SecProbe.io

CORRESP
 1
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 SMART POWERR CORP.

 June 16, 2025

 VIA EDGAR

 U.S. Securities and
Exchange Commission

 Division of Corporation Finance

 100 F Street, NE

 Washington, D.C., 20549

 Re:
 Smart Powerr Corp.

 Registration Statement
 on Form S-1

 File No. 333-286858

 Request for Acceleration
 of Effectiveness

 Ladies and Gentlemen:

 In
accordance with Rule 461 of the General Rules and Regulations under the Securities Act of 1933, as amended, Smart Powerr Corp.
hereby requests acceleration of the effectiveness of the above-referenced Registration Statement on Form S-1, as amended, so that
such Registration Statement will become effective at 4:00 p.m., Eastern Time, on June 18, 2025, or as soon thereafter as practicable.

 The
Company understands that the Commission will consider this request for acceleration of the effective date of the Registration Statement
as a confirmation of the fact that the Company is aware of its responsibilities under the Securities Act as they relate to the proposed
public offering of the securities specified in the Registration Statement.

 Very truly yours,

 Smart Powerr Corp.

 By:
 /s/ Guohua Ku

 Name:
 Guohua Ku

 Title:
 Chief Executive Officer and Chairman of the Board

<DOCUMENT>
<TYPE>TEXT-EXTRACT
<SEQUENCE>2
<FILENAME>filename2.txt
<TEXT>
 May 7, 2025

Guohua Ku
Chief Executive Officer
Smart Powerr Corp.
4/F, Tower C
Rong Cheng Yun Gu Building Keji 3rd Road, Yanta District
Xi An City, Shaan Xi Province
China 710075

 Re: Smart Powerr Corp.
 Registration Statement on Form S-1
 Filed April 30, 2025
 File No. 333-286858
Dear Guohua Ku:

 This is to advise you that we have not reviewed and will not review your
registration
statement.

 Please refer to Rules 460 and 461 regarding requests for acceleration.
We remind you
that the company and its management are responsible for the accuracy and
adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action
by the staff.

 Please contact Eddie Kim at 202-551-8713 with any questions.

 Sincerely,

 Division of
Corporation Finance
 Office of Trade &
Services
cc: Yarona L. Yieh
</TEXT>
</DOCUMENT>

CORRESP
1
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Smart Powerr Corp.

August 27, 2024

Via EDGAR

Division of Corporation Finance

Office of Trade and Services

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, D.C., 20549

    Attention:
    Kate Beukenkamp

    Re:
    Smart Powerr Corp.

    Registration Statement on Form S-3

    Filed on August 19, 2024

    File No. 333-281639

Dear Ms. Beukenkamp:

In accordance with Rule 461
of the General Rules and Regulations under the Securities Act of 1933, as amended, Smart Powerr Corp. hereby requests that the effectiveness
of the above-referenced Registration Statement on Form S-3, be accelerated to and that the Registration Statement become effective
at 4:30 p.m., Eastern Time, on August 29, 2024, or as soon thereafter as practicable.

    Very truly yours,

    Smart Powerr Corp.

    By:
    /s/ Guohua Ku

    Name:
     Guohua Ku

    Title:
    Chief Executive Director

August 26, 2024
Guohua Ku
Chief Executive Officer
Smart Powerr Corp.
4/F, Tower C
Rong Cheng Yun Gu Building Keji 3rd Road, Yanta District
Xi An City, Shaan Xi Province
China 710075
Re:Smart Powerr Corp.
Registration Statement on Form S-3
Filed August 19, 2024
File No. 333-281639
Dear Guohua Ku:
            This is to advise you that we have not reviewed and will not review your registration
statement.
            Please refer to Rules 460 and 461 regarding requests for acceleration. We remind you that
the company and its management are responsible for the accuracy and adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action by the staff.
            Please contact Kate Beukenkamp at 202-551-3861 with any questions.
Sincerely,
Division of Corporation Finance
Office of Trade & Services
cc:Yarona L. Yieh

CORRESP
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CHINA RECYCLING ENERGY CORPORATION

May 31, 2019

VIA EDGAR

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, DC 20549

    Re:
    China Recycling Energy Corporation

Registration Statement
on Form S-1

Filed May 24, 2019

File No. 333-231755

Acceleration Request

Requested Date:
         June 4, 2019

Requested Time:
        2:00 p.m. Eastern Time

Ladies and Gentlemen:

Pursuant
to Rule 461 of the General Rules and Regulations under the Securities Act of 1933, as amended, China Recycling Energy Corporation
(the “Company”) hereby respectfully requests the Securities and Exchange Commission (the “Commission”)
to accelerate the effective date of the above- referenced Registration Statement and declare such Registration Statement effective
at the “Requested Date” and “Requested Time” set forth above or as soon thereafter as practicable.

In
connection with the acceleration request, the Company hereby acknowledges that:

    ●
    should the Commission or the staff of the Commission, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing;

    ●
    the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and

    ●
    the Company may not assert the staff comments and the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

If
you have any further comments, require any further information or if any questions should arise in connection with this submission,
please call Mr. Jeffrey Li at (202) 298-1735 at Garvey Schubert Barer, P.C.

[Signature Page
Follows]

    Sincerely,

    CHINA RECYCLYING ENERGY CORPORATION

    By:
    /s/ Binfeng (Adeline) Gu

    Binfeng (Adeline) Gu

    Chief Financial Officer

 cc: Jeffrey Li, Garvey Schubert
Barer, P.C.

May 30, 2019
Guohua Ku
Chairman of the Board of Directors and Chief Executive Officer
China Recycling Energy Corporation
Rong Cheng Yun Gu Building
Keji 3rd Road, Yanta District
Xi’an City, Shaanxi Province
China 710068
Re:China Recycling Energy Corporation
Registration Statement on Form S-1
Filed May 24, 2019
File No. 333-231755
Dear Mr. Ku:
            This is to advise you that we have not reviewed and will not review your registration
statement.
            Please refer to Rules 460 and 461 regarding requests for acceleration.  We remind you
that the company and its management are responsible for the accuracy and adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action by the staff.
            Please contact Katherine Bagley at (202) 551-2545 with any questions.
Sincerely,
Division of Corporation Finance
Office of Consumer Products
cc:       Jeffrey Li

Mail Stop 3561

April 11, 2019

Adeline Gu
Chief Financial Officer
China Recycling Energy Corporation
4/F, Tower C
Rong Cheng Yun Gu Building
Keji 3rd Road, Yanta District
Xi’an City, Shaanxi Province
China 710075

Re: China Recycling Energy Corporation
 Form 10-K for the Fiscal Year Ended December 31, 2017
Filed April 13, 2018
File No. 1 -34625

Dear Ms. Gu :

We have completed our review of your filing .  We remind you that the company and its
management are responsible for the accuracy and adequacy of the ir disclosure s, notwithstanding
any review, comments, action or absence  of action  by the staff .

Sincerely,

 /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief
Office of Consumer Products

CORRESP
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filename1.htm

UNITED
STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

☒   QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For
the quarterly period ended June 30, 2016

OR

☐   TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For
the transition period from
to

Commission
File No. 000-12536

China
Recycling Energy Corporation

(Exact
Name of Registrant as Specified in Its Charter)

    Nevada

    90-0093373

    (State
                                         or other jurisdiction of

        incorporation
        or organization)

    (I.R.S.
                                         Employer

        Identification
        No.)

12/F,
Tower A

Chang
An International Building

No.
88 Nan Guan Zheng Jie

Xi’an
City, Shaanxi Province, China

(Address
of Principal Executive Offices, Zip Code)

Registrant’s
Telephone Number, Including Area Code: + 86-29-8765-1097

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes   ☐ No

Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes   ☐ No

Indicate by check mark whether the registrant
is large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
See definitions of “large accelerated filer,” accelerated filer” “smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act:

    Large accelerated filer
    ☐
    Accelerated filer
    ☐

    Non-accelerated filer
    ☐
    Smaller reporting company
    ☒

    Emerging growth company
    ☐

If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes   ☒ No

The number of shares outstanding of the registrant’s Common
Stock, as of August 10, 2016 was 8,310,198.

EXPLANATORY NOTE

 In response to
a comment letter received from the Securities and Exchange Commission (the “SEC”), dated December 4, 2018, China Recycling
Energy Corporation (the “Company,” “we,” “us” or “our”) is filing this Amendment
No. 1 on Form 10-Q/A to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, originally filed with the
SEC on August 15, 2016 (the “Original Form 10-Q”) for the following purposes: reevaluate the leases for Erdos TCH
as a result of a supplemental agreement effective on May 1, 2016, wherein Erdos TCH cancelled monthly minimum lease payments from
Erdos, charged Erdos based on actual electricity sold at RMB 0.30 / Kwh, and concluded the lease payments that depend on a factor
directly related to the future use of the leased property were contingent rentals and, accordingly, were excluded from minimum
lease payments in their entirety. The Company therefore wrote off the net investment receivables of these leases on May 1, 2016.

This Form 10-Q/A
should be read in conjunction with the Company’s periodic filings made with the SEC subsequent to the filing date of the
Original Form 10-Q, including any amendments to those filings, as well as any Current Reports, filed on Form 8-K subsequent to
the date of the Original Form 10-Q. In addition, in accordance with applicable rules and regulations promulgated by the SEC, the
Company’s Chief Executive Officer and Chief Financial Officer are providing currently dated certifications in connection
with this Form 10-Q/A. The certifications are filed as Exhibits 31.3, 31.4, 32.3 and 32.4. Because this Form 10-Q/A sets forth
the Original Form 10-Q in its entirety, it includes both items that have been changed as a result of the amended disclosures and
items that are unchanged from the Original Form 10-Q. Other than the revision of the disclosures as discussed above, this Form
10-Q/A speaks as of the original filing date of the Original Form 10-Q and has not been updated to reflect other events occurring
subsequent to the original filing date. This includes forward-looking statements and all other sections of this Form 10-Q/A that
were not directly impacted by this amendment, which should be read in their historical context.

INDEX

    Page No.

    PART
    I - FINANCIAL INFORMATION
    1

    Item
    1.
    Consolidated
    Financial Statements
    1

    Consolidated
    Balance Sheets as of June 30, 2016 (Unaudited) and December 31, 2015
    1

    Consolidated
    Statements of Income and Comprehensive Income (Loss) (Unaudited) – Three and Six Months Ended June 30, 2016 and June
    30, 2015
    2

    Consolidated
    Statements of Cash Flows (Unaudited) – Three and Six Months Ended June 30, 2016 and June 30, 2015
    3

    Notes
    to Consolidated Financial Statements (Unaudited)
    4

    Item
    2.
    Management’s
    Discussion and Analysis of Financial Condition and Results of Operations
    29

    Item
    3.
    Quantitative
    and Qualitative Disclosures About Market Risk
    47

    Item
    4.
    Controls
    and Procedures
    47

    PART
    II - OTHER INFORMATION

    Item
    1.
    Legal
    Proceedings
    48

    Item
    1A.
    Risk
    Factors
    48

    Item
    2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds
    48

    Item
    3.
    Defaults
    Upon Senior Securities
    48

    Item
    4.
    Mine
    Safety Disclosures
    48

    Item
    5.
    Other
    Information
    48

    Item
    6.
    Exhibits
    49

PART
I – FINANCIAL INFORMATION

Item 1.
Financial Statements

CHINA
RECYCLING ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED
BALANCE SHEETS

AS
OF JUNE 30, 2016 (UNAUDITED) AND DECEMBER 31, 2015

     2016 (Restated)
     2015

     ASSETS

     CURRENT ASSETS

     Cash and equivalents
     $   42,736,716
     $   41,749,388

     Restricted cash
         542,888
         1,130,344

     Accounts receivable
         35,289,806
         15,399,778

     Current portion of investment in sales-type leases, net
         5,690,343
         6,679,019

     Interest receivable on sales type leases
         1,258,536
         555,451

     Prepaid expenses
         373,355
         1,179,778

     Other receivables
         238,834
         553,886

     Total current assets
         86,130,478
         67,247,644

     NON-CURRENT ASSETS

     Investment in sales-type leases, net
         54,213,910
         133,079,634

     Long term investment
         1,035,110
         950,470

     Long term deposit
         55,850
         57,033

     Property and equipment, net
         14,249
         17,724

     Construction in progress
         88,629,529
         115,522,068

     Total non-current assets
         143,948,648
         249,626,929

     TOTAL ASSETS
     $   230,079,126
     $   316,874,573

     LIABILITIES AND STOCKHOLDERS' EQUITY

     CURRENT LIABILITIES

     Accounts payable
     $   797,368
     $   427,732

     Notes payable - bank acceptances
         995,295
         1,130,344

     Taxes payable
         1,163,427
         1,058,417

     Accrued liabilities and other payables
         2,596,722
         3,199,395

     Due to related parties
         44,328
         44,059

     Deferred tax liability, net
         1,071,441
         1,538,105

     Loans payable - current
         1,432,622
         6,159,911

     Interest payable on entrusted loans
         239,294
         268,801

     Current portion of entrusted loan payable
         42,224,635
         43,119,379

     Total current liabilities
         50,565,132
         56,946,143

     NONCURRENT LIABILITIES

     Deferred tax liability, net
         3,018,445
         10,771,348

     Refundable deposit from customers for systems leasing
         1,070,696
         1,555,378

     Loans payable
         -
         18,187,138

     Entrusted loan payable
         15,381,831
         15,707,773

     Total noncurrent liabilities
         19,470,972
         46,221,637

     Total liabilities
         70,036,104
         103,167,780

     CONTINGENCIES AND COMMITMENTS

     STOCKHOLDERS' EQUITY

     Common stock, $0.001 par value; 100,000,000 shares authorized, 8,310,159
    shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively
         8,310
         8,310

     Additional paid in capital
         111,789,166
         111,789,166

     Statutory reserve
         14,059,947
         13,823,789

     Accumulated other comprehensive income
         (493,581   )
         3,210,315

     Retained earnings
         34,591,218
         84,661,602

     Total Company stockholders' equity
         159,955,060
         213,493,182

     Noncontrolling interest
         87,962
         213,611

     Total equity
         160,043,022
         213,706,793

     TOTAL LIABILITIES AND EQUITY
     $   230,079,126
     $   316,874,573

The
accompanying notes are an integral part of these unaudited consolidated financial statements.

    1

CHINA
RECYCLING ENERGY CORPORATION AND SUBSIDIARIES

 CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(UNAUDITED)

     SIX MONTHS ENDED
 JUNE
    30,
     THREE MONTHS ENDED

    JUNE 30,

     2016 (Restated)
     2015
     2016 (Restated)
     2015

     Revenue

     Sales of systems
     $   -
     $   24,474,612
     $   -
     $   24,474,612

     Contingent rental income
         1,107,721
         275,427
         1,100,962
         101,089

     Total revenue
         1,107,721
         24,750,039
         1,100,962
         24,575,701

     Cost of sales

     Cost of systems and contingent rental income
         921
         21,476,876
         --
         21,464,596

     Total cost of sales
         921
         21,476,876
         --
         21,464,596

     Gross profit
         1,106,800
         3,273,163
         1,100,962
         3,111,105

     Interest income on sales-type leases
         8,197,534
         12,821,625
         3,316,004
         6,329,343

     Total operating income
         9,304,334
         16,094,788
         4,416,966
         9,440,448

     Operating expenses

     General and administrative
         1,632,106
         1,256,900
         1,135,489
         552,339

     Impairment loss of net investment receivable
         58,352,244
         -
         58,352,244
         -

     Total operating expenses
         59,984,350
         1,256,900
         59,487,733
         552,339

     Income from operations
         (50,680,016   )
         14,837,888
         (55,070,767   )
         8,888,109

     Non-operating income (expenses)

     Interest income
         63,502
         53,816
         31,814
         21,529

     Interest expense
         (3,381,989   )
         (1,802,684   )
         (2,032,419   )
         (1,308,979   )

     Loss on sale of construction in progress of Xuzhou Zhongtai
         (2,822,679   )
         -
         -
         -

     Loss on systems repurchase from Yida
         (417,952   )
         -
         (417,952   )
         -

     Gain on systems repurchase from Jitie
         -
         4,594,922
         -
         4,594,922

     Other income
         76,418
         14,319
         74,091
         377,268

     Total non-operating income (expenses), net
         (6,482,700   )
         2,860,373
         (2,344,466   )
         3,684,740

     Income (loss) before income tax
         (57,162,716   )
         17,698,261
         (57,415,233   )
         12,572,849

     Income tax expense (benefit)
         (7,181,285   )
         2,299,463
         (7,392,056   )
         1,301,511

     Income (loss) before noncontrolling interest
         (49,981,431   )
         15,398,798
         (50,023,177   )
         11,271,338

     Less: loss attributable to noncontrolling interest
         (147,205   )
         (16,117   )
         (95,925   )
         (7,779   )

     Net income (loss) attributable to China Recycling Energy Corporation
         (49,834,226   )
         15,414,915
         (49,927,252   )
         11,279,117

     Other comprehensive items

     Foreign currency translation
    gain (loss) attributable to China Recycling Energy Corporation
         (3,703,896   )
         219,035
         (4,773,553   )
         1,012,750

     Foreign currency translation
    gain attributable to noncontrolling interest
         21,556
         187
         21,021
         1,151

     Comprehensive income (loss) attributable
    to China Recycling Energy Corporation
     $   (53,538,122   )
     $   15,633,950
     $   (54,700,805   )
     $   12,291,867

     Comprehensive loss attributable to noncontrolling interest
     $   (125,649   )
     $   (15,930   )
     $   (74,904   )
     $   (6,628   )

     Basic and diluted weighted average shares outstanding
         8,310,159
         8,307,823
         8,310,159
         8,308,404

     Basic and diluted earnings per share
     $   (6.00   )
     $   1.86
     $   (6.01   )
     $   1.36

The
accompanying notes are an integral part of these unaudited consolidated financial statements.

    2

CHINA
RECYCLING ENERGY CORPORATION AND SUBSIDIARIES

 CONSOLIDATED
STATEMENTS OF CASH FLOWS

(UNAUDITED)

     SIX MONTHS ENDED
 JUNE
    30,

     2016 (Restated)
     2015

     CASH FLOWS FROM OPERATING ACTIVITIES:

     Income including noncontrolling interest
     $   (49,981,431   )
     $   15,398,798

     Impairment loss of net investment receivable

     Adjustments to reconcile income including noncontrolling
    interest to net cash provided by operating activities:
         58,352,244
         -

     Depreciation and amortization
         3,156
         21,705

     Stock option expense
         -
         13,264

     Investment income
         (105,975   )
         (8,487   )

     Changes in deferred tax
         (8,087,193   )
         (1,436,483   )

     Loss on sale of construction in progress of Xuzhou Zhongtai
         2,822,679
         -

     Changes in assets and liabilities:

     Interest receivable on sales type leases
         (825,579   )
         376,983

     Collection of principal on sales type leases
         19,668,078
         47,907,042

     Prepaid expenses
         794,023
         789,347

     Accounts receivable
         (19,809,195   )
         (7,326,079   )

     Other receivables
         (181,410   )
         (1,213,615   )

     Construction in progress
         22,051,212
         (9,595,562   )

     Accounts payable
         271,044
         1,463,130

     Taxes payable
         128,935
         1,039,073

     Interest payable on entrusted loan
         (24,299   )
         (25,891   )

     Accrued liabilities and other payables
         (1,014,498   )
         394,477

     Net cash provided by operating activities
         24,061,791
         47,797,702

     CASH FLOWS FROM INVESTING ACTIVITIES:

     Changes of restricted cash
         572,715
         -

     Acquisition of property and equipment
         -
         (20,164   )

     Net cash provided by (used in) investing activities
         572,715
         (20,164   )

     CASH FLOWS FROM FINANCING ACTIVITIES:

     Repayment of loans
         (22,755,463   )
         (27,941,848   )

     Long term payable

CORRESP
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March
7, 2019

Via
EDGAR

United
States Securities and Exchange Commission

Division
of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

Attn:	William H. Thompson, Accounting Branch Chief

Office
of Consumer Products

Re:
China Recycling Energy Corporation

Form
10-K for the Fiscal Year Ended December 31, 2017

Filed
April 13, 2018

Responses
Dated March 5, 2019

File
No. 1-34625

Dear
Mr. Thompson:

China
Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we” or
“our”) is filing a response to the SEC Comment Letter, dated March 6, 2019 (the “Comment Letter”), in
connection with complying with the issues and outstanding disclosure items set forth therein. For convenience of reference, we
have included in this response letter the same caption and paragraph numbers, as well as the text of the comments, set forth in
the Comment Letter followed by our responses thereto.

Form
10-K for the Fiscal Year Ended December 31, 2017

Item
8. Financial Statements and Supplementary Data

 1. Organization
                                         and Description of Business

Erdos
TCH – Joint Venture, page F-6

 1. We
                                         reviewed your response to comment 1 in our letter dated February 28, 2019. We did not
                                         communicate any position regarding the classification of the modified lease. As previously
                                         requested, please explain to us why accounting for the modified lease as an operating
                                         lease is appropriate.

Response:
The Company has reconsidered the modified lease, and concluded it is not an operating lease, but is a sales-type lease because
it has bargain purchase option. However, since the rental payment is variable and depending on actual electricity generated, it
is a contingent rental income, and accordingly, the future net investment receivable as of the lease modification date will be
written off.

Response
Dated February 22, 2019

 2. We
                                         reviewed your response to comment 2 in our letter dated February 28, 2019. We understand
                                         that the impairment charge was classified as non-operating expense. However, it appears
                                         the impairment charge should be classified as an operating expense. As previously requested,
                                         please tell us your basis for classifying the “Impairment loss of net investment
                                         receivable” as a non-operating expense.

Response:
we will record the impairment loss of net investment receivable as operating expense.

If
you have any further comments or require any further information or if any questions should arise in connection with this submission,
please call Mr. Jeffrey Li at (202) 298-1735 or Ms. Chelsea Anderson at (206) 816-1312 at Garvey Schubert Barer, P.C.

    Very
    truly yours,

    /s/
    Guohua     Ku

    Guohua
    Ku

    Chief
        Executive Officer

        China
        Recycle Energy Corporation

Mail Stop 3561

March 6 , 2019

Adeline Gu
Chief Financial Officer
China Recycling Energy Corporation
4/F, Tower C
Rong Cheng Yun Gu Building
Keji 3rd Road, Yanta District
Xi’an City, Shaanxi Province
China 710075

Re: China Recycling Energy Corporation
 Form 10-K for the Fiscal Year Ended December 31, 2017
Filed April 13, 2018
Response  Dated March 5, 2019
File No. 1 -34625

Dear Ms. Gu :

We have reviewed  your March 5, 2019  response s to our comment  letter  and have the
following comment s.  In some of our comments , we may ask you to provide us with information
so we may better understand your disclosure.

Please respond to these comments  within ten busine ss days by providing the request ed
information or advis e us as soon as possible when you will respond.  If you  do not believe our
comments apply to your facts and circumstances, please tell us why in your response.

After reviewing your response to these  comments, we may have additiona l comments.
Unless we note otherwise, our references to prior comments are to comments in our February 28,
2019 letter .

Adeline Gu
China Recycling Energy Corporation
March 6, 2019
Page 2

 Form 10 -K for the Fiscal Year Ended December 31, 2017

Item 8. Financial Statements and Supplementary Data

1. Organization and Description of Business

Erdos TCH – Joint Venture, page F -6

1. We reviewed your response to comment 1 in our letter dated February 28, 2019.  We did
not communicate any position regarding the classification of the modified lease.  As
previously requeste d, please explain to us why accounting for the modified lease as an
operating lease is appropriate.

Response Dated February 22, 2019

2. We reviewed your response to comment 2 in our letter dated February 28, 2019.  We
understand that the impairment charge was classified as non -operating expense.
However, it appears the impairment charge should be classified as an operating expense.
As previously requested, please tell us your basis for classifying the “Impairment loss of
net investment receivable” as a no n-operating expense.

You may contact Adam Phippen, Staff Accountant, at (202) 551 -3336 or me at (202)
551-3344 with any questions.

Sincerely,

 /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief
Office of Consumer Products

CORRESP
1
filename1.htm

March 5, 2019

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

Attn:	William H. Thompson, Accounting Branch Chief

Office of Consumer Products

Re: China Recycling Energy Corporation

Form 10-K for the Fiscal Year Ended December
31, 2017

Filed April 13, 2018

Responses Dated January 11, 2019 and
February 22, 2019

File No. 1-34625

Dear Mr. Thompson:

China Recycling Energy Corporation (“CREG”
or the “Company” and sometimes referred to as “we” or “our”) is filing a response to the SEC
Comment Letter, dated February 28, 2019 (the “Comment Letter”), in connection with complying with the issues and outstanding
disclosure items set forth therein. For convenience of reference, we have included in this response letter the same caption and
paragraph numbers, as well as the text of the comments, set forth in the Comment Letter followed by our responses thereto.

Form 10-K for the Fiscal Year Ended December 31, 2017

Item 8. Financial Statements and Supplementary Data

1. Organization and Description of Business

Erdos TCH – Joint Venture, page F-6

 1. We reviewed your responses to comment 1. Your response dated January 11, 2019 states that the
modified lease is not an operating lease. Your response dated February 22, 2019 states and the proposed revisions assume the modified
lease is an operating lease. Referencing authoritative literature, please explain to us in detail why accounting for the modified
lease as an operating lease is appropriate.

Response: In our January 11, 2019 response,
we stated that we do not believe the modified lease is an operating lease because it still has a bargain purchase option.
It is not a direct financing lease as it has dealer's profit, so, in our opinion, we believe it to be a sales-type lease.

During this comment process, we finally concluded
that it is not a sales-type lease. Because the nature of the Company’s business, including this particular transaction with
Erdos, is to allow the lessee to use the asset that the Company has invested in and constructed for a specified time period in
return for a periodic payment, we believe it to be a lease. Since it is not a sales-type lease, nor a direct financing lease as
explained above, our only option is to classify it as an operating lease. As an operating lease, the asset leased is recorded on
the lessor’s balance sheet.

Nevertheless, based on the comments received, it seems
SEC does not believe it to be an operating lease. Please let us know if it is more appropriate to write off the lease receivable
and not record the fixed assets.

Response Dated February 22, 2019

 2. Reference is made to page 2 of proposed Amendment No. 1 to Form 10-Q for the Quarterly Period
Ended June 30, 2016. Please tell us your consideration of classifying the “Impairment loss of net investment receivable”
as an operating expense.

Response: For the Results of Operations
for the six and three months ended June 30, 2016, in the proposed Amendment No. 1 to Form 10-Q, we did not classify the “impairment
loss of net investment receivable” as an operating expense. We classified it as non-operating expense.

 3. Reference is made to page 28 of proposed Amendment No. 1 to Form 10-Q for the Quarterly Period
Ended June 30, 2016. Please explain to us why general and administrative expenses increased $1,195,742 as a result of the restatement.

Response: The general and administrative
expenses increased by approximately $1.20 million due to: (i) $418,421 of depreciation expense of fixed assets (the cost of the
Erdos systems), (ii) an executory cost for operating the systems of $754,828, which was originally net with net investment in sales-type
leases under the sales-type lease, and (iii) sales tax and additions on rental income of $22,493.

There will not be depreciation expense for
the systems if we do not treat it as an operating lease.

 4. Reference is made to page 47 of proposed Amendment No. 1 to Form 10-Q for the Quarterly Period
Ended June 30, 2016. Please tell us whether you re-evaluated your conclusion that disclosure controls and procedures were effective
as of June 30, 2016 in light of the restatement. If so, please explain the basis for your conclusion. If not, please tell us your
consideration of re-evaluating your assessment.

Response: the Company has re-evaluated its disclosure
controls and procedures, and our Chief Executive Officer (CEO) and Chief Financial Officer (CFO) concluded that disclosure controls
and procedures were effective as of June 30, 2016 even in light of the restatement, because the Company and management at all times
were aware there were no minimum lease payments from the supplemental agreement, but believed that, since there was still a bargain
purchase option, the modified leases should still be treated as a sales-type lease. The Company understands there are different
opinions to the treatment of the modified leases and is working with SEC to reach an agreement on such treatment. However, our
CEO and CFO believe the disclosure controls and procedures were effective as of June 30, 2016.

 5. In light of the restatement, please tell us the periodic filings filed subsequent to June 30,
2016 that will be amended to correct the accounting error and when you expect to file the amendments. Please also file the amendment
to your June 30, 2016 Form 10-Q.

Response: We will file an amendment to
the Form 10-Q for the quarter ended June 30, 2016 as soon as we resolve all comments with the SEC for our proposed amendment and
accounting treatments. Shortly after we file the Form 10-Q/A for the period ended on June 30, 2016, we will file amendments to
the quarterly report on Form 10-Q for the quarter ended September 30, 2016, and the annual report on Form 10-K for the fiscal year
ended December 31, 2016. Per previous phone discussions with the SEC, we will not amend the quarterly filings for the quarters
ended March 31, 2017, June 30, 2017 and September 30, 2017, but only amend the Form 10-K for the year ending December 31, 2017.

We will file amendments for the quarterly filing
for the quarters ended March 31, 2018, June 30, 2018 and September 30, 2018.

If
you have any further comments or require any further information or if any questions should arise in connection with this submission,
please call Mr. Jeffrey Li at (202) 298-1735 or Ms. Chelsea Anderson at (206) 816-1312 at Garvey Schubert Barer, P.C.

    Very truly yours,

    /s/ Guohua
    Ku

    Guohua Ku

        Chief Executive Officer

        China Recycle Energy Corporation

Mail Stop 3561

February 28, 2019

Adeline Gu
Chief Financial Officer
China Recycling Energy Corporation
4/F, Tower C
Rong Cheng Yun Gu Building
Keji 3rd Road, Yanta District
Xi’an City, Shaanxi Province
China 710075

Re: China Recycling Energy Corporation
 Form 10-K for the Fiscal Year Ended December 31, 2017
Filed April 13, 2018
Responses Dated January 11, 2019 and February 22, 2019
File No. 1 -34625

Dear Ms. Gu :

We have reviewed  your January 11, 2019 and February 22, 2019  response s to our
comment  letter  and have the following comment s.  In some of our comments , we may ask you to
provide us with information so we may better understand your disclosure.

Please respond to these comments  within ten busine ss days by providing the requested
information or advis e us as soon as possible when you will respond.  If you  do not believe our
comments apply to your facts and circumstances, please tell us why in your response.

After review ing your response to these  comments, we may have additional comments.
Unless we note otherwise, our references to prior comments are to comments in our December 4,
2018 letter .

Adeline Gu
China Recycling Energy Corporation
February 28 , 201 9
Page 2

 Form 10 -K for the Fiscal Year Ended December 31, 2017

Item 8. Financial Statements and Supplementary Data

1. Organization and Description of Business

Erdos TCH – Joint Venture, page F -6

1. We reviewed your responses to comment 1.  Your response dated January 11, 2019 states
that the modified lease is not an operating  lease.  You r response dated February 22, 2019
states and the proposed revisions assume the modified lease is an operating lease.
Referencing authoritative literature, please explain to us in detail why accounting for the
modified lease as an operating lea se is appropriate.

Response Dated February 22, 2019

2. Reference is made to page 2 of proposed Amendment No. 1 to Form 10 -Q for the
Quarterly Period Ended June 30, 2016.  Please tell us your consideration of classifying
the “Impairment loss of net investmen t receivable” as an operating expense.

3. Reference is made to page 28 of proposed Amendment No. 1 to Form 10 -Q for the
Quarterly Period Ended June 30, 2016.  Please explain to us why general and
administrative expenses increased $1,195,742 as a result of th e restatement.

4. Reference is made to page 47 of proposed Amendment No. 1 to Form 10 -Q for the
Quarterly Period Ended June 30, 2016.   Please tell us whether you re -evaluated your
conclusion that disclosure controls and procedures were effective as of June 30, 2016 in
light of the restatement.  If so, please explain the basis for your conclusion.  If not, please
tell us your consideration of re -evaluating your assessment.

5. In light of the restatement, please tell us the periodic filings filed subsequent to June 30,
2016 that will be amended to correct the accounting error and when you expect to file the
amendments.  Please also file the amendment to your June 30, 2016 Form 10 -Q.

Adeline Gu
China Recycling Energy Corporation
February 28 , 201 9
Page 3

You may contact Adam Phippen, Staff Accountant, at (202) 551 -3336 or me at (202)
551-3344 with any questions.

Sincerely,

 /s/ William H. Thompso n

William H. Thompson
Accounting Branch Chief
Office of Consumer Products

CORRESP
1
filename1.htm

February
22, 2019

Via
EDGAR

United
States Securities and Exchange Commission

Division
of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

Attn:	William H. Thompson,

Accounting Branch Chief

Office
of Consumer Products

    Re:
    China
    Recycling Energy Corporation

    Form
    10-K for the Fiscal Year Ended December 31, 2017

    Filed
    April 13, 2018

    Response
    Dated October 9, 2018

    File
    No. 1-34625

Dear
Mr. Thompson:

China
Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we” or
“our”) is filing a response to the SEC Comment Letter, dated December 4, 2018 (the “Comment Letter”),
in connection with complying with the issues and outstanding disclosure items set forth therein. For convenience of reference,
we have included in this response letter the same caption and paragraph numbers, as well as the text of the comments, set forth
in the Comment Letter followed by our responses thereto.

Item
8. Financial Statements and Supplementary Data

1.
Organization and Description of Business

Erdos
TCH – Joint Venture, page F-6

1.
We reviewed your response to comment 1. We object to your accounting for this modification. You elected to estimate variable lease
payments and include them in your calculation of minimum lease payments, which directly contradicts the definition of minimum
lease payments in ASC 840. Please revise your financial statements accordingly.

Response:

Attached
please find our Form 10-Q/A for the quarter ended June 30, 2016, in which we reevaluate the leases for Erdos TCH as a result of
a supplemental agreement effective on May 1, 2016, wherein Erdos TCH cancelled monthly minimum lease payments from Erdos, charged
Erdos based on actual electricity sold at RMB 0.30 / Kwh, and concluded the lease payments that depend on a factor directly related
to the future use of the leased property were contingent rentals and, accordingly, were excluded from minimum lease payments in
their entirety.  The Company therefore wrote off the net investment receivables of these leases and treated them as
operating leases starting on May 1, 2016.

If
you have any further comments or require any further information or if any questions should arise in connection with this submission,
please call Mr. Jeffrey Li at (202) 298-1735 or Ms. Chelsea Anderson at (206) 816-1312 at Garvey Schubert Barer.

    Very
    truly yours,

    /s/
    Guohua Ku

    Guohua
    Ku

    Chief
        Executive Officer

        China
        Recycle Energy Corporation

UNITED
STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 FORM 10-Q/A

 (Amendment No. 1)

☒   QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For
the quarterly period ended June 30, 2016

OR

☐   TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For
the transition period from
to

Commission
File No. 000-12536

China
Recycling Energy Corporation

(Exact
Name of Registrant as Specified in Its Charter)

    Nevada

    90-0093373

    (State
        or other jurisdiction of

        incorporation
        or organization)

    (I.R.S.
        Employer

        Identification
        No.)

12/F,
Tower A

Chang
An International Building

No.
88 Nan Guan Zheng Jie

Xi’an
City, Shaanxi Province, China

(Address
of Principal Executive Offices, Zip Code)

Registrant’s
Telephone Number, Including Area Code: + 86-29-8765-1097

 Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes   ☐ No

 Indicate by check mark whether the
registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit such files). ☒ Yes   ☐ No

 Indicate by check mark whether the
registrant is large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging
growth company. See definitions of “large accelerated filer,” accelerated filer” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act:

     Large accelerated filer

     ☐
     Accelerated filer
     ☐

     Non-accelerated filer
     ☐
     Smaller reporting company
     ☒

     Emerging growth company
     ☐

 If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes   ☒ No

The number of shares outstanding of the registrant’s Common
Stock, as of August 10, 2016 was 8,310,198.

 EXPLANATORY NOTE

 In response to
a comment letter received from the Securities and Exchange Commission (the “SEC”), dated December 4, 2018, China Recycling
Energy Corporation (the “Company,” “we,” “us” or “our”) is filing this Amendment
No. 1 on Form 10-Q/A to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, originally filed with the
SEC on August 15, 2016 (the “Original Form 10-Q”) for the following purposes: reevaluate the leases for Erdos TCH
as a result of a supplemental agreement effective on May 1, 2016, wherein Erdos TCH cancelled monthly minimum lease payments from
Erdos, charged Erdos based on actual electricity sold at RMB 0.30 / Kwh, and concluded the lease payments that depend on a factor
directly related to the future use of the leased property were contingent rentals and, accordingly, were excluded from minimum
lease payments in their entirety. The Company therefore wrote off the net investment receivables of these leases and treated them
as operating leases starting on May 1, 2016.

 This Form 10-Q/A
should be read in conjunction with the Company’s periodic filings made with the SEC subsequent to the filing date of the
Original Form 10-Q, including any amendments to those filings, as well as any Current Reports, filed on Form 8-K subsequent to
the date of the Original Form 10-Q. In addition, in accordance with applicable rules and regulations promulgated by the SEC, the
Company’s Chief Executive Officer and Chief Financial Officer are providing currently dated certifications in connection
with this Form 10-Q/A. The certifications are filed as Exhibits 31.3, 31.4, 32.3 and 32.4. Because this Form 10-Q/A sets forth
the Original Form 10-Q in its entirety, it includes both items that have been changed as a result of the amended disclosures and
items that are unchanged from the Original Form 10-Q. Other than the revision of the disclosures as discussed above, this Form
10-Q/A speaks as of the original filing date of the Original Form 10-Q and has not been updated to reflect other events occurring
subsequent to the original filing date. This includes forward-looking statements and all other sections of this Form 10-Q/A that
were not directly impacted by this amendment, which should be read in their historical context.

INDEX

    Page No.

    PART I - FINANCIAL INFORMATION
    1

    Item 1.
    Consolidated Financial Statements
    1

    Consolidated Balance Sheets as of June 30, 2016 (Unaudited) and December 31, 2015
    1

    Consolidated Statements of Income and Comprehensive Income (Loss) (Unaudited) – Three and Six Months Ended June 30, 2016 and June 30, 2015
    2

    Consolidated Statements of Cash Flows (Unaudited) – Three and Six Months Ended June 30, 2016 and June 30, 2015
    3

    Notes to Consolidated Financial Statements (Unaudited)
    4

    Item 2.
    Management’s Discussion and Analysis of Financial Condition and Results of Operations
    29

    Item 3.
    Quantitative and Qualitative Disclosures About Market Risk
    47

    Item 4.
    Controls and Procedures
    47

    PART II - OTHER INFORMATION

    Item 1.
    Legal Proceedings
    48

    Item 1A.
    Risk Factors
    48

    Item 2.
    Unregistered Sales of Equity Securities and Use of Proceeds
    48

    Item 3.
    Defaults Upon Senior Securities
    48

    Item 4.
    Mine Safety Disclosures
    48

    Item 5.
    Other Information
    48

    Item 6.
    Exhibits
    49

PART
I – FINANCIAL INFORMATION

Item 1.
Financial Statements

CHINA
RECYCLING ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED
BALANCE SHEETS

AS
OF JUNE 30, 2016 (UNAUDITED) AND DECEMBER 31, 2015

     2016

    (Restated)
     2015

     ASSETS

     CURRENT ASSETS

     Cash
    and equivalents
     $   42,736,716
     $   41,749,388

     Restricted
    cash
         542,888
         1,130,344

     Accounts
    receivable
         35,289,808
         15,399,778

     Current
    portion of investment in sales-type leases, net
         5,690,343
         6,679,019

     Interest
    receivable on sales type leases
         1,258,536
         555,451

     Prepaid
    expenses
         373,355
         1,179,778

     Other
    receivables
         238,833
         553,886

     Total
    current assets
         86,130,479
         67,247,644

     NON-CURRENT ASSETS

     Investment
    in sales-type leases, net
         54,213,910
         133,079,634

     Long
    term investment
         1,035,110
         950,470

     Long
    term deposit
         55,850
         57,033

     Property
    and equipment, net
         35,159,888
         17,724

     Construction
    in progress
         88,629,529
         115,522,068

     Total
    non-current assets
         179,094,287
         249,626,929

     TOTAL
    ASSETS
     $   265,224,766
     $   316,874,573

     LIABILITIES
    AND STOCKHOLDERS' EQUITY

     CURRENT LIABILITIES

     Accounts
    payable
     $   797,368
     $   427,732

     Notes
    payable - bank acceptances
         995,295
         1,130,344

     Taxes
    payable
         1,163,427
         1,058,417

     Accrued
    liabilities and other payables
         2,596,722
         3,199,395

     Due
    to related parties
         44,328
         44,059

     Deferred
    tax liability, net
         1,071,441
         1,538,105

     Loans
    payable - current
         1,432,622
         6,159,911

     Interest
    payable on entrusted loans
         239,294
         268,801

     Current
    portion of entrusted loan payable
         42,224,635
         43,119,379

     Total
    current liabilities
         50,565,132
         56,946,143

     NONCURRENT LIABILITIES

     Deferred
    tax liability, net
         3,018,445
         10,771,348

     Refundable
    deposit from customers for systems leasing
         1,070,696
         1,555,378

     Loans
    payable
         -
         18,187,138

     Entrusted
    loan payable
         15,381,831
         15,707,773

     Total
    noncurrent liabilities
         19,470,972
         46,221,637

     Total
    liabilities
         70,036,104
         103,167,780

     CONTINGENCIES AND
    COMMITMENTS

     STOCKHOLDERS' EQUITY

     Common
    stock, $0.001 par value; 100,000,000 shares authorized, 8,310,159 shares issued and outstanding as of June 30, 2016 and December
    31, 2015, respectively
         8,310
         8,310

     Additional
    paid in capital
         111,789,166
         111,789,166

     Statutory
    reserve
         14,059,945
         13,823,789

     Accumulated
    other comprehensive income
         (1,036,618   )
         3,210,315

     Retained
    earnings
         70,279,897
         84,661,602

     Total
    Company stockholders' equity
         195,100,700
         213,493,182

     Noncontrolling
    interest
         87,962
         213,611

     Total
    equity
         195,188,662
         213,706,793

     TOTAL
    LIABILITIES AND EQUITY
     $   265,224,766
     $   316,874,573

The
accompanying notes are an integral part of these unaudited consolidated financial statements.

    1

CHINA
RECYCLING ENERGY CORPORATION AND SUBSIDIARIES

 CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(UNAUDITED)

     SIX
    MONTHS ENDED
 JUNE 30,
     THREE
    MONTHS ENDED
 JUNE 30,

     2016
    (Restated)
     2015
     2016
    (Restated)
     2015

     Revenue

     Sales
    of systems
     $   -
     $   24,474,612
     $   -
     $   24,474,612

     Contingent
    rental income
         1,107,721
         275,427
         1,100,962
         101,089

     Total revenue
         1,107,721
         24,750,039
         1,100,962
         24,575,701

     Cost of sales

     Cost
    of systems and contingent rental income
         921
         21,476,876
         -
         21,464,596

     Total
    cost of sales
         921
         21,476,876
         -
         21,464,596

     Gross profit
         1,106,800
         3,273,163
         1,100,962
         3,111,105

     Interest income on
    sales-type leases
         8,197,534
         12,821,625
         3,316,004
         6,329,343

     Total
    operating income
         9,304,334
         16,094,788
         4,416,966
         9,440,448

     Operating expenses

     General
    and administrative
         2,050,526
         1,256,900
         1,553,909
         552,339

     Total
    operating expenses
         2,050,526
         1,256,900
         1,553,909
         552,339

     Income from operations
         7,253,808
         14,837,888
         2,863,057
         8,888,109

     Non-operating income
    (expenses)

     Interest
    income
         63,502
         53,816
         31,814
         21,529

     Interest
    expense
         (3,381,989   )
         (1,802,684   )
         (2,032,419   )
         (1,308,979   )

     Loss
    on sale of construction in progress of Xuzhou Zhongtai
         (2,822,679   )
         -
         -
         -

     Loss
    on systems repurchase from Yida
         (417,952   )
         -
         (417,952   )
         -

     Gain
    on systems repurchase from Jitie
         -
         4,594,922
         -
         4,594,922

     Impairment
    loss of net investment receivable
         (22,245,147   )
         -
         (22,245,147   )
         -

     Other
    income
         76,418
         14,319
         74,091
         377,268

     Total
    non-operating income (expenses), net
         (28,727,847   )
         2,860,373
         (24,589,613   )
         3,684,740

     Income (loss) before
    income tax
         (21,474,039   )
         17,698,261
         (21,726,556   )
         12,572,849

     Income
    tax expense (benefit)
         (7,181,285   )
         2,299,463
         (7,392,056   )
         1,301,511

     Income (loss) before
    noncontrolling interest
         (14,292,754   )
         15,398,798
         (14,334,500   )
         11,271,338

     Less:
    loss attributable to noncontrolling interest
         (147,205   )
         (16,117   )
         (95,925   )
         (7,779   )

     Net income (loss) attributable
    to China Recycling Energy Corporation
         (14,145,549   )
         15,414,915
         (14,238,575   )
         11,279,117

     Other comprehensive
    items

     Foreign
    currency translation gain (loss) attributable to China Recycling Energy Corporation
         (4,246,933   )
         219,035
         (5,316,590   )
         1,012,750

     Foreign
    currency translation gain attributable to noncontrolling interest
         21,556
         187
         21,021
         1,151

     Comprehensive
    income (loss) attributable to China Recycling Energy Corporation
     $   (18,392,482   )

CORRESP
1
filename1.htm

January
11, 2019

Via
EDGAR

United
States Securities and Exchange Commission

Division
of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

Attn:	William H. Thompson, Accounting Branch Chief

Office
of Consumer Products

    Re:
    China
    Recycling Energy Corporation

    Form
    10-K for the Fiscal Year Ended December 31, 2017

    Filed
    April 13, 2018

    Response
    Dated October 9, 2018

    File
    No. 1-34625

Dear
Mr. Thompson:

China
Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we” or
“our”) is filing a response to the SEC Comment Letter, dated December 4, 2018 (the “Comment Letter”),
in connection with complying with the issues and outstanding disclosure items set forth therein. For convenience of reference,
we have included in this response letter the same caption and paragraph numbers, as well as the text of the comments, set forth
in the Comment Letter followed by our responses thereto.

Item
8. Financial Statements and Supplementary Data

1.
Organization and Description of Business

Erdos
TCH – Joint Venture, page F-6

1.
We reviewed your response to comment 1. We object to your accounting for this modification. You elected to estimate variable lease
payments and include them in your calculation of minimum lease payments, which directly contradicts the definition of minimum
lease payments in ASC 840. Please revise your financial statements accordingly.

Response:

We
agree the variable lease payments are not minimum lease payments as defined in ASC 840. However, we could not find the alternative
accounting treatment that would be appropriate for our situation. We do not believe that this can be an operating lease because
it still has a bargain purchase option.  It is not a direct financing lease as it has dealer's profit, so it is still a sales-type
lease, in our opinion.

The
below table is the lease income collections quarter-by-quarter.  It is not clear to us whether CREG should not consider the
cash collections for the two quarters in 2016, four quarters in 2017 and three quarters in 2018 in considering if there is any
loss at all. We believe by writing off the receivable it is turning this lease as modified into an operating lease.  If that
event, it is also not clear to us whether CREG should reinstate the related asset and depreciate it.

    Lease income
    Actual amount
    Estimated amount

    May 2016 and June 2016
      1,287,849
      -

    Quarter ended September 30, 2016
      2,003,859
      2,160,605

    Quarter ended December 31, 2016
      1,902,841
      1,973,050

    Quarter ended March 31, 2017
      2,072,107
      1,742,641

    Quarter ended June 30, 2017
      1,799,010
      1,882,222

    Quarter ended September 30, 2017
      1,962,434
      2,024,717

    Quarter ended December 31, 2017
      1,752,320
      2,042,607

    Quarter ended March 31, 2018
      1,664,712
      1,521,228

    Quarter ended June 30, 2018
      1,570,163
      2,116,352

    Quarter ended September 30, 2018
      1,389,409
      1,986,580

Excluding
the June 2016 quarter, the actual amounts collected totaled $16,117,000 for nine quarters (from the quarter ending September 30,
2016 through the quarter ending September 30, 2018), as compared to the estimated collections for these quarters totaled $17,450,000;
a $1,333,000 difference, or 7.6%.

The
management estimated the future payment based on the following factors:

 1. The
                                         management compared the estimated future payment with actual amounts from the prior month,
                                         and with the actual amounts from same period of the prior year.

 2. The
                                         management communicated with the system operator, to understand if any things occurred
                                         or would likely occur to affect recent electricity generation.

 3. From
                                         the company level, the management reviewed operations to see if anything or any decision
                                         or operation plan affected or would affect the actual electricity generation.

 4. The
                                         management checked to see if any other external factors affected or will affect the actual
                                         electricity generation.

If
we take a loss in the period of modification by writing off the $57.59 million of net lease receivables and then subsequently
record the collection of principal and interest from the leases as income, it would violate two accounting principles: the
matching concept and the fact accounting estimates are inherent in the preparation of financial statements.  We believe the
financial statements would be misleading.

In
addition, ASC 450-20-05-2a lists collectability of receivables as a loss contingency. ASC 450-20-05-5 requires a probability threshold
for the recognition of a loss contingency and the amount of loss be reasonable estimable. ASC 450-20-25-2 requires an indication
that an asset has been impaired and the amount of loss can be reasonably estimated. ASC 450-20-30-1 requires recording the best
estimate of loss or the minimum loss in a range. The Company’s analysis does not indicate a loss has been incurred as the
estimated collections are approximately the same as the carrying value of the lease receivable. As of September 30, 2018, the
estimated total future payment collection is $57.54 million, the Company believes it is sufficient future estimated collections
to support the net investment receivable.

    2

Below
is the impact to the Company’s consolidated financial statements for the quarter ended and as of June 30, 2016, for the
quarter ended and as of September 30, 2016, and for the quarter ended and as of December 31, 2016, if the Company wrote off the
net investment receivable at the lease term modification date and started to record the principal and interest as contingent lease
income based on actual electricity generated:

    Three months
 ended,

June 30,
 2016
    Three months
 ended,

September 30,
 2016
    Three months
 ended,

December 31,
 2016

    Net income (loss) as previously stated
      2,347,926
      536,839
      (1,150,620 )

    Write-off of lease receivable
      57,585,543
      -
      -

    Contingent lease income from actual electricity generated
      1,287,849
      2,003,859
      1,902,841

    Reduction in deferred tax liability
      6,208,518
      -
      -

    Net income (loss) if restated
      (50,400,677 )
      2,330,874
      4,567,885

If
you have any further comments or require any further information or if any questions should arise in connection with this submission,
please call Mr. Jeffrey Li at (202) 298-1735 or Ms. Chelsea Anderson at (206) 816-1312 at Garvey Schubert Barer.

    Very
    truly yours,

    /s/
    Guohua     Ku

    Guohua
    Ku

    Chief
                                         Executive Officer

        China
        Recycle Energy Corporation

    3

Mail Stop 3561

December 4, 2018

Adeline Gu
Chief Financial Officer
China Recycling Energy Corporation
4/F, Tower C
Rong Cheng Yun Gu Building
Keji 3rd Road, Yanta District
Xi’an City, Shaanxi Province
China 710075

Re: China Recycling Energy Corporation
 Form 10-K for the Fiscal Year Ended December 31, 2017
Filed April 13, 2018
Response Dated October 9 , 2018
File No. 1 -34625

Dear Ms. Gu :

We have reviewed  your October 9 , 2018  response to our comment  letter  and have the
following comment s.  In some of our comments , we may ask you to provide us with information
so we may better understand your disclosure.

Please respond to these comments  within ten busine ss days by providing the  requested
information or advis e us as soon as possible when you will respond.  If you  do not believe our
comments apply to your facts and circumstances, please tell us why in your response.

After reviewing your response to these  comments, we may have a dditional comments.
Unless we note otherwise, our references to prior comments are to comments in our September
24, 2018 letter .

Item 8. Financial Statements and Supplementary Data

1. Organization and Description of Business

Erdos TCH – Joint Venture, page F -6

1. We reviewed your response to comment 1.  We object to your accounting for this
modification.  You elected to estimate variable lease payments and include them in your
calculation of minimum lease payments, which directly contradicts the definitio n of

Adeline Gu
China Recycling Energy Corporation
December 4, 2018
Page 2

 minimum lease payments in ASC 840.  Please revise your financial statements
accordingly.

You may contact Adam Phippen, Staff Accountant, at (202) 551 -3336 or me at (202)
551-3344 with any questions.

Sincerely,

 /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief
Office of Consumer Products

CORRESP
1
filename1.htm

October
9, 2018

Via
EDGAR

United
States Securities and Exchange Commission

Division
of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

Attn:	William H. Thompson, Accounting Branch Chief

Office
of Consumer Products

 Re: China
Recycling Energy Corporation

Form
10-K for the Fiscal Year Ended December 31, 2017

Filed
April 13, 2018

Response
Dated September 20, 2018

File
No. 1-34625

Dear
Mr. Thompson:

China
Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we” or
“our”) is filing a response to the SEC Comment Letter, dated September 24, 2018 (the “Comment Letter”),
in connection with complying with the issues and outstanding disclosure items set forth therein. For convenience of reference,
we have included in this response letter the same caption and paragraph numbers, as well as the text of the comments, set forth
in the Comment Letter followed by our responses thereto.

Item
8. Financial Statements and Supplementary Data

1.
Organization and Description of Business

Erdos
TCH – Joint Venture, page F-6

1.
We reviewed your response to comment 1. Please explain to us in detail how you concluded the modification did not change the
classification of the lease referencing authoritative literature that supports your conclusion. Please also clarify for us
whether you considered payments based on actual electricity sold as minimum lease payments when evaluating the modified terms
referencing authoritative literature that supports your conclusion. If so, tell us what minimum payments you assumed and how
you estimated such amounts. In addition, please explain your accounting conclusions and show us how your financial statements
would change had you not considered payments based on actual electricity sold as minimum lease payments. Finally, please
explain why you believe ASC 450-20-25-2 should be considered when evaluating this transaction.

Response:

(a)
Please explain to us in detail how you concluded the modification did not change the classification of the lease referencing authoritative
literature that supports your conclusion.

Our
basis for the conclusion that the modification did not change the classification was based on ASC 840-30-35-30, which provides
that if the provisions of a sales-type or direct financing lease are changed in a way that changes the amount of the remaining
minimum lease payments, the balance of the minimum lease payments receivable and the estimated residual value (if affected) shall
be adjusted to reflect the change (subject to the limitation on the residual value imposed by paragraph 840-30-35-25), and the
net adjustment shall be charged or credited to unearned income if the change meets either of the following conditions:

“a.
[It does not give rise to a new agreement under the guidance in paragraph 840-10-35-4. [FAS 013, paragraph 17, sequence 177.1.2.1]]

b.
[It does give rise to a new agreement under the guidance in paragraph 840-10-35-4, but such agreement is classified by the lessor
as a direct financing lease. [FAS 013, paragraph 17, sequence 177.1.2.2.1]]

840-10-35
Subsequent Measurement - General

>
Reassessing Lease Classification

35-4
If at any time the lessee and lessor agree to change the provisions of the lease, other than by renewing the lease or extending
its term, in a manner that would have resulted in a different classification of the lease under the lease classification criteria
in paragraphs 840-10-25-1 and 840-10-25-42, had the changed terms been in effect at lease inception , the revised agreement shall
be considered as a new agreement over its term, and the lease classification criteria in paragraphs 840-10-25-1 and 840-10-25-42shall
be applied for purposes of classifying the new lease.”

As
you can see, ASC 840-10-35-4 does not apply here as there has been no change in the lease terms that extend the life of the lease,
and there has been no change in the bargain purchase option or any other term of the lease that would change the classification
of the lease at inception, which would make this lease other than a sales type lease.

(b)
Please also clarify for us whether you considered payments based on actual electricity sold as minimum lease payments when evaluating
the modified terms referencing authoritative literature that supports your conclusion.

Our
management considered payments based on actual electricity sold as minimum lease payments when evaluating the modified terms as
defined in ASC 840-10-25-4, and understood that lease payments that depend on a factor directly related to the future use of the
leased property are contingent rentals and, accordingly, are excluded from minimum lease payments in their entirety; however,
this is the criteria for classifying the lease at inception and, since we accounted for the lease term modification in accordance
with ASC 840-30-35-30, the consideration of ASC 840-10-25-4 would not change our conclusion as described above. CREG considered
treating all future receipts under the new agreements as contingent rentals but concluded this would not reflect future income
correctly. To do this would require CREG to record a large loss at lease modification. This loss would be offset by future income
received. CREG concluded that recording such loss would violate ASC 450-20-25-2 as “both conditions” must be met to
record a loss. CREG does not believe that the conditions are met in these circumstances.

    2

(c)
If so, tell us what minimum payments you assumed and how you estimated such amounts.

Our
management estimated the future minimum lease payment at the end of each year based on actual payment received during the year,
and the actual payments received in 2016, along with discussing with the customer for their operation, understanding customer's
future production plan, and considering whole national economic situation, would be the basis for the management to estimate future
minimum lease payment for 2017 and thereafter.  The management then recomputed the present value of the minimum lease payments
(net investment receivable) on an annual basis, and the balance of the minimum lease payments receivable was adjusted to reflect
the change and the net adjustment was charged or credited to unearned income. Following the completion of each quarter, we adjust
interest income/expense based on actual payment received.

(d)
In addition, please explain your accounting conclusions and show us how your financial statements would change had you not considered
payments based on actual electricity sold as minimum lease payments.

CREG’s
financial statements would change had we not considered payments based on actual electricity sold as minimum lease payments. In
such case, CREG would recognize a loss of approximately US$58.70 million from writing-off the net investment in sales-type leases
of Erdos TCH on May 1, 2016, the effective date of the supplemental agreement.

(e)
Finally, please explain why you believe ASC 450-20-25-2 should be considered when evaluating this transaction.

The
reference to ASC 450-20-25-2 relates to recording a loss as there are no minimum lease payments. CREG believes that recording
a loss based on the lease modification would violate ASC 450-20-25-2 because it does not believe it is probable that a loss has
been incurred, and writing-off the net investment in sales-type lease as described in preceding paragraph would not reflect the
true financial position of the Company. In fact, CREG cannot estimate the loss amount as there will be rents coming through. This
loss to be recorded currently would be offset in future periods as the rents are collected. To record such a loss would be tantamount
to “big bath” accounting.

If
you have any further comments or require any further information or if any questions should arise in connection with this submission,
please call Mr. Jeffrey Li at (202) 298-1735 or Ms. Chelsea Anderson at (206) 816-1312 at Garvey Schubert Barer.

    Very
    truly yours,

    /s/
    Guohua Ku

    Guohua
    Ku

    Chief
        Executive Officer

        China
        Recycle Energy Corporation

    3

Mail Stop 3561

September 24, 2018

Adeline Gu
Chief Financial Officer
China Recycling Energy Corporation
4/F, Tower C
Rong Cheng Yun Gu Building
Keji 3rd Road, Yanta District
Xi’an City, Shaanxi Province
China 710075

Re: China Recycling Energy Corporation
 Form 10-K for the Fiscal Year Ended December 31, 2017
Filed April 13, 2018
Response Dated September 20, 2018
File No. 1 -34625

Dear Ms. Gu :

We have reviewed  your September 20, 2018  response to our comment  letter  and have the
following comment s.  In some of our comments , we may ask you to provide us with information
so we may better understand your disclosure.

Please respond to these comments  within ten busine ss days by providing the requested
information or advis e us as soon as possible when you will respond.  If you  do not believe our
comments apply to your facts and circumstances, please tell us why in your response.

After reviewing your response to these  comments, we may have additional comments.
Unless we note otherwise, our references to prior comments are to comments in our September
7, 2018 letter .

Item 8. Financial Statements and Supplementary Data

1. Organization and Description of Business

Erdos TCH – Joint Venture, page F -6

1. We reviewed your response to comment 1.  Please explain to us in detail how you
concluded the modification did not change the classification of the lease referencing
authoritative literature that supports your conclusion.  Please also  clarify for us whether

Adeline Gu
China Recycling Energy Corporation
September 24, 2018
Page 2

 you considered payments based on actual electricity sold as minimum lease payments
when evaluating the modified terms referencing authoritative literature that supports your
conclusion.  If so, tell us what minimum payments you assu med and how you estimated
such amounts.  In addition, please explain your accounting conclusions and show us how
your financial statements would change had you not considered payments based on actual
electricity sold as minimum lease payments.  Finally, pl ease explain why you believe
ASC 450 -20-25-2 should be considered when evaluating this transaction.

You may contact Adam Phippen, Staff Accountant, at (202) 551 -3336 or me at (202)
551-3344 with any questions.

Sincerely,

 /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief
Office of Consumer Products

CORRESP
1
filename1.htm

September 20, 2018

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

    Attn:
    William H. Thompson,

Accounting Branch Chief Office of
Consumer Products

 Re: China Recycling Energy Corporation

Form 10-K for the Fiscal Year Ended December 31, 2017

Filed April 13, 2018

File No. 1-34625

Dear Mr. Thompson:

China Recycling Energy Corporation (“CREG”
or the “Company” and sometimes referred to as “we” or “our”) is filing a response to the SEC
Comment Letter, dated September 7, 2018 (the “Comment Letter”), in connection with complying with the issues and outstanding
disclosure items set forth therein. For convenience of reference, we have included in this response letter the same caption and
paragraph numbers, as well as the text of the comments, set forth in the Comment Letter followed by our responses thereto.

Item 8. Financial Statements and Supplementary Data

1. Organization and Description of Business

Erdos TCH – Joint Venture, page F-6

 1. Reference is made to the supplemental agreement effective May 1, 2016 whereby Erdos TCH canceled
monthly minimum lease payments from Erdos and charges Erdos based on actual electricity sold. Referencing authoritative literature
that supports your accounting treatment, please explain to us how you evaluated and accounted for the lease modification. Refer
to ASC 840-30-35-30 and 840-30-40-6. In doing so, please tell us whether you consider the payments based on actual electricity
sold under the supplemental agreement minimum lease payments as defined in ASC 840-10-25-4.

Response: Effective on
May 1, 2016, Erdos TCH cancelled monthly minimum lease payments from Erdos, and started to charge Erdos based on actual electricity
sold at a rate of RMB 0.30 / KWH. The selling price of each KWH is determined annually based on prevailing market conditions.

We accounted for the lease modification
in accordance with the provisions of ASC 840-30-35-30 and concluded the modification of the minimum lease payments based on actual
electricity sold/generated did not change the classification of the lease had the changed terms been in effect at the lease inception.
The Company is a manufacturer and the lease has a bargain purchase option. The balance of the minimum lease payments receivable
was adjusted to reflect the change and the net adjustment was charged or credited to unearned income.

We considered the payments based
on actual electricity sold under the supplemental agreement minimum lease payment as defined in ASC 840-10-25-4, by treating all
future receipts under the new agreements as contingent rentals, but concluded this would not reflect future income correctly. To
do this would require the Company to record a large loss at lease modification. This loss would be offset by future income received.
We concluded to record such loss would violate ASC 450-20-25-2 as "both conditions" must be met to record a loss. We
do not believe they are met. Further, the lease modification did not change the lessee's ability to purchase the asset for a nominal
amount at the end of the lease.

2. Summary of Significant Accounting Policies

Basis of Presentation, page F-13

 2. You disclose that certain information and footnote disclosures normally
present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States
of America were omitted. Please tell the information and footnote disclosures that have been omitted.

Response:
We should not have included the statement of ‘certain information and footnote disclosures normally present in annual financial
statements prepared in accordance with accounting principles generally accepted in the United States of America were omitted’
in the annual financial statements for the years ending December 31, 2017 and 2016; there was nothing omitted, and we will remove
this statement in future filings.

16.
Income Tax, page F-25

 3. In future filings, please disclose the total
valuation allowance recognized for deferred tax assets. Refer to ASC 740-10-50-2c. Please also disclose the amounts and expiration
dates of the PRC NOLs. Refer to ASC 740-10-50-3a.

Response: In future filings,
we will disclose the total valuation allowance recognized for deferred tax assets under 740-10-50-2c, as well as the amounts and
expirations dates of the PRC NOLs under ASC 740-10-50-3a.

Item 9A. Controls and Procedures

Internal Controls Over Financial Reporting, page 50

 4. Please amend to disclose a statement as to
whether or not internal control over financial reporting was effective as of December 31, 2017. In this regard, your current disclosure
states that your assessment was as of December 31, 2015. Refer to Item 308(a)(3) of Regulation S-K.

Response: Our management
has concluded that our internal control over financial reporting was effective as of the end of the fiscal year (December 31, 2017)
as disclosed in Item 9A in page 50 of the Form 10-K. The reference to 2015 was a typographical error, which should read “2017”
instead. We will amend the Form 10-K to reflect the correct period.

    2

If
you have any further comments or require any further information or if any questions should arise in connection with this submission,
please call Mr. Jeffrey Li at (202) 298-1735 or Ms. Chelsea Anderson at (206) 816-1312 at Garvey Schubert Barer.

    Very truly yours,

    /s/ Guohua
    Ku

    Guohua Ku

        Chief Executive Officer

        China Recycle Energy Corporation

3

Mail Stop 3561

September 7 , 2018

Adeline Gu
Chief Financial  Officer
China Recycling Energy Corporation
4/F, Tower C
Rong Cheng Yun Gu Building
Keji 3rd Road, Yanta District
Xi’an City, Shaanxi Province
China 710075

Re: China Recycling Energy Corporation
 Form 10-K for the Fiscal Year Ended December 31, 2017
Filed April 13, 2018
File No. 1 -34625

Dear Ms. G u:

We have limited our review  of your filing  to the financial statements and related
disclosures 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 these comments  within ten busine ss days b y providing the requested
information or advis e us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.

After reviewing your response to these  comments , we may have  additional comments.

Item 8. Financial Statements and Supplementary Data

1. Organization and Description of Business

Erdos TCH – Joint Venture, page F -6

1. Reference is made to the supplemental agreement effective May 1, 2016 wh ereby Erdos
TCH canceled monthly minimum lease payments from Erdos and charges Erdos based on
actual electricity sold.  Referencing authoritative literature that supports your accounting
treatment, please explain to us how you evaluated and accounted for t he lease
modification.  Refer to ASC 840 -30-35-30 and 840 -30-40-6.  In doing so, please tell us

Adeline Gu
China Recycling Energy Corporation
September 7 , 2018
Page 2

 whether you consider the payments based on actual electricity sold under the
supplemental agreement minimum lease payments as defined in ASC 840 -10-25-4.

2. Su mmary of Significant Accounting Policies

Basis of Presentation, page F -13

2. You disclose that certain information and footnote disclosures normally present in annual
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America were omitted.  Please tell the information and
footnote disclosures that have been omitted.

16. Income Tax, page F -25

3. In future filings, please disclose the total valuation allowance recognized for deferred tax
assets.  Re fer to ASC 740 -10-50-2c.  Please also disclose the amounts and expiration
dates of the PRC NOLs.  Refer to ASC 740 -10-50-3a.

Item 9A. Controls and Procedures

Internal Controls Over Financial Reporting, page 50

4. Please amend to disclose a statement as to whether or not internal control over financial
reporting was effective as of December 31, 2017.  In this regard, your current disclosure
states that your assessment was as of December 31, 2015.  Refer to Item 308(a)(3) of
Regulation S -K.

We remind you tha t the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.

You may contact Adam Phippen, Staff Accountant, at (202) 551 -3336 or me at (202)
551-3344  with any questions.

Sincerely,

 /s/ William H.  Thompson

William H. Thompson
Accounting Branch Chief
Office of Consumer Products

Mail Stop 3561
April 30, 2018

Guohua Ku
Chief Executive Officer
China Recycling Energy Corporation
4/F, Tower C
Rong Cheng Yun Gu Building
Keji 3rd Road, Yanta District
Xi An City, Shaanxi Province , China

Re: China Recycling Energy Corporation
  Registration Statement on Form S-3
Filed  April 25, 2018
  File No.  333-224433

Dear Mr. Ku :

This is to advise you that we have not  reviewed and will not review your registration
statement .

Please refer to Rules 460 and 461 regarding requests for acceleration.  We remind you
that the company and its management are responsible for the accuracy and adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action  by the staff.

Please  contact Katherine Bagley  at (202) 551 -2545  with any questions.

Sincerely,

 /s/ Lisa M. Kohl for

Mara L. Ransom
Assistant Director
Office of Consumer Products

CORRESP
1
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CHINA RECYCLING ENERGY CORPORATION

May
1, 2018

VIA
EDGAR

Securities
and Exchange Commission

Division
of Corporation Finance

100
F Street, N.E.

Washington,
DC 20549

    Re:
    China
    Recycling Energy Corporation

Registration
Statement on Form S-3

Filed April 25, 2018

File No. 333-224433

Acceleration
Request

Requested
Date:          May 3, 2018

Requested
Time:         2:00 p.m. Eastern Time

Ladies
and Gentlemen:

Pursuant
to Rule 461 of the General Rules and Regulations under the Securities Act of 1933, as amended, China Recycling Energy Corporation
(the “Company”) hereby respectfully requests the Securities and Exchange Commission (the “Commission”)
to accelerate the effective date of the above- referenced Registration Statement and declare such Registration Statement effective
at the “Requested Date” and “Requested Time” set forth above or as soon thereafter as practicable.

In
connection with the acceleration request, the Company hereby acknowledges that:

    ●
    should
    the Commission or the staff of the Commission, acting pursuant to delegated authority, declare the filing effective, it does
    not foreclose the Commission from taking any action with respect to the filing;

    ●
    the
    action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not
    relieve the Company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and

    ●
    the
    Company may not assert the staff comments and the declaration of effectiveness as a defense in any proceeding initiated by
    the Commission or any person under the federal securities laws of the United States.

If
you have any further comments, require any further information or if any questions should arise in connection with this
submission, please call Mr. Jeffrey Li at (202) 298-1735 or Ms. Chelsea Anderson at (206) 816-1312 at Garvey Schubert Barer,
P.C.

[Signature Page
Follows]

    Sincerely,

    CHINA
    RECYCLYING ENERGY CORPORATION

    By:
    /s/
    Binfeng (Adeline) Gu

    Binfeng
    (Adeline) Gu

    Chief
    Financial Officer

    cc:
    Jeffrey
        Li, Garvey Schubert Barer, P.C.

        Chelsea
        Anderson, Garvey Schubert Barer, P.C.

CORRESP
1
filename1.htm

CHINA
RECYCLING ENERGY CORPORATION

December 7, 2017

VIA EDGAR

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, DC 20549

Re:  China Recycling Energy Corporation

    Registration Statement on Form S-3

    Filed December 1, 2017

    File No. 333-221868

Acceleration Request

Requested Date:
         December 8, 2017

Requested Time:
        4:00 p.m. Eastern Time

Ladies and Gentlemen:

Pursuant
to Rule 461 of the General Rules and Regulations under the Securities Act of 1933, as amended, China Recycling Energy Corporation
(the “Company”) hereby respectfully requests the Securities and Exchange Commission (the “Commission”)
to accelerate the effective date of the above- referenced Registration Statement and declare such Registration Statement effective
at the “Requested Date” and “Requested Time” set forth above or as soon thereafter as practicable.

In
connection with the acceleration request, the Company hereby acknowledges that:

•  should the Commission or the staff of the Commission,
acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action
with respect to the filing;

•  the action of the Commission or the staff, acting pursuant
to delegated authority, in declaring the filing effective, does not relieve the Company from its full responsibility for the adequacy
and accuracy of the disclosure in the filing; and

•  the Company may not assert the staff comments and the
declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federal securities
laws of the United States.

If
you have any further comments, require any further information or if any questions should arise in connection with this submission,
please call Mr. Jeffrey Li at (202) 298-1735 or Ms. Chelsea Anderson at (206) 816-1312 at Garvey Schubert Barer.

[Signature
Page Follows]

    Sincerely,

    CHINA RECYCLYING ENERGY CORPORATION

    By:

    /s/ Binfeng (Adeline) Gu

    Binfeng (Adeline) Gu

    Chief Financial Officer

    cc:

        Jeffrey Li, Garvey Schubert Barer

        Chelsea Anderson, Garvey Schubert Barer

Mailstop 3561

December 6, 2017

Guohua Ku
Chief Executive Officer
China Recycling Energy Corporation
Chang An International Building
No. 88 Nan Guam Zheng Jie
Xi An City, Shaanxi Province, China

Re: China Recycling Energy Corporation
  Registration Statement on Form S-3
Filed  November 1, 2017
  File No.  333-221868

Dear Mr. Ku :

This is to advise you that we have not  reviewed and will not review your registration
statement .

Please refer to Rules 460 and 461 regarding requests for acceleration.  We remind you
that the company and its management are responsible for the accuracy and adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action by the staff.

Please  contact Danilo Castelli at (202)551 -6521  with any questions.

Sincerely,

 /s/ Lisa M. Kohl for

 Mara L. Ransom
Assistant Director
Office of Consumer Products
cc: Jeffrey Li

CORRESP
1
filename1.htm

CHINA
RECYCLING ENERGY CORPORATION

December 16, 2016

VIA EDGAR

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, DC 20549

    Re:
    China Recycling Energy Corporation

    Amendment No. 1 to Resale Registration Statement on
    Form S-3/A

    Filed December 14, 2016

    File No. 333-214834

Acceleration Request

Requested
Date:          December 20, 2016

Requested
Time:         4:00 p.m. Eastern Time

Ladies and Gentlemen:

Pursuant
to Rule 461 of the General Rules and Regulations under the Securities Act of 1933, as amended, China Recycling Energy Corporation
(the “Company”) hereby respectfully requests the Securities and Exchange Commission (the “Commission”)
to accelerate the effective date of the above- referenced Registration Statement and declare such Registration Statement effective
at the “Requested Date” and “Requested Time” set forth above or as soon thereafter as practicable.

In
connection with the acceleration request, the Company hereby acknowledges that:

    •

    should the Commission or the staff of the Commission, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing;

    •

    the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and

    •

    the Company may not assert the staff comments and the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

If
you have any further comments, require any further information or if any questions should arise in connection with this submission,
please call Mr. Jeffrey Li at (202) 298-1735 at Garvey Schubert Barer.

[Signature
Page Follows]

    Sincerely,

    CHINA RECYCLYING ENERGY CORPORATION

    By:

    /s/ Binfeng (Adeline) Gu

    Binfeng (Adeline) Gu

    Chief Financial Officer

    cc:
    Jeffrey Li, Garvey Schubert Barer

CORRESP
1
filename1.htm

[China
Recycling Energy Corporation]

June 17, 2014

VIA EDGAR

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549-0405

Attention: Mara L. Ransom, Assistant Director

Scott M. Anderegg, Staff Attorney

    Re:
    China Recycling Energy Corporation

    Resale Form S-3/A (No.1) Registration Statement

    File No. 333-194470

Dear Mr. Anderegg:

Pursuant to Rule 461
of the General Rules and Regulations under the Securities Act of 1933, China Recycling Energy Corporation (the “Company”)
hereby requests the Securities and Exchange Commission (the “Commission”) to accelerate the effective date of the above-
referenced Resale Registration Statement and declare such Resale Registration Statement effective as of 2:00 p.m. EDT, on June
19, 2014, or as soon thereafter as practicable. The Company also requests that the Commission specifically confirm such effective
date and time to the Company and the undersigned.

In connection with
the acceleration request, the Company hereby acknowledges that: (i) should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing;
(ii) the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does
not relieve the Company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and (iii) the
Company may not assert this action as a defense in any proceeding initiated by the Commission or any person under the federal securities
laws of the United States.

If you have any further
comments or require any further information or if any questions should arise in connection with this submission, please call Mr.
Thomas Wardell at (404) 527-4990 or Mr. Derek Swanson at (404) 527-4037 at McKenna Long & Aldridge LLP.

    Very truly yours,

    /s/ David Chong

    David Chong

    Chief Financial Officer and Secretary

CORRESP
1
filename1.htm

    Albany

        Atlanta

        Brussels

        Denver

        Los Angeles

        Miami

        New York

        Thomas
        Wardell

        404.527.4990

        mckennalong.com

        Northern
        Virginia

        Orange
        County

        Rancho
        Santa Fe

        San
        Diego

        San
        Francisco

        Seoul

        Washington,
        DC

        email
        address

        twardell@mckennalong.com

June 10, 2014

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

    Attn:
    Mara Ransom, Assistant Director

    Lilyanna Peyser, Legal Branch Chief

    Scott M. Anderegg

    Re:
    China Recycling Energy Corporation

    Registration Statement on Form S-3

    Filed March 10, 2014

    File No. 333-194470

Dear Ms. Ransom:

On behalf of our
client, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we”
or “our”), this firm is filing a response to the SEC Comment Letter, dated June 9, 2014, in connection with complying
with the issues and outstanding disclosure items set forth therein. For convenience of reference, we have included, in this response
letter, the same caption and paragraph number, as well as the text of the comment, set forth in your June 9, 2014 comment letter
followed by our response.

General

    Comment 1.
    We note your response to comment 1 in our letter dated May 7, 2014. Please amend the Form 8-K filed on September 16, 2013 to change the date of the reportable event and to clarify the fact that the agreements in question were effective upon execution on September 11, 2013, as opposed to on September 5, 2013 as currently stated in the Form 8-K.

Response:

The Company
has filed an amendment no. 1 to the 8-K in question to change the date of the reportable event and to clarify the fact that the
agreements in question were effective upon execution on September 11, 2013.

United States Securities and Exchange Commission

June 10, 2014

Page 2

If you have any further
comments or require any further information or if any questions should arise in connection with this submission, please call me
at (404) 527-4990, Derek Swanson at (404) 527-4037 or Jeffrey Li at (202) 496-7443.

    Very truly yours,

    /s/ Thomas Wardell, Esq.

    Thomas Wardell, Esq.

    cc:
    David Chong, CFO, China Recycling Energy Corp.

    Jeffrey Li, Esq.

    Derek Swanson, Esq.

June 9 , 2014

Via E -mail
Guohua Ku
Chief Executive Officer
China Recycling Energy Corporation
12/F, Tower A
Chang An International Building
No. 88 Nan Guan Zheng Jie
Xi’an City, Shaanxi  Province
China 710068

Re: China Recycling Energy Corporation
  Registration Statement on For m S-3
Filed  March 10, 2014
Response dated May 30, 2014
  File No.  333-194470

Dear Mr. Ku:

We have limited our review of your registration statement to those issues we have
addressed in our comment .  In our comment , we may ask you to provide us with information so
we may better understand your disclosure.

Please respond to this letter by amending your registration statement and providing the
requeste d information .  Where you do not believe our comment  applies  to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.

After reviewing any amendment to your registration statement and the informat ion you
provide in response to this comment , we may have  additional comments.
General

1. We note your response to comme nt 1 in our letter dated May 7, 2014.  Please amend the
Form 8 -K filed on September 16, 2013 to change the date of  the reportable even t and to
clarify the fact that the agreements in question were eff ective upon execution on
September 11, 2013 , as opposed  to on September 5, 2013  as currently stated in the  Form
8-K.

Guohua Ku
China Recycling Energy Corporation
June 9, 2014
Page 2

 You may contact Scott M. Anderegg, Attorney  Adviser , at (202) 551 -3342, Lilyanna
Peyser, Legal Branch Chief, at (202) 551 -3222,  or me at (202) 551 -3720 with any other
questions  with any other questions.

Sincerely,

 /s/ Lilyanna L. Peyser for

 Assistant Director
Mara Ransom

CORRESP
1
filename1.htm

        Albany

        Atlanta

        Brussels

        Denver

        Los Angeles

        Miami

        New York

        Thomas
        Wardell

        404.527.4990

        mckennalong.com

        Northern Virginia

        Orange County

        Rancho Santa Fe

        San Diego

        San Francisco

        Seoul

        Washington, DC

        email
        address

        twardell@mckennalong.com

May 30, 2014

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

 Attn: Mara Ransom, Assistant Director

Lilyanna Peyser, Legal Branch Chief

Scott M. Anderegg

 Re: China Recycling Energy Corporation

Registration Statement on Form S-3

  Filed March 10, 2014

File No. 333-194470

Dear Ms. Ransom:

On behalf of our
client, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we”
or “our”), this firm is filing a response to the SEC Comment Letter, dated May 7, 2014, in connection with complying
with the issues and outstanding disclosure items set forth therein. For convenience of reference, we have included, in this response
letter, the same caption and paragraph number, as well as the text of the comment, set forth in your May 7, 2014 comment letter
followed by our response.

General

Comment
1:	We note your response to comment 1 in our letter dated April 3, 2014. The issues raised in such comment apply
to the lease agreement filed as Exhibit 10.2 to the Form 8-K filed on September 16, 2014, as well. Please advise

Response:

The
Company also confirms that Pucheng Xin Heng Yuan Biomass Power Generation Corporation
signed the Biomass Power Generation Project Lease Agreement on September 11, 2013.

United States Securities and Exchange
Commission

May 30, 2014

Page 2

Exhibit 5.1 – Opinion of McKenna Long &
Aldridge LLP

 Comment 2: We note your response to comment 3 in our letter dated
April 3, 2014, including your belief that the language that the opinion “is provided for use solely in connection with the
resale of the Common Stock covered by the Registrant Statement” should be interpreted as allowing investors to rely on Counsel’s
opinion. While this language appears to appropriately limit the purpose for which the opinion may be used, it does not appear
to speak as to a person or a class of persons. However, the language that the opinion “may not be furnished to, quoted from
or relied upon by any other person, firm or corporation” appears to inappropriately limit the persons that may rely on the
opinion to the addressee of the opinion (your board of directors). Accordingly, we re-issue this comment.

Response:

We will revise and
replace the sentence “This opinion letter is provided for use solely in connection with the resale of the Common Stock covered
by the Registration Statement may not be furnished to, quoted from or relied upon by any other person, firm, or corporation without
our express written consent.” with a new sentence (italicized font reflects new proposed insert) that “This opinion
letter is provided for use solely in connection with the resale of the Common Stock covered by the Registration Statement, and
except for its use in connection with such resale  may not be furnished to, quoted from or relied upon by any other
person, firm, or corporation without our express written consent.”

If you have any further
comments or require any further information or if any questions should arise in connection with this submission, please call me
at (404) 527-4990, Derek Swanson at (404) 527-4037 or Jeffrey Li at (202) 496-7443.

    Very truly
    yours,

    /s/ Thomas Wardell, Esq.

    Thomas Wardell, Esq.

 cc: David Chong, CFO, China Recycling Energy Corp.

Jeffrey Li, Esq.

Derek Swanson, Esq.

May 7, 2014

Via E -mail
Guohua Ku
Chief Executive Officer
China Recycling Energy Corporation
12/F, Tower A
Chang An International Building
No. 88 Nan Guan Zheng Jie
Xi’an City, Shaanxi Province
China 710068

Re: China Recycling Energy Corporation
  Registration Statement on For m S-3
Filed  March 10, 2014
Response dated April 25, 2014
  File No.  333-194470

Dear Mr. Ku:

We have limited our review of your registration statement to those issues we have
addressed in our 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 by amending your registration statement and providing the
requeste d information .  Where you do not believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.

After reviewing any amendment to your registration statement and the informat ion you
provide in response to these  comments, we may have  additional comments.
General
1. We note your response to comment 1 in our letter dated April 3, 2014.  The issues raised
in such comment apply to the lease agreement filed as Exhibit 10.2 to the For m 8-K filed
on September 16, 2014, as well.  Please advise.
Exhibit 5.1
2. We note your response to comment 3 in our letter dated April 3 , 2014 , including your
belief that the language that the opinion “is provided for use solely in connection with the
resale of the Common Stock covered by the Registrant Statement” should be interpreted

Guohua Ku
China Recycling Energy Corporation
May 7 , 2014
Page 2

 as allowing investors to rely on Counsel’s opinion.  While this language appears to
appropriately limit the purpose for which the opinion may be used, it does not appear to
speak as to a person or a class of persons.  However, the language that the opinion “may
not be furnished to, quoted from or relied upon by any other person, firm or corporation”
appears to inappropriately limit the persons that may rely on the opinion to t he addressee
of the opinion (your board of directors).  Accordingly, we re -issue this comment.

You may contact Scott M. Anderegg, Staff Attorney, at (202) 551 -3342, Lilyanna Peyser,
Legal Branch Chief, at (202) 551 -3222,  or me at (202) 551 -3720 with any other questions  with
any other questions.

Sincerely,

 /s/ Lilyanna L. Peyser for

 Mara Ransom
        Assistant Director

CORRESP
1
filename1.htm

    Albany

    Northern Virginia

    Atlanta
    Orange County

    Brussels
    Rancho Santa Fe

    Denver
    mckennalong.com
    San Diego

    Los Angeles

    San Francisco

    Miami

    Seoul

    New York

    Washington, DC

    Thomas Wardell

    email address

    404.527.4990

    twardell@mckennalong.com

April 25, 2014

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

    Attn:
    Mara Ransom, Assistant Director

    Lilyanna Peyser, Legal Branch Chief

    Scott M. Anderegg

 Re: China Recycling Energy Corporation

Registration Statement on Form S-3

  Filed March 10, 2014

File No. 333-194470

Dear Ms. Ransom:

On behalf of our
client, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we”
or “our”), this firm is filing a response to the SEC Comment Letter, dated April 3, 2014, in connection with complying
with the issues and outstanding disclosure items set forth therein. For convenience of reference, we have included, in this response
letter, the same caption and paragraph number, as well as the text of the comment, set forth in your April 3, 2014 comment letter
followed by our response.

General

 Comment 1. General
Instruction I.A.3.(b) of Form S-3 requires that a registrant file in a timely manner all reports required to be filed during the
twelve calendar months and any portion of a month immediately preceding the filing of the registration statement. In this regard,
we note that the Form 8-K filed on September 16, 2013 does not appear to have been timely filed, given that the relevant event
date was September 5, 2013. Therefore, it does not appear that you have satisfied the eligibility requirement set forth in General
Instruction I.A.3.(b) of Form S-3. Please advise.

United States Securities and Exchange Commission

April 25, 2014

Page 2

Response:

As explained in my
telephone message exchange with Mr. Anderegg, the Form 8-K, although unclear in the form submitted, was, in fact, timely filed
on September 16, 2013.

The Form 8-K, as well
as the underlying transaction documents attached as Exhibits 10.1 and 10.2 to the Form 8-K, inaccurately reflected an “as
of” effective date as the date of execution.

The date pre-printed
on the cover page of the agreement was intended to reflect the effective date of the agreement and not the date that a definitive,
binding agreement was entered into by the parties (i.e., the execution date), even though that cover page expressly states that
the agreement was “signed on September 5, 2013.” The agreement also states clearly in Item Eighteen "Others",
paragraph 5, that the agreement "will take effect upon the Parties or their representatives execution of the Agreement."
The Company signed the agreement on September 5, 2013 and sent it to the counterparty Pucheng Xin Heng Yuan Biomass Power
Generation Corporation for execution and return. However, Pucheng Xin Heng Yuan Biomass Power Generation Corporation, did
not sign and enter into the Biomass Power Generation Asset Transfer Agreement and the Biomass Power Generation Project Lease Agreement
until September 11, 2013. Attached as Appendix A please find a Signed Confirmation Letter from Pucheng Xin Heng Yuan Biomass
Power Generation Corporation confirming, and attesting to, the September 11, 2013 execution date. Upon receipt of the counterparty's
signed signature page, the Company promptly prepared and filed the Form 8-K within the required time limit.

As the parties did
not actually enter into a binding, reportable transaction until September 11, 2013, the Company's filing on September 16, 2013
was timely. To clarify the language of the Form 8-K and reflect the accurate execution date, the Company is prepared to file an
amendment to the at-issue Form 8-K. However, given the clarification provided by this correspondence filing, combined with the
fact that an untimely filing under Item 1.01 would not on a standalone basis affect S-3 eligibility, the Company is respectfully
requesting that it not be required to do so.

In addition, as reflected
in the Form S-3 filed on March 10, 2014, the settlement and closing of the unregistered securities issuance to Pucheng Xin
Heng Yuan Biomass Power Generation Corporation, necessitating disclosure under Item 3.02, did not occur until October 29, 2013.

Selling Stockholders, Page 5

 Comment 2: Please disclose whether the selling shareholder is a
registered broker-dealer or an affiliate of a broker dealer. Please note that a registration statement registering the resale
of shares being offered by a broker-dealer must be on a form for which the registrant is eligible to make a primary offering and
identify the broker-dealer as an underwriter if the shares were not issued as underwriting compensation. For a selling shareholder
that is an affiliate of a broker-dealer, the prospectus must state that: (1) the seller purchased in the ordinary course of business;
and (2) at the time of purchase of the securities you are registering for resale, the seller had no agreements or understandings,
directly or indirectly, with any person, to distribute the securities. If you are unable to make these statements in the prospectus,
please amend the registration statement to be on form for which the registrant is eligible to make a primary offering and disclose
that the seller is an underwriter. We may have additional comments upon review of your response.

Response:

With this Response
Letter we are confirming that to the Company's best knowledge, the selling shareholder is not a registered broker-dealer
or an affiliate of a broker dealer .

United States Securities and Exchange Commission

April 25, 2014

Page 3

Exhibit 5.1 – Opinion of McKenna Long & Aldridge
LLP

 Comment 3: We note the language in the fifth paragraph of the legal
opinion, which states that the opinion “may not be furnished to, quoted from or relied upon by any other person, firm, or
corporation without our express written consent.” This language appears to limit the ability of investors to rely upon the
legal opinion. Disclaimers of responsibility that in any way state or imply that investors are not entitled to rely on the legal
opinion are unacceptable. Please revise to either remove or modify this language.

Response:

We respectfully disagree
that the at-issue paragraph –

"This opinion letter is provided
for use solely in connection with the resale of the Common Stock covered by the Registration Statement and may not be furnished
to, quoted from or relied upon by any other person, firm, or corporation without our express written consent."

- is an unacceptable
limitation on reliance or is contrary to the SEC's position as set forth in Staff Legal Bulletin No. 19 "Legality and Tax
Opinions in Registered Offerings," which specifically prohibits an opinion from limiting reliance solely to the issuer or
its board of directors on the basis that purchasers of the securities in the offering are entitled to rely on the opinion. We agree
with this position, and our counsel's opinion does not make any such limitation. Our counsel's opinion states that it is "for
use in connection with the resale of the Common Stock covered by the Registration Statement." It is implicit that all investors/purchasers
of the underlying common stock are entitled to rely on our counsel's legal opinion. Further, this issue has arisen in earlier registration
statements filed by the Company, and the SEC has agreed to this language.

With this Response
Letter, we confirm that Exhibit 5.1 (Opinion of McKenna Long & Aldridge) covers, without exception, the resale of the common
stock covered by the resale registration statement and all purchasers of such common stock are entitled to rely on our counsel's
legality opinion.

Acknowledgement

The Company acknowledges
that the Company is responsible for the adequacy and accuracy of the disclosure in the filing and staff comments or changes to
disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; the
action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve
the Company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and the Company may not
assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws
of the United States.

I will confirm with
you within the next 48 hours whether our response is satisfactory; however, if, before that time, you have any further comments
or require any further information or if any questions should arise in connection with this submission, please call me at (404)
527-4990 or Mr. Jay Shah at (404) 527-4593.

United States Securities and Exchange Commission

April 25, 2014

Page 4

Very truly yours,

/s/ Thomas Wardell, Esq.

Thomas Wardell, Esq.

    cc:
    David Chong, CFO, China Recycling Energy Corp.

    Jeffrey Li, Esq.

    Jay V. Shah, Esq.

April 3, 2014

Via Email
Guohua Ku
Chief Executive Officer
China Recycling Energy Corporation
12/F, Tower A
Chang An International Building
No. 88 Nan Guan Zheng Jie
Xi’an City, Shaanxi  Province
China 710068

Re: China Recycling Energy Corporation
  Registration Statement on For m S-3
Filed  March 10, 2014
  File No.  333-194470

Dear Mr. Ku:

We have limited our review of your registration statement to those issues we have
addressed in our 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 by amending your registration statement and providing the
requested information .  Where you do  not believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.

After reviewing any amendment to your registration statement and the information you
provide in response to these  comments, we may have  additional comments.

General
1. General Instruction I. A.3.(b)  of Form S -3 requires that a registrant  file in a timely manner
all reports required to be filed during the twelve calendar months and any portion of a
month immedi ately preceding the filing of the registration statement.  In this regard, we
note that the Form 8 -K filed on September 16, 2013 does not appear to have been timely
filed, given that the relevant event date was September 5, 2013.  Therefore, it does not
appear that you have satisfied the eligibility requirement set forth in General Instruction
I.A.3.(b)  of Form S -3.  Please advise.

Guohua Ku
China Recycling Energy Corporation
April 3, 2014
Page 2

 Selling Stockholders, page 4
2. Please disclose whether the selling shareholder is a registered broker -dealer or an affiliate
of a broker dealer.  Please note that a registration statement registering the resale of
shares being offered by a broker -dealer must be on a form for which the registrant is
eligible to make a primary offering and identify the broker -dealer as an underwrit er if the
shares were not issued as underwriting compensation.  For a selling s hareholder that is an
affiliate of a broker -dealer,  the prospectus must state that: (1) the seller purchased in the
ordinary course of business; and (2) at the time of purchase of the  securities you are
registering for resale, the seller had no  agreements or understandings, directly or
indirectly, with any  person, to distribute the securities.  If you are unable to make  these
statements in the prospectus, please amend the registr ation statement to be on form for
which the registrant is eligible to make a primary offering and disclose that the seller is
an underwriter.  We may have additional comments upon review of your response.
Exhibit 5.1
3. We note the language in the fifth para graph of the legal opinion, which states that the
opinion “may not be furnished to, quoted from or relied upon  by any  other person, firm,
or corporation without our express written consent.”  This language appears to limit the
ability of investors to rely upon the legal opinion.  Disclaimers of responsibility that in
any way state or imply that investors are not entitled to rely on the  legal  opinion are
unacceptable.  Please revise to either remove or modify this language.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Act of 193 3 and
all applicable Securities  Act rules require.   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.

Notwithstanding our comments, in the event you request acceleration of the effective date
of the pending registration statement please provide a written statement from the company
acknowledging that:

 should the Commission or the staff, acting pursuant to delegated authority, declare the
filing effective, it does not foreclose the Commissi on from taking any action with respect
to the filing;

 the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective, does not relieve the company from its full responsibility for
the adequacy and acc uracy of the disclosure in the filing; and

 the company may not assert staff comments and the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the federal
securities laws of the United States.

Guohua Ku
China Recycling Energy Corporation
April 3, 2014
Page 3

 Please refer to Rules 460 and 461 regarding requests for  acceleration .  We will consider a
written request for acceleration of the effective date of the registration statement as confirmation
of the fact that those requesting acceleration are aware of their respective responsibilities under
the Securities Act of 1933 and the Securities Exchange Act of 1934 as they relate to the proposed
public offering of the securities specified in the above registration statement.  Please allow
adequate time  for us to revie w any amendment prior to the requested effective date of the
registration statement.

You may contact Scott M. Anderegg, Staff Attorney, at (202) 551 -3342, Lilyanna Peyser,
Legal Branch Chief, at (202) 551 -3222,  or me at (202) 551 -3720 with any other questions  with
any other questions.

Sincerely,

 /s/ Lilyanna L. Peyser for

Mara Ransom
Assistant Director

September 4, 2013

Via E-mail
David Chong
Chief Financial Officer
China Recycling Energy Corporation
12/F, Tower A
Chang An International Building
No. 88 Nan Guan Zheng Jie
Xi’an City, Shaanxi Province
China

Re: China Recycling Energy Corporation
 Form 10-K for Fiscal Year Ended December 31, 2011
Filed March 22, 2012
File No. 1 -34625

Dear Mr. Chong :

We have completed our review of your filing.  We remind you that our comment s or
changes to disclo sure in response to our comment s do not foreclose the Commission from taking
any action with respect to the company or the filing and the compa ny may not assert staff
comment s as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.  We urge all persons who are responsible for the
accuracy and adequacy of the disclosure in the filing to be certain that the filing include s the
information the Securities Exchange Act o f 1934 and all applicable rules require.

Sincerely,

 /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief

CORRESP
1
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August 27, 2013

Via
EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

    Attn:
    William H. Thompson, Accounting Branch Chief

    Tony Watson

    Re:

    China
    Recycling Energy Corporation

    Amendment
    No. 1 to Form 10-K for Fiscal Year Ended December 31, 2011

    Filed
    July 18, 2013

    Response
    dated August 5, 2013

    File
    No. 001-34625

Dear Mr. Thompson:

On behalf of our
client, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we”
or “our”), this firm is filing a response to the SEC Comment Letter, dated August 14, 2013, in connection with complying
with the issues and outstanding disclosure items set forth therein. For convenience of reference, we have included, in this response
letter, the same caption and paragraph number, as well as the text of the comment, set forth in your August 14, 2013 comment letter
followed by our response.

Amendment
No. 1 to Form 10-K for Fiscal Year Ended December 31, 2011

Item
8. Financial Statements and Supplementary Data, page 51

15.
Convertible Notes Payable and Revolving Financing Agreement, page 71

Convertible
Note Agreement with China Cinda, page 73

    Comment 1.
    We reviewed your response to the comment in our letter dated July 25, 2013. We understand that the conversion feature of the notes was eliminated at the time of execution of supplemental agreement, the elimination of the conversion feature was recognized during the quarter ended March 31, 2012 and you did not revise your financial statements for the year ended December 31, 2011 since the correcting adjustment was not material to your financial position and results of operations for that year. However, it appears that the impact of adjustment to the fair value of the conversion feature liability had a material impact on your results of operations for the year ended December 31, 2012. As such, please provide us with your materiality analysis for the year ended December 31, 2012 and summarize in detail why the adjustment to the fair value of the conversion feature liability should not be recognized during the year in which the supplemental agreement was executed in light of the results of your materiality analysis.

United States Securities and Exchange Commission

August 27, 2013

Page 2

Response:

We
agree that the impact of adjustment to the fair value of the conversion feature liability had a material impact on the Company's
results of operations for the year ended December 31, 2012. However, we believe that the additional information we have obtained,
which is reflected below, establishes that the Company's previous periodic filings were correct and that an adjustment in 2011
was not necessary.

As
set forth in our July 25, 2013 response, the December 9, 2011 Supplemental Agreement entered into with China Cinda (HK) Asset Management
Co., Ltd. ("Cinda") was silent as to the conversion feature. Thereafter, the Company and Cinda had numerous discussions
regarding proper treatment; however, at the time the Company filed its Form 10-K for fiscal year ended 2011 no resolution had been
reached. Therefore, the Company concluded that as of December 31, 2011 the conversion feature
remained applicable, pending payment of the remaining balance of RMB 25 million.

Resolution
was finally reached between the parties on May 4, 2012, to be effective as of March 31, 2012. It was agreed that the remaining
RMB 25 million outstanding under the note payable would not have a conversion option and would be treated as a straight general
note. Further, Cinda would no longer have any rights or obligations under the convertible note.
Both parties agreed that the conversion feature should be eliminated in 2012 and hence the reversal was reflected in our Form 10-Q
for the fiscal quarter ended March 31, 2012. While we had understood that this was the result, we had not previously understood
that this resolution had been documented in a "Confirmation Letter" of May 4, 2012 (copy attached) confirming this resolution.
Consequently, the Company's position remains that eliminating the conversion feature in Q1 2012 was appropriate, and that a recognition
in 2011 (the year that the supplemental agreement was executed) was not the point in time at which recognition should have occurred.

I will confirm with
you within the next 48 hours whether our response is satisfactory; however, if, before that time, you have any further comments
or require any further information or if any questions should arise in connection with this submission, please call me at (404)
527-4990 or Mr. Jay Shah at (404) 527-4593.

    Very truly yours,

    /s/ Thomas Wardell, Esq.

    Thomas Wardell, Esq.

    cc:
    David Chong, CFO, China Recycling Energy Corp.

    Jeffrey Li, Esq.

    Jay V. Shah, Esq.

Confirmation letter regarding the nature
of Cinda Note with CREG

Pursuant to Supplemental Agreement dated
December 9, 2011 (“Supplemental Agreement”), Xi’an TCH Energy Technology Company Ltd., on behalf of China Recycling
Energy Corporation, has repaid RMB 25 million to our company, and has remaining RMB 25 million outstanding.

Due to the fact that the Supplemental Agreement
did not clearly state if the Cinda Note still have the conversion option, both parties had numerous communication regarding this
mater, and finally reached the agreement in May 2012. Effective March 31, 2012, the remaining RMB 25 million outstanding Note
payable will not have the conversion nature and conversion option, and become a straight general note, China Cinda (HK) Asset
Management Co., Ltd will no longer have the right and obligation under the Convertible Note.

Stamp of China Cinda (HK) Asset Mangaement Co., Ltd

Date: May 4, 2012

August 14 , 2013

Via E-mail
David Chong
Chief Financial Officer
China Recycling Energy Corporation
12/F, Tower A
Chang An International Building
No. 88 Nan Guan Zheng Jie
Xi’an City, Shaanxi Province
China

Re: China Recycling Energy Corporation
 Amendment No. 1 to Form 10-K for Fiscal Year Ended
December 31, 2011
Filed July  18, 2013
Response dated August 5, 2013
File No. 1 -34625

Dear Mr. Chong :

We have reviewed your response dated April 8, 2013  and have the following additional
comment .  In our comment , 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 fil ing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comment applies to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in you r response.

After reviewing any amendment to your filing  and the information you provide in
response to this comment , we may have  additional comments

Amendment No. 1 to Form 10 -K for Fiscal Y ear Ended December 31, 20 11

Item 8. Financial Statements  and Supplementary Data, page 51

15. Convertible Notes Payable and Revolving Financing Agreement, page 71

Convertible Note Agreement with China Cinda , page 73

1. We reviewed your response to the comment in our letter dated July 25, 2013.  We
understand that the conversion feature of the notes was eliminated at the time of

David Chong
China Recycling Energy Corporation
August 14 , 2013
Page 2

 execution of supplemental agreement, the elimination of the conversion feature was
recognized during the quarter ended March 31, 2012 and you did not revise your
financial statements for the year ended December 31, 2011 since the correcting
adjustment was not material to your financial position and results of operations for that
year.  However, it appears that the impact of adjustment to the fair value of the
conversion feature liability had a material impact on your results of operations for the
year ended December 31, 2012.  As such, please provide us with your materiality
analysis for the year en ded December 31, 2012 and summarize in detail why the
adjustment to the fair value of the conversion feature liability should not be recognized
during the year in which the supplemental agreement was executed in light of the results
of your materiality ana lysis.

You may contact Tony Watson, Accountant,  at (202) 551 -3318  if you have questions
regarding our comments.  Please contact me at (202) 551 -3344  with any other questions.

Sincerely,

 /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief

CORRESP
1
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August 5, 2013

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

    Attn:
    William H. Thompson, Accounting Branch Chief

    Tony Watson

    Re:
    China Recycling Energy Corporation

    Amendment No. 1 to Form 10-K for Fiscal Year Ended

    December 31, 2011

    Filed July 18, 2013

    File No. 1-34625

Dear Mr. Thompson:

On behalf of our
client, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we”
or “our”), this firm is filing a response to the SEC Comment Letter, dated July 25, 2013, in connection with complying
with the issues and outstanding disclosure items set forth therein. For convenience of reference, we have included, in this response
letter, the same caption and paragraph number, as well as the text of the comment, set forth in your July 25, 2013 comment letter
followed by our response.

Amendment No. 1 to Form 10-K for Fiscal Year Ended December
31, 2011

Item 8. Financial Statements and Supplementary Data, page
51

15. Convertible Notes Payable and Revolving Financing
Agreement, page 71

Convertible Note Agreement with China Cinda, page 73

Comment
1.	Please clarify whether or not the December 9, 2011 Supplemental Agreement to the Notes Purchase Agreement eliminated
the conversion feature related to the notes at the time of execution of the agreement. If so, please explain why you have a conversion
feature liability recorded as of December 31, 2011 related to the notes. If not, please tell us if the notes are still convertible
and your basis for not recognizing a conversion feature liability as of December 31, 2012. In this regard, we note your disclosure
in Form 10-K filed April 1, 2013 that you paid half of the amounts owed on the first tranche notes on June 20, 2012 and the remaining
half due on November 30, 2012 was extended to a future date.

United States Securities and Exchange Commission

August 5, 2013

Page 2

Response:

The December 9, 2011
Supplemental Agreement was silent as to the conversion feature at the time of execution of the agreement. In addition, Section
2.6 of the Supplemental Agreement, states that “except as otherwise provided herein, all rights and remedies of investor
pursuant to the Note Purchase Agreement shall remain in full force and effect from the date hereof.” Accordingly, the Company
concluded that as of December 31, 2011 the conversion feature remained applicable, pending payment of the remaining balance of
RMB 25 million.

However, during the
quarter ended March 31, 2012, we completed additional analysis as to the conversion feature of the Supplemental Agreement,
including a discussion with the investor, and concluded that the conversion feature of the Notes was eliminated at the time of
execution of the Supplemental Agreement, in accordance with the following language in Section 2.2 of the Supplemental Agreement:
“the Investor hereby agrees that on each of December 30, 2011 and November 30, 2012, the Company shall respectively redeem
half of the outstanding Convertible Notes at a price for an amount equivalent to RMB 25,000,000 … ” Both parties agreed
that the Supplemental Agreement provided for the redemption of the convertible notes in two payments of RMB 25,000,000, each at
specified due dates, and that the conversion feature would no longer exist as to the unpaid portion. If, by way of example, the
investor proposed to convert today, the Company would refuse on the basis that the investor agreed to a redemption of the entire
amount, and, as such, the investor agreed to terminate the conversion feature.

Therefore, we eliminated
the conversion feature liability at March 31, 2012; however, we did not go back to revise the financial statements as of December
31, 2011, for the new conclusion reached as of March 31, 2012, due to the fact that on December 31, 2011, the amount of the conversion
feature liability of $1,127,401 was only 0.5% of total assets, 1.2% of total liabilities and 4.7% of pre-tax income, which was not
material.

    Very truly yours,

    /s/ Thomas Wardell, Esq.

    Thomas Wardell, Esq.

    cc:
    David Chong, CFO, China Recycling Energy Corp.

    Jeffrey Li, Esq.

    Jay V. Shah, Esq.

July 25 , 2013

Via E-mail
David Chong
Chief Financial Officer
China Recycling Energy Corporation
12/F, Tower A
Chang An International Building
No. 88 Nan Guan Zheng Jie
Xi’an City, Shaanxi Province
China

Re: China Recycling Energy Corporation
 Amendment No. 1 to Form 10-K for Fiscal Year Ended
December 31, 2011
Filed July  18, 2013
File No. 1 -34625

Dear Mr. Chong :

We have reviewed your amendment and have the following additional comment .  In our
comment , 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 reques ted information, or by advising us when you will provide the requested
response.   If you do not believe our comment applies to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewi ng any amendment to your filing  and the information you provide in
response to this comment , we may have  additional comments

Amendment No. 1 to Form 10 -K for Fiscal Y ear Ended December 31, 20 11

Item 8. Financial Statements  and Supplementary Data, page 51

15. Convertible Notes Payable and Revolving Financing Agreement, page 71

Convertible Note Agreement with China Cinda , page 73

1. Please clarify whether or not the December 9, 2011 Supplemental Agreement to the
Notes Purchase Agreement eliminated the conversion feature related to the notes at the
time of execution of the agreement.  If so, please explain why you have a conversion

David Chong
China Recycling Energy Corporation
July 25 , 2013
Page 2

 feature liability recorded as of December 31, 2011 related to the notes.  If not, please tell
us if the notes are still convertible and your basis for not recognizing a conversion feature
liability as of December 31, 2012.  In this regard, we note your disclo sure in Form 10 -K
filed April 1, 2013 that you paid h alf of the amounts owed on the first tranche notes o n
June 20, 2012 and the remaining half due on November 30, 2012 was extended to a
future date.

You may contact Tony Watson, Accountant,  at (202) 551 -3318  if you have questions
regarding our comments.  Please contact me at (202) 551 -3344  with any other questions.

Sincerely,

 /s/ William H. Thompson

William Thompson
Accounting Branch Chief

CORRESP
1
filename1.htm

    Albany

    Northern Virginia

    Atlanta
    Orange County

    Brussels
    mckennalong.com
    Rancho Santa Fe

    Denver

    San Diego

    Los Angeles

    San Francisco

    Miami

    Seoul

    New York

    Washington, DC

    Thomas Wardell

    email address

    404.527.4990

    twardell@mckennalong.com

May 22, 2013

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

    Attn:
    William H. Thompson, Accounting Branch Chief

    Tony Watson

 Re: China Recycling Energy Corporation

Form 10-K for Fiscal Year Ended December 31, 2011

File No. 001-34625

Dear Mr. Thompson:

On behalf of our
client, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we”
or “our”), and pursuant to our phone conferences on April 25, 2013 and May 13, 2013, this firm is filing a response
to the SEC Comment Letters, dated December 14, 2012, January 23, 2013, February 7, 2013, March 4, 2013, March 20, 2013, March 28,
2013 and April 17, 2013, in connection with complying with the issues and outstanding disclosure items set forth therein. For convenience
of reference, we have included in this response letter the same caption and paragraph number, as well as the text of the comment,
set forth in your April 17, 2013 comment letter followed by our response. In addition, attached to this Response Letter are the
following Excel spreadsheets: (i) a summary evidencing the effect of the restatements on our financial statements, (ii) analysis
as of fiscal quarter ended June 30, 2010, (iii) analysis as of fiscal quarter ended September 30, 2010, (iv) analysis as of fiscal
year ended December 31, 2010, (v) analysis as of fiscal quarter ended March 31, 2011, (vi) analysis as of fiscal quarter ended
June 30, 2011, (vii) analysis as of fiscal quarter ended September 30, 2011 and (viii) analysis as of fiscal year ended December
31, 2011 (collectively, the "Restatement Spreadsheets").

Upon learning from
you that the SEC has no further comment, the Company will promptly file: (i) Amendment No. 1 to the
Company’s Form 10-K for fiscal year ended December 31, 2011 with the SEC (as attached to the Company’s Response Letter,
filed January 30, 2013 and further revised as disclosed below) and (ii) with respect to the Shareholders' Equity comment below,
Amendments to the Company's Form 10-Q reports for fiscal quarters ended March 31, 2011, June 30, 2011 and September 30, 2011.

United States Securities and Exchange Commission

May 22, 2013

Page 2

Form 10-K for Fiscal Year Ended December 31, 2011

Item 8. Financial Statements and Supplementary Data, page
50

Note 17: Shareholders’ Equity, page 78

 Comment 1. We reviewed your response to the comment in our letter
dated March 28, 2013. We do not believe the guidance in ASC 450 should be applied to subsequently measure the instrument you initially
recorded using the guidance in ASC 480. As such, please revise your financial statements to subsequently measure the instrument
in accordance with the measurement guidance in ASC 480-10-35.

Response:

  Attached please find the aforementioned Restatement Spreadsheets, in
Excel for 2010 and 2011, showing the impact on the financial statements of the issuance of the settlement shares to Mr. Dong pursuant
to that certain PuCheng Biomass Asset Transfer Agreement in accordance with ASC 480-10-35.

  As reflected in the Restatement Spreadsheets, the first gain is recognized in the quarter ending
June 30, 2010 and the total gain recognized in 2010 is $2,809,884. The Restatement Spreadsheets also show the impact of the adjustment
to the 2011 and 2010 annual and quarterly income statements and balance sheets. The Company proposes
to reflect the recognition of the gain by amending only its 2011 periodic reports which will reflect the changes in the 2010 comparative
periods as well. All three quarterly reports for 2011 would be amended as well as the 10-K for 2011. The Company believes that
amending its reports in this way and including an explanatory note in the reports will be the best manner to communicate to, and
appropriately inform, investors and the market.

I will confirm with
you shortly whether our response is satisfactory, and, if so, we will file the amendments noted above. If, before that time, you
have any further comments or require any further information or if any questions should arise in connection with this submission,
please call me at (404) 527-4990 or Mr. Jay Shah at (404) 527-4593.

    Very truly yours,

    /s/ Thomas Wardell, Esq.

    Thomas Wardell, Esq.

    cc:
    David Chong, CFO, China Recycling Energy Corp.

    Jeffrey Li, Esq.

    Jay V. Shah, Esq.

CREG

shares issued to Mr. Dong - restatements

Worksheet

    Stock price
      3.63
      3.75
      3.13
      3.05
      2.69
      2.02
      1.2
      1.2

    Balance sheet date, as of
      6/29/2010
      6/30/2010
      9/30/2010
      12/31/2010
      3/31/2011
      6/30/2011
      9/30/2011
      11/22/2011
      12/31/2011

    Balance sheet impact to liability - share to be issued
    Original
      11,780,471
      11,780,471
      11,780,471
      11,780,471
      11,780,471
      11,780,471
      11,780,471
      -
      -

    Restate - marked to market liability
      11,780,471
      11,029,410
      9,205,881
      8,970,587
      7,911,763
      5,941,176
      3,529,411
      -
      -

    Difference
      -
      751,061
      2,574,590
      2,809,884
      3,868,708
      5,839,295
      8,251,060
      -
      -

    For the period ending

    Quarter ending

    Jun 30, 2010
    Quarter ending

    Sept 30, 2010
    Quarter ending

    Dec 31, 2010
    for the year
    ending

    Dec 31, 2010
    Quarter ending

    Mar 31, 2011
    Quarter ending

    Jun 30, 2011
    Quarter ending

    Sept 30, 2011
    Quarter ending

    Dec 31, 2011
    for the year

    endind Dec 31, 2011

    P&L impact - gain on settlement of Dong's liability
    Original
      -
      -
      -
      -
      -
      -
      -
      -
      8,251,060
      8,251,060

    Restate
      -
      751,061
      1,823,529
      235,294
      2,809,884
      1,058,823
      1,970,588
      2,411,764
      -
      5,441,176

    Difference
      -
      751,061
      1,823,529
      235,294
      2,809,884
      1,058,823
      1,970,588
      2,411,764
      (8,251,060 )
      (2,809,884 )

China Recyclying Energy

Restatement worksheet

As of June 30, 2010

    Consolidated Balance Sheet
    As previously reported
    Net adjustment
    Restated

    Shares to be issued
      11,780,471
      (751,061 )
      11,029,410

    Retained earnings
      7,393,961
      751,061
      8,145,022

For the six months ended June 30, 2010

    Consolidated Statement of Operations and comprehensive income
    As previously reported
    Net adjustment
    Restated

    Changes in fair value of the liability
      -
      751,061
      751,061

    Total non-operating income (expense), net
      (1,170,583 )
      751,061
      (419,522 )

    Income before income tax
      10,565,294
      751,061
      11,316,355

    Income from operations
      7,667,251
      751,061
      8,418,312

    Net income attributable to China recycling Energy Corp
      7,180,678
      751,061
      7,931,739

    Basic net earnings per share
      0.19
      0.01
      0.20

    Diluted net earnings per share
      0.15
      0.01
      0.16

For the six months ended June 30, 2010

    Cash flows from Operating activities
    As previously reported
    Net adjustment
    Restated

    Net income
      7,667,251
      751,061
      8,418,312

    Adjustments to reconcile income including noncontrolling interest to net cash provided by (used in) operating activities:

    Changes in fair value of the liability
      -
      (751,061 )
      (751,061 )

China Recyclying Energy

Restatement worksheet

As of September 30, 2010

    Consolidated Balance Sheet
    As previously reported
    Net adjustment
    Restated

    Shares to be issued
      12,812,971
      (2,574,590 )
      10,238,381

    Retained earnings
      9,922,599
      2,574,590
      12,497,189

For the nine months ended September 30, 2010

    Consolidated Statement of Operations and comprehensive income
    As previously reported
    Net adjustment
    Restated

    Changes in fair value of the liability
      -
      2,574,590
      2,574,590

    Total non-operating income (expense), net
      (1,780,580 )
      2,574,590
      794,010

    Income before income tax
      15,067,783
      2,574,590
      17,642,373

    Income from operations
      10,817,221
      2,574,590
      13,391,811

    Net income attributable to China recycling Energy Corp
      10,227,402
      2,574,590
      12,801,992

    Basic net earnings per share
      0.26
      0.07
      0.33

    Diluted net earnings per share
      0.21
      0.06
      0.27

For the nine months ended September 30, 2010

    Cash flows from Operating activities
    As previously reported
    Net adjustment
    Restated

    Net income
      10,817,221
      2,574,590
      13,391,811

    Adjustments to reconcile income including noncontrolling interest to net cash provided by (used in) operating activities:

    Changes in fair value of the liability
      -
      (2,574,590 )
      (2,574,590 )

China Recyclying Energy

Restatement worksheet

As of December 31, 2010

    Consolidated Balance Sheet
    As previously reported
    Net adjustment
    Restated

    Shares to be issued
      11,780,471
      (2,809,884 )
      8,970,587

    Retained earnings
      14,812,630
      2,809,884
      17,622,514

For the year ended December 31, 2010

    Consolidated Statement of Operations and comprehensive income
    As previously reported
    Net adjustment
    Restated

    Changes in fair value of the liability
      -
      2,809,884
      2,809,884

    Total non-operating income (expense), net
      (2,675,662 )
      2,809,884
      134,222

    Income before income tax
      24,692,109
      2,809,884
      27,501,993

    Income from operations
      17,826,069
      2,809,884
      20,635,953

    Net income attributable to China recycling Energy Corp
      16,032,597
      2,809,884
      18,842,481

    Basic net earnings per share
      0.39
      0.06
      0.45

    Diluted net earnings per share
      0.31
      0.06
      0.37

For the year ended December 31, 2010

    Cash flows from Operating activities
    As previously reported
    Net adjustment
    Restated

    Net income
      17,826,069
      2,809,884
      20,635,953

    Adjustments to reconcile income including noncontrolling interest to net cash provided by (used in) operating activities:

     Changes in fair value of the liability
      -
      (2,809,884 )
      (2,809,884 )

China Recyclying Energy

Restatement worksheet

As of March 31, 2011

    Consolidated Balance Sheet
    As previously reported
    Net adjustment
    Restated

    Shares to be issued
      11,780,471
      (3,868,708 )
      7,911,763

    Total Noncurrent liability
      73,417,554
      (3,868,708 )
      69,548,846

    Total liability
      101,481,863
      (3,868,708 )
      97,613,155

    Retained earnings
      18,811,698
      3,868,708
      22,680,406

For
the three months ended March 31, 2011

    Consolidated Statement of Operations and comprehensive income
    As previously reported
    Net adjustment
    Restated

    Changes in fair value of the liability
      -
      1,058,823
      1,058,823

    Total non-operating income (expense), net
      304
      1,058,823
      1,059,127

    Income before income tax
      6,478,035
      1,058,823
      7,536,858

    Income before noncontrolling interest
      5,082,105
      1,058,823
      6,140,928

    Net income attributable to China recycling Energy Corp
      4,562,967
      1,058,823
      5,621,790

    Basic net earnings per share
      0.12
      0.02
      0.14

    Diluted net earnings per share
      0.09
      0.02
      0.11

For the three months ended March 31, 2011

    Cash flows from Operating activities
    As previously reported
    Net adjustment
    Restated

    Net income
      5,082,105
      1,058,823
      6,140,928

    Adjustments to reconcile income including noncontrolling interest to net cash provided by (used in) operating activities:

    Changes in fair value of the liability
      -
      (1,058,823 )
      (1,058,823 )

China Recyclying Energy

Restatement worksheet

As of June 30, 2011

    Consolidated Balance Sheet
    As previously reported
    Net adjustment
    Restated

    Shares to be issued
      16,780,471
      (5,839,296 )
      10,941,175

    Total Noncurrent liability
      73,115,306
      (5,839,296 )
      67,276,010

    Total liability
      97,035,322
      (5,839,296 )
      91,196,026

    Retained earnings
      22,139,584
      5,839,296
      27,978,880

For the six months ended June 30, 2011

    Consolidated Statement of Operations and comprehensive income
    As previously reported
    Net adjustment
    Restated

    Changes in fair value of the liability
      -
      3,029,411
      3,029,411

    Total non-operating income (expense), net
      536,401
      3,029,411
      3,565,812

    Income before income tax
      11,120,897
      3,029,411
      14,150,308

    Income before noncontrolling interest
      8,941,266
      3,029,411
      11,970,677

    Net income attributable to China recycling Energy Corp
      8,257,968
      3,029,411
      11,287,379

    Basic net earnings per share
      0.20
      0.08
      0.28

    Diluted net earnings per share
      0.16
      0.06
      0.22

For the six months ended June 30, 2011

    Cash flows from Operating activities
    As previously reported
    Net adjustment
    Restated

    Net income
      8,941,266
      3,029,411
      11,970,677

    Adjustments to reconcile income including noncontrolling interest to net cash provided by (used in) operating activities:

    Changes in fair value of the liability
      -
      (3,029,411 )
      (3,029,411 )

China Recyclying Energy

Restatement worksheet

As of September 30, 2011

    Consolidated Balance Sheet
    As previously reported
    Net adjustment
    Restated

    Shares to be issued
      11,780,471
      (8,251,060 )
      3,529,411

    Total Noncurrent liability
      72,767,729
      (8,251,060 )
      64,516,669

    Total liability
      107,727,016
      (8,251,060 )
      99,475,956

    Retained earnings
      30,173,358
      8,251,060
      38,424,418

For the nine months ended September 30, 2011

    Consolidated Statement of Operations and comprehensive income
    As previously reported
    Net adjustment
    Restated

    Changes in fair value of the liability
      -
      5,441,176
      5,441,176

    Total non-operating income (expense), net
      1,871,324
      5,441,176
      7,312,500

    Income before income tax
      22,053,728
      5,441,176
      27,494,904

    Income before noncontrolling interest
      17,684,471
      5,441,176
      23,125,647

    Net income attributable to China recycling Energy Corp
      16,913,200
      5,441,176
      22,354,376

    Basic net earnings per share
      0.41
      0.13
      0.54

    Diluted net earnings per share
      0.33
      0.10
      0.43

For the nine months ended September 30, 2011

    Cash flows from Operating activities
    As previously reported
    Net adjustment
    Restated

    Net income
      17,684,471
      5,441,176
      23,125,647

    Adjustments to reconcile income including noncontrolling interest to net cash provided by (used in) operating activities:

    Changes in fair value of the liability
      -
      (5,441,176 )
      (5,441,176 )

China Recyclying Energy

Restatement worksheet

As of December 31, 2011

    C

April 17 , 2013

Via E-mail
David Chong
Chief Financial Officer
China Recycling Energy Corporation
12/F, Tower A
Chang An International Building
No. 88 Nan Guan Zheng Jie
Xi’an City, Shaanxi Province
China

Re: China Recycling Energy Corporation
 Form 10-K for Fiscal Year Ended December 31, 2011
Filed March 22, 2012
Response dated April 8 , 2013
File No. 1 -34625

Dear Mr. Chong :

We have reviewed your response dated April  8, 2013  and have the following additional
comment .  In our comment , 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 re quested information, or by advising us when you will provide the requested
response.   If you do not believe our comment applies  to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After rev iewing any amendment to your filing  and the information you provide in
response to this comment , we may have  additional comments.

Form 10 -K for Fiscal Y ear Ended December 31, 20 11

Item 8. Financial Statements and Supplementary Data, page 50

17. Shareholders’ Equity, page 78

1. We reviewed your response to the comment in our letter dated March 28, 2013.  We do
not believe the guidance in ASC 450 should be applied to subsequently measure the
instrument you initially recorded using the guidance in ASC 480.  As such, please revise
your financial statements to subsequently measure the instrument in accordance with the
measurement guidance in ASC 480 -10-35.

David Chong
China Recycling Energy Corporation
April 17 , 2013
Page 2

You may contact Tony Watson, Accountant,  at (202) 551 -3318  if you have questions
regarding our comment .  Please contact me at (202) 551 -3344  with any other questions.

Sincerely,

 /s/ William H. Thompson

William Thompson
Accounting Branch Chief

CORRESP
1
filename1.htm

    Albany

        Atlanta

        Brussels

        Denver

        Los Angeles

        Miami

        New York

        mckennalong.com

    Northern
                                                                      Virginia

        Orange
        County

        Rancho
        Santa Fe

        San
        Diego

        San
        Francisco

        Seoul

        Washington,
        DC

        THOMAS WARDELL

        404.527.4990

        EMAIL ADDRESS

        twardell@mckennalong.com

April 8, 2013

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

Attn: William H. Thompson, Accounting Branch Chief

Tony Watson

 Re: China Recycling Energy Corporation

Form 10-K for Fiscal Year Ended December 31, 2011

File No. 001-34625

Dear Mr. Thompson:

On behalf of our
client, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we”
or “our”), and pursuant to our phone conference on March 14, 2013, this firm is filing a final response to the SEC
Comment Letters, dated December 14, 2012, January 23, 2013, February 7, 2013, March 4, 2013, March 20, 2013 and March 28, 2013,
in connection with complying with the issues and outstanding disclosure items set forth therein. For convenience of reference,
we have included, in this response letter, the same caption and paragraph number, as well as the text of the comment, set forth
in your March 28, 2013 comment letter followed by our response.

Upon learning from
you that the SEC has no further comment, the Company will promptly file Amendment No. 1 to the Company’s
Form 10-K for fiscal year ended December 31, 2011 with the SEC (as attached to the Company’s Response Letter, filed February
15, 2013).

Form 10-K for Fiscal Year Ended December 31, 2011

Item 8. Financial Statements and Supplementary Data, page
50

Note 17: Shareholders’ Equity, page 78

 Comment 1.   We reviewed your response to the comment in our letter
dated March 20, 2013. Please tell us why your initial measurement and subsequent measurements of the obligation complies with
the measurement guidance in ASC 480-10-30 and ASC 480-10-35.

United States Securities and Exchange Commission

April 8, 2013

Page 2

Response:

Our initial measurement
and subsequent measurements of the obligation complies with the measurement guidance in ASC 480-10-30-7 and ASC 480-10-35-5 as
follows:

ASC 480-10-30-7: All Other Financial
Instruments 30-7

This measurement guidance
states that all other financial instruments recognized
under the guidance in Section 480-10-25 shall be measured
initially at fair value.

The obligation was
incurred on June 29, 2010 and the Company recognized the fair value of the obligation, which was $11.7 Million (RMB 80 million/6.82),
to be settled in shares worth $11.7 million. The number of shares could be less or more subject to a maximum of 2.9 million shares.
The obligation was fixed at $11.7 million, which was the fair value of the obligation.

ASC 480-10-35-5: All Other Financial
Instruments 35-5

This measurement guidance
states that all other financial instruments recognized under the guidance in Section 480-10-25 shall
be measured subsequently at fair value with changes
in fair value recognized in earnings, unless either this subtopic or another subtopic specifies another measurement attribute.

The obligation was
fixed at $11.7 million. The Company recorded the shares at fair value when issued on November 22, 2011. The Company did not measure
the changes in fair value during the intervening period (June 2010 to November 2011), as the obligation under FAS 5 was a contingent
gain throughout this period and as such, according to FAS 5 would only be recorded when the contingency was resolved, which, in
fact, occurred when the holder asked for the shares issued.

I will confirm with
you shortly whether our response is satisfactory, and, if so, we will file the Form 10-K/A attached to our previous responses.
If, before that time, you have any further comments or require any further information or if any questions should arise in connection
with this submission, please call me at (404) 527-4990 or Mr. Jay Shah at (404) 527-4593.

    Very truly yours,

    /s/ Thomas Wardell, Esq.

    Thomas Wardell, Esq.

    cc:
    David Chong, CFO, China Recycling Energy Corp.

    Jeffrey Li, Esq.

    Jay V. Shah, Esq.

March 28 , 2013

Via E-mail
David Chong
Chief Financial Officer
China Recycling Energy Corporation
12/F, Tower A
Chang An International Building
No. 88 Nan Guan Zheng Jie
Xi’an City, Shaanxi Province
China

Re: China Recycling Energy Corporation
 Form 10-K for Fiscal Year Ended December 31, 2011
Filed March 22, 2012
Response dated March 26 , 2013
File No. 1 -34625

Dear Mr. Chong :

We have reviewed your response dated March 26, 2013  and have the following additional
comment .  In our comment , 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 re quested information, or by advising us when you will provide the requested
response.   If you do not believe our comment applies  to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After rev iewing any amendment to your filing  and the information you provide in
response to this comment , we may have  additional comments.

Form 10 -K for Fiscal Y ear Ended December 31, 20 11

Item 8. Financial Statements and Supplementary Data, page 50

17. Shareholders’ Equity, page 78

1. We reviewed your response to the comment in our letter dated March 20, 2013.  Please
tell us why your initial measurement and subsequent measurements of the obligation
complies with the measurement guidance in ASC 480 -10-30 and ASC 480 -10-35.

David Chong
China Recycling Energ y Corporation
March 28 , 2013
Page 2

 You may contact Tony Watson, Accountant,  at (202) 551 -3318  if you have questions
regarding our comment .  Please contact me at (202) 551 -3344  with any other questions.

Sincerely,

 /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief

CORRESP
1
filename1.htm

March 26, 2013

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

    Attn:
    William H. Thompson, Accounting Branch Chief

    Tony Watson

    Re:
    China
    Recycling Energy Corporation

    Form 10-K
    for Fiscal Year Ended December 31, 2011

    File No.
    001-34625

Dear Mr. Thompson:

On behalf of our
client, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we”
or “our”), and pursuant to our phone conference on March 14, 2013, this firm is filing a final response to the SEC
Comment Letters, dated December 14, 2012, January 23, 2013, February 7, 2013, March 4, 2013 and March 20, 2013, in connection with
complying with the issues and outstanding disclosure items set forth therein. For convenience of reference, we have included, in
this response letter, the same caption and paragraph number, as well as the text of the comment, set forth in your March 20, 2013
comment letter followed by our response.

Upon learning from
you that the SEC has no further comment, the Company will promptly file Amendment No. 1 to the Company’s
Form 10-K for fiscal year ended December 31, 2011 with the SEC (as attached to the Company’s Response Letter, filed February
15, 2013).

Form 10-K for Fiscal Year Ended December 31, 2011

Item 8. Financial Statements and Supplementary Data, page
50

Note 17: Shareholders’ Equity, page 78

Comment
1.	We reviewed your response to the comment in our letter dated March 4, 2013. You did not provide us with your analysis
at inception of all possible outcomes you considered in your evaluation of which component is predominate. In this regard, it appears
to us there are two possible outcomes to consider. The first outcome being whether or not your stock price would be above $4 per
share when you settled the agreement and the second outcome being whether or not your stock price would be below $4 per share when
you settled the agreement. The analysis you provide should be both quantitative and qualitative. The quantitative part of the analysis
should consider your stock price and volatility and the qualitative part should consider any other pertinent information you considered.
Based on these quantitative and qualitative factors, you should tell us the likelihood of achieving both outcomes (i.e., 20%, 50%
or 90%).

United States Securities and Exchange Commission

March 26, 2013

Page 2

Response:

There were three possible
outcomes we considered at inception: the stock price would be above $4 per share, equal $4 per share, and below $4 per share when
we settle the agreement.

As set forth in our
previous responses, and disclosed in our filings, the Company and Mr. Dong entered into that certain Transfer Agreement on June
29, 2010. Concurrently, the Company had been diligently preparing for an initial public offering (“IPO”) and working
with its investment banks and legal counsel. The Company with guidance from its investment bankers decided to set an IPO price
at above $4 per share. In addition. the Company had just listed on the NASDAQ Global Market on March 17th 2010, which,
at that time, had a $4 minimum bid price initial listing requirement. As of June 29, 2010, the Company’s stock price was
$3.63, and our average stock price, from January 1, 2010 to the date of the Transfer Agreement, was $4.02. Further, a signed letter
of intent, as well as the draft underwriting agreement, between the Company and the engaged underwriter, each reflect a clear intent
to set an IPO price between $6 to $7. In addition, as further support for our position, in fiscal year 2010, a reputable, third-party
investment bank prepared a comprehensive valuation analysis, that indicated a price target of $6.00 per share, citing that the
Company was trading at a “well below averages of 4.4x [P/E multiple] for small cap Chinese Cleantech companies listed in
the US” and historical averages of listed clean technology and environmental remediation companies. Therefore, the Company
expected an IPO price of at least $4 per share, and entered into the above mentioned agreement with Mr. Dong, which provided that
the Company would issue shares to Mr. Dong at a price equal to our IPO price, but in no circumstance at a price less than $4 per
share.

Even though our stock
price was subject to fluctuations and relatively high volatility (over 100%), these factors were not strong indicators and/or references
to estimate our stock price for a future settlement date, given that it is very common for US-listed China based companies to have
limited trading volumes and given our specific facts, which include the following: (i) our stock price, as of the date of the Transfer
Agreement (June 29, 2010) was $3.63; (ii) our average stock price in 2010 was in the range of $3 - $5; (iii) from January 1, 2010
to the date of the Transfer Agreement, our average stock was $4.02; (iv) $4 per share was the initial threshold stock price to
be listed on NASDAQ, (v) we operate in the energy-saving and environment protection sectors, both of which are supported by the
PRC government and attractive to investors; (vi) our steady, continuous growth, which was based, in part, on an increased number
of energy saving projects launched, and (v) information that we received from the investment banks that we worked with on IPO that
our stock price would be significantly above $4. Given these facts, the Company was very confident, with the probability of 60
– 70%, that our IPO or settlement date stock price would be no less than $4. The Company analyzed all of the facts and surrounding
circumstances and logically concluded that, despite external factors, the issuance to Mr. Dong would occur at a share price equal
to, or greater than, $4 per share.

We believed, at inception,
that the probability of a settlement date stock price below $4 would likely be significantly lower than the probability of a settlement
date stock price above $4 (see above), and that if such occurred it would likely be due to our limited trading volume, which could
lead to an unstable stock price. Our stock price started to drop below $3 in the 1st quarter of 2011. We believe this drop was
due to external factors, such as the impact of an increased number of short selling articles and investigations and securities
lawsuits against US listed China based companies, which resulted in an overall negative market sentiment towards US listed China
based companies. We firmly believed the reduced share price was not indicative of the Company’s true fair value and financial
condition, and we didn’t expect the price to be below $4 on the settlement date. Our already initiated IPO timing schedule
was affected, delayed, suspended and eventually aborted due to the unfavorable environment towards US listed China based companies
and our share price, unexpectedly got worse and more severe in the latter half of 2011 and 2012. This unexpectedly caused our IPO
timing to be unpredictable, because, for the reasons mentioned above, we did not want to launch an IPO at a stock price below $4
per share. Mr. Dong was aware of this prolonged unfavorable investment environment towards US listed China based public companies
and did not want to wait for our IPO and felt that an immediate share issuance at $4 per share was in his best interests. Therefore
on November 22, 2011, he requested the issuance of shares at the $4 per share price indicated in the Transfer Agreement. Given
that our stock price was $1.2 on the issuance date, we recorded a gain on the settlement of Dong’s liability through issuance
of the shares.

United States Securities and Exchange Commission

March 26, 2013

Page 3

I will confirm with
you within the next 48 hours whether our response is satisfactory, and, if so, we will file the Form 10-K/A attached to our previous
responses. If, before that time, you have any further comments or require any further information or if any questions should arise
in connection with this submission, please call me at (404) 527-4990 or Mr. Jay Shah at (404) 527-4593.

    Very truly yours,

    /s/ Thomas Wardell, Esq.

    Thomas Wardell, Esq.

    cc:
    David Chong, CFO, China Recycling Energy Corp.

    Jeffrey Li, Esq.

    Jay V. Shah, Esq.

March 20 , 2013

Via E-mail
David Chong
Chief Financial Officer
China Recycling Energy Corporation
12/F, Tower A
Chang An International Building
No. 88 Nan Guan Zheng Jie
Xi’an City, Shaanxi Province
China

Re: China Recycling Energy Corporation
 Form 10-K for Fiscal Year Ended December 31, 2011
Filed March 22, 2012
Response dated March 19 , 2013
File No. 1 -34625

Dear Mr. Chong :

We have reviewed your response dated March 19, 2013  and have the following additional
comment .  In our comment , 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 th e requested information, or by advising us when you will provide the requested
response.   If you do not believe our comment applies  to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After  reviewing any amendment to your filing  and the information you provide in
response to this comment , we may have  additional comments.

Item 8. Financial Statements and Supplementary Data, page  50

17. Shareholders’ Equity, page 78

1. We reviewed your response to the comment in our letter dated March 4, 2013.  You did
not provide us with your analysis at inception of all possible outcomes you considered in
your evaluation of which component is predominate.  In this regard, it appears to  us there
are two possible outcomes to consider.  The first outcome being whether or not your
stock price would be above $4 per share when you settled the agreement and the second
outcome being whether or not your stock price would be below $4 per share wh en you
settled the agreement.  The analysis you provide should be both quantitative and

David Chong
China Recycling Energy Corporation
March 20 , 2013
Page 2

 qualitative.  The quantitative part of the analysis should consider your stock price and
volatility and the qualitative part should consider any other pertinent informa tion you
considered.  Based on these quantitative and qualitative factors, you should tell us the
likelihood of achieving both outcomes  (i.e., 20%, 50% or  90%).

You may contact Tony Watson, Accountant,  at (202) 551 -3318  if you have questions
regarding our comments.  Please contact me at (202) 551 -3344  with any other questions.

Sincerely,

        /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief

CORRESP
1
filename1.htm

March 19, 2013

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

Attn: William
H. Thompson, Accounting Branch Chief

                                                                                           Tony Watson

 Re: China Recycling Energy Corporation

Form 10-K for Fiscal Year Ended December 31, 2011

File No. 001-34625

Dear Mr. Thompson:

On behalf of our
client, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we”
or “our”), and pursuant to our phone conference on March 14, 2013, this firm is filing a final response to the SEC
Comment Letters, dated December 14, 2012, January 23, 2013, February 7, 2013 and March 4, 2013, in connection with complying with
the issues and outstanding disclosure items set forth therein. For convenience of reference, we have included, in this response
letter, the same caption and paragraph number, as well as the text of the comment, set forth in your March 4, 2013 comment letter
followed by our response.

Upon learning from
you that the SEC has no further comment, the Company will promptly file Amendment No. 1 to the Company’s
Form 10-K for fiscal year ended December 31, 2011 with the SEC (as attached to the Company’s Response Letter, filed February
7, 2013).

Form 10-K for Fiscal Year Ended December 31, 2011

Item 8. Financial Statements and Supplementary Data, page
50

Note 17: Shareholders’ Equity, page 78

Comment
1.	We reviewed your response to the comment in our letter dated February 7, 2013. We understand that the purchase price
you agreed to pay in connection with the biomass power generation transfer agreement included RMB 80,000,000 in shares of your
common stock at a price equal to the price per share of common stock sold in your first initial public offering contemplated to
occur in 2010 or 2011, but in no event would the price be less than $4 per share. We also understand that at the request of Mr.
Dong your board of directors approved the issuance of 2,941,176 shares of common stock at a price of $4 per share on November 22,
2011 to settle the obligation because you were unable to launch your initial public offering as originally contemplated. Please
explain to us in detail why you believe the monetary value of the obligation was based solely or predominately on a fixed monetary
amount known at inception. Please refer to guidance in ASC 480-10-55-1 through 2, ASC 480-10-55-22 and ASC 480-10-55-46 through
51. In your response, please:

United States Securities and Exchange Commission

March 19, 2013

Page 2

 · provide us with your analysis at inception of all possible outcomes you considered in your evaluation
of which component is predominate;

 · tell us the facts and circumstances that support your conclusion that settlement of the equity
contract based on the initial public offering price was more likely than a settlement at the minimum issuance price considering
your stock price on the date of the agreement, expected volatility of the price of your common stock and other pertinent factors;
and

 · explain to us why settlement of the obligation in accordance with terms of the agreement would
result in the recognition of a substantial gain if the monetary value of the obligation is based solely or predominately on a fixed
monetary amount known at inception.

If you conclude
that the monetary value of the equity contract was not based solely or predominately on a fixed monetary amount known at inception,
the contract would not be within the scope of paragraph ASC 480-10-25-14 and would need to be evaluated under ASC 815-40. In that
event, please provide us with an evaluation of the equity contract based on the guidance in ASC 815-40-15 and ASC 815-40-25.

Response:

	A.	Provide
us with your analysis at inception of all possible outcomes you considered in your evaluation of which component is predominate.

We
believe the monetary value of the obligation to issue a number of shares that varies was based solely or predominantly
on a fixed monetary amount known at inception. Whether the monetary value of a financial instrument varies in response to changes
in market conditions depends on the nature of the agreement, including, in part, the form of settlement. Under ASC 480-10-55-2
example (a), the monetary value of a financial instrument that embodies an obligation that requires settlement either by transfer
of $100,000 in cash or by issuance of $100,000 worth of equity shares, is fixed at $100,000, even if the share price changes. Under
ASC 480-10-55-2 example (b), the monetary value of a financial instrument that embodies an obligation that requires physical settlement
by transfer of $100,000 in cash in exchange for the issuer’s equity shares, is fixed at $100,000, even if the fair value
of the equity shares changes.

On June 29, 2010, under
the Transfer Agreement, Mr. Dong transferred the Biomass Systems to Xi’an TCH, and Xi’an TCH was to pay Dong $14,705,900
(RMB 100,000,000) for the systems, including RMB 20,000,000 in cash and RMB 80,000,000 in shares of the Company’s common
stock. Under similar examples from ASC 480-10-55-2 a & b monetary value of the financial obligation is fixed even if the share
price or fair value of the equity shares changes; therefore, we believe the monetary value of the obligation was fixed at RMB 100
million including RMB 80 million to be paid in shares, at a price equal to the price per share of common stock sold in our first
initial public offering contemplated to occur in 2010 or 2011, but in no event at a price less than $4 per share.

United States Securities and Exchange Commission

March 19, 2013

Page 3

In addition, at the
time the agreement was entered into, our share price was $3.63. The agreement stated that the Company would issue RMB 80 million
($11.78 million) of shares at the first price set by an IPO, but not at less than $4 per share.  Hence, if the IPO the Company
did was at $5 per share, the Company would have issued 2,356,000 shares ($11.78 million/$5).  If the IPO was at $6 per share,
the Company would have issued 1,963,333 shares.  If at a price of $4 or less, 2,941,176 shares would have been issued. Hence
the instrument had a fixed monetary liability (RMB 80 million) for all CREG share prices. It is not likely that the instrument
holder (Dong) would have agreed to the terms if he expected CREG's share price to fall significantly below $4. This fact pattern
further supports the Company's belief that the monetary value of the obligation was predominantly based on a fixed monetary amount
known at inception, which was $11.78 million.

	B.	Tell
us the facts and circumstances that support your conclusion that settlement of the equity contract based on the initial public
offering price was more likely than a settlement at the minimum issuance price considering your stock price on the date of the
agreement, expected volatility of the price of your common stock and other pertinent factors; and

On the date of the
agreement, June 29, 2010, our stock price was $3.63; the average stock price in 2010 was in the range of $3 - $5 and the Company
was planning to launch an IPO at a price of $4 per share or higher. Accordingly, the parties agreed on a minimum price of $4, the
expected minimum IPO price at that time, since $4.02 was the average stock price in 2010 prior to the asset transfer agreement
with Mr. Dong.

	C.	Explain
to us why settlement of the obligation in accordance with terms of the agreement would result in the recognition of a substantial
gain if the monetary value of the obligation is based solely or predominately on a fixed monetary amount known at inception.

The obligation is a
straight liability under 480-10-25-14 (a). The liability is to be settled by issuance of stock. The reason we issued the shares
to Mr. Dong when we did rather than to roll the agreement forward was because Mr. Dong requested that he get the shares. The Company
had been unable to launch the public offering as contemplated under the agreement with Mr. Dong but Mr. Dong wanted to receive
the shares and offered to accept the shares in settlement of the obligation at the $4 minimum price. Under ASC 470-50-40-1, as
indicated in paragraph 470-50-15-4, the general guidance for the extinguishment
of liabilities is contained in Subtopic 405-20 and defines transactions
that the debtor shall recognize as an extinguishment of a liability. ASC 470-50-40-2 states a difference between the reacquisition
price and the net carrying amount of the extinguished debt shall be recognized
currently in income of the period of extinguishment as losses or gains and identified as a separate item.

In our case, the reacquisition
price is the stock price ($1.2) at settlement date (November 22, 2011) times the fixed amount of shares to be issued (2,941,176
shares, determined at $4 per share), the net carrying amount of the liability is RMB 80 million ($11.78 million), the difference
of $8.3 million was recorded as gain on settlement of debt.

	D.	If
you conclude that the monetary value of the equity contract was not based solely or predominately on a fixed monetary amount known
at inception, the contract would not be within the scope of paragraph ASC 480-10-25-14 and would need to be evaluated under ASC
815-40. In that event, please provide us with an evaluation of the equity contract based on the guidance in ASC 815-40-15 and ASC
815-40-25.

United States Securities and Exchange Commission

March 19, 2013

Page 4

We concluded that the monetary value of
the equity contract was based solely or predominantly on a fixed monetary amount known at inception as explained above.

I will confirm with
you within the next 48 hours whether our response is satisfactory, and, if so, we will file the Form 10-K/A attached to our previous
responses. If, before that time, you have any further comments or require any further information or if any questions should arise
in connection with this submission, please call me at (404) 527-4990 or Mr. Jay Shah at (404) 527-4593.

    Very truly yours,

    /s/ Thomas Wardell, Esq.

    Thomas Wardell, Esq.

    cc:
    David Chong, CFO, China Recycling Energy Corp.

    Jeffrey Li, Esq.

    Jay V. Shah, Esq.

March 4 , 2013

Via E-mail
David Chong
Chief Financial Officer
China Recycling Energy Corporation
12/F, Tower A
Chang An International Building
No. 88 Nan Guan Zheng Jie
Xi’an City, Shaanxi Province
China

Re: China Recycling Energy Corporation
 Form 10-K for Fiscal Year Ended December 31, 2011
Filed March 22, 2012
Response dated February 15, 2013
File No. 1 -34625

Dear Mr. Chong :

We have reviewed your response dated February 15 , 2013  and have the following
additional comment .  In our comment , 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 advising us when you will provide the requested
response.   If you do not believe our comment applies  to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing  and the information you provide in
response to this comment , we may have  additional comments.

Form 10 -K for Fiscal Y ear Ended December 31, 20 11

Item 8. Financial Statements and Supplementary D ata, page 50

17. Shareholders’ Equity, page 78

1. We reviewed your response to the comment in our letter dated February 7, 2013.  We
understand that the purchase price you agreed to pay in connection with the biomass
power generation transfer agreement included RMB 80,000,000 in shares of your
common stoc k at a price equal to the price per share of common stock sold in your first
initial public offering contemplated to occur in 2010 or 2011, but in no event would the

David Chong
China Recycling Energy Corporation
March 4, 2013
Page 2

 price be less than $4 per share.  We also understand that at the request of Mr. Dong your
board of directors approved the issuance of 2,941,176 shares of common stock at a price
of $4 per share  on November 22, 2011 to settle the obligation because you were unable to
launch your initial public offering as originally contemplated.  Please explain  to us in
detail why you believe the monetary value of the obligation was based solely or
predominately on a fixed monetary amount known at inception. Please refer to guidance
in ASC 480 -10-55-1 through 2, ASC 480 -10-55-22 and ASC 480 -10-55-46 through 51.
In your response , please:

 provide us with your analysis at inception of all possible outcomes you considered
in your evaluation of which component is predominate;

 tell us the facts and circumstances that support your conclusion that settlement of
the equity contract based on the initial public offering price was more likely than
a settlement at the minimum issuance price considering your stock price on the
date of the agreement, expected volatility of the price of your common stock and
other pertinent factors ; and

 explain to us why settlement of the obligation in accordance with terms of the
agreement would result in the recognition of a substantial gain if the monetary
value of the obligation is based solely or predominately on a fixed monetary
amount known at inception.

If you conclude that the monetary value of the equity contract was not based solely or
predominately on a fixed monetary amount known at inception, the contract would not be
within the scope of paragraph ASC 480-10-25-14 and would need to be evaluated under
ASC 815-40.  In that event, please provide us with an evaluation of the equity contract
based on the guidance in ASC 815 -40-15 and ASC 815 -40-25.

You may contact Tony Watson, Accountant , at (202) 551 -3318  if you have questions
regarding our comments.  Please contact me at (202) 551 -3344  with any other questions.

Sincerely,

 /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief

CORRESP
1
filename1.htm

    Albany

Atlanta

Brussels

Denver

Los Angeles

                           www.mckennalong.com

    New York

Philadelphia

San Diego

San Francisco

Washington, DC

    Thomas
Wardell

(404)
527-4990

    email address

twardell@mckennalong.com

February 15, 2013

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

    Attn:
    William H. Thompson, Accounting Branch Chief

    Tony Watson

    Re:
    China Recycling Energy Corporation

    Form 10-K for Fiscal Year Ended December 31, 2011

    File No. 001-34625

Dear Mr. Thompson:

On behalf of our client,
China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we”
or “our”), this firm is filing a final response to the SEC Comment Letters, dated December 14, 2012, January 23, 2013
and February 7, 2013, in connection with complying with the issues and outstanding disclosure items set forth therein. For convenience
of reference, we have included, in this response letter, the same caption and paragraph number, as well as the text of the comment,
set forth in your February 7, 2013 comment letter followed by our response.

Upon learning from
you that the SEC has no further comment, the Company will promptly file Amendment No. 1 to the Company’s
Form 10-K for fiscal year ended December 31, 2011 with the SEC (as attached to the Company’s Response Letter, filed January
30, 2013).

Form 10-K for Fiscal Year Ended December 31, 2011

Item 8. Financial Statements and Supplementary Data, page
50

Note 17: Shareholders’ Equity, page 78

Comment
1.	We reviewed your response to comment three in our letter dated January 23, 2013. If you were initially obligated to issue
a maximum of 2,941,176 shares under the agreement then it appears the guidance in ASC 815-40 may have been applicable. As such,
please provide us with your detailed analysis of the guidance in ASC 815-40-25-1 through ASC 815-40-25-35 related to your initial
accounting for the agreement.

United States Securities and Exchange Commission

February 15, 2013

Page 2

Response:

In determining the
accounting treatment for the obligation represented by the transaction with Mr. Dong, we considered ASC 815-40, as well as the
guidance in ASC 815-40-25-1 to 35, and we concluded that guidance does not apply to the share issuance pursuant to the at-issue
Asset Transfer Agreement (the “ATA”) and therefore, derivative accounting under ASC 815-40 did not apply.

The substance of the
transaction is that a liability of $11.78 million was to be settled in shares with the maximum number of shares limited to 2.95
million shares. While there was a maximum, because of the minimum share price provision, the actual number of shares to be issued
remained variable pending determination of the offering price in the contemplated public offering.

Therefore, the Company
concluded the instrument should be considered a liability in accordance with FAS 150 (ASC 480) and not be governed by derivative
accounting considerations. Our reasoning can be summarized as follows:

ASC 480-10-25-14 (SFAS
150 P 12) states, “A financial instrument that embodies an unconditional obligation, or a financial instrument
other than an outstanding share that embodies a conditional obligation, that the issuer must or may settle by issuing a variable
number of its equity shares shall be classified as a liability … if, at inception, the monetary value of the obligation
is based solely or predominantly on any one of the following: a. a fixed monetary amount known at inception (for example, a payable
settle able with a variable number of the issuer’s equity shares).” We concluded this literature most accurately describes
the ATA transaction.

We also considered
EITF 07-05 (ASC 815-40) which provides guidance with respect to whether or not the ATA has a derivative feature.  Examples
15 and 16 (ASC 815-40-55-40 Variability Involving Stock Price Cap and Floor, and 815-40-55-41 Variability Involving Cap on Shares
Issued) describe a similar agreement and contains this conclusion:

“Because the only variable that
can affect the settlement amount is the entity’s stock price, which is an input to the fair value of a fixed-for-fixed forward
contract on equity shares, the instrument is considered indexed to the entity’s own stock.”

As such, we concluded
the instrument (in this case the obligation to issue shares under the ATA) is not a derivative instrument.

United States Securities and Exchange Commission

February 15, 2013

Page 3

I will confirm with
you within the next 48 hours that the Form 10-K/A attached hereto is satisfactory for filing. If, before that time, you have any
further comments or require any further information or if any questions should arise in connection with this submission, please
call me at (404) 527-4990 or Mr. Jay Shah at (404) 527-4593.

    Very truly yours,

    /s/ Thomas Wardell, Esq.

    Thomas Wardell, Esq.

    cc:
    David Chong, CFO, China Recycling Energy Corp.

    Jeffrey Li, Esq.

    Jay V. Shah, Esq.

February 7 , 2013

Via E-mail
David Chong
Chief Financial Officer
China Recycling Energy Corporation
12/F, Tower A
Chang An International Building
No. 88 Nan Guan Zheng Jie
Xi’an City, Shaanxi Province
China

Re: China Recycling Energy Corporation
 Form 10-K for Fiscal Year Ended December 31, 2011
Filed March 22, 2012
Response dated January 30 , 2013
File No. 1 -34625

Dear Mr. Fortunato :

We have reviewed your response dated January 30 , 2013  and have the following
additional comment .  In our comment , 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 advising us when you will provide the requested
response.   If you do not believe our comment applies  to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing  and the information you provide in
response to this comment , we may have  additional comments.

Form 10 -K for Fiscal Y ear Ended December 31, 20 11

Item 8. Financial Statements and Supplementary Da ta, page 50

2. Summary of Significant Accounting Policies, page 57

17. Shareholders’ Equity, page 78

1. We reviewed your response to comment three in our letter dated January 23, 2013.  If you
were initially obligated to issue a maximum of 2,941,176 shares under the agreement
then it appears the guidance in ASC 815 -40 may have been applicable.  As such, please

David Chong
China Recycling Energy Corporation
February 7 , 2013
Page 2

 provide us with your detailed analysis of the guidance in ASC 815 -40-25-1 throu gh ASC
815-40-25-35 related to your initial accounting for the agreement.

You may contact Tony Watson, Accountant,  at (202) 551 -3318  if you have questions
regarding our comment .  Please contact me at (202) 551 -3344  with any other questions.

Sincere ly,

 /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief

CORRESP
1
filename1.htm

    Albany

    New York

    Atlanta
    Philadelphia

    Brussels
    San Diego

    www.mckennalong.com

    Denver

    San Francisco

    Los Angeles

    Washington, DC

    Thomas Wardell
    email address

    (404) 527-4990
    twardell@mckennalong.com

January 30, 2013

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

 Attn: William H. Thompson, Accounting Branch Chief

Tony Watson

 Re: China Recycling Energy Corporation

Form 10-K for Fiscal Year Ended December 31, 2011

File No. 001-34625

Dear Mr. Thompson:

On behalf of our client,
China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we”
or “our”), and pursuant to our phone conference, on January 24, 2013 with Mr. Tony Watson, this firm is filing a final
response to the SEC Comment Letters, dated December 14, 2012 and January 23, 2013, in connection with complying with the issues
and outstanding disclosure items set forth therein. For convenience of reference, we have included, in this response letter, the
same caption and paragraph number, as well as the text of the comment, set forth in your January 23, 2013 comment letter followed
by our response.

In
addition, attached to this response letter, for the SEC’s review and comment, is a draft of Amendment No. 1 to the Company’s
Form 10-K for fiscal year ended December 31, 2011, reflecting the changes in disclosure described herein. Upon learning
from you that the SEC has no further comment, the Company will promptly file Amendment No. 1 to the
Company’s Form 10-K for fiscal year ended December 31, 2011 with the SEC.

Form 10-K for Fiscal Year Ended December 31, 2011

Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations, page 33

Liquidity and Capital Resources, page 43

 Comment 1. We reviewed your response to comment one in our letter
dated December 14, 2012. Please include a discussion of how cash is transferred to your PRC subsidiaries and how earnings are
transferred from your PRC subsidiaries to the parent company in the amendment you intend to file. Please also describe the nature
of the restrictions on the ability of your subsidiaries to transfer funds to the parent in the form of cash dividends, loans or
advances and the potential impact on your liquidity.

United States Securities and Exchange Commission

January 30, 2013

Page 2

Response:

Per our phone conference,
the response prepared and included, by the Company, in its Response Letter, dated January 14, 2013, was satisfactory to the SEC.
Amendment No. 1 to our Form 10-K for fiscal year ended December 31, 2011 includes the supplementary disclosures set forth below.
(please refer to pg. 45 of the Form 10-K/A).

The Company is able
to transfer cash (U.S. dollars) to its PRC subsidiaries by: (i) investment – increasing the Company’s registered capital
in a PRC subsidiary or (ii) a shareholder loan. Other than as follows, to date, its PRC subsidiaries have not transferred any earnings/cash
to the Company. As reflected in its Form 10-K, the Company’s business is primarily conducted through its subsidiaries. The
Company is a holding company and its material assets consist solely of the ownership interests held in its PRC subsidiaries. The
Company relies on dividends paid by its subsidiaries for its working capital/cash needs, including: (i) the funds necessary to
pay dividends/cash distributions to its shareholders, (ii) to service any debt obligations and (iii) to pay operating expenses.
As a result of PRC laws and regulations (noted below) that require annual appropriations of 10% of after-tax income to be set aside
in a general reserve fund prior to payment of dividends, the Company’s PRC subsidiaries are restricted to that extent, as
well as the others noted below, in their ability to transfer a portion of their net assets to the Company as a dividend.

	PRC has currency
and capital transfer regulations that require us to comply with regulations for the movement of capital.

With respect to transferring
cash from the Company to its subsidiaries, increasing the Company’s registered capital in a PRC subsidiary requires the pre-approval
of the local commerce department, and a shareholder loan requires a filing with the state administration of foreign exchange or
its local bureau.

With respect to the
payment of dividends:

 i. PRC regulations currently permit the payment of dividends only out of accumulated profits, as determined
in accordance with accounting standards and PRC regulations (an in-depth description of the PRC regulations is set forth below);

 ii. our PRC subsidiaries are required to set aside, at a minimum, 10% of their net income after taxes,
based on PRC accounting standards, each year as statutory surplus reserves until the cumulative amount of such reserves reaches
50% of their registered capital;

 iii. these reserves may not be distributed as cash dividends;

 iv. our PRC subsidiaries may also allocate a portion of their after-tax profits to fund their staff
welfare and bonus funds; except in the event of a liquidation, these funds may also not be distributed to shareholders; as disclosed
in Note 18, the Company does not participate in a Common Welfare Fund; and

 v. the incurrence of debt, specifically the instruments governing such debt, may restrict a subsidiary’s
ability to pay shareholder dividends or make other cash distributions; the Company is subject to covenants and consent requirements
(presently, the Company has all consents necessary).

United States Securities and Exchange Commission

January 30, 2013

Page 3

If, for the reasons
noted above, our subsidiaries are unable to pay shareholder dividends and/or make other cash payments to the Company when needed,
the Company’s ability to conduct operations, make investments and/or acquisitions, or undertake other activities requiring
working capital may be materially and adversely affected. However, our operations and business, including investment and/or acquisitions
by our subsidiaries within China, will not be affected as long as the capital is not transferred in or out of the PRC.

PRC Regulations

In accordance with
PRC regulations on Enterprises with Foreign Investment and their articles of association, a foreign-invested enterprise (“FIE”)
that is established in the PRC is required to provide certain statutory reserves, which are appropriated from net profit, as reported
in the FIE’s PRC statutory accounts. FIEs are required to allocate at least 10% of its annual after-tax profit to the surplus
reserve until such reserve has reached 50% of its respective registered capital (based on the FIE’s PRC statutory accounts).
The aforementioned reserves may only be used for specific purposes and may not be distributed as cash dividends. In the event that
the FIE’s statutory accounts are insufficient to satisfy this requirement, the FIE’s shareholders are required to contribute
capital required to satisfy the registered capital requirement. Until such contribution of capital is satisfied, the FIE is not
allowed to repatriate profits to its shareholders, unless otherwise approved by the State Administration of Foreign Exchange. After
satisfaction of this requirement, the remaining funds may be appropriated at the discretion of the FIE’s board of directors.
Our subsidiary, Shanghai TCH, qualifies as an FIE and is therefore subject to the above-mandated regulations on distributable profits.

Additionally, in accordance
with PRC Company Law, a domestic enterprise is required to maintain a surplus reserve of at least 10% of its annual after-tax profit
until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts.
A domestic enterprise is also required to provide discretionary surplus reserve, at the discretion of the board of directors, from
the profits determined in accordance with the enterprise’s PRC statutory accounts. The aforementioned reserves can only be
used for specific purposes and may not be distributed as cash dividends. Xi’an TCH, Xingtai Huaxin, Huahong, Pingshan Shengda
(dissolved in 2012) and Erdos TCH were established as domestic enterprises; therefore, each is subject to the above-mentioned restrictions
on distributable profits.

As a result of PRC
laws and regulations that require annual appropriations of 10% of after-tax income to be set aside, prior to payment of dividends,
in a general reserve fund, the Company’s PRC subsidiaries are restricted in their ability to transfer a portion of their
net assets to the Company as a dividend or otherwise.

Chart of the Company’s
Statutory Reserve

Pursuant to PRC
corporate law, effective on January 1, 2006, the Company is now required to maintain a statutory reserve by appropriating from
its after-tax profit before declaration or payment of dividends. The statutory reserve represents restricted retained earnings.
Our restricted and unrestricted retained earnings under US GAAP are set forth below:

United States Securities and Exchange Commission

January 30, 2013

Page 4

    As at December 31,

    2011
    2010

    Unrestricted retained earnings
    $ 34,414,271
    $ 14,812,630

    Restricted retained earnings (surplus reserve fund)
      7,051,843
      5,203,605

    Retained earnings (including surplus reserve fund)
    $ 41,466,114
    $ 20,016,235

Item 8. Financial Statements and Supplementary Data, page
50

Note 2: Summary of Significant Accounting Polices, page
57

Fair Value of Financial Instruments, page 60

 Comment 2. We reviewed your response to comment three in our letter
dated December 14, 2012. Please disclose the fair value of long-term debt together with the related carrying amounts and the method
and assumptions used to estimate the fair value in the amendment you intend to file.

Response:

Per our phone conference,
the response prepared and included, by the Company, in its Response Letter, dated January 14, 2013, was satisfactory to the SEC.
Amendment No. 1 to our Form 10-K for fiscal year ended December 31, 2011 includes the supplementary disclosures set forth below.
(please refer to pg.  62 of the Form 10-K/A).

The following are our
considerations with respect to disclosures of fair value of long-term debt obligations.

As of fiscal year ended
December 31, 2011, the Company’s long term debt obligations consisted of the following: (i) bank loans payable in the amount
of $20.79 million, (ii) trust loans payable in the amount of $31.50 million and (iii) a long term payable for a sale-leaseback
transaction in the amount of $5.00 million.

Fair value measurements/approximations,
for certain financial instruments, are based on what a reporting entity would likely have to pay to transfer the financial obligation
to an entity with a comparable credit rating. Our bank loans and trust loans payable are privately held (i.e., nonpublic) debt;
therefore, pricing inputs are not observable. For this reason, we classified bank loans and trust loans payable as a Level 3 fair
value measurement in the valuation hierarchy.

For each of our long
term debt obligations noted above, we believe the carrying amounts approximate their fair values. The following reasons are supportive
of this determination.

United States Securities and Exchange Commission

January 30, 2013

Page 5

Bank Loans Payables
of $20.79 Million (noncurrent portion)

As of fiscal year ended
December 31, 2011, the Company had three loans with the same Chinese commercial bank with terms of 3, 3 and 4 years, respectively.
Each loan was for our subsidiary’s (Xi’an TCH’s) energy saving and emission reduction projects and had a floating
interest rate that reset at the beginning of each quarter at 110%, 115% and 115%, respectively, of the national base interest rate
for the same term and same level loan. Each of these loans was guaranteed by Xi’an TCH (along with a pledge of its accounts
receivables) and by certain executive officers of the Company, and a pledge of certain BMPG (Biomass Power Generation) systems.
Based on our understanding of the credit markets, the fact that our business is in a sector (energy-saving green) that is supported
by the PRC government and the lending bank, we believe that we could have obtained similar loans at December 31, 2011 on similar
terms and interest rates. In addition, in connection with the fair value measurement, we considered nonperformance risk (including
credit risk) relating to the debt obligations, including the following: (i) we are considered a low credit risk customer to the
lending bank and our creditors; (ii) we have a good history of making timely payments and have never defaulted on any loans; and
(iii) we have a stable and continuous cash inflow from collections from our sales-type lease of energy saving projects.

Trust Loans Payable
of $31.50 Million (noncurrent portion)

Pursuant to a Trust
Loan Plan, the Company issued trust loans at RMB 1 per unit for total of 300,000,000 units with interest rates ranging from 8.35%
- 12.05% and terms ranging from 2 – 4 years. Of these units, (i) 13,750,000 units ($2.0 million) were purchased by the management
of Erdos TCH; and (ii) 47,850,000 units were purchased by Xi’an TCH. All of the proceeds raised under the Trust Loan Plan
were loaned to Erdos TCH to fund the construction and operation of its waste heat power generation projects. To guarantee the repayment
of the loans, Erdos TCH provided a lien on its equipment, assets and accounts receivable. Xi’an TCH and Mr. Guohua Ku, our
CEO, the Chairman of our Board of Directors and a major shareholder, provided unconditional and irrevocable joint liability guarantees
for Erdos TCH’s performance under the Agreement. Erdos (the minority shareholder and customer of Erdos TCH) provided a commitment
letter on minimum power purchase from Erdos TCH. The carrying value of the trust loans approximates the fair value, because we
believe that we could obtain similar trust loans at December 31, 2011 for the same purpose of usage on comparable interest rates
and terms. In addition, in connection with the fair value measurement, we considered nonperformance risk (including credit risk),
including the following: (i) we are considered a low credit risk customer to the lending bank and our creditors; (ii) we have a
good history of making timely payments and have never defaulted on any loans; and (iii) we have a stable and continuous cash inflow
from collections from our sales-type lease of energy saving projects to make repayment.

Sale-Leaseback Transaction
of $5.00 Million

We recorded the sale-lease
back transaction at fair value, which is the present value of the total future cash outflow including principal and interest payments.

Note 17: Shareholders’ Equity, page 78

 Comment 3. We reviewed your response to comment seven in our letter
dated December 14, 2012. Please provide us with a copy of the letter from Mr. Dong and any other correspondence from Mr. Dong
which supports the extinguishment of the obligation. In addition, tell us your consideration of initially accounting for the agreement
with Mr. Dong within equity as opposed to a liability given that the contract contained an explicit limit on the number of shares
to be delivered to settle the contract. Refer to guidance in ASC 815-40-25 and ASC 815-40-25.

Response:

A.		          Please
provide us with a copy of the letter from Mr. Dong and any other correspondence from Mr. Dong which supports the extinguishment
of the obligation.

United States Securities and Exchange Commission

January 30, 2013

Page 6

Attached
to this Response Letter please find a copy of the requested letter, from Mr. Dong to the Company, dated May 24, 2011, supporting
the extinguishment of the debt obligation (please see attached). The original letter is in Chinese;
for ease of reference, an English transl

January 23, 2013

Via E-mail
David Chong
Chief Financial Officer
China Recycling Energy Corporation
12/F, Tower A
Chang An International Building
No. 88 Nan Guan Zheng Jie
Xi’an City, Shaanxi Province
China

Re: China Recycling Energy Corporation
 Form 10-K for Fiscal Year Ended December 31, 2011
Filed March 22, 2012
Response dated January 14, 2013
File No. 1 -34625

Dear Mr. Chong :

We have reviewed your response dated January 14, 2013  and have the following
additional comment s.  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 filin g, by
providing the requested information, or by advising us when you will provide the requested
response s.  If you do not believe our comment s applies  to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in you r response.

After reviewing any amendment to your filing  and the information you provide in
response to these comment s, we may have  additional comments.

Item 7. Management’s Discussion and  Analysis of Financial Condition and Results of
Operations, page 33

Liquidity and Capital Resources, page 43

1. We reviewed your response to comment one  in our letter dated December 14, 2012.
Please include a discussion of how cash is transferred to your P RC subsidiaries and how
earnings are transferred from your PRC subsidiaries to the parent company in the
amendment you intend to file.  Please also describe the nature of the restrictions on the
ability of your subsidiaries to transfer funds to the parent in the form of cash dividends,
loans or advances and the potential impact on your liquidity.

David Chong
China Recycling Energy Corporation
January 23, 2013
Page 2

Item 8. Financial Statements and Supplementary Data, page 50

2. Summary of Significant Accounting Policies, page 57

Fair Value of Financial Instruments, page  60

2. We reviewed your response to comment three in our letter dated December 14, 2012.
Please disclose the fair value of long -term debt together with the related carrying
amounts and the method and assumptions used to estimate the fair value in the
amendment y ou intend to file.

17. Shareholders’ Equity, page 78

3. We reviewed your response to comment seven in our letter dated December 14, 2012.
Please provide us with a copy of the letter from Mr. Dong and any other correspondence
from Mr. Dong which supports  the extinguishment of the obligation.  In addition, tell us
your consideration of initially accounting for the agreement with Mr. Dong within equity
as opposed to a liability given that the contract contained an explicit limit on the number
of shares to b e delivered to settle the contract.  Refer to guidance in ASC 815 -40-25 and
ASC 815 -40-25.

18. Statutory Reserves, page 79

4. We reviewed your response to comment eight in our letter dated December 14, 2012.
Please disclose that the maximum statutory re serve amounts of your subsidiaries have not
been reached as of the most recent balance sheet date in the amendment you attend to
file.

You may contact Tony Watson, Accountant,  at (202) 551 -3318  if you have questions
regarding our comments.  Please contact  me at (202) 551 -3344  with any other questions.

Sincerely,

 /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief

CORRESP
1
filename1.htm

January 14, 2013

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

    Attn:
    William H. Thompson, Accounting Branch Chief

    Tony Watson

    Re:
    China Recycling Energy Corporation

    Form 10-K for Fiscal Year Ended December 31, 2011

    File No. 001-34625

Dear Mr. Thompson:

On behalf of our client,
China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we”
or “our”), and pursuant to our phone conference on December 28, 2012, this firm is filing a response to the SEC Comment
Letter, dated December 14, 2012, in connection with complying with the issues and outstanding disclosure items set forth therein.
For convenience of reference, we have included, in this response letter, the same caption and paragraph number, as well as the
text of the comment, set forth in your comment letter followed by our response; in addition, for questions containing multiple
questions/comments, we separated our response into subparts.

In
addition, attached to this response letter, for the SEC’s review and comment, is a draft of Amendment No. 1 to the Company’s
Form 10-K for fiscal year ended December 31, 2011, reflecting the changes in disclosure described herein. Upon confirmation
that the attached Form 10-K/A meets the SEC’s satisfaction and approval, the Company will promptly file
Amendment No. 1 to the Company’s Form 10-K for fiscal year ended December 31, 2011 with the SEC.

Form 10-K for Fiscal Year Ended December 31, 2011

Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations, page 33

Liquidity and Capital Resources, page 43

Comment
1.	Please describe how cash is transferred to your PRC subsidiaries, and conversely, how earnings are transferred from
your PRC subsidiaries to the parent company. If applicable, please also describe any restrictions that impact your ability to
transfer cash within the corporate structure, including the nature of restrictions on the net assets of your subsidiaries,
the amount of those net assets and the potential impact on your liquidity.

United States Securities and Exchange Commission

January 14, 2013

Page 2

Response:

A.		Please
describe how cash is transferred to your PRC subsidiaries, and conversely, how earnings are transferred from your PRC subsidiaries
to the parent company.

The Company is able
to transfer cash (U.S. dollars) to its PRC subsidiaries by: (i) investment – increasing the Company’s registered capital
in a PRC subsidiary or (ii) a shareholder loan. Other than as follows, to date, its PRC subsidiaries have not transferred any earnings/cash
to the Company. As reflected in its Form 10-K, the Company’s business is primarily conducted through its subsidiaries. The
Company is a holding company and its material assets consist solely of the ownership interests held in its PRC subsidiaries. The
Company relies on dividends paid by its subsidiaries for its working capital/cash needs, including: (i) the funds necessary to
pay dividends/cash distributions to its shareholders, (ii) to service any debt obligations and (iii) to pay operating expenses.
As a result of PRC laws and regulations (noted below) that require annual appropriations of 10% of after-tax income to be set aside
in a general reserve fund prior to payment of dividends, the Company’s PRC subsidiaries are restricted to that extent, as
well as the others noted below, in their ability to transfer a portion of their net assets to the Company as a dividend.

B.		If
applicable, please also describe any restrictions that impact your ability to transfer cash within the corporate structure, including
the nature of restrictions on the net assets of your subsidiaries, the amount of those net assets and the potential impact on your
liquidity.

	PRC has currency
and capital transfer regulations that require us to comply with regulations for the movement of capital.

With respect to transferring
cash from the Company to its subsidiaries, increasing the Company’s registered capital in a PRC subsidiary requires the pre-approval
of the local commerce department, and a shareholder loan requires a filing with the state administration of foreign exchange or
its local bureau.

With respect to the
payment of dividends:

 i. PRC regulations currently permit the payment of dividends only out of accumulated profits, as determined
in accordance with accounting standards and PRC regulations (an in-depth description of the PRC regulations is set forth below);

 ii. our PRC subsidiaries are required to set aside, at a minimum, 10% of their net income after taxes,
based on PRC accounting standards, each year as statutory surplus reserves until the cumulative amount of such reserves reaches
50% of their registered capital;

 iii. these reserves may not be distributed as cash dividends;

 iv. our PRC subsidiaries may also allocate a portion of their after-tax profits to fund their staff
welfare and bonus funds; except in the event of a liquidation, these funds may also not be distributed to shareholders; as disclosed
in Note 17 of our Form 10-K for fiscal year ended December 31, 2011, the Company does not participate in a Common Welfare Fund;
and

 v. the incurrence of debt, specifically the instruments governing such debt, may restrict a subsidiary’s
ability to pay shareholder dividends or make other cash distributions; as disclosed in our Form 10-K for fiscal year ended December
31, 2011, the Company is subject to covenants and consent requirements (presently, the Company has all consents necessary).

United States Securities and Exchange Commission

January 14, 2013

Page 3

If, for the reasons
noted above, our subsidiaries are unable to pay shareholder dividends and/or make other cash payments to the Company when needed,
the Company’s ability to conduct operations, make investments and/or acquisitions, or undertake other activities requiring
working capital may be materially and adversely affected. However, our operations and business, including investment and/or acquisitions
by our subsidiaries within China, will not be affected as long as the capital is not transferred in or out of the PRC.

PRC Regulations

In accordance with
PRC regulations on Enterprises with Foreign Investment and their articles of association, a foreign-invested enterprise (“FIE”)
that is established in the PRC is required to provide certain statutory reserves, which are appropriated from net profit, as reported
in the FIE’s PRC statutory accounts. FIEs are required to allocate at least 10% of its annual after-tax profit to the surplus
reserve until such reserve has reached 50% of its respective registered capital (based on the FIE’s PRC statutory accounts).
The aforementioned reserves may only be used for specific purposes and may not be distributed as cash dividends. In the event that
the FIE’s statutory accounts are insufficient to satisfy this requirement, the FIE’s shareholders are required to contribute
capital required to satisfy the registered capital requirement. Until such contribution of capital is satisfied, the FIE is not
allowed to repatriate profits to its shareholders, unless otherwise approved by the State Administration of Foreign Exchange. After
satisfaction of this requirement, the remaining funds may be appropriated at the discretion of the FIE’s board of directors.
Our subsidiary, Shanghai TCH, qualifies as an FIE and is therefore subject to the above-mandated regulations on distributable profits.

Additionally, in accordance
with PRC Company Law, a domestic enterprise is required to maintain a surplus reserve of at least 10% of its annual after-tax profit
until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts.
A domestic enterprise is also required to provide discretionary surplus reserve, at the discretion of the board of directors, from
the profits determined in accordance with the enterprise’s PRC statutory accounts. The aforementioned reserves can only be
used for specific purposes and may not be distributed as cash dividends. Xi’an TCH, Xingtai Huaxin, Huahong, Pingshan Shengda
(dissolved in 2012) and Erdos TCH were established as domestic enterprises; therefore, each is subject to the above-mentioned restrictions
on distributable profits.

As a result of PRC
laws and regulations that require annual appropriations of 10% of after-tax income to be set aside, prior to payment of dividends,
in a general reserve fund, the Company’s PRC subsidiaries are restricted in their ability to transfer a portion of their
net assets to the Company as a dividend or otherwise.

Chart of the Company’s
Statutory Reserve

	Pursuant to PRC
corporate law, effective on January 1, 2006, the Company is now required to maintain a statutory reserve by appropriating from
its after-tax profit before declaration or payment of dividends. The statutory reserve represents restricted retained earnings.
Our restricted and unrestricted retained earnings under US GAAP are set forth below:

United States Securities and Exchange Commission

January 14, 2013

Page 4

    As at December 31,

    2011
    2010

    Unrestricted retained earnings
    $ 34,414,271
    $ 14,812,630

    Restricted retained earnings (surplus reserve fund)
      7,051,843
      5,203,605

    Retained earnings (including surplus reserve fund)
    $ 41,466,114
    $ 20,016,235

Item 9A. Controls and Procedures, page 81

Comment 2.	Please
tell us whether there have been changes in the qualifications of your accounting staff and outside consultants responsible for
the preparation of your financial statements in accordance with US GAAP as set forth in your response letters dated December 8,
2010 (comment 4) and January 31, 2011 (comment 3). For example, please tell us: (i) whether you still engage a US licensed CPA
to assist in the conversion and consolidation of the financial statements of your subsidiaries prepared in accordance with PRC
GAAP to US GAAP and preparation of financial statement footnotes that comply with the disclosure requirements of US GAAP, and if
so, the nature and extent of the involvement of the US CPA in preparing your financial statements in accordance with US GAAP, and
(ii) whether you have added any personnel holding a license to practice public accounting in the US or with education, knowledge
and on-going training in US GAAP and SEC Rules and Regulations together with a summary of that education, knowledge and on-going
training.

Response:

A.	Please
tell us whether there have been changes in the qualifications of your accounting staff and outside consultants responsible for
the preparation of your financial statements in accordance with US GAAP as set forth in your response letters dated December 8,
2010 (comment 4) and January 31, 2011 (comment 3).

	There have been
no material changes in the qualifications of the accounting staff and outside consultants responsible for the preparation of our
financial statements in accordance with US GAAP as set forth in our response letters dated December 8, 2010 (comment 4) and January
31, 2011 (comment 3).

B.		Whether
you still engage a US licensed CPA to assist in the conversion and consolidation of the financial statements of your subsidiaries
prepared in accordance with PRC GAAP to US GAAP and preparation of financial statement footnotes that comply with the disclosure
requirements of US GAAP, and if so, the nature and extent of the involvement of the US CPA in preparing your financial statements
in accordance with US GAAP.

Yes. The Company has
retained, and continues to use, the same outside consultants. In accordance with proper accounting protocols and best practices,
the Company, internally, prepares its financial statements and related supporting schedules and books under PRC GAAP in Renminbi
Yuan (“RMB”) for the Company and each of its subsidiaries and then provides such to the Company’s contracted
U.S. Certified Public Accountant (the “U.S. CPA”), who is unrelated to the Company’s Independent Registered Public
Accounting Firm, for conversion and consolidation. Our U.S. CPA then prepares the Company’s consolidated financial statements
in accordance with U.S. GAAP (translating RMB to USD) and prepares a consolidating financial statements worksheet and related schedules,
as well footnote disclosures with related schedules and worksheets, to support the prepared financials and footnote disclosures.
In connection with the preparation of the aforementioned, the Company’s U.S. CPA uses the Practitioners Publishing Company’s
(“PPC”) Disclosure Check List as guidance. The prepared financials (and related disclosures) are then provided to the
Company’s management and its independent auditor for review and audit; in connection with the review/audit process, our U.S.
CPA answers any questions raised and adjustments/revisions are made as necessary. When the review/audit process is completed, and
all comments and issues cleared, the financials are sent to our Board of Directors and Audit Committee for their review and final
approval prior to the public disclosure (filing) of the financials.

United States Securities and Exchange Commission

January 14, 2013

Page 5

C.		Whether
you have added any personnel holding a license to practice public accounting in the US or with education, knowledge and on-going
training in US GAAP and SEC Rules and Regulations together with a summary of that education, knowledge and on-going training.

	No. However, the
Company is diligent is making sure that all necessary personnel continue on-going training/education in US GAAP and SEC Rules and
Regulations. For example, in March 2011, we hired PricewaterhouseCoopers LLP (Singapore) to give training lessons/course work on
convertible note and sales type lease under US GAAP to our CFO, Vice President (Accounting) and two additional internal accountants,
each of whom completed the course requirements and received the necessary training.

Item 8. Financial Statements and Supplementary Data, page
50

Notes to Consolidated Financial Statements, page 55

Note 2: Summary of Significant Accounting Polices, page
57

Fair Value of Financial Instruments, page 60

Comment
3.	Please tell us your consideration of disclosing the fair value long term debt obligations together with the related carrying
amounts and the methods and significant assumptions used to estimate the fair value of the instruments. Please refer to ASC 825-10-50-10
and 11.

Response:

The following are our
considerations with respect to disclosures of fair value of long-term debt obligations.

As of fiscal year ended
December 31, 2011, the Company’s long term debt obligations consisted of the following: (i) bank loans payable in the amount
of $20.79 million, (ii) trust loans payable in the amount of $31.50 million and (iii) a long term payable for a sale-leaseback
transaction in the amount of $5.00 million.

Fair value measurements/approximations,
for certain financial instruments, are based on what a reporting entity would likely have to pay to transfer the financial obligation
to an entity with a comparable credit rating. Our bank loans and trust loans payable are privately held (i.e., nonpublic) debt;
therefore, pricing inputs are not observable. For this reason, we classified bank loans and trust loans payable as a Level 3 fair
value measurement in the valuation hierarchy.

United States Securities and Exchange Commission

January 14, 2013

Page 6

For each of our long
term debt obligations noted above, we believe the carrying amounts approximate their fair values. The following reasons are supportive
of this determination.

Bank Loans Payables
of $20.79 Million (noncurrent portion)

As of fiscal year ended
December 31, 2011, the Company had three loans with the same Chinese commercial bank with terms of 3, 3 and 4 years, res

December  14, 2012

Via E-mail
David Chong
Chief Financial  Officer
China Recycling Energy Corporation
12/F, Tower A
Chang An International Building
No. 88 Nan Guan Zheng Jie
Xi’an City, Shaanxi Province
China

Re: China Recycling Energy Corporation
 Form 10-K for Fiscal Year Ended December 31 , 2011
Filed March 22 , 2012
File No. 1-34625

Dear Mr. Chong :

We have reviewed your filing and have the following comment s.  We have limited  our
review to only your financial statements and related disclosures and do not intend to expand our
review to ot her portions of your document .  In some of our comments, we may ask you to
provide us with information so we may better understand your discl osure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comments apply to your facts and circ umstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to this comment , we may have  additional comments.

Form 10 -K for Fiscal Y ear Ended December 31, 20 11

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations , page 33

Liquidity and Capital Resources, page 43

1. Please describe  how cash is transferred to your  PRC subsidi aries, and conversely, how
earnings are transferred from your PRC subsidi aries to the parent company.  If
applicable, p lease also de scribe any restrictions that impac t your ability to transfer cash
within the corporate structure, including the nature of re strictions on the net assets of

David Chong
China Recycling Energy Corporation
December 14, 2012
Page 2

 your subsidiaries, the amount of those net assets and the potential impact on your
liquidity.

Item 9A. Controls and Procedures, page 81

2. Please tell us whether there have been changes in the qualifications of your accounting
staff and outside consultants responsible for the preparation of your financial statements
in accordance with US GAAP as set forth in your response letters dated December 8,
2010 (comment 4) and January 31, 2011 (comment 3).  For example, please  tell us: (i)
whether you still engage a US licensed CPA to assist in the conversion and consolidation
of the financial statements of your subsidiaries prepared in accordance with PRC GAAP
to US GAAP and preparation of financial statement footnotes that co mply with the
disclosure requirements of US GAAP, and if so, the nature and extent of the involvement
of the US CPA in preparing your financial statements in accordance with US GAAP, and
(ii)  whether you have added any personnel holding a license to pract ice public
accounting in the US or with education, knowledge and on -going training in US GAAP
and SEC Rules and Regulations together with a summary of that  education, knowledge
and on -going training.

Item 8. Financial Statements and Supplementary Data, p age 50

Notes to Consolidated Financial Statements, page 55

2. Summary of Significant Accounting Polices, page 57

Fair Value of Financial Instruments, page 60

3. Please tell us your consideration of disclosing the fair value long term debt obligations
together with the related carrying amounts  and the method s and significant assumptions
used to estimate the fair of the instruments .  Please refer to ASC 825 -10-50-10 and 11.

8. Accrued Liabilities and Other Payables, page 64

4. The amount of accrued liabi lities and other payables disclosed in the table summarizing
the components of accrued liabilities and other payables at December 31, 2011 differs
from the amount stated in the balance sheet.  Please revise or advise.

15. Convertible Notes Payable and Re volving Finance Agreement, page 70
Convertible Note Agreement with China Cinda, page 72

5. Please tell us the fair value of the debt discount attributable to the embedded conversion
featur es at the date s of issuance of the convertible debt.  Please also tell  us the fair value
of the embedded conversion features attributable to the notes as of the dates you
extinguished the debt obligations and the amount of the gain or loss recognized.  In
addition, we understand that you recognized the gain or loss attributa ble to the

David Chong
China Recycling Energy Corporation
December 14, 2012
Page 3

 extinguishments of the debt and related embedded conversion features as a component of
the changes in fair value of the conversion feature liability recognized in income.  If so,
please tell us why the gain or loss is not separately presented in  the consolidated
statements of income and comprehensive income.  If not, please tell us how the gain or
loss i s classified in the consolidated statements of income and comprehensive income.

6.  Please tell us your consideration of disclosing the principal amount of the convertible
debt, the unamortized discount and the net carrying amount of the debt as of the most
recent balance sheet date.

17. Shareholders’ Equity, page 78

7. We note your response to comment 11 in our letter dated September 22, 2010.  In your
response dated October 12, 2010 you indicate that you used the guidance in ASC 480 -10-
25-14 to record your obligation to issue a variable number of shares to settle the RMB
80,000,000 liability, a fixed monetary amount.  Please tell us why the issuan ce of
common stock to Dong at a price of $4 per share resulted in the extinguishment of the
aggregate liability recognized in 2010.  In that regard, we note that the fair market value
of your common stock on the date of issuance was below the $4 issuance p rice and that
you recognized a gain for the difference between the carrying amount of the liability and
fair market value of your common stock on the date of issuance of the shares.  In your
response, please clearly describe the payment terms of the Transf er Agreement and tell us
why the counterparty agreed to extinguish the liability upon receipt of common shares
with a fair market value less than the carrying amount of the liability.  In addition, please
confirm to us that the issuance of the shares legal ly extinguished the liability pursuant to
terms of the Transfer Agreement and the basis for that conclusion.  Also, tell us your
consideration of the guidance in ASC 480 -10-55-22.

18. Statutory Reserves, page 79

8. Please disclose whether the maximum statutory reserve amount has been reached as of
the most recent balance sheet date.

Signatures, page 83

9. Please note that the report should also be signed by your principal financial officer and
principal accounting officer in your behalf and in their ca pacities as the principal
financial officer and principal accounting officer in the second signature block.  Please
revise.  Refer to the signature section and General Instruction D(2) of Form 10 -K.

We urge all persons who are responsible for the accura cy and adequacy of the disclosure
in the filing  to be certain that the filing  include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   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.

David Chong
China Recycling Energy Corporation
December 14, 2012
Page 4

 In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsibl e for the adequacy and accuracy of the disclosure in the filing s;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact Tony Watson, Accountant,  at (202) 551 -3318  if you have questions
regarding our comments.  Pleas e contact me at (202) 551 -3344  with any other questions.

Sincerely,

 /s/ William H. Thompson

William H. Thompson
Accounting Branch Chief

CORRESP
1
filename1.htm

[China
Recycling Energy Corporation]

May 16, 2012

VIA EDGAR

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549-0405

Attention:  Mara L. Ransom, Assistant Director

    Lisa Kohl, Staff Attorney

 Re: China Recycling Energy Corporation

    Resale Form S-3/A (No.2) Registration Statement

    File No. 333-179628

Dear Ms. Kohl:

Pursuant to Rule 461
of the General Rules and Regulations under the Securities Act of 1933, China Recycling Energy Corporation (the “Company”)
hereby requests the Securities and Exchange Commission (the “Commission”) to accelerate the effective date of the above-
referenced Resale Registration Statement and declare such Resale Registration Statement effective as of 2:00 p.m. EDT, on May 18,
2012, or as soon thereafter as practicable. The Company also requests that the Commission specifically confirm such effective date
and time to the Company and the undersigned.

In connection with
the acceleration request, the Company hereby acknowledges that: (i) should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing;
(ii) the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does
not relieve the Company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and (iii) the
Company may not assert this action as a defense in any proceeding initiated by the Commission or any person under the federal securities
laws of the United States.

If you have any further
comments or require any further information or if any questions should arise in connection with this submission, please call Mr.
Thomas Wardell at (404) 527-4990 or Mr. Jay Shah at (404) 527-4593 at McKenna Long & Aldridge LLP.

    Very truly yours,

    /s/ David Chong

    David Chong

    Chief Financial Officer and Secretary

CORRESP
1
filename1.htm

    Albany

Atlanta

Brussels

Denver

Los Angeles

www.mckennalong.com

    New
        York

Philadelphia

San Diego

San Francisco

Washington,
DC

    THOMAS WARDELL

        (404) 527-4990

    EMAIL
        ADDRESS

        twardell@mckennalong.com

April 11, 2012

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C. 20549-0405

 Attn:       Lisa Kohl

Catherine T. Brown

Mara L. Ransom

 Re: China Recycling Energy Corporation

Registration Statement on Form S-3

  Filed February 22, 2012

File No. 333-179628

Dear Ms. Kohl:

On behalf of our client,
China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we”
or “our”), and pursuant to our phone conference on April 5, 2012, this firm is filing a response to the SEC Comment
Letter, dated March 20, 2012, in connection with complying with the issues and outstanding disclosure items set forth therein.

Registration Statement on Form S-3

General

 Comment:         We note your Item 2.01 Form 8-K filed on July 11, 2011
and amended on July 13, 2011. It does not appear that this Form 8-K was timely filed. Accordingly, please explain why you believe
that you are eligible to register securities on Form S-3 at this time. Refer to General Instruction I.A.3(b) of Form S-3.

Response:

Our
current position is that the Company is eligible to register securities on a Form S-3, because the Company was not required
to report the at-issue transaction under Item 2.01 of Form 8-K. The at-issue Form 8-K, initially filed on July 11, 2011,
should have been filed under Items 1.01 and 2.03.

A filing under Item
2.01 is only required if the reporting company (or any of its subsidiaries) completes the acquisition or disposition of a significant
amount of assets, otherwise than in the ordinary course of business. An acquisition or disposition is deemed to involve
a “significant amount of assets,” if (i) the acquisition or disposition exceeded 10% of the total assets of CREG or
(ii) it involved a business that is “significant” as such term is defined in Item 11-01 of Regulation S-X.

United States Securities
and Exchange Commission

April 11, 2012

Page 2

As reported by the
Company on the aforementioned Form 8-K, pursuant to the terms and conditions of that certain Financial Leasing Agreement, dated
June 28, 2011, by and between the Company’s wholly-owned subsidiary, Xi’an TCH Energy Technology Co., Ltd. (“Xi’an
TCH”) and Cinda Financial Leasing Co., Ltd. (“Cinda”), Xi’an TCH transferred ownership of a set of steam
turbine waste heat power generations systems, four furnaces and certain ancillary assets to Cinda for an aggregate sale price
of approximately $6.64 million. For reference, the Company had total assets of $208,013,149 for fiscal year ended December 31,
2011 and total assets of $165,728,487 for fiscal year ended December 31, 2010 (please see Form 10-Ks on file with the SEC).
The transaction did not meet the bright-line test of materiality required under Item 2.01, and,
therefore, a filing was not required under Item 2.01 and should not result in the Company losing Form S-3 eligibility. Note, an
untimely filing under Items 1.01 and 2.03 (i.e., the items where disclosure was required) does not result in a loss of Form S-3
eligibility (see  Article I, Eligibility Requirements for Use of Form S-3).

If the SEC desires,
and as discussed during our phone conference on April 5, 2012, the Company will file an Form 8-K/A, eliminating the voluntary
reference to Item 2.01.

Selling Stockholders, Page 5

 Comment:         Please disclose the person(s) with voting and/or investment
control over the shares held by Carlyle Asia Growth Partners III, CAGP III Co-Investment, L.P., MRV Asia Capital Fund, Great Essential
Investment, Ltd., and Sino Way Limited. For additional guidance, refer to Question 140.02 and Interpretive Response 240.04 of
our Regulation S-K Compliance and Disclosure Interpretations, located on our website.

Response:

For
ease of reference, the Company’s response is broken-down by each entity, in the following order: (i) Carlyle
Asia Growth Partners III & CAGP III Co-Investment, L.P., (ii) MRV Asia Capital Fund, (iii) Great Essential Investment,
Ltd. and (iv) Sino Way Limited. Amendment No. 1 to the Company’s Form S-3 registration
statement shall disclose the requested information   as follow: (please refer to the footnotes accompanying the
Selling Security Stockholder Table on pgs. 7-8 of the to be filed form S-3/A).

Carlyle Asia
Growth Partners III & CAGP III Co-Investment, L.P.

The
Company shall include the requested disclosure for both Carlyle Asia Growth Partners III and CAGP III Co-Investment,
L.P. in Footnote 8 of the Selling Security Stockholder Table (please see pgs. 7-8 of the  to be
filed Form S-3/A). Footnote 8 has been revised to include the following disclosure: “DBD Cayman Holdings, Ltd. exercises
investment discretion and control over the shares held by each of Carlyle Asia Growth Partners III, L.P. and CAGP III
Co-Investment, L.P., through its indirect subsidiary, CAGP General Partner, L.P., which is the general partner of each of
Carlyle Asia Growth Partners III, L.P. and CAGP III Co-Investment, L.P. DBD Cayman Holdings, Ltd. is controlled by its
ordinary members, and all action relating to the voting or disposition of the Common Stock covered by this Registration
Statement requires approval of a majority of the ordinary members. William E. Conway, Jr., Daniel A. D’Aniello and
David M. Rubenstein, as the ordinary members of DBD Cayman Holdings, Ltd., may be deemed to share beneficial ownership of the
shares of Common Stock in the Company beneficially owned by DBD Cayman Holdings, Ltd.”

United States Securities and Exchange
Commission

April 11, 2012

Page 3

MRV Asia Capital
Fund

The
Company shall include the requested disclosure for MRV Asia Capital Fund in Footnote 6 of the Selling
Security Stockholder Table (please see pgs. 7-8 of the to be filed Form S-3/A). Footnote 6 has been revised to
include the following disclosure: “MRV Capital Pte Ltd., as the investment manager of MRV Asia Capital Fund, exercises
investment discretion and control over the shares held by the MRV Asia Capital Fund. MRV Capital Pte Ltd. is controlled by
its fund managers, Mr. Yek Tiew Chan and Mr. Michael Ong, and all action relating to the voting or disposition of the common
stock held in the Company requires unanimous consent of the fund managers.”

Great Essential
Investment, Ltd.

The
Company shall include the requested disclosure for Great Essential Investment, Ltd. in Footnote 7 of
the Selling Security Stockholder Table on pgs. 7-8 of the to be filed Form S-3/A. Footnote 7 has been revised
to include the following disclosure: “Mr. Jinghe Dong is the sole shareholder of Great Essential Investment, Ltd. and
is the beneficial owner (i.e., exercises all investment discretion and voting control) of the shares owned by Great Essential
Investment, Ltd.”

Sino Way Limited

We
reviewed your comment and the additional guidance you referenced and note that the requested information for Sino Way Limited
was included in the previously filed Form S-3. We direct your attention to the Selling Stockholder Table on pgs. 7-8 of the
initial Form S-3, specifically Footnote 8. For ease of reference, Footnote 8 states, in part, as follows:
“[t]he address of Sino Way Limited is 100 Beach Road, #25-06 Shaw Towers, Singapore 189702. Mr. David
Chong, our CFO and Secretary, is the sole shareholder of Sino Way Limited and is the beneficial owner of the shares owned by
Sino Way Limited.” (emphasis added). In addition, we direct your attention to the
following paragraph at the bottom of page 6 of CREG’s Form S-3.

“The following selling stockholders
have had a material relationship with the Company within the past three years: (i) Carlyle Asia Growth Partners III, L.P., (ii)
GAGP III Co. Investment L.P. (together, with Carlyle Asia Growth Partners III, L.P. referred to as the “Investors”
in this Registration Statement) and (iii) Sino Way Limited…David Chong, our Chief Financial Officer and Secretary,
is the sole stockholder of Sino Way Limited. Mr. Chong has served as our Chief Financial Officer and Secretary since December 30,
2010. Other than as described above, none of the selling stockholders has, or within the past three years has had, any
position, office or material relationship with us or any of our predecessors or affiliates.” (emphasis added)

Signatures

 Comment:         Please revise the second signature block to identify your
principal executive officer and principal financial officer. Refer to Instruction 1 to the Signatures section of Form S-3.

Response:

We reviewed your
comment and note that the Signature Page to the previously filed Form S-3 identifies Mr. David Chong as our Chief Financial
Officer, Principal Accounting Officer and Secretary. Nonetheless, the to be filed Amendment No. 1 to the Company’s Form
S-3 registration statement shall include a revised signature block that identifies Mr. David Chong as our principal
financial officer. (please refer to signature page of to be filed S-3/A).

United States Securities and Exchange Commission

April 11, 2012

Page 4

Exhibit Index

 Comment:         Please revise the exhibit index to include, and file or
incorporate by reference, the biomass power generation asset transfer agreement pursuant to which the shares to be sold by Xueyi
Dong were issued.

Response:

Amendment No. 1
to the Company’s Form S-3 registration statement shall incorporate by reference the Form 8-K filed by the Company on
July 6, 2010. The noted Biomass Power Generation Asset Transfer Agreement was attached as Exhibit 10.1. to the Form 8-K filed
on July 6, 2010. (please refer to Exhibit Index of the to be filed S-3/A).

Exhibit 5.1 – Opinion of McKenna Long & Aldridge
LLP

 Comment:         Please have counsel remove as inappropriate the limitation
on counsel’s expertise in the first paragraph on page 2 of the opinion. Refer to Section II.B.3.b of Staff Legal Bulletin
No. 19, Legality and Tax Opinions in Registered Offerings, available on our website.

Response:

As
requested and discussed on our April 5, 2012 phone conference, the following limitation on expertise shall be deleted from Exhibit
5.1 - Opinion of McKenna Long & Aldridge LLP: “We are not members of the Bar of the
State of Nevada.”

Paragraph
1, on page 2 of the Legal Opinion accompanying Amendment No. 1 to the Company’s
Form S-3 shall be revised as follows: “Our opinion is limited to applicable statutory provisions of Chapter 78
of the Nevada Revised Statutes and the reported judicial decisions interpreting those laws, and federal laws of the United
States of America to the extent referred to specifically herein.  We do not express any opinion herein concerning
any other laws.  We are generally familiar with Chapter 78 of the Nevada Revised Statutes as currently in effect
and the judicial decisions thereunder and have made such inquiries and review of matters of fact and law as we determined
necessary to render the opinion contained herein.   We assume no obligation to revise or supplement this opinion in
the event of future changes in such laws or the interpretations thereof or such facts.  We express no opinion
regarding the Securities Act, or any other federal or state laws or regulations.” (please
refer to Exhibit 5.1 of the to be filed S-3/A).

United States Securities and Exchange Commission

April 11, 2012

Page 5

Note, shortly after
filing this response with the SEC, the Company plans on filing a Form S-3/A that reflects the changes noted above. I will confirm
with you next Monday, April 16, 2012, that the to be filed Form S-3/A is satisfactory. If, before that time, you have any further
comments or require any further information or if any questions should arise in connection with this submission, please call me
at (404) 527-4990 or Mr. Jay Shah at (404) 527-4593.

    Very truly yours,

    /s/ Thomas Wardell, Esq.

    Thomas Wardell, Esq.

 cc:            David Chong, CFO, China Recycling Energy Corp.

    Jeffrey Li, Esq.

    Jay V. Shah, Esq.

March 20, 2012
 Via E-mail

David Chong Chief Financial Officer China Recycling Energy Corporation 12/F, Tower A Chang An International Building No. 88 Nan Guan Zheng Jie Xi’an City, Shaanxi Province China
Re: China Recycling Energy Corporation
  Registration Statement on Form S-3
Filed February 22, 2012
  File No. 333-179628

Dear Mr. Chong:
 We have limited our review of your registra tion statement to those issues we have
addressed in our 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 by amending your registration statement and providing the
requested information.  Where you do not beli eve our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
 After reviewing any amendment to your re gistration statement and the information you
provide in response to these comments, we may have additional comments.
 General

1. We note your Item 2.01 Form 8-K filed on July 11, 2011 and amended on July 13,
2011.  It does not appear that this Form 8-K was timely filed.  Accordingly, please
explain why you believe that you are eligible to  register securities on Form S-3 at this
time.  Refer to General Instruc tion I.A.3(b) of Form S-3.

Selling Stockholders, page 5

2. Please disclose the person(s) with voting an d/or investment control over the shares
held by Carlyle Asia Growth Partners III,  CAGP III Co-Investment, L.P., MRV Asia
Capital Fund, Great Essential Invest ment, Ltd., and Sino Way Limited.  For

David Chong China Recycling Energy Corporation March 20, 2012 Page 2

 additional guidance, refer to Question 140.02 and Interpretive Response 240.04 of our
Regulation S-K Compliance and Disclosure Interpretations, located on our website.
 Signatures

3. Please revise the second signature block to  identify your principal executive officer
and principal financial officer.  Refer to Instruction 1 to the Signatures section of
Form S-3.
 Exhibit Index

4. Please revise the exhibit inde x to include, and file or in corporate by reference, the
biomass power generation asset transfer agreement pursuant to which the shares to be
sold by Xueyi Dong were issued.
 Exhibit 5.1 – Opinion of McKenna Long & Aldridge LLP

5. Please have counsel remove as inappropriate  the limitation on counsel’s expertise in
the first paragraph on page 2 of the opinion.  Refer to Section II.B.3.b of Staff Legal
Bulletin No. 19, Legality and Tax Opinions in Registered Offerings, available on our
website.

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing incl udes the information the Securities Act of 1933 and
all applicable Securities Act rules require.  Since the company and its management are in
possession of all facts relating to a company’s disc losure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
Notwithstanding our comments, in the event you request acceleration of  the effective date
of the pending registration statement please pr ovide a written statement from the company
acknowledging that:

 should the Commission or the staff, acting purs uant to delegated authority, declare the
filing effective, it does not foreclose the Co mmission from taking any action with respect
to the filing;

 the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective, does not relieve the company from its full responsibility for
the adequacy and accuracy of the disclosure in the filing; and

 the company may not assert staff comments a nd the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the federal
securities laws of the United States.

David Chong China Recycling Energy Corporation March 20, 2012 Page 3

 Please refer to Rules 460 and 461 regarding re quests for acceleration.  We will consider a
written request for acceleration of  the effective date of the regi stration statement as confirmation
of the fact that those reques ting acceleration are aware of thei r respective responsibilities under
the Securities Act of 1933 and the Securities Excha nge Act of 1934 as they relate to the proposed
public offering of the securities specified in th e above registration stat ement.  Please allow
adequate time for us to review any amendment prior to the requested effective date of the
registration statement.
 Please contact Lisa Kohl, Staff Attorne y, at (202) 551-3252, Catherine Brown, Staff
Attorney, at (202) 551-3513 or me at  (202) 551-3720 with any questions.

Sincerely,
   /s/ Catherine T. Brown for
Mara L. Ransom Assistant Director
  cc:  Thomas Wardell, Esq.
 McKenna Long & Aldridge LLP

CORRESP
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    Unassociated Document

China Recycling Energy Corporation

November 9, 2011

VIA EDGAR & FACSIMILE

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549-0405

Attention:     H. Christopher Owings, Assistant Director

       Lisa Kohl

Re:

China Recycling Energy Corporation

Form S-3 Registration Statement on Form S-3, as amended

File No. 333-174484

Dear Mr. Owings:

Pursuant to Rule 461 of the General Rules and Regulations under the Securities Act of 1933, China Recycling Energy Corporation (the “Company”) hereby requests the Securities and Exchange Commission (the “Commission”) to accelerate the effective date of the above- referenced Registration Statement and declare such Registration Statement effective as of 4:00 p.m. EST, on November 10, 2011, or as soon thereafter as practicable. The Company also requests that the Commission specifically confirm such effective date and time to the Company and the undersigned.

In connection with the acceleration request, the Company hereby acknowledges that: (i) should the Commission or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing; (ii) the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and (iii) the Company may not assert this action as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Please note, as requested and agreed to, the Company will be submitting an amendment to its Form S-3/A the morning of November 10, 2011.

If you have any further comments or require any further information or if any questions should arise in connection with this submission, please call Mr. Thomas Wardell at (404) 527-4990 or Mr. Jay Shah at (404) 527-4593.

                Very truly yours,

                /s/ David Chong

                David Chong

                Chief Financial Officer and Secretary

CORRESP
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Albany

Atlanta

Brussels

Denver

Los Angeles

THOMAS WARDELL

(404) 527-4990

www.mckennalong.com

New York

Philadelphia

Sacramento

San Diego

San Francisco

Washington, DC

EMAIL ADDRESS

twardell@mckennalong.com

November 9, 2011

VIA EDGAR & FACSIMILE

U.S. Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549-0405

Attention:     H. Christopher Owings, Assistant Director

       Lisa Kohl

Re:

China Recycling Energy Corporation

Form S-3 Registration Statement on Form S-3, as amended

File No. 333-174484

Dear Mr. Owings:

Pursuant to Rule 461 of the General Rules and Regulations under the Securities Act of 1933, on behalf of our client, China Recycling Energy Corporation (the “Company”), we hereby request the Securities and Exchange Commission (the “Commission”) to accelerate the effective date of the above- referenced Registration Statement and declare such Registration Statement effective as of 4:00 p.m. EST, on November 11, 2011, or as soon thereafter as practicable. The Company also requests that the Commission specifically confirm such effective date and time to the Company and the undersigned.

In connection with the acceleration request, the Company hereby acknowledges that: (i) should the Commission or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing; (ii) the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and (iii) the Company may not assert this action as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Please note, as requested and agreed to, the Company will be submitting an amendment to its Form S-3/A the morning of November 11, 2011.

If you have any further comments or require any further information or if any questions should arise in connection with this submission, please call me at (404) 527-4990 or Mr. Jay Shah at (404) 527-4593.

                Very truly yours,

                /s/ Thomas Wardell, Esq.

                Thomas Wardell, Esq.

CORRESP
1
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September 30, 2011

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C.  20549-0405

Attn:

H. Christopher Owings, Assistant Director

Lilyanna L. Peyser

Lisa Kohl

Re:

China Recycling Energy Corporation

Amendment No. 1 to Form S-3 Registration Statement

File No. 333-174484

Dear Mr. Owings:

On behalf of our client, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we” or “our”), this firm is filing a response to the SEC comment letter, dated June 17, 2011, in connection with complying with the issues and outstanding disclosure items set forth in your comment letter, dated June 17, 2011.

The Company filed Amendment No. 1 to the Company’s Form S-3. The filed amendment reflects the changes in disclosure described herein.

Registration Statement on Form S-3

Prospectus Cover Page

Comment:

Please include the calculations required by General Instruction I.B.6(a) and Instruction 7 to General Instruction I.B to Form S-3 on the outside front cover page of the prospectus.

Response:

The Company included the requested calculation on the outside front cover page of the prospectus. The outside front cover page includes the following calculation and accompanying disclosure statement:  “[a]s of September 1, 2011 the aggregate market value of our outstanding common stock held by non-affiliates was approximately $7.8 million based on 43,533,174 shares of outstanding common stock, of which 37,926,605 shares are held by affiliates, and a price of $1.39 per share, which was the last reported sale price of our common stock as quoted on NASDAQ Global Market on that date.  As of the date of this prospectus, we have not offered any securities during the past twelve months pursuant to General Instruction I.B.6 of Form S-3.” (please refer to the outside front cover page of the prospectus). This disclosure will be appropriately updated in subsequently filed prospectus supplements in connection with each “takedown.”

United States Securities and Exchange Commission

September 30, 2011

Page 2

Item 17. Undertakings, Page II-20

Comment:

Please revise your disclosure to include the undertakings required by Item 512(a)(5)(i) of   Regulation S-K.

Response:

The Company revised Item 17, Undertakings, to include the undertakings, as required by Item 512(a)(5)(i). Amendment No. 1 to the Company’s Form S-3 includes the following undertakings:

“That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

(i)             Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(ii)             Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.”

 (please refer to II-21 and II-22 of Form S-3/A)

Signatures

Comment:

Please revise your signature page to include the signature of your principal accounting officer. If one of the individuals who signed the document is your principal accounting officer in addition to any other position(s) held, please add this title below the signature to the title or titles you have provided already. See Instructions 1 and 2 to the "Signatures" section of Form S-3.

United States Securities and Exchange Commission

September 30, 2011

Page 3

Response:

Amendment No. 1 to the Company’s Form S-3 registration statement includes the signature of our principal financial officer and accounting officer. (please refer to signature page).

Exhibit Index

Exhibit 5.1 – Opinion of McKenna Long & Aldridge LLP

Comment:

The reference to Chapter 78 of the Nevada Revised Statutes also should include all applicable Nevada statutory provisions and the reported judicial decisions interpreting those laws. Please revise accordingly.

Response:

As requested, the reference to Chapter 78 of the Nevada Revised Statutes includes all applicable Nevada statutory provisions and the reported judicial decisions interpreting those laws.  The Legal Opinion, accompanying Amendment No. 1 to the Company’s Form S-3 reads as follows: “In connection with this opinion, we have examined such documents and considered such legal matters deemed by us to be relevant to this opinion letter and the Registration Statement, including the applicable statutory provisions and related rules and regulations of Chapter 78 of the Nevada Revised Statutes and the reported judicial decisions interpreting those laws, the Articles of Incorporation of the Company, the Fourth Amended and Restated Bylaws of the Company and the authorizing resolutions of the Company’s Board of Directors.”

Comment:

Please either remove the statements in the first and fourth paragraphs on page two of the opinion that counsel assumes no obligation to revise or supplement the opinion or to advise you of any changes that may affect the opinion and that counsel’s opinion is given “as of the date hereof,” or have counsel re-file the opinion on the date of effectiveness.

Response:

In connection with this discussing this comment and coming to an agreement, as to an appropriate course of action, Ms. Kohl and I had a telephone conversation on September 16, 2011. As discussed and agreed to, McKenna Long & Aldridge will file a legal opinion with each prospectus supplement filed with the SEC by the Company.

If you have any further comments or require any further information or if any questions should arise in connection with this submission, please call me at (404) 527-4990 or Mr. Jay Shah at (404) 527-4198.

Very truly yours,

/s/ Thomas Wardell, Esq.

Thomas Wardell, Esq.

cc:

David Chong, CFO, China Recycling Energy Corp.

Jeffrey Li, Esq.

Jay V. Shah, Esq.

June 17, 2011
 Via E-mail

Guohua Ku Chief Executive Officer China Recycling Energy Corporation 12/F, Tower A Chang An International Building No. 88 Nan Guan Zheng Jie Xi’an City, Shaanxi Province China
Re: China Recycling Energy Corporation
  Registration Statement on Form S-3
Filed May 25, 2011
  File No. 333-174484

Dear Mr. Ku:
 We have limited our review of your registra tion statement to those issues we have
addressed in our 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 by amending your registration statement and providing the
requested information.  Where you do not beli eve our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
 After reviewing any amendment to your re gistration statement and the information you
provide in response to these comments, we may have additional comments.
 Prospectus Cover Page

1. Please include the calculations require d by General Instruction I.B.6(a) and
Instruction 7 to General Instruction I.B to Form S-3 on the outside front cover page of
the prospectus.

Item 17.  Undertakings, page II-20

2. Please revise your disclosure to incl ude the undertakings required by Item
512(a)(5)(i) of Regulation S-K.

Guohua Ku China Recycling Energy Corporation June 17, 2011 Page 2

 Signatures

3. Please revise your signature page to in clude the signature of your principal
accounting officer.  If one of the indi viduals who signed the document is your
principal accounting officer in addition to a ny other position(s) held, please add this
title below the signature to  the title or titles you ha ve provided already.  See
Instructions 1 and 2 to the "Si gnatures" secti on of Form S-3.
 Exhibit Index

 Exhibit 5.1 – Opinion of McKenna Long & Aldridge LLP

4. The reference to Chapter 78 of the Nevada Revised Statutes also  should include all
applicable Nevada statutory provisions and the reported judicial decisions interpreting
those laws.  Please revise accordingly.

5. Please either remove the statements in the first and fourth paragraphs on page two of
the opinion that counsel assumes no obligati on to revise or supplement the opinion or
to advise you of any changes that may aff ect the opinion and that  counsel’s opinion is
given “as of the date hereof,” or have counsel re-file the opinion on the date of
effectiveness.

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing incl udes the information the Securities Act of 1933 and
all applicable Securities Act rules require.  Since the company and its management are in
possession of all facts relating to a company’s disc losure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
Notwithstanding our comments, in the event you request acceleration of  the effective date
of the pending registration statement please pr ovide a written statement from the company
acknowledging that:

 should the Commission or the staff, acting purs uant to delegated authority, declare the
filing effective, it does not foreclose the Co mmission from taking any action with respect
to the filing;

 the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective, does not relieve the company from its full responsibility for
the adequacy and accuracy of the disclosure in the filing; and

 the company may not assert staff comments a nd the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the federal
securities laws of the United States.

Guohua Ku China Recycling Energy Corporation June 17, 2011 Page 3

 Please refer to Rules 460 and 461 regarding re quests for acceleration.  We will consider a
written request for acceleration of  the effective date of the regi stration statement as confirmation
of the fact that those reques ting acceleration are aware of thei r respective responsibilities under
the Securities Act of 1933 and the Securities Excha nge Act of 1934 as they relate to the proposed
public offering of the securities specified in th e above registration stat ement.  Please allow
adequate time for us to review any amendment prior to the requested effective date of the
registration statement.
 Please contact Lisa Kohl, Staff Attorney, at (202) 551-3252, Lilyanna  L. Peyser, Staff
Attorney, at (202) 551-3222, or me at  (202) 551-3720 with any questions.

Sincerely,
   /s/ Lilyanna L. Peyser for
H. Christopher Owings Assistant Director
  cc:  Thomas Wardell, Esq.
 McKenna Long & Aldridge LLP

April 5, 2011
 Via E-mail

Guohua Ku Chief Executive Officer 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-K/A for the Fiscal Year Ended December 31, 2009 Filed April 1, 2011 File No. 1-34625

Dear Mr. Ku:
 We have completed our review of your fili ngs and do not have any further comments at
this time.
Sincerely,  /s/ William H. Thompson

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

CORRESP
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    Unassociated Document

Albany

Atlanta

Brussels

Denver

Los Angeles

www.mckennalong.com

New York

Philadelphia

San Diego

San Francisco

Washington, DC

THOMAS WARDELL

(404) 527-4990

EMAIL ADDRESS

twardell@mckennalong.com

March 30, 2011

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C.  20549-0405

Attn:      William H. Thompson, Accounting Branch Chief

Adam Phippen

Re:

China Recycling Energy Corporation

Amendment No. 1 to Form 10-K for Fiscal Year Ended December 31, 2009

File No. 001-34625

Dear Mr. Thompson:

On behalf of our client, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we” or “our”), and pursuant to our phone conferences, dated March 18, 2011 and March 21, 2011, this firm is filing a final response to the SEC comment letters, dated August 3, 2010, September 22, 2010, January 4, 2011, February 9, 2011 and February 28, 2011, in connection with complying with the outstanding disclosure items set forth in your comment letter, dated September 22, 2010, and acknowledged in our response letter, dated October 12, 2010.

In addition, attached to this response letter, for the SEC’s review and comment, is a draft of Amendment No. 1 to the Company’s Form 10-K for fiscal year ended December 31, 2009, reflecting the changes in disclosure described herein. Upon confirmation that the attached Form 10-K/A meets the SEC’s satisfaction and approval, the Company will promptly file Amendment No. 1 to the Company’s Form 10-K for fiscal year ended December 31, 2009 with the SEC.

Form 10-K for Fiscal Year Ended December 31, 2009

Item 9A. Controls and Procedures, page 51

Internal Control Over Financial Reporting, page 51

Comment 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.  Refer to Exchange Act rule 12b-15.

United States Securities and Exchange Commission

March 30, 2011

Page 2

Response:

We revised the disclosure contained in the above referenced item on our Form 10-K for fiscal year ended December 31, 2009.  Amendment No. 1 to our Form 10-K for fiscal year ended December 31, 2009 includes the following statement: “in connection with this amendment, management reevaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2009. Based on our reevaluation and those criteria, management has concluded that the Company maintained effective internal control over financial reporting as of December 31, 2009.” (please refer to pg. 52 of Form 10-K/A)

Changes in Internal Control Over Financial Reporting, page 52

Comment 8.

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

Response:

We revised the disclosure contained in the above referenced item on our Form 10-K for fiscal year ended December 31, 2009. Amendment No. 1 to our Form 10-K for fiscal year ended December 31, 2009 includes the following statement: “there were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.” (please refer to pg. 53 of Form 10-K/A)

Item 15. Exhibits, Financial Statement Schedules, page 52

Comment 9.

We reviewed your response to comment 29 in our letter dated August 3, 2010.  Please file the written consent of your independent accountant in accordance with Item 601(b)(23) of Regulation S-K in an amendment.  Refer to Exchange Act Rule 12b-15.

Response:

We attached the written consent to Amendment No. 1 to our Form 10-K for fiscal year ended December 31, 2009. (please refer to the Exhibits to Form 10-K/A)

Signatures, page 54

Comment 10.

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

Response:

Amendment No. 1 to our Form 10-K for fiscal year ended December 31, 2009 includes the signature of our principal financial officer and accounting officer. (please refer to signature page of Form 10K/A).

United States Securities and Exchange Commission

March 30, 2011

Page 3

Item 8.  Financial Statements and Supplementary Data, page 26

Consolidated Statements of Cash Flows, page 30

In addition, as discussed in our phone conferences, Amendment No. 1 to our Form 10-K for fiscal year ended December 31, 2009 includes: (i) a revised cash flow statement for fiscal year ended December 31, 2009 and (ii) a footnote with respect to that statement disclosing that the statement reflects the reclassification of cash flows for fiscal year ended December 31, 2009, for certain line items from investing to operating activities.

I will confirm with you within the next 48 hours that the Form 10-K/A attached hereto is satisfactory for filing. If, before that time, you have any further comments or require any further information or if any questions should arise in connection with this submission, please call me at (404) 527-4990 or Mr. Jay Shah at (404) 527-4198.

Very truly yours,

/s/ Thomas Wardell

Thomas Wardell

cc:

David Chong, CFO, China Recycling Energy Corp.

Jeffrey Li, Esq.

Jay V. Shah, Esq.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Amendment No. 1)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

Commission file number: 000-12536

China Recycling Energy Corporation

(Exact name of registrant as specified  in its charter)

Nevada

(State or other jurisdiction of incorporation or organization)

90-0093373

 (I.R.S. Employer Identification No.)

12/F, Tower A

Chang An International Building

No. 88 Nan Guan Zheng Jie

Xi An City, Shan Xi Province

China

710068

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (011) 86-29-8769-1097

Securities registered pursuant to Section 12(b) of the Act:

NONE

Securities registered pursuant to Section 12(g) of the Act:

NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer ¨

Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The aggregate market value of 11,953,346 shares of voting stock held by non-affiliates of the registrant was approximately $11,833,813 based on the last reported sale price of the registrant’s Common Stock as reported on the NASD’s Over-the-Counter Bulletin Board on June 30, 2009.

As of March 12, 2009, the registrant had 38,778,035 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the China Recycling Energy Corporation Proxy Statement regarding the 2010 Annual Meeting of Shareholders (the “Proxy Statement”) are incorporated into Part III of this Annual Report on Form 10-K/A.

CHINA RECYCLING ENERGY CORPORATION

FORM 10-K/A

TABLE OF CONTENTS

Explanatory Note

1

PART I

2

Item 1.     Business.

2

Item 1A.  Risk Factors.

8

Item 2.     Properties.

12

Item 3.     Legal Proceedings.

12

Item 4.     Submission of Matters to a Vote of Security Holders.

12

PART II

12

Item 5.     Market for Common Equity, Related Shareholder Matters and Small Business Issuer Purchases of Equity Securities.

12

Item 6.     Selected Financial Data.

16

Item 7.     Management’s Discussion and Analysis of Financial Condition and Results of Operations.

16

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

26

Item 8.     Financial Statements and Supplementary Data.

27

Item 9.     Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.

52

Item 9A.  Controls and Procedures.

52

Item 9B.  Other Information.

53

PART III

53

Item 10.   Directors, Executive Officers and Corporate Governance.

53

Item 11.   Executive Compensation.

53

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.

53

Item 13.   Certain Relationships and Related Transactions, Director Independence.

53

Item 14.   Principal Accountant Fees and Services.

53

Item 15.   Exhibits, Financial Statement Schedules.

53

Explanatory Note

China Recycling Energy Corporation (the “Company,” “we,” “us” or “our”) is filing this Amendment No. 1 on Form 10-K/A to our Annual Report on Form 10-K for the year ended December 31, 2009, originally filed with the Securities and Exchange Commission (the “SEC”) on March 16, 2010 (the “Original Form 10-K”) for the following purposes: (i) to include management’s assessment of internal control over financial reporting and also amend management's conclusions regarding the effectiveness of the Company’s disclosure controls and procedures as of the end of the fiscal year covered by the report; (ii) to include, as an exhibit, a written consent from our independent accountant, pursuant to Item 601(b)(23) of Regulation S-K; (iii) to include the signature of our principal financial officer and accounting officer; and (iv) to revise our consolidated statements of cash flows.

This Form 10-K/A should be read in conjunction with the Company’s periodic filings made with the SEC subsequent to the filing date of the Original Form 10-K, including any amendments to those filings, as well as any Current Reports, filed on Form 8-K subsequent to the date of the Original Form 10-K. In addition, Item 15 of Part III of this Form 10-K/A has been revised to contain currently-dated certifications from our principal executive officer and chief accounting officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. Because this Form 10-K/A sets forth the Original Form 10-K in its entirety, it includes both items that have been changed as a result of the amended disclosures and items that are unchanged from the Original Form 10-K. Other than the revision of the disclosures as discussed above, this Form 10-K/A speaks as of the original filing date of the Original Form 10-K and has not been updated to reflect other events occurring subsequent to the original filing date. This includes forward-looking statements and all other sections of this Form 10-K/A that were not directly impacted by this amendment, which should be read in their historical context. The following items have been amended as a result of the amended disclosures:

Part I, Item 8. Financial Statements and Supplementary Data;

Part II, Item 9A. Controls and Procedures; and

Part III, Item 15. Exhibits, Financial Statement Schedules.

1

PART I

When we use the terms ”we,” ”us,” ”our” and “the Company,” we mean China Recycling Energy Corporation., a Nevada corporation, and its wholly-owned subsidiary, Sifang Holdings Co., Ltd., and Sifang Holdings Co., Ltd.’s wholly-owned subsidiary, Shanghai TCH Energy Technology Co., Ltd. and Shanghai TCH Energy Technology Co., Ltd’s wholly-owned subsidiary, Xi’an TCH Energy Technology Co., Ltd. Prior to March 8, 2007, China Recycling Energy Corporation’s name was China Digital Wireless, Inc.

ITEM 1. BUSINESS

General

We currently engage in the recycling energy business, providing energy savings and recycling products and services.

Overview

Business History.

We originally began operations as a Colorado corporation known as Boulder Brewing Company, or Boulder Brewing. We were incorporated in Colorado on May 8, 1980 and operated as a microbrewery of various beers. Boulder Brewing was unable to become profitable within any segment of its core business, became illiquid, and was forced to divest itself of all of its assets. Boulder Brewing became dormant without any operations or assets in the second quarter of 1990.

In September 2001, Boulder Brewing changed its state of incorporation from Colorado to Nevada and changed its name to Boulder Acquisitions, Inc., or Boulder Acquisitions. From the date of reincorporation until June 23, 2004, Boulder Acquisitions had no material operations or assets.

On June 23, 2004, we completed a stock exchange transaction with the shareholders of Sifang Holdings Co., Ltd. (“Sifang Holdings”). The exchange was consummated under Nevada and Cayman Islands law pursuant to the terms of a Securities Exchange Agreement dated as of June 23, 2004 by and among Boulder Acquisitions, Sifang Holdings and the shareholders of Sifang Holdings. Pursuant to the Securities Exchange Agreement, we issued 13,782,636 shares of our common stock to the shareholders of Sifang Holdings, representing approximately 89.7% of our post-exchange issued and outstanding common stock, in exchange for 100% of the outstanding capital stock of Sifang Holdings. We presently carry on the business of Sifang Holdings’ wholly-owned subsidiary,  Shanghai TCH Energy Technology Co., Ltd. or Shanghai TCH, a corporation organized under the laws of the People’s Republic of China (“PRC” or “China”).

Effective August 6, 2004, we changed  our name from Boulder Acquisitions, Inc. to China Digital Wireless, Inc.  From August 2004 to December 2006, we primarily engaged in the business of pager and mobile phone distribution and provided value added information services to the customers in the PRC.  We gradually phased out and substantially scaled down most of the business of mobile phone distribution and provision of pager and mobile phone value-added information services, and on May 10, 2007, the Company approved and announced that it completely ceased and discontinued these businesses.

In December 2006, we began to engage in business activities in the energy saving and recycling industry, including purchasing certain equipment, devices, hardware and software for the construction and installation of top gas recovery turbine systems (“TRT”) and other renewable energy products. TRT is an electricity generating system that utilizes the exhaust pressure an

CORRESP
1
filename1.htm

    Unassociated Document

Albany

Atlanta

Brussels

Denver

Los Angeles

THOMAS WARDELL

(404) 527-4990

www.mckennalong.com

New York

Philadelphia

San Diego

San Francisco

Washington, DC

EMAIL ADDRESS

twardell@mckennalong.com

March 9, 2011

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C.  20549-0405

Attn:

William H. Thompson, Accounting Branch Chief

Re:

China Recycling Energy Corporation

Form 10-K for the Fiscal Year Ended December 31, 2009

Filed March 16, 2010

File No. 1-34625

Dear Mr. Thompson:

This firm is counsel to the above-referenced company, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we” or “our”) and is filing this response to your comment letter, dated February 28, 2011, with respect to the above-referenced filings on CREG’s behalf.  For convenience of reference, we have included, in this response letter, the same caption and paragraph number, as well as the text of the comment, set forth in your comment letter followed by our response.

Form 10-K for Fiscal Year Ended December 31, 2009

Item 8.  Financial Statements and Supplementary Data, page 26

Consolidated Statements of Cash Flows, page 30

1.

We reviewed the revised consolidated statements of cash flows provided in response to comment one in our letter dated February 9, 2011.  Please provide us with a reconciliation of the changes in the “Investment in sales type leases, net,” and “Construction in progress” balance sheet line items to the “Changes in gross sales type leases receivables,” Collection of principal on sales type leases,” and “Construction in progress” reported in the statement for each year presented.

Response:

In accordance with your comment letter, dated February 28, 2011, a reconciliation of the requested changes, for fiscal years ended 2009 and 2010, is attached to and submitted with this response.

United States Securities and Exchange Commission

March 9, 2011

Page 2

Should you have any further comments or require any further information, or if any questions should arise in connection with this submission, please call me at (404) 527-4990 or Mr. James Thornton at (404) 527-8118.

Very truly yours,

/s/ Thomas Wardell

Thomas Wardell

cc:

David Chong, CFO, China Recycling Energy Corp.

Jeffrey Li, Esq.

James L. Thornton, Esq.

CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES

RECONCILATION OF CASH FLOW BASED ON BALANCE SHEET

balance sheet date rate

balance sheet date rate

yearly average rate

Exchange rate

 6.8282

 6.6227

 6.7695

2010 vs 2009

NON-CASH

Change

 2009

 2009

 2010

 2010

RMB

USD

RMB

USD

difference of the

amount @

12/31/2009 and 12/31/2010

RMB

RMB

Changes in gross sales type leases receivables

Collection of principal on sales type leases

RMB

a

b

 c

b+c-a

Investment in sales type leases, net - current

¥
30,019,464

$
4,396,395

¥
50,495,683

$
7,624,637

Investment in sales type leases, net - noncurrent

¥
328,762,385

$
48,147,738

¥
778,737,670

$
117,586,131

Total investment in sales type lease, net

¥
358,781,849

$
52,544,133

¥
829,233,353

$
125,210,768

¥
-470,451,504

¥
80,000,000

¥
-422,589,658

¥
32,138,154

¥
-470,451,504

$
(62,425,535
)

$
4,747,493

Construction in progress

¥
238,023,165

$
34,858,845

¥
168,070,768

$
25,377,983

¥
69,952,397

$
10,333,466

* Non-Cash ￥80,000,000 is stock to be issued for purchase of equipment for biomass BMPG.

Exchange rate

 6.8346

 6.8282

 6.831

2009 vs 2008

difference of the

amount @

12/31/2009 and 12/31/2010

RMB

NON-CASH

Change

 2008

 2008

 2009

 2009

RMB

Changes in gross sales type leases receivables

Collection of principal on sales type leases

RMB

USD

RMB

USD

a

b

c

 b+c-a

Investment in sales type leases, net - current

¥
13,468,201

$
1,970,591

¥
30,019,464

$
4,396,395

Investment in sales type leases, net - noncurrent

¥
101,410,968

$
14,837,879

¥
328,762,385

$
48,147,738

Total investment in sales type lease, net

¥
114,879,169

$
16,808,470

¥
358,781,849

$
52,544,133

¥
-243,902,680

¥
90,000,000

¥
-171,537,374

¥
17,634,694

¥
-243,902,680

$
(25,111,382
)

$
2,581,568

Construction in progress

¥
25,500,000

$
3,731,016

¥
238,023,165

$
34,858,845

(212,523,165
)

$
(31,111,575
)

* Non-Cash ￥90,000,000 is inventory and advance to suppliers for the equipment which was bought in prior years (in 2008), but used in 2009 for Shengmu project.

CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31,

2010

2009

CASH FLOWS FROM OPERATING ACTIVITIES:

            Income including noncontrolling interest

$
17,826,069

$
10,061,756

            Adjustments to reconcile income including noncontrolling

            interest to net cash used in operating activities:

            Changes in sales type leases receivables

(62,425,535
)

(25,111,381
)

            Depreciation and amortization

23,631

35,121

            Amortization of discount related to conversion feature of convertible note

1,789,558

-

            Stock options and warrants

2,940,985

1,793,228

            Stock compensation expense

602,000

-

            Accrued interest on convertible notes

246,805

184,530

            Changes in deferred tax

4,516,906

2,085,709

                         (Increase) decrease in current assets:

                                   Interest receivable on sales type lease

(101,476
)

(355,220
)

                                   Collection of principal on sales type leases

4,747,493

2,581,568

                                   Prepaid expenses

31,229

3,415,076

                                   Other receivables

1,153,682

(1,421,503
)

                         Increase (decrease) in current liabilities:

                                   Accounts payable

2,622,021

2,394,223

                                   Taxes payable

908,894

(633,648
)

                                   Unearned revenue

-

(658,762
)

                                   Accrued liabilities and other payables

481,783

(745,309
)

                                   Construction in progress

10,333,466

(31,111,575
)

            Net cash used in operating activities

(14,302,489
)

(37,486,187
)

CASH FLOWS FROM INVESTING ACTIVITIES:

            Increase investment in subsidiary

-

(16,103
)

            Restricted cash

(630,697
)

(1,461,060
)

            Acquisition of property & equipment

(81,975
)

(33,498
)

            Net cash used in investing activities

(712,672
)

(1,510,661
)

CASH FLOWS FROM FINANCING ACTIVITIES:

            Insurance of common stock

430,500

2,000,000

            Insurance of convertible notes

7,533,391

3,000,000

            Notes payable - bank acceptances

-

1,461,060

            Cash contribution from noncontrolling interest

908,279

263,439

            Proceeds from loans

15,444,272

25,559,947

            Advance from related parties

682,158

556,940

            Net cash provided by financing activities

24,998,600

32,841,386

EFFECT OF EXCHANGE RATE CHANGE ON CASH & CASH EQUIVALENTS

(23,132
)

61

NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS

9,960,307

(6,155,401
)

CASH & EQUIVALENTS, BEGINNING OF YEAR

1,111,943

7,267,344

CASH & EQUIVALENTS, END OF YEAR

$
11,072,250

$
1,111,943

Supplemental Cash flow data:

   Income tax paid

$
1,745,643

$
1,480,698

   Interest paid

$
4,758,991

$
358,789

February 28, 2011
 Guohua Ku Chief Executive Officer 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 File No. 1-34625

Dear Mr. Ku:
We have reviewed your response letter date d February 24, 2011 and have the following
comment.  In our comment, we may ask you to pr ovide 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 comment applies 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 this comment, we may have additional comments.
 Form 10-K for Fiscal Year Ended December 31, 2009

 Item 8.  Financial Statements and Supplementary Data, page 26

 Consolidated Statements of Cash Flows, page 30

 1. We reviewed the revised consolidated statem ents of cash flows provided in response to
comment one in our letter  dated February 9, 2011.  Please provide us with a
reconciliation of the changes in the “Investment in sales type leases, net,” and
“Construction in progress” bala nce sheet line items to the “Changes in gross sales type
leases receivables,” Collection of principal on sales type leases,”  and “Construction in
progress” reported in the statem ent for each year presented.

Guohua Ku
China Recycling Energy Corporation February 28, 2011 Page 2

 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,  /s/ William H. Thompson

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

CORRESP
1
filename1.htm

    Unassociated Document

Albany

Atlanta

Brussels

Denver

Los Angeles

THOMAS WARDELL

(404) 527-4990

www.mckennalong.com

New York

Philadelphia

San Diego

San Francisco

Washington, DC

EMAIL ADDRESS

twardell@mckennalong.com

February 24, 2011

Via EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C.  20549-0405

Attn:

William H. Thompson, Accounting Branch Chief

Re:

China Recycling Energy Corporation

Form 10-K for the Fiscal Year Ended December 31, 2009

Filed March 16, 2010

File No. 1-34625

Dear Mr. Thompson:

This firm is counsel to the above-referenced company, China Recycling Energy Corporation (“CREG” or the “Company” and sometimes referred to as “we” or “our”) and is filing this response to your comment letter, dated February 9, 2011, with respect to the above-referenced filings on CREG’s behalf.  For convenience of reference, we have included, in this response letter, the same caption and paragraph number, as well as the text of the comment, set forth in your comment letter followed by our response.

Form 10-K for Fiscal Year Ended December 31, 2009

Item 8.  Financial Statements and Supplementary Data, page 26

Consolidated Statements of Cash Flows, page 30

1.

We reviewed your response to comment one in our letter, dated January 4, 2011, which indicates that revised consolidated statements of cash flows are attached to the response. However, we are unable to locate the revised statements in submitted correspondence files. Please submit the revised statements as correspondence so that we are able to review your proposed revisions. In addition, please tell us whether you plan to restate your statements of cash flows presented in the filing and in subsequently filed quarterly reports on Form 10-Q. If so, tell how you intend to disclose the restatements. If not, please explain the quantitative and qualitative reasons why a restatement is not necessary. Refer to SAB Topics 1:M and 1:N.

United States Securities and Exchange Commission

February 24, 2011

Page 2

Response:

The revised Consolidated Statements of Cash Flows are submitted with this response in accordance with your comment letter, dated of February 9, 2011.  The Company does not plan to restate its statements of cash flows presented in its Form 10-K for the fiscal year ended December 31, 2009, or its quarterly reports on Form 10-Q for fiscal year 2010.  The Company does intend to disclose the reclassification of cash flows for fiscal year ended December 31, 2009, for certain line items, from investing to operating activities, and implement such reclassification prospectively, including in our Form 10-K for the fiscal year ended December 31, 2010, in a footnote to the 2010 financial statements included in its Form 10-K, and will present its Cash Flow statements consistent with its presentation on the attached statement in all reports thereafter.

Qualitatively, the reclassification of cash flows is undertaken in order to provide consistency in presentation.  The Company believes that the decision as to classification of cash flows with respect to the construction of its projects and payments received under sales-type leases of these projects as either operating or investing inflow or outflow is subject to interpretation and is not clearly directed by GAAP.  In connection with its conversations with the Staff, the Company understands and agrees with the position that consistency in treatment of both cash inflow and outflow provides disclosure that is more easily understood.  However, the change to treating both outflows and inflows as operating items has no overall effect either on the net cash flow itself or on the other financial statements of the Company, and as such the Company does not believe that the reclassification rises to the level of requiring retrospective restatements of the cash flows in its prior filings.

In addition, qualitatively, the Company does not believe there is any need to retroactively restate the cash flows because:

·

There is no change in net income or earnings per share

·

There is no change in the net cash flows for any period

·

There is no change in any balance sheet or income statement line items

·

There is no cumulative effect of the change on retained earnings or any other component of equity or net assets.

Should you have further comments or require further information, or if any questions should arise in connection with this submission, please call me at (404) 527-4990 or Mr. James Thornton at (404) 527-8118.

Very truly yours,

/s/ Thomas Wardell

Thomas Wardell

cc:

David Chong, CFO, China Recycling Energy Corp.

Jeffrey Li, Esq.

James L. Thornton, Esq.

CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

September 30, 2010 (Unaudited)

December 31, 2009

ASSETS

CURRENT ASSETS

     Cash & cash equivalents

$
6,488,518

$
1,111,943

     Restricted cash

2,253,361

1,461,659

     Investment in sales type leases, net

6,635,231

4,396,395

     Interest receivable on sales type leases

766,580

437,626

     Prepaid expenses

154,798

445,458

     Other receivables

414,248

184,355

     Subscription receivable

430,500

-

     VAT receivables - current

1,268,448

383,027

        Total current assets

18,411,684

8,420,463

NON-CURRENT ASSETS

     VAT receivables - noncurrent

1,053,437

957,567

     Investment in sales type leases, net

86,733,485

48,147,738

     Property and equipment, net

172,524

97,311

     Construction in progress

45,907,791

34,858,845

        Total non-current assets

133,867,237

84,061,461

TOTAL ASSETS

$
152,278,921

$
92,481,924

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

     Accounts payable

$
6,208,498

$
3,583,219

     Notes payable - bank acceptances

2,999,508

1,461,659

     Interest payable

2,509,889

-

     Taxes payable

1,707,112

681,707

     Accrued liabilities and other payables

2,945,354

2,785,796

     Advance from related parties, net

4,036,492

468,475

     Convertible note, net of discount due to beneficial conversion feature

3,980,937

-

     Accrued interest on short term convertible note

127,939

-

     Deferred tax liability-current

54,466

148,193

     Loans payable - current

1,343,063

-

         Total current liabilities

25,913,258

9,129,049

NONCURRENT LIABILITIES

      Shares to be issued

12,812,971

-

      Deferred tax liability, net

5,446,238

2,762,115

      Convertible notes

3,000,000

8,000,000

      Accrued interest on long term convertible notes

346,668

353,024

      Loans payable

40,761,965

25,570,429

         Total noncurrent liabilities

62,367,842

36,685,568

         Total liabilities

88,281,100

45,814,617

CONTINGENCIES AND COMMITMENTS

STOCKHOLDERS' EQUITY

     Common stock, $0.001 par value; 100,000,000 shares

           authorized, 38,778,035 shares issued and outstanding

           as of September 30, 2010 and December 31, 2009, respectively

38,779

38,779

     Additional paid in capital

42,583,642

38,319,163

     Statutory reserve

4,288,441

2,497,724

     Accumulated other comprehensive income

4,929,794

3,709,490

     Retained earnings

9,922,599

1,485,914

         Total Company stockholders' equity

61,763,255

46,051,070

         Noncontrolling interest

2,234,566

616,237

         Total equity

63,997,821

46,667,307

TOTAL LIABILITIES AND EQUITY

$
152,278,921

$
92,481,924

Updated

CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

NINE MONTHS ENDED SEPTEMBER 30,

2010

2009

CASH FLOWS FROM OPERATING ACTIVITIES:

            Income including noncontrolling interest

$
10,817,221

$
8,097,090

            Adjustments to reconcile income including noncontrolling

            interest to net cash provided by operating activities:

            Changes in gross sales type leases receivables

(30,724,470
)

(11,032,444
)

            Depreciation and amortization

9,298

23,155

            Amortization of discount related to conversion feature of convertible note

1,326,274

-

            Stock options and warrants

1,919,102

1,129,328

            Stock compensation expense

602,000

-

            Accrued interest on convertible notes

121,583

60,182

            Changes in deferred tax

2,495,828

1,731,344

                         (Increase) decrease in current assets:

                                   Interest receivable on sales type leases

(315,675
)

(379,331
)

                                   Collection of principal on sales type leases

3,267,917

1,547,527

                                   Prepaid expenses

294,464

3,828,438

                                   VAT receivable and other receivables

(1,163,901
)

(113,744
)

                         Increase (decrease) in current liabilities:

                                   Accounts payable

4,004,280

847,314

                                   Taxes payable

996,753

(1,917,728
)

                                   Unearned revenue

-

(658,655
)

                                   Interest payable

2,470,914

-

                                   Accrued liabilities and other payables

112,574

(260,167
)

                                   Construction in progress

(10,226,469
)

(8,255,441
)

            Net cash used in operating activities

(13,992,307
)

(5,353,132
)

CASH FLOWS FROM INVESTING ACTIVITIES:

            Increase investment in subsidiary

-

(16,100
)

            Restricted cash

(752,116
)

(4,393,159
)

            Acquisition of property & equipment

(81,526
)

(15,096
)

            Net cash used in investing activities

(833,642
)

(4,424,355
)

CASH FLOWS FROM FINANCING ACTIVITIES:

            Insurance of common stock

-

2,000,000

            Insurance of convertible notes

-

3,000,000

            Cash contribution from noncontrolling interest

908,279

263,439

            Proceeds from loans

15,800,376

2,927,358

            Advance from related parties

3,504,613

-

            Net cash provided by financing activities

20,213,268

8,190,797

EFFECT OF EXCHANGE RATE CHANGE ON CASH & CASH EQUIVALENTS

(10,744
)

2,646

NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS

5,376,575

(1,584,044
)

CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD

1,111,943

7,267,344

CASH & CASH EQUIVALENTS, END OF PERIOD

$
6,488,518

$
5,683,300

Supplemental Cash flow data:

   Income tax paid

$
1,307,901

$
1,307,406

   Interest paid

$
269,083

$
319,086

Original

CHINA RECYCLING ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

NINE MONTHS ENDED SEPTEMBER 30,

2010

2009

CASH FLOWS FROM OPERATING ACTIVITIES:

            Income including noncontrolling interest

$
10,817,221

$
8,097,090

            Adjustments to reconcile income including noncontrolling

            interest to net cash provided by operating activities:

            Depreciation and amortization

9,298

23,155

            Amortization of discount related to conversion feature of convertible note

1,326,274

-

            Stock options and warrants

1,919,102

1,129,328

            Stock compensation expense

602,000

-

            Accrued interest on convertible notes

121,583

60,182

            Changes in deferred tax

2,495,828

1,731,344

                         (Increase) decrease in current assets:

                                   Interest receivable on sales type leases

(315,675
)

(379,331
)

                                   Prepaid expenses

294,464

3,828,438

                                   VAT receivable and other receivables

(1,163,901
)

(113,744
)

                         Increase (decrease) in current liabilities:

                                   Accounts payable

4,004,280

847,314

                                   Taxes payable

996,753

(1,917,728
)

                                   Unearned revenue

-

(658,655
)

                                   Interest payable

2,470,914

-

                                   Accrued liabilities and other payables

112,574

(260,167
)

                                   Construction in progress

(10,226,469
)

(8,255,441
)

            Net cash provided by operating activities

13,464,246

4,131,785

CASH FLOWS FROM INVESTING ACTIVITIES:

            Initial investment in sales type leases

(30,724,470
)

(11,032,444
)

            Collection of principal on sales type leases

3,267,917

1,547,527

            Increase investment in subsidiary

-

(16,100
)

            Restricted cash

(752,116
)

(4,393,159
)

            Acquisition of property & equipment

(81,526
)

(15,096
)

            Net cash used in investing activities

(28,290,195
)

(13,909,272
)

CASH FLOWS FROM FINANCING ACTIVITIES:

            Insurance of common stock

-

2,000,000

            Insurance of convertible notes

-

3,000,000

            Cash contribution from noncontrolling interest

908,279

263,439

            Proceeds from loans

15,800,376

2,927,358

            Advance from related parties

3,504,613

-

            Net cash provided by financing activities

20,213,268

8,190,797

EFFECT OF EXCHANGE RATE CHANGE ON CASH & CASH EQUIVALENTS

(10,744
)

2,646

NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS

5,376,575

(1,584,044
)

CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD

1,111,943

7,267,344

CASH & CASH EQUIVALENTS, END OF PERIOD

$
6,488,518

$
5,683,300

Supplemental Cash flow data:

   Income tax paid

$
1,307,901

$
1,307,406

   Interest paid

$
269,083

$
319,086

February 9, 2011
 Guohua Ku Chief Executive Officer 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 File No. 1-34625

Dear Mr. Ku:
We have reviewed your response letter da ted January 31, 2011 and have the following
comment.  In our comment, we may ask you to pr ovide 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 comment applies 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 this comment, we may have additional comments.
 Form 10-K for Fiscal Year Ended December 31, 2009

 Item 8. Financial Statements and Supplementary Data, page 26

 Consolidated Statements of Cash Flows, page 30

 1. We reviewed your response to comment one  in our letter dated January 4, 2011, which
indicates that revised consolidated statements of cash flows are attached to the response.
However, we are unable to locate the re vised statements in submitted correspondence
files.  Please submit the revised statements as correspondence so that we are able to review your proposed revisions.  In addition, please tell us whether you plan to restate
your statements of cash flows pr esented in the filing and in subsequently filed quarterly
reports on Form 10-Q.  If so, tell how you inte nd to disclose the restatements.  If not,

Guohua Ku
China Recycling Energy Corporation February 9, 2011 Page 2

 please explain the quantitative and qualitative reasons why a restatement is not necessary.
Refer to SAB Topics 1:M and 1:N.

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,  /s/ William H. Thompson

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

CORRESP
1
filename1.htm

    Unassociated Document

    January
__, 2011

    Via
EDGAR

    United
States Securities and Exchange Commission

    Division
of Corporation Finance

    100 F
Street, NE

    Washington,
D.C.  20549-0405

    Attn:           William
H. Thompson, Accounting Branch Chief

              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 Periods Ended June 30, 2010 and September 30,
      2010

                Filed
      August 16, 2010 and November 15, 2010

                  File
      No. 1-34625

    Dear Mr.
Thompson:

    This firm
is counsel to the above-referenced company, China Recycling Energy Corporation
(“CREG” or the “Company” and sometimes referred to as “we” or “our”) and is
filing this response to your comment letter, dated January 4, 2011, with respect
to the above-referenced filings on CREG’s behalf.  For convenience of
reference, we have included, in this response letter, the same captions and
paragraph numbers, as well as the text of the comment, set forth in your comment
letter followed by our response.

    Form 10-K for Fiscal Year
Ended December 31, 2009

    Item 8.  Financial
Statements and Supplementary Data, page 26

    Consolidated Statements of
Cash Flows, page 30

              1.

              We
      reviewed your response to comment two in our letter dated November 5,
      2010.  We understand you have now concluded that cash
      expenditures for construction of power generating stations sold pursuant
      to sales-type leases should be classified as operating cash outflows since
      such expenditures are like the production of inventory in a manufacturing
      environment.  We also understand that cash inflows related to
      your investment in sales-type leases consist of principal and interest and
      that you believe that principal collections should be classified as
      investing cash inflows.  In addition, we understand that sales
      of systems results in an increase in the investment in sales-type leases,
      and that you believe that the increase should be presented as an investing
      cash outflow.  However, it seems as though your investment in
      sales-type leases is like accounts and/or short- and long-term notes
      receivable from customers arising from sales and that the change in the
      investment should be classified as an adjustment to reconcile net income
      to net cash provided by or used for operating activities, which would be
      consistent with your classification of cash outflows related to
      construction of the power generating systems.  As such, please
      tell us the following:

    United
States Securities and Exchange Commission

      January
31, 2011

      Page
2

              ·

              the
      basis in GAAP, citing specific ASC paragraphs, for classifying the
      increase in the investment in sales-type leases as investing cash outflows
      when the investment (both short- and long-term) arises from sales of power
      generating systems, which are classified as operating cash inflows;
      and

              ·

              why
      you believe it is appropriate to classify principal collections as
      investing cash inflows when collections represent a reduction in the
      investment recognized upon the sale of power generating systems and the
      basis in GAAP for your classification, citing specific ASC
      paragraphs.

    Response:

    We have reclassified increase in the
gross investment in sales type leases, and principal collection on sales type
leases, from investing activities to operating activities in the attached
consolidated cash flow statements.

    Notes to Consolidated
Financial Statements, page 31

    Note
19.  Stock-Based Compensation, page 47

              2.

              We
      reviewed your response to comment three in our letter dated November 5,
      2010, which is the same response you submitted to comment six in our
      letter dated September 22, 2010.  Please tell us why you believe
      the issuance of warrants to non-employees in exchange for services is not
      within the scope of ASC 505-50 and that the guidance in ASC 450-20-25
      should be applied.  In that regard, please note that ASC 505-50
      specifically addresses the date an issuer shall use to measure the fair
      value of equity instruments issued to non-employees, the periods and
      manner an issuer shall use to recognize the fair value of the equity
      instruments and how the equity instruments shall be accounted for before
      the measurement date for purposes of recognizing the cost of the
      transaction.  Please also note that we acknowledge a liability
      should be recognized on the grant date and that the cost should be
      recognized as the services are performed.  Notwithstanding, we
      believe that the fair value of the warrants should be measured based on
      the guidance in ASC 505-50 as of the date at which a commitment for
      performance by the counterparty to earn the equity instrument is reached
      or the date at which the counterparty’s performance is complete, whichever
      is earlier.  As such, as previously requested, please tell us
      the basis for your determination that the measurement date for the
      warrants was the grant date in light of the guidance in ASC 505-50-30-11
      through ASC 505-50-30-17.  Specifically 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
      nonperformance.  If you concluded the warrants were fully vested
      and nonforfeitable on the grant date despite their vesting terms because
      their issuance was irrevocable and you agreed to take no action to cause
      the warrants to become void or revoked or their issuance to be otherwise
      terminated, please confirm that fact and tell us the facts and
      circumstances supporting that conclusion.  Otherwise, please
      explain in detail the sufficiently large disincentives for
      nonperformance.

    United
States Securities and Exchange Commission

      January
31, 2011

      Page
3

              Response:

              We
      have re-measured the fair value of warrants to the IR firm based on ASC
      505-50 at each balance sheet and expense recorded based on the period
      elapsed at each  balance sheet date, which is the date at which
      the counterparty’s performance is deemed to be completed for the period.
      As illustrated in the table below, the difference in expense under ASC
      505-50 and ASC 450-20-25 is not material; the Company will comply with ASC
      505-50 to account for the warrants before the measurement date, for
      purposes of recognizing the cost of the transaction with a cumulative
      adjustment in the 4th
      quarter of fiscal year 2010, and will record the additional expenses under
      ASC 505-50 in the income statement for the year ended December 31, 2010.
      The Company believes expensing the cost over the service term of the
      investor relations agreement is a better matching of cost with services
      received rather than expensing over the warrant’s vesting
      period.

              Amortize
      over the service period of 12
months

              IR
      expense - warrants issued

              2009
      Q4

              2010
      Q1

              2010
      Q2

              2010
      Q3

              2010
      accumulated

              expense
      originally recorded

              90,749

              90,749

              90,749

              -

              272,247

              expense
      under ASC 505 - 50

              176,884

              257,698

              34,830

              34,662

              504,074

              Difference

              86,135

              166,949

              (55,919)

              34,662

              231,827

              Difference
      as % of quarterly net income

              5%

              6%

              1%

              1%

              -

              Difference
      as % of YTD net income

              1%

              -

              1%

              0.3%

              -

              Difference
      as % of total assets

              0.09%

              0.17%

              -0.04%

              0.02%

              -

              Difference
      as % of total equity

              0.18%

              0.32%

              -0.09%

              0.05%

              -

              Impact
      to basic EPS - current quarter

              $0.002

              $0.004

              $(0.001)

              $0.001

              -

              Impact
      to basic EPS - YTD

              $0.002

              -

              $(0.001)

              $0.001

              -

    Item 9A.  Controls
and Procedures, page 51

    Internal Controls over
Financial Reporting, page 51

              3.

              We
      reviewed your response to comment five in our letter dated November 5,
      2010.  We understand that your CFO is responsible for reviewing
      the financial reports under U.S. GAAP and ensures the financial statements
      and other financial information fairly presents the financial condition,
      results of operations and cash flows in accordance in US
      GAAP.  We also understand that your CFO has a U.S. MBA education
      and many years of experience in banking, investment, financing and
      accounting areas in China and the U.S.  Please tell us about the
      CFO’s education, knowledge, experience and on-going training in US GAAP
      and SEC Rules and Regulations.  In addition, please tell about
      the education, knowledge, experience and on-going training in US GAAP and
      SEC Rules and Regulations of your Vice President of Accounting and other
      personnel identified in your
response.

      United
States Securities and Exchange Commission

        January
31, 2011

        Page
4

    Response:

    First, as disclosed in a Form 8-K,
filed January 6, 2011, our Board of Directors appointed David Chong to the
office of CFO of the Company, effective December 30, 2010; therefore, Mr. Xinyu
Peng is no longer the Company’s CFO.

    Our Vice President of Accounting, Mr.
Xiaogang Zhu, is responsible for overseeing and designating the review of our
financial reports under Chinese GAAP. Mr. Zhu is a Chinese Senior Accountant and
an expert in financial reporting.  Mr. Zhu has 30 years of experience
in financial reporting. Mr. Zhu has been the CFO and vice president of
accounting for two NASDAQ listed companies in the past five years. Mr. Zhu is an
expert in Chinese GAAP and is knowledgeable in U.S. GAAP. Mr. Zhu has had prior
training in U.S. GAAP and SEC Rules and Regulations. Mr. Zhu received his
bachelor degree in Accounting from Shaanxi Finance and Accounting Institute (now
Xian Jiaotong University Management School). Mr. Zhu has not completed any
formal on-going training in U.S. GAAP and SEC Rules and Regulations. That said,
Mr. Zhu has remained knowledgeable and current with respect to U.S. GAAP and SEC
Rules and Regulations, since he has held the office of vice president of
accounting for two NASDAQ listed companies within the past five years. In
addition, the Company is in the process of finalizing an on-going training
course for Mr. Zhu and other executive officers of the Company, in U.S. GAAP and
SEC Rules and Regulations.

    Our CFO
is responsible for overseeing and designating the review of our financial
reports under U.S. GAAP. The CFO, for the period covered by this Comment Letter,
Mr. Peng, is a seasoned expert in financial reporting with a unique blend of
banking and private and public company experience. Mr. Peng has significant
experience and knowledge with respect to U.S. GAAP and SEC Rules and
Regulations.  Prior to joining the Company, Mr. Peng served as: (i)
Vice President of Tavistock Group Asia, (ii) Chief Financial Officer and
Director of MOD3 Cabinets & Home LLC, (iii) Chief Financial Officer of
Creative Hospitality Concepts LLC; and (iv) a management level officer of the
Bank of China. Mr. Peng has maintained his knowledge of accounting standards by
completing on-going training in U.S. GAAP and other SEC Rules and Regulations.
Mr. Peng holds a MBA degree from University of Miami and Bachelor degree in Arts
from Shanghai Fudan University major in International Finance. For fiscal
year-ended December 31, 2009, the Company engaged a U.S. CPA, Ms. Yvonne Zhang,
to ensure that the Company’s financial statements fairly present the financial
condition, results of operations and cash flows of the Company in accordance in
U.S. GAAP. Ms. Zhang is licensed in the State of California. As disclosed in our
previous Response Letter, dated November 15, 2010, Ms. Zhang has 10 years of
experience working in various U.S. accounting firms supervising, planning and
performing financial statement audits and reviews (for both SEC reporting and
private companies), preparing financial statement compilations and related
footnote disclosures and special reports, and preparing corporate, partnership
and personal income tax returns. Further, to ensure that: (i) the Company’s
financial statements continue to be presented in accordance with U.S. GAAP and
SEC Rules and Regulations; and (ii) the Company stays fully informed,
knowledgeable and current as to all applicable accounting standards and
principles, the Company has continued its engagement of Ms. Zhang.

              4.

              We
      reviewed your response to comment six in our letter dated November 5,
      2010.  We note that you engaged Deloitte to provide consulting
      services and provide assistance in conducting your evaluation and
      assessment of internal control over financial reporting for fiscal
      2010.  Please tell us how and why Deloitte is qualified to
      evaluate your internal control over financial reporting.  In
      addition, please tell us whether you engaged an accounting firm or other
      similar organization to provide assistance in conducting your evaluation
      and assessment of internal control over financial reporting for fiscal
      2009.  If so, please provide the information requested in our
      previous comment.  Otherwise, please tell us the role each of
      the persons identified in your response to comment five in our letter
      dated November 5, 2010 had in conducting the evaluation and assessment of
      your internal control over financial reporting in fiscal
    2009.

      United
States Securities and Exchange Commission

        January
31, 2011

        Page
5

    Response:

    In the Company’s previous Response
Letter, dated December 8, 2010, we stated that, on June 2, 2010, Xi’an TCH
engaged Deloitte to provide consultancy services for the Group’s SOX 404 and
related internal control compliance. It was not an engagement to provide
consulting services nor an engagement to provide assistance in conducting our
evaluation and assessment of internal control over financial reporting for
fiscal year 2010. On June 23, 2009, the Company engaged Deloitte Touche Tohmatsu
CPA LTD for the specific purpose of providing support services and technical
support to the Company in connection with SOX 404 and related internal control
compliance; the engagement commenced in June 2009 and ended in February 2010.
This was not an engagement to provide assistance in conducting our evaluation
and assessment of internal control over financial reporting for fiscal year
2009. Our evaluation a

January 4, 2011
 Xinyu Peng Chief Executive 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 Fiscal Year Ended December 31, 2009 Filed March 16, 2010 Form 10-Q for Quarterly Periods Ended June 30, 2010 and September 30, 2010 Filed August 16, 2010 and November 15, 2010 File No. 1-34625

Dear Mr. Peng:
We have reviewed your response letter date d December 8, 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 facts and circumstances please 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 8.  Financial Statements and Supplementary Data, page 26

 Consolidated Statements of Cash Flows, page 30

 1. We reviewed your response to comment tw o in our letter dated November 5, 2010.  We
understand you have now concluded that cash  expenditures for construction of power
generating stations sold pursuant to sales-t ype leases should be cl assified as operating
cash outflows since such expenditures are like the production of  inventory in a
manufacturing environment.  We also unders tand that cash inflows related to your
investment in sales-type leases  consist of principal and intere st and that you believe that

Xinyu Peng China Recycling Energy Corporation January 4, 2011 Page 2

principal collections should be classified as  investing cash inflows.  In addition, we
understand that sales of systems results in an  increase in the investment in sales-type
leases, and that you believe that the increase  should be presented as an investing cash
outflow.  However, it seems as though your i nvestment in sales-t ype leases is like
accounts and/or short- and long- term notes receivable from customers arising from sales
and that the change in the inve stment should be classified as  an adjustment to reconcile
net income to net cash provided by or used  for operating activities, which would be
consistent with your classification of cash out flows related to cons truction of the power
generating systems.  As such, please tell us the following:
• the basis in GAAP, citing specific ASC paragraphs, for classifying the increase in the
investment in sales-type l eases as investing cash outflow s when the investment (both
short- and long-term) arises from sales of power generating systems, which are
classified as operati ng cash inflows; and
• why you believe it is appropriate to classi fy principal collections as investing cash
inflows when collections re present a reduction in the i nvestment recognized upon the
sale of power generating systems and the ba sis in GAAP for your classification, citing
specific ASC paragraphs.
 Notes to Consolidated Financial Statements, page 31

 Note 19.  Stock-Based Compensation, page 47

 2. We reviewed your response to comment three in our letter dated November 5, 2010,
which is the same response you submitted to comment six in our letter dated September
22, 2010.  Please tell us why you believe the issu ance of warrants to non-employees in
exchange for services is not  within the scope of ASC 505- 50 and that the guidance in
ASC 450-20-25 should be applied.  In th at regard, please note that ASC 505-50
specifically addresses the date an issuer shal l use to measure the fair value of equity
instruments issued to non-employees, the pe riods and manner an issuer shall use to
recognize the fair value of the equity instruments and how the equity instruments shall be
accounted for before the measurement date fo r purposes of recognizing the cost of the
transaction.  Please also note that we acknowledge a liability  should be recognized on the
grant date and that the cost should be r ecognized as the serv ices are performed.
Notwithstanding, we believe that the fair valu e of the warrants should be measured based
on the guidance in ASC 505-50 as of the date at which a commitment for performance by the counterparty to earn the equity instrume nt is reached or the date at which the
counterparty’s performance is complete, whiche ver is earlier.  As such, as previously
requested, please tell us the basis for your de termination that the measurement date for
the warrants was the grant date in ligh t of the guidance in ASC 505-50-30-11 through
ASC 505-50-30-17.  Specifically discuss why you believe: (i) performance was complete
on the grant date or (ii) a performance comm itment to earn the equity instruments was
probable on the grant date because of sufficien tly large disincentives for nonperformance.
If you concluded the warrants were fully ve sted and nonforfeitable on the grant date
despite their vesting terms because their issuan ce was irrevocable and you agreed to take

Xinyu Peng China Recycling Energy Corporation January 4, 2011 Page 3

no action to cause the warrants to become void or revoked or thei r issuance to be
otherwise terminated, please c onfirm that fact and tell us  the facts and circumstances
supporting that conclusion.  Otherwise, pleas e explain in detail th e sufficiently large
disincentives for nonperformance.
 Item 9A. Controls and Procedures, page 51

Internal Controls over Financial Reporting, page 51
 3. We reviewed your response to comment five  in our letter dated November 5, 2010.  We
understand that your CFO is responsible for reviewing the financ ial reports under US
GAAP and ensures the financial statements and other financial information fairly
presents the financial conditi on, results of operations and cas h flows in accordance in US
GAAP.  We also understand that your CFO ha s a U.S. MBA education and many years of
experience in banking, investment, financing an d accounting areas in China and the U.S.
Please tell us about the CF O’s education, knowledge, experience and on-going training in
US GAAP and SEC Rules and Regulations.  In  addition, please tell about the education,
knowledge, experience and on-going traini ng in US GAAP and SEC Rules and
Regulations of your Vice President of Accoun ting and other personnel identified in your
response.

4. We reviewed your response to comment si x in our letter dated November 5, 2010.  We
note that you engaged Deloitte to provide c onsulting services and provide assistance in
conducting your evaluation and assessment of in ternal control over financial reporting for
fiscal 2010.  Please tell us how and why Deloit te is qualified to evaluate your internal
control over financial reporting.  In add ition, please tell us whether you engaged an
accounting firm or other similar organizati on to provide assistance in conducting your
evaluation and assessment of in ternal control over financial reporting for fiscal 2009.  If
so, please provide the information requested in  our previous comment.  Otherwise, please
tell us the role each of the persons identifie d in your response to comment five in our
letter dated November 5, 2010 had in conductin g the evaluation and assessment of your
internal control over financia l reporting in fiscal 2009.
 Form 10-Q for Quarterly Period Ended September 30, 2010

 Part I. Financial Information, page 3

 Item 1. Financial Statements, page 3

 5. Please refer to ASC 505-10-50-2 a nd tell us your consideratio n of disclosing the changes
in the separate accounts comprising stockhol ders’ equity and of the changes in the
number of shares of common stock outstanding  in a separate statement of stockholders’
equity or in the notes to  financial statements.

Xinyu Peng China Recycling Energy Corporation January 4, 2011 Page 4

  You may contact me at (202) 551- 3344 if you have any questions.
          S i n c e r e l y ,
William Thompson
         A c c o u n t i n g  B r a n c h  C h i e f

CORRESP
1
filename1.htm

    Unassociated Document

    December
8, 2010

    Via
EDGAR

    United
States Securities and Exchange Commission

    Division
of Corporation Finance

    100 F
Street, NE

    Washington,
D.C.  20549-0405

    Attn:
William H. Thompson, Accounting Branch Chief

              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. 1-34625

    Dear Mr.
Thompson:

    This firm
is counsel to the above-referenced company, China Recycling Energy Corporation
(“CREG” or the “Company” and sometimes “we” or “our”) and is filing this
response to your comment letter of November 5, 2010 with respect to the
above-referenced filings on CREG’s behalf.  For convenience of
reference, we have included in this response letter the same captions and
paragraph number, as well as the text of the comment, from your comment letter
followed by our response.

    Form 10-K for Fiscal Year
Ended December 31, 2009

    Item 8.  Financial
Statements and Supplementary Data, page 26

    Report of Independent
Registered Public Accounting Firm, page 26

              1.

              We
      reviewed your response to comment two in our letter dated September 22,
      2010.  Please confirm that you intend to include the conformed
      signature of your independent accountant in the amendment you intend to
      file upon conclusion of our review.

    United
States Securities and Exchange Commission

      December
8, 2010

      Page
2

    Response:

    We
confirm that the Company will include the conformed signature of its independent
accountants in the amendment to be filed upon conclusion of the
review.

    Consolidated Statements of
Cash Flows, page 30

              2.

              We
      reviewed your response, along with the analysis provided in the appendix,
      to comment three in our letter dated September 22, 2010.  We
      acknowledge the guidance in ASC 230-10-45-22 that certain cash receipts
      and payments may have aspects of more than one class of cash flows, and
      that the appropriate cash flow classification should depend on the
      activity that is likely to be the predominate source of cash
      flows.  As such, it appears that the construction costs of power
      generating systems and the related proceeds from the sale of these systems
      should be consistently presented as either operating or investing
      activities dependent on the predominant source of cash
      flows.  Please tell us how you are applying the referenced
      guidance in determining whether cash flows from the
      acquisition/construction and sale of power generation systems should be
      classified as operating or investing activities.  In your
      response, please address the following questions with respect to the
      consolidated statement of cash flows provided in the
    appendix:

              ·

              We
      note that the increase in construction in progress is classified in cash
      flows from operating activities while principal collections on sales type
      leases are classified in cash flows from investing
      activities.  Please tell us your basis in GAAP for these cash
      flow classifications in light of the guidance in ASC 230-10-
      45-22.

              ·

              We
      note that sales of systems are classified as cash outflows from investing
      activities in the initial investment in sales type lease line
      item.  Please tell us why the sale of systems results in cash
      outflows.

              ·

              It
      seems as though sales of power generating systems net of the costs of
      systems subject to sales and lease back arrangements represent non-cash
      income and expense.  If you consider construction expenditures
      and collection of principal on sales type leases as investing cash flows,
      please tell us why you should not present gross profit from the sale of
      systems as a reduction to cash flows from operating activities in the
      adjustments to reconcile net income (loss) to net cash provided by
      operating activities.

                Response:

              ·

              After
      reviewing ASC 230-10-45-22, we have classified cash flow from construction
      in progress as cash flow operating activities because we concluded that
      construction of energy saving systems is like the production of inventory
      in a manufacturing environment.  We do not have sales lease back
      type arrangements but the sales type leases of terms of 15 to 20 years;
      therefore, we concluded these cash inflows from collections are
      appropriately classified as cash flows from investing activities as they
      are received.

      United
States Securities and Exchange Commission

        December
8, 2010

        Page
3

              ·

              Sales
      of systems result in an increase in receivables from sales type leases.
      This is similar to making an installment loan. The lease receivable will
      be collected over 15-20 years; therefore, we have concluded a cash outflow
      should be classified as investing cash flow.  Similarly,
      principal collections are classified as investing cash
      inflow.  The sale of systems results in an increase in assets
      and is, consequently, treated as a cash
outflow.

              ·

              We
      consider construction expenditure to be operating cash flows as described
      in the paragraph above.  Gross profit is included in lease
      receivables like accounts receivable, which includes gross profit on
      sales. Therefore, we have concluded that gross profit from sales of
      systems should not be an adjustment to cash provided by operating
      activities.

    Notes to Consolidated
Financial Statements, page 31

    Note
19.  Stock-Based Compensation, page 47

              3.

              We
      reviewed your response to comment six in our letter dated September 22,
      2010.  It appears that the guidance at ASC 505-50-30-11 through
      ASC 505-50-30-17 should be followed when determining the measurement date
      for equity instruments issued in a share-based payment transaction with
      nonemployees.  If you disagree, please explain in greater detail
      why such guidance is not applicable.  Given this guidance, as
      previously requested, please tell us in more detail the basis for your
      determination that the measurement date for the warrants issued to
      non-employees was the 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
      nonperformance.  With respect to the latter, please explain in
      detail the sufficiently large disincentives for
      nonperformance.

    Response:

    The
Company believes that as of the grant date it was more likely than not the
consultant would perform the service.  The warrants became exercisable
nine months from the effective date of the Investor Relations Agreement pursuant
to which they were issued.  Under that Agreement, the issuance of
warrants was irrevocable and the Company agreed to take no action to cause the
warrants to become void or revoked or their issuance to be otherwise
terminated.  Hence, the warrants are considered earned upon execution
of the Investor Relations Agreement.  Therefore, in accordance with
ASC 450-20-25, the transaction should be recorded on the grant date. The Company
also believes that not to recognize the expense as the services are performed is
misleading.  Given that a date must be chosen, we feel the grant date most
accurately reflects the economics of the transaction.  Further, EITF 96-18
ASC 505-50-30-11 through ASC 505-50-30-17 criteria appear inconsistent with
ASC 450-20-25 criteria for liability recognition, i.e. it is probable a
liability had been incurred and the amount was reasonably estimable.  ASC
450-20-25 is derived from a higher-order accounting rule than ASC 505-50-30, as
per ASU No. 2009-01, and therefore we have applied ASC
450-20-25.

          United
States Securities and Exchange Commission

            December
8, 2010

            Page
4

    The
Company believes we accounted for the transaction in accordance with its
substance. The alternative was to record the transaction after completion of
performance as there was no large disincentive to not perform. Performance would
be completed after the expiration of one year. Recording the expense after the
services are performed does not make economic sense and would attribute the
expense to improper periods.

    Item 9A.  Controls
and Procedures, page 51

    Internal Controls over
Financial Reporting, page 51

              4.

              We
      note that you conduct substantially all of your operations outside of the
      United States.  In order to enhance our understanding of how you
      prepare your financial statements and assess your internal control over
      financial reporting, we ask that you provide us with the following
      information:

              ·

              In
      connection with your process to determine whether your internal control
      over financial reporting was effective, please describe whether and how
      you considered controls to address financial reporting risks that are
      relevant to all locations where you have
  operations.

              ·

              If
      you have an internal audit function, please describe it and explain how,
      if at all, that function impacted your evaluation of your internal control
      over financial reporting.

              ·

              If
      you maintain your books and records in accordance with U.S. GAAP, describe
      the controls you maintain to ensure that the activities you conduct and
      the transactions you consummate are recorded in accordance with U.S.
      GAAP.

              ·

              If
      you do not maintain your books and records in accordance with U.S. GAAP,
      tell us what basis of accounting you use and describe the process you go
      through to convert your books and records to U.S. GAAP for SEC
      reporting.  Describe the controls you maintain to ensure that
      you have made all necessary and appropriate adjustments in your
      conversions and disclosures.

    Response:

    The
Company and all its subsidiaries have financial departments equipped with
qualified financial professionals. We have established accounting polices and
processes which cover all our businesses.  We also have an “accounting
verifier” as a part of the process:  a professional reviews and
verifies every transaction for legality and compliance and original documents
for their legality and completeness.  According to the policy
regarding authority for approval, for each cash inflow and outflow, the handling
personnel fill out a required form, which must be signed by the department head,
accountant, financial manager, the “accounting verifier” and the vice president
in charge or the president to minimize any possible financial
risks.

          United
States Securities and Exchange Commission

            December
8, 2010

            Page
5

    Although
the Company is a small reporting company exempted from SOX404(b) requirements
according to the Dodd Frank Wall Street Reform Act passed this year, we believe
the requirement is very helpful for the Company to improve its internal control.
Therefore, the Company organized professionals to improve and standardize the
Company’s internal control.

    The
Company’s operating subsidiaries, Huahong New Energy Technology Co., Ltd.
(“Huahong”) and Shanghai TCH, Shanghai TCH’s subsidiaries Xi’an TCH Energy Tech
Co., Ltd. (“Xi’an TCH”) and Xingtai Huaxin Energy Tech Co., Ltd. (“Huaxin”), and
Xi’an TCH’s subsidiary Erdos TCH Energy Saving Development Co., Ltd, maintain
their books and records in accordance with accounting standards generally
accepted in the People’s Republic of China (“PRC GAAP”); its financial
statements are converted to U.S. GAAP for financial statement reporting purposes
on a quarterly basis.  The Company provides its internally generated
financial statements and related supporting schedules prepared under PRC GAAP in
Renminbi Yuan (“RMB”) to the Company’s contracted U.S. certified public
accountant (the “Company CPA”), who is unrelated to the Company’s independent
registered public accounting firm, for conversion and consolidation. The
Company’s CPA then prepares the Company’s consolidated financial statements and
footnotes under U.S. GAAP in US dollars by
preparing:  adjusting/converting entries for the purpose of converting
the financial statements from PRC GAAP to U.S. GAAP; a consolidating financial
statements worksheet and related schedules; and footnote disclosures with
related schedules and worksheets to support the numbers disclosed in the
footnote, using the Thomson Reuters Disclosure Check List as
guidance.  The Company’s CPA then provides her work to the Company’s
management and its auditor for review/audit, answers any questions raised by the
auditor or management and posts additional review/audit entries from the
auditor, if necessary.  Once all comments and issues are cleared with
confirmation from the Company’s auditor, the financial statements are provided
to the Company’s board of directors for review and approval prior to
filing.

              5.

              We
      would like to understand more about the background of the people who are
      primarily responsible for preparing and supervising the preparation of
      your financial statements and evaluating the effectiveness of your
      internal control over financial reporting and their knowledge of U.S. GAAP
      and SEC rules and regulations.  Do not identify people by name,
      but for each person, please tell
us:

              ·

              what
      role he or she takes in preparing your financial statements and evaluating
      the effectiveness of your internal
control;

              ·

              what
      relevant education and ongoing training he or she has had relating to U.S.
      GAAP;

              ·

              the
      nature of his or her contractual or other relationship to
    you;

        United
States Securities and Exchange Commission

          December
8, 2010

          Page
6

              ·

              whether
      he or she holds and maintains any professional designations such as
      Certified Public Accountant (U.S.) or Certified Management Accountant;
      and

              ·

              about
      his or her professional experience, including experience in preparing
      and/or auditing financial statements prepared in accordance with U.S. GAAP
      and evaluating effectiveness of internal control over financial
      reporting.

    Response:

    The
Company’s businesses in China are accounted for and prepared for financial
reports according to Chinese GAAP.  For each reporting period, the
Company uses U.S. accounting firm to prepare financial reports under US GAAP
based upon financial reports of Chinese GAAP.

    1.  CFO---
is responsible for reviewing the financial reports under US GAAP, supervising
the financial activities of the Company and designing and supervising the
designing of internal
control over financial reporting.  The CFO ensures the
financial statements, and other financial information, filed by the Company

November 5, 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. 1-34625
 Dear Mr. Peng:
We have reviewed your response letter da ted October 12, 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 8.  Financial Statements and Supplementary Data, page 26

Report of Independent Registered Public Accounting Firm, page 26

1. We reviewed your response to comment two in our letter dated September 22, 2010.  Please confirm that you intend to include th e conformed signature of your independent
accountant in the amendment you intend to f ile upon conclusion of our review.

Xinyu Peng
China Recycling Energy Corporation
November 5, 2010 Page 2

Consolidated Statements of Cash Flows, page 30

 2. We reviewed your response, along with the analysis provided in the appendix, to
comment three in our letter dated Septem ber 22, 2010.  We acknowledge the guidance in
ASC 230-10-45-22 that certain cash receipts and payments ma y have aspects of more
than one class of cash flows, and that th e appropriate cash flow  classification should
depend on the activity that is likely to be the predominate source of cash flows.  As such,
it appears that the construc tion costs of power generati ng systems and the related
proceeds from the sale of these systems should be consistently presented as either operating or investing activities dependent on the predominant source of cash flows.
Please tell us how you are applying the refere nced guidance in determining whether cash
flows from the acquisition/construction and sa le of power generation systems should be
classified as operating or i nvesting activities.  In your  response, please address the
following questions with respect to the conso lidated statement of cash flows provided in
the appendix:
• We note that the increase in construction in  progress is classified in cash flows
from operating activities while principal collections on sales type leases are
classified in cash flows from investing ac tivities.  Please tell  us your basis in
GAAP for these cash flow classifications in light of the guidance in ASC 230-10-
45-22.
• We note that sales of systems are clas sified as cash outflows from investing
activities in the initial investment in sales type lease line item.  Please tell us why
the sale of systems results in cash outflows.

• It seems as though sales of power generati ng systems net of the costs of systems
subject to sales and lease back arrang ements represent non-cash income and
expense.  If you consider construction expenditures and collection of principal on
sales type leases as investing cash flows, please tell us why you should not
present gross profit from the sale of sy stems as a reduction to cash flows from
operating activities in the adjustments to reconcile net income (loss) to net cash
provided by operating activities.

Notes to Consolidated Financial Statements, page 31

Note 19.  Stock-Based Compensation, page 47

3. We reviewed your response to comment si x in our letter dated September 22, 2010.  It
appears that the guidance at ASC 505- 50-30-11 through ASC 505- 50-30-17 should be
followed when determining the measurement da te for equity instruments issued in a
share-based payment transaction with nonemplo yees.  If you disagree, please explain in
greater detail why such guidance is not appli cable.  Given this guidance, as previously
requested, please tell us in more detail the basis for your determination that the

Xinyu Peng
China Recycling Energy Corporation
November 5, 2010 Page 3

measurement date for the warrants issued to  non-employees was the same as the grant
date.  Refer to the guidance in AS C 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 nonperformance.  With respect to the latter, please explain in detail the sufficiently large disincentives for nonperformance.
 Item 9A. Controls and Procedures, page 51

Internal Controls over Financial Reporting, page 51
 4. We note that you conduct substantially all of your  operations outside of the United States.
In order to enhance our unders tanding of how you prepare y our financial statements and
assess your internal control over financial reporting, we ask that you provide us with
following information:

• In connection with your process to dete rmine whether your in ternal control over
financial reporting was effective, please describe whether and how you
considered controls to addr ess financial reporting risks that are relevant to all
locations where you have operations.

• If you have an internal aud it function, please describe it and explain how, if at all,
that function impacted your evaluation of your internal control over financial reporting.

• If you maintain your books and records in accordance with U.S. GAAP, describe
the controls you maintain to ensure that the activities you conduct and the
transactions you consummate are recorded in accordance with U.S. GAAP.

• If you do not maintain your books and reco rds in accordance with U.S. GAAP,
tell us what basis of accounting you us e and describe the process you go through
to convert your books and records to U.S.  GAAP for SEC reporting.  Describe the
controls you maintain to ensure that you have made all necessary and appropriate
adjustments in your conversi ons and disclosures.
 5. We would like to understand more about the background of the people who are primarily
responsible for preparing and s upervising the preparation of your financial statements and
evaluating the effectiveness of your internal control over financial reporting and their
knowledge of U.S. GAAP and SEC rules and regulations.  Do not identify people by
name, but for each person, please tell us:
• what role he or she takes in preparing your financial statements and evaluating the
effectiveness of your internal control;

Xinyu Peng
China Recycling Energy Corporation
November 5, 2010 Page 4

• what relevant education and ongoing traini ng he or she has had relating to U.S.
GAAP;

• the nature of his or her contractual or other relationship to you;

• whether he or she holds and maintains any professional designations such as
Certified Public Accounta nt (U.S.) or Certified Management Accountant; and

• about his or her professional experience, including experience in preparing and/or
auditing financial statements prepared  in accordance with U.S. GAAP and
evaluating effectiveness of internal control over financial reporting.
 6. If you retain an accounting firm or other sim ilar organization to prepare your financial
statements or evaluate your internal cont rol over financial repor ting, please tell us:

• the name and address of the acc ounting firm or organization;

• the qualifications of their employees who perform the services for your company;

• how and why they are qualified to prepar e your financial statements or evaluate
your internal control over financial reporting;

• how many hours they spent last year performing these services for you; and

• the total amount of fees you paid to each accounting firm or organization in connection with the preparation of your financial statements and in connection
with the evaluation of internal control ove r financial reporting for the most recent
fiscal year end.
 7. If you retain individuals who are not your employees and are not employed by an
accounting firm or other similar organization to prepare your financial statements or
evaluate your internal control over financial reporting, do not provide us with their
names, but please tell us:
• why you believe they are qualified to pr epare your financial statements or
evaluate your internal contro l over financial reporting;

• how many hours they spent last year performing these services for you; and

• the total amount of fees you paid to each individual in connection with the
preparation of your financial statements and in connection with the evaluation of
internal control over financial reporting for the most recent fiscal year end.

Xinyu Peng
China Recycling Energy Corporation November 5, 2010 Page 5

8. We note that you identify Mr. Sean Shao, member of your audit committee, as a financial expert in your Proxy Statement filed April 30, 2010.  Please describe the financial expert’s qualifications, including the extent of the financial expert’s knowledge of U.S.
GAAP and internal control over financial reporting.
 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

 9. We reviewed your response to comment 11 in our letter dated September 22, 2010.  In
your response you state that you classified th e shares to be issu ed as a non-current
liability.  However, shares to be issued are classified as temporary equity between total
liabilities and equity.  Please classify the obl igation as a non-current liability in future
filings.

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

CORRESP
1
filename1.htm

    Unassociated Document

Albany

                  Atlanta

                  Brussels

                  Denver

                  Los
      Angeles

                  THOMAS
      WARDELL

                  Direct
      telephone: (404) 527-4990

                  Direct facsimile: (404) 527-8890

                  www.mckennalong.com

New
      York

                  Philadelphia

                  San
      Diego

                  San
      Francisco

                  Washington,
      DC

                  EMAIL
      ADDRESS

                  twardell@mckennalong.com

    October
12, 2010

    Via EDGAR

    United
States Securities and Exchange Commission

    Division
of Corporation Finance

    100 F
Street, NE

    Washington,
D.C.  20549-0405

    Attn:  William
H. Thompson, Accounting Branch Chief

              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.
Thompson:

    This firm
is counsel to the above-referenced company, China Recycling Energy Corporation
(“CREG” or the “Company” and sometimes “we” or “our”) and is filing this
response to your comment letter of September 22, 2010 with respect to the
above-referenced filings on CREG’s behalf.

    Form 10-K for the 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

              Comment
    1.

              We
      reviewed your proposed disclosure in response to comment four in our
      letter dated August 3, 2010.  As previously requested, 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 effective tax
rate.

    United
States Securities and Exchange Commission

    October 12, 2010

    Page
2

    Response:    The
Company acknowledges the comment of the Staff.  In future filings the
Company will include disclosure materially like the following with respect to
our effective tax rate for each year presented and will include the reasons for
any changes to our effective tax rates:

    INCOME
TAX EXPENSE.  Income tax expense was $2.95 million for the year ended
December 31, 2009, an increase of $1.32 million compared to $1.63 million for
2008.  The increase was mainly due to the change in income (loss)
before income tax from a $0.59 million loss in 2008 to $13.01 million in income
during 2009; the consolidated effective income tax rates for 2009 and 2008 were
22.7% and (278.3)%, respectively.  The change in the consolidated
effective tax rate was mainly due to a permanent non-tax deductible interest
expense of $5 million resulting from amortization of a beneficial conversion
feature for a convertible note in 2008, which was added back to taxable income
for US income tax return purposes. The income tax rate for our US parent company
was 34% for both 2008 and 2009; the rates for Shanghai TCH were 18% and 20% for
2008 and 2009, respectively.  Xi’an TCH’s income tax rate for both
2008 and 2009 was 15% as a result of its high tech enterprise status that was
approved by the taxing authorities in the PRC.  Xingtai Huaxin’s
effective income tax rate for both 2008 and 2009 was 25%.  Our newly
incorporated subsidiaries – Huahong and Erdos TCH – had effective income tax
rates of 25% for 2009.

    Item 8. Financial Statements
and Supplementary Data, page 26

    Report of Independent
Registered Public Accounting Firm, page 26

              Comment
    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 include the
      conformed signature of your independent accountant in future filings
      and/or amendments.

    Response:    The
Company received a signed copy of the report issued by our independent
accountant and will include the conformed signature of the independent
accountant in future filings and/or amendments.

      United
States Securities and Exchange Commission

      October 12, 2010

      Page
3

    Consolidated Statements of
Cash Flows, page 30

              Comment
    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
      from investing activities rather than as a reduction to cash flows
      from operating activities in the adjustments to reconcile net income
      (loss) to net cash provided by operating activities. It also appears that
      you netted cash outflows for construction in progress against
      proceeds from sales-type leases in cash flows from investing
      activities, which resulted 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 understanding is correct, tell us how
      you would revise your presentation to comply with the guidance in ASC
      230. If our understanding is incorrect, tell us how you classified
      the profit from sales-type leases and why cash flows from your gross
      investment in sales-type leases resulted in a net cash outflow for
      each year presented.

    Response:    The
Staff understanding is not correct.  Profit from sales type leases is
the fair value of the system to be leased, net of cost of goods
sold.  This profit is part of the Company’s net income.  The
Company did not report such profit either as a reduction in cash flows from
investing activities or as a reduction to cash flows from operating activities
in the adjustments to reconcile net income (loss) to net cash provided by
operating activities.  Nor do we believe such reporting is required.
For your ease in reference, we have once again attached to this correspondence a
copy of the cash flow analysis.

    We
revised our cash flow statement to separate cash outflows for construction in
progress from net investment receivable in sales type leases to comply with the
guidance in ASC 230.  Gross investment in sales type leases represents
initial investment in sales type leases.  Principal collected on sales
type leases is now reclassified from initial investment in sales type
leases.  Initial investment in sales type leases represents cash used
in investing activities while collection of principal amount on sales type
leases represents cash provided by investing activities.  This is
considered similar to notes receivable for principal under installment
sales.

    ASC
230-10-55-10 includes an example showing all principal payments under leases as
being investing activities.  Accordingly, the Company treated lease
originations the same way. ASC 230 also acknowledges that a somewhat difficult
classification issue arises for installment sales and purchases of
inventory by an enterprise for which cash inflows or outflows may occur several
years after the date of the transaction.  Those transactions can be viewed
as having aspects of both operating and investing activities.

      United
States Securities and Exchange Commission

      October 12, 2010

      Page
4

    Notes to Consolidated
Financial Statements, page 31

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

              Comment
    4.

              We
      reviewed your response to 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 applicable. 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 incentive benefit) as discussed in Form
      8-K filed December 8, 2009.

    Response:    The
Company did not consolidate Beijing Trust because the Company is not the primary
beneficiary of Beijing Trust.  The Company has adopted FIN 46R, ASC
810, Consolidation, which requires a variable interest entity (VIE) to be
consolidated by a company if that company is subject to a majority of the risk
of loss for the VIE or is entitled to receive a majority of the VIE’s residual
returns.

    Beijing
Trust is:  Beijing International Trust Co. Ltd., previously known as
Beijing International Trust and Investment Corporation Limited incorporated in
October 1984; it is a non-banking financial institution with registered capital
of RMB 1.4 billion.  In determining if Beijing Trust is the VIE of the
Company, the Company considered the following indicators, among
others:

              ·

              The
      Company does not have the right to control and administer the financial
      affairs and daily operations of Beijing Trust and has no right to manage
      and control the assets of Beijing
Trust;

              ·

              The
      Company does not have any voting rights in Beijing Trust and has no right
      to appoint the directors and senior management personnel of Beijing
      Trust;

              ·

              The
      Company will not provide financial support if Beijing Trust requires
      additional funds to maintain its operations and to repay its
      debts;

              ·

              The
      Company could not assume the operating risks of Beijing Trust and would
      not bear any losses or profits from Beijing
  Trust.

    Therefore,
the Company concluded that Beijing Trust is not the VIE of the Company, and the
Company is not the primary beneficiary of Beijing Trust. Accordingly,
disclosures under ASC 810-10-50-8 through ASC 810-10-50-19 are not
required.

    We expect
to include the following disclosure with respect to the sharing of benefits from
the Clean Development Mechanism and the payment of the management incentive
benefit:

    Under the
Clean Development Mechanism ("CDM"), any benefit received will be paid to Erdos
Metallurgy. Under the agreement with Xi’an TCH, Erdos Metallurgy agrees to
deliver to Xi’an TCH 50% of the benefit Erdos Metallurgy receives. Xi’an TCH
agrees to share 50% of the benefit it receives from Erdos Metallurgy with Erdos
TCH. Under the Capital Trust Loan Agreement (the "Loan Agreement") between Erdos
TCH and Beijing Trust, Erdos TCH agrees that 50% of any benefit it receives will
be delivered to Beijing Trust. Pursuant to the Plan, Beijing Trust will
distribute 70% of the CDM benefit it receives to the holders of the category B
trust units. The receipt of any CDM benefit is subject to a process of
evaluation and certification of the project by the CDM Executive Board and is
under the guidance of the Conference of the Parties of the United Nations
Framework Convention on Climate Change. The first stages of the certification
process have been completed successfully.

      United
States Securities and Exchange Commission

      October 12, 2010

      Page
5

    Under the
Loan Agreement, Erdos TCH must pay a management incentive benefit to Beijing
Trust upon maturity of the category A3 and category B trust units in December
2013 if the ratio of Erdos TCH’s profit to its registered capital exceeds a base
amount. If this criterion is met, the amount of the management incentive benefit
is calculated based on a formula tied to Erdos TCH’s net profit and the average
registered capital for the 2012 fiscal year. Under this formula the management
incentive benefit could range between 0% and 100% of the net profit of Erdos TCH
in the 2012 fiscal year.

    The
management incentive benefit was structured to provide an incentive to
management to make the joint venture profitable. Under the Plan, Beijing Trust
will distribute the entire amount of the management incentive benefit it
receives to the holders of the category B trust units. As previously disclosed,
the holders of the category B trust units are the management of Erdos TCH and
Xi’an TCH. Category B trust units receive a lower base interest rate than the
category A trust units but the economic return to the holders of category B
trust units will be enhanced by any management incentive benefit.

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

              Comment
    5.

              We
      reviewed your proposed disclosure in response to comment 24 in our letter
      dated August 3, 2010.  Please provide the disclosures 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.

    Response:    The
Company acknowledges the comment of the Staff and proposes to expand the
disclosures required by ASC 825-20-50-1b, ASC 825-20-50-1c and ASC 825-20-50-1d
as follows:

    The
Company accounts for payment arrangements under a registration rights agreement
in accordance with ASC Topic 825, “Financial Instruments,” which requires that
the contingent obligation to make future payments or otherwise transfer
consideration under a registration payment arrangement, whether issued as a
separate agreement or included as a provision of a financial instrument or other
agreement, be separately recognized and measured in accordance with ASC Topic
450, “Contingencies.

      United
States Securities and Exchange Commission

      October 12, 2010

      Page
6

    The
Company is required to file a registration statement with the SEC upon receiving
a demand notice from a convertible debt holder.  At December 31, 2009
and June 30, 2010 the Company had not received a demand notice from any
holder.

    Under the
registration rights agreement, the Company must file the registration statement
within 90 days of receipt of a demand notice (the “Filing Date”), and the
registration statement must have become effective within 120 days after filing
(the “Effective Date”) or the Company must pay damages to the holders of the
shares to be registered.  The Company must also pay damages if the
registration statement ceases for any reason to remain continuously effective as
to all Registrable Shares for which it is required to be effective, or the
holders are not permitted to utilize the prospectus to resell shares for thirty
(30) consecutive calendar days during any 12-month period.

    The
damages for failure to meet any of these requirements are equal to 1% of the sum
of:

              (x)

              the
      purchase price of the unconverted
notes;

              (y)

              the
      purchase price of shares of Company Common Stock purchased under a related
      agreement; and

              (z)

              the
      conversion price of shares of Common Stock received on conversion of
      notes,

    for each
30 days, or a pro rata portion of such 1% for a period less than 30
days.

    The
damages are liquidated damages and must be paid in cash; the registration rights
agreement does not provide for any alternative payment
arrangement.  The maximum potential amount of consideration,
undiscounted, that the Company could be required to transfer under the
registration payment arrangement cannot exceed 1% of the sum described above in
any thirty (30) calendar day period.

    Note 19. Stock-Based
Compensation, page 47

              Comment
    6.

              We
      reviewed your response to comment 26 in our letter dated August 3, 2010.
      Pleas

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

CORRESP
1
filename1.htm

    Unassociated Document

Albany

                Atlanta

                Brussels

                Denver

                Los
      Angeles

                THOMAS
      WARDELL

                (404)
      527-4990

                www.mckennalong.com

New
      York

                Philadelphia

                San
      Diego

                San
      Francisco

                Washington,
      DC

                EMAIL
      ADDRESS

                twardell@mckennalong.com

    August
31, 2010

    Via EDGAR

    United
States Securities and Exchange Commission

    Division
of Corporation Finance

    100 F
Street, NE

    Washington,
D.C.  20549-0405

    Attn:    H.
Christopher Owings, Assistant Director

              Re:

              China
      Recycling Energy Corporation

              Form
      10-K for the Fiscal Year Ended December 31,
2009

              Filed
      March 16, 2010

              Definitive
      Proxy Statement on Schedule 14A

              File
      April 30, 2010

              Form
      10-Q for the Quarterly Period Ended March 31,
  2010

              Filed
      May 12, 2010

              File
      No. 001-34625

    Ladies
and Gentlemen:

    This firm
is counsel to the above-referenced company, China Recycling Energy Corporation
(“CREG” or the “Company” and sometimes “we” or “our”) and are filing this
response to your comment letter of August 3, 2010 with respect to the
above-referenced filings on CREG’s behalf.

    Form 10-K for the Fiscal
Year Ended December 31, 2009

    Item 1. Business, page
1

    Overview, page
1

    Business History, page
1

              Comment
    1.

              Please
      revise the last paragraph on page 3 to clarify the relevance of these
      economic stimulus plans to your business. Refer to Item 101(h)(4)(ix) of
      Regulation S-K.

    August
31, 2010

    Page
2

      Response:
  The Company acknowledges the comment by the Staff and intends to include
disclosure substantially similar to the following at the end of the last
paragraph on page 3 in future filings, as appropriate:

    Since the
Company targets producers of iron and steel, cement, and nonferrous metals for
its products and services, which products and services help reduce waste and
environmental impact, the commitment of substantial resources by the Chinese
government in these areas may assist potential customers for energy-recycling
projects with the Company to finance those projects.

              Comment
    2.

              You
      reference Phase 1 of the Erdos TCH project in the second paragraph on page
      3. Please expand this discussion to describe the status of Phases I, II
      and III of the Erdos TCH project. Refer to Item 101(h)(4)(iii) of
      Regulation S-K.

    Response:
 The Company acknowledges the comment by the Staff and points its attention
to page 39 of the Company’s Quarterly Report on Form 10-Q for the period ended
June 30, 2010 for additional disclosure regarding Erdos Phases II and III, which
additional disclosure is presented below for reference and supplements the
disclosure regarding Erdos Phase I as previously provided in the Company’s
Annual Report on Form 10-K for the period ended December 31, 2009.

    Erdos
Phase II and III of Power Generation Projects

    In April
2009, Erdos TCH signed a contract with Erdos Metallurgy to recycle heat from
groups of furnaces of Erdos Metallurgy’s metal refining plants to generate power
and steam, to be sold back to Erdos Metallurgy. According to the contract, Erdos
TCH will install a group of power generation projects with a total of 70MW power
capacity, which may expand up to 120MW, and 30-ton steam per hour, with an
estimated total investment in excess of $75 million (RMB 500 million). The
Company split the construction of the projects into three phases, two systems of
power generation in Phase I with a total of 18MW power capacity, three systems
in Phase II with a total of 27MW power capacity and one system in Phase III with
25MW power capacity.  For each phase of the project, the lease term is
20 years starting from the date of completion of the phase.  During
the lease term, Erdos TCH will be responsible for operating the projects and
charge Erdos Metallurgy for supply of electricity and steam.  Erdos
Metallurgy agreed to pay a fixed minimum of $0.22 million (RMB 1.5 million) per
month for each 9MW capacity power generation system.  Effective
January 1, 2010, Erdos TCH outsourced to an independent third party the
operation and maintenance of the first 9MW power generation project for $
922,000 (RMB 6.27 million) per year.  After 20 years, each system will be
transferred to Erdos Metallurgy without any charge.

    August
31, 2010

    Page
3

    During
the first quarter of 2010, Erdos power generation system Phase I project was
completed and put into operation.  Effective April 1, 2010, Erdos TCH
outsourced to an independent third party the operation and maintenance of the
second 9MW power generation project for $ 922,000 (RMB 6.27 million) per
year.

    As of
June 30, 2010 the projects of Erdos Phase II and Phase III are under
construction. At June 30, 2010, the Company had paid $44.17 million for Phase II
and Phase III.  The Company currently expects to complete Phase II and
Phase III in 2010.

    Competition, page
6

              Comment
    3.

              In
      the fourth bullet on page 7 you state that your provision of “BOT”
      services is an advantage over your competitors. Please expand to define or
      explain BOT services.

    Response:        The
Company acknowledges the comment by the Staff and future filings will include,
as appropriate, additional disclosure substantially similar to the
following:

    We
provide BOT (Build-Operate-Transfer) or capital lease services to our
customers, while our competitors usually use an EPC (engineering, procurement
and construction) or turnkey contract model. For each project, we design,
finance, construct and install the waste energy recycling projects for our
customers, operate the projects for five to 20 years, and then transfer the
projects to the owners.

    As a BOT service provider, we fund all
contracted projects on our own or jointly with our customers; such financing
arrangements can help our customers by removing or reducing the heavy capital
expenditure burden required by these projects, thereby allowing them to
concentrate on their core businesses. The BOT model creates a win-win solution
for both our customers and us. We provide the capital expenditure financing in
exchange for attractive returns on each project; our customers can focus their
capital resources on their core businesses, do not need to invest additional
capital to comply with government environmental regulations, reduce noise and
emissions and reduce their energy costs. We in turn efficiently recapture our
costs through the stream of lease payments. Compared to the EPC model, we
believe our BOT model creates a more efficient business solution for the China
market and is well recognized by our targeted customers.

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

    Results of Operations, page
22

              Comment
    4.

              Please
      include a comparative analysis of non-operating income and expenses,
      income tax expense and the effective rates for the years
      presented.

    August
31, 2010

    Page
4

    Response:        The
Company acknowledges the comment of the Staff.  In future filings the
Company will include the following disclosures:

    NON-OPERATING
EXPENSES (NET).  Non-operating expenses consisted of non sales-type
lease interest income, interest expense, bank charges and some miscellaneous
expenses.  For the year ended December 31, 2009, net non-operating
expenses were $0.48 million, consisting mainly of interest expense on
convertible notes; compared to the same period in 2008, this was a decrease of
$4.25 million from $4.73 million during the year ended December 31, 2008, as a
result of a $4.68 million one-time expense for the unamortized portion of the
beneficial conversion feature of our first $5 million convertible note at the
time of repayment in 2008.

    INCOME
TAX EXPENSE.  The income tax expense was $2.95 million for the year
ended December 31, 2009, an increase of $1.32 million compared to $1.63 million
for the same period of 2008.  The increase was mainly due to the
increase in taxable income from $0.59 million taxable loss during the year ended
December 31, 2008 to $13.01 million taxable income during the same period of
2009; the effective tax rate for 2009 was 22.7%.  The income tax rate
for Shanghai TCH was 18% and 20% for 2008 and 2009,
respectively.  Xi’an TCH’s effective income tax rate for 2008 and 2009
is 15% as a result of its high tech enterprise status that was approved by the
taxing authority.  Xingtai Huaxin’s effective income tax rate for 2008
and 2009 is 25%.  Our newly incorporated subsidiaries – Huahong and
Erdos TCH’s effective income tax rate for 2009 is 25%.

    Liquidity and Capital
Resources page 23

    Loan Payable – Collective
Capital Trust Plan, page 24

              Comment
    5.

              Please
      expand your disclosure in the third paragraph on page 25, or elsewhere as
      appropriate, to describe the Erdos Power Generation Projects you first
      reference in the third paragraph on page
25.

    Response:        The
Company acknowledges the Staff’s comment.  We point the Staff’s
attention to the top of page 3 as well as the second and third paragraphs of
page 17 of the Company’s Annual Report on Form 10-K for the period ended
December 31, 2009.  These sections describe the Erdos Power Generation
Projects, in particular Phase I of such projects.  We also refer the
Staff to our response to Comment 2 hereto, in which the Company has described
additional disclosure regarding Phase II and Phase III of the Erdos
projects.  To avoid confusion we will also explain/define the term
“Erdos Power Generation Projects” far forward in future filings, as
appropriate.  For example, to the disclosure at page 3 where the Erdos
projects are first described we will add the disclosure in the first bullet
below and thereafter we will use cross-references or shortened descriptions; in
particular we will also make the change noted in the second bullet below at page
24 in the first paragraph at “Loans Payable - Collective Capital Trust
Plan.”  These changes are:

    August
31, 2010

    Page
5

    ·           in
“Business - Overview - Business History” additional final sentences to what is
the first paragraph on page 3 in this 10-K (with appropriate references to the
term “Erdos Power Generation Projects” in other disclosures) that read as
follows:

    We refer
to these as the Erdos Power Generation Projects.  There are five
phases to complete these projects, which we refer to as Phases I, II, III, IV
and V and which, when completed, will together generate a total of 109 MW of
electricity.  Phase I began in the fourth quarter of 2009 and we
expect to complete all five phases by the end of the fourth quarter of
2011.

    ·           a
revised final sentence to the first paragraph under “Liquidity and Capital
Resources - Loan Payable - Collective Capital Trust Plan” (at page 24 in this
10-K) that reads as follows:

    All
amounts raised under the Plan are loaned to Erdos TCH in connection with the
construction and operation of Phases II and III of the Erdos Power Generation
Projects described above at “Business - Overview - Business
History.”  These projects, when completed, will recycle waste heat
from Erdos Metallurgy’s metal refining plants to generate electric power and
steam, which will then be sold back to Erdos Metallurgy.

              Comment
    6.

              Please
      expand your disclosure in the fourth paragraph on page 24 to disclose the
      “benefits from the Clean Development Mechanism” you expect to
      receive.

    Response:        The
Company acknowledges the comment of the Staff and in future filings disclosure
regarding the Clean Development Mechanism will be expanded substantially as
follows:

    Under the
CDM mechanism, any benefits received will be paid to Erdos
Metallurgy.  Under the agreement with Xi’an TCH, Erdos Metallurgy
agrees to deliver to Xi’an TCH 50% of the benefit Erdos Metallurgy
receives.  Xi’an TCH agrees to share 50% of the benefit it receives
from Erdos Metallurgy with Erdos TCH.  Under the loan agreement
between Erdos TCH and Beijing Trust, Erdos TCH agrees that 50% of any benefit it receives
will be delivered to Beijing Trust.  The receipt of benefits is
subject to a process of evaluation and certification of the project, the first
stages of which have been completed successfully.

              Comment
    7.

              In
      the fifth paragraph on page 25 you state, in part, “accordingly, was
      eliminated in the consolidation.” The context of your disclosure makes it
      unclear what was eliminated. Please revise to
  clarify.

    Response:        The
Company acknowledges the comment of the Staff and in future filings the
disclosure will be revised to read as follows:

    August
31, 2010

    Page
6

    In
December 2009, the Company sold 206,880,000 units for RMB 206,880,000 ($30.30
million), of which 9,100,000 units ($1.33 million) were purchased by the
management of Erdos TCH; 32,280,000 units ($4.73 million) were purchased by
Xi’an TCH, the amount of $4.73 million was considered as investment by Xi’an TCH
into Erdos TCH and, accordingly, was eliminated in the Company’s consolidated
financial statements.  The net long term loan payable under this trust
plan was $25.58 million at December 31, 2009.  Interest expense
accrued on this trust loan was $0 at December 31, 2009.

    Item 8. Financial Statements
and Supplementary Data, page 26

              Comment
    8.

              We
      note that your auditors are located in California. It appears that all of
      your assets, liabilities, revenues and expenses relate to operations
      located in the People’s Republic of China. Please tell us how the audit of
      the operations in the People’s Republic of China, including the associated
      assets and liabilities, was conducted. Your response should include a
      discussion of the following:

              ·

              Whether
      another auditor was involved in the audit of the People’s Republic of
      China operations. If so, please tell the name of the firm and indicate
      whether they are registered with the Public Company Accounting Oversight
      Board (PCAOB). Additionally, please tell us how your U.S. auditor assessed
      the qualifications of the other auditor and the other auditor’s knowledge
      of US GAAP and PCAOB Standards;

              ·

              Whether
      your U.S. auditor performed all the required audit procedures within the
      United States or whether a portion of the audit was conducted by your U.S.
      auditor within the People’s Republic of
China.

    Response:        In
conducting the audit of the Company’s financial statements for the years ended
December 31, 2007 through 2009, the Company’s auditors used Beijing Anshun
International, CPAs Co., Ltd. (“Anshun”); HeQiao Building, Suite A310, Guanghua
Rd., Chaoyang District, Beijing, P.R. China 100026.  Tel:
+86-10-6581-2891; Fax: +86-10-6581-2892.

    Anshun is
registered with the PCAOB.  Our U.S. auditors have worked with Anshun
for the last four years.

    The
auditors make no reference to Anshun’s work in their audit report nor do they
obtain an audit report from Anshun.  Anshun’s international audit
department works exclusively for our auditors and is, in substance, their office
in China.

    Our
auditors plan the audit and develop the audit

August 3, 2010  Mr. Xinyu Peng, Chief Financia l 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 Definitive Proxy Statement on Schedule 14A Filed April 30, 2010 Form 10-Q for the Quarterly Period Ended March 31, 2010 Filed May 12, 2010
  File No. 001-34625

Dear Mr. Peng:
We have reviewed your filings and have the following comments.  You should comply
with the comments in all future filings, if app licable.  Please confirm in writing that you will do
so and also explain to us in sufficient detail how you intend to comply by providing us with your
proposed revisions.  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 te n business days by providing the requested
information, or by advising us when you will provide the requested response.  If you do not believe our comments apply to your facts and circum stances please tell us w hy in your response.
 After reviewing the information you provide in response to these comments, we may
have additional comments.  Form 10-K for the Fiscal Year Ended December 31, 2009

 Item 1.  Business, page 1

 Overview, page 1

 Business History, page 1

1. Please revise the last paragraph on page 3 to clarify the relevance of these economic
stimulus plans to your business.  Refer to Item 101(h)(4)(ix) of Regulation S-K.

Mr. Xinyu Peng China Recycling Energy Corporation August 3, 2010 Page 2

2. You reference Phase I of the Erdos TCH proj ect in the second paragraph on page 3.
Please expand this discussion to describe the status of Phases  I, II and III of the Erdos
TCH project.  Refer to Item 101( h)(4)(iii) of Regulation S-K.
 Competition, page 6

3. In the fourth bullet on page 7 you state that your provision of “BOT” services is an
advantage over your competitors.  Please expa nd to define or explain BOT services.

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

4. Please include a comparative analysis of non- operating income and expenses, income tax
expense and the effective tax rates for the years presented.
 Liquidity and Capital Resources, page 23

 Loan Payable – Collective Ca pital Trust Plan, page 24

5. Please expand your disclosure in the thir d paragraph on page 25, or elsewhere as
appropriate, to describe the Erdos Power Generation Projects  you first reference in the
third paragraph on page 25.
6. Please expand your disclosure in the fourth pa ragraph on page 25 to disclose the “benefits
from the Clean Development Mechanism” you expect to receive.
7. In the fifth paragraph on page 25 you state, in part, “accordingly, was eliminated in the
consolidation.”  The context of your disclosu re makes it unclear what was eliminated.
Please revise to clarify.
 Item 8.  Financial Statements and Supplementary Data, page 26

8. We note that your auditors are located in California.  It a ppears that all of your assets,
liabilities, revenues and expenses  relate to operations locate d in the People’s Republic of
China.  Please tell us how the audit of the operations in the People’s Republic of China,
including the associated asse ts and liabilities, was conducte d.  Your response should
include a discussion of the following:
• Whether another auditor was involved in the audit of the People’s Republic of China
operations.  If so, please tell the name of  the firm and indicate whether they are
registered with the Public Company Accounting Oversight Board (PCAOB).
Additionally, please tell us how your U.S. auditor assesse d the qualifications of the
other auditor and the other auditor's knowle dge of US GAAP and PCAOB Standards;

Mr. Xinyu Peng China Recycling Energy Corporation August 3, 2010 Page 3

• Whether your U.S. auditor performed all th e required audit procedures within the
United States or whether a portion of th e audit was conducted by your U.S. auditor
within the People’s Republic of China.

Report of Independent Registered Public Accounting Firm, page 26

9. Please include a conformed signature of the independent accountant to indicate the report
was manually signed.  Please refer to  Part 302 of Regulation S-T.
 Consolidated Statements of Stockholders Equity, page 29

10. Please include an analysis of changes in non-co ntrolling interests in the statement.  Please
refer to ASC 50-10-S99-1.
 Consolidated Statements of Cash Flows, page 30

11. Please tell us how you present cash flows used  in constructing power generating systems
and received from the sale /leasing of power generating systems and explain why your
presentation complies with FASB ASC 230.  In doing so, please reconcile the relevant
line items in the statement of cash flow such as “Gross investment in  sales-type leases”
and “Construction in progress” to th e consolidated balance sheet.
 Notes to Consolidated Financial Statements, page 31

12. If revenues from transactions with a single external customer amount to ten percent or
more of your revenues, please disclose that fact and the total amount of revenues from
each such customer.  Refer to FASB ASC 280-10-50-42.
13. Please disclose whether value added taxes ar e presented on a gross basis (included in
revenues and costs) or a net ba sis (excluded from revenues).  For any such taxes that are
reported on a gross basis, please disclose the amounts of those taxes in interim and annual
financial statements for each period for which an income statement is presented if those
amounts are significant.  Refer to ASC 605-45- 50-3 and 605-45-50-4.  In addition, please
explain to us in detail the nature of the de ductible VAT other receivable disclosed in Note
6 and why such amount can be used to offset  future VAT payable and is appropriately
reflected as an asset.
 Note 2.  Summary of Significan t Accounting Policies, page 33

 Basis of Consolidation, page 33

14. You disclose that Erdos TCH is a 90% ow ned subsidiary.  However, on page 2 you
disclose that you own 80% of Erdos TCH and in notes 1 and 13 to the financial
statements you disclose that you currently rece ive 80% of the profits from Erdos TCH.
Please tell us how the Erdos TCH joint vent ure is structured and the reasons for an

Mr. Xinyu Peng China Recycling Energy Corporation August 3, 2010 Page 4

allocation of profits on a basis that differs from  equity ownership interests.  In addition,
please revise your disclosure on page 2 or in note 1 to the financial statements regarding
your ownership interest in the JV as appropriate.
 Sales-type Leasing and Relate d Revenue Recognition, page 34

15. Please disclose your accounting policy for c ontingent rental income and the total
contingent rentals included in income for each year presented.  Refer to ASC 840-10-50-
5 and 840-30-50-4c.  Please provide us with an  example of your proposed disclosure.
 Basic and Diluted Earnings Per Share, page 36

16. Please tell us whether the dilutiv e effect of convertible secur ities is reflected in diluted
earnings per share by application of the if-c onverted method.  If so, please clarify your
disclosure regarding the method(s) applied to compute diluted earnings per share.
 Note 3.  Net Investment in Sales-Type Leases, page 39

17. You disclose that TRT systems leased to Xingt ai are accounted for as  sales-type leases.
However, your response to comment 8 in our le tter dated October 3, 2007 states that the
lease with Xingtai was accounted for as a dir ect financing lease.  Please tell us why you
changed your accounting method for the lease and the impact of  the accounting change, if
any, on your financial statements  or otherwise advise.
18. Please explain to us how you determined minimum lease payments and the discount rate
used to measure unearned income under each le ase contract.  Please also explain to us
why future minimum lease payments do not include amounts representing executory costs, such as maintenance,  taxes and insurance.
19. We note that you discuss the sales-type leas e agreements with each customer in note 1
with the exception of the agreement with Zh angzhi.  Please tell us why the arrangement
with Zhangzhi is not disclosed in note  1 or elsewhere in the document.
 Note 15.  Income Tax, page 43

20. Please disclose the significant components of  income tax expense attributable to
continuing operations for each year presented.  Those components would include, for example, current and deferred tax expens e.  Refer to FASB ASC 740-10-50-9.
 Note 17.  Loan Payable – Collect ive Capital Trust Plan, page 44

21. Please tell us whether or not you consolid ated Beijing Trust and the basis for your
conclusion.  In your response,  please discuss in detail  your application of the
consolidation guidance in ASC 810.  If Beijing Tr ust is consolidated, please disclose that
fact in your consolidation accounting policy in Note 2.  If Beijing Trust is a variable

Mr. Xinyu Peng China Recycling Energy Corporation August 3, 2010 Page 5

interest entity, please provide the disclo sures required by ASC 810-10-50-8 through ASC
810-10-50-19 to the extent applicable.  In addition, please tell us and expand your
disclosure in future filings 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 pr ofit (or incentive benefit) as discussed in
Form 8-K filed December 8, 2009.  Further, please tell us how you are accounting for these provisions and how these provisions  will affect your consolidated financial
statements.
 Note. 18.  Convertible Notes Payable and Revolving Financing Agreement, page 45

22. Please tell us why the convert ible notes are classified as  current liabilities in your
consolidated balance sheets.  Please re ference the GAAP guidance which supports the
current classification.
23. Please tell us how you account for interest on co nvertible debt that is paid-in-kind.  To
the extent material, please disclose your acc ounting policy for paid-i n-kind interest in
future filings.  Refer to FASB ASC 470-20-30-16 through 470-20-30-18.
24. Please provide the disclosures required by ASC 825-20-50 for the convertible note
registration payment arrangeme nts disclosed on page 47.
 Note 19.  Stock-Based Compensation, page 47

25. Please disclose the number and weighted-ave rage exercise price of stock options
exercisable at the end of th e year.  In addition, for fully vested options and options
expected to vest at the late st balance sheet date please di sclose the number, weighted-
average exercise price, aggr egate intrinsic value, and weighted-average remaining
contractual term of options outstanding and currently exercisable.  Refer to ASC 718-10-
50-2c.iii and 718-10-50-2e.
26. Please tell us how you are accounting for the warra nts issued to investor relations firms.
Please specifically discuss your determinati on of measurement dates and the facts that
support the measurement dates of the awards.  Please also  address your accounting for
the changes in fair valu e of the awards between the issuan ce date of the awards and their
measurement dates.  Refer to FASB ASC 505-50-30.
Item 9A.  Controls a nd Procedures, page 51

 Internal Control Over Financial Reporting, page 51

27. Please include a statement as to whether or not  internal control over financial reporting is
effective.  Please refer to Item 308T(a)(3) of Regulation S-K.

Mr. Xinyu Peng China Recycling Energy Corporation August 3, 2010 Page 6

Changes in Internal Control Over Financial Reporting, page 52

28. Please specifically disclose any change in in ternal control over financial reporting that
occurred during the last fiscal quarter that ha s materially affected, or  is reasonably likely
to materially affect, your in ternal control over financial reporting rather than providing
the qualified disclosure presently provided.  Please refer to Item 308T(b) of Regulation S-
K.
 Item 15.  Exhibits, Financial Statement Schedules, page 52

29. We note that you have effective Registration Statements on Form S-8 that incorporate by
reference all documents subsequently filed pur suant to the Securities Exchange Act.  As
such, please file the written consent of your independent ac countant in accordance with
Item 601(b)(23) of Regulation S-K.
 Signatures, page 54

30. Please include the signatures of your principal financial officer and controller or principal
accounting officer in the second signature section.  Please refe r to general instruction D.2.
of Form 10-K.  Please also confirm in your  response whether your principal financial
officer and controller or pr incipal accounting officer have manually signed a copy of this
10-K, and if not, why.
Definitive Proxy Statement on Schedule 14A

 Executive Officers and Directors, page 4

31. For each director, briefly discuss the specifi c experience, qualifications, attributes or
skills that led to the conclusion that the pe rson should serve as a director.  See Item
401(e) of Regulation S-K.
 Corporate Governance and No minating Committee, page 6

32. Please provide the disclosure required by Item 407(c)(2)(vi) of Regulation S-K regarding
your nominating committee’s process for identi fying and evaluating director nominees.
Please make sure to state whether the co mmittee considers diversity in identifying
director nominees, whether the committee has a related policy, and if  so, how such policy
is implemented.
33. Please provide the disclosure required by Item 407(h) of Re gulation S-K regarding your
board leadership structure and its role in ri sk oversight.  In this  regard, we note that
Guohua Ku serves as both your Chief Executiv e Officer and Chairman of the Board.

Mr. Xinyu Peng China Recycling Energy Corporation August 3, 2010 Page 7

Executive Compensation, page 8

 Summary Compensation Table, page 8

34. Please provide disclosure explaining why your Chief Financial O fficer’s salary is
significantly greater than  your Chief Executive Officer’s salary.  Refer to Item 402(o) of
Regulation S-K.

Form 10-Q for the Quarterly Period Ended March 31, 2010
35. We note that your disclosure in your Form 8- K filed on May 5, 2010 that you entered into
a material loan agreement w ith Industrial Bank Co., Ltd., Xi’a n Branch.  Please confirm
that you will file a copy of this agreement w ith your next periodic report.  Refer to Item
601(b)(10) of Regulation S-K.

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities 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.
In responding to our comments, please provi de a written statement from the company
acknowledging that:

• the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;

• staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

• the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the sta ff of the Division of Corporati on Finance in our review of your
filings or in response to our comments on your filings.

Mr. Xinyu Peng China Recycling Energy Corporation August 3, 2010 Page 8

You m

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0405

       DIVISION OF
CORPORATION FINANCE

 Mail Stop 3561           March 18, 2010  Mr. Xinyu Peng China Recycling Energy Corporation Suite 909, Tower B, Chang An International Building No. 88 Nan Guan Zheng Jie Xi An City, Shan Xi Province, China 710068
 Re: China Recycling Energy Corporation
  Item 4.01 Form 8-K
  Filed August 18, 2009   File No. 0-12536

Dear Mr. Xinyu Peng:
We have completed our review of your Form 8-K and have no further comments
at this time.
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    cc: Thomas Wardell, Esq.  McKenna Long & Aldridge LLP

CORRESP
1
filename1.htm

    Unassociated Document

                    Albany

                    Atlanta

                    Brussels

                    Denver

                    Los
      Angeles

                    www.mckennalong.com

                    New
      York

                    Philadelphia

                    San
      Diego

                    San
      Francisco

                    Washington,
      DC

                  THOMAS
      WARDELL

                  (404)
      527-4990

                  EMAIL
      ADDRESS

                  twardell@mckennalong.com

                  February 19,
2010

      Via EDGAR

      United
States Securities and Exchange Commission

        Division
of Corporation Finance

          100 F
Street, NE

            Washington,
D.C.  20549-0405

                Attn:

                Ta
      Tanisha Meadows, Staff Accountant

                Re:

                China
      Recycling Energy Corporation

      Item 4.01
Form 8-K

      Filed
August 18, 2009

      File No.
0-12536

      Ladies
and Gentlemen:

      We are
counsel to the above-referenced company, China Recycling Energy Corporation
(“CREG” or the “Company”) and are filing this response to your comment letter of
January 13, 2010 with respect to the above-referenced filing on Form 8-K on
CREG’s behalf.

      Item 4.01 8-K Filed August
18, 2009

                Comment
    1.

                It
      appears that your disclosures are inconsistent or incomplete when compared
      to the information provided in your response letter and the disclosures in
      Item 4.01 of Form 8-K filed May 11, 2009 and Item 8.01 of Form 8-K filed
      August 11, 2009 (hereinafter referred to, together with Item 4.01 Form 8-K
      filed August 18, 2009, as the “Form 8-K current reports”)  As
      such, we believe that you should clarify your disclosures to describe all
      of the events related to the change in and disagreements with accountants
      on accounting and financial disclosure and to comply with the disclosure
      requirements of Item 304 of Regulation S-K.  Specifically,
      please:

        February
19, 2010

        Page
2

                ·

                Disclose
      that you engaged Deloitte and dismissed GPKM on May 5, 2009 and that
      decision to change accountants was approved by the board of directors or
      your audit or similar committee of the board of
  directors.

                ·

                Disclose
      that the current report filed on August 11, 2009 announcing the delayed
      engagement of Deloitte until after the filing of your quarterly report on
      Form 10-Q for the quarter ended June 30, 2009 was filed under Item 8.01 of
      Form 8-K.

                ·

                Disclose
      the impact of your decision to delay the engagement of Deloitte on the
      dismissal of GPKM.  For example, if the decision to delay the
      engagement of Deloitte also delayed the dismissal of GPKM until GPKM
      completed its review of your interim financial statements included in the
      Form 10-Q for the quarter ended June 30, 2009, please disclose that
      fact.

                ·

                Revise
      your disclosure regarding the August 12, 2009 letter received from
      Deloitte to clarify that (i) Deloitte concluded that the firm had been
      dismissed because your decision to use the services of GPKM through the
      filing of the June 30, 2009 Form 10-Q was inconsistent with the terms of
      the Deloitte engagement letter of May 5, 2009 and (ii) you decided to
      accept Deloitte’s interpretation that it had been
      dismissed.  Also revise to clarify whether your decision to
      accept Deloitte’s interpretation that it had been dismissed was approved
      by the board of directors or your audit or similar committee of the board
      of directors.

                ·

                Revise
      your disclosure regarding the approval of the engagement of GPKM by the
      board of directors on August 13, 2009.  It appears that this
      disclosure is inconsistent with your statement in your response to comment
      one in our letter dated August 20, 2009 that you decided to reaffirm your
      relationship with GPKM on August 12, 2009.  Also, clarify
      whether or not you dismissed and engaged GPKM and the dates thereof or
      whether you continued the engagement of GPKM after you received the August
      12, 2009 letter from Deloitte and the date thereof.  In
      addition, clarify whether your decision to dismiss and engage GPKM or
      continue the engagement of GPKM was approved by the board of directors or
      your audit or similar committee of the board of
  directors.

        February
19, 2010

        Page
3

                ·

                Revise
      your disclosure in the third paragraph to clarify whether or not there
      were any disagreements, as defined in paragraph 4 of the instructions to
      Item 304 of Regulation S-K, regarding the accounting issues identified by
      Deloitte and under discussion when the firm concluded that it had been
      dismissed.  If there were any disagreements regarding the
      accounting issues expand your description of each of the accounting issues
      and the disagreements, including the differences of opinion and disclose
      that the issues were not resolved to Deloitte’s satisfaction as of the
      date Deloitte concluded that the firm had been
      dismissed.  Otherwise, clearly state that there were no
      disagreements regarding the accounting issues identified by Deloitte
      because the issue were under discussion when the firm concluded it had
      been dismissed.

                ·

                Disclose
      that the accounting issues identified by Deloitte were the subject of
      on-going discussions between you, Deloitte and GPKM.  In
      addition, briefly describe the views of GPKM regarding each of the
      accounting issues and request GPKM to review the disclosure required by
      Item 304(a) and provide GPKM the opportunity to furnish a letter in
      accordance with paragraph (D) of Item 304(a)(2) of Regulation S-K, or tell
      us why you believe the disclosures in Item 304(a)(2) of Regulation S-K are
      not required.  Please file any letter received from GPKM as an
      exhibit to your amended filing.

                ·

                File
      an updated letter from Deloitte stating whether the firm agrees with the
      statements made in your amended filing and, if not, stating the respects
      in which the firm does not agree.

      Response:

       The
responses to Comment #1 are reflected in the attached draft report on Form 8-K/A
addressing the changes in disclosure requested in the first seven items
identified in Comment 1, except as to:  (1) the request in the
6th item that the Company clarify whether there were any disagreements, as
defined in paragraph 4 of the instructions to Item 304 of Regulation S-K;
(2) the final clause of the second sentence of the seventh item concerning
disclosures described in Item 304(a)(2) of the Regulation S-K; and (3) the
8th item in Comment #1 (an updated letter from Deloitte).

      (1)           The
Company has concluded, based upon its conversations with representatives of
Deloitte, its review of the discussions with Deloitte during the period from May
5, 2009 to August 12, 2009, and its review of the correspondence from Deloitte
of August 12, 2009 that there were no disagreements, as defined in paragraph 4
of the instructions to Item 304 of Regulation S-K regarding the accounting
issues identified by Deloitte and under discussion when Deloitte concluded that
it had been dismissed.  However, Deloitte has requested the Company to
remove the Company’s disclosure to that effect from the draft 8-K/A and
indicated that its agreement with the 8-K/A would not extend to including that
disclosure nor that disclosure that there were disagreements would reflect the
situation.  The Company is satisfied that the draft 8-K/A accurately
discloses the status of the discussions at August 12, 2009 and understands that
Deloitte agrees with the disclosure in the draft 8-K/A.  In addition,
in the draft 8-K/A the Company believes it has fully disclosed the information
that would be relevant and required had there been any disagreements as that
term is defined in Instruction 4 to Item 304.  Therefore the Company
requests that it not be required to make this particular
disclosure.

        February
19, 2010

        Page
4

      (2)           The
Company does not believe the disclosures identified in the final clause of Item
7 are required for the following reason:

      The
Company engaged GPKM as its independent registered public accounting firm for
the fiscal year ending December 31, 2009.  Inasmuch as GPKM had been
the Company’s independent registered public accounting firm since March 12,
2008, and undertook and completed the review for both the first and second
quarters of 2009, the Company and its Board did not perceive the formal
engagement of GPKM on August 12, 2009 as the engagement of a new firm to act as
its independent registered public accounting firm and therefore did not file a
separate report on Form 8-K to that effect.  GPKM has been the
independent registered public accounting firm for the Company for all financial
reports covered by paragraph (a)(2) of Item 304 of Regulation S-K and therefore
the Company believes that the provisions of Item 304 (a)(2) and the disclosures
contemplated by that paragraph are not required.  However, the Company
notes that GPKM’s views are expressed in the draft 8-K/A.  It has also
requested GPKM to furnish the letter described in the seventh item.

      (3)           In
reference to the 8th item, the Company has furnished a copy of the draft 8-K/A
to Deloitte-Touche Tohmatsu CPA Ltd. and requested them to furnish the letter
described in this item.  Deloitte has indicated their willingness to
do so.  We will file this letter as soon as it is received or, if it
is received prior to filing of the 8-K/A, as an exhibit to that
filing.

                Comment
    2.

                We
      understand that you restated previously issued financial statements for
      the fourth and fifth accounting issues disclosed in the filing pursuant to
      Item 304(a)(1)(iv) of Regulation S-K.  Please tell us in more
      detail how you resolved the other three accounting issues and why your
      accounting for each matter complies with GAAP citing relevant
      authoritative literature.  Please also tell us why you believe
      that you are not required to provide the disclosures required by Item
      304(b) of Regulation S-K.  Otherwise provide the required
      disclosures.  In any event, please tell us the effects on your
      interim and annual financial statements had you followed the accounting
      that Deloitte apparently would have concluded was
  required.

      Response:

      The
resolution of the three accounting issues not resolved by the Company’s
restatement are set forth in the draft 8-K/A included in these responses to the
comment letter.  It is the Company’s understanding that the decisions
reached with respect to these three issues are driven by the facts and
circumstances of each situation as much as by the accounting
literature.  The Company believes that the disclosure required by Item
304(b) of Regulation S-K is not required because there were neither any
disagreements nor reportable events as described in paragraphs (a)(1)(iv) or
(a)(1)(v), respectively, of Item 304.  Nevertheless, the Company
believes that its disclosure in the draft 8-K/A with respect to these issues,
provides an adequate framework for understanding the effect on the financial
statements had the other possible treatments under consideration been
applied.

        February
19, 2010

        Page
5

                Comment
    3.

                We
      note that the representations requested in connection with the response to
      our comment letter dated August 20, 2009 were provided by your legal
      counsel on page 4 of your response letter dated January 6,
      2010.  Please provide the requested representations from a duly
      authorized representative of China Recycling Energy
      Corporation.

      Response:

      The
requested representations are included in a letter from the Company signed by
its Chief Financial Officer.

      Should
you have further comments or require further information, or if any questions
should arise in connection with this submission, please call me at (404)
527-4990 or Mr. James Thornton at (404) 527-8118.

                  Very
      truly yours,

                  /s/
      Thomas Wardell

                  Thomas
      Wardell

                cc:

                Tony
      Peng, CFO, China Recycling Energy
Corp.

      Jeffrey
Li, Esq.

      James L.
Thornton, Esq.

      UNITED STATES

      SECURITIES AND EXCHANGE
COMMISSION

      Washington, DC 20549

      FORM 8-K/A

      (Amendment No. 1)

      CURRENT REPORT

      Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

      Date of Report (Date of earliest event
reported):

      May 11,
2009

      CHINA RECYCLING ENERGY
CORPORATION

      (Exact name of registrant as specified
in its charter)

                Nevada

                000-12536

                90-0093373

                (State or other jurisdiction of
      incorporation)

                (Commission File
      Number)

                (IRS Employer Identification
      No.)

                0000721693

                4911-Electric
      Services

                06628887

                (Central Index
      Key)

                (Standard Industrial
      Classification)

                (Film
    Number)

      Suite 909, Tower B

      Chang An International
Building

      No. 88 Nan Guan Zheng
Jie

      Xi An City, Shan Xi
Province

      China 710068

       (Address of principal executive
offices, including zip code)

      (011)
86-29-8769-1097

      (Registrant’s telephone number,
including area code)

      Not Applicable

      (Former name or former address, if
changed since last report.)

      Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction
A.2. below):

      £
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)

      £
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)

      £
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))

      £
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))

                Item
      4.01

                Changes
      in Registrant's Certifying
Accountant.

      This
8-K/A is filed to amend previous Forms 8-K as follows:  the
disclosures in Item 4.01 of Form 8-K filed on May 11, 2009, the disclosures in
Item 8.01 of Form 8-K filed August 11, 2009 and the disclosures in Item 4.01 of
Form 8-K filed on August 18, 2009.  All of these disclosures concerned
the plan of China Recycling Energy Corporation (the “Company”) to change its
independent registered public accounting firm from Goldman Parks Kurland
Mohidin, LLP (“GPKM”) to Deloitte-Touche Tohmatsu CPA Ltd. (“Deloitte”) for the
fiscal year ended December 31, 2009, and events which occurred that changed that
plan and resulted in the Company’s ultimate decision to continue its
relationship with GPKM as the Company’s independent registered public accounting
firm for the fiscal year ending December 31, 2009.  The Company is
filing this 8-K/A to clarify and amplify those disclosures and,

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0405

       DIVISION OF
CORPORATION FINANCE

 Mail Stop 3561           January 13, 2010  Mr. Xinyu Peng China Recycling Energy Corporation Suite 909, Tower B, Chang An International Building No. 88 Nan Guan Zheng Jie Xi An City, Shan Xi Province, China 710068
 Re: China Recycling Energy Corporation
  Item 4.01 Form 8-K
  Filed August 18, 2009   File No. 0-12536

Dear Mr. Xinyu Peng:
We have reviewed your response letter dated January 6, 2010 to our comment
letter dated August 20, 2009 and have the following comments.  We think you should file an amended Form 8-K 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 additional 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 filings.  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 contact us at the telephone numbers listed at the end of this letter.
Item 4.01 Form 8-K Filed August 18, 2009

1. It appears that your disclosures are inconsistent or incomplete when compared to
the information provided in your response letter and the disclosures in Item 4.01 of Form 8-K filed May 11, 2009 and Item 8.01 of Form 8-K filed August 11, 2009 (hereinafter referred to, together with Item 4.01 Form 8-K filed August 18, 2009, as the “Form 8-K current reports”).  As such, we believe that you should clarify your disclosures to describe all of the events related to the change in and disagreements with accountants on accounting and financial disclosure and to

Mr. Xinyu Peng
China Recycling Energy Corporation
January 13, 2010 Page 2
comply with the disclosure requirements of Item 304 of Regulation S-K.  Specifically, please:

o Disclose that you engaged Deloitte and dismissed GPKM on August 5, 2009, and that the decision to change accountants was approved by the board of directors or your audit or similar committee of the board of directors.
 o Disclose that the current report filed on August 11, 2009 announcing the delayed engagement of Deloitte until after the filing of your quarterly report on Form 10-Q for the quarter ended June 30, 2009 was filed under Item 8.01 of Form 8-K.
 o Disclose the impact of your decision to delay the engagement of Deloitte on the dismissal of GPKM.  For example, if the decision to delay the engagement of Deloitte also delayed the dismissal of GPKM until GPKM completed its review of your interim financial statements included in Form 10-Q for the quarter ended June 30, 2009, please disclose that fact.
 o Revise your disclosure regarding the August 12, 2009 letter received from Deloitte to clarify that (i) Deloitte concluded that the firm had been dismissed because your decision to use the services of GPKM through the filing of the June 30, 2009 Form 10-Q was inconsistent with the terms of the Deloitte engagement letter of May 5, 2009 and (ii) you decided to accept Deloitte’s interpretation that it had been dismissed.  Also revise to clarify whether your decision to accept Deloitte’s interpretation that it had been dismissed was approved by the board of directors or your audit or similar committee of the board of directors.
 o Revise your disclosure regarding the approval of the engagement of GPKM by the board of directors on August 13, 2009.  It appears that this disclosure is inconsistent with the statement in your response to comment one in our letter dated August 20, 2009 that you decided to reaffirm your relationship with GPKM on August 12, 2009.  Also, clarify whether or not you dismissed and engaged GPKM and the dates thereof or whether you continued the engagement of GPKM after you received the August 12, 2009 letter from Deloitte and the date thereof.  In addition, clarify whether your decision to dismiss and engage GPKM or continue the engagement of GPKM was approved by the board of directors or your audit or similar committee of the board of directors.

Mr. Xinyu Peng
China Recycling Energy Corporation
January 13, 2010 Page 3
o Revise your disclosure in the third paragraph to clarify whether or not there were any disagreements, as defined in paragraph 4 of the instructions to Item 304 of Regulation S-K, regarding the accounting issues identified by Deloitte and under discussion when the firm concluded that it had been dismissed.  If there were any disagreements regarding the accounting issues expand your description of each of the accounting issues and the disagreements, including the differences of opinion and disclose that the issues were not resolved to Deloitte’s satisfaction as of the date Deloitte concluded that the firm had been dismissed.  Otherwise, clearly state that there were no disagreements regarding the accounting issues identified by Deloitte because the issues were under discussion when the firm concluded that it had been dismissed.
 o Disclose that the accounting issues identified by Deloitte were the subject of on-going discussions between you, Deloitte and GPKM.  In addition, briefly describe the views of GPKM regarding each of the accounting issues and request GPKM to review the disclosure required by Item 304(a) and provide GPKM the opportunity to furnish a letter in accordance with paragraph (D) of Item 304(a)(2) of Regulation S-K, or tell us why you believe the disclosures in Item (a)(2) of Regulation S-K are not required.  Please file any letter received from GPKM as an exhibit to your amended filing.
 o File an updated letter from Deloitte stating whether the firm agrees with the statements made in your amended filing and, if not, stating the respects in which the firm does not agree.
 2. We understand that you restated previously issued financial statements for the fourth and fifth accounting issues disclosed in the filing pursuant to Item 304(a)(1)(iv) of Regulation S-K.  Please tell us in more detail how you resolved the other three accounting issues and why your accounting for each matter complies with GAAP citing relevant authoritative literature.  Please also tell us why you believe you are not required to provide the disclosures required by Item 304(b) of Regulation S-K.  Otherwise, provide the required disclosures.  In any event, please tell us the effects on your interim and annual financial statements had you followed the accounting that Deloitte apparently would have concluded was required.
 3. We note that the representations requested in connection with the response to our comment letter dated August 20, 2009 were provided by your legal counsel on page 4 of your response letter dated January 6, 2010.  Please provide the requested representations from a duly authorized representative of China Recycling Energy Corporation.

Mr. Xinyu Peng
China Recycling Energy Corporation January 13, 2010 Page 4
 As appropriate, please amend your filing and respond to these comments within
five business days or tell us when you will respond.  You may wish to provide us with marked copies of the amendment to expedite our review.  Please furnish a cover letter with your amendment that keys your responses to our comments and provides any requested information.  Detailed cover letters greatly facilitate our review.  Please understand that we may have additional comments after reviewing your amendment and responses to our comments.     You may contact Ta Tanisha Meadows at 202-551-3322 if you have any questions.  In her 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    cc: Thomas Wardell, Esq.  McKenna Long & Aldridge LLP

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0405

       DIVISION OF
CORPORATION FINANCE

 Mail Stop 3561           August 20, 2009  Xinyu Peng China Recycling Energy Corporation Suite 909, Tower B, Chang An International Building No. 88 Nan Guan Zheng Jie Xi An City, Shan Xi Province, China 710068
 Re: China Recycling Energy Corporation
  Item 4.01 Form 8-K
  Filed August 18, 2009   File No. 0-12536

Dear Xinyu Peng:   We have reviewed your filing and have the following comments.  We have limited our review to Item 4.01 of the above-referenced filing.  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.    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 filings.  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 contact us at the telephone numbers listed at the end of this letter.   Item 4.01 8-K Filed August 18, 2009

1. Please state whether Deloitte resigned, declined to stand for re-election or was dismissed and the date thereof.  Refer to paragraph (a)(1)(i) of Item 304 of Regulation S-K.

2. Please clarify your description of the nature of the disagreements with Deloitte as required by item (A) of paragraph (a)(1)(iv) of Item 304 of Regulation S-K.  For example, describe the actual disagreement in accounting for the transactions including the positions taken by Deloitte and management.

Xinyu Peng
China Recycling Energy Corporation
August 20, 2009 Page 2
3. We note that the Board of Directors approved the engagement of GPKM on August 13, 2009.  Please disclose the date that you actually engaged GPKM.  Otherwise, please acknowledge your obligation to file a current report on Form 8-K and provide the disclosures required by paragraph (a)(2) of Item 304 of Regulation S-K when you engage  a new independent accountant.

4. Please file an updated letter from Deloitte stating whether the firm agrees with the statements made in any amendment to the filing and, if not, stating the respects in which the firm does not agree.

As appropriate, please amend your filing and respond to these comments within
five business days or tell us when you will respond.  You may wish to provide us with marked copies of the amendment to expedite our review.  Please furnish a cover letter with your amendment that keys your responses to our comments and provides any requested information as an EDGAR correspondence file.  Detailed cover letters greatly facilitate our review.  Please understand that we may have additional comments after reviewing your amendment and responses to our comments.
 We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filings to be certain that the filings include all information required under the Securities Exchange Act of 1934 and that they have provided all information investors require for an informed investment decision.  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.
In connection with responding to our comments, please provide, in writing, a
statement from the company acknowledging that:
‚ the company is responsible for the adequacy and accuracy of the disclosures in the filing;

‚ staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

‚ the company may not assert this action as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
  In addition, please be advised that the Division of Enforcement has access to all information you provide to the staff of the Di vision of Corporation Finance in connection
with our review of your filing or in response to our comments on your filing.

Xinyu Peng
China Recycling Energy Corporation August 20, 2009 Page 3
   If you have any questions regarding these comments, please direct them to me at (202) 551-3322.  In my absence, you may direct your questions to Bill Thompson, Accounting Branch Chief, at (202) 551-3344.
Sincerely,   Ta Tanisha Meadows
        Staff Accountant

CORRESP
1
filename1.htm

    Unassociated Document

    McKenna
Long & Aldridge LLP

    Suite
5300

    303
Peachtree Street

    Atlanta,
Georgia 30308

                January 6, 2010

    Via
EDGAR

    United
States Securities and Exchange Commission

    Division
of Corporation Finance

    100 F
Street, NE

    Washington,
D.C.  20549-0405

    Attn:     Ta
Tanisha Meadows, Staff Accountant

              Re:

              China
      Recycling Energy Corporation

              Item
      4.01 Form 8-K

              Filed
      August 18, 2009

              File
      No. 0-12536

    Ladies
and Gentlemen:

    We are
counsel to the above-referenced company, China Recycling Energy Corporation
(“CREG” or the “Company”) and are filing this response to your comment letter of
August 20, 2009 with respect to the above-referenced filing on Form 8-K on
CREG’s behalf.

    First,
let me reiterate our apologies for the late response.  As I indicated
in our telephone conversation, unfortunately, this comment letter was forwarded
to the Company’s offices in China and not forwarded to the appropriate officer’s
attention until very recently.  The Company’s responses to the
comments in that letter are set forth below.

     Item 4.01 8-K Filed August
18, 2009

              Comment
      1.

              Please
      state whether Deloitte resigned, declined to stand for re-election or was
      dismissed and the date thereof.  Refer to paragraph (a)(1)(i) of
      Item 304 of Regulation S-K.

    Response:

    As
indicated in the above-referenced 8-K, the Company was in the process of
transitioning the responsibilities for independent audit services to Deloitte
from and after the May 5, 2009 announcement until August 11,
2009.  When it became apparent that the transition would not be
completed soon enough to file timely the Company’s quarterly report on Form 10-Q
for the quarter ended June 30, 2009, the Company decided to have the review of
that Form 10-Q conducted by its previous and present audit firm, GPKM (which had
been working with Deloitte throughout the transition period), and to delay the
completion of the transition to Deloitte until after filing the second quarter
10-Q.  On August 11, 2009 the Company filed an 8-K to that
effect.  Deloitte responded with correspondence indicating it
considered the use of GPKM through the filing of the June 30, 2009 10-Q to be
“inconsistent with the engagement letter of May 5, 2009,” and, therefore, that
Deloitte had been dismissed.  Deloitte forwarded to the Company (copy
to PCAOB) a letter dated August 12, 2009 informing the Company that “the
client-auditor relationship…has ceased.”  The Company decided to
accept Deloitte’s interpretation and reaffirmed its relationship with GPKM on
August 12, 2009.

    While the
Company took no active steps to dismiss Deloitte, it has accepted Deloitte’s
interpretation of the events and treated matters accordingly for reporting
purposes.

      United
States Securities and Exchange Commission

      January
6, 2010

      Page
2

              Comment
      2.

              Please
      clarify your description of the nature of the disagreements with Deloitte
      as required by item (A) of paragraph (a)(1)(iv) of Item 304 of Regulation
      S-K.  For example, describe the actual disagreement in
      accounting for the transactions including the positions taken by Deloitte
      and management.

    Response:

    In the
Company’s 8-K filed August 18, 2009, the Company identified five topics with
which there had been disagreement with Deloitte with respect to matters of
accounting treatment.  The disclosure of August 18 may have suggested
a level of disagreement that in fact did not exist.  As is always the
case in a transition from one auditor to another, the Company and both audit
firms reviewed prior filings and financial statements.  In the course
of this review, Deloitte identified the five topics, described in the August 18,
2009 8-K.  These topics had been the subject of ongoing discussions
between the Company, Deloitte and GPKM and remained such on August 12, 2009, and
the Company’s expectation, until receipt of the Deloitte correspondence, was
that these discussions would continue until agreement had been reached and
whatever restatement, if any, was required was prepared and filed.  At
no point did the discussions rise to the level of a disagreement, as described
in paragraph (a)(1)(iv) of Item 304 of Regulation S-K, or a reportable event, as
described in paragraph (a)(1)(v) of Item 304.   In the
correspondence we referenced above, Deloitte indicated only that it believed
“the Company has a complete understanding of the potential misstatements that we
were discussing with respect to the Company’s 10-K’s for the years ended
December 31, 2007 and 2008 in respects of prior accounting for revenue
recognition, issuance of convertible notes and stock-based
compensation.  Those discussions were not brought to resolution by the
date of [our
dismissal.]”    (brackets
supplied)

    As you
will probably have observed, the Company and GPKM continued their review after
August 12, 2009, and on August 19, 2009 filed an 8-K under Item 402 of that form
indicating that a restatement was being prepared.  The restatement was
filed on September 28, 2009.

    As the
topics were still under discussion at the time of the Company’s decision to
continue its relationship with GPKM as outside independent auditors through the
period of the second quarter ending June 30, 2009, we can only describe the
matters of discussion as they existed at the time of Deloitte’s determination
that it had been dismissed on August 12, 2009.  Each of these items
was identified in the Form 8-K filed on August 18, 2009.  Each was
discussed by the Board of Directors of the Company and the Board of Directors
discussed these matters with Deloitte.  Each was also a matter of
discussion with GPKM, which is both the predecessor and successor accounting
firm.  These discussions with both firms continued throughout the
period of May 5, 2009 to August 12, 2009.  The positions are reflected
as follows:

      United
States Securities and Exchange Commission

      January
6, 2010

      Page
3

    1.           2007
sales-type leases:  As the Company understood matters on August 12,
2009, the Company and Deloitte differed over the appropriate interest rate to be
applied as a discount rate to the stream of revenue to be received under its
sales-type leases and over the method to be employed to determine both the size
of the profit margin and when the sale would be recognized.  The
method Deloitte was suggesting for consideration utilized a derivation of the
Company’s cost of capital which resulted in a negative margin in the case of one
lease and a margin of approximately 60% in the other – neither of which
suggested a reasonable profit had the systems been sold.  In addition,
the assumed cost of capital used by the consultant was not based upon the
Company’s actual historical cost of capital.  Finally, to use the
concept of cost of capital in this analysis is to import a concept applicable to
a lessee, not to a lessor, which is CREG ‘s role in the
transaction.  The Company was therefore concerned that this treatment
would be inaccurate.  At August 12, 2009, Deloitte had not taken a
position and it was the Company’s  understanding that Deloitte was
considering this concern of the Company.

    2.           2008
sales-type lease:  As the Company understood matters on August 12,
2009, the Company and Deloitte differed as to whether the Company needed a
minimum guarantee provision in the agreement in order to qualify the contract as
a sales-type lease; in any event, the amendment to the agreement made on August
12, 2009 contained such minimum guarantee.

    3.           Volatility
assumption used for November 2007 stock option awards to establish grant date
fair value:  As the Company understood matters on August 12, 2009, the
Company and Deloitte differed over whether the Company was obliged to use the
evaluation determined by a separate evaluation firm employed by the Company to
determine the volatility assumption.  The Company believed the
evaluation firm’s results suggested a lower volatility assumption than was
appropriate and produced values that did not comport with historical stock
prices.  The Company continued to use the 100% volatility assumption
which had previously been employed due to the lack of history with respect to
the subject.

    4.           Cancellation
and subsequent reissuance of stock option awards:  As the Company
understood matters on August 12, 2009, the Company and Deloitte differed over
whether the Company’s intent to reissue accompanied the cancellation at the time
of cancellation.  The Company believed it had no intent at the time of
cancellation, whereas Deloitte believed that technically the later events
reflected an intent to reissue.  In any event, the reissuance was
treated as a modification in the restatement filed by the Company on September
28, 2009.  To the best of the Company’s knowledge, this restatement
reflected the position Deloitte suggested.

    5.           Conversion
feature of convertible note:  As the Company understood matters on
August 12, 2009, the Company and Deloitte were discussing the proper treatment
of the unamortized amount of the beneficial conversion feature recognized by the
Company upon issuance in 2007 of the convertible note.  Deloitte had
not taken a position with respect to the unamortized beneficial conversion
feature.  To the best of the Company’s knowledge, the restatement
filed by the Company on September 28, 2009 reflects the discussions with
Deloitte.

    Under
these circumstances, we suggest the disclosure in the August 18, 2009 8-K,
agreed to by Deloitte in its letter of August 19, 2009, satisfied the
requirements of Item 304 of Regulation S-K and, hence, of Item 4.01 of Form
8-K.  That is, since the topics discussed in the 8-K of August 18 were
still in discussion and, with respect to certain matters, the Company’s later
restatement of positions in the financial restatements incorporated the matters
raised by Deloitte, at least as the Company understood them on August 12, 2009,
we respectfully suggest a further amendment of the 8-K is both unnecessary and
perhaps inappropriate.

      United
States Securities and Exchange Commission

      January
6, 2010

      Page
4

              Comment
      3.

              We
      note that the Board of Directors approved the engagement of GPKM on August
      13, 2009.  Please disclose the date that you actually engaged
      GPKM.  Otherwise, please acknowledge your obligation to file a
      current report on  Form 8-K and provide the disclosures required
      by paragraph (a)(2) of Item 304 of Regulation S-K when you engage a new
      independent accountant.

    Response:

    The
Company engaged GPKM to provide the services of independent auditor for the year
2009 on August 12, 2009.  This engagement was ratified by the Board of
Directors on August 13, 2009.  Inasmuch as GPKM had been the Company’s
independent auditors for prior periods and continued to undertake and complete
the review for both the first and second quarters of 2009, the Company did not
perceive the formal engagement of GPKM on August 12, 2009 as the engagement of a
new independent audit firm; however, technically it may have
been.  Consequently, we respectfully suggest that under these
circumstances no further 8-K be required; paragraph (a)(2) of Item 304 is
inapplicable; and GPKM has in fact been the independent auditor for all
financial reports covered by that paragraph.

              Comment
      4.

              Please
      file an updated letter from Deloitte stating whether the firm agrees with
      the statements made in any amendment to the filing and, if not, stating
      the respects in which the firm does not
agree.

    Response:

    Inasmuch as it is our desire to discuss
further with you the content of our response to Comment 2, if further discussion
is necessary, prior to determining that an amendment to the 8-K is required, we
respectfully request that we defer the filing of any updated letter from
Deloitte until it has been determined that the Company will need to file an
amended 8-K.

              * *
      * *

    The Company acknowledges
that:

              ·

              the Company is responsible for the
      adequacy and accuracy of the disclosure in the filings reviewed by the
      Staff;

              ·

              Staff comments or changes to
      disclosure in response to Staff comments in the filings
      reviewed by the Staff do not foreclose the
      Commission from taking any action with respect to the filing;
      and

              ·

              the Company may not assert
      Staff comments as a defense in any
      proceeding initiated by the Commission or any person under the federal
      securities laws of the United
States.

      United
States Securities and Exchange Commission

      January
6, 2010

      Page
5

    Should
you have further comments or require further information, or if any questions
should arise in connection with this submission, please call me at (404)
527-4990 or Mr. James Thornton at (404) 527-8118.

                Sincerely,

              /s/ Thomas
      Wardell

                Thomas
      Wardell

    cc:           Tony
Peng, CFO, China Recycling Energy Corp.

    Jeffrey Li, Esq.

June 26, 2008  Mail Stop 4561
By U.S. Mail and facsimile to (212) 219-3604

Mr. Guangyu Wu, Chief Executive Officer China Recycling Energy Corporation 429 Guangdong Road Shanghai, People’s Republic of China    200001
RE: China Recycling Energy Corporation
            File No.  000-12536
 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

Dear Mr. Wu:
We have completed our review of your Fo rm 10-KSB and related filings and have
no further comments at this time.
                                                                                  Sincerely,
                                                                                                                                                                                                                                                                        Linda van Doorn                                                                                   Senior Assistant Chief Accountant

May 27, 2008  Mail Stop 4561
By U.S. Mail and facsimile to (212) 219-3604

Mr. Guangyu Wu, Chief Executive Officer China Recycling Energy Corporation 429 Guangdong Road Shanghai, People’s Republic of China    200001
RE: Item 4-02 Form 8-K filed April 30, 2008
            Item 4-02 Form 8-K/A filed May 15, 2008             Item 4-02 Form 8-K/A filed May 22, 2008             File No.  000-12536

Dear Mr. Wu:
We have completed our review of the above referenced filings and have no
further comments at this time.
                                                                                  Sincerely,
                                                                                                                                                                                                                                                                        Jorge L. Bonilla
                                                                      Senior Staff Accountant

CORRESP
1
filename1.htm

China Recycling Energy Corporation - Correspondence

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:

China
Recycling Energy Corporation

File No. 000-12536

Form 10-KSB/A-2 for the year ended December 31, 2006 filed March 6, 2008

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

Date: June 16, 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 March 11, 2008:

Comment:

Form 10-KSB/A2

Item 8A Controls and Procedures, page 45

1. Your response to our prior comment two does
not address our request for revision of Item 8A. As previously requested, please
revise your disclosures in Item 8A on page 45 to describe the effect of the
restatement on your officers' conclusions regarding the effectiveness of the
company's disclosure controls and procedures.

Response:

As to the effectiveness of our disclosure
controls and procedures, we concluded that they were not effective as of
December 31, 2006. We have revised the Form 10-KSB to effect of the restatement
on our officers' conclusions regarding the effectiveness of the company's
disclosure controls and procedures. Please see the Form 10-KSB/A-4 filed on June
13, 2008 for details.

Comment:

Financial Statements

Report of Independent Registered Public Accounting Firm, page F-2

2. Please have your accountants revise their report to
indicate the exact date of their report as it relates to the restatement.

Response:

The accountants have revised their report to
indicate the exact date of their report as it relates to the restatement. Please
see the Form 10-KSB/A-4 filed on June 13, 2008 for details.

3. We noted the date of the restatement
disclosed in your Item 4.02 Form 8-K is inconsistent with the date of the
restatement disclosed in your accountants report included in the Form
10-KSB/A-2. Please revise as appropriate to clarify this conflict.

Response:

We have corrected the inconsistence in the Form 8-K/A filed on
March 17, 2008.

Certifications

Comment:

4. Please include your Chief Executive Officer
Certification, Exhibit 3 1.1, pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.

Response:

We have included our Chief Executive Officer's
Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Please
see the Form 10KSB/A-4 filed on June 13, 2008.

Comment:

5. Please refer to Exhibit 3 1.2, the
certification of your Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002. We noted that the identification of the certifying
individual at the beginning of the certification required by Exchange Act Rule
13a-14(a) also includes the title of the certifying individual. Considering that
the certifications must be signed in a personal capacity, please confirm to us
that your officer signed such certification in a personal capacity and revise
your certification to exclude the title of the certifying individual from the
opening sentence.

Response:

We confirm that our officers have signed the
certifications in personal capacity and we have revised the certifications to
exclude the title of the certifying individuals from the opening sentence.
Please see the Form 10-KSB/A-4 filed on June 13, 2008.

Comment:

6. Please revise the date of your Section 302
and Section 902 certifications as well as the date in the signature section on
page 55 consistent with the filing date of the Form 10-KSB/A.

Response:

We are aware of inconsistence between the date
of Section 302 and Section 902 certifications and the filing date of our Form
10-KSB/A. We have corrected the inconsistence in the Form 10-KSB/A-4 filed on
June 13, 2008.

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

Financial Statements

Condensed Consolidated Balance Sheet

Comment:

7. We have read and considered your response
to comments six relating to the amount reported as "Due from a third party."
Consistent with your response, please revise the filing to disclose how you
assessed the debtor's financial ability to pay this receivable and your
determination that no loss accrual is needed.

Response:

We have restated our financial statements for
year ended December 31, 2006 in our Form 10KSB for year 2007 and Form 10QSB/A
for quarter ended March 31, 2007, June 30, 2007 and September 30, 2007. In the
restatements, we concluded that we had no adequate basis to assess the financial
ability of the debtor to pay back the account receivable. Therefore, we wrote
off and eliminate those account receivables in our Form 10KSB for year 2007 and
Form 10QSB/A for quarter ended March 31, 2007, June 30, 2007 and September 30,
2007.

Acknowledgement Statement

In connection to responding to all the comments of the
Securities and Exchange Commission, China Recycling Energy Corporation
("Company") hereby acknowledges that:

1. The Company is responsible for the adequacy and accuracy of
the disclosure in the filings;

2. Staff comments or changes to disclosure in response to
staff comments do not foreclose the Commission from taking any action with
respect to the filings; and

3. The Company may not assert Staff comments as a defense in
any proceeding initiated by the Commission or any person under the federal
securities laws of the United States.

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

May 19, 2008  Mail Stop 4561
By U.S. Mail and facsimile to (212) 219-3604

Mr. Guangyu Wu, Chief Executive Officer China Recycling Energy Corporation 429 Guangdong Road Shanghai, People’s Republic of China    200001
RE: Item 4-02 Form 8-K/A
            Filed May 15, 2008
            File No.  000-12536

Dear Mr. Wu:
We have reviewed your Item 4.02 Form 8-K/A for compliance with the form
requirements and have the following comments.
1. Item 4.02(c) of Form 8-K requires you to provide your independent accountant with a copy of the disclosure you are making in response to Item 4.02(b) and
request that it furnish you with a lett er stating whether it agrees with the
statements you have made in response to Item 4.02(b).  If your independent
accountant does not agree with your disclosu re, it should explain why not.  Please,
amend your Form 8-K to file an updated le tter as an exhibit no later than two
business days after you receive it.

You should respond and file an amendmen t to the filing on or before May 27,
2008.

If you have any questions, pl ease call me at (202) 551-3414.
                                                                                     Sincerely,                                                                                                                                                                                                                                                                          Jorge L. Bonilla
                                                                      Senior Staff Accountant

May 2, 2008  Mail Stop 4561
By U.S. Mail and facsimile to (212) 219-3604

Mr. Guangyu Wu, Chief Executive Officer China Recycling Energy Corporation 429 Guangdong Road Shanghai, People’s Republic of China    200001
RE: Item 4-02 Form 8-K
            Filed April 30, 2008
            File No.  000-12536

Dear Mr. Wu:
We have reviewed your Item 4.02 Form 8-K for compliance with the form
requirements and have the following comments.
1. Please amend your filing to:
• indicate that the financial statemen ts for the year ended December 31,
2006 should no longer be relied upon; and
• describe the information provide d by your independent accountant;
2. We note that you intend to file restated financial statements. Please tell us how,
and when, you will file them.

You should respond and file an amendmen t to the filing on or before May 9,
2008.

 We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filings reviewed by the staff to be certain that they have provided all information investors require for an info rmed decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
  In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:
• the company is responsible for the adequacy  and accuracy of the disclosure in the
filings;

China Recycling Energy Corporation
Page 2 of 2
• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filings; and

• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filings or in response to our comments on your filings.

If you have any questions, pl ease call me at (202) 551-3414.

                                                                                   Sincerely,                                                                                                                                                                                                                                                                          Jorge L. Bonilla
                                                                      Senior Staff Accountant

March 18, 2008  Mail Stop 4561
By U.S. Mail and facsimile to (212) 219-3604

Mr. Guangyu Wu, Chief Executive Officer China Recycling Energy Corporation 429 Guangdong Road Shanghai, People’s Republic of China    200001
RE: Item 4-02 Form 8-K filed March 6, 2008
            Item 4-02 Form 8-K/A filed March 17, 2008
            File No.  000-12536

Dear Mr. Wu:
We have completed our review of the above referenced filings and have no
further comments at this time.

                                                                                  Sincerely,

                                                                                                                                                                           Jorge L. Bonilla
                                                                      Senior Staff Accountant

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filename1.htm

China Recycling Energy Corporation - Correspondence

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:      Item 4-02 Form 8-K

Filed March 6, 2008

File No. 000-12536

Date: March 17, 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 March 7, 2008:

Comment:

1. Please revise to describe the nature of the error and how
you reflected the restatement.

Response:

We have revised the Form 8-K to describe the nature of the
error and how we reflected the restatement. Please see the Form 8-K/A filed on
March 17, 2008 for details.

Comment:

2. We noted the date of the restatement
disclosed in your Form 8-K is inconsistent with the date of the restatement
disclosed in your accountants report included in the Form 10-KSB/A-2. Please
revise as appropriate to clarify this conflict.

Response:

We have corrected the inconsistence in the Form 8-K/A filed on
March 17, 2008.

Acknowledgement Statement

In connection to responding to all the comments of the
Securities and Exchange Commission, China Recycling Energy Corporation
("Company") hereby acknowledges that:

1. The Company is responsible for the adequacy and accuracy of
the disclosure in the filings;

2. Staff comments or changes to disclosure in response to
staff comments do not foreclose the Commission from taking any action with
respect to the filings; and

3. The Company may not assert Staff comments as a defense in
any proceeding initiated by the Commission or any person under the federal
securities laws of the United States.

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

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

CORRESP
1
filename1.htm

Appendix 1:

Please find following the terms of the
settlement agreement (Repayment Plan) with Shanghai Sifang Information
Technology Co.

Repayment Plan

To Shanghai TCH Energy Technology Co., Ltd.:

We promised to you in the form of Letter of
Undertaking on 31st Dec. 2007, that we will repay the debt before the
end of July, 2008. Since our company was in a period of operation transforming
from 2006 to 2007 that we didn't repay in time, we apologize again for any
inconvenience caused. According to the requirements in the letter dated 14th,
Feb. from you, and our recent financing status, the following supplemental
repayment plan was proposed and approved by the Board of Directors of our
company,

1. Repay RMB 6,000,000 before the end of
April., 2008

2. Repay RMB 10,000,000 before the end of May, 2008

3. Repay RMB 10,908,515.20 before the end of June., 2008

Total: RMB 26,908,515.20

We solemnly and sincerely promise that, if we
can't repay in time, we will bear all the legal responsibility arising
there-from.

Shanghai Sifang Information Technology Co.

02/15/2008

CORRESP
1
filename1.htm

Appendix 1

Repayment Plan

To Shanghai TCH Energy Technology Co., Ltd.:

We promised to you in the form of Letter of Undertaking on
December 31, 2007, that we will repay the debt before the end of July 2008.
Since our company was in a period of operation transforming from 2006 to 2007
that we didn't repay in time, we apologize again for any inconvenience caused.
According to the requirements in the letter dated February 14, 2008 from you,
and our recent financing status, the following supplemental repayment plan was
proposed and approved by the Board of Directors of our company:

1. Repay RMB 6,000,000 before the end of April., 2008

2. Repay RMB 10,000,000 before the end of May, 2008

3. Repay RMB 10,908,515.20 before the end of June., 2008

Total: RMB 26,908,515.20

We solemnly and sincerely promise that, if we can't repay in
time, we will bear all the legal responsibility arising there-from.

Shanghai Sifang Information Technology Co. 02/15/2008

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: March 05, 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 February 12, 2008:

General

Comment:

1. Please submit your response letter and file your Form 10-KSBIA on EDGAR.

Response:

We have filed the response letters and Form 10-KSB/A and
10-KSB/A-2 onto Edgar system.

Forms 10-KSB

Item 8A Controls and Procedures, page 45

Comment:

2. Please revise your disclosures in Item 8A on page 17 to
describe the effect of the restatement on your officers' conclusion regarding
the effectiveness of the company's disclosure controls and procedures. See Item
307 of Regulation S-B If your officers conclude that the disclosure controls and
procedures were effective, despite the restatement, describe the basis for your
officers' conclusions.

Response:

We believe that our disclosure controls and
procedures are effective. Prior to the conclusion of the period covered by this
report, we carried out an evaluation, under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e).
Based upon that evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures are effective in
timely alerting them to material information relating to us (including our
consolidated subsidiary) required to be included in our periodic SEC filings.

Financial Statements

Consolidated Statement of Operations and Comprehensive Income (Loss), page F-5

Comment:

3. We have read and considered your response
to comment three and your proposed amendment to your 2006 Form 10-KSB. We noted
that you included the impairment loss in "other income (expenses)." Since you
are presenting a subtotal "(loss) income from operations", please revise your
statement of operations to include the impairment loss in that subtotal as
required by paragraph 25 of SPAS 144.

Response:

We have revised the statement of operations to
include the impairment loss in that subtotal as required by paragraph 25 of SFAS
144. Please see the attached Form 10-KSB/A-2.

Comment:

4. Please refer to note 8 and 13 on page 10
and 14, respectively. Please revise your description of your accounting for the
impairment loss to be consistent with your restatement of the financial
statements.

Response:

We have revised Note 8 and 13 on page 10 and
14 accordingly and please see the attached Form 10-KSB/A-2.

Comment:

5. Please file an Item 4.02 8-K regarding the
restatement of your previously issued financial statements. The Form 8-K should
include the date of the conclusion regarding non-reliance, the financia1
statement years and periods that shou1d no longer be relied upon, a brief
description of the facts underlying your conclusion, a statement whether your
audit committee or its alternative has discussed this matter with your
independent accountants, and a statement of how and when you reflected the
restatement.

Response:

We have filed the Form 8-K Item 4.02 regarding
the restatement of our previously issued financial statement.

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

Financial Statements

Condensed Consolidated Balance Sheet

Comment:

6. We have read and considered your response
to comments two and three relating to the amount reported as "Due from a third
party." Please address the following comments: Explain to us the terms of your
settlement agreement with Shanghai Sifang Information Technology Co. (the
"debtor") and how you considered these terms in assessing the need for a loss
accrual. Given that you do not have access to the financial statements of the
debtor, explain to us how you were able to assess the debtor's fillancia1
ability to pay your receivable and to assess the need for a loss accrual.

Response:

Please find in Appendix 1 the settlement
agreement (Repayment Plan) with Shanghai Sifang Information Technology Co
("debtor").

Since 2005, Shanghai Sifang Information
Technology Co. ("Sifang Information") gradually changed its business from SP
value-added service, beep pagers service and mobile phone distribution business
to real estate investment business.

Currently, Sifang Information has the
following two real properties in the PRC and their status are described as
below::

1)

An
office building located at LaoShan East Road, Pudong New District, Shanghai, PRC
with an aggregate rental area of 2,000
meter square. All premises
are leased out at this moment. The annual rental income is about $986,301
(equivalent to RMB7.2 million), based on the daily rental charge of $1.37
(equivalent to RMB10) per meter square, similar to the current market price in
Shanghai, the PRC.

2)

A
building located at Guangdong Road, Huangpu District, Shanghai, PRC with an
aggregate rental area of about 20,000
meter square. This building is operated for shops, offices and serviced
apartment purposes. For shops, its annual rental income is about $308,219
(equivalent to RMB2.25 million) with an area of 5,000 meter square, based on the
daily rental charge of $2 (equivalent to RMB15) per meter square. For office
use, its annual rental income is about $7.4 million (equivalent to RMB54
million) with an area of 15,000 meter square, based on the daily rental charge
of $1.37 (equivalent to RMB10) per meter square. For service apartments, there
are 150 rooms with an average daily tariff of $82 (equivalent to RMB600) and its
annual income is about $4.4 million (equivalent to RMB32 million). These prices
are similar to the current market price in Shanghai, the PRC. Offices are fully
rented out and part of shops and service apartments are pending for leases. The
aggregate annual income is estimated $12 million (equivalent to RMB88.25
million).

Based on our projection of the rental income
generating from these real estate investment projects, we have a confident level
of assurance about Sifang Information's financial ability to repay our
receivables and no loss accrual is needed.

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

February 12, 2008  Mail Stop 4561
By U.S. Mail and facsimile to (212) 219-3604

Mr. Guangyu Wu, Chief Executive Officer China Recycling Energy Corporation 429 Guangdong Road Shanghai, People’s Republic of China    200001
RE: China Recycling Energy Corporation
            File No.  000-12536
 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

Dear Mr. Wu:
We have reviewed your response letter that we received by email on February 4,
2008 and have the following comments.
Where indicated, we think you should revise your documents 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.  Pl ease be as detailed as necessary in your
explanation.  In some of our comments, we may ask you to provide us with additional 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 re view 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 comment or on any other aspect of
our review.  Feel free to call us at the tele phone numbers listed at th e end of th is letter.

China Recycling Energy Corporation
Page 2 of 3

General

1. Please submit your response letter an d file your Form 10-KSB/A on EDGAR.
 Form 10-KSB

Item 8A Controls and Procedures, page 45
 2. Please revise your disclosures in Item 8A on page 17 to describe the effect of the
restatement on your officers’ conclusions  regarding the effectiveness of the
company’s disclosure controls and procedures.   See Item 307 of Regulation S-B.
If your officers conclude that the disc losure controls and procedures were
effective, despite the restatement, describe the basis for your officers’
conclusions.

Financial Statements

Consolidated Statements of Operations and Comprehensive Income (Loss), page F-5
 3. We have read and considered your res ponse to comment three and your proposed
amendment to your 2006 Form 10-KSB.  We noted that you included the
impairment loss in “other income (expens es).” Since you are presenting a subtotal
“(loss) income from operations”, please revise your statement of operations to
include the impairment loss in that subtot al as required by paragraph 25 of SFAS
144.
 4. Please refer to note 8 and 13 on page 10 and 14, respectively. Please revise your
description of your accounting for the impair ment loss to be consistent with your
restatement of the financial statements.
 5. Please file an Item 4.02 8-K regarding the restatement of your previously issued
financial statements.  The Form 8-K s hould include the date of the conclusion
regarding non-reliance, the financial stat ement years and periods that should no
longer be relied upon, a brief descripti on of the facts underlying your conclusion,
a statement whether your audit committee or  its alternative has discussed this
matter with your independent accountants,  and a statement of how and when you
reflected the restatement.

China Recycling Energy Corporation
Page 3 of 3

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

Financial Statements

Condensed Consolidated Balance Sheet

6. We have read and considered your res ponse to comments two and three relating
to the amount reported as “Due from a third party.” Please address the following
comments:
• Explain to us the terms of your settlement agreement with Shanghai
Sifang Information Technology Co. (the “debtor”) and how you
considered these terms in assess ing the need for a loss accrual.
• Given that you do not have access to the financial statements of the
debtor, explain to us how you were able to assess the debtor’s financial
ability to pay your receivable and to assess the need for a loss accrual.

As appropriate, please amend your filings and respond to these comments within
10 business days or tell us when you will provid e us with a response.  You may wish to
provide us with marked copies of the amendm ent to expedite our review.  Please furnish
a cover letter with your amendment that keys your responses to our comments and provides any requested information.  Detailed  response letters great ly facilitate our
review.  Please submit your cover letter on EDGAR. Please understand that we may have
additional comments after reviewing your amendment and responses to our comments.
 You may contact Jorge L. Bonilla at ( 202) 551-3414 or me at (202) 551-3498 if
you have any questions,                                                                                      Sincerely,                                                                                                                                                                                                                                                                          Linda van Doorn                                                                                   Senior Assistant Chief Accountant

January 15, 2008  Mail Stop 4561
By U.S. Mail and facsimile to (212) 219-3604

Mr. Guangyu Wu, Chief Executive Officer China Recycling Energy Corporation 429 Guangdong Road Shanghai, People’s Republic of China    200001
RE: China Recycling Energy Corporation
            File No.  000-12536
 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

Dear Mr. Wu:
We have reviewed your response letter  dated December 14, 2007 and have the
following comments.
Where indicated, we think you should revise your documents 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.  Pl ease be as detailed as necessary in your
explanation.  In some of our comments, we may ask you to provide us with additional 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 re view 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 comment or on any other aspect of
our review.  Feel free to call us at the tele phone numbers listed at th e end of th is letter.

China Recycling Energy Corporation
Page 2 of 3
  Form 10-KSB

Financial Statements

Note 4 – Impairment Write Down Recognized  As A Result Of  Strategic Review of
Certain Operations, page 9
 1. We have read and considered your respons e to comment three. Please revise your
statement of operations to reflect the im pairment 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 not e that paragraph 15 of SFAS 5, which
was cited in support for your accounting tr eatment, prohibits charging costs or
losses to an appropriation  of retained earnings.
 Forms 10-QSB for the quarters ended March 31, 2007, June 30, 2007 and September 30,
2007
 Financial Statements

 Condensed Consolidated Balance Sheet

 2. We have read and considered your re sponse to comment six relating to the
amount reported as “Due from a third pa rty.” We noted this amount is trade
related, due from a single debtor, unsecu red and it relates to the mobile phone
distribution business that you discon tinued 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.
 3. Also, explain to us how you evaluated th e risks due to this substantial asset
concentration, and how you considered provi ding audited financial statements of
the debtor for an investor’s financial assessment of the Company.

As appropriate, please amend your filings and respond to these comments within
10 business days or tell us when you will provid e us with a response.  You may wish to
provide us with marked copies of the amendm ent to expedite our review.  Please furnish
a cover letter with your amendment that keys your responses to our comments and provides any requested information.  Detailed  response letters great ly facilitate our
review.  Please submit your cover letter on EDGAR. Please understand that we may have
additional comments after reviewing your amendment and responses to our comments.

China Recycling Energy Corporation
Page 3 of 3
   You may contact Jorge L. Bonilla at ( 202) 551-3414 or me at (202) 551-3498 if
you have any questions,                                                                                      Sincerely,                                                                                                                                                                                                                                                                          Linda van Doorn                                                                                   Senior Assistant Chief Accountant

CORRESP
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China Recycling Energy Corporation - Correspondence

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:   China Recycling Energy Corporation, File
No. 000-12536

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

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

Date: December 14, 2007

Dear Ladies and Gentlemen,

On behalf of our client 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 October 03, 2007:

Form 10-KSB

Management's Discussion and Analysis

Critical Accounting Policies, page 12

1. Comment: In future filings, please
revise the MD&A to address the role significant accounting policies and
estimates have in understanding the company's results. Provide a comprehensive
discussion of your critical accounting policies, including the judgments and
uncertainties affecting the application of those policies and the likelihood
that materially different amounts would be reported under different conditions
or using different but reasonably plausible assumptions. Refer to FR- 60.

Response: Your comment is noted and
will be incorporated in the future filings

Financial Statements

Note 3 - Summary of Significant Accounting Policies

Foreign Currencies Translation, page 7.

2.
Comment: The note
indicates that the functional currency of the Company is the U.S. dollar. Please
reconcile this assertion with the disclosure in note 17(a) on page 19 that
"...100% of the Company's assets were located in the PRC and 100% of the Company's
revenues and purchases were derived from customers located in the PRC", and with
your disclosure in your 2005 Form 10-KSB. Explain to us how you considered
paragraphs 5-10 of SFAS 52 in determining your functional currency. Also, tell
us your accounting policy for foreign currency transaction gains or losses.

Response: The
accounting policy on foreign currencies translation stated in the financial
statements contributed the same meaning as below:

Transactions denominated in currencies other
than the functional currency are translated into the functional currency at the
exchange rates prevailing at the dates of the transaction. Monetary assets and
liabilities denominated in currencies other than the functional currency are
translated into the functional currency using the applicable exchange rates at
the balance sheet dates. The resulting exchange differences are recorded in the
consolidated statement of operations.

The functional and reporting currency of the
Company is the United States dollars ("U.S. dollars"). The accompanying
consolidated financial statements have been expressed in U.S. dollars. In
addition, the Company's operating subsidiary in the PRC, TCH maintains its books
and records in its local currency, the Renminbi Yuan ("RMB"), which is
functional currency as being the primary currency of the economic environment in
which its operations are conducted.

Assets and liabilities of its subsidiary whose
functional currency is not the U.S. dollars are translated into US dollars, in
accordance with SFAS No 52, "Foreign Currency Translation", using the
exchange rate on the balance sheet date. Revenues and expenses are translated at
average rates prevailing during the period. The gains and losses resulting from
translation of financial statements of foreign subsidiary is recorded as a
separate component of accumulated other comprehensive income within the
statement of stockholders' equity.

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

3. Comment: We noted that you charged
additional paid-in capital for the impairment relating to property and equipment
and deposit for business acquisition. Please explain to us your basis in GAAP
for this treatment.

Response: The $7,114,047 was transferred from the
retained earnings to the additional paid-in capital and then the impairment is
written-off against this $7,114,047 in the additional paid-in capital. So
effectively the impairment was written off against the retained earnings.

The ground that the impairment was written off
against the retained earnings is according to Statement of Financial Accounting
Standards No. 5 "Accounting for Contingencies". According to paragraph 15
of this standard, an enterprise can have a portion of retained earnings as
appropriated for loss contingencies. The impairment to the property and
equipment and the deposit for business acquisition were understood as loss
contingencies as a result of the Company's plan to stop the mobile phone and
advertising business and the uncertainty in the collectibility of the deposit
for business acquisition.

Note 7 Property and Equipment, Net, page 10

4. Comment: It appears from the
disclosure in the last paragraph of note 7 that the assets that have been
written down are pledged as security for Sifang's line of credit. Please clarify
to us whether you guarantee this line of credit.

Response: There was no corporate guarantee provided by
the Company or its subsidiaries to Sifang Information Technology Co. as
alternative security to the property.

Exhibit 3 1.1 and 3 1.2 - Certifications

5. Comment: We noted that the
identification of the certifying individual at the beginning of the
certification required by Exchange Act Rule 13a-14(a) included in the 10-KSB and
Forms 10-QSB also includes the title of the certifying individual. Considering
that the certifications must be signed in a personal capacity, please confirm to
us that your officers signed such certification in a personal capacity. Also,
confirm that in future filings you will revise the identification of the
certifying individual at the beginning of the certification so as not to include
the individual's title.

Response: The Company confirms that the officers signed
such certification in a personal capacity and also confirm that in future
filings the Company will revise the identification of the certifying individual
at the beginning of the certificate so as not to include the individual's title.

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

Financial Statements

Condensed Consolidated Balance Sheet

6. Comment: Please explain to us the
transactions that gave rise to the amount reported as "Due from a third party",
the nature of the considerations exchanged and your basis in GAAP for your
accounting.

Response: The amount
due from a third party, Shanghai Sifang Information Technology Co. ("Sifang
Information"), a Shanghai-based privately owned enterprise established under the
laws of the PRC, is unsecured, non-interest bearing and repayable in the next
twelve months.

During 2006, Sifang Information was considered
as a related party whereas its shareholders were related through common
ownership with the major shareholders of the Company. On January 24, 2007, these
shareholders of Sifang Information disposed of their ownership in the Company.
Hence, Sifang Information became a non-related party as of March 31, 2007 and
June 30, 2007.

The nature of the transactions were trade related and relating
to the mobile phone distribution business and they were recorded at cost.

Note 2 - Organization and Business Background, page 9

7. Comment: We note that under the
Joint-Operation Agreement with Yingfeng, TCH provides various forms of
investments and properties into the Project and in return TCH becomes entitled
to all the rights, benefits and interests that Yingfeng originally had under the
Project Contract, including but not limited to the cash payment made by Xingtai
on a regular basis and other property rights and interests. We also note your
funding commitment related to a TRT System project disclosed in note 14 on page
16. Please explain to us how you considered the guidance in FIN 46R with respect
to your rights and obligations referenced above and your relationship with
Yingfeng.

Response: The
Company's subsidiary, Shanghai TCH Data Technology Co., Ltd. ("TCH") and Xi'an
Yingfeng Science and Technology Co., Ltd. ("Yingfeng") are two independent legal
entity registered in the PRC. TCH and Yingfeng have no common control and
managed by two different management teams. Under the Joint-Operation Agreement,
TCH is entitled to all the rights, interest, risks and expected returns or
losses of the TRT system. On the other hand, Yingfeng is contracted for the
provision of maintenance service to the TRT system and in return received a
monthly maintenance fee. Under the above circumstances, Yingfeng is not
considered as a variable interest entity of TCH under FIN 46R.

Note 3 - Summary of Significant account in Policies

Revenue Recognition, page 11

8. Comment: The notes suggests that
your basis for accounting your lease with Xingtai as direct financing lease is
that the lease transfers substantially all benefits and risks of TRT system
ownership to Xintai. Please specifically explain to us how this lease meets the
criteria in paragraph 6.b.ii. of SFAS 13.

Response: The lease between Xingtai
Iron and Steel Company Ltd. ("Xingtai") and TCH is classified as direct
financing lease as:

a)
the lease did not involve a long-term creditor and hence it is not classified as
leveraged lease under paragraph 42 of SFAS 13;

b)
the lease transfers all benefits and risks of the TRT system ownership to the
lessee, Xingtai, by the end of a five-year lease term under paragraph 7.a. of
SFAS 13;

c)
the collectibility of the minimum lease payments is reasonably predictable under
paragraph 8.a. of SFAS 13 as the management of TCH predicted to collect the
lease payments in December 2007; and

d)
there is no important uncertainties surround the amount of unreimbursable costs
yet to be incurred by TCH under the lease under paragraph 8.b. of SFAS 13.

Please also find attached in Exhibit a statement made by the
Company in connection with responding to your comments. The attached statement
acknowledges that:

(1) the company is responsible for the adequacy and accuracy
of the disclosure in the filings;

(2) staff comments or changes to disclosure in response to
staff comments do not foreclose the Commission from taking any action with
respect to the filings; and

(3) the company may not assert staff comments as a defense in
any proceeding initiated by the Commission or any person under the federal
securities laws of the United States.

If you have any questions or comments regarding the foregoing,
please do not hesitate to contact us at telephone: (212) 219-7783 or fax: (212)
219-3604

Very truly yours,

/s/ Bernard & Yam, LLP

Bernard & Yam, LLP

401 Broadway Suite 1708

New York, NY 10013

October 3, 2007

Mail Stop 4561

By U.S. Mail and facsimile to 011 86 21 6336 0909

Mr. Guangyu Wu, Chief Executive Officer
China Recycling Energy Corporation
429 Guangdong Road
Shanghai, People’s Republic of China    200001

RE: China Recycling Energy Corporation
            File No.  000-12536
 Form 10-KSB for the year ended December 31, 2006
Forms 10-QSB for the quarters ended March 31, 2007 and June 30, 2007

Dear Mr. Wu:

We have reviewed the above referenced filings and have the following comments.
We have limited our review to only your fina ncial statements and related disclosures and
will make no further review of your documents.  As such, all persons who are responsible
for the adequacy and accuracy of the disclosu res are urged to be certain that they have
included all information required pursuant to  the Securities Exchange Act of 1934.

In our comments, we ask you to provide us with supplemental information so we
may better understand your disclosure.  Please be as detailed as necessary in your explanation. After reviewing this inform ation, we may or may not raise additional
comments.

Please understand that the purpose of our re view 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 comment or on a ny other aspect of
our review.  Feel free to call us at the tele phone numbers listed at th e end of th is letter.

Form 10-KSB

Management's Discussion and Analysis

Critical Accounting Policies, page 12

1. In future filings, please revise the MD&A to address the role significant
accounting policies and estimates have in understanding the company's results.

China Recycling Energy Corporation
Page 2 of 4
Provide a comprehensive disc ussion of your critical acc ounting policies, including
the judgments and uncertainties affecting the application of th ose policies and the
likelihood that materially different am ounts would be reported under different
conditions or using different but reasonably plausible assumptions.  Refer to FR-60.

Financial Statements

Note 3 – Summary of Significant Accounting Policies

Foreign Currencies Translation, page 7

2. The note indicates that the functional currenc y of the Company is the U.S. dollar.
Please reconcile this assertion with the disclosure in note 17(a) on page 19 that
“…100% of the Company's assets were located in the PRC and 100% of the Company's revenues and purchases were derived from customers located in the PRC”, and with your disclosure in your 2005 Form 10-KSB. Explain to us how you considered paragraphs 5-10 of SFAS 52 in determining your functional currency. Also, tell us your acc ounting policy for foreign currency transaction
gains or losses.

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

3. We noted that you charged additional pa id-in capital for the impairment relating
to property and equipment and deposit for business acquisition. Please explain to
us your basis in GAAP for this treatment.

Note 7 Property and Equipment, Net, page 10

4. It appears from the disclosure in the last paragraph of note 7 that the assets that
have been written down are pledged as secu rity for Sifang’s line of credit.  Please
clarify to us whether you gua rantee this line of credit.

Exhibit 31.1 and 31.2 - Certifications

5. We noted that the identification of the certifying indivi dual at the beginning of the
certification required by Exchange Act Rule  13a-14(a) included  in the 10-KSB
and Forms 10-QSB also includes the title of the certifying individual. Considering that the certifications must  be signed in a personal capacity, please confirm to us
that your officers signed such  certification in a persona l capacity. Also, confirm
that in future filings you will revise th e identification of the certifying individual
at the beginning of the certification so as not to include th e individual’s title.

China Recycling Energy Corporation
Page 3 of 4

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

Financial Statements

Condensed Consolidated Balance Sheet

6. Please explain to us the transactions that gave rise to the amount reported as “Due
from a third party”, the nature of the c onsiderations exchanged and your basis in
GAAP for your accounting.

Note 2 – Organization and Business Background, page 9

7. We note that under the Joint-Operation Agreement with Yingfeng, TCH provides various forms of investments and properties into the Project and in return TCH becomes entitled to all the rights, benefits  and interests that Yingfeng originally
had under the Project Contract, includi ng but not limited to the cash payment
made by Xingtai on a regular basis and other property rights and interests. We also note your funding commitment related to a TRT System project disclosed in
note 14 on page 16. Please explain to us how you considered the guidance in FIN
46R with respect to your rights and ob ligations referenced above and your
relationship with Yingfeng.

Note 3 – Summary of Significant Accounting Policies

Revenue Recognition, page 11

8. The notes suggests that your basis for accounting your lease with Xingtai as direct financing lease is that the lease transfers substantially all benefits and risks of TRT system ownership to Xintai.  Please sp ecifically explain to us how this lease
meets the criteria in pa ragraph 6.b.ii. of SFAS 13.

As appropriate, please respond to these co mments within 10 business days or tell
us when you will provide us with a response.  Please submit a response letter on EDGAR that keys your responses to our comment s and provides any requested information.
Detailed response letters great ly facilitate our review.  Please understand that we may
have additional comments after review ing your responses to our comments.

 We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filings reviewed by the staff to be certain that they have provided all information investors require for an info rmed decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.

China Recycling Energy Corporation
Page 4 of 4

 In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:

• the company is responsible for the adequacy  and accuracy of the disclosure in the
filings;

• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filings; and

• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filings or in response to our comments on your filings.

You may contact Jorge L. Bonilla at ( 202) 551-3414 or me at (202) 551-3498 if
you have any questions,

                                                                                  Sincerely,

                                                                                  Linda van Doorn
                                                                                  Senior Assistant Chief Accountant

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

      January 5, 2006

Mail Stop 4561

VIA U.S. MAIL 214-661-6618

Mr. Qian Fang
Chief Financial Officer
China Digital Wireless, Inc.
429 Guangdong Road
Shanghai, People`s Republic of China 200001

RE: China Digital Wireless, Inc.
Form 10-KSB for the year ended December 31, 2004
File no. 000-12536
Form 10-QSB for the quarters ended March 31, 2005 and June 30,
2005
File no. 000-12536

Dear Mr. Fang:

We have completed our review of your Form 10-KSB and related
filings
and have no further comments at this time.

						Sincerely,

Cicely D. Luckey
Accounting Branch Chief

??

??

??

??

<COMPANY NAME>
<DATE>
Page 2

</TEXT>
</DOCUMENT>

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

      Mail Stop 4561

      October 5, 2005

VIA U.S. MAIL 214-661-6618

Mr. Qian Fang
Chief Financial Officer
China Digital Wireless, Inc.
429 Guangdong Road
Shanghai, People`s Republic of China 200001

RE: China Digital Wireless, Inc.
Form 10-KSB for the year ended December 31, 2004
File no. 000-12536
Form 10-QSB for the quarters ended March 31, 2005 and June 30,
2005
File no. 000-12536

Dear Mr. Fang:

      We have reviewed your response letter dated July 20, 2005
and
have the following additional comments.  Where indicated, we think
you should revise your documents 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.  Provide
to
us the information requested if indicated and please be as
detailed
as necessary in your explanation.

1. We have reviewed your response to comment 2 and continue to
question your basis for classifying these amounts as permanent
equity
at year-end.  As previously requested, please tell us what
consideration was given to paragraph 11 of SFAS 150.

2. Further to the previous comment, we also question your position
that the expiration of the options subsequent to year-end would be
considered a Type 1 subsequent event.  Type 1 subsequent events
are
those that provide additional evidence with respect to conditions
existing at the balance sheet date.  As of the balance sheet date
the
option was still exercisable and therefore it does not appear that
you meet the criteria in paragraph 16 of SFAS 140 to derecognize
the
liability under this obligation at year-end.  Please revise
accordingly.

3. We reviewed your response to our prior comment 5. Based on the
disclosure in your financial statements these advances are to help
Sifang Information purchase mobile phones and to establish
marketing
for channel distribution that will enable you to become a
distributor.  Please clarify if this advance solely benefits your
company.  Also advise us the repayment terms of the advance.

*  *  *  *

      As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter with your amendment that keys your
responses to our comments and provides any requested information.
Detailed cover letters greatly facilitate our review.  Please file
your cover letter on EDGAR.  Please understand that we may have
additional comments after reviewing your responses to our
comments.

	You may contact me, at (202) 551-3413 if you have questions.

						Sincerely,

Cicely D. Luckey
Accounting Branch Chief

??

??

??

??

China Digital Wireless, Inc.
October 5, 2005
Page 2

</TEXT>
</DOCUMENT>

<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

                     [Preston Gates & Ellis LLP letterhead]

                                November 15, 2005

Cicely D. Luckey
Securities and Exchange Commission
Division of Corporation Finance
Mail Stop 4561
450 Fifth Street, N.W.
Washington, D.C. 20549

         Re:      China Digital Wireless, Inc.
                  Form 10-KSB for the Year Ended  December  31,  2004,  File No.
                  000-12536
                  Form 10-QSB for the Quarter  Ended  March 31,  2005,  File No.
                  000-12536

Dear Ladies and Gentlemen:

         On behalf of our client China Digital  Wireless,  Inc. (the "Company"),
in connection with the above referenced reports, we are hereby providing you the
following supplemental responses to the comments in your letter dated October 5,
2005:

1.       Comment.  We have  reviewed  your response to comment 2 and continue to
         question your basis for classifying  these amounts as permanent  equity
         at year-end. As previously requested, please tell us what consideration
         was given to paragraph 11 of SFAS 150.

         Response.  The Company does not believe  that  Paragraph 11 of SFAS 150
         applies.  In this case,  the option to  repurchase  the shares was only
         exercisable  after the date that was six months after the Company filed
         a registration statement registering the shares up to and including the
         earlier  of the date  that such  registration  statement  was  declared
         effective  by the  Commission  or the shares were  eligible  for resale
         under Rule 144 under the Act. As a result, the option was not effective
         or  exercisable at inception or at the date of the balance sheet in the
         Company's Form 10-KSB. In fact, the obligation to repurchase the shares
         never became  exercisable  because the Company filed such  registration
         statement and the Commission declared it effective less than six months
         later.  Because of the conditional  nature of this option,  the Company
         concluded  that it did  not  meet  the  definition  of a  "freestanding
         financial  instrument"  under  SFAS  150.  Additionally,   the  Company
         concluded  that the option did not fall within any other examples cited
         in paragraph 11.

2.       Comment.  Further  to the  previous  comment,  we  also  question  your
         position  that the  expiration  of the options  subsequent  to year-end
         would be considered a Type I subsequent event. Type 1 subsequent events

<PAGE>

Cicely D. Luckey
November 15, 2005
Page 2

         are those that provide  additional  evidence with respect to conditions
         existing at the balance  sheet date.  As of the balance  sheet date the
         option was still  exercisable and therefore it does not appear that you
         meet  the  criteria  in  paragraph  16 of SFAS 140 to  derecognize  the
         liability under this obligation at year-end. Please revise accordingly.

         Response. For the reasons stated in our response to Comment 1 above, we
         concluded  this was not a liability and therefore  would not be subject
         to paragraph 16 of SFAS 140.

3.       Comment. We reviewed your response to our prior comment 5. Based on the
         disclosure  in your  financial  statements  these  advances are to help
         Sifang  Information  purchase mobile phones and to establish  marketing
         for channel  distribution that will enable you to become a distributor.
         Please  clarify if this advance  solely  benefits  your  company.  Also
         advise us the repayment terms of the advance.

         Response. Shanghai TCH Data Technology Co., LTD ("TCH"), a wholly-owned
         subsidiary of the Company,  has entered into an agreement with Shanghai
         Sifang Information  Technology Co., Ltd. ("Sifang Information") whereby
         Sifang Information  purchases cell phones from cell phone manufacturers
         and sells such phones to TCH at the actual  cost.  This  advance  soley
         benefits the Company.  TCH distributes the cell phones to customers via
         TCH's marketing  channels.  TCH collects  payment from the distribution
         from the  customers  and  compensates  Sifang  Information  accordingly
         pursuant to the agreement.  The outstanding amount due from Sifang will
         be repaid back to TCH on demand by TCH.

         If you have any questions or comments  regarding the foregoing,  please
do not hesitate to contact me at (206) 370-6651.

                                                     Very truly yours,

                                                     PRESTON GATES & ELLIS LLP

                                                     /s/ Kristy T. Harlan

                                                     By Kristy T. Harlan

</TEXT>
</DOCUMENT>

<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

[Preston Gates Ellis LLP Letterhead]

                                 July 20, 2005

Cicely D. Luckey
Kelly McCusker
Securities and Exchange Commission
Division of Corporation Finance
Mail Stop 4561
450 Fifth Street, N.W.
Washington, D.C. 20549

Re:  China Digital  Wireless,  Inc.Form  10-KSB for the Year Ended  December 31,
     2004, File No.  000-12536Form  10-QSB for the Quarter Ended March 31, 2005,
     File No. 000-12536

Dear Ladies and Gentlemen:

     On behalf of our client China  Digital  Wireless,  Inc. (the  Company),  in
connection with the above  referenced  reports,  we are hereby providing you the
following  supplemental  responses to the comments in your letter dated June 30,
2005:

Form 10-KSB for the fiscal year ended December 31, 2004
-------------------------------------------------------

Note 2  Summary of Significant Accounting Policies
--------------------------------------------------

1.   Comment.  Advise  us how you  considered  FIN 46(R) as it  relates  to your
     relationship  with  Sifang  Information  and  Tianci  Group in light of the
     rights obtained through the information service and cooperation  agreements
     and funding of working capital needs.

          Response.  We first  considered  whether either Sifang  Information or
          Tianci Group possessed one of the following characteristics that would
          make it a Variable Interest Entity (VIE):

     1.   The entity is thinly capitalized from an equity point of view.

     2.   Residual equity holders do not control the entity.

     3.   Equity  holders  do not  participate  fully  in an  entity's  residual
          economics.

     4.   The entity was established with non-substantive voting interests.

<PAGE>

     Based  on our  review  of the  financial  statements  of both  entities  we
     concluded  that  both  were  adequately   capitalized  and  had  their  own
     substantial  operations other than the related party  transactions they had
     engaged in with the Company. We also concluded that, in both instances, the
     equity  holders  controlled  the  entities,  participated  fully  in  their
     residual  economics and held substantive voting interests.  Therefore,  the
     Company  concluded that the VIE determinates as noted above do not apply to
     Sifang Information and Tianci Group.

     Furthermore,  Under  FIN 46, an entity  that is not a VIE is  considered  a
     "voting  interest  entity".   In  a  voting  interest  entity,  the  equity
     investment  is deemed  sufficient  to  absorb  the  expected  losses of the
     entity,  and the  equity  investment  has all of the  characteristics  of a
     controlling  financial  interest.  As a result,  voting  rights are the key
     determinant for determining  which entity,  if any, should  consolidate the
     entity.  Boulder/Sifang  Holdings/TCH  has no  voting  interest  in  Sifang
     Information  and Tianci  Group that would  require  consolidation  based on
     GAAP.

Note 3  Equity Transactions, page F-15
--------------------------------------

2.   Comment.  Please  tell us the  nature of your  relationship  with the three
     investors that you issued 1,315,789 shares of common stock on June 28, 2004
     and how you  determined  the  issuance of shares below the market price was
     not a  compensatory  arrangement.  In addition,  clarify if the shares were
     actually issued in June 2004 or if they were held in escrow as well.

     Response.  The parties were not related to the Company nor did they perform
     any services for the Company.  As a result,  the  transaction  was solely a
     capital transaction where the shares were issued to three outside investors
     in a capital raising activity.  The shares were issued on June 28, 2004 and
     held in  escrow  until  November  12,  2004,  the  date  that  the  related
     registration statement on Form SB-2 was filed.

3.   Comment.  We note  for the  options  granted  to  certain  shareholders  to
     repurchase  their  shares at $1.14 per share you  considered  Topic D-98 in
     accounting  for the  options.  Advise  us what  consideration  was given to
     paragraph 11 of SFAS 150 as it relates to  classifying  these  amounts as a
     liability  at year-end.  Further,  since the  contingency  was not resolved
     until  after  year-end,  tell us your basis in GAAP for  classifying  these
     amounts in permanent equity at December 31, 2004.

<PAGE>

     Response.  Based on  conditions  that existed at the balance sheet date, it
     was more likely than not that the options would expire. Since this involved
     the  settlement  of  estimated  liabilities,  we  believe  that the  actual
     expiration  of the options  would then be  considered  a Type 1  subsequent
     event that requires the financial statements to be adjusted.

Form 10-QSB for the fiscal quarter ended March 31, 2005
-------------------------------------------------------

Consolidated  Statements  of Income,  page F-2,  Note 2 Summary  of  Significant
--------------------------------------------------------------------------------
Accounting  Policies,  Revenue Recognition,  Advertising Service Revenues,  net,
--------------------------------------------------------------------------------
page F-8
--------

4.   Comment.  Tells  us  how  you  considered  EITF  99-19  as  it  relates  to
     Advertising Service Revenues.

     Response.  The  Company  is not  the  primary  obligor  in  the  applicable
     advertising  arrangement.  Further,  the Company  receives a fixed fee from
     Shanghai Sifang Media Co., Ltd with respect to this  arrangement and has no
     latitude in  determining  prices,  indicating  that the revenues  should be
     netted with the  associated  costs  (EITF  99-19).  Therefore,  the Company
     recorded the Advertising  Service Revenues net in the financial  statements
     as of March 31, 2005.

Consolidated Statements of Cash Flows, page F-4
-----------------------------------------------

5.   Comment.  Since  the  nature  of  certain  related  party  advances  are to
     facilitate  revenue-generating activities on behalf of the company, tell us
     your basis for presenting these amounts as an investing  activity versus an
     operating  activity on the Statements of Cash Flows.  In addition,  explain
     how the $3.0 million and $2.4 million  advances,  related to the March 2005
     agreements as disclosed on page F-14,  were  recorded in your  Statement of
     Cash Flows.

     Response.  Both the $3.0  million and the $2.4  million  advances  meet the
     definition of and were  classified as investing  activities on the Companys
     Statement of Cash Flows.  The $3.0 million relates to an advance of cash to
     a related  company  to  finance  its future  operations.  The $2.4  million
     relates to advancement of funds to a related party to for the investment in
     a digital media company that the assets will be transferred to the Company.

<PAGE>

     As you requested in your letter dated June 30, 2005, enclosed please find a
     letter from the Company making the requested  acknowledging  statement.  If
     you have any questions or comments  regarding the foregoing,  please do not
     hesitate to contact me at (206) 370-6651.

                                     Very truly yours,

                                     Preston Gates & Ellis llp

                                     /s/ Kristy T. Harlan

                                     By: Kristy T. Harlan

</TEXT>
</DOCUMENT>

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

      June 30, 2005

Mail Stop 4561

VIA U.S. MAIL 214-661-6618

Mr. Qian Fang
Chief Financial Officer
China Digital Wireless, Inc.
429 Guangdong Road
Shanghai, People`s Republic of China 200001

RE:	China Digital Wireless, Inc.
Form 10-KSB for the year ended December 31, 2004
File no. 000-12536
Form 10-QSB for the quarter ended March 31, 2005
File no. 000-12536

Dear Mr. Fang:

We have reviewed the above referenced filings and have the
following
comments.  We have limited our review to only your financial
statements and related disclosures and will make no further review
of
your documents.  In our comments, we may ask you to provide us
with
information so we may better understand your disclosure.  Please
be
as detailed as necessary in your explanation.  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.

Form 10-KSB for the fiscal year ended December 31, 2004

Note 2 - Summary of Significant Accounting Policies
1. Advise us how you considered FIN 46(R) as it relates to your
relationship with Sifang Information and Tianci Group in light of
the
rights obtained through the information service and cooperation
agreements and funding of working capital needs.

Note 3 - Equity Transactions, page F-15
2. Please tell us the nature of your relationship with the three
investors that you issued 1,315,789 shares of common stock on June
28, 2004 and how you determined the issuance of shares below the
market price was not a compensatory arrangement.  In addition,
clarify if the shares were actually issued in June 2004 or if they
were held in escrow as well.
3. We note for the options granted to certain shareholders to
repurchase their shares at $1.14 per share you considered Topic D-
98
in accounting for the options.  Advise us what consideration was
given to paragraph 11 of SFAS 150 as it relates to classifying
these
amounts as a liability at year-end.  Further, since the
contingency
was not resolved until after year-end, tell us your basis in GAAP
for
classifying these amounts in permanent equity at December 31,
2004.

Form 10-QSB for the fiscal quarter ended March 31, 2005

Consolidated Statements of Income, page F-2, Note 2 - Summary of
Significant Accounting Policies, Revenue Recognition, Advertising
Service Revenues, net, page F-8
4. Tell us how you considered EITF 99-19 as it relates to
Advertising
Service Revenues.

Consolidated Statements of Cash Flows, page F-4

5. Since the nature of certain related party advances are to
facilitate revenue-generating activities on behalf of the company,
tell us your basis for presenting these amounts as an investing
activity versus an operating activity on the Statements of Cash
Flows.  In addition, explain how the $3.0 million and $2.4 million
advances related to the March 2005 agreements as disclosed on page
F-
14, were recorded in your Statement of Cash Flows.

*    *    *    *

As appropriate, please respond to these comments within 10
business
days or tell us when you will provide us with a response.  Please
file your response on EDGAR.  Please understand that we may have
additional comments after reviewing your responses to our
comments.

We urge all persons who are responsible for the accuracy and
adequacy
of the disclosure in the filings reviewed by the staff to be
certain
that they have provided all information investors require for an
informed decision.  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.

In connection with responding to our comments, please provide, in
writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

In addition, please be advised that the Division of Enforcement
has
access to all information you provide to the staff of the Division
of
Corporation Finance in our review of your filings or in response
to
our comments on your filings.

You may contact Kelly McCusker, Staff Accountant, at (202) 551-
3433
or the undersigned at (202) 551-3413 if you have questions.

						Sincerely,

      Cicely D. Luckey
      Branch Chief

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??

??

??

Mr. Qian Fang
China Digital Wireless, Inc.
June 30, 2005
Page 1

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<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

      					January 14, 2005

Mail Stop 0409

VIA US MAIL AND FAX 214-661-6618

Mr. Tai Caihua
President
China Digital Wireless, Inc.
429 Guangdong Road
Shanghai, Peoples Republic of China  200001

RE:	China Digital Wireless, Inc.
	Form 8-K filed January 12, 2005
            File No. 0-12536

Dear Mr. Caihua:

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 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.

1. Revise the Form to state whether the former accountant
resigned,
declined to stand for re-election or was dismissed, and the
specific
date, as required by Item 304(a)(1)(i) of Regulation S-B.  It is
not
sufficient to state that the company "approved resolutions not to
engage" the accountant, as that wording is unclear to a reader.

2. Item 304(a)(1)(ii) of Regulation S-B requires a statement
whether
the accountant`s report on the financial statements for either of
the
past two years contained an adverse opinion or a disclaimer of
opinion or was modified as to uncertainty, audit scope or
accounting
principles; and a description of the nature of each such adverse
opinion, disclaimer of opinion or modification.  Amend your Form
8-K
to disclose uncertainty regarding the ability to continue as a
going
concern in the accountant`s report.

File an amendment under cover of Form 8-K/A and include the ITEM
4.01
designation, including the letter from the former accountant filed
as
an Exhibit 16.  Please note that your former accountant should
make
it clear within the Exhibit 16 letter that it is in reference to
your
amended Form 8-K.

We urge all persons who are responsible for the accuracy and
adequacy
of the disclosure in the filings reviewed by the staff to be
certain
that they have provided all information investors require.  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.

In connection with responding to our comments, please provide, in
writing, a statement from the company acknowledging that

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

In addition, please be advised that the Division of Enforcement
has
access to all information you provide to the staff of the Division
of
Corporation Finance in our review of your filing or in response to
our comments on your filing.

Please provide the supplemental information requested above within
10
business days from the date of this letter.  The supplemental
information should be filed as correspondence on EDGAR.  The
amendment requested should be filed as promptly as possible and
should be reviewed by the former accountants.  The letter required
by
Exhibit 16 should cover any revised disclosures.

Any questions regarding the above should be directed to me at
(202)
824-5336, or in my absence, to Robert Benton at (202) 942-1811.

						Sincerely,

						Rachel Zablow
						Staff Accountant

Cc: Mr. George Diamond, Jackson Walker LLP, via fax
??

??

??

??

China Digital Wireless, Inc.
January 14, 2005

Page 1

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