10 Million Shares Returned to Xinhua China For Cancellation

10 Million Shares Returned to Xinhua China For Cancellation

July 27, 2006

    BEIJING, July 27 /Xinhua-PRNewswire/ -- Xinhua China
Ltd. (the "Company") (OTC Bulletin Board: XHUA),
a US-traded holding company, announced today that 10
million of its common shares held by four of its largest
shareholders are being surrendered to the Company for
cancellation.

    This decision by the shareholders was agreed to as of
July 10, 2006, following the reduction of the Company's
equity interest in Xinhua Publications Circulation &
Distribution Co., Ltd ("Xinhua C & D") from
56.14% to 7.96%, as previously announced in the news
release dated June 30, 2006.

    As a result of the cancellation of these 10 million
shares, the total stock outstanding will be reduced from
approximately 62 million to 52 million.

    The Company said it appreciated the move by these large
shareholders that recognizes its history, current position
and outlook.  It furthers a capital structure more in
keeping with present conditions, it said.  The shares were
originally issued in connection with the anticipated
majority ownership interest in Xinhua C & D being
completed, the Company reported.

    About Xinhua China

    Xinhua China Ltd. is a US domiciled company with book
related publishing and distribution interests in China.
Through its subsidiary, Beijing Joannes Information
Technology Co., Ltd., it is entering into the online
distribution businesses through existing and new strategic
partnerships with both domestic and foreign publishers,
authors, and distributors in China.

    INVESTOR CONTACT:
    MR. ALEX HELMEL
    1 800 884 3864 (EXT. 17)
    http://www.xinhuachina.com.cn

    Safe Harbor Statement

    This news release may include forward-looking
statements within the meaning of section 27a of the UNITED
STATES SECURITIES ACT of 1933, as amended, and section 21e
of the UNITED STATES SECURITIES and EXCHANGE ACT of 1934,
as amended, with respect to achieving corporate objectives,
developing additional project interests, Xinhua China's
analysis of opportunities in the acquisition and
development of various project interests and certain other
matters. These statements are made under the "safe
harbor" provisions of the United States private
securities litigation reform act of 1995 and involve risks
and uncertainties, which could cause actual results to
differ materially from those in the forward-looking
statements contained herein.

    For more information, please contact:

     Alex Helmel
     Investor Relations 
     Xinhua China Ltd.
     Tel:    [phone] or [phone]
     Email:  [e-mail]

     Woody Wallace or Michael Arneth
     The Investor Relations Company
     Tel:    [phone]      

SOURCE  Xinhua China Ltd.