SC 13D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Schedule 13D

Under the Securities Exchange Act of 1934
(Amendment No.    )*

Information to be Included in Statements Filed Pursuant to Rule 13d-1(a) and Amendments Thereto Filed Pursuant to Rule 13d-2(a)

YONGYE INTERNATIONAL, INC.

(Name of Issuer)

Common Stock, par value US$0.001 per share

(Title of Class of Securities)

98607B106

(CUSIP Number)

Zhong Xingmei	Wu Zishen
Full Alliance International Limited	c/o Yongye International, Inc., 6th Floor, Suite
Room 1701, Wing Tuck Commercial Centre,	608, Xue Yuan International Tower, No. 1
183 Wing Lok Street	Zhichun Road, Haidian District, Beijing, PRC.
Sheung Wan, Hong Kong	+(86) 10 8231 8866
+(852) 2572 3986

With a copy to:

Peter X. Huang

Skadden, Arps, Slate, Meagher & Flom LLP

30th Floor, China World Office 2

No. 1, Jianguomenwai Avenue

Beijing 100004, People’s Republic of China

+(86) 10 6535-5599

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) 

October 15, 2012

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No.	98607B106
1.	NAME OF REPORTING PERSON: Full Alliance International Limited
2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)          x (b)          ¨
3.	SEC USE ONLY
4.	SOURCE OF FUNDS OO
5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): ¨
6.	CITIZENSHIP OR PLACE OF ORGANIZATION British Virgin Islands

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7.	SOLE VOTING POWER 7,657,704
	8.	SHARED VOTING POWER 0
	9.	SOLE DISPOSITIVE POWER 7,657,704
	10.	SHARED DISPOSITIVE POWER 0

11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,657,704
12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES x1
13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13.9%2
14.	TYPE OF REPORTING PERSON CO

1 Excludes 1,155,000 shares of Common Stock beneficially owned by Mr. Wu, 6,858,136 shares of Common Stock beneficially owned by Morgan Stanley, and 20,000 shares of Common Stock beneficially owned by Abax.

2 Percentage calculated based on 55,147,596 shares of Common Stock outstanding on an as-converted basis as of October 16, 2012 provided by the Company.

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CUSIP No.	98607B106
1.	NAME OF REPORTING PERSON: Zhong Xingmei
2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)          x (b)          ¨
3.	SEC USE ONLY
4.	SOURCE OF FUNDS OO
5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): ¨
6.	CITIZENSHIP OR PLACE OF ORGANIZATION Canada

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7.	SOLE VOTING POWER 0
	8.	SHARED VOTING POWER 7,657,704
	9.	SOLE DISPOSITIVE POWER 0
	10.	SHARED DISPOSITIVE POWER 7,657,704

11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,657,704
12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES x1
13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13.9%2
14.	TYPE OF REPORTING PERSON IN

1 Excludes 1,155,000 shares of Common Stock beneficially owned by Mr. Wu, 6,858,136 shares of Common Stock beneficially owned by Morgan Stanley, and 20,000 shares of Common Stock beneficially owned by Abax.

2 Percentage calculated based on 55,147,596 shares of Common Stock outstanding on an as-converted basis as of October 16, 2012 provided by the Company.

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CUSIP No.	98607B106
1.	NAME OF REPORTING PERSON: Wu Zishen
2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)          x (b)          ¨
3.	SEC USE ONLY
4.	SOURCE OF FUNDS PF, OO
5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): ¨
6.	CITIZENSHIP OR PLACE OF ORGANIZATION People’s Republic of China

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7.	SOLE VOTING POWER 1,155,000
	8.	SHARED VOTING POWER 0
	9.	SOLE DISPOSITIVE POWER 1,155,000
	10.	SHARED DISPOSITIVE POWER 0

11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,155,000
12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES x1
13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.1%2
14.	TYPE OF REPORTING PERSON IN

1 Excludes 7,657,704 shares of Common Stock beneficially owned by Full Alliance and Ms. Zhong, 6,858,136 shares of Common Stock beneficially owned by Morgan Stanley, and 20,000 shares of Common Stock beneficially owned by Abax.

2 Percentage calculated based on 55,147,596 shares of Common Stock outstanding on an as-converted basis as of October 16, 2012 provided by the Company.

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This Schedule 13D is filed jointly by Full Alliance International Limited (“Full Alliance”), Zhong Xingmei (“Ms. Zhong”), and Wu Zishen (“Mr. Wu”). Full Alliance, Ms. Zhong, and Mr. Wu are collectively referred to herein as the “Reporting Persons.”

This Schedule 13D represents the initial statement on Schedule 13D jointly filed by the Reporting Persons with respect to Yongye International, Inc., a Nevada corporation (the “Company” or the “Issuer”), and amends and supplements the statement on Schedule 13D filed on June 17, 2008, on behalf of Full Alliance and Ms. Zhong with the United States Securities and Exchange Commission (the “SEC”), as amended and/or supplemented by Amendment No. 1 to the Schedule 13D filed on May 18, 2009, and Amendment No. 2 to the Schedule 13D filed on June 9, 2011.

ITEM 1. SECURITIES AND ISSUER

This Schedule 13D relates to the common stock, par value $0.001 per share (“Common Stock”), of the Issuer. The address of the Issuer’s principal executive office is 6th floor, Suite 608, Xue Yuan International Tower, No.1 Zhichun Road, Haidian District, Beijing, PRC.

ITEM 2. IDENTITY AND BACKGROUND

(a) – (c) This Schedule 13D is being filed jointly by the Reporting Persons pursuant to Rule 13d-1(k) promulgated by the SEC under Section 13 of the Act. The Reporting Persons are making this single, joint filing because they may be deemed to constitute a “group” within the meaning of Section 13(d)(3) of the Act with respect to the transaction described in Item 4 of this Schedule 13D.

The Reporting Persons may be deemed to be a “group” with MSPEA and Abax for purposes of Section 13(d) of the Act as a result of entering into the Consortium Agreement and the submission of the Proposal Letter (each as defined in Item 4 below). However, Full Alliance and Ms. Zhong expressly disclaims beneficial ownership for all purposes of the Common Stock held by Mr. Wu, MSPEA and Abax, and Mr. Wu expressly disclaims beneficial ownership for all purposes of the Common Stock held by Full Alliance and Ms. Zhong, MSPEA and Abax. The Reporting Persons are only responsible for the information contained in this Schedule 13D and assume no responsibility for information contained in any other Schedules 13D filed by MSPEA and/or Abax.

The agreement between the Reporting Persons relating to the joint filing of this Schedule 13D is attached hereto as Exhibit 7.01. Information with respect to each of the Reporting Persons is given solely by such Reporting Person, and no Reporting Person assumes responsibility for the accuracy or completeness of the information concerning the other Reporting Persons, except as otherwise provided in Rule 13d-1(k).

Full Alliance is a company incorporated in the British Virgin Islands. The principal business of Full Alliance is general and management services. Ms.  Zhong Xingmei is a Canadian citizen and sole director and owner of Full Alliance.  By virtue of her position as sole director and owner, Ms. Zhong may be deemed to be a beneficial owner having power to direct the voting and disposition of the Common Stock held or controlled by Full Alliance. The address of both Full Alliance and Ms. Zhong’s principal business is OMC Chambers, P.O. Box 3152, Road Town, Tortola, British Virgin Islands. The principal office of Full Alliance and Ms. Zhong is located at Room 1701, Wing Tuck Commercial Centre, 183 Wing Lok Street, Sheung Wan, Hong Kong.

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Mr. Wu’s present occupation is Chief Executive Officer, President and Chairman of the board of directors of the Company. The principal business address of Mr. is c/o Yongye International, Inc., 6th Floor, Suite 608, Xue Yuan International Tower, No. 1 Zhichun Road, Haidian District, Beijing, PRC.

(d) – (e) During the five years preceding the date of this filing, none of the Reporting Persons has been (1) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (2) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) Ms. Zhong is a citizen of Canada. Mr. Wu is a citizen of the People’s Republic of China.

ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION

The Reporting Persons, together with the other members of the Consortium (as defined below) anticipate that, at the price per share set forth in the Proposal (as described in Item 4 below), approximately US$261 million would be expended in acquiring all of the outstanding capital stock of the Issuer that the Consortium does not already own (the “Publicly Held Shares”).

It is anticipated that the funding for the acquisition of the Publicly Held Shares will be provided by a combination of debt and equity capital. Equity financing will be provided by the members of the Consortium in the form of cash and/or through the rollover of existing equity interests in the Issuer held by certain members of the Consortium. Debt financing will be primarily provided by third party financial institutions. The Consortium has held discussions with a Chinese bank which is experienced in financing going-private transactions and has expressed interest in providing loans to finance the Transaction, and the Consortium is confident that it will secure adequate financing to consummate the proposed acquisition of the Publicly Held Shares. In addition, on October 15, 2012, Abax indicated to the Consortium its preliminary interest in potentially providing equity and/or senior mezzanine financing up to US$50 million in the aggregate that would be required for the proposed acquisition of the Publicly Held Shares.

Page 6 of 10

ITEM 4. PURPOSE OF TRANSACTION

On October 15, 2012, Mr. Wu, Full Alliance, MSPEA Agricultural Holding Limited, an affiliate of Morgan Stanley Private Equity Asia (“MSPEA”), and Abax Global Capital (Hong Kong) Limited, on behalf of funds managed and/or advised by it and its nominee entities and its and their affiliates (collectively, “Abax”), formed a consortium (the “Consortium”) by entering into a consortium agreement (the “Consortium Agreement”), a copy of which is attached hereto as Exhibit 7.02. Under the Consortium Agreement, the Consortium agreed, among other things, (i) to jointly deliver a non-binding proposal (the “Proposal”) to the Issuer’s board of directors for the acquisition of the Publicly Held Shares, (ii) to deal exclusively with each other with respect to the transaction contemplated under the Proposal for a maximum of six months after the date thereof (except that the Consortium Agreement shall terminate with respect to Abax if Abax has not provided any written confirmation of continued interest within 60 days after the date thereof), (iii) to conduct a joint assessment of the Issuer as promptly as reasonably, and (iv) to use their reasonable best efforts to work together to structure, negotiate and do all things necessary or desirable, subject to the Issuer’s approval, to enter into the definitive agreements in respect of the transactions contemplated under the Proposal.

On October 15, 2012, the Consortium, on behalf of itself, submitted the Proposal to the Issuer’s board of directors, a copy of which is attached hereto as Exhibit 7.03. In the Proposal, the Consortium proposed to acquire, through an acquisition vehicle to be established by the Consortium, all of the Publicly Held Shares for US$6.60 per share. The Consortium also stated in the Proposal that they are interested only in acquiring the Publicly Held Shares, and that they do not intend to sell their stakes in any other transaction involving the Issuer.

The Consortium intends to finance the transactions contemplated under the Proposal through a combination of third party debt and equity capital funded by the Consortium.

Any definitive agreement entered into in connection with the transactions contemplated under the Proposal is likely to be subject to customary closing conditions, including approval by the Issuer’s shareholders of the terms of such transactions, accuracy of the representations and warranties given by the parties to the merger agreement, compliance by each party to such agreement with its covenants thereunder, the absence of a material adverse effect.

If the transactions contemplated under the Proposal are completed, the shares of Common Stock would become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Act and would be delisted from the NASDAQ Global Select Market.

References to the Consortium Agreement and the Proposal in this Schedule 13D are qualified in their entirety by reference to the Consortium Agreement and the Proposal, copies of which are attached hereto as Exhibit 7.02 and 7.03.

Except as indicated above, none of the Reporting Persons have any plans or proposals that relate to or would result in any other action specified in Item 4 on this Schedule 13D. The Reporting Persons reserve their right to change their plans and intentions in connection with any of the actions discussed in this item 4, including, among others, the purchase price and the financing arrangement for the transactions contemplated under the Proposal. Any action taken by the Reporting Persons may be effected at any time and from time to time, subject to any applicable limitations imposed by any applicable laws.

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ITEM 5 INTEREST IN SECURITIES OF THE ISSUER

(a) – (b) With respect to each of the Reporting Persons, the cover pages of this Schedule 13D are incorporated by reference, as if set forth in its entirety.

As of the date of this Schedule 13D, Full Alliance is the beneficial owner of 7,657,704 shares of Common Stock, representing 13.9% of the shares of Common Stock outstanding on an as-converted basis of the Issuer. As sole member and sole director of Full Alliance, Ms. Zhong beneficially owns and has sole voting and dispositive control over 7,657,704 shares of Common Stock, representing 13.9% of the shares of Common Stock outstanding on an as-converted basis of the Issuer. Of the 7,657,704 shares of common stock beneficially owned by Full Alliance and Ms. Zhong, 5,600,000 shares of the Company’s Common Stock have been pledged to MSPEA and are subject to the terms of a Stockholders’ Agreement entered into by and between Full Alliance and MSPEA, dated as of June 9 , 2011.

As of the date of this Schedule 13D, Mr. Wu beneficially owns 1,155,000 shares of Common Stock, representing 2.1% of the shares of Common Stock outstanding on an as-converted basis of the Issuer, of which 555,000 shares are held directly by Mr. Wu and 600,000 shares have been transferred to Prosper Sino Development Limited, which entity is an affiliate of a trustee that has been engaged to administer such shares for the benefit of the relevant transferor or members of his or her family.

(c) Except as set forth in Item 3 and 4 above, none of the Reporting Persons has effected any transactions in the Common Stock of the Company during the 60 days preceding the filing of this Schedule 13D.

(d) - (e) Not applicable.

ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPSWITH RESPECT TO SECURITIES OF THE ISSUER.

The descriptions of the principal terms of the of the Consortium Agreement and the Proposal under Item 3 and Item 4 are incorporated herein by reference in their entirety.

To the best knowledge of the Reporting Persons, except as provided herein, there are no other contracts, arrangements, understandings or relationships (legal or otherwise) among the Reporting Persons and between any of the Reporting Persons and any other person with respect to any securities of the Issuer, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, divisions of profits or loss, or the giving or withholding of proxies, or a pledge or contingency, the occurrence of which would give another person voting power over the securities of the Issuer.

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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.

Exhibit 7.01: Joint Filing Agreement by and among the Reporting Persons, dated as of October 15, 2012

Exhibit 7.02: Consortium Agreement by and among Mr. Wu, Full Alliance, MSPEA and Abax, dated as of October 15, 2012.

Exhibit 7.03: Proposal Letter from Mr. Wu, Full Alliance, MSPEA and Abax to the board of directors of the Issuer, dated as of October 15, 2012.

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SIGNATURE

After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: October 15, 2012

/s/ Zhong Xingmei

ZHONG XINGMEI

FULL ALLIANCE INTERNATIONAL LIMITED
By:	/s/ Zhong Xingmei
Name:	ZHONG XINGMEI
Title:	Director

/s/ Wu Zishen

WU ZISHEN

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EX-7.01

EXHIBIT 7.01

Joint Filing Agreement

In accordance with Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with all other Reporting Persons (as such term is defined in the Schedule 13D referred to below) on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the shares of Common Stock, par value US$0.001, of Yongye International, Inc., a Nevada corporation, and that this Agreement may be included as an Exhibit to such joint filing. This Agreement may be executed in any number of counterparts all of which, taken together, shall constitute one and the same instrument.

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Signature Page

IN WITNESS WHEREOF, the undersigned hereby execute this agreement as of October 15, 2012.

/s/ Zhong Xingmei

ZHONG XINGMEI

FULL ALLIANCE INTERNATIONAL LIMITED
By:	/s/ Zhong Xingmei
Name:	ZHONG XINGMEI
Title:	Director

/s/ Wu Zishen

WU ZISHEN

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EX-7.02

EXHIBIT 7.02

CONSORTIUM AGREEMENT

THIS CONSORTIUM AGREEMENT (this "Agreement") is dated as of October 15, 2012 and is entered into by and among Zishen Wu ("Founder"), Full Alliance International Limited ("Full Alliance" or "Holdco"), MSPEA Agriculture Holding Limited ("MSPEA") and Abax Global Capital (Hong Kong) Limited ("Abax"). Each of Founder, Full Alliance, MSPEA and Abax is referred to herein as a "Party", and collectively, the "Parties".

RECITALS

WHEREAS, the Parties are interested in jointly pursuing a possible acquisition (the "Transaction") of all of the outstanding capital stock of Yongye International, Inc. (the "Company") through a special purpose vehicle to be formed by Holdco in the Cayman Islands or another offshore jurisdiction ("Parent");

WHEREAS, (a) in connection with the Transaction, Holdco will cause Parent to form a direct, wholly-owned subsidiary ("Merger Sub") under the laws of the State of Nevada, and (b) at the closing of the Transaction, the Parties intend that Merger Sub will be merged with and into the Company, with the Company being the surviving company and becoming a direct, wholly-owned subsidiary of Parent which will be beneficially owned by the Parties;

WHEREAS, on the date hereof, the Parties will submit a non-binding proposal, a copy of which is attached hereto as Schedule A (the "Proposal Letter"), to the board of directors of the Company (the "Company Board") in connection with the Transaction; and

WHEREAS, in accordance with the terms of this Agreement, the Parties will cooperate and participate in: (a) the evaluation of the Company, including conducting due diligence of the Company and its business; (b) discussions regarding the Proposal Letter with the Company; and (c) the negotiation of the terms of definitive documentation in connection with the Transaction (in which negotiations the Parties expect that the Company will be represented by a special committee of independent and disinterested directors of the Company Board), including an agreement and plan of merger among Parent, Merger Sub and the Company in form and substance to be agreed by the Parties (the "Merger Agreement"), which shall be subject to the approval of the shareholders of the Company and any financing documents in connection with the Transaction.

NOW, THEREFORE, the Parties agree as follows:

1.          Certain Definitions.

"Competing Transaction" shall mean (i) any direct or indirect acquisition by any person or entity of any securities representing a controlling equity interest in the Company or all or substantially all of its assets or (ii) a recapitalization, restructuring, merger, consolidation or other business combination involving a change in control of the Company or any of its material subsidiaries, in either case other than the Transaction involving all of the Parties.

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"Exclusivity Period" shall mean the period beginning on the date hereof and ending on the date of termination of this Agreement pursuant to Section 14.

"Representatives" shall mean, with respect to a person, such person's employees, directors, officers, partners, members, affiliates, agents, advisors (including, but not limited to, legal counsel, accountants, consultants and financial advisors), and any representative of the foregoing. The Representatives shall include the Advisors as defined in Section 3(c).

"Shares" shall mean all capital stock in the Company.

2.           Commitment to the Consortium.

(a)          Within the Exclusivity Period, and except for actions taken by Founder in his capacity as the Chief Executive Officer, the Chairman of the Company Board or a Director of the Company, each Party will deal exclusively with each other with respect to the Transaction and will not, and will cause his or its Representatives acting in such capacity not to, without the written consent of the other Parties: (i) directly or indirectly initiate, solicit, encourage or otherwise engage in discussions or negotiations with the Company or any third party with respect to a Competing Transaction; (ii) provide any information to any third party with a view to the third party pursuing a Competing Transaction; or (iii) enter into any written or oral agreement, arrangement or understanding (whether legally binding or not) regarding, or do anything which is directly inconsistent with, or omit to do anything, which omission is directly inconsistent with, the Transaction involving all of the Parties as contemplated under this Agreement; provided, however, that if Abax has not provided to the other Parties a written confirmation, which written confirmation the other Parties, in exercising their good faith judgment, are reasonably satisfied with, on or prior to December 14, 2012 (60 days from the date hereof) (the "Exclusivity Expiry Date") that Abax continues to be interested in pursuing the Transaction as contemplated by this Agreement, this Agreement shall terminate with respect to Abax effective as of such Exclusivity Expiry Date.

(b)          Within the Exclusivity Period, each Party will not, and will not permit his or its affiliates or Representatives to, directly or indirectly: (i) sell, offer to sell, give, pledge, encumber, assign, grant any option for the sale of or otherwise transfer or dispose of, or enter into any agreement, arrangement or understanding to sell, any Shares beneficially owned by such Party (“Shareholder Shares”) (in each instance a "Transfer"), or enter into any contract, option or other arrangement or understanding with respect to a Transfer or limitation on voting rights of the Shareholder Shares or any right, title or interest thereto or therein; (ii) deposit any Shareholder Shares into a voting trust or grant any proxy or enter into a voting agreement, power of attorney or voting trust with respect to any Shareholder Shares; (iii) take any action that would have the effect of preventing, disabling or delaying any Party or his or its affiliate from performing his or its obligations under this Agreement; or (iv) agree (whether or not in writing) to take any of the actions referred to in the foregoing clauses (i), (ii) or (iii) of this Section 2(b). Notwithstanding the foregoing, Founder may make a Transfer to his spouse, siblings, parents, lineal descendants or antecedents or the estates of or trusts for the benefit of Founder or his spouse, siblings, parents or lineal descendants or antecedents, and MSPEA may make a Transfer to its affiliates; provided, however, that in all cases, any such Transfer shall not relieve the transferor of his or its obligations hereunder, and the transferee or other recipient executes a counterpart copy of this Agreement and becomes bound thereby as is the transferor.

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(c)          Subject to Section 2(a), and except for actions taken by Founder in his capacity as the Chief Executive Officer, the Chairman of the Company Board or a Director of the Company, each Party will, and will cause his or its Representatives to, immediately cease and terminate any existing activities, discussions and negotiations in connection with any Competing Transaction.

(d)          Subject to the provision in Section 2(a) with respect to Abax, upon the termination of this Agreement in accordance with clause (iii) of Section 14, the Parties shall negotiate in good faith and in a commercially reasonable manner an extension of the term of this Agreement.

3.           Process.

(a)          Upon signing of this Agreement, the Parties shall immediately deliver the Proposal Letter to the Company Board.

(b)          Within the term of this Agreement and as permitted by the Company Board, the Parties shall as promptly as reasonably practicable conduct a joint assessment of the Company, and shall in good faith and with mutual cooperation use their reasonable best efforts to work together to structure, negotiate and do all things necessary or desirable, subject to the Company's approval, to enter into the Merger Agreement and other ancillary documents in connection with the Transaction (the "Definitive Agreements"). This Agreement constitutes only a preliminary arrangement relating to a Transaction and does not constitute any binding commitment with respect to a Transaction. Such commitment will result only from the execution of the Definitive Agreements (upon such execution, all actions by Parent will be subject to the prior approval of all of the Parties), and then will be on the terms provided in the Definitive Agreements. The Parties and their respective affiliates and Representatives shall coordinate with each other in performing due diligence, securing debt (as applicable) and equity financing, and structuring and negotiating the Transaction, including establishing appropriate vehicles for the purpose of the Transaction; provided, however, that in no event will any Party be obligated without his or its consent to enter into or otherwise be a Party to any Definitive Agreements.

(c)          Skadden , Arps, Slate, Meagher & Flom LLP (“Skadden” ) is acting as legal advisor to Founder and Full Alliance, Paul, Weiss, Rifkind, Wharton & Garrison LLP (“Paul Weiss”) is acting as legal advisor to MSPEA and Weil, Gotshal & Manges LLP (“Weil”) is acting as legal advisor to Abax. Skadden (acting as legal advisor to Founder and Full Alliance), Paul Weiss, and Weil are collectively referred to as the “Legal Advisors”.

(d)          Skadden, Paul Weiss and Weil will jointly act as transaction counsel to the buyer consortium (the "Consortium") established hereunder by the Parties in connection with the Transaction. All other advisors to the Consortium, including any financial advisor to the Consortium (collectively with the Legal Advisors, the "Consortium Advisors") shall be jointly selected by the Parties.

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4.           Confidentiality. Each Party shall, and shall direct his or its Representatives to, keep this Agreement and the Transaction confidential and shall not make any public statement or announcement concerning or disclose to any third party the fact that discussions or negotiations are taking place concerning the Transaction or any of the terms, conditions or other facts with respect thereto, including the status thereof, other than as mutually agreed in writing by the Parties or as required by applicable laws, rules or regulations. Each Party shall coordinate in good faith all press releases and regulatory filings (including any Schedule 13D filings to disclose its participation in the Transaction) and other public relation matters relating to the Transaction. Notwithstanding the foregoing, MSPEA may disclose this Agreement or the status of negotiations between the Parties with respect to the Transaction to any investors in MSPEA III. Similarly, Abax may disclose the same to any investors in any fund Abax manages.

5.           Certain Fees and Expenses.

(a)          If the Transaction is not consummated, and the failure for the Transaction to be consummated is not due to the willful misconduct of any Party, the Parties agree that: (i) each Party shall bear fees and out-of-pocket expenses payable by him or it to his or its respective Legal Advisor in connection with the Transaction incurred prior to the termination of this Agreement with respect to such Party; and (ii) each Party shall bear a percentage, equal to his or its planned equity beneficial ownership percentage of Parent immediately after the consummation of the Transaction (“Planned Equity Participation”), of all fees and out-of-pocket expenses (A) payable in connection with the Transaction to the Consortium Advisors (other than the Legal Advisors) or any lender or other financing sources or (B) incurred in the defense, pursuit or settlement of any disputes or litigation relating to the Transaction; provided, however, that each Party shall bear fees and out-of-pocket expenses payable by him or it to any advisor retained by him or it to conduct due diligence.

(b)          Subject to Section 5(d) herein, upon consummation of the Transaction, Parent shall reimburse each Party for all fees and out-of-pocket expenses incurred by him or it (including fees and expenses of his or its Legal Advisor retained pursuant to Section 3(c) hereof) in connection with the Transaction; provided, however, that such reimbursable expenses of each Party other than Founder incurred prior to the execution of this Agreement shall be limited to those approved in writing by Founder prior to the date hereof.

(c)          Each Party shall share, ratably based on its Planned Equity Participation, any termination, topping, break-up or other fees or amounts (including amounts paid in settlement of any disputes or litigation relating to the Transaction) payable by Parent (or one or more of its affiliates or designees), net of the expenses required to be borne by such Party pursuant to Section 5(a).

(d)          This Section 5 shall survive the termination of this Agreement. In the event this Agreement is terminated with respect to Abax pursuant to Sections 2(a), then upon such termination Abax shall cease to have any liability with respect to any fees and expenses incurred by the Parent or the other Parties under Section 5.

6.            Remedies. It is understood and agreed that money damages may not be a sufficient remedy for a breach of this Agreement by any Party and that each Party shall be entitled to seek equitable relief, including injunction and specific performance, as a remedy of any such breach by the other Parties. Such remedies shall not be deemed to be the exclusive remedies for a breach by a Party but shall be in addition to all other remedies available at law or in equity to the other Parties. Each Party further agrees not to raise as a defense or objection to the request or granting of such relief that any breach of this Agreement is or would be compensable by an award of money damages, and each Party agrees to waive any requirements for the securing or posting of any bond in connection with such remedy.

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7.          Governing Law; Arbitration. This letter agreement and all matters arising out of or relating to this letter agreement shall be governed by and construed in accordance with the laws of Hong Kong, without reference to conflict of laws principles. Any dispute, controversy or claim arising out of or relating to this letter agreement, including the validity, invalidity, breach or termination thereof, shall be settled by arbitration in Hong Kong under the Hong Kong International Arbitration Centre Administered Arbitration Rules (the "Rules") in force when the notice of arbitration is submitted in accordance with these Rules. There shall be three arbitrators, one to be appointed by the claimant, one to be appointed by the respondent and the third to be appointed by the secretary general of the Hong Kong International Arbitration Centre. The arbitration proceedings shall be conducted in English.

8.          No Modification. No provision in this Agreement can be waived, modified or amended except by written consent of the Parties, which consent shall specifically refer to the provision to be waived, modified or amended and shall explicitly make such waiver, modification or amendment.

9.          No Waiver or Rights. It is understood and agreed that no failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

10.        Counterparts; Entire Agreement. This Agreement may be signed and delivered by facsimile or portable document format via electronic mail and in one or more counterparts, each of which shall be deemed an original but all of which shall be deemed to constitute a single instrument. This Agreement sets forth the entire agreement and understanding among the Parties and supersedes all prior agreements, discussions or documents relating thereto. No Party shall be entitled to punitive, exemplary, special, unforeseen, incidental, indirect or other consequential damages.

11.        Severability. If any provision of this Agreement is found to violate any statute, regulation, rule, order or decree of any governmental authority, court, agency or exchange, such invalidity shall not be deemed to affect any other provision hereof or the validity of the remainder of this Agreement, and such invalid provision shall be deemed deleted herefrom to the minimum extent necessary to cure such violation.

12.        Successors. This Agreement shall inure to the benefit of, and be binding upon, the Parties and their respective successors and assigns. No Party may assign or transfer, directly or indirectly, its rights or obligations hereunder without the prior written consent of the other Parties except as provided herein. No assignment will relieve the assignor of its obligations hereunder.

13.        No Third Party Beneficiaries. Unless otherwise specifically provided herein, each Party agrees and acknowledges that nothing herein expressed or implied is intended to confer upon or give any rights or remedies to persons who are not a party to this Agreement under or by reason of this Agreement.

14.        Term. Except as otherwise provided in Section 2(a) with respect to Abax, this Agreement shall terminate upon the earlier of: (i) the mutual written agreement by the Parties; (ii) the execution and delivery of the Definitive Agreements; and (iii) the date six months after the date hereof.

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Zishen Wu
By:	/s/ Zishen Wu
	Name: Zishen Wu

Full Alliance International Limited
By:	/s/ Zhong Xingmei
	Name: Zhong Xingmei
	Title: Director

MSPEA Agriculture Holding Limited
By:	/s/ Holmer Sun
	Name: Holmer Sun
	Title: Managing Director

Abax Global Capital (Hong Kong) Limited
By:	/s/ Donald Yang
	Name: Donald Yang
	Title: Managing Partner

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EX-7.03

EXHIBIT 7.03

PROPOSAL LETTER

 Zishen Wu

Full Alliance International Limited

MSPEA Agriculture Holding Limited

Abax Global Capital (Hong Kong) Limited

The Board of Directors

Yongye International, Inc.

6th Floor, Suite 608, Xue Yuan International Tower

No. 1 Zichun Road, Haidian District

Beijing, China

October 15, 2012

Dear Sirs:

Zishen Wu ("Mr. Wu"), Full Alliance International Limited ("Full Alliance"), MSPEA Agriculture Holding Limited ("MSPEA") and Abax Global Capital (Hong Kong) Limited, on behalf of funds managed and/or advised by it and its nominee entities and its and their affiliates (collectively “Abax”, together with Mr. Wu, Full Alliance, MSPEA and Abax, the "Buyer Parties" and each a "Buyer Party") are pleased to submit this preliminary non-binding proposal to acquire all outstanding shares of common stock (the "Shares") of Yongye International, Inc. (the "Company") not beneficially owned by the Buyer Parties (the "Acquisition").

We believe that our proposal of US$6.60 in cash per share of the Company's common stock will provide a very attractive opportunity to the Company's shareholders. This price represents a premium of approximately 37.8% to the Company's closing price on October 12, 2012 and a premium of approximately 47.2% to the volume-weighted average price during the last 30 trading days, a premium of 70.4% to the volume-weighted average price during the last 90 trading days, and a premium of 84.4% to the volume-weighted average price during the last 180 trading days.

The terms and conditions upon which we are prepared to pursue the Acquisition are set forth below. We are confident in our ability to consummate an Acquisition as outlined in this letter.

1.    Buyer. The Buyer Parties have entered into a letter agreement dated October 15, 2012 (the "Consortium Agreement"), pursuant to which Full Alliance will form an acquisition vehicle for the purpose of pursuing the Acquisition ("Acquisition Vehicle"), and the Buyer Parties will work with each other on an exclusive basis in pursuing the Acquisition during the term of the Consortium Agreement.

2.    Purchase Price. The Buyer Parties are prepared to pay for the Shares acquired in the Acquisition at a price of US$6.60 per share, in cash.

3.    Financing. We intend to finance the Acquisition with a combination of debt and equity capital. Equity financing will be provided by the Buyer Parties or its affiliated entities in the form of cash and/or rollover equity in the Company. Debt financing will be primarily provided by third party financial institutions. We have held discussions with a Chinese bank which is experienced in financing going-private transactions and has expressed interest in providing loans to finance the Acquisition. We are confident that we will secure adequate financing to consummate the Acquisition.

4.    Due Diligence. We will be in a position to commence our due diligence for the Acquisition immediately upon receiving access to the relevant materials.

5.    Definitive Agreements. We are prepared to negotiate and finalize definitive agreements (the "Definitive Agreements") concurrently with our due diligence review. This proposal is subject to execution of the Definitive Agreements. These documents will include provisions typical for transactions of this type.

6.    Confidentiality. We are sure you will agree with us that it is in all of our interests to ensure that we proceed in a confidential manner, unless otherwise required by law, until we have executed the Definitive Agreements or terminated our discussions.

7.    Process. We believe that the Acquisition will provide superior value to the Company's shareholders. We recognize of course that the Company’s Board of Directors will evaluate the proposed Acquisition independently before it can make its determination whether to endorse it. In considering the proposed Acquisition, you should be aware that we are interested only in acquiring the outstanding shares that the Buyer Parties and their affiliates do not already own, and that the Buyer Parties and their affiliates do not intend to sell their stake in the Company to a third party.

8.    About MSPEA. MSPEA is a vehicle controlled by Morgan Stanley Private Equity Asia III, L.P., a fund managed by Morgan Stanley Private Equity Asia. Morgan Stanley Private Equity Asia is one of the leading private equity investors in the Asia Pacific region, having invested in the region for over 19 years. The team has invested approximately US$2.4 billion in Asia, focusing on profitable, growth-oriented companies. Morgan Stanley Private Equity Asia has offices located in Hong Kong, Shanghai, Mumbai, Seoul, Tokyo and New York.

9.    About Abax. Abax Global Capital is a leading Hong-Kong-based investment fund focused on Pan-Asian private and public investments with an emphasis on Greater China. Founded in 2007, Abax Global Capital’s objective is to invest in and create value for small-to-mid-sized Asian enterprises.

10.  Advisors. Mr. Wu and Full Alliance have retained Skadden, Arps, Slate, Meagher & Flom LLP as its legal counsel, MSPEA has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as its legal counsel and Abax Global Capital has retained Weil, Gotshal & Manges LLP as its legal counsel in connection with this proposal and the Acquisition.

11.  No Binding Commitment. This letter constitutes only a preliminary indication of our interest, and does not constitute any binding commitment with respect to an Acquisition. Such a commitment will result only from the execution of Definitive Agreements, and then will be on the terms provided in such documentation.

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In closing, each of us would like to personally express our commitment to working together to bring this Acquisition to a successful and timely conclusion. Should you have any questions regarding this proposal, please do not hesitate to contact Mr. Wu at +86 10 8231-9608, Mr. Homer Sun of MSPEA at +852 2848-5844 or Mr. Chee-Kong Chan at Abax at +852 3602-1835. We look forward to speaking with you.

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Sincerely,

Zishen Wu

By: /s/ Wu Zishen 

Full Alliance International Limited

By:	/s/ Zhong Xingmei
	Name: Zhong Xingmei
	Title: Director

MSPEA Agriculture Holding Limited

By:	/s/ Holmer Sun
	Name: Holmer Sun
	Title: Managing Director

Abax Global Capital (Hong Kong) Limited

By:	/s/ Donald Yang
	Name: Donald Yang
	Title: Managing Partner

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