the staff has the following comments on
the
above-referenced documents.  We think you should revise all future
filings in response to these comments.  If you disagree, we will
consider your explanation as to why our comments are inapplicable
or
a revision is unnecessary.  Please be as detailed as necessary in
your response.  In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure.  After reviewing this information, we may or may not
raise additional comments.

Please understand that the purpose of our review 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 comments or on any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Please respond to confirm that such comments will be complied
with,
or, if certain of the comments are deemed inappropriate by the
Company, advise the staff of the reason thereof.

Pursuant to Rule 101(a)(3) of Regulation S-T, your response should
be
submitted in electronic form, under the label "corresp" with a
copy
to the staff.  Please respond within ten (10) business days.

Form 10-K for the Fiscal Year Ended December 31, 2004

Item 2 - Description of Properties, page 13

1. We note that your principal executive offices are leased free
of
rent from a related company controlled by SHQ.  We also note the
chairman and president of SHQ is also the CEO and chairman of the
Company.  However, it is unclear how you have accounted for such
expenses incurred on behalf of Fantatech by the related company.
Note that all costs of doing business, including costs incurred by
principal shareholders or similar related parties, should be
reflected in the historical financial statements.  Refer to the
guidance outlined in SAB 5.T.  Please quantify for us and explain
in
detail how the costs were accounted for within your financial
statements.  If the amounts were not material, please specifically
state so in future filings.  We may have further comment upon
receipt
of your response.

Item 6 - MD&A

Overview, page 15

2. Reference is made to the last paragraph on page 15.  We believe
your disclosure regarding your foreign currency translation policy
is
confusing and requires revision.  For example, you state that the
functional currency of the Company`s PRC operations is the
Renminbi.
You also state that the accounts of foreign operations are
prepared
in their local currency and translated into USD at the applicable
rate of exchange.  However, it is unclear whether you are
referring
to foreign operations other than that of PRC and if so, whether
the
local currency of such foreign operations represents the
functional
currency in accordance with paragraph 5 of SFAS No. 52.  Further,
it
is unclear how applicable exchange rates are defined.  Please
clarify
for us in the MD&A and notes to the financial statements, and how
your treatment complies with the guidance outlined in SFAS No. 52.

3. We also note that you disclose transactions denominated in
currencies other than in U.S. dollar are translated into U.S.
dollar
at the applicable exchange rates.  Note that foreign currency
transactions are defined as transactions denominated in a currency
other than the entity`s functional currency (i.e. Renmenbi), and
not
its reporting currency.  Further, transaction gains and losses,
which
arise from changes in the exchange rates of the foreign currency
and
functional currency (measured from the transaction date and
subsequent settlement), are realized upon settlement of the
foreign
currency transaction and generally should be included in net
income
(loss) in the period in which the transaction is settled.
However,
translation adjustments which result from translating the entity`s
financial statements into its reporting currency are not included
in
determining net income (loss) but rather are reported in other
comprehensive income (loss).  In this regard, please tell us why
transactions denominated in currencies other than in U.S. dollar
are
translated into U.S. dollar rather than the functional currency.
Refer to paragraphs 15 and 16 of SFAS No. 52.  Also,
supplementally
explain why translation gains and losses are credited or charged
to
the consolidated statements of operations rather than reported as
a
component of other comprehensive income in the statements of
shareholders` equity pursuant to the guidance in paragraph 13 of
SFAS
No. 52.  We may have further comment upon receipt of your
response.

Consolidated Results of Operations
Fiscal Years Ended December 31, 2004 and 2003

- Revenue, page 16

4. We note that net contracted sales increased by $3,479,562 or
75.5%
as compared to fiscal 2003.  You disclose this was due to the
substantial increase in the number of projects attributable to the
successful marketing strategies implemented by the Company.  In
this
regard, please tell us and revise future filings to quantify the
incremental amount of revenue and number of projects attributable
to
the successful marketing strategies in comparison to prior year.
Further, we also note that compared to fiscal 2003, contracted
sales
from customers outside of PRC declined from 21% to 9.3% in fiscal
2004. Please tell us and revise future filings to disclose the
reason(s) for the decrease in contracted sales from customers
outside
of PRC.

- Gross Profit, page 16

5. Please revise future filings to describe the significant
components of costs of sales.  Specifically, tell us and describe
the
types of costs that comprise direct costs of sales and other costs
of
revenue - RSO (e.g. rent, employee salaries, depreciation, etc.)
as
presented on the face of your consolidated income statement.

6. Please supplementally quantify and describe the nature of the
initial operating expenses that were incurred a few months prior
to
the formal opening of the six new Funplexes that were launched in
fiscal 2004.  Also, similarly revise your disclosure in future
filings.  Supplementally tell us how you accounted for the initial
operating expenses within your financial statements and why you
believe you treatment is appropriate.

- Other Income (Expenses), page 17

7. Please tell us and revise future filings to disclose the
nature,
facts and circumstances surrounding the discretionary incentive
subsidiary of $72,000 granted by the local government.

8. We note that you describe the loss on disposal of fixed assets
of
$41,481 was mainly attributed to the obsolescence of one set of
FantaWild 4D theatre due to the relocation of a FunPlex.  Please
describe in further detail the facts and circumstances surrounding
the obsolescence of such theatre, including a timeline of the
events
leading up to the loss on disposal.  Tell us whether you performed
an
impairment analysis in accordance with paragraph 8 of SFAS No. 144
and if so, whether it resulted in a charge to your statement of
operations.  Quantify the amount and tell us the period in which
the
impairment was recognized, if applicable.  If no impairment
analysis
was performed, tell us why.

Item 10 - Executive Compensation, page 27

9. We note the disclosure on page 27 indicating that no
compensation
was paid to the Chairman and Chief Executive Officer for
remuneration
during fiscal years ended December 31, 2004 and 2003.  Note that
the
Company`s financial statements should include all costs of doing
business, including the fair value of any services provided
without
charge by the Company`s officers and directors.  Please revise the
financial statements to reflect the fair value of the services
provided to the Company by the Company`s Chairman and Chief
Executive
Officer during 2004 and 2003 as an expense and a capital
contribution
in the Company`s financial statements.  Refer to the guidance
outlined in SAB Topic 5:T.

Consolidated Statement of Operations, page F-4

10. To the extent you recognize gains (losses) on the disposal of
fixed assets; they should be included in income from operations
rather than as a component of other income (expense) on the face
of
the income statements.  Refer to footnote 68 of Staff Accounting
Bulletin No. 104 (Topic 13) and paragraphs 25 and 45 of SFAS No.
144.
In this regard, please revise your presentation in future filings
to
include the gain (loss) on disposal of fixed assets within
operating
expenses.

11. Please reconcile the net income for 2004 included in the
Company`s consolidated statement of operations of $1,076,421, with
that reflected in your consolidated statement of shareholders`
equity
of $1,092,487.

Consolidated Statements of Cash Flows, page F-6

12. We note that you have reflected "minority interests`
contribution
in subsidiary" as a cash flow from financing activities in your
consolidated statements of cash flows for 2003. As this appears to
be
a non-cash transaction, please revise your statement of cash flows
in
future filing to exclude non-cash transactions. Refer to the
guidance
outlined in paragraph 32 of SFAS No.95.

Note 3 - Summary of Significant Accounting Policies
- Revenue and cost recognition, page F-10

13. According to page 7 under the heading Production of the
Business
section, you disclose software as one of the products that you
develop and produced in house.  In this regard, please tell us and
disclose your policy for how you account for internally developed
software under SFAS No. 86.   Further, describe in detail the
nature
of the software products that you sell and how it is used in
connection with your entertainment and amusement products.  Your
response should include how the software is sold (i.e. separately
or
bundled) and whether with other elements (i.e. hardware,
electronic
control systems, mechanics, etc).  Tell us whether it is
considered
incidental or essential to the functionality of such products as a
whole.  Refer to the guidance in paragraph 2 of SOP 97-2.  If you
consider the software to be incidental and therefore, not
essential
to the functionality of the products, please provide us with the
basis for your conclusions and why you believe it is appropriate.
If
you conclude that the software is essential to the functionality
of
your products, please tell us and disclose how such arrangements
are
accounted for under SOP 97-2 and EITF No. 03-5.  We may have
further
comment upon receipt of your response.

14. We note that you implement strict product quality controls and
management systems to maintain premium quality of your 3D and 4D
entertainment products which includes after sale service as
described
on page 7 under the heading Product Quality of your Business
section.
In this regard, please tell us the nature and the period over
which
you provide the after sale service.  Also, tell us and disclose in
future filings whether the Company is obligated to provide the
customer with any other services subsequent to the delivery of the
entertainment and amusement products.  If so, tell us and describe
the nature and term of the service period.  Also, disclose the
revenue recognition policy for such services, if applicable.  We
may
have further comment upon receipt of your response.

15. We believe you should expand your revenue recognition policy
to
describe how you account for arrangements which include multiple
elements such as software, hardware, equipment, services, etc.
Tell
us how your arrangements comply with the guidance outlined in EITF
No. 00-21 or SOP 97-2, if applicable.

Note 4 - Business Acquisitions, page F-14

16. We note the disclosure indicating that on October 18, 2004,
the
Company entered into an agreement to acquire the remaining 34.59%
of
SDCL.  Please tell us and clarify in the financial statements how
the
Company accounted for the remaining interest in SDCL. Clarify
whether
the acquisition was accounted for at fair value in accordance with
SFAS No.141 or at historical cost because SDCL was under common
control with the Company. As part of your response, you should
also
explain the rationale for the accounting treatment that was used.
We
may have further comment upon receipt of your response.

Note 7  - Costs and Estimated Earnings in Excess of Billings on
Uncompleted Contracts, page F-15

17. We note your disclosure that most of your contracted sales
will
be completed within one to two years.  To the extent that you have
costs and estimated earnings in excess of billings which are for a
period greater than one year, the amounts should be classified as
non-current assets.  Similarly, billings in excess of cost and
estimated earnings that will not be recognized within one year
from
the balance sheet date should also be classified as non-current.
Please advise us as to whether there are amounts which should be
reclassified.  If material, please revise future filings
accordingly.

Note 10 - Income Taxes, page F-16

18. We note the disclosure indicating that the Company`s US
subsidiaries had incurred losses totaling $539,255 that are
available
for carryforward through 2023. We also not that at December 31,
2004,
tax losses available for carryforward in the PRC were $152,346.
Given
the existence of these tax loss carryforwards, please explain why
you
have not established deferred tax assets with respect to these tax
loss carryforwards at December 31, 2004.

Note 12 - Related Party Transactions and Arrangements

- (a) Agreement with associated company, page F-18

19. We note that as part of your agreement with FDI, you agreed to
pay an advertising and promotional incentive of 15% on the total
contract amount for the direct sales of equipment, in addition to
an
aggregated commission of 20% during fiscal 2004.  In this regard,
please tell us and revise future filings to disclose how you
account
for the advertising and promotional incentives within your
financial
statements.  Specifically, tell us and disclose in your notes
where
such amounts are recorded within your statements of operations.
If
the incentives are not recorded as a reduction to revenue, explain
in
detail how your accounting treatment complies with EITF No. 01-9.
We
may have further comment upon receipt of your response.

- (d) Related party receivables and payables, page F-19

20. Reference is made to footnotes (1) and (3).  We note that
these
related party receivables are unsecured, non-interest bearing and
have no definite term of repayment.  In this regard, please tell
us
and disclose why you believe these amounts to be collectible.

Note 13 - Disposal of Hytechnology Limited - Discontinued
Operations,
page F-20

21. We note that the Hytech HK was sold to Top Link a related
party
for $1,277 during fiscal 2004.    Please tell us and revise future
filings to disclose the carrying value of the net assets sold and
how
the sales price for such assets was determined.  Also, explain how
the gain on disposal of Hytech HK of $1,277 was calculated.

Note 14 - Segment Reporting, page F-20

22. Please revise your disclosure to include all the segment
reporting disclosures as required by paragraph 27 of SFAS No. 131
as
applicable.  You should provide more detailed information
regarding
each reported segment to the extent the specified amounts (a) are
included in the measure of segment profit or loss reviewed by the
chief operating decision maker (CODM) or (b) are otherwise
regul