Xinhua China Ltd. Moves Forward With Book Distribution Center Development

Xinhua China Ltd. Moves Forward With Book Distribution Center Development

BEIJING, Aug. 31 /PRNewswire-FirstCall/ -- Xinhua China Ltd. (BULLETIN BOARD: XHUA) reported today that, further to the letter of intent signed on March 15, 2005, an agreement of co-operation has now been signed by its subsidiary, Pac-Poly Investments, and the Beijing Riyue Hongcheng Commerce Trading Center. The agreement outlines new terms of a formal lease covering the development of the Company's planned Book Distribution Center in Beijing, China.

The original plan called for the project to be developed on approximately 128 acres of land. The new agreement covers only the 100 acres of that land already zoned for commercial use. The remaining 28 acres, currently zoned for agricultural use, are awaiting rezoning before being developed. The revised development site will contain a 3 million square feet book distribution center. As a result, the terms of the new agreement also provide for a corresponding reduction in the annual lease payments to $US1.50 million for each of the first five years, $US1.67 million in years 6 through 10, and $US1.85 million in years 11 through 50. This agreement is a major step toward the signing of the Land Use Agreement, which will allow construction of the project to begin.

"Although the negotiations have delayed the commencement of the development project, our efforts to improve our agreement have been successful and will be beneficial in the long run," said Mr. Xianping Wang, President and CEO of Xinhua China. "The new terms will allow us to achieve savings of $US26.5 million over the term of this project."

Phase one of the development is expected to start once the required financing is in place. This first phase involves construction of a 500,000 square foot publishers warehousing facility and is scheduled for completion in early 2006. Phase two of the project will develop approximately 1.5 million square feet of distribution space primarily for use by domestic publishers and Xinhua China Ltd. Commencing in early 2006, phase two should be completed by the end of 2006. The final phase of the project will be the construction of commercial space to house a book city retail operation, additional commercial venues, and an office tower. The final phase is expected to be completed in 2008.

The completion of this project will enable Xinhua China Ltd. to better handle both current volume and the anticipated explosive growth of demand for books in China.

About Xinhua China

Xinhua China Ltd. is a US publicly traded holding company that, through one of its subsidiaries, Xinhua Publications Circulation & Distribution Co., Ltd., holds a national license for distribution of books and other publications in China. Xinhua China is involved in forming strategy, operating and financing for Xinhua C & D. Xinhua China also interfaces with the worldwide financial communities to inform them of the combined companies' goals and developments. For more information, please call Mr. Alex Helmel at 1 800-884-3864 ext. 17 or visit its website at http://www.xinhuachina.com.cn/ .

Safe Harbor Statement

This news release may include forward-looking statements within the meaning of section 27a of the UNITED STATES SECURITIES ACT of 1933, as amended, and section 21e of the UNITED STATES SECURITIES and EXCHANGE ACT of 1934, as amended, with respect to achieving corporate objectives, developing additional project interests, Xinhua China's analysis of opportunities in the acquisition and development of various project interests and certain other matters. These statements are made under the "safe harbor" provisions of the United States private securities litigation reform act of 1995 and involve risks and uncertainties, which could cause actual results to differ materially from those in the forward-looking statements contained herein.

Source: Xinhua China Ltd.

CONTACT: Alex Helmel, Investor Relations of Xinhua China Ltd.,
+1-604-681-3864, +1-800-884-3864, info@xinhua-china.net ; or Woody Wallace,
wwallace@tirc.com , or Michael Arneth, marneth@tirc.com, both of The Investor
Relations Company, +1-847-296-4200

Web site: http://www.xinhuachina.com.cn/

-------
Profile: jene08