Over the last twenty-five years, China's economy has grown at a remarkable 9% average annual rate. Despite the fact that naysayers continue to forecast economic slowdown, figures show that China's economy grew by 11.9% in the second quarter of 2007 compared with the same period a year ago. In addition, the country's growth has been close to, or above, double-digits since 2004 and the figures for the period from April to June show a sharp increase over the 11.1% growth reported for the first quarter (Source: EuroNews). The outlook remains extremely positive, as a government think tank issued a report forecasting economic growth in 2008 at 10.8%, just slightly below the 11.5% growth expected for 2007 (Source: Associated Press, 12-03-2007). Such sustained growth has continued to drive many industries in China, including construction and building materials.

Chang-On International Limited (OTC: CAON) is bent on capturing market share in China with its innovative green architectural products made of recycled synthetic resin using patented technologies. The Company is engaged in the manufacturing and sales of green and recycled architectural products in the People's Republic of China through its sole operating subsidiary Harbin Hongbo Environment Protection Material, Inc. Utilizing recycled waste plastic granules and fly ash in a unique process that employs patented technologies, Chang-On produces architectural products that can be molded into a virtually limitless range of end-use products, included pallets, pipes, tubes, floorboards, and others. In addition, the raw materials used in the Company's production processes are readily available and inexpensive, ensuring a solid supply chain and high gross margins. As the Chinese government continues to adopt environmentally friendly policies, Chang-On is well positioned to become a major player in this growing sector.

2006 marks the first year of China's 11th Five Year Plan (2006-2010). The Chinese government has placed "Energy Efficiency" and "Green Construction" as top priority goals in China's construction industry. During the 11th Five Year period, the plan for total construction is estimated to reach 2 billion square meters each year, moreover, with the planned infrastructure investment in roads, rail systems, bridges, ports and airports will bring more opportunities for foreign companies in the building materials market. During the period from 2000 to 2005, the growth rate of import of building materials products was 23.5% every year, and the total import volume was $189.8 billion. In 2005, the total import was $54.3 billion. Recently, products that are more energy efficient and environmentally friendly have been increasingly in demand (Source: Icon Group International). By developing innovative technologies that produce environmentally friendly products, Chang-On is well ahead of the curve in its ability to answer the growing demands for green construction in China.

Driven by continuous economic development, China's building materials market is developing rapidly. In 2005, the total import volume was $54 Billion, which increased 12.4% comparing with the previous year (Source: China Building Materials Development Report). Construction spending in China will grow 9.7% annually through 2010, outperforming other major national construction markets (Source: Freedonia). China's green construction system, with a market value estimated at ¥1.5 Trillion (USD$208 Billion), is growing through energy-efficient projects, according to the Ministry of Construction. Qiu Baoxing, deputy head of the ministry, stated the construction area involved had increased by 2 Billion square meters each year, nearly half of the world's total (Source: People's Republic of China Embassy to the U.S.). Because of its ability to produce building products that answer the growing demands of China's construction industry, and the high margins that are the result of its proprietary production processes, Chang-On holds significant competitive advantages in this dynamic industry.