Chief Executive Officer Details Focused Initiatives to Further Accelerate Shareholder Value NEW YORK and SHENZHEN, China, Dec. 5 /PRNewswire-Asia-FirstCall/ -- China Finance, Inc. (OTC Bulletin Board: CHFI; the "Company"), a provider of financial support and services for China's large and rapidly expanding class of small and medium enterprises ("SMEs"), today released the following letter to shareholders from Ms. Ann Yu, Chief Executive Officer: December 5, 2008 My Fellow Shareholders: In light of the current turmoil in the global financial markets, and several exciting developments at our Company, I wanted to share some thoughts directly with you. We believe that China Finance offers an opportunity that is unique among investment companies. While we are a publicly traded closed end fund, our flexible yet focused business model is designed to permit varied initiatives to maximize potential value for our shareholders. I believe that steps taken, planned and underway at the Company will significantly enhance our ability to grow revenues and earnings into 2009 and beyond. While the main thrust of our business activities has been and will continue to be providing financial services (such as guarantee, loan and other financing services) to small and medium sized (SME) China-based companies, we have extended our investment strategy to include directly acquiring positions (including controlling positions) in enterprises where we see substantial growth and revenue potential. A case in point is our recently announced intention to purchase 80% of the shares of Wenxi Baiyu Magnesium for approximately $11.4 million. This potential purchase, which is still in negotiations, is representative of the type of direct investments we are looking to make in the future as we seek to expand our revenues and provide consistent and growing shareholder value. We expect our future direct investments to be in companies that have earned a minimum of $30 million in revenue during their most recent fiscal year. As previously announced, we are also in the process of seeking a listing on the NYSE Alternext US (formerly the American Stock Exchange) that should increase our Company's visibility within the investment community, expose our Company to more investors, and raise our profile within our target markets to allow us to attract more (and potentially greater) revenue producing opportunities. While there can be no assurance that we will become listed, we are working with the NYSE to provide materials and information they have requested to keep the process moving forward. As you know, the current global market turmoil has led to declines in stock markets around the world. We believe our share price, while still volatile, has held up relatively well. In late October, I became a shareholder of China Finance for the first time by acquiring 300,000 shares at a cost of approximately $1.4 million. While this was a strategic personal investment decision, and did not reflect any position of the Company, my purchase speaks to my faith and confidence in the long-term prospects of China Finance. I believe we have the expertise and depth of management to continue identifying opportunities both through the financial services arena (loans or guarantees to China-based companies) and direct investments with Chinese companies that have demonstrated strong growth and compelling potential. Obviously, I believe that the prospects for China Finance are bright, and I am excited about our initiatives and future. I thank you for your continued support and interest, and I look forward to continuing communication about our initiatives into 2009 and beyond. For the latest information about China Finance, you may bookmark our updated website: http://www.chinafinanceinc.com/ . Sincerely, Ann Yu Chief Executive Officer China Finance Inc. ABOUT CHINA FINANCE, INC. China Finance, Inc. provides financial support and services -- primarily in the form of surety guarantees, loan guarantees, or short-term loans -- to privately owned SMEs when they seek access to capital or to be acquired by a United States reporting company. China Finance provides its services through its wholly owned indirect subsidiary, Shenzhen Hua Yin Guaranty and Investment Limited Liability Corporation, which is located in the financial district of Shenzhen, China. The Company also directly invests in the equity of SMEs through its wholly owned subsidiary, Value Global International Limited, a British Virgin Islands company. FORWARD-LOOKING STATEMENTS The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements relating to expected operating results and future performance, as well as future events and developments, are forward-looking statements and are not historical in nature. Generally, the words "looking forward", "believe", "expect", "intend", "estimate", "anticipate", "likely", "project", "may", "will" and similar expressions identify forward-looking statements. The Company warns that any forward-looking statements in this release involve numerous risks and uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by any forward-looking statement. These risks and uncertainties include, but are not limited to, the risk that the value of our portfolio securities will decline resulting in a decline in the value of the Company's stock, we might not achieve our anticipated development milestones, the market for our services will not grow as expected and we might not achieve our expectations. If these or other significant risks and uncertainties occur, or if our underlying assumptions prove inaccurate, our actual results could differ materially. While the Company is an operating company, the Company is registered as a "closed-end" investment company under the Investment Company Act of 1940, as amended, and is subject to the types of investment risks that effect investment companies. You are urged to consider the operating and investment objectives and strategies, expenses and history of the Company, along with all risks and uncertainties noted above, and to review the risk factors and financial information about the Company available in the Company's registration statement on Form N-2, and the Company's Annual and Semi-Annual Reports and other regulatory filings accessible on the SEC's website at http://www.sec.gov/ . In light of the uncertainty inherent in forward-looking statements, you should not consider their inclusion to be a representation that such forward-looking matters will be achieved. Moreover, pursuant to the Private Securities Litigation Reform Act of 1995, such statements speak only as of the date they were made, and the company undertakes no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise. Past performance is no guarantee of future results, and like all investments, you may lose money on an investment in the Company's stock. For more information, please contact: Investor Relations China America Financial Communications Group Darren Minton Tel: +1-212-823-0523 Email: DATASOURCE: China Finance, Inc. CONTACT: Darren Minton of China America Financial Communications Group, +1-212-823-0523, or , for China Finance, Inc. Web site: http://www.chinafinanceinc.com/

Copyright