China Energy Resources Corporation Reports Six Month Results.

NEW YORK--(BUSINESS WIRE)--Aug. 22, 1997--

Operating Income up 91.1%, Net Income up 40.8%

China Energy Resources Corporation (ASE:CHG) today announced results for the six months ended June 30, 1997.

For the first six months of fiscal 1997, total revenues were $4.5 million, an increase of 5.7% from $4.2 million in the six months ended June 30, 1996. Net sales were $4.13 million, a 2.8% decrease from $4.25 million for the same period in 1996, attributable to lower production levels at the Company's factories. MCCF, one of the Company's factories in a joint venture with the Chinese government, operated through a subcontractor during the first quarter of fiscal 1997 due to lack of working capital. However, on March 31, 1997, after obtaining sufficient working capital, MCCF terminated its subcontracting agreement and began rebuilding its production capacity and customer base. QCCF, the joint venture's second factory, experienced a delay in its net sales due to a shortage of transportation capacity during May 1997.

Operating income increased 91.1% to $923,000 from $483,000 for the six months ended June 30, 1996. Net income increased 40.8% to $252,000 as compared to $179,000 for the first half of last year, due in great part to a higher gross margin as a percent of net sales, which increased to 32.8% from 24.8% in the same period of 1996. The gain in gross margin percentage resulted from a 28% increase in QCCF's average selling price due to higher quality output.

Commenting, Mr. Li Hong Wu, China Energy Resources' Chairman and President, stated, "We are extremely pleased with our continued progress. The strong results for the first six months of the year were achieved despite lower production levels at our factories. I am confident that our success will continue and our profitability will improve as we utilize more of our production capacity and expand our distribution capability. I am particularly enthusiastic about our 100- year exclusive mining rights for five coal fields that we believe have a significant reserve of high quality coal. John T. Boyd Company, one of the leading geological surveyors, has conducted its preliminary survey of the reserves and will issue the final report within the next month regarding the Company's ability to produce high quality foundry coke. Once sufficient funding is obtained, mining activities will commence and should increase sales as well as lower raw material costs, thereby increasing gross profit margin."

China Energy Resources Corporation is a coal refining company operating in the People's Republic of China. Through its 80% interest in a 30-year joint venture with the government, the Company owns two modern coal production plants which produce steam coal for use as fuel in electric power plants, and metallurgical coke used in steel production. The Company also initiated preliminary production of foundry coke, a material essential in specialty steel production. In addition, the Company has exclusive 100-year mining rights for five coal fields that the Company believes have a significant reserve of high quality coal. -0-

                  CHINA ENERGY RESOURCES CORPORATION
            Unaudited Consolidated Statements of Operations
                 (In Thousands, Except Per Share Data)

                                            Six Months Ended
                                                June 30,
                                          1997        1996

Net sales                                $4,125     $4,245
Subcontracting income                       362          -
Total revenues                            4,487      4,245

Cost of sales                            (2,773)    (3,191)
Gross profit                              1,714      1,054

Selling, general and administrative
 expenses                                  (791)      (571)
Operating income                            923        483

Interest expense                           (533)      (262)
Other income                                 79          3

Net income before minority interest         469        224
Minority interest                          (217)       (45)

Net Income                              $   252     $  179

Earnings per share - Basic              $   .09     $  .13

Weighted average number of
  shares outstanding - Basic              2,734 (1)  1,409

(1) Basic earnings per share for the current six month period were
calculated on 94% more shares outstanding than the prior year period
due primarily to the following factors: (i) the Company came into
existence on March 15, 1996, (ii) the Company issued 109,850 common
shares in connection with its merger with Jackson Holding Corp.  on
March 22, 1996 and (iii) the Company issued convertible notes and
stock purchase warrants of $5.07 million and $1.00 million in
November 1996 and January 1997, respectively, of which $2.89 million
with interest accrued was converted into 848,644 shares of common
stock in the first half of 1997.

    The statements in this press release that are not historical
facts constitute "forward-looking statements"  that involve risks,
uncertainties and other facts which may cause actual results to be
materially different from those set forth in the forward-looking
statements.  Such factors include but are not limited to, the
following general economic and business conditions; competition; the
ability to implement and the effectiveness of business strategy and
development plans; quality of management; business abilities and
judgment of personnel; availability of qualified personnel; labor and
employee benefit costs; and availability and cost of raw materials
and supplies.  China Energy Resources Corporation will not undertake
and specifically declines any obligation to publicly release the
result of any revisions which may be made to any forward-looking
statements to reflect events or circumstances after the date of such
statements or to reflect the occurrence of anticipated or
unanticipated events.

CONTACT: CHINA ENERGY RESOURCES RESOURCES CORP.

Monita Mo, U.S. Representative, [phone]

Rose-Marie Fox, U.S. Representative, [phone]

or

INVESTOR RELATIONS COUNSEL:

The Equity Group Inc.

Loren Goldstein, [phone]

Linda Latman, [phone]