EX-99.77B ACCT LTTR

NAME OF REGISTRANT:
Templeton China World Fund
File No. 811-07876

EXHIBIT ITEM NO. 77(b): Accountant's Report on Internal Control



             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Shareholders of
Templeton China World Fund

In planning and performing our audit of the financial statements of Templeton
China World Fund (the "Fund") as of and for the year ended August 31, 2006, in
accordance with the standards of the Public Company Accounting Oversight Board
(United States), we considered the Fund's internal control over financial
reporting, including control activities for safeguarding securities, as a basis
for designing our auditing procedures for the purpose of expressing our opinion
on the financial statements and to comply with the requirements of Form N-SAR,
but not for the purpose of expressing an opinion on the effectiveness of the
Fund's internal control over financial reporting. Accordingly, we express no
such opinion.

The management of the Fund is responsible for establishing and maintaining
effective internal control over financial reporting. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs of controls. A fund's internal control over
financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles. Such internal control over financial reporting includes
policies and procedures that provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use or disposition of a fund's
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

A control deficiency exists when the design or operation of a control does not
allow management or employees, in the normal course of performing their assigned
functions, to prevent or detect misstatements on a timely basis. A significant
deficiency is a control deficiency, or combination of control deficiencies, that
adversely affects the fund's ability to initiate, authorize, record, process or
report external financial data reliably in accordance with generally accepted
accounting principles such that there is more than a remote likelihood that a
misstatement of the fund's annual or interim financial statements that is more
than inconsequential will not be prevented or detected. A material weakness is a
control deficiency, or combination of control deficiencies, that results in more
than a remote likelihood that a material misstatement of the annual or interim
financial statements will not be prevented or detected.

Our consideration of the Fund's internal control over financial reporting was
for the limited purpose described in the first paragraph and would not
necessarily disclose all deficiencies in internal control over financial
reporting that might be significant deficiencies or material weaknesses under
standards established by the Public Company Accounting Oversight Board (United
States). However, we noted no deficiencies in the Fund's internal control over
financial reporting and its operation, including controls for safeguarding
securities, that we consider to be material weaknesses as defined above as of
August 31, 2006.

This report is intended solely for the information and use of management and the
Board of Trustees of Templeton China World Fund and the Securities and Exchange
Commission and is not intended to be and should not be used by anyone other than
these specified parties.

San Francisco, California

/s/PRICEWATERHOUSECOOPERS LLP

October 18, 2006

EX-99.77E LEGAL

NAME OF REGISTRANT:
Templeton China World Fund
File No. 811-07876

EXHIBIT ITEM No. 77(e): Legal Proceedings

As part of various investigations by a number of federal, state, and foreign
regulators and governmental entities, relating to certain practices in the
mutual fund industry, including late trading, market timing and marketing
support payments to securities dealers who sell fund shares, Franklin Resources,
Inc. and certain of its subsidiaries (collectively, the "Company"), entered into
settlements with certain of those regulators.

Specifically, the Company entered into settlements with the Securities and
Exchange Commission ("SEC") concerning market timing (the "August 2, 2004 SEC
Order") and marketing support payments to securities dealers who sell fund
shares (the "December 13, 2004 SEC Order") and with the California Attorney
General's Office ("CAGO") concerning marketing support payments to securities
dealers who sell fund shares (the "CAGO Settlement"). Under the terms of the
settlements with the SEC and the CAGO, the Company retained an Independent
Distribution Consultant ("IDC") to develop separate plans for distribution of
the respective settlement monies. The CAGO approved the distribution plan
pertaining to the distribution of the monies owed under the CAGO settlement
agreement, and in March 2005, the disbursement of monies to the relevant funds
in accordance with the terms and conditions of that settlement was completed.
The Fund did not participate in the CAGO Settlement.

On June 23,  2006,  the SEC  approved the IDC's  proposed  plan of  distribution
arising from the December 13, 2004 SEC Order and  disbursement of the settlement
monies to the  designated  funds in accordance  with the terms and conditions of
the SEC's order and the plan was completed in September  2006.  The Fund did not
participate in the December 13, 2004 SEC Order.

The IDC has also completed a proposed Plan of Distribution under the August 2,
2004 SEC Order resolving the SEC's market timing investigation and has submitted
that plan to the SEC staff, where it is under review. The SEC has announced the
following expected schedule with respect to the market timing Plan of
Distribution. The SEC anticipates that Notice of the Plan will be published on
or after November 15, 2006. After publication and comment, the proposed
Distribution Plan will be submitted to the SEC for approval. When the SEC
approves the proposed Distribution Plan, with modification as appropriate,
distributions will begin pursuant to that Plan.

In addition, the Company, as well as most of the mutual funds within Franklin
Templeton Investments and certain current or former officers, directors, and/or
employees, have been named in private lawsuits (styled as shareholder class
actions, or as derivative actions on behalf of either the named funds or
Franklin Resources, Inc.) relating to the industry practices referenced above,
as well as to allegedly excessive advisory fees, commissions, and/or 12b-1 fees.
The lawsuits were filed in different courts throughout the country. Many of
those suits are now pending in a multi-district litigation in the United States
District Court for the District of Maryland.

The Company and fund management strongly believe that the claims made in each of
the private lawsuits referenced above are without merit and intend to defend
against them vigorously. The Company cannot predict with certainty the eventual
outcome of these lawsuits, nor whether they will have a material negative impact
on the Company. If it is determined that the Company bears responsibility for
any unlawful or inappropriate conduct that caused losses to the Fund, it is
committed to making the Fund or its shareholders whole, as appropriate.