MORGAN STANLEY CHINA A SHARE FUND, INC.

                  DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN

                              TERMS AND CONDITIONS

     1. Each shareholder ("Shareholder") holding shares of common stock of
Morgan Stanley China A Share Fund, Inc. (the "Fund") will automatically be
deemed to have elected to be a participant in the Fund's Dividend Reinvestment
and Cash Purchase Plan (the "Plan"), unless Computershare Shareholder Services,
Inc. (the "Plan Agent") is otherwise instructed by the Shareholder, in writing
to have all distributions, net of any applicable U.S. withholding tax, paid in
cash. A Shareholder who does not wish to participate in the Plan will receive
all distributions, the record date for which follows the receipt by the Plan
Agent of such Shareholder's instructions, in cash and will be paid by check in
U.S. dollars mailed directly to such Shareholder by Computershare Shareholder
Services, Inc., as dividend disbursing agent. The Plan Agent will act as agent
for individual Shareholders in administering the Plan and will open an account
for each Shareholder under the Plan in the same name as her or his shares of
common stock are registered.

     2. Whenever the directors of the Fund declare an income dividend or capital
gains distribution payable in shares of common stock or cash, participating
Shareholders will take such dividend or distribution entirely in shares of
common stock to be issued by the Fund or to be purchased on the open market by
the Plan Agent, and the Plan Agent shall automatically receive such shares of
common stock, including fractions, for the Shareholder's account. Whenever the
market price per share of common stock equals or exceeds the net asset value per
share at the time the shares of common stock are valued for the purpose of
determining the number of shares of common stock equivalent to the dividend or
distribution (the "Valuation Date"), participants will be issued shares of
common stock by the Fund valued at net asset value or, if the net asset value is
less than 95%, of the market price on the Valuation Date, then participants will
be issued shares valued at 95% of the market price. If net asset value per share
on the Valuation Date exceeds the market price per share on that date, the Plan
Agent, as agent for the participants, will buy shares of the Fund's common stock
on the open market, on the New York Stock Exchange or elsewhere, for the
participants' accounts. If, before the Plan Agent has completed such purchases,
the market price exceeds the net asset value per share, the average per share
purchase price paid by the Plan Agent may exceed the net asset value per share,
resulting in the acquisition of fewer shares than if the dividend or
distribution had been paid in shares issued by the Fund at net asset value.
Additionally, if the market price exceeds the net asset value per share before
the Plan Agent has completed its purchases, the Plan Agent is permitted to cease
purchasing shares and the Fund may issue the remaining shares at a price equal
to the greater of (a) net asset value or (b) 95% of the then current market
price. In a case where the Plan Agent has terminated open market purchases and
the Fund has issued the remaining shares, the number of shares received by each
participant in respect of the dividend or distribution will be based on the
weighted average of prices paid for shares purchased in the open market and the
price at which the Fund issues the remaining shares. The Valuation Date shall be
the dividend or distribution payment date or, if that date is not a New York
Stock Exchange trading day, the next preceding trading day.

     3. Whenever the directors of the Fund declare an income dividend or capital
gains distribution payable only in cash, the Plan Agent, as agent for the
participants, will buy shares of the Fund's common stock on the open market, on
the New York Stock Exchange or elsewhere, with the cash in respect of such
dividend or distribution for the participants' accounts, on, or shortly after,
the payment date. To the extent the market price exceeds the net asset value of
the common stock when the Plan Agent makes such purchases, participants may
receive fewer shares of common stock than if the dividend or distribution had
been payable in common stock issued by the Fund.


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     4. The Plan Agent will apply all cash received as a dividend or
distribution to purchase shares of common stock on the open market as soon as
practicable after the payment date of the dividend or distribution, but in no
event later than 30 days after such payment date, except where necessary to
comply with applicable provisions of the federal securities laws. No participant
will have any authority to direct the time or price at which the Plan Agent may
purchase shares of the Fund's common stock on such participant's behalf.

     5. For all purposes of the Plan: (a) the market price of shares of common
stock of the Fund on a particular date shall be the last sales price on the New
York Stock Exchange at the close of the previous trading day or, if there is no
sale on the New York Stock Exchange on that date, then the mean between the
closing bid and asked quotations for such stock on the New York Stock Exchange
on such date, (b) each Valuation Date shall be the dividend or distribution
payment date or, if that date is not a New York Stock Exchange trading day, the
next preceding trading day, and (c) the net asset value per share of common
stock on a particular date shall be as determined by or on behalf of the Fund.

     6. The open-market purchases provided for above may be made on any
securities exchange where the shares of common stock of the Fund are traded, in
the over-the-counter market or in negotiated transactions, and may be on such
terms as to price, delivery and otherwise as the Plan Agent shall determine.
Funds held by the Plan Agent will not bear interest. In addition, it is
understood that the Plan Agent shall have no liability (other than as provided
in paragraph 15 hereof) in connection with any inability to purchase shares of
common stock within 30 days after the payment date of any dividend or
distribution as herein provided or with the timing of any purchases effected.
The Plan Agent shall have no responsibility as to the value of the shares of
common stock of the Fund acquired for any Shareholder's account.

     7. The Plan Agent will hold shares of common stock acquired pursuant to the
Plan in non-certificated form in the name of the Shareholder for whom such
shares are being held and each Shareholder's proxy will include those shares of
common stock held pursuant to the Plan. The Plan Agent will forward to each
Shareholder participating in the Plan any proxy solicitation material received
by it. In the case of Shareholders, such as banks, brokers or nominees, that
hold shares for others who are the beneficial owners, the Plan Agent will
administer the Plan on the basis of the number of shares certified from time to
time by such Shareholders as representing the total amount registered in the
names of such Shareholders and held for the account of beneficial owners who
participate in the Plan.

     8. The Plan Agent will confirm, in writing, each acquisition made for the
account of a Shareholder as soon as practicable, but in any event not later than
60 days after the date thereof. Such confirmation will indicate the number of
shares purchased and the price per share paid, and will include any applicable
tax information pertaining to such Shareholder's account. It is understood that
the reinvestment of dividends and distributions does not relieve the participant
of any income tax which may be payable on such dividends. Any Shareholder who is
subject to U.S. backup withholding tax, or who is a foreign Shareholder subject
to U.S. income tax withholding, will have the applicable tax withheld from all
dividends and distributions received and only the net amount will be reinvested
in shares of the Fund's common stock. Although a Shareholder may from time to
time have an undivided fractional interest in a share of common stock of the
Fund, no certificates for fractional shares will be issued. However,
distributions and dividends on fractional shares of common stock will be
credited to each Shareholder's account. In the event of termination of a
Shareholder's account under the Plan, the Plan Agent will adjust for any such
undivided fractional interest in cash at the current market value of the shares
of common stock at the time of termination.

     9. Any stock dividends or split shares distributed by the Fund on shares of
common stock held by the Plan Agent for a Shareholder will be credited to the
Shareholder's account. In the event that


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the Fund makes available to Shareholders rights to purchase additional shares of
common stock or other securities, the Plan Agent will forward to each
Shareholder participating in the Plan any materials received by it relating to
such rights.

     10. Shareholders will be charged a pro rata share of brokerage commissions
incurred with respect to the Plan Agent's open market purchases in connection
with the reinvestment of dividends or distributions. Brokerage charges for
purchasing small amounts of stock for individual accounts through the Plan are
expected to be less than the usual brokerage charges for such transactions
because the Plan Agent will be purchasing stock for all participants in large
blocks and prorating the lower commission thus attainable.

     11. A Shareholder may terminate her or his participation in the Plan by
notifying the Plan Agent, in writing, at Computershare Shareholder Services,
Inc., P.O. Box 43010, Providence, RI 09240-3010. Such termination will be
effective immediately if notice is received by the Plan Agent prior to any
dividend or distribution record date; otherwise such termination will be
effective, with respect to any subsequent dividend or distribution, on the first
trading day after the dividend or distribution paid for such record date shall
have been credited to such Shareholder's account. The Plan may be terminated by
the Plan Agent or the Fund with respect to any voluntary cash payments made or
any dividends or distributions paid subsequent to a notice of termination in
writing mailed to the Shareholders at least 90 days prior to the quarterly
contribution date, in the case of voluntary cash payments, or the record date
for the payment of any dividend or distribution by the Fund. Upon any
termination, the Plan Agent will cause a certificate or certificates for the
full shares held for a Shareholder under the Plan, and cash adjustment for any
fractional shares, to be delivered to her or him or, upon the request of such
Shareholder, will sell all of the shares held for the Shareholder under the
Plan, within ten days of receiving the Shareholder's instructions, and will
deliver the proceeds less any brokerage commissions and transfer taxes to the
Shareholder.

     12. If any Shareholder has withdrawn shares from the Plan, or acquires
shares which have been withdrawn from the Plan, and wishes to have such shares
held through and subject to the Plan, such Shareholder may resubmit such shares
by notifying the Plan Agent at Computershare Shareholder Services, Inc., P.O.
Box 43010, Providence, RI 09240-3010.

     13. These terms and conditions may be amended or supplemented by the Plan
Agent or the Fund at any time or times but, except when necessary or appropriate
to comply with applicable law or the rules or policies of the Securities and
Exchange Commission or any other regulatory authority, only by mailing to the
Shareholders appropriate written notice at least 90 days prior to the effective
date thereof. The amendment or supplement shall be deemed to be accepted by the
Shareholders unless, prior to the effective date thereof, the Plan Agent
receives written notice of the termination of a Shareholder's account under the
Plan. Any such amendment may include an appointment by the Plan Agent in its
place and stead of a successor Plan Agent under these terms and conditions, with
full power and authority to perform all or any of the acts to be performed by
the Plan Agent under these terms and conditions. Upon any such appointment of a
successor Plan Agent for the purpose of receiving dividends and distributions,
the Fund will be authorized to pay to such successor Plan Agent, for the
Shareholders' accounts, all dividends and distributions payable on the shares of
common stock held in the Shareholders' name or under the Plan for retention or
application by such successor Plan Agent as provided in these terms and
conditions.

     14. The Plan Agent shall at all times act in good faith and agree to use
its best efforts within reasonable limits to ensure the accuracy of all services
performed under this Plan and to comply with applicable law, but assumes no
responsibility and shall not be liable for loss or damage due to errors unless
such error is caused by its negligence, bad faith or willful misconduct or that
of its employees.


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