CDS China Direct (MM)

DEERFIELD BEACH, Fla., June 16 /PRNewswire-FirstCall/ -- China Direct, Inc. (NASDAQ:CDS), a U.S. company that owns controlling stakes in a diversified portfolio of Chinese entities and assists Chinese businesses in accessing the U.S. capital markets, is set to join the broad-market Russell 3000(R) Index when Russell Investments reconstitutes its comprehensive set of U.S. and global equity indexes on June 27, 2008 according to a preliminary list of additions posted Friday on http://www.russell.com/. Annual reconstitution of Russell's U.S. indexes captures the 4,000 largest U.S. stocks as of the end of May, 2008 ranking them by total market capitalization. Membership in the Russell 3000, which remains in place for one year, means automatic inclusion for China Direct in the small-cap Russell 2000(R) Index as well as the appropriate growth and value style indexes. Russell determines membership for its equity indexes primarily by objective, market-capitalization rankings and style attributes. Commenting on the event, Marc Siegel, President of China Direct, stated, "We are extremely pleased to be a part of the Russell 3000 in its latest reconstitution. We have worked diligently to build a world-class organization and the addition of China Direct to the small-cap Russell 2000(R) Index is another step forward in the growth of our company. We believe this will expand our visibility to the institutional community as we continue to build China Direct for the future." The Russell 3000 also serves as the U.S. component to the Russell Global Index, which Russell launched last year. Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for both passive and active investment strategies. An industry-leading $4.4 trillion in assets currently are benchmarked to them. These investment tools originated from Russell's multi-manager investment business in the early 1980s when the company saw the need for a more objective, market-driven set of benchmarks in order to evaluate outside investment managers. Real-time market analysis on the Russell 3000 and other Russell Indexes is available at http://www.russell.com/Indexes/performance/real_time_market_analysis.asp . About Russell Russell Investments aims to improve financial security for people by providing strategic advice, world-class implementation, state-of-the-art performance benchmarks, and a range of institutional-quality investment products. With more than $213 billion in assets under management, Russell serves individual, institutional and advisor clients in more than 40 countries. Russell provides access to some of the world's best money managers. It helps investors put this access to work in corporate defined benefit and defined contribution plans, and in the life savings of individual investors. Headquartered in Tacoma, Wash., Russell has principal offices in Amsterdam, Auckland, Johannesburg, London, Melbourne, New York, Paris, San Francisco, Seoul, Singapore, Sydney, Tokyo and Toronto. For more information on Russell indexes, go to http://www.russell.com/. About China Direct, Inc. China Direct, Inc. (NASDAQ:CDS) is a diversified management and advisory services organization headquartered in the U.S. Our management services division acquires a controlling interest in entities operating in China. Our ownership control enables China Direct to provide management advice, as well as financing to Chinese entities. This infrastructure creates a platform to expand business opportunities globally while effectively and efficiently accessing the U.S. capital markets. Our advisory services division provides comprehensive advisory and consulting services to Chinese entities seeking to access the U.S. capital markets. As a direct link to China, China Direct serves as a vehicle allowing investors to directly participate in the rapid growth of the Chinese economy in a diversified and balanced manner. For more information about China Direct, please visit http://www.chinadirectinc.com/. DISCLOSURE NOTICE: In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, China Direct, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our guidance and expectations regarding revenues, net income and earnings. In addition, any such statements are qualified in their entirety by reference to, and are accompanied by, the following key factors that have a direct bearing on our results of operations: our ability to identify and close acquisitions of operating companies in China in a cost effective manner that enhance our financial condition; our need for additional financing which we may not be able to obtain on acceptable terms, the dilutive effect additional capital raising efforts in future periods may have on our current shareholders and the increased interest expense in future periods related to additional debt financing; our ability to effectively integrate our acquisitions and to manage our growth and our inability to fully realize any anticipated benefits of acquired business; the value of the equity securities we accept as compensation is subject to adjustment which could result in losses to us in future periods; the Investment Company Act of 1940 which limits the value of securities we can accept as payment for our business consulting services which may limit our future revenues; our acquisition efforts in future periods may be dilutive to our then current shareholders; our dependence on certain key personnel; the lack various legal protections in certain agreements to which we are a party and which are material to our operations which are customarily contained in similar contracts prepared in the United States; our ability to assure that related party transactions are fair to our company. Chang Magnesium's chief executive officer is also chief executive officer of a group of companies which directly compete with Chang Magnesium; the risks and hazards inherent in the mining industry on the operations of our basic materials segment; the effect of changes resulting from the political and economic policies of the Chinese government on our assets and operations located in the PRC. The influence of the Chinese government over the manner in which our Chinese subsidiaries must conduct our business activities; the impact on future inflation in China on economic activity in China; the impact of any recurrence of severe acute respiratory syndrome, or SARS, or another widespread public health problem; the limitation on our ability to receive and use our revenues effectively as a result of restrictions on currency exchange in China; our ability to enforce our rights due to policies regarding the regulation of foreign investments in China; our ability to comply with the United States Foreign Corrupt Practices Act which could subject us to penalties and other adverse consequences; our ability to establish adequate management, legal and financial controls in the PRC; the provisions of our articles of incorporation and bylaws which may delay or prevent a takeover which may not be in the best interests of our shareholders; and the adverse impact of various policies recently adopted by the PRC which seek to minimize pollution by limiting the operation of specific polluting agents commencing on June 1, 2008 in advance of the Beijing Olympics to be held during August 2008. We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward- looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the year ended December 31, 2007 and our reports on Form 10-Q. DATASOURCE: China Direct, Inc. CONTACT: Investors: Alan Sheinwald, HC International, LLC, +1-914-669-0222, ; or Richard Galterio, Executive Vice President of China Direct, Inc., +1-877-China-57, Web site: http://www.chinadirectinc.com/ http://www.russell.com/

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