SecProbe.io

CORRESP
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filename1.htm

December
28, 2022

VIA
EDGAR

Ms.
Julie Sherman

Division
of Corporation Finance

Office
of Life Sciences

Securities
and Exchange Commission

100
F Street, N.E.

Washington,
D.C. 20549

    Re:
    China
    Foods Holdings Ltd. (the “Company”)

    Form
    10-K for the Fiscal Year Ended December 31, 2021

    Filed
    April 15, 2022

    Form
                                            10-Q for the Quarterly Period ended March 31, 2022

    Filed
    May 16, 2022

    File
    No. 001-32522

Dear
Ms. Sherman:

This
letter sets forth certain of the Company’s responses to the comments contained in the letter dated May 25, 2022 from the staff
(the “Staff”) of the Securities and Exchange Commission (the “Commission”) regarding the Company’s
Form 10-K for the fiscal year ended December 31, 2021 filed with the Commission on April 15, 2022 (the “2021 Form 10-K”).
The Staff’s comments are repeated below in bold and are followed by the Company’s responses thereto. All capitalized terms
used but not defined in this letter shall have the meaning ascribed to such terms in the 2021 Form 10-K. This response includes the responses
previously provided via October 13, 2022 letter and November 20, 2022 letter.

FORM
10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021

1. Please
amend this section to provide all information required by Item 101(h) of Regulation S-K, including, but not limited to, your principal
products or services and their markets, distribution methods of the products or services, competitive business conditions, sources and
availability of raw materials and the names of principal suppliers, and the number of total employees.

The
Company believes that its prior disclosure of information satisfies the requirements of Item 101(h) of Regulation S-K. The Company has
described its principal products and services in the sections headed “Our Products”, “Our Services”, “Our
Markets”, “Our Strategies”, “Competition”, and identification of vendors throughout the Report on 10-K.
To supplement that disclosure the Company proposed to add the following disclosures:

 ● Due
                                            to the impact of the COVID-19 pandemic in the healthcare industry and to diversify due to
                                            market demand and customer needs, we began offering a new line of high-end wine products
                                            in our online and offline sales platform.

 ● The
                                            Company’s business model applies to both its healthcare and wine segments and both
                                            segments use the same marketing system.

 ● GXXHIC
                                            traditionally employs anywhere from 30-50 employees, but this number has been inconsistent
                                            since the COVID-19 pandemic.

 ● GXXHIC
                                            will adjust the number of employees according to market changes and business strategies.

2.
At the onset of Part I, please disclose prominently that you are not a Chinese operating company but a Delaware holding company with
operations conducted by your subsidiaries. In addition, please provide early in the Business section a diagram of the company’s
corporate structure.

The
Company proposes to add the following disclosure:

The
Company is a Delaware holding company and we conduct our business through our wholly owned subsidiary Guangzhou Xiao Xiang Health Industry
Company Limited, a limited liability company organized under the laws of China on March 8, 2017 (“GXXHIC”). GXXHIC is wholly
owned by Alpha Wellness (HK) Limited, a limited liability company organized under the laws of Hong Kong on April 24, 2019, which is in
turn wholly owned by Elite Creation Group, a limited liability company formed under the laws of the British Virgin Islands formed on
September 5, 2018. Alpha Wellness (HK) Limited and Elite Creation Group are holding companies without operations and are wholly owned
by the Company.

3.
Provide prominent disclosure about the legal and operational risks associated with being based in or having the majority of the company’s
operations in China. Your disclosure should make clear whether these risks could result in a material change in your operations and/or
the value of the securities you have registered for sale or could significantly limit or completely hinder your ability to offer or continue
to offer securities to investors and cause the value of such securities to significantly decline or be worthless. Your disclosure should
address how recent statements and regulatory actions by China’s government, such as those related to the use of variable interest
entities and data security or anti-monopoly concerns, have or may impact the company’s ability to conduct its business, accept
foreign investments, or list on a U.S. or other foreign exchange.

The
Company proposes to add the following disclosure:

We
are a Delaware corporation and we conduct our primary operations in China through our subsidiary GXXHIC. We
face various risks and uncertainties related to doing business in China. Our subsidiary GXXHIC is subject to complex and evolving PRC
laws and regulations. We face various legal and operational risks and uncertainties associated with being based in or having the
majority of our operations in China and the complex and evolving PRC laws and regulations. As such, we face risks associated with regulatory
approvals on offerings conducted overseas by and foreign investment in China-based issuers, the use of variable interest entities (“VIE”),
anti-monopoly regulatory actions, and oversight on cybersecurity and data privacy, which may impact our ability to conduct certain businesses,
accept foreign investments, or list on a United States or other foreign exchange. Currently, the Company does not use any VIE structures.

We
do not believe there GXXHIC is in violation of any laws, rules or regulations but since these newly enacted rules are still evolving,
we cannot assure you that our business operations comply with such regulations and authorities’ requirements in all respects during
the development of these new rules. However, in terms of business operation, GXXHIC expects to adapt to the newly issued rules and take
dependent measures to comply with the laws and regulations of the Chinese authorities. But so far, the current operation and securities
value of the Company and GXXHIC are stable, and we believe that the risks to the Company from these new rules and regulations are manageable.
Please see below for further information on these new rules and regulations.

The
PRC government’s authority in regulating our operations and its oversight and control over offerings and listings conducted overseas
by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue to
offer securities to investors. Implementation of industry-wide regulations in this nature may cause the value of such securities to significantly
decline or be worthless. Risks and uncertainties arising
from the legal system in China, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations
in China, could result in a material adverse change in our operations and the value of our securities.

The
PRC government has recently indicated an intent to exert more oversight over offerings that are conducted overseas and/or foreign investment
in China-based issuers like us, and published a series of proposed rules for public comments in this regard, the enaction timetable,
final content, interpretation and implementation of which remains uncertain. Therefore, there are substantial uncertainties as to how
PRC governmental authorities will regulate overseas listing in general. There may be requirements to file application documents with
the China Securities Regulation Commission (“CSRC”). As of the date of this report, it remains unclear whether the PRC will
adopt these rules, what the filings requirements will be, and whether the Company or GXXHIC will be required to make these filings or
obtain any specific regulatory approvals from the CSRC or any other PRC governmental authorities for any contemplated future offerings.
If we had inadvertently concluded that such approvals were not required, or if applicable laws, regulations or interpretations change
in a way that requires us to obtain such approval in the future, we may be unable to obtain such necessary approvals in a timely manner,
or at all, and such approvals may be rescinded even if obtained. Any such circumstance could subject us to penalties, including fines,
suspension of business and revocation of required licenses, significantly limit or completely hinder our ability to continue to offer
securities to investors and cause the value of such securities to significantly decline or be worthless.

PRC
anti-monopoly regulators have promulgated new anti-monopoly and competition laws and regulations and strengthened the enforcement under
these laws and regulations. There remain uncertainties as to how the laws, regulations and guidelines recently promulgated will be implemented
and whether these laws, regulations and guidelines will have a material impact on our business, financial condition, results of operations
and prospects. We cannot assure you that our business operations comply with such regulations and authorities’ requirements in
all respects. If any non-compliance is raised by relevant authorities and determined against us, we may be subject to fines and other
penalties. Any failure or perceived failure by us to comply with the anti-monopoly and competition laws and regulations in the PRC may
result in governmental investigations, enforcement actions, litigation or claims against us and could have an adverse effect on business,
reputation, results of operations and financial condition. These risks could result in a material adverse change in our operations and
the value of our ADSs, significantly limit or completely hinder our ability to continue to offer securities to investors, or cause the
value of such securities to significantly decline.

The
PRC has recently promulgated the PRC Data Security Law and the PRC Personal Information Protection Law in 2021 posed additional challenges
to our cybersecurity and data privacy compliance. The Cybersecurity Review Measures issued by the Cyberspace Administration of China,
or the CAC and several other PRC governmental authorities in December 2021, as well as the Administration Regulations on Cyber Data Security
(Draft for Comments) published by the CAC for public comments in November 2021, exposes uncertainties and potential additional restrictions
on China-based overseas-listed companies like us. If the detailed rules, implementations, or the enacted version of the draft measures
mandate clearance of cybersecurity review and other specific actions to be completed by us, we face uncertainties as to whether such
clearance can be timely obtained, the failure of which may subject us to penalties, which could materially and adversely affect our business
and results of operations and the price of our securities. However, as the Company operates in a traditional food industry, we believe
the promulgation of the above laws will have a low impact on the Company and GXXHIC, and we believe our companies are in compliance with
the above laws.

4.
Please prominently disclose whether your auditor is subject to the determinations announced by the PCAOB on December 16, 2021 and whether
and how the Holding Foreign Companies Accountable Act (“HFCAA”) and related regulations will affect your company. Additionally,
please disclose prominently that you have been included on the Commission’s conclusive list of issuers identified under the HFCAA
as having retained a registered public accounting firm to issue an audit report where the firm has a branch or office that: (1) is located
in a foreign jurisdiction and (2) the PCAOB has determined that it is unable to inspect or investigate completely because of a position
taken by an authority in the foreign jurisdiction.

The
Company proposes to update its disclosures to include:

The
Holding Foreign Companies Accountable Act (the “HFCAA”), was enacted on December 18, 2020. The HFCAA requires
that the Public Company Accounting Oversight Board (the “PCAOB”) determine whether it is unable to inspect or investigate
completely registered public accounting firms located in a non-U.S. jurisdiction because of a position taken by one or more authorities
in that jurisdiction. Our auditor, HKCM & CPA Co., is based in Hong Kong and is subject to
the determinations announced by the PCOAB on December 16, 2021 and the HFCAA. On December 16, 2021, the PCAOB reported its determination
that it was unable to inspect or investigate completely registered public accounting firms headquartered in the PRC and Hong Kong, because
of positions taken by PRC authorities in those jurisdictions. On March 30, 2022, based on this determination, the Company was transferred
to the SEC’s “Conclusive list of issuers identified under the HFCA.” Since our
auditor is located in Hong Kong, a jurisdiction where the PCAOB has been unable to conduct inspections without the approval of the Chinese
authorities, our auditor is not currently inspected by the PCAOB. The HFCAA states that if the SEC determines that we have filed audit
reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years
beginning in 2021, the SEC shall prohibit our shares from being traded on a national securities exchange or in the over-the-counter trading
market in the United States. Further, proposed legislation in the U.S. (the Accelerating Holding Foreign Companies Accountable
Act passed by the U.S. Senate in June 2021 and the America Creating Opportunities for Manufacturing Pre-Eminence in Technology and Economic
Strength (COMPETES) Act of 2022 passed by the U.S. House of Representatives in February 2022) would reduce the number of non-inspection
years from three years to two years. It is unclear if or when either of these bills will be signed into law. The
related risks and uncertainties could cause the value of our shares to significantly decline or be worthless.

5.
Clearly disclose how you will refer to the holding company and subsidiaries when providing the disclosure throughout the document so
that it is clear to investors which entity the disclosure is referencing and which subsidiaries or entities are conducting the business
operations. For example, disclose, if true, that your subsidiaries conduct operations in China.

The
Company updated the filing to clarify that GXXHIC is a subsidiary of the Company and operates in China, and proposes to update its disclosure
to add:

The
Company is a Delaware holding company and we conduct our business through our wholly owned subsidiary Guangzhou Xiao Xiang Health Industry
Company Limited, a limited liability company organized under the laws of China on March 8, 2017 (“GXXHIC”).

6.
Provide a clear description of how cash is transferred through your organization. Disclose your intentions to distribute earnings. Quantify
any cash flows and transfers of other assets by type that have occurred between the holding company and its subsidiaries, and direction
of transfer. Quantify any dividends or distributions that a subsidiary have made to the holding company and which entity made such transfer,
and their tax consequences. Similarly quantify dividends or distributions made to U.S. investors, the source, and their tax consequences.
Your disclosure should make clear if no transfers, dividends, or distributions have been made to date. Describe any restrictions on foreign
exchange and your ability to transfer cash between e