Qiao Xing's (XING) subsidiary Huizhou Qiao Xing Communication Industry Limited ("HZQXCI") has signed sale and purchase agreements with four sub-branches of China Telecom (CHA) in Yunnan.

The agreements provide for the supply by HZQXCI of up to 30,000 units of CDMA Wireless Cityphone sets to the four local communications operators. The first shipments are expected in the middle of September 2005.

The CDMA Wireless Cityphone is a mobile wireless communications terminal product using the 3G-frequency band and the landline network, operated mainly by China Telecom and China Netcom in China. It is similar to the Little Smart Phone in terms of the one-way charge system and the airtime charge rate, which is as low as that for conventional fixed-line telephone.

However, unlike the Little Smart Phone, the CDMA Cityphone uses CDMA technology instead of the PHS one, and so has better communications qualities and is more environmentally friendly.