UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Asia Electrical Power International Group Inc.

(Exact name of registrant as specified in Charter)

NEVADA	0-51787	98-0522960
(State or other jurisdiction of	(Commission File No.)	(IRS Employee
incorporation or organization)		Identification No.)

E-4, Floor 3, Haijin Square
Taizi Road, Nanshan District, Shenzhen, PRC 518067
(Address of Principal Executive Offices)

86 755 2823 1993
(Issuer Telephone number)

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yes o No

Large Accelerated Filer o	Accelerated Filer o	Non-Accelerated Filer o	Smaller Reporting Company þ
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. o Yes þ No

State the number of shares outstanding of each of the issuer’s classes of common equity, as of August 13, 2010: 51,959,693 shares of common stock and 5,000,000 shares of preferred stock.

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
	Item 1. Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures about Market Risks
	Item 4. Controls and Procedures
PART II OTHER INFORMATION
	Item 1 Legal Proceedings
	Item 1A Risk Factors
	Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
	Item 3 Defaults Upon Senior Securities
	Item 5 Other Information
	Item 6 Exhibits
SIGNATURES
EX-31.1
EX-31.2
EX-32

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.
CONSOLIDATED BALANCE SHEETS

	June 30, 2010		December 31, 2009
	(Unaudited)		(Audited)
ASSETS
Current Assets:
Cash	$	3,179,864	$	3,013,027
Accounts receivables		5,791,166		5,381,315
Other receivables		191,819		161,290
Advances to suppliers		188,670		81,340
Inventory		4,109,969		2,851,726
Total current assets		13,461,488		11,488,698
Fixed Assets:
Land use right		2,725,995		2,727,123
Property, Plant & Equipment		8,090,132		7,812,984
Total cost		10,816,127		10,540,107
Less accumulated depreciation		1,685,025		1,449,790
Net fixed assets		9,131,102		9,090,317
Other Assets:
Deposits		1,059,435		554,345
Total other assets		1,059,435		554,345
Total Assets	$	23,652,025	$	21,133,360
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Notes payable	$	1,278,515	$	—
Accounts payable		6,498,413		5,935,826
Advances from customers		1,504,953		545,739
Accrued liabilities		315,437		713,579
Other liabilities		193,474		195,643
Convertible Note Payable		1,473,160		1,400,833
Total current liabilities		11,263,952		8,791,620
Shareholder advances		0		0
Total Liabilities		11,263,952		8,791,620
Stockholders’ Equity:
Common stock: authorized 150,000,000 shares of $0.001 par value; issued and outstanding 51,959,693 and 51,000,000, respectively		51,960		51,960
Preferred stock: authorized 5,000,000 shares of $0.001 par value; issued and outstanding 5,000,000 shares		5,000		5,000
Paid in capital — Stock options		0		0
Capital in excess of par value		11,154,789		11,154,789
Accumulated deficit		5,840		94,546
Earnings appropriated for statutory reserves		183,749		183,749
Other accumulated comprehensive income		986,735		851,696
Total Stockholders’ equity		12,388,073		12,341,740
Total Liabilities and Stockholders’ Equity	$	23,652,025	$	21,133,360

The accompanying notes are an integral part of these financial statements.

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Month Periods Ended June 30, 2010 and 2009
(Unaudited)

	Six Month Periods Ended June 30,						Three Month Periods Ended June 30,
	2010			2009			2010			2009
Revenue	$	8,609,330		$	6,713,518		$	5,072,406		$	4,634,236
Cost of Sales		6,964,376			5,397,613			4,134,235			3,698,146
Gross Profit		1,644954			1,315,905			938,171			936,090
Expenses:
Selling and Administrative Expenses		1,619,331			1,294,868			846,115			796,854
Operating Income		25,623			21,037			92,056			139,236
Interest expense		(75,504	)		(58,832	)		(38,071	)		(30,835	)
Foreign exchange loss		—			(61,148	)		—			(61,148	)
Interest income		2,819			5,878			1,351			3,642
Other income		70,577			61,771			36,747			37,378
Other expenses		(30,725	)		—			(29,262	)		—
Total other income(expense)		(32,833	)		(52,331	)		(29,235	)		(50,963	)
Income before Income Taxes		(7,210	)		(31,294	)		62,821			88,273
Provision for Income Taxes:
Current Provision		81,497			47,470			45,864			47,470
Net loss(income) for the period		(88,707	)		(78,764	)		16,957			40,803
Other Comprehensive Income -
Foreign currency translation adjustments		135,039			14,426			132,992			1,394
Total Comprehensive Income	$	46,332		$	(64,338	)		149,949			42,197
Income Per Common Share -
Basic and Diluted	$	0.00			($0.00	)	$	0.00		$	0.00
Weighted average number of shares outstanding		51,959,693			51,959,693			51,959,693			51,959,693

The accompanying notes are an integral part of these financial statements.

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Month Periods Ended June 30, 2010mand 2009
(Unaudited)

	2010			2009
CASH FLOWS FROM OPERATIONS:
Net income (loss)	$	(88,707	)	$	(78,764	)
Charges not requiring the outlay of cash:
Depreciation and amortization		219,714			182,283
Amortization of discount on convertible note		72,326			55,994
Changes in assets and liabilities:
Increases in accounts receivable		(352,212	)		(787,655	)
Increases in other receivables		(28,625	)		(46,231	)
Decrease (increase) in advances to suppliers		(105,486	)		23,055
Increase (decrease) in inventory		(1,217,685	)		573,538
(Decrease) inrease in notes payable		1,266,218			(201,976	)
Decreases in accounts payable		(187,343	)		(107,690	)
Increases in advances from customers		944,542			122,441
Increases in other payable		677,957			292,468
Decreases in accrued liabilities		(401,434	)		(29,015	)
Net Cash Consumed (Provided) By Operating Activities		799,265			(1,552	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of fixed assets		(178,884	)		(438,843	)
Return of guarantee deposit		0			203,664
Increase( decrease) in deposits		(485,214	)		267,025
Net Cash Consumed By Investing Activities		(664,098	)		31,846
Issuance of consultable note
Exchange rate effect on cash		31,670			4,132
Net change in cash		166,837			34,426
Cash balance, beginning of period		3,013,027			3,013,900
Cash balance, end of period	$	3,179,864		$	3,048,326

The accompanying notes are an integral part of these financial statements.

ASIA ELECTRICAL POWER INTERNATIONAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2010
(Unaudited)

1. BASIS OF PRESENTATION

The unaudited interim financial statements of Asia Electrical Power International Group Inc. (“the Company”) as of June 30, 2010 and 2009 and for the three and six month periods ended June 30, 2010 and 2009, have been prepared in accordance with United States generally accepted accounting principles. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such periods. The results of operations for the six months ended June 30, 2010 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2010.

Certain information and disclosures normally included in the notes to financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2009.

2. INCOME TAXES

The Company was granted a 50% exemption from income taxes for the years 2009 and 2010. Such exemptions are available to Chinese enterprises classified as foreign investment companies.

3. SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION

The Company did not make any cash payments of either interest or income taxes during the three month periods ended June 30, 2010 or 2009.

There were no non cash financing or investing transactions during either of the periods presented.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Notice Regarding Forward Looking Statements.

We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. This filing contains a number of forward-looking statements which reflect management’s current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this filing other than statements of historical fact, including statements addressing operating performance, events, or developments which management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products, adequacy of funds from operations, statements expressing general optimism about future operating results, and non-historical information, are forward looking statements. In particular, the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” variations of such words, and similar expressions identify forwarding-looking statements, but are not the exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances. Readers should not place undue reliance on these forward-looking statements, which are based on management’s current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below), and apply only as of the date of this filing. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, the risks to be discussed in our next Annual Report on Form10-K and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We undertake no obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Background

Asia Electrical Power International Group Inc. (“AEPW”) was incorporated in the State of Nevada on August 30, 2002 as “Berita International Corporation.” On December 24, 2003, we changed our name to “Keiji International Group Inc.” and on September 30, 2004, we changed our name to “Asia Electrical Power International Group Inc.”

On January 23, 2003, we entered into an Asset and Share Exchange Agreement (the “Agreement”) with Shenzhen Naiji Electrical Equipment Co., Ltd. (“Naiji”), a PRC company, whereby we acquired all the issued and outstanding stock of Naiji for consideration of 24,000,000 shares of our common stock.

The shareholders of Naiji unanimously approved the Agreement for the purpose of restructuring itself in anticipation of becoming listed on the OTC Bulletin Board. AEPW was formed by Naiji for this purpose. As a result, Naiji became our wholly-owned subsidiary. Prior to entering into the Agreement, we had no assets, liabilities, equity and had not issued any of our shares. In PRC, corporate ownership is determined by each shareholder’s proportionate capital contribution. As a result of entering into the Agreement, the shareholders of Naiji became the shareholders of AEPW in equal proportions wherein the 24,000,000 shares were allocated based on the capital contributions, or ownership, of Naiji. The Agreement therefore was a non-arms length transaction.

Naiji has produced high and mid-voltage electrical switchgears since its inception in 1997.

For the year ended December 31, 2009, we generated a pre-tax income of $553,733 compared with a pre-tax net income of $64,075 for the 2008 fiscal year end period.

Recent Events

On December 4, 2009, we filed a Schedule 13E-3 Transaction Statement including a Preliminary Information as an Exhibit with the Securities and Exchange Commission (“SEC”) in connection with the approval by the board of directors of a reverse stock split of one share for each 500 shares of the Company’s common stock presently issued and outstanding. The purpose of the reverse stock split is to reduce the number of stockholders of the Company as part of a process to permit the Company to terminate operating as a “reporting company” under the Securities Exchange Act of 1934 because of the disproportionate expense in remaining a “public company” compared with any benefits the Company receives as a result thereof. A Definitive Schedule 14C Information Statement will be sent or made available to all stockholders before the Company carries out the reverse stock split. No proxies are being solicited in connection with this transaction since stockholders holding approximately 70.8% of the issued and outstanding common stock of the Company have voted in favor of the reverse stock split.

We intend to carry out the reverse stock split by filing an amendment to our Articles of Incorporation with the Secretary of State of Nevada after the SEC approves the transaction disclosure documents and we complete the dissemination of transaction information materials to our stockholders. We also intend to file a final Schedule 13E-3 Transaction Statement and a Form 15 Certification and Notice of Termination of Registration with the SEC in order to effect the voluntary deregistration of our common stock after the reverse stock split is completed. For more information regarding the reverse stock split, please see our Schedule 13E-3 Transaction Statement, as amended, and the exhibits thereto, which was filed on August 13, 2010, and Schedule 14C Definitive Information Statement , and the exhibits thereto, which was filed on August 13, 2010.

Results of Operations

June 30, 2010, compared to June 30, 2009

Revenues

	Six months ended					Six months ended
	June 30, 2010		% Sales			June 30, 2009		% Sales
Revenue	$	8,609,330		100	%	$	6,713,518		100	%
Cost of Sales		6,964,376		81	%		5,397,613		80	%
Gross Profit	$	1,644,954		19	%	$	1,315,905		20	%

Our revenues for the six months ended June 30, 2010 were $8,609,330, which represents an increase of $1,895,812 (or 28.2% which includes the effectiveness of the exchange rate) from revenues of $6,713,518 for the comparable 2009 period. The increase in revenues reflects the effectiveness of the Company’s aggressive marketing efforts in the north and northwest markets in China, especially in tendering for engineering projects.

Cost of Sales for the six month period in 2010 was $6,964,376, which represents an increase of $1,566,763 (or 29%) from $5,397,613 for the comparable 2009 period. The increase in cost of sales reflects the corresponding increase in revenues for the period. Gross profit for the 2010 period was $1,644,954 representing an increase of $329,049 or $25% from $1,315,905 for the comparable period in 2009. The increase in gross profit is attributable to the increase in revenues for the 2010 period.

	Three months ended					Three months ended
	June 30, 2010		% Sales			June 30, 2009		% Sales
Revenue	$	5,072,406		100	%	$	4,634,236		100	%
Cost of Sales		4,134,235		81.5	%		3,698,146		80	%
Gross Profit	$	938,171		18.5	%	$	936,090		20	%

Our revenues for the three months ended June 30, 2010 were $5,072,406, which represents an increase of $438,170 (or 9.5% which includes the effectiveness of the exchange rate) from revenues of $4,634,236 for the comparable 2009 period. The increase in revenues is principally due to the effectiveness of the PRC government’s stimulus money and policy to boost domestic demand. Especially for the quarter ended June 30, 2010, the Company actively participated in tendering for projects. As a result, sales increased dramatically during the quarter.

Cost of Sales for the three month period ended June 30, 2010 was $4,134,235, which represents an increase of $436,089 (or 11.8%) from $3,698,146 for the comparable 2009 period. The increase in cost of sales reflects the corresponding increase in revenues for the period. Gross profit for the 2010 three month period was $938,171 representing an increase of $2,081 (or $0.2%) from $936,090 for the comparable period in 2009. The increase in gross profit is attributable to the increase in revenues for the 2010 period.

Selling and Administrative Expenses

Selling and administrative expenses (which includes salaries and benefits, depreciation and amortization, travel and promotion, technical support and related overhead, among other charges) for the 2010 six month period were $1,619,331, which represents an increase of $324,463 (or 25.1%) from $1,294,868 for the prior year period. The increase in selling and administrative expenses for the 2010 six month period was due principally to increases from the prior period in executive salaries and expenses ($700,000 for the 2010 period compared with $450,000 for the 2009 period), travel and promotion ($140,907 for the 2010 period compared with $103,937 for the 2009 period), depreciation and amortization ($138,223 for the 2010 period compared with $128,666 for the 2009 period), office and utilities charge ($109,311 for the 2010 period versus $38,758 in 2009 period) and other miscellaneous charges ($170,295 for the 2010 period compared with $141,804 for the 2009 period), offset by the reductions in employee salaries and benefits ($283,702 in the 2010 period compared with $336,558 in 2009 period), research and development ($11,807 for the 2010 period compared with $38,843 for the 2009 period), bad debt expense (expense of $63 for the current period versus a prior year expense of $511) and Marketing (expense of $293 compared with $7,689 for 2009 period).

The selling and administrative expenses for the three months ended June 30, 2010 were $846,115, which represents an increase of $49,261 (or 6.2%) from $796,854 for the prior year period.

Operating (Loss) Income

During the first six months of 2010, we had an operating income of $25,623 compared with operating income of $21,037 for the comparable period in 2009, due to the reasons discussed above.

During the three month period ended June 30, 2010, our operating income was $92,056 compared with operating income of $139,236 for the comparable period in 2009, due to the reasons discussed above.

Other Income (Expense)

Other Income (Expense) was $(32,833) for the 2010 six month period compared with $(52,331) for the comparable 2009 period and was $(29,235) for the three month period compared with $(50,963) for the 2009 period.

Income (Loss) before Income Taxes, Net Income (Loss) for the Period, Total Comprehensive Income (Loss), and Loss Per Share

For the 2010 six month period, we had a loss before taxes of $7,210 compared with loss of $31,294 for the comparable period in 2009. For the three month period ended June 30, 2010, we had an income before taxes of $62,821 compared with income of $88,273 for the comparable period in 2009. During the 2010 six month period, we also made a provision for income taxes of $81,497, compared with a provision of $47,470 for the comparable period in 2009.

For three months ended June 30, 2010 and 2009, the provisions for income taxes were $45,864 and $47,470, respectively. Our net loss for the 2010 six month period was $88,707, compared with net income of $78,764 for the comparable period in 2009. The net income for the three month period ended June 30, 2010 was $16,957, compared with net income of $40,803 for the comparable period in 2009. Foreign currency translation adjustment, which is the impact of different foreign exchange rates applied to the balance sheet and income statement, was a gain of $135,039 for the 2010 six month period, compared to a gain of $14,426 for the same period in 2009. Total comprehensive income of $46,322 for the first six months of 2010 compares with total comprehensive loss of $64,338 for the same period in 2009. For the three months ended June 30, 2010, total comprehensive income was $149,949, compared with total comprehensive income of $42,197 for the same period in 2009.

Income (Loss) Per Share applicable to common stockholders for the 2010 period was $0.00 per share compared with a loss per share of $(0.00) for the 2009 six month period and $0.00 for the three month period ended June 30, 2009.

Current Trends in the Industry

With new developments in rural areas, the PRC will be accepting bids to service such areas to establish electrical networks. We anticipate such new developments may potentially increase our sales by 20% during fiscal 2010. A majority of our sales are generated through referrals from existing customer base. However with these new developments, we expect a substantial amount of our sales to be generated by fulfilling PRC contract bids to service rural areas in 2010.

Liquidity and Capital Resources

As of June 30, 2010, we had working capital of $2,197,536 compared to working capital of $2,697,076 as of December 31, 2009. The decrease is due principally to reclassification of a convertible note from long-term liability to a current liability, the increase in accounts payables and the increase in advances from customers, partially offset by the increase in inventories.

Over the next 6 months, we will require approximately $6,200,000 to sustain our working capital needs as follows, based on projected sales of $8,050,000:

Materials, Labor, Overhead	$	4,960,000
Selling Expenses and Administrative Expenses	$	1,240,000
Total	$	6,200,000

Sources of Capital

We expect our revenues generated from operations to cover our projected working capital needs; however, if additional capital is needed, we will explore financing options such as shareholder loans. Shareholder loans are without stated terms of repayment. In the past, we have been charged interest at the rate of 6% per annum. We have no formal agreement that ensures that we will receive such loans. In the event shareholder loans are not available, we may seek long or short term financing from local banks.

We do not have any credit facilities with any lender.

Material Commitments

We do not have any material commitments for capital expenditures.

Seasonal Aspects.

Our business is seasonal in that sales are particularly low in February, due to the Chinese New Year holiday, during which time our business is closed up to 2 weeks. Sales in March are usually higher than usual levels as a result.

Off Balance Sheet Arrangements.

We have no off balance sheet arrangements.

CRITICAL ACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES.

Critical Accounting Estimates.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The application of GAAP involves the exercise of varying degrees of judgment. The resulting accounting estimates will not always precisely equal the related actual results. Management considers an accounting estimate to be critical if:

• Assumptions are required to be made, and

• Changes in estimates could have a material adverse effect on our financial statements.

The following table presents information about our most critical accounting estimates and the effects of hypothetical changes in the assumptions used when making such estimates:

			How accurate have	How likely to
Balance Sheet	There is a risk of	How did we arrive	we been in the	change in the
Account	change because?	at these Estimates?	past?	future?
Accounts Receivable	We provide an Allowance For Doubtful Accounts (AFDA) based on the age of each account. Uncollectible accounts are also written off, particularly when bankruptcy occurs.	AFDA provisions are made by analyzing agings of the accounts receivable.	These estimates of AFDA have been accurate in the past.	This method of determining AFDA will likely not change as the method used has provided accurate results.
Inventory	We review the net realizable value of our inventory to ensure that it is recorded at a lower of cost or market value. At this time, any obsolete inventory is written off. The market value could change due to the success of technical innovation on our part or by competitors within the switchgear Market.	The cost of our inventory (including manufacturing Overhead) is compared to net realizable value in the market.	Our procedure has produced reliable results.	We do not expect any change in procedure.
Fixed Assets	We calculate our depreciation using the straight line method based on useful lives of the assets. The useful lives of the asset could change due to technical innovation and or other factors and we may write off or write down obsolete assets.	The estimated lives of fixed assets are based on guidelines provided by Chinese tax authorities.	We believe our depreciation method has produced accurate results.	We do not foresee any changes.
Accrued Liabilities (Income Tax)	We are subject to income taxes in China. The determination of the tax liability is based on calculations which are further based on estimates such as, for example, allowances for bad debt. These estimates may change from time to time and the final tax outcome may increase or decrease our income tax expense provision made.	Income tax provision is calculated based on the statutory tax rate and level of operating income. Operating income is partially based on various estimates. These estimates may differ from actual results. This calculation is made monthly and installments are made toward the tax liability.	Our estimates currently have been in line with the actual assessment in our tax liability. Income tax provisions are calculated monthly.	Our estimates may change from time to time and this may affect the income tax provision. We may under or over remit our installments based on how our estimates differ from actual results.

Revenue Recognition.

Revenue is recognized when the product is delivered to customers. In determining delivery, consideration is given to the following: whether an arrangement exists with the buyer; whether delivery has occurred; whether the price to the buyer is fixed or determinable; and that collection is reasonably assured. No provision is made for any right of return that may exist as the criteria specified in pronouncement of the Financial Accounting Standards (SFAS) have been met.

Item 3. Quantitative and Qualitative Disclosures about Market Risks

Not applicable because we are a smaller reporting company.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures.

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Our chief executive officer and chief financial officer have concluded, based on the evaluation of the effectiveness of the disclosure controls and procedures by our management, with the participation of our chief executive officer and chief financial officer, as of the end of the period covered by this report, that our disclosure controls and procedures were effective for this purpose, except as noted below under “Changes in Internal Controls.”

Changes in Internal Controls over Financial Reporting.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q our disclosure controls and procedures were effective to enable us to accurately record, process, summarize and report certain information required to be included in the Company’s periodic SEC filings, and to accumulate and communicate to our management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Prior to the issuance of our financial statements, we completed the account reconciliations, analyses and our management review such that we can certify that the information contained in our financial statements for the year ended December 31, 2009, fairly presents, in all material respects, the financial condition and results of operations of the Company.

Limitations on Effectiveness of Controls and Procedures.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

     None.

Item 1A. Risk Factors.

     Not applicable to small reporting companies.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

     None.

Item 3. Defaults Upon Senior Securities.

     None.

Item 5. Other Information.

     None.

Item 6. Exhibits

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Signatures appear on following page)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.

Date: August 23, 2010

By:	/s/ Yulong Guo
	Yulong Guo
	President and Chief Executive Officer
By:	/s/ Yunbin Li
	Yunbin Li
	Chief Financial Officer