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Oct 20, 2008

China Education Alliance, Inc.-Recent Developments

(By freelance Chinese translator li – based in Harbin,China – English to Chinese translation or Chinese to English translation services - website localization)

In April 2008, China Education Alliance, Inc. purchased 70% of the entire issued share capital of World Exchanges Inc. (''World Exchanges''), which provides English training programs, English test preparation courses and overseas study and consulting services through its five existing branches in regions of Beijing, Yantai(烟台), Xiamen(厦门) and Qingdao(青岛). World Exchanges will establish a Wholly Foreign Owned Enterprise ("WFOE") as its English education headquarters to operate World Exchanges College of Language ("WECL") English Education business. WECL works closely with local universities to promote its on-campus language instruction programs that create a total English language environment in Chinese universities to enhance practical English skills and English examination skills(英语考试技能) for students. In addition, WECL also provides part- time language training programs, test preparation programs as well as overseas study and consulting services for students.

In July 2008, the Company contributed approximately $430,000 cash to purchase a 49.02% equity interest in a joint venture company, Harbin New Discovery Media Co., Ltd. ("Harbin Media"), with Harbin Daily Newspaper Group[哈报集团] ("Harbin Daily"). The Company will cooperate with Harbin Daily to run the newspaper, "Scientific Discovery," which has won strong brand recognition and a loyal readership in Heilongjiang province. The Company plans to publish this newspaper twice per week by targeting primary and middle school students and the general population to provide after-school tutorship materials and scientific knowledge of daily life.

"In this quarter, the operating results combined with first quarter results met our first half year expectations and plans and we remain confident that we can resume(继续) our growth trend in the latter half of 2008. We believe we can achieve our previously stated goals for $23 million in revenue and $8.5 to $11.0 million in net income," said Mr. Yu. "We will continue to provide exam- oriented education by primarily targeting the 10 million students in the northeast region of China, and to increase our market share in these areas. We believe that our language training business will create another major platform for growth beginning in the second half of this year. We will establish another ten WECL branches by the end of year 2008. We also believe our newly established educational media distribution platform (发布平台)will generate considerable revenues for us later this year, help us to promote the China Education Alliance brand, and facilitate our nationwide expansion with minimal advertising expenses."

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