AMENDMENT TO
                                          INVESTMENT MANAGEMENT AGREEMENT

     This Amendment  dated as of June 1, 2004, is to the  Investment  Management
Agreement  made as of the 3rd day of  December,  2002 (the  "Agreement")  by and
between Templeton Asset Management Ltd., a U.S.  registered  investment  adviser
and a corporation  organized  under the laws of Singapore (the  "Manager"),  and
Templeton China World Fund (the "Fund").

                                                    WITNESSETH:

     WHEREAS,  both the  Manager  and the Fund wish to amend  Paragraph 4 of the
Agreement; and

     WHEREAS,  the Board of  Trustees  of the Fund,  including a majority of the
Independent  Trustees  of the Fund  present in person,  approved  the  following
amendment at a meeting called for such purpose on May 13, 2004.

NOW, THEREFORE, in consideration of the
         foregoing premises, the parties hereto agree as follows:

     The Fund  agrees to pay to the  Manager a monthly  fee in  dollars,  at the
annual rate of the Fund's average weekly net assets, as listed below, payable at
the end of each calendar month:


     1.25%, up to and including $1 billion
     1.20% over $1 billion, up to and including $5 billion
     1.15% over $5 billion, up to and including $10 billion
     1.10% over $10  billion,  up to and  including  $15 billion
     1.05% over $15 billion, up to and including $20 billion
     1.00% over $20 billion

     IN WITNESS  WHEREOF,  this  Amendment  has been  executed on behalf of each
party as of the date set forth above.



                         TEMPLETON ASSET MANAGEMENT LTD.



                         By:/s/GREGORY E. MCGOWAN
                            -------------------------------------------------
                            Gregory E. McGowan
                            Director


                         TEMPLETON CHINA WORLD FUND



                         By:/s/MURRAY L. SIMPSON
                            -------------------------------------------------
                            Murray L. Simpson
                            Vice President and Assistant Secretary