ZHUHAI, China and NEW YORK -- China Architectural Engineering, Inc. ("CAE" or the "Company") (Nasdaq: CAEI), a provider of design, engineering, fabrication and installation services of high-end building envelope systems, today announced that the Company has completed its acquisition of 60% ownership of Shanghai ConnGame Network Ltd. ("ConnGame"), an MMORPG (Massively Multiplayer Online Role Playing Game) developer and operator, in exchange for 25 million shares of the Company's common stock. The acquisition of ConnGame was conducted through the acquisition of a 60% ownership in New Crown Technology, Inc., ConnGame's 100% parent.

ConnGame, founded and led by experienced management in China's online game industry, develops MMORPGs for operation in China. Leveraging its innovative game engines, scalable development platforms, and accomplished production teams, ConnGame focuses on self-developed MMORPGs game titles that are based on China's iconic characters and nostalgic epochs.

The Company also announced today that the Company's board of directors has appointed Mr. Jun Tang as a member and as the chairman of the board of directors of the Company, effective as of the closing of the acquisition, which occurred on August 18, 2010. Immediately prior to the effective time of Mr. Jun Tang's appointment, Luo Ken Yi resigned as the chairman of the board of directors, but remains a member of the board.

Mr. Jun Tang, the new chairman of CAE, commented, "It's my great honor to be appointed as the chairman of the board of CAE. I am very excited about this opportunity to return to the gaming industry and to quickly develop and grow CAE's new business. It is my duty and goal to work closely with my team and members of the board to build a strong management team, strengthen our execution capabilities and further enhance our communication with investors to grow and expand our company.

"With the completion of this acquisition, we envision CAE taking greater advantage of our core architectural engineering and design market, and more importantly, capturing China's large and rapidly growing online game market. We will strengthen our business model by diversifying our revenue stream, as well as eliminating unprofitable business segments. I am convinced that CAE and ConnGame share a common culture of technical excellence. Therefore, I am confident that the integration of our businesses and technologies will drive business growth and operational efficiency for CAE and ultimately create higher shareholder value.

"I would also like to express my deep appreciation to the former chairman of CAE, Mr. Luo Ken Yi, for his dedication, professionalism and leadership during his tenure. He has made outstanding contributions to CAE and we sincerely thank him for his hard work, both in the past and in the future as he continues to serve as a member of the board."

About China Architectural Engineering

China Architectural Engineering, Inc. (Nasdaq: CAEI) is a provider of design, engineering, fabrication and installation services of high-end curtain wall systems, roofing systems, steel construction systems, and eco-energy systems. Founded in 1992, CAEI has maintained its market leadership by providing timely, high-quality, reliable, fully integrated, and cost-effective solutions. Collaborating with world-renowned architects and building engineers, the Company has successfully completed over one hundred large, complex and unique projects worldwide, including numerous award-winning landmarks across Asia's major cities.

For further information on China Architectural Engineering, Inc., please visit http://www.caebuilding.com .

About Shanghai ConnGame

Shanghai ConnGame, founded and led by experienced management in China's online game industry, develops MMORPGs for operation in China. Leveraging its innovative game engines, scalable development platforms, and accomplished production teams, ConnGame focuses on self-developed MMORPGs game titles that are based on China's iconic characters and nostalgic epochs.

Forward-Looking Statements

In addition to historical information, the statements set forth above may include forward-looking statements that may involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Actual results could differ materially from the expectations contained in forward-looking statements as a result of risks and uncertainties, including, but not limited to, difficulties in moving into the online gaming market; the Company's ability to integrate the management, personnel and operations of the Company and ConnGame; required Company payments under the waiver agreement and ability to maintain the conditions of the bondholder waiver and dilution from the potential adjustment to the conversion price of the bonds for non-compliance with the waiver; identification and remediation of the Company's deficiencies and weaknesses in its internal controls over financial reporting, potential claims or litigation that may result from the occurrence of restatements, ability to identify and secure debt, equity, and/or other financing required to continue the operations of the Company; reduction or reversal of the Company's recorded revenue or profits due to "percentage of completion" method of accounting and expenses; increasing provisions for bad debt related to the Company's accounts receivable; fluctuation and unpredictability of costs related to our products and services; adverse capital and credit market conditions; expenses and costs associated with its convertible bonds, regulatory approval requirements and competitive conditions; and various other matters, many of which are beyond our control. These and other factors that may result in differences are discussed in greater detail in the Company's reports and other filings with the Securities and Exchange Commission.

    For more information, please contact:

    Investor Contact:
    ICR:
     Michael Tieu
     Tel:   +86-10-6599-7960
     Email: michael.tieu@icrinc.com

     Bill Zima
     Tel:   +1-203-682-8200
     Email: bill.zima@icrinc.com

SOURCE China Architectural Engineering, Inc.

Investor Contact: ICR: Michael Tieu, +86-10-6599-7960, or michael.tieu@icrinc.com; Or Bill Zima, +1-203-682-8200, or bill.zima@icrinc.com

Second Quarter 2010 Results

Revenues from contracts for the second quarter of 2010 were $5.7 million, a decrease of $24.9 million, or 81%, from $30.6 million for the comparable period in 2009, mainly as a result of fewer projects, due to the declining global construction activities and the Company's suspension of international projects.

Gross loss was $0.4 million, compared to a gross profit $10.0 million for the second quarter of 2009. The decrease in gross profit was primarily a result of increases in raw material, labor and administrative costs in China, as well as adjustments made in accordance to the percentage-of-completion method of accounting because of increases in estimated costs of current projects.

Selling, general and administrative expenses were $1.8 million for the second quarter of 2010, versus $6.1 million a year ago. Payroll expenses accounted for approximately 44% of the total expenses, followed by depreciation expenses of 8%, and rental expenses of 6%.

Interest expenses were $1.9 million for the second quarter ended June 30, 2010, an increase of $0.4 million from $1.5 million a year ago. The increase was mainly due to the additional interest expense related to short-term bank loans, as well as the increase in accretion of bonds interest discount.

Net loss was $3.3 million, or a loss of $0.06 per fully diluted share, compared to a net profit of $2.5 million, or $0.05 per fully diluted share, for the comparable period in 2009.

Liquidity and Capital Resources

The Company had an unrestricted cash balance of approximately $0.6 million as of June 30, 2010, as compared to $0.5 million as of March 31, 2010. Net cash provided by operating activities was $9.0 million for the six months ended June 30, 2010, compared to $2.7 million for same period in 2009.

Mr. Ken Luo, chairman and chief executive officer of CAE, commented, "Our second quarter sales performance was primarily impacted by the fewer number of projects executed as a result of the global economic slowdown. However, this summer, we have seen a much improved market sentiment. Leveraging our unique design, technology and craftsmanship, we have signed new contracts in the second quarter worth approximately $21.5 million, including the Terrace Garden Project and Xinhai Revolution Museum in Hubei, and Liuzhou Sports Centre in Guangxi. We are also making good progress in the designing and constructing of high-end curtain wall system segment. We expect most of these revenues to be recognized in the second half of this year. With our advanced technical capabilities, we have strategically targeted China's high-end landmark projects that involve more design and consulting services to highlight our value proposition and capabilities. To date, we have won approximately $3 million worth of such contracts, including contracts with the Shenzhen Airport, Hangzhou Railway Station and Joy Coast at Overseas Chinese Town."

Business Updates

Mr. Luo continues, "Despite the difficult global economic crisis that heavily impacted high-end construction and engineering companies, we are working diligently to counter the negative impact on CAE. Such efforts include our corporate restructuring, through which we believe that CAE can benefit from a more diversified business model, while lowering both operational and financial risks. We are pleased to announce that we have entered into a definitive agreement for the acquisition of a 60% interest in ConnGame. We expect to announce the closing of this deal in the near future. After the completion of this acquisition, we envision CAE becoming a web-based engineering and design service platform that complements ConnGame's core online gaming business.

"In the architecture construction and engineering segment, we will be more selective and focus only on quality projects that return higher profits and pose lower risks. In the online gaming segment, we currently intend to launch our new games in the following months, and we expect this segment to soon drive the majority of our revenues. We believe our pending acquisition of a 60% interest in ConnGame will enable CAE to take greater advantage of our core architectural engineering and design market, and more importantly, to capture China's large and rapidly growing online game market.

"Upon the completion of the acquisition, CAE's board and management team will be reorganized to reflect the new business model. I truly look forward to the new management team to grow our combined businesses and to deliver greater value to our supportive shareholders," Mr. Luo concludes.

About China Architectural Engineering

China Architectural Engineering, Inc. (NASDAQ:CAEI - News) is a provider of design, engineering, fabrication and installation services of high-end curtain wall systems, roofing systems, steel construction systems, and eco-energy systems. Founded in 1992, CAEI has maintained its market leadership by providing timely, high-quality, reliable, fully integrated, and cost-effective solutions. Collaborating with world-renowned architects and building engineers, the Company has successfully completed over one hundred large, complex and unique projects worldwide, including numerous award-winning landmarks across Asia's major cities.

For further information on China Architectural Engineering, Inc., please visit http://www.caebuilding.c... .

Forward-Looking Statements

In addition to historical information, the statements set forth above may include forward-looking statements that may involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Actual results could differ materially from the expectations contained in forward-looking statements as a result of risks and uncertainties, including, but not limited to, the proposed acquisition of ConnGame; difficulties in moving into the online gaming market; the Company's ability to integrate the personnel and operations of the Company and ConnGame; required Company payments under the waiver agreement and ability to maintain the conditions of the bondholder extension; identification and remediation of the Company's deficiencies and weaknesses in its internal controls over financial reporting, potential claims or litigation that may result from the occurrence of restatements, ability to identify and secure debt, equity, and/or other financing required to continue the operations of the Company; difficulties related to integration and management of the combined operations; reduction or reversal of the Company's recorded revenue or profits due to "percentage of completion" method of accounting and expenses; increasing provisions for bad debt related to the Company's accounts receivable; fluctuation and unpredictability of costs related to our products and services; adverse capital and credit market conditions; fluctuation and unpredictability of costs related to the Company's products and services; expenses and costs associated with its convertible bonds, regulatory approval requirements and competitive conditions; and various other matters, many of which are beyond our control. These and other factors that may result in differences are discussed in greater detail in the Company's reports and other filings with the Securities and Exchange Commission.

    For more information, please contact:

    Investor Contact:
     ICR:
     Michael Tieu
     Tel:   +86-10-6599-7960
     Email: michael.tieu@icrinc.com

     Bill Zima
     Tel:   +1-203-682-8200
     Email: bill.zima@icrinc.com



                      CHINA ARCHITECTURAL ENGINEERING, INC.
                           CONSOLIDATED BALANCE SHEETS
       AS OF JUNE 30, 2010 (UNAUDITED) AND DECEMBER 31, 2009(STATED IN US
                                    DOLLARS)

                                                 June 30,    December 31,
                                                   2010          2009
                                               (unaudited)
    ASSETS
    Current assets
    Cash and cash equivalents                $     631,444  $    740,125
    Restricted cash                              3,102,371     3,033,819
    Contract receivables, net                   86,205,606    89,189,103
    Costs and earnings in excess of
     billings                                    8,424,430     8,100,580
    Job disbursements advances                   1,347,604     2,696,794
    Other receivables                           27,104,828    30,768,067
    Inventories                                    170,076       727,499
    Deferred income taxes, current                 112,603       113,033
    Other current assets                           256,510       297,838
    Total current assets                       127,355,472   135,666,858

    Non-current assets
    Plant and equipment, net                     2,214,877     2,539,457
    Intangible assets                               60,998        70,610
    Goodwill                                     7,995,896     7,995,896
    Other non-current asset                        377,910       287,586

    TOTAL ASSETS                             $ 138,005,153  $146,560,407


    Current liabilities
    Short-term bank loans                    $   6,969,821  $  9,529,880
    Accounts payable                            27,256,636    26,614,484
    Billings over costs and estimated
     earnings                                    4,613,674     6,098,666
    Amount due to shareholder                    3,540,998    10,080,345
    Other payables                              13,874,058     9,360,314
    Business and other taxes payable             4,670,310     4,923,771
    Customers' deposits                          5,939,674     6,392,676
    Other Accrual                                4,756,148     4,324,011
    Total current liabilities                   71,621,319    77,324,147

    Non-current liabilities
    Long term bank loans                     $      70,415  $    109,239
    Convertible bond payable, net               26,569,215    24,564,161


    TOTAL LIABILITIES                        $  98,260,949  $101,997,547

    STOCKHOLDERS' EQUITY
    Preferred stock, $0.001 par value,
     10,000,000 shares authorized, 0
     shares issued and outstanding at
     June 30, 2010 and December 31,
     2009; Common stock, $0.001 par
     value, 100,000,000 shares
     authorized, 55,156,874 shares
     issued and outstanding at June
     30, 2010 and 53,256,874 shares
     issued at and outstanding December
     31, 2009                                $      55,157  $     53,257
    Additional paid in capital                  28,465,904    26,495,876
    Statutory reserves                           3,040,595     3,040,595
    Accumulated other comprehensive income       3,931,932     3,868,437
    Retained earnings                            4,280,864    11,131,084
    Total Company shareholders' equity          39,774,452    44,589,249
    Noncontrolling interests                       (30,248)      (26,389)
    Total shareholders' equity                  39,744,204    44,562,860
    TOTAL LIABILITIES AND

    STOCKHOLDERS' EQUITY                     $ 138,005,153  $146,560,407





                      CHINA ARCHITECTURAL ENGINEERING, INC.
                   UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
        FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2010 AND 2009
                              (STATED IN US DOLLARS)

                             Three Months Ended         Six Months Ended
                                  June 30,                   June 30,
                            2010           2009         2010         2009
    Contract
     revenues earned     $5,708,417   $30,598,974  $17,180,540   $66,942,038
    Cost of contract     (6,137,792)  (20,647,144) (15,281,985)  (48,809,377)
    revenues earned

    Gross profit /
     (Loss)               $(429,375)   $9,951,830   $1,898,555   $18,132,661

    Selling, general
     and administrative
     expenses            (1,845,895)   (6,119,798)  (6,068,575)  (12,070,828)

    Income / (Loss)
     from operations    $(2,275,270)   $3,832,032  $(4,170,020)   $6,061,833

    Interest income           2,867        46,259        5,283        49,965
    Interest expense     (1,867,885)   (1,463,851)  (3,493,996)   (2,775,584)
    Other expense            (8,081)           --       (8,930)           --
    Other income            816,414       138,619      823,928       160,456

    Income / (Loss)
     before taxation
     on Continuing
     Operations         $(3,331,955)   $2,553,059  $(6,843,735)   $3,496,670

    (Income tax) /
     tax benefit                 --            --       (9,575)           --

    Net earnings/
     (Loss) including
     non-controlling
     interests           (3,331,955)    2,553,059   (6,853,310)    3,496,670
    (Income) / Loss
     attributable to
     non-controlling
     interests                1,619        (1,405)       3,090        (1,405)

    Net earnings/(Loss)
     attributable to
     the Company        $(3,330,336)   $2,551,654  $(6,850,220)   $3,495,265

    Earnings/(Loss)
     per share:
    Basic                    $(0.06)        $0.05       $(0.12)        $0.07
    Diluted                  $(0.06)        $0.05       $(0.12)        $0.07

    Weighted average
     shares outstanding:
    Basic                55,156,874    53,256,874   54,945,763    53,256,874
    Diluted              55,156,874    53,256,874   54,945,763    53,256,874

ConnGame, founded and led by seasoned experts with extensive previous success in China's online game industry, develops and operates MMORPGs in China. Leveraging its innovative game engines, scalable development platforms, and accomplished production teams, ConnGame focuses on self-developed MMORPGs game titles that are based on China's iconic characters and nostalgic epochs.

"This is a very exciting development for our company and an important move that we believe will ultimately benefit our shareholders," commented Mr. Ken Yi Luo, Chairman and Chief Executive Officer of China Architectural Engineering. "While at first glance CAE and ConnGame may appear to share few common grounds, we expect the acquisition of ConnGame will further expand CAE's core capabilities and accelerate our planned transformation into a high- end architectural design consultant and service provider, as we intend to leverage ConnGame's robust design engines and virtual applications to broaden our service capabilities and scope of architectural collaborations. We envision utilizing ConnGame's cutting-edge technology and innovative online platform to provide technical consulting and advisory services to architects, real estate developers and governments. We view CAE as prominent architectural engineers of physical landmarks and ConnGame as innovative architects of digital engines and creators of iconic virtual worlds. We believe our acquisition of ConnGame will enable CAE to not only continue to take greater advantage of our core architectural engineering and design market but also China's large and rapidly growing online game market."

In anticipation of issuing 25 million new shares of CAE's common stock upon the closing of this acquisition, CAE has withdrawn its previously announced common stock private placement of 17 million shares to certain investors, as the Company has terminated its LOI to purchase land from Zhejiang Nine Dragon Co. However, CAE continues to cooperate with Nine Dragon on its future construction projects which include a marine theme park, movie theatres, premium retail outlets, five-star hotels, and luxurious residential apartments.

About China Architectural Engineering

China Architectural Engineering, Inc. (NASDAQ:CAEI) is a leader in the design, engineering, fabrication and installation of high-end curtain wall systems, roofing systems, steel construction systems, and eco-energy systems. Founded in 1992, CAEI has maintained its market leadership by providing timely, high-quality, reliable, fully integrated, and cost-effective solutions. Collaborating with world-renowned architects and building engineers, the Company has successfully completed nearly one hundred large, complex and unique projects worldwide, including numerous award-winning landmarks across Asia's major cities.

For further information on China Architectural Engineering, Inc., please visit http://www.caebuilding.c...

Forward-Looking Statements

In addition to historical information, the statements set forth above may include forward-looking statements that may involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Actual results could differ materially from the expectations contained in forward-looking statements as a result of risks and uncertainties, including, but not limited to, the execution of a definitive acquisition agreement; satisfactory completion of due diligence; attaining shareholder and regulatory approvals; difficulties related to integration and management of the combined operations; reduction or reversal of the Company's recorded revenue or profits due to "percentage of completion" method of accounting and expenses; resolving the dispute with the master contractor on the Dubai Metro Rail Project; the Company's ability to obtain a modification for the Waiver agreement with the bondholders applicable to the proposed acquisition of ConnGame; increasing provisions for bad debt related to the Company's accounts receivable; fluctuation and unpredictability of costs related to our products and services; the Company's plans to enter into real estate development projects such as the Nine Dragons Project; adverse capital and credit market conditions; fluctuation and unpredictability of costs related to the Company's products and services; expenses and costs associated with its convertible bonds, regulatory approval requirements and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's reports and other filings with the Securities and Exchange Commission.

    For more information, please contact:

    Investor Contact:
     ICR:
     Michael Tieu
     Tel:   +86-10-6599-7960
     Email: michael.tieu@icrinc.com

     Bill Zima
     Tel:   +1-203-682-8200
     Email: bill.zima@icrinc.com

China and NEW YORK, Nov. 16, 2009 (PRNewswire-Asia-FirstCall) -- China Architectural Engineering, Inc. ("CAE" or the "Company") (Nasdaq: CAEI), a leader in the design, engineering, fabrication and installation of high-end building envelope systems, today announced its financial results for the third quarter ended September 30, 2009.

"In the third quarter of 2009, our markets continued to diverge, as demand in China strengthened while demand overseas remained challenging. In light of this dichotomy, we focused on the domestic market, and to this extent, I am encouraged by our progress," comments Mr. Ken Yi Luo, Chairman and Chief Executive Officer of China Architectural Engineering. "We strategically targeted China's high-end, landmark projects that took on more design and consulting, required advanced technical capabilities, and offered higher margin and better cash flows. We have delivered notable milestones in many of China's signature projects, including the following:

    -- PRC - Guangzhou Science City Project (Building envelope project)
-- PRC - Guangzhou Opera House (Building envelope project)
-- PRC - Wuhan Race Course Project (Building envelope project)
-- PRC - Hunan Changsha High Speed Train Station
-- PRC - Hunan Changsha Riverfront Cultural Park Museum
-- PRC - Shenzhen Bao'an International Airport

Mr. Luo continues, "As we prepare ourselves for an eventual return to growth in the global economy, we persisted with our top priority of improving CAE's financial resources and internal controls. This September, we significantly lowered our future operating costs by moving our Shenzhen office to a smaller leased space, from the previous multi-floor office that was originally set up for large-scale support of our previously anticipated overseas expansions. We were also pleased that Gene Michael Bennett has accepted his new role as acting Chief Financial Officer. With over 20 years of valuable experience, Gene has strong capital market expertise and deep understanding of GAAP, both in China and the US, and will greatly help us to strengthen our finance department and internal controls."

New Acting Chief Financial Officer

Following his initial appointment as Vice President of Finance on September 29, 2009, Mr. Gene Michael Bennett was additionally named Acting Chief Financial Officer effective November 6, 2009. Mr. Bennett has over 20 years of diverse experience in finance, auditing and CFO services. He has lived in China for four years and is fully familiar with both US and China GAAP, International Accounting Standards, internal control issues, SOX404 compliance and numerous other aspects about doing business in China. He was CPA-certified in Colorado and had taught accounting and audit at Chapman University and California State University at Fullerton. Most recently, Mr. Bennett served as CEO of the American General Business Association, a Beijing-based company that provides business consulting services such as IPO, funding and cross-border transaction assistance, among others. Prior to that, he was Partner at Nexis Investment Consulting Corporation and ProCFO, helping Chinese companies establish good corporate governance and/or serving as an interim CFO for numerous companies in the US. He is currently the Audit Committee Chair on the Board of Directors of three US-listed Chinese companies: China AgriTech Group, Inc., China Shenzhou Mining & Resources, Inc. and China Pharma Holdings, Inc. Mr. Bennett received his BA in accounting and MBA in finance from Michigan State University and is currently working on a thesis on corporate governance for a Doctorate from the City University of Hong Kong.

Summary of Dubai Metro Dispute

On September 9, 2009, the Red Line, or first phase, of the Dubai Metro was officially opened. As previously announced, CAE, through its subsidiary Techwell Engineering Limited, had been working towards completion of its unique external envelopes for stations along the Red Line of the Dubai Metro System. According to the Company's original construction blueprint, the majority of the Company's construction work was completed at the end of June 2009, and final construction milestones were scheduled for completion in the third quarter of 2009. Techwell has generated approximately $92.8 million in total revenue for the Company since construction began in 2008.

With less than 5% of the Company's contract remaining to be completed, Techwell was removed by the master contractor of the project, who also called for and received payment of $2.1 million in performance bonds and $7.3 million in advance payment bonds that were issued on Techwell's behalf for the project. The calling of the advance payment bonds was based on the master contractor's belief that it had paid in excess of the construction work performed. Techwell and the Company, as a guarantor of the bonds, do not believe that the master contractor had a proper basis for calling the bonds and have engaged Hill International, a global leader in managing construction risk and construction claims, to facilitate resolution of this dispute.

Based on a review of the facts, documents, and materials available, the Company, along with Hill International, believes that CAE has a reasonable opportunity to collect the amounts due to Techwell from the master contractor, less appropriate credits for work performed through September 2009. However, no assurance can be given that the dispute will be resolved in CAE's and Techwell's favor.

Third Quarter 2009 Results

As summarized above, a dispute between the Company and the master contractor of the Metro Red Line Project in Dubai, led to an adjustment to estimated gross revenue of the Dubai project, and resulted in a decrease in recognized revenue in this quarter from that project. Consequently, revenues for the third quarter of 2009 were $25.6 million, versus $56.0 million in third quarter of 2008. The revenue decrease was also attributable to the Company's refocus on the domestic market and major international projects entering the completion phase.

In the third quarter of 2009, gross profit was $0.5 million, compared to $17.4 million for the same period last year. Gross margin in this quarter was 2% as compared with 31% in the same of prior year. The decreased gross margin was primarily due to the higher cost in raw material, labor and overheads in Dubai and Doha, as well as the adjustment related to the dispute with master contractor on the Dubai project.

Selling, general and administrative expenses were $5.5 million for the third quarter of 2009, versus $6.3 million a year ago. The decrease was mainly due to the reduced overhead expenses related to the payroll and streamlined office administrative expenses as part of the decreased contracts in the quarter and the refocus of the Company's operation.

Interest expenses were $1.7 million for the third quarter 2009, an increase of $0.3 million from $1.4 million a year ago. The increase was mainly due to the use of short-term bank loan in financing of purchases of raw materials and general business operations.

Income tax expense was $114,000 for the three months ended September 30, 2009 at an effective tax rate of -1.8%, compared with approximately $31,000 in taxes for the same period of 2008 at an effective tax rate of 0.3%. The tax was mainly charged for the company's operations in mainland China.

Net loss for the third quarter of 2009 was $8.4 million, or ($0.16) per diluted share, compared with a net profit of $9.9 million, or $0.18 per diluted share, for the same period in 2008. The decrease was primarily due to the decrease in contract revenue, the revenue adjustment for projects in Dubai, higher costs in raw material and overheads, full loss provision of the project in Doha, and a $1.8 million loss from the discontinued construction works in the closed Shenzhen office.

Liquidity and Capital Resources

The Company had an unrestricted cash balance of approximately $6.5 million as of September 30, 2009, as compared to $7.0 million as of June 30, 2009. Net cash used by operating activities was $11.2 million for the nine months ended September 30, 2009, compared to net cash used by operating activities of $15.3 million in the same period of 2008. Contract receivables increased slightly to $84.3 million from $83.6 million at the end of the second quarter of 2009, due to slower customer payments as a result of the worldwide economic crisis.

Mr. Luo concludes, "Reflecting a strengthened China market, we will continue to concentrate our resources and capital in the domestic market for the remainder of 2009 and beyond. Supported by our patented technology, high quality design and extensive experience, we believe we are leading candidates for additional landmark projects throughout the country's major cities. We are also further innovating on our design and consulting processes by implementing a collaborative Internet-based platform that should allow us to not only deliver faster solutions but also lower costs to our clients. In addition to our progress in China, we are nearing completion of our curtain wall installation in New York City's high-profile 100 11th Avenue project. The project's avant-garde architect Jean Nouvel had visited the building and expressed his delight with the appearance and quality of the curtain wall. Two weeks ago, the project's owner was granted the TCO (temporary certificate of occupancy), a significant milestone which allows the developer to commence closing sales on the units."

About China Architectural Engineering

China Architectural Engineering, Inc. (NASDAQ: CAEI) is a leader in the design, engineering, fabrication and installation of high-end curtain wall systems, roofing systems, steel construction systems, and eco-energy systems. Founded in 1992, CAEI has maintained its market leadership by providing timely, high-quality, reliable, fully integrated, and cost-effective solutions. Collaborating with world-renowned architects and building engineers, the Company has successfully completed nearly one hundred large, complex and unique projects worldwide, including numerous award-winning landmarks across Asia's major cities.

For further information on China Architectural Engineering, Inc., please visit http://www.caebuilding.com .

Forward-Looking Statements

In addition to historical information, the statements set forth above may include forward-looking statements that may involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Actual results could differ materially from the expectations contained in forward-looking statements as a result of risks and uncertainties, including, but not limited to, reduction or reversal of the Company's recorded revenue or profits due to "percentage of completion" method of accounting and expenses; our ability to being able to close the transactions contemplated by the Securities Purchase Agreement; resolving the dispute with the master contractor on the Dubai Metro Rail Project; our ability to obtain an extension or other modification for the Waiver agreement with the bondholders; increasing provisions for bad debt related to our accounts receivable; fluctuation and unpredictability of costs related to our products and services; the Company's plans to enter into real estate development projects such as the Nine Dragons Project; adverse capital and credit market conditions; the vulnerability of the Company's business to the current global economic downturn; the Company's dependence on government contracts; changes in the laws of the PRC that affect the Company's operations; fluctuation and unpredictability of costs related to the Company's products and services; the Company's dependence on the steel and aluminum markets; expenses and costs associated with its convertible bonds, regulatory approval requirements and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's reports and other filings with the Securities and Exchange Commission.

    For more information, please contact:

Investor Contact:
ICR:
Michael Tieu
Tel:   +86-10-6599-7960
Email: michael.tieu@icrinc.com

Bill Zima
Tel:   +1-203-682-8200
Email: bill.zima@icrinc.com

CHINA ARCHITECTURAL ENGINEERING, INC.
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2009 (UNAUDITED) AND DECEMBER 31, 2008
(STATED IN US DOLLARS)

September 30,      December 31,
2009              2008
(unaudited)
ASSETS
Current assets
Cash and cash equivalents                   $6,517,969        $9,516,202
Restricted cash                                  2,930         7,451,388
Contract receivables, net                   84,268,586        71,811,627
Costs and earnings in excess
of billings                                24,393,864        15,988,920
Job disbursements advances                   2,674,922         2,252,241
Other receivables                           17,314,096        18,614,928
Inventories                                    291,633           308,842
Deferred income taxes,
current                                       113,106             3,264
Other current assets                           767,040         1,659,307
Total current assets                       136,344,146       127,606,719

Non-current assets
Plant and equipment, net                     2,961,900         5,852,110
Intangible assets                               75,664            50,720
Goodwill                                     7,995,896         7,995,896
Other non-current asset                             --            32,137

TOTAL ASSETS                              $147,377,606      $141,537,582

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term bank loans                       $9,533,975               $--
Notes payable                                       --        10,193,088
Accounts payable                            27,667,418        35,510,827
Billings over costs and
estimated earnings                         16,115,529         5,358,527
Amount due to shareholder                    4,635,428           924,687
Other payables                              10,062,000         7,364,816
Income tax payable                           2,939,329         2,318,743
Business and other taxes
payable                                     1,918,736         3,304,522
Other Accrual                                4,606,225         1,794,879
Total current liabilities                   77,478,640        66,770,089

Non-current liabilities
Long term bank loans                          $128,599          $328,285
Convertible bond payable, net               23,645,242        24,907,170

TOTAL LIABILITIES                         $101,252,481       $92,005,544

STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value,
10,000,000 shares authorized, 0 shares
issued and  outstanding at September 30,
2009 and December 31, 2008; Common stock,
$0.001 par value, 100,000,000 shares
authorized, 53,256,874 shares issued and
outstanding at September 30, 2009 and
December 31, 2008                             $53,257           $53,257
Additional paid in capital                  26,500,138        23,043,792
Statutory reserves                           3,230,098         3,040,595
Accumulated other comprehensive income       3,282,496         5,443,432
Retained earnings                           13,089,426        17,940,421
Total Company shareholders' equity          46,155,415        49,521,497
Noncontrolling interests                       (30,290)           10,541
Total shareholders' equity                  46,125,125        49,532,038
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY                                   $147,377,606      $141,537,582

CHINA ARCHITECTURAL ENGINEERING, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME FOR THE
THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2009 AND 2008
(STATED IN US DOLLARS)

Three Months Ended        Nine Months Ended
September 30,             September 30,
2009        2008         2009         2008

Contract revenues
earned               $25,558,074  $55,978,184  $92,500,112 $122,707,679
Cost of contract
revenues earned      (25,082,910) (38,595,231) (73,892,287) (83,537,317)

Gross profit             $475,164  $17,382,953  $18,607,825  $39,170,362

Selling, general and
administrative
expenses              (5,548,946)  (6,273,059) (17,619,775) (13,877,990)

Income/(Loss) from
operations           $(5,073,782) $11,109,894     $988,050  $25,292,372

Interest income             4,835        3,622       54,800       45,827
Interest expense       (1,741,368)  (1,356,085)  (4,524,936)  (2,888,111)
Other income              335,104      177,114      495,560      342,075

Income/(Loss) before
taxation on
Continuing
Operations           $(6,475,211)  $9,934,545  $(2,986,526) $22,792,163
Income tax               (114,113)     (30,945)    (114,113)    (147,925)
Discontinued Operation
Loss, net of tax      (1,829,971)          --   (1,829,971)          --

Net Earnings/(Loss)    (8,419,295)   9,903,600   (4,930,610)  22,644,238

Net Loss attributable
to non-controlling
interest                  38,009        5,924       36,604       16,787

Net earnings/(loss)
attributable to the
Company              $(8,381,286)  $9,909,524  $(4,894,006) $22,661,025

Earnings/(Loss) per
share:
Basic                    $(0.16)       $0.19       $(0.09)       $0.44
Diluted                  $(0.16)       $0.18       $(0.09)       $0.42

Weighted average
shares
outstanding:
Basic                53,256,874   51,891,657   53,256,874   51,829,156
Diluted              53,256,874   55,653,537   53,256,874   55,554,987

CHINA ARCHITECTURAL ENGINEERING, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2009 AND 2008
(STATED IN US DOLLARS)

Nine Months Ended September 30,
2009           2008
Cash flows from operating
activities
Net/(Loss) income                 $(4,894,006)   $22,661,025
Noncontrolling interest             (40,831)       (16,787)
Depreciation expense                710,901        589,961
Amortization expense on
intangible assets                   78,461             --
Amortization expense on
convertible bond                 2,194,418        682,261
Loss on disposal of fixed
assets                           1,998,634             --
Deferred income taxes              (109,842)            --
Increase/(decrease) in
inventories                         17,209       (989,879)
Increase in receivables         (12,456,959)   (54,359,406)
(Increase)/decrease in
other assets                    (6,339,445)       100,246
Increase in payables              7,656,923     15,987,691
Net cash used in operating
activities                    $(11,184,537)  $(15,344,888)

Cash flows from investing
activities
Purchases of assets               $(161,420)   $(2,577,397)
Purchases of short term
investment                              --             --
Purchase of intangible
assets                            (103,405)            --
Proceeds from disposal of
fixed assets                       342,095             --
Decrease / (increase)
in restricted cash                7,448,458    (10,464,272)
Net cash provided by/(used
in) investing activities            $7,525,728   $(13,041,669)

Cash flows from financing
activities
Proceeds from short-term
loans                             $9,533,975     $6,359,035
Proceeds from long-term
loans                                   --      1,404,840
Repayment of Notes Payable      (10.193.088)            --
Repayment of long-term
loans                             (199,686)      (124,519)
Proceeds from shareholders        3,710,741        100,555
Issuance of convertible
bond and warrants                       --     19,500,000
Net cash provided by
financing activities            $2,851,942    $27,239,911

Net decrease in cash and
cash equivalents                     $(806,867)   $(1,146,646)
Effect of foreign currency
translation on cash and
cash equivalents                    (2,191,366)     3,644,437

Cash and cash equivalents -
beginning of period                  9,516,202      4,040,168

Cash and cash equivalents -
end of period                       $6,517,969     $6,537,961

Other supplementary
information:
Cash paid during the period for:
Interest paid                           $--       $643,880
Income tax paid                    $143,306       $203,682

SOURCE China Architectural Engineering, Inc.

Source: PR Newswire (November 16, 2009 - 8:12 AM EST)

About China Architectural Engineering

China Architectural Engineering, Inc. (NASDAQ: CAEI - News) is a leader in the design, engineering, fabrication and installation of high-end curtain wall systems, roofing systems, steel construction systems, and eco-energy systems. Founded in 1992, CAEI has maintained its market leadership by providing timely, high-quality, reliable, fully integrated, and cost-effective solutions. Collaborating with world-renowned architects and building engineers, the Company has successfully completed nearly one hundred large, complex and unique projects worldwide, including numerous award-winning landmarks across Asia's major cities.

For further information on China Architectural Engineering, Inc., please visit http://www.caebuilding.c... .

Forward-Looking Statements

In addition to historical information, the statements set forth above may include forward-looking statements that may involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Actual results could differ materially from the expectations contained in forward-looking statements as a result of risks and uncertainties, including, but not limited to, conditions being met for the closing of the Securities Purchase Agreement such as shareholder approval, the Company's plans to enter into real estate development projects such as the Nine Dragons Project, adverse capital and credit market conditions, the vulnerability of the Company's business to a general economic downturn in China and globally; the Company's dependence on government contracts, changes in the laws of the PRC that affect the Company's operations, fluctuation and unpredictability of costs related to the Company's products and services, the Company's dependence on the steel and aluminum markets, reduction or reversal of the Company's recorded revenue or profits due to "percentage of completion" method of accounting and expenses, and costs associated with its convertible bonds, regulatory approval requirements and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's reports and other filings with the Securities and Exchange Commission.

    For more information, please contact:

    Investor Contact:
     ICR:
     Michael Tieu
     Tel:   +86-10-6599-7960
     Email: michael.tieu@icrinc.com

     Bill Zima
     Tel:   +1-203-682-8200
     Email: bill.zima@icrinc.com

Mr. Bennett has over 30 years of diverse experience in finance, auditing and CFO services. He has lived in China for four years and is fully familiar with both US and China GAAP, International Accounting Standards, internal control issues, SOX404 compliance and numerous other aspects about doing business in China. He was CPA-certified in Colorado and had taught accounting and audit at Chapman University and California State University at Fullerton. Most recently, Mr. Bennett served as CEO of American General Business Association, a Beijing-based company that provides business consulting services such as IPO, funding and cross-border transaction assistance, among others. Prior to that, he was Partner at Nexis Investment Consulting Corporation and ProCFO, helping Chinese companies establish good corporate governance and/or serving as an interim CFO for numerous companies in the US. He is currently the Audit Committee Chair on the Board of Directors of three US-listed Chinese companies: China AgriTech Group, Inc., China Shenzhou Mining & Resources, Inc. and China Pharma Holdings, Inc. Mr. Bennett received his BA in accounting and MBA in finance from Michigan State University and is currently working on a thesis on corporate governance for a Doctorate from the City University of Hong Kong.

Ken Yi Luo, Chairman and Chief Executive Officer of China Architectural Engineering commented, "We are delighted to welcome Gene to our team. His broad capital market experience and deep understanding of GAAP, both in China and the US, will greatly help us to strengthen our finance department. We look forward to his contributions as we continue to fulfill our vision of becoming the leader in China's fast growing real estate and construction industry."

About China Architectural Engineering

China Architectural Engineering, Inc. (NASDAQ: CAEI - News) is a leader in the design, engineering, fabrication and installation of high-end curtain wall systems, roofing systems, steel construction systems, and eco-energy systems. Founded in 1992, CAEI has maintained its market leadership by providing timely, high-quality, reliable, fully integrated, and cost-effective solutions. Collaborating with world-renowned architects and building engineers, the Company has successfully completed nearly one hundred large, complex and unique projects worldwide, including numerous award-winning landmarks across Asia's major cities.

For further information on China Architectural Engineering, Inc., please visit http://www.caebuilding.c... .

Forward-Looking Statements

In addition to historical information, the statements set forth above may include forward-looking statements that may involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Actual results could differ materially from the expectations contained in forward-looking statements as a result of risks and uncertainties, including, but not limited to, conditions being met for the closing of the Securities Purchase Agreement such as shareholder approval, adverse capital and credit market conditions, the vulnerability of the Company's business to a general economic downturn in China and globally; the Company's dependence on government contracts, changes in the laws of the PRC that affect the Company's operations, fluctuation and unpredictability of costs related to the Company's products and services, the Company's dependence on the steel and aluminum markets, reduction or reversal of the Company's recorded revenue or profits due to "percentage of completion" method of accounting and expenses, and costs associated with its convertible bonds, regulatory approval requirements and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's reports and other filings with the Securities and Exchange Commission.

    For more information, please contact:

    Investor Contact:
    ICR:
     Michael Tieu
     Tel:   +86-10-6599-7960
     Email: michael.tieu@icrinc.com

     Bill Zima
     Tel:   +1-203-682-8200
     Email: bill.zima@icrinc.com

Recently, the Nine Dragon Project successfully passed evaluation and assessment by China's national experts, which should pave the way for new, large projects to commence construction by the end of this year and the beginning of next year. The Nine Dragon Resort ("Resort"), which was mentioned in the Company's press release dated June 24, 2009, covers 10 square kilometers (10 million sq. m.) and aims to become a preeminent tourist destination in China. To date, the Resort has already completed construction of horse race tracks, polo grounds, a yacht basin, golf courses, and other high-end leisure facilities. Projects under construction include a marine theme park, movie theatres, premium retail outlets, five-star hotels, and luxurious residential apartments.

Ken Yi Luo, Chairman and Chief Executive Officer of China Architectural Engineering, commented, "Since the Chinese economy has recovered quickly from the global financial crisis, we continue to strategically shift our focus back to the stronger Chinese domestic construction market. I'm optimistic that a number of large Nine Dragon projects will launch by the end of this year, which should provide substantial new revenue sources for CAE in the next several years. We also hope that we will grow our Nine Dragon land assets and improve their corresponding market value, aided by China's steady economic expansion and Shanghai's unquestioned position as its financial center."

Separately, on September 9, 2009, the Red Line, or first phase, of the Dubai Metro was officially opened. As previously announced, CAE, through its subsidiary Techwell Engineering Limited, had been working towards completion of its unique external envelopes for stations along the Red Line of the Dubai Metro System. According to the Company's original construction blueprint, the majority of the Company's construction work was completed at the end of June 2009, and final construction milestones were scheduled for completion in the third quarter of 2009. Techwell has generated approximately $92.8 million in total revenue for the Company since construction began in 2008.

With less than 5% of the Company's contract remaining to be completed, Techwell was removed by the master contractor of the project, who also called for and received payment of $2.1 million in performance bonds and $7.3 million in advance payment bonds that were issued on Techwell's behalf for the project. The calling of the advance payment bonds was based on the master contractor's belief that it had paid in excess of the construction work performed. Techwell and the Company, as a guarantor of the bonds, do not believe that the master contractor had a proper basis for calling the bonds and have engaged Hill International, a global leader in managing construction risk and construction claims, to facilitate resolution of this dispute.

Mr. Luo continued, "We are satisfied with Techwell's successful completion of the Red Line of the Dubai Metro, and we hope to resolve our dispute with the contractor. Our unique design, technology, and craftsmanship continue to highlight our value proposition and capabilities. We believe that we have fulfilled the duties and requirements of our contract. We will continue our diligent efforts to create greater long-term value for our customers, partners, suppliers, employees, and shareholders."

About China Architectural Engineering

China Architectural Engineering, Inc. (NASDAQ: CAEI - News) is a leader in the design, engineering, fabrication and installation of high-end curtain wall systems, roofing systems, steel construction systems, and eco-energy systems. Founded in 1992, CAEI has maintained its market leadership by providing timely, high-quality, reliable, fully integrated, and cost-effective solutions. Collaborating with world-renowned architects and building engineers, the Company has successfully completed nearly one hundred large, complex and unique projects worldwide, including numerous award-winning landmarks across Asia's major cities.

For further information on China Architectural Engineering, Inc., please visit http://www.caebuilding.c... .

Forward-Looking Statements

In addition to historical information, the statements set forth above may include forward-looking statements that may involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Actual results could differ materially from the expectations contained in forward-looking statements as a result of risks and uncertainties, including, but not limited to, obtaining favorable resolution of the dispute on the Dubai Metro Project and securing proper remedies, negotiating final project agreements for the Nine Dragon projects, raising sufficient capital to fund the Nine Dragon and other projects, successful closing of the Securities Purchase Agreement, adverse capital and credit market conditions, the vulnerability of the Company's business to a general economic downturn in China and globally; the Company's dependence on government contracts, changes in the laws of the PRC that affect the Company's operations, fluctuation and unpredictability of costs related to the Company's products and services, the Company's dependence on the steel and aluminum markets, reduction or reversal of the Company's recorded revenue or profits due to "percentage of completion" method of accounting and expenses, and costs associated with its convertible bonds, regulatory approval requirements and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company's reports and other filings with the Securities and Exchange Commission.

    For more information, please contact:
    ICR:
     Michael Tieu
     Tel:   +86-10-6599-7960
     Email: michael.tieu@icrinc.com

     Bill Zima
     Tel:   +1-203-682-8200
     Email: bill.zima@icrinc.com

The Latest Update on the Current Projects

CAE’s work on the Dubai Metro System is expected to be completed in the third quarter as well as the projects in US and Doha, which will be completed within this year. CAE expects the project completions to provide more resources to build the aforesaid new projects. Meanwhile, due to the global financial crisis and other various factors, the company cannot utilize sufficient resources to continue the Singapore project. Given the uncertain global economic outlook and the limited company resources, CAE has decided to give up the project and reallocate resources towards other projects.

China Architectural Engineering Chairman and CEO Ken Yi Luo commented, “Our latest project update shows the effects of an uncertain global economic outlook. The termination of our Singapore project is a disappointment, of course, but it is also noteworthy that we continue to gain new business in our core domestic market of China. Here, our track record and extensive network of contacts in the public and private sectors are enabling us to take advantage of the Chinese government’s aggressive stimulus spending. In the future, we will gradually develop some good business that will produce steady revenues for the company to offset the impacts from the volatile construction industry.”

About China Architectural Engineering

China Architectural Engineering, Inc. (NASDAQ: CAEI - News), which began operations in 1992, has maintained a leading position in the global commercial construction industry by providing timely, high-quality, reliable, fully integrated and cost-effective service solutions to our clients utilizing specialized technical expertise in the design, engineering, fabrication and construction of structural exterior cladding systems. It specializes in high-end curtain wall systems (including glass, stone and metal curtain walls), roofing systems, steel construction systems, eco-energy saving building conservation systems and related products, for public works and commercial real estate projects.

CAEI has worked with world-renowned architects and building engineers from China and other countries and has completed over one-hundred large, complex and unique projects throughout China, Hong Kong, Macau, Australia and Southeast Asia, including numerous award-winning landmark buildings in many of Asia’s major cities. CAE has also expanded beyond China into some of the growing construction markets in the world, such as Middle East, Central Asia and Eastern Europe.

For further information on China Architectural Engineering, please visit www.caebuilding.com.

Forward-Looking Statements: In addition to historical information, the statements set forth above include forward-looking statements that may involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, adverse capital and credit market conditions; the vulnerability of the Company's business to a general economic downturn in China and globally; uncertainty of contract negotiations and payments under existing contracts, the Company’s dependence on government contracts, changes in the laws of the PRC that affect the Company’s operations, fluctuation and unpredictability of costs related to the Company’s products and services, the Company’s dependence on the steel and aluminum markets, reduction or reversal of the Company’s recorded revenue or profits due to “percentage of completion” method of accounting and expenses and costs associated with the issuance of convertible bonds. The forward-looking statements are also identified through use of the words “believe,” “enable,” “may,” “will,” “could,” “intends,” “estimate,” “anticipate,” “plan,” “predict,” “probable,” “potential,” “possible,” “should,” “continue,” and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including regulatory approval requirements and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company’s reports and other filings with the Securities and Exchange Commission.

Investor Relations International
Brian Chen, 818-382-9700
bchen@irintl.com

Company Continues Expansion Despite Global Recession; CAE Uniquely Positioned to Benefit from China’s $586 Billion Stimulus Package, Particularly in Construction Spending

ZHUHAI, China & LOS ANGELES--(BUSINESS WIRE)--China Architectural Engineering, Inc. (CAE) (NASDAQ:CAEI - News), a leader in the design, engineering, fabrication and installation of high-end building envelope systems, today reported strong financial results for the first quarter ended March 31, 2009.

International Strategy Projects Spur Revenue Growth

CAE’s revenues for the first quarter of 2009 totaled $36.34 million, up 43.4% from $25.35 million in the first quarter of 2008. The Company noted that the gain was due primarily to continued progress on major international projects, including the engineering and installation of station facilities for the Dubai Metro rapid transit system.

Gross profits for the first quarter of 2009 decreased slightly by 3.1%, to $8.18 million from $8.45 million, primarily because of higher raw material, labor and administrative costs in international markets.

Increased Operating Costs Reflect Global Expansion Strategy

Selling, general and administrative expenses rose to $5.95 million in the first quarter of 2009 from $3.00 million a year earlier. The increase was due largely to the Company’s ongoing expansion strategy, including the growth in staff, office rental and other costs associated with the growth of CAE’s international operations since 2008. Operating income for the first quarter of 2009 was $2.23 million, down from $5.45 million a year earlier.

Interest expenses rose to $1.31 million in the first quarter of 2009, up from $334,337 a year earlier. The increase was related to the Company’s issuance of $20 million in convertible bonds in April 2008. Income tax expense for the first quarter of 2009 was nil, compared to $47,367 in the first quarter of 2008. The drop was due to the zero corporate tax rate associated with the Dubai Metro project, the Company’s largest ongoing project so far in 2009.

Net income for first quarter of 2009 was $943,611, or $0.02 per fully diluted share, compared to $5.17 million, or $0.09 per fully diluted share, a year earlier.

CAE Chairman and CEO Ken Li Luo commented, “The latest quarter was extremely challenging for most businesses, especially those involved in large-scale construction. However, despite this environment, I am gratified that the Company was able to grow its revenues sharply and maintain profitability despite a deep worldwide recession. It is also notable that CAE was able to continue its aggressive global expansion efforts. In the near term, this aspect of CAE’s growth strategy impacts profits by increasing the Company’s operating costs. But in the longer term it can be expected to produce a sharp rise in revenues, with rising gross margins and international diversification that makes us less vulnerable to demand volatility in CAE’s home market, China.”

Mr. Luo continued, “The overseas push is already producing strong growth for CAE in the Middle East, where our work on the Dubai Metro system is our largest single ongoing project. We are also bidding for major contracts on a new rapid transit system in Doha, Qatar, and on the next phase of the Dubai Metro. Public-sector projects such as these are a crucial source of revenue that fills the gap created by the private-sector slump. They also raise CAE’s profile in markets that should produce substantial new commercial business when the global economy resumes is growth. In short, CAE is meeting two objectives at once -- positioning itself for recovery while gaining new business.”

CEO Sees China’s Stimulus Package as Key Driver to Ongoing Expansion

“While our success in expanding internationally will further increase our exposure and brand name to the global markets, we have not lost focus on our domestic market and, in particular, on how best to capitalize on China’s recently announced $586 billion stimulus package, of which over $50 billion has already been allocated to construction spending. Keeping in mind that CAE has been a large recipient of historical government projects, we expect to continue to use such key relationships and sales channels within the government to pursue and be awarded a portion of the multi-billion dollars of new construction and infrastructure spending that will be awarded in China, thereby further extending our leadership position as one of the country’s premier architectural and engineering firms,” concluded Mr. Luo.

In the latest of its periodic backlog updates, CAE today also reported that the total value of projects expected to produce revenue as of March 31, 2009 stood at $136 million. CAE defines backlog as the total anticipated revenue from projects already begun and upcoming projects for which contracts have been signed or awarded and pending signing. CAE views backlog as an important statistic in evaluating its level of sales activity and short-term sales trends in its business. It also cautions that backlog is only one indicator and not necessarily the most effective indicator of the ultimate profitability of its revenues.

Conference Call Information

CAE will hold a conference call to discuss first quarter 2009 earnings today, May 14, 2009, at 11 a.m. ET by dialing 1-877-407-0778 (international callers, please dial 1-201-689-8565). The conference call will also be webcast live on the Internet by visiting www.caebuilding.com. An audio replay will be available shortly after the call on CAE’s website. An audio replay will also be available via telephone by calling 1-877-660-6853, passcode 323333 (international callers will need to dial 1-201-312-7415).

If you would like to be added to China Architectural Engineering’s investor email lists or have additional questions, please contact Haris Tajyar with Investor Relations International at htajyar@irintl.com.

About China Architectural Engineering

China Architectural Engineering, Inc. (NASDAQ:CAEI - News), which began operations in 1992, has maintained a leading position in the global commercial construction industry by providing timely, high-quality, reliable, fully integrated and cost-effective service solutions to our clients utilizing specialized technical expertise in the design, engineering, fabrication and construction of structural exterior cladding systems. It specializes in high-end curtain wall systems (including glass, stone & metal curtain walls), roofing systems, steel construction systems, eco-energy saving building conservation systems and related products, for public works and commercial real estate projects.

CAEI has worked with world-renowned architects and building engineers from China and other countries and has completed over one-hundred large, complex and unique projects throughout China, Hong Kong, Macau, Australia and Southeast Asia, including numerous award-winning landmark buildings in many of Asia’s major cities. CAE has also expanded beyond China into some of the growing construction markets in the world, such as Middle East, Central Asia and Eastern Europe.

For further information on China Architectural Engineering, please visit www.caebuilding.com.

Forward-Looking Statements: In addition to historical information, the statements set forth above include forward-looking statements that may involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, adverse capital and credit market conditions; the vulnerability of the Company's business to a general economic downturn in China and globally; uncertainty of contract negotiations and payments under existing contracts, the Company’s dependence on government contracts, changes in the laws of the PRC that affect the Company’s operations, fluctuation and unpredictability of costs related to the Company’s products and services, the Company’s dependence on the steel and aluminum markets, reduction or reversal of the Company’s recorded revenue or profits due to “percentage of completion” method of accounting and expenses and costs associated with the issuance of convertible bonds. The forward-looking statements are also identified through use of the words “believe,” “enable,” “may,” “will,” “could,” “intends,” “estimate,” “anticipate,” “plan,” “predict,” “probable,” “potential,” “possible,” “should,” “continue,” and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including regulatory approval requirements and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company’s reports and other filings with the Securities and Exchange Commission.

CHINA ARCHITECTURAL ENGINEERING, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(STATED IN US DOLLARS)
			March 31, 2009			December 31, 2008
			(unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	8,799,412		$	9,516,202
Restricted cash			6,131,162			7,451,388
Contract receivables, net			70,022,117			71,811,627
Costs and earnings in excess of billings			8,260,841			15,988,920
Job disbursements advances			2,201,114			2,252,241
Other receivables			12,067,079			18,614,928
Amount due from shareholders			1,028,122			-
Inventories			291,401			308,842
Deferred income taxes, current			-			3,264
Other current assets			927,221			1,659,307
Total current assets			109,728,469			127,606,719
Non-current assets
Plant and equipment, net			5,534,518			5,852,110
Intangible assets			92,982			50,720
Goodwill			7,995,896			7,995,896
Other non-current asset			31,157			32,137
TOTAL ASSETS		$	123,383,022		$	141,537,582
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Short-term bank loans		$	2,578,435		$	-
Notes payable			3,072,466			10,193,088
Accounts payable			21,303,520			35,510,827
Billings over costs and estimated earnings			5,642,520			5,358,527
Amount due to shareholder			-			924,687
Other payables			4,945,111			7,364,816
Income tax payable			2,297,592			2,318,743
Business and other taxes payable			3,121,505			3,304,522
Other Accrual			3,852,615			1,794,879
Total current liabilities			46,813,764			66,770,089

CHINA ARCHITECTURAL ENGINEERING, INC.
CONSOLIDATED BALANCE SHEETS (Continued)
(UNAUDITED)
(STATED IN US DOLLARS)
			March 31, 2009			December 31, 2008
			(unaudited)
Non-current liabilities
Long term bank loans		$	254,851		$	328,285
Convertible bond payable, net			25,581,257			24,907,170
TOTAL LIABILITIES		$	72,649,872		$	92,005,544
STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding at March 31, 2009 and December 31, 2008; Common stock, $0.001 par value, 100,000,000 shares authorized, 53,256,874 shares issued and outstanding at March 31, 2009 and December 31, 2008, respectively		$	53,257		$	53,257
Additional paid in capital			23,043,792			23,043,792
Statutory reserves			3,040,595			3,040,595
Accumulated other comprehensive income			5,700,933			5,443,432
Retained earnings			18,884,032			17,940,421
Total Company shareholders’ equity			50,722,609			49,521,497
Noncontrolling interests			10,541			10,541
Total shareholders’ equity			50,733,150			49,532,038
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY		$	123,383,022		$	141,537,582

Contact:

Investors Relations International
Haris Tajyar
Managing Partner
818-382-9702
htajyar@irintl.com

Grisel, 45, will oversee corporate finance for Hong Kong-based KGE, which owns approximately 62% of CAE’s outstanding shares of common stock. Prior to joining CAE last year, Grisel accumulated more than 19 years of global financial management experience in various positions at the international bank ABN AMRO.

Replacing Grisel as CFO at China Architectural Engineering is Victor Cheng Li, 43, who has served as CAE’s director of investor relations and business development since the Company’s inception. He has over 15 years of experience in management positions for international organizations, government agencies and multinational businesses.

CAE Chairman and CEO Ken Yi Luo commented, “Since joining China Architectural Engineering from ABN AMRO, Bert has worked quickly and effectively to review our financial controls and assess management control. Thanks to his work, the company is better equipped to meet the requirements of investors and regulators. We are pleased that he can now advance to a wider scope of responsibility in overseeing the strategy of KGE and its subsidiaries, including CAE. We are also pleased to announce that he is being succeeded by Victor Li, an executive who is well-versed in CAE’s financial systems through his work as CAE’s IR and business development director.”

If you would like to be added to China Architectural Engineering’s investor email lists or have additional questions, please contact Haris Tajyar with Investor Relations International at htajyar@irintl.com.

About China Architectural Engineering

China Architectural Engineering, Inc. (NASDAQ:CAEI - News), which began operations in 1992, has maintained a leading position in the global commercial construction industry by providing timely, high-quality, reliable, fully integrated & cost-effective service solutions to our clients utilizing specialized technical expertise in the design, engineering, fabrication and construction of structural exterior cladding systems. It specializes in high-end curtain wall systems (including glass, stone & metal curtain walls), roofing systems, steel construction systems, eco-energy saving building conservation systems and related products, for public works and commercial real estate projects.

CAEI has worked with world-renowned architects and building engineers from China and other countries and has completed nearly one hundred large, complex and unique projects throughout China, Australia & Southeast Asia, including numerous award-winning landmark buildings in many of Asia’s major cities. It is now looking to capitalize on its industry-leading expertise to expand aggressively beyond China into some of the other construction markets in the world, such as Middle East, Central Asia and Eastern Europe.

For further information on China Architectural Design, please visit www.caebuilding.com.

Forward-Looking Statements: In addition to historical information, the statements set forth above include forward-looking statements that may involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, completion and audit of the Company’s financial statements for the fourth quarter and year ended December 31, 2008; the Company’s ability to remediate the significant deficiencies and/or material weaknesses in its internal controls; adverse capital and credit market conditions; the vulnerability of the Company's business to a general economic downturn in China and globally; uncertainty of contract negotiations and payments under existing contracts, the Company’s dependence on government contracts, changes in the laws of the PRC that affect the Company’s operations, fluctuation and unpredictability of costs related to the Company’s products and services, the Company’s dependence on the steel and aluminum markets, reduction or reversal of the Company’s recorded revenue or profits due to “percentage of completion” method of accounting and expenses and costs associated with the issuance of convertible bonds. The forward-looking statements are also identified through use of the words “believe,” “enable,” “may,” “will,” “could,” “intends,” “estimate,” “anticipate,” “plan,” “predict,” “probable,” “potential,” “possible,” “should,” “continue,” and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including regulatory approval requirements and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company’s reports and other filings with the Securities and Exchange Commission.

Investor Relations Intl
Haris Tajyar, Managing Partner
818-382-9702
htajyar@irintl.com
or
China Architectural Engineering
Ken Luo, Chairman and CEO
luo@caebuilding.com

The Company uses, in compliance with US GAAP, the percentage-of-completion accounting method, under which revenues are measured by the percentage-of-costs incurred to date divided by the total budgeted costs. At the beginning of certain running projects, the expected revenues, costs and gross profits on each project were projected by CAE management based on the expected contract revenues and budgeted cost. As is standard in the construction industry, a recent interim review by CAE management of actual incurred and further projected costs versus budgeted costs related to these projects has caused management to review its estimates and decrease the gross profit related to these projects primarily as a result of higher than expected startup, transportation, material and labor costs. In accordance with the “balance sheet approach and accumulative catch up” accounting for these revised estimates, the impact of this change of best estimates from management on the running projects during 2008, will be entirely accounted for in the fourth quarter of 2008.

The Company also reported that it will be following a more prudent accounting practice due to the global economic downturn which has caused slowing customer payments. Accordingly, the Company expects to record a bad debt provision of approximately $2.5 million during its fourth quarter.

Despite the adjustments and impact thereof on the fourth quarter, the Company expects earnings for 2008 to be between $18 million and $20 million, or $0.34 to $0.37 per basic earnings per share for the full year 2008, which represents an increase of 46% to 58% compared to the year 2007.

Ken Yi Luo, Chairman and Chief Executive Officer of China Architectural Engineering, said, “CAE has grown rapidly in recent years and largely transformed itself through a period of significant international expansion, during which the Company has been awarded a number of major projects. As a result of management’s interim review of running projects, we have decided to adjust the estimated gross profit related to certain projects which, together with our provision for bad debt, will negatively impact our fourth quarter financial results and our 2008 results. We believe the continued demand for our specialized products and services globally, highlighted by our strong backlog of projects and consequent visibility for our revenues in 2009, will enable us to achieve continued growth and expansion as we head into a new year in a challenging economic environment.”

Bert Grisel, the Company’s recently announced CFO said, “These prudent accounting measures demonstrates management is committed to following effective internal control procedures, including, but not limited to, regular reviews of our budgeted costs. Our status as a public company requires that we adhere to the highest quality of financial reporting standards and we will continue to focus and review our internal and external control where necessary, to ensure we meet these requirements.”

If you would like to be added to China Architectural Engineering’s investor email lists or have additional questions, please contact Haris Tajyar with Investor Relations International at htajyar@irintl.com or at 818....

About China Architectural Engineering

China Architectural Engineering, Inc. (NASDAQ/GS:CAEI), which began operations in 1992, has maintained a leading position in the global commercial construction industry by providing timely, high-quality, reliable, fully integrated & cost-effective service solutions to our clients utilizing specialized technical expertise in the design, engineering, fabrication and construction of structural exterior cladding systems. It specializes in high-end curtain wall systems (including glass, stone & metal curtain walls), roofing systems, steel construction systems, eco-energy saving building conservation systems and related products, for public works and commercial real estate projects.

CAEI has worked with world-renowned architects and building engineers from China and other countries and has completed nearly one hundred large, complex and unique projects, including numerous award-winning landmark buildings in many of Asia’s major cities. It is now looking to capitalize on its industry-leading expertise to expand aggressively beyond China into some of the most active construction markets in the world, such as the Middle East, the U.S. and Central Asia.

For further information on China Architectural Engineering, please visit www.caebuilding.com.

Forward-Looking Statements: In addition to historical information, the statements set forth above include forward-looking statements that may involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, adverse capital and credit market conditions, reduction or reversal of the Company’s recorded revenue or profits due to “percentage of completion” method of accounting, declining global economies, uncertainty of contract negotiations and payments under existing contracts, the Company’s dependence on government contracts, changes in the laws of the PRC that affect the Company’s operations, fluctuation and unpredictability of costs related to the Company’s products and services, the Company’s dependence on the steel and aluminum markets, and expenses and costs associated with the issuance of convertible bonds. The forward-looking statements are also identified through use of the words “believe,” “enable,” “may,” “will,” “could,” “intends,” “estimate,” “anticipate,” “plan,” “predict,” “probable,” “potential,” “possible,” “should,” “continue,” and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including regulatory approval requirements and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company’s reports and other filings with the Securities and Exchange Commission.

Investor Relations International
Haris Tajyar, Managing Partner
818-382-9702
htajyar@irintl.com
or
China Architectural Engineering, Inc.
Bert Grisel, Chief Financial Officer
852-2152-3528
bg@caebuilding.com

Highlights of the Company’s performance include:

• Revenues rise 107% year-over-year, driven by international contracts

• Gross margins rise to 31% from 24% in Q3 2007

• EPS triples to $0.18 from $0.06

• Revenues exceed earlier guidance with net income reaching high end of guidance

• Company projects Q4 revenues of $45 million to $50 million and earnings of between $6 million to $9 million, or $0.11to-$0.16, respectively, per fully diluted share

• Project backlog rises to $245 million.

• Nine-month revenues rise 101% year-over-year to $122.71 million.

• Nine-month EPS increases 133% to $0.42 from $0.18 in Q3 2007.

For the Company’s third quarter ended September 30, 2008, revenues totaled $55.98 million, up 107% from $27.08 million in the third quarter of 2007. The Company noted that the increase was primarily due to new projects outside its home market of China, particularly in the Middle East.

Gross profit for the third quarter of 2008 was $17.38 million, up 166% from $6.55 million a year earlier. Gross margin increased year-over-year to 31% from 24%. The improvement in margin was primarily due to the higher margins of overseas projects, partially offset by higher raw material and labor costs as well as the appreciation of the Chinese Yuan from 2007 to 2008.

Selling, general and administrative (SG&A) expenses totaled $6.27 million in the third quarter of 2008, up 234% from $1.88 million in the third quarter of 2007. The increase was due to the growth in staff, office rental and other start-up costs associated with the expansion of CAE’s international operations.

Operating income for the third quarter of 2008 was $11.11 million, up 138% from $4.67 million in the third quarter of 2007. Interest expenses in the third quarter of 2008 rose 77% year-over-year to $1.36 million, primarily as a result of the cash interest expense and non-cash amortization expenses associated with $20 million in convertible bonds and warrants issued by CAE in April 2008. Income taxes for the third quarter fell year-over-year to $30,945 from $784,744. The drop was due primarily to the zero corporate income tax rate associated with revenues from CAE’s Dubai activities.

Net income for the third quarter of 2008 was $9.91 million, or $0.18 per fully diluted share, up 217% on a per-share basis from $3.13 million, or $0.06 per fully diluted share, in the third quarter of 2007.

On the balance sheet, cash and cash equivalents totaled $6.54 million as of September 30, 2008, up from $4.04 million on December 31, 2007. Long-term debt totaled $25.96 million on September 30, 2008, up from $3.96 million at the end of 2007. The increase in long-term debt was primarily due to the issuance in April 2008 of $20 million in convertible bonds and warrants.

CEO Hails Results, Cites Ongoing Success of International Expansion Strategy

“Today’s financial results confirm the success of our strategy to seek growth overseas while maintaining our already strong position in our home market of China,” said Ken Yi Luo, Chairman and CEO of China Architectural Engineering. “This global approach is producing revenues from major new projects in the Middle East, the U.S., and East Asia, among other locations, while giving us the benefit of region-based advantages in margins and taxation. It is notable that the higher gross margins from these projects are improving our overall gross profits despite rising labor and material costs and the substantial appreciation of China’s currency.”

Mr. Luo continued, “The global strategy also continues to give us valuable diversification in very uncertain economic times.When robust demand continues, we will be positioned to take advantage of it. At the same time, we are establishing our presence in new markets, such as the U.S., providing us with new opportunities to select from. Our predominantly government sponsored landmark projects tend to be less cyclical than overall building activity. Clearly if overall building activity will pick up as and when credit eases, we believe CAE will be fully prepared to take advantage of it.”

CAE Reports Record Nine-Month Results

For the nine months ended September 30, 2008, CAE revenues totaled $122.71 million, up 101% from $60.96 million in the first nine months of 2007. As with the third quarter results, the Company’s increase in nine-month revenues was primarily due to growth in international projects. Gross profit for the first nine months of 2008 was $39.17 million, up 131% from $16.94 million a year earlier. Gross margin, showing the impact of higher project margins on international projects, improved to 32% in the first nine months of 2008 from 28% in the comparable period of 2007.

SG&A expenses for the first nine months of 2008, reflecting expansion costs and expenses related to the internationalization of the Company’s business strategy, rose 213% to $13.88 million from $4.44 million in the first nine months of 2007. Operating income for the first nine months of 2008 was $25.29 million, up 102% from $12.50 million a year earlier. Interest expenses rose to $2.89 million in the first nine months of 2008 from $1.34 million a year earlier, while income taxes fell to $147,925 from $2.05 million. The rising interest costs reflected the Company’s April 2008 bond issue as well as a $10 million issue of convertible bonds and warrants in April 2007. The drop in income taxes reflected the zero-corporate-tax treatment of CAE’s Dubai activities.

Net income for the nine months ended September 30, 2008 was a record $22.66 million, or $0.42 per fully diluted share, up 149% on a per-share basis from $9.11 million, or $0.18 per fully diluted share, for the same period a year earlier.

CAE Expects Continued Growth for Fourth Quarter 2008; CEO Notes High Visibility

Should Sustain Growth for 2009 and Beyond

The Company today also provided financial guidance for its fourth quarter ending December 31. 2008 of revenues ranging between $45 million to $50 million, with earnings of between $6 million to $9 million, or $0.11 to $0.16, respectively, per fully diluted share. At the low-end of these ranges, the projected fourth quarter 2008 revenue would represent an 80% increase above the fourth quarter 2007 revenue of $25.6 million.

As was previously reported today, as of October 31, 2008, CAE’s backlog increased to a record $245 million in expected revenue from projects either under way, contracted or with contracts soon to be finalized. This is up from a $240 million backlog reported on August 11, 2008, at the time of CAE’s release of its second quarter 2008 financials. Included in the latest backlog figure are $80 million in newly announced projects in

Dubai and Singapore.

CAE views backlog as an important statistic in evaluating its level of sales activity and short-term sales trends in its business. It also cautions that backlog is only one indicator and not the most effective indicator of the ultimate profitability of its revenues.

Commenting on the Company’s outlook, Mr. Luo said, “Despite slowdowns in some construction markets, our new contracts and growing backlog make us confident that our prospects will remain healthy for both the fourth quarter and full-year 2009. The visibility of our future revenues and net income remains very high, due in large part to our well-established position in Middle East markets where construction spending on high end architectural buildings continues to boom.”

Conference Call Details

The Company will be hosting a conference call today, Monday, November 10, 2008 at 11:00 am EDT to review and discuss its third quarter and nine-month fiscal 2008 results and will be available to answer questions. To participate, please either access the live webcast on the Company's website, or call one of the following teleconferencing numbers below. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international dial-in number.

US Dial-in Number: 877-407-8035

International Dial-in Number: 201-689-8035

A replay of the conference call will be available through November 24, 2008 and may be accessed by calling 877-660-6853, or 201-612-7415 for international callers. Please use account #286 and conference ID #302925. An audio archive will also be available on the Company's website at www.caebuilding.com shortly after the call.

To be added to China Architectural Engineering’s investor lists, please contact Haris Tajyar at htajyar@irintl.com or at 818-382-9702.

About China Architectural Engineering

China Architectural Engineering, Inc. (CAE) (NASDAQ: CAEI), which began operations in 1992, has maintained a leading position in the global commercial construction industry by providing timely, high-quality, reliable, fully integrated and cost-effective service solutions to its clients utilizing specialized technical expertise in the design, engineering, fabrication and construction of structural exterior cladding systems. It specializes in high-end curtain wall systems (including glass, stone & metal curtain walls), roofing systems, steel construction systems, eco-friendly and energy saving buildings and conservation systems and related products, for public works and commercial real estate projects.

CAE has worked with world-renowned architects and building engineers from China and other countries and has completed over 100 large, complex and unique projects throughout China, Hong Kong, Macau, Australia and Southeast Asia, including numerous award-winning landmark buildings in many of Asia's major cities. It is now capitalizing on its industry-leading expertise by expanding aggressively beyond China into some of the most active construction markets in the world, including the Middle East, Central Asia, United States and Eastern Europe.

For further information on China Architectural Engineering, please visit www.caebuilding.com.

Forward Looking Statements: In addition to historical information, the statements set forth above include forward-looking statements that may involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, adverse capital and credit market conditions, uncertainty of contract negotiations and payments under existing contracts, the Company’s dependence on government contracts, changes in the laws of the PRC that affect the Company’s operations, fluctuation and unpredictability of costs related to the Company’s products and services, the Company’s dependence on the steel and aluminum markets, reduction or reversal of the Company’s recorded revenue or profits due to “percentage of completion” method of accounting and expenses and costs associated with the issuance of convertible bonds. The forward-looking statements are also identified through use of the words “believe,” “enable,” “may,” “will,” “could,” “intends,” “estimate,” “anticipate,” “plan,” “predict,” “probable,” “potential,” “possible,” “should,” “continue,” and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including regulatory approval requirements and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company’s reports and other filings with the Securities and Exchange Commission.

[FINANCIAL TABLES FOLLOW]

Operations with New Controller and Head of Accounting

ZHUHAI, China & LOS ANGELES — October 29, 2008—China Architectural Engineering, Inc. (CAE) (NASDAQ/GS: CAEI), a leader in the design, engineering, fabrication and installation of high-end building envelope systems, today announced three new appointments designed to significantly improve the Company’s finance and accounting operations while providing the investment community with reporting and transparency that meet the highest U.S. and global standards.

CAE Names Bert Grisel as Chief Financial Officer

Appointed to lead CAE’s finance and accounting operations is seasoned financial executive Bert Grisel, 45, who will serve as Chief Financial Officer, succeeding interim CFO Wang Xin.

“Bert’s appointment brings an added dimension to CAE as his 19-years of expertise in financing, capital markets, investment banking and management will be pivotal in helping guide and manage CAE’s ambitious and systematic, international expansion strategy,” said Ken Yi Luo, China Architectural Engineering’s Chairman and CEO. “During his career at ABN AMRO, Bert was instrumental in structuring and improving the financial position of several private and public companies and, with his leadership, will look towards him to help us achieve optimal capital structuring, increased financial transparency, improved visibility, increased investor relations activities, all of which will be directed toward one goal, enhancement of shareholder value.”

Grisel comes to CAE with over 19 years of global financial management experience in various positions at ABN AMRO. Most recently, he served as Corporate Managing Director in the bank’s Global Clients Division, since 2005 based in Hong Kong, where he was responsible for ABN AMRO’s Asian Global Industries sector and Global Real Estate Advisory Group. His responsibilities included business development, mergers and acquisitions, equity, debt and hybrid capital market financing transactions for both public and private real estate companies.

Starting at ABN AMRO Bank in June 1989 as a corporate trainee, Grisel worked in commercial banking and special credits before joining the firm’s investment banking division in 1998. In 2000, he was promoted to manage the bank’s Dutch real estate franchise. After transferring to Hong Kong in 2005, he then spearheaded the expansion of a dedicated real estate venture for ABN AMRO in Europe and Asia. Within real estate alone, Grisel has successfully structured a number of syndicated loans, bonds, conduit and CMBS transactions, PtP, IPOs, secondary offerings and private real estate fund raisings for both developers and stabilized assets.

Grisel is a graduate of the University of Groningen in the Netherlands and holds a Masters Degree in business law.

CAE Also Further Strengthens its Financial Operations with Two New Positions

As part of the Company’s efforts to improve and enhance its financial and accounting operations to better manage its rapid growth, CAE today also named Jeff Zhou, CPA and Kenneth Chan, CPA, to the newly created posts of Financial Controller and Head of Accounting, respectively.

Zhou joined CAE in June 2008 after gaining extensive experience in audits of multinational corporations in China and the U.S. He spent six years with KPMG, including two years in the Big 4 firm’s Dallas office providing audit services to listed companies as well as large private companies. He received a Master of Science degree from Vanderbilt University in 2002 and was an honors graduate from Shanghai Jiaotong University in China in 2000. Zhou is a member of Chinese Institute of Certified Public Accountants.

Chan comes to CAE from Hua Yang Printing Holdings Company Ltd., a printing and paper toy company with a payroll of approximately 4,000. He served there as Assistant Financial Controller from August 2007 to April 2008 and as Finance Manager from May 2006 to July 2007. Earlier, he served in accounting and audit posts at Long Champion Ltd., Falcon International Group Ltd., Midi Aluminum Fabricator Ltd., Ciba Geigy (Hong Kong) Ltd. and Glass Radcliffe & Co.

If you would like to be added to China Architectural Engineering’s investor email lists or have additional questions, please contact Haris Tajyar with Investor Relations International at htajyar@irintl.com or at 818-382-9702

About China Architectural Engineering

China Architectural Engineering, Inc. (NASDAQ/GS: CAEI ), which began operations in 1992, has maintained a leading position in the global commercial construction industry by providing timely, high-quality, reliable, fully integrated & cost-effective service solutions to our clients utilizing specialized technical expertise in the design, engineering, fabrication and construction of structural exterior cladding systems. It specializes in high-end curtain wall systems (including glass, stone & metal curtain walls), roofing systems, steel construction systems, eco-energy saving building conservation systems and related products, for public works and commercial real estate projects.

CAEI has worked with world-renowned architects and building engineers from China and other countries and has completed nearly one hundred large, complex and unique projects throughout China, Australia & Southeast Asia, including numerous award-winning landmark buildings in many of Asia’s major cities. It is now looking to capitalize on its industry-leading expertise to expand aggressively beyond China into some of the hottest construction markets in the world, such as Middle East, Central Asia and Eastern Europe. It also plans to set up operations in New York to expand in the U.S. and Canadian markets. For further information on China Architectural Engineering, please visit www.caebuilding.com.

Forward-Looking Statements: Statements about the Company's future expectations, including future revenues and earnings, and all other statements in this press release other than historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as the term is defined in the Private Securities Litigation Reform Act of 1995. The Company's actual results could differ materially from expected results for reasons described from time to time in the Company's public filings. The Company undertakes no obligation to update forward-looking statements to reflect subsequently occurring events.

ZHUHAI, China, & LOS ANGELES—September 29, 2008 -- China Architectural Engineering Inc. (CAE) (NASDAQ: CAEI), a leader in the design, engineering, fabrication and installation of high-end building envelope systems, today announced a new round of contract awards valued at approximately $16 million. The Company also noted that it has made significant additions to its engineering staff to meet the increasing demands of its record and growing project backlog and pipeline, particularly from international markets.

These latest contract wins are for projects in CAE’s domestic market of Mainland China. They include a façade for the Hengze Tiancheng Podium Building in Dalian City as well as Phase 2 of the highly anticipated horseracing track in Wuhan City, the only city in China where betting on horses will be legalized by next year. CAE expects to recognize revenues from these two new projects from now until the end of the fourth quarter of 2009.

CAE Significantly Increases Engineering Staff in Response to Record Project Backlog and Pipeline Figures

The Company today also announced that it has hired more than 20 engineers during the third quarter of 2008 as its project volume continues to expand.

“The growth in our engineering capacity is directly related to a sharp rise in bidding activity and contracts awarded over the past year across all of our strategic target markets,” said Ken Yi Luo, China Architectural Engineering’s Chairman and CEO. “These new contracts we announced today offer the latest evidence that this upward trend in our business continues unabated, including in our own home market of Mainland China.”

Mr. Luo continued, “The ongoing expansion of our engineering workforce is a direct result of our management team’s confidence in our future growth expectations based primarily on the strong and record project backlog and pipeline we currently are bidding on. Further, despite the economic uncertainties that is affecting all our markets to some degree, builders and project managers, particularly in the Middle East, continue to demand for our services. Our ability to continue to grow is due to the superiority of our world-class design and engineering techniques and recognized experience,” concluded Mr. Luo.

To be added to China Architectural Engineering’s investor lists, please contact Haris Tajyar at htajyar@irintl.com or at 818-382-9702.

About China Architectural Engineering

China Architectural Engineering, Inc. (CAE) (NASDAQ: CAEI), which began operations in 1992, has maintained a leading position in the global commercial construction industry by providing timely, high-quality, reliable, fully integrated and cost-effective service solutions to its clients utilizing specialized technical expertise in the design, engineering, fabrication and construction of structural exterior cladding systems. It specializes in high-end curtain wall systems (including glass, stone & metal curtain walls), roofing systems, steel construction systems, eco-energy saving building conservation systems and related products, for public works and commercial real estate projects.

CAE has worked with world-renowned architects and building engineers from China and other countries and has completed over 100 large, complex and unique projects throughout China, Hong Kong, Macau, Australia and Southeast Asia, including numerous award-winning landmark buildings in many of Asia's major cities. It is now capitalizing on its industry-leading expertise by expanding aggressively beyond China into some of the most active construction markets in the world, including the Middle East, Central Asia, United States and Eastern Europe.

For further information on China Architectural Engineering please visit www.caebuilding.com.

Forward Looking Statements: In addition to historical information, the statements set forth above include forward-looking statements that may involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, uncertainty of contract negotiations and payments under existing contracts, the Company’s dependence on government contracts, changes in the laws of the PRC that affect the Company’s operations, fluctuation and unpredictability of costs related to the Company’s products and services and the Company’s dependence on the steel and aluminum markets. The forward-looking statements are also identified through use of the words “believe,” “enable,” “may,” “will,” “could,” “intends,” “estimate,” “anticipate,” “plan,” “predict,” “probable,” “potential,” “possible,” “should,” “continue,” and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including regulatory approval requirements and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company’s reports and other filings with the Securities and Exchange Commission.

2008 EARNINGS NEAR HIGH END OF EARLIER GUIDANCE

ZHUHAI, China, & LOS ANGELES—September 23, 2008 -- China Architectural Engineering Inc. (CAE) (NASDAQ: CAEI), a leader in the design, engineering, fabrication and installation of high-end building envelope systems, today issued an update on its previously-announced guidance for the Company’s third quarter ending September 30, 2008.

The Company said it now expects net income for the third quarter to reach near the high end of the $8 million to $10 million range projected on August 11, 2008, at the time of CAE’s second-quarter financial report. At earnings of $10 million, or $0.18 per fully diluted share, third quarter 2008 net income would be 219% above the $3.13 million in net income reported in the third quarter of 2007.

The Company also reiterated its revenue guidance for the third quarter of 2008, with revenues expected to reach at least $45 million, representing a year-over-year increase of at least 66%. The expected rise is primarily due to the continued expansion of CAE’s business outside its home market of Mainland China and into the U.S., Middle East and non-Asian markets. The revenue mix between domestic (China) and international projects now stands at a 50%-50% ratio, more than a quarter ahead of schedule.

Company’s International Expansion Increases Revenues and Margins

“Today’s updated guidance testifies to the rapid growth we have been achieving in key markets around the world,” said Ken Yi Luo, China Architectural Engineering’s Chairman and CEO. “Business remains strong in our core market of the People’s Republic of China while we are rapidly gaining new business in the U.S. and Middle East. Our rising earnings expectations and strong backlog figures also reflects our success at winning contracts for higher-margin projects in our newer markets outside China.”
Mr. Luo continued, “Our widening global reach is working not only to increase revenues and margins but also to create a diversified market base that will tend to cushion us from the potential effects of regional economic volatility. Even in case of regional volatility, due to our focus on the high-end side of the market we can still be selective in the projects that we want to go after.”

To be added to China Architectural Engineering’s investor lists, please contact Haris Tajyar at htajyar@irintl.com or at 818-382-9702.

About China Architectural Engineering
China Architectural Engineering, Inc. (CAE) (NASDAQ: CAEI), which began operations in 1992, has maintained a leading position in the global commercial construction industry by providing timely, high-quality, reliable, fully integrated and cost-effective service solutions to its clients utilizing specialized technical expertise in the design, engineering, fabrication and construction of structural exterior cladding systems. It specializes in high-end curtain wall systems (including glass, stone & metal curtain walls), roofing systems, steel construction systems, eco-energy saving building conservation systems and related products, for public works and commercial real estate projects.

CAE has worked with world-renowned architects and building engineers from China and other countries and has completed over 100 large, complex and unique projects throughout China, Hong Kong, Macau, Australia and Southeast Asia, including numerous award-winning landmark buildings in many of Asia's major cities. It is now capitalizing on its industry-leading expertise by expanding aggressively beyond China into some of the most active construction markets in the world, including the Middle East, Central Asia, United States and Eastern Europe.

For further information on China Architectural Engineering please visit www.caebuilding.com.

Forward Looking Statements: In addition to historical information, the statements set forth above include forward-looking statements that may involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, uncertainty of contract negotiations and payments under existing contracts, the Company’s dependence on government contracts, changes in the laws of the PRC that affect the Company’s operations, fluctuation and unpredictability of costs related to the Company’s products and services, the Company’s dependence on the steel and aluminum markets, reduction or reversal of the Company’s recorded revenue or profits due to “percentage of completion” method of accounting and expenses and costs associated with the issuance of convertible bonds. The forward-looking statements are also identified through use of the words “believe,” “enable,” “may,” “will,” “could,” “intends,” “estimate,” “anticipate,” “plan,” “predict,” “probable,” “potential,” “possible,” “should,” “continue,” and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including regulatory approval requirements and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company’s reports and other filings with the Securities and Exchange Commission.