Simon Fu, CFO of China Expert Technology

Interactive Q&A: Simon Fu, CFO of China Expert Technology (CXTI.OB)

Thanks for your comment.

1. In Fujian, there are 82 cities and counties, and approximately 30% of these cities and counties are our target customers. At the moment, we have contracts with 12 of them and we believe there are substantial business opportunities in Fujian, in addition to possible future system upgrades and maintenance services opportunities.

2. Recently, we have adopted a balanced business development strategy and we will explore new business within and outside Fujian province. In three to five years time, we expect at least half of our revenues generated outside Fujian. We will work with different consultants to explore new prospects but hopefully we can have less reliance on them in future once we have more credible references and successful cases.

3. We have make an application to Nasdaq for listing on GM recently but it takes time and subject to their approval. We are working on getting an effective registration statement and several compliance issues to facilitate such listing.

4. At the moment, we are subject to PRC corporation income tax at 15% on the net income derived in China. According to the latest PRC tax reform, such tax rate will be raised to 25% with effective from January 2008 though some kind of transitional arrangement is generally expected, but no details have been released by the State Council of PRC government yet.

Thanks & regards,

Simon