SecProbe.io

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Mail Stop 7010

							October 21, 2005

Peter Khean
Magnum Industries Inc.
#703-1112 West Pender Street
Vancouver, British Columbia
Canada, V6E 2S1

	Re:	China Energy Corporation
      Registration Statement on Form SB-2
      Filed September 27, 2005
      File No. 333-128608

Dear Mr. Khean:

      We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments.  If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.  After
reviewing this information, we may 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 any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

General

1. Please tell us with a view towards disclosure whether
restrictions
exist in China or Inner Mongolia on foreign ownership of your
business.  If restrictions on foreign ownership do exist, then
revise
throughout to discuss what steps you have taken to comply with
those
restrictions, including any contractual relationships with your
subsidiaries to ensure cash flow accrues to you.

2. Advise us why your agent for service is in Vancouver, BC,
Canada.

3. Please update all information in the prospectus to the most
recent
practicable date and where we ask for revisions to your disclosure
in
one place in the registration statement, please make similar
revisions in all other applicable places.
4. Insert a small-scale map showing the location and access to
your
property.  See Item 102(a) of Regulation S-B.  Briefly describe
the
road, barge and/or railroad access to each of your properties in
the
text.

Note that SEC`s EDGAR program now accepts digital maps.  So please
include these in any future amendments that are uploaded to EDGAR.
It is relatively easy to include automatic links at the
appropriate
locations within the document to GIF or JPEG files, which will
allow
the figures and/or diagrams to appear in the right location when
the
document is viewed on the Internet.  For more information, please
consult the EDGAR manual, and if you need addition assistance,
please
call Filer Support at 202-942-8900.  Otherwise provide the map to
the
engineering staff for our review.

5. For each of your mines, provide the disclosures required by
Industry Guide 7(b).  In particular, provide a brief discussion
of:
* The coal beds of interest, including minable coal thickness.
* The description, condition, and capacities of the mine, mining
equipment used and other infrastructure facilities present.  This
would include crushing, screening, washing, and other means of
preparing coal for sale.
* A list of your coal processing and/or handling facilities.
* The road, barge and/or railroad access to each of your
properties.
* The present condition of the mine, wash plant, and screening
facility.
* Material events of interest concerning the mine, adverse or
otherwise within the last three years.
* Any mine expansions, contractions or decommissioning within the
last three years.
* Any planned expansions or reductions in mining.
* Any joint ownership.
* Any use of mining contractors.
* Describe different transportation methods and any contractors
that
transport your coal products.

Registration Statement Cover Page

6. Please add the IRS employer identification number.

7. Please add the registration statement file number.

8. Please add the name and telephone number for the agent for
service.

9. We note the statement that the shares "can" be sold... at a
fixed
price of $0.19.  Please revise to disclose the range of prices at
which the selling shareholders will sell the shares.
10. Please disclose that officers and directors will sell shares
and
receive proceeds in the offering.

Prospectus Summary, page 5

About us, page 5

11. Please describe all your business activities in a clear
concise
manner.  The term "expropriate" implies your company collects coal
from many sources for common use.  The terms "produce" or "mine"
may
be more descriptive to the average investor.

12. A review of your filing indicates China Energy Corporation
mines
coal to provide the fuel used by your subsidiaries or other
companies
in the region.  Your coal company also acts as a broker
facilitating
transactions between buyers and sellers.  In a table, please
provide
three years data contrasting the tonnage of coal purchased from
external sources and that coal produced by your company.  Your
subsidiaries use coal for power generation and/or (steam/water?)
heating services.  Is this thermoelectric heating service part of
a
co-generation process, a separate process, or both?  Please
briefly
explain your mining, heating, and power generation activities with
more detail.

13. Please briefly describe the extent to which you are a
regulated
utility company.

Inner Mongolia Tehong Coal Group Co., Ltd. ("Coal Group"), page 5

14. Does the term "non-baking" indicate the coal product is a non-
coking coal or that this coal is not to be used in food
production?
Please clarify.  Please make a statement as to the coal rank or
quality (i.e. Is this coal bituminous, sub-bituminous or lignite?)

Inner Mongolia Zhunger Heat Power Co., Ltd. ("Heat Power"), page 5

15. The Heat Power subsidiary provides heating services to the
town
of Xuejiawan.  Disclose whether these are services steam, hot
water
or both.  Does your company heat 55 hectares consisting of private
dwellings, municipal facilities, factories, or all living spaces?
Please clarify.  Please briefly describe your customer`s needs and
the use of your products/services in more detail.  Your expansion
will add 150 hectares to your system or network.  Please describe
how
this will occur.  Please disclose whether your company will
purchase
other companies in the region or whether you will construct
infrastructure to service a larger population base.

The market we operate in, page 5

16. Please revise to include a balanced description of your
business.
Therefore, please move the section relating to the industry in
general and your business strategy.

17. Tell us supplementally of the basis or source for your
statements
regarding the Chinese coal market.

Differing Legal Systems, page 6

18. Briefly describe why civil action against persons in China may
be
difficult.

19. Your paragraph regarding various PRC laws appears to set forth
legal conclusions.  If you include these statements, please
provide
an appropriate opinion of counsel, identify counsel here and
disclose
that these statements represent their opinion.  We may have
further
comment.

The Offering, page 7

20. Please reconcile the statement that the shares offered are
held
by a principal shareholder and your officers and directors, with
the
selling shareholder table on page 18.

21. Please disclose the offering period.  If you are offering
under
Rule 415, please address how you comply with Rule 415.

History and results of operations, page 7

22. It appears from your disclosure elsewhere in the filing, that
China Energy was a shell company until the share exchange
agreement.
Please revise the first paragraph accordingly. Clarify which
subsidiaries you are referring to in the rest of the history.

23. In order to provide a balanced summary, delete the language
regarding your business strategy or provide the risks associated
with
your strategy.

Risk Factors, page 10

24. Revise the first paragraph. All material risks should be
described in the risk factors section.  If risks are not deemed
material, you should not reference them.

25. Unless you can substantiate significant technical training
and/or
experience in minerals exploration or mining by members of your
management, you need to include a risk factor early in this risk
factor section that your management lacks technical training and
experience with exploring for, starting, and/or operating a mine.
With no direct training or experience in these areas, your
management
may not be fully aware of many of the specific requirements
related
to working within this industry.  Their decisions and choices may
not
take into account standard engineering or managerial approaches
mineral exploration companies commonly use.  Consequently, your
operations, earnings, and ultimate financial success could suffer
irreparable harm due to management`s lack of experience in this
industry.  Please address these risks in your disclosure.

26. Provide the information investors need to assess the magnitude
of
the risk. For example: describe the potential liabilities for
violation of environmental standards; provide a timeline for the
Inner Mongolia government approval process; provide additional
disclosure about the Inner Mongolia Zhunger Pricing Bureau
regulations and quantify the effects of being unable to recoup
increases in raw material costs; quantify the capital required if
you
do not receive approval to increase your prices; disclose the
minimum
price at which you are required to sell coal and describe the Coal
Sales Association regulations; for the projects that have not yet
received government approval, discuss the status of the approval.
We
may have further comments after reviewing your responses.

27. Please note that you should disclose all material risks to the
potential investor. Consider adding other material risk factors
relating to your business, including:
* the continual renewal of your licenses with the government;
* you may lose the benefits provided by special economic zones and
describe your requirements to receive those benefits;
* the various political and legal uncertainties as a result of
doing
business in the PRC;
* that your rate of profit is capped by government regulations;
* your history of losses;
* that you may not expand your expropriation capabilities by 240%
* that you may not be able to raise the funds for this expansion;
* since selling shareholders will sell 32.5 million shares and
only
45 million shares are authorized, discuss your need to issue more
shares for public offerings and the resulting dilutive effect to
existing shareholders;
* disclose that your accounts receivable collections generally are
about two years in the coal business and six months in the heating
business.

Note that this is not meant to represent an all-inclusive list. We
encourage you to provide further disclosure in this section.

Selling Security Holders, page 16

28. Please describe in greater detail the share exchange agreement
and how the selling shareholders acquired their shares in Coal
Group
and Heat Power. Describe the relationship between the promoters or
others involved in the private placement and the selling
shareholders. Identify the promoters.

29. Explain why you state there is no material relationship
between
any of the stockholders and the company, when you disclose
elsewhere
that WenHua Ding is the brother and Qun Ding is the spouse of
WenXiang Ding. Disclose any other familial or other relationships
among the stockholders and officers and directors of the company.

30. Under this section and under the security ownership table on
page
25, please name all natural persons who share beneficial ownership
with the non-public entities that you list.

31. Please tell us whether any of the selling shareholders are a
broker-dealer or an affiliate of broker-dealer.  If any selling
shareholder is a registered broker-dealer, it should be named as
an
underwriter.  If the selling shareholder is an affiliate of a
registered broker-dealer, expand the prospectus to indicate
whether
it acquired the securities to be resold in the ordinary course of
business.  Also indicate whether at the time of the acquisition it
had any agreements, understandings or arrangements with any other
persons, either directly or indirectly, to dispose of the
securities.

Plan of Distribution, page 19

32. We note that the selling shareholders may distribute their
shares
to one or more of their partners, who may distribute your shares.
Please tell us who these partners are and disclose if there are
any
agreements to purchase or distribute your securities. Revise to
indicate how the registration statement will reflect the addition
or
substitution of selling shareholders.

33. Please revise this section to indicate that the selling
shareholders may be underwriters with respect to the shares that
they
are offering for resale.

Directors, Executive Officers, Promoters and Control Persons, page
22

34. Please revise your disclosure to address the following:
* briefly describe each person`s technical training;
* briefly describe each person`s business experience during the
past
five years;
* disclose the approximate percent of time that the officers
worked
on affairs of your company this last year, and the current weekly
number of hours spent on the company by each of your officers and
directors; and
* disclose other significant responsibilities that they currently
have with other companies.

      See Item 401 of Regulation S-B.

35. Under "Family Relationships" you state there are no family
relationships among any of your officers and directors, yet you
disclose elsewhere that WenXiang Ding and YanHua Li are husband
and
wife. Please clarify.

Security Ownership of Certain Beneficial Owners and Management,
page
26

36. Please revise the row for officers and directors as a group to
include all the shares beneficially owned by Mr. Ding.

Organization within the Last Five Years, page 30

37. Since it appears that the company was a shell prior to the
share
exchange agreement, describe the business of the subsidiaries
within
the last five years.

38. Describe when the shell company, formed by Peter Khean, was
transferred to WenXiang Ding, since Mr. Ding signed the share
exchange agreement on behalf of Coal Group, Heat Power, and China
Energy. Please file any related agreement as an exhibit. Disclose
any
consideration that any promoters received for this transaction.

39. We noted your disclosure that you acquired all of the issued
stock of Coal Group and Heat Power valued at $8,440,146. Since the
transaction was a share exchange, it is not clear to us how your
discussion of valuation is appropriate.  Please advise or revise
to
remove this disclosure.  If you determine the disclosure is
appropriate, disclose how you determined the value, your valuation
methodology and any related assumptions, and the appropriateness
of
the valuation to your financial statements.

40. Describe the purpose of the share exchange agreement in
greater
detail. We note that the share exchange agreement provides that
"the
Company endeavors to raise up to $10,000,000 for investment in
Coal
Group Co. and Zhunger Heat Power Co., to assist in the expansion
of
their operations." Please explain how the company expects to raise
this amount and whether any public offerings or private placements
are currently anticipated. Disclose whether any of your promoters
received any fees or commissions in connection with this
agreement.

41. Throughout the Business section, please disclose in detail the
terms of all the material contracts you have filed as exhibits.
For
example, you refer to exhibit 10.3 as a purchase contract for a
mine.
However, the exhibit refers to a "permit merging into Mengxi
Electric
Network for 2x12 MW generator in Zhunger Heat Power Co., Ltd
controlled by Inner Mongolia Tehong Coal Group Co."

Business Development, page 30

42. Disclose the affiliation of the curr