Note 5 – Inventories

Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out method. Cost of inventories comprises direct materials. Inventories by major categories are as follows:

	June 30,				December 31,
	2011		2011		2010
	USD’000		RMB’000		RMB’000
Raw materials		27		172		162
Finished goods		61,809		399,506		250,411
Total inventories		61,836		399,678		250,573

Inventories amounting to RMB63 thousand (USD10 thousand) were written off during the three months and six months ended June 30, 2011. No inventories were written off during the three months and six months ended June 30 2010.