-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, SsyJUvb1ngImMZZ7sIfFjbrPJGj/6zMWzoQ2/BAT/bwwudjm/DC6D+YqfaM5D253 GjBSDs/RkSObhXfEU5vHKw== 0000928385-95-000216.txt : 19950726 0000928385-95-000216.hdr.sgml : 19950726 ACCESSION NUMBER: 0000928385-95-000216 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950531 FILED AS OF DATE: 19950725 SROS: NASD SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEMPLETON CHINA WORLD FUND INC CENTRAL INDEX KEY: 0000909226 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 593192206 STATE OF INCORPORATION: MD FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: 1940 Act SEC FILE NUMBER: 811-07876 FILM NUMBER: 95555794 BUSINESS ADDRESS: STREET 1: BROWARD FINANCIAL CENTRE STREET 2: 500 EAST BROWARD BLVD STE 2100 CITY: FORT LAUDERDALE STATE: FL ZIP: 33394-3091 BUSINESS PHONE: 3055277500 MAIL ADDRESS: STREET 1: 500 EAST BROWARD BLVD SUITE 2100 CITY: FORT LAUDERDALE STATE: FL ZIP: 33394 N-30B-2 1 QUARTERLY REPORT Templeton China World Fund, Inc. - -------------------------------------------------------------------------------- Your Fund's Objective The Templeton China World Fund, Inc. seeks long-term capital appreciation through equity investments in "China companies." - -------------------------------------------------------------------------------- July 17, 1995 Dear Shareholder: This update for the quarter ended May 31, 1995, includes your Fund's long-term performance, a listing of its investments, and a brief discussion by Dr. Mark Mobius on a topic of current interest. Please keep in mind that this summary is one of four reports you will receive during the Fund's fiscal year. Next quarter, you will receive the annual report, which is more comprehensive. It will include a discussion of the financial markets and a summary of the Fund's performance and investment direction during the fiscal year. The portfolio manager's outlook and the Fund's financial statements and investment portfolio will also be included. If you have any questions regarding this report, you may call the Franklin Templeton Fund Information Department, toll free, at 1-800/342-5236. - -------------------------------------------------------------------------------- Templeton China World Fund Cumulative Total Returns* Periods ended May 31, 1995 Since Inception 1-Year (9/8/93) Based on change in net asset value -9.94% -8.48% Based on change in market price -18.98% -11.93% *Cumulative total return represents the change in value of an investment over the specified periods. These calculations assume reinvestment of all distributions and capital gains at net asset value or at market price on the reinvestment date. Past performance is not predictive of future results. Investing in geographically concentrated developing markets involves special considerations, which may include increased risks related to market and currency volatility, adverse social and political developments, and the relatively small size and lesser liquidity of these markets. While short-term volatility can be disconcerting, declines of as much as 40% to 50% are not unusual in emerging markets. For example, the Hong Kong market has increased 1000% in the last 15 years, but has suffered nine declines of more than 20% during that time. - -------------------------------------------------------------------------------- 1 A Closer Look at China by Dr. Mark Mobius It's hard to argue with Deng Xiaoping's overall economic record. During his time in power, he's opened his country's doors to the world, and the world has responded with foreign investment at record levels. In the process, he has paved the way for the likely emergence of a 21st Century economic giant. Today, the ultimate architect of all this progress sits in Beijing, an ailing 90 year-old man widely believed to be in his final days. Although the political succession issue has not been clearly defined, we can make some educated guesses regarding what can be expected in the near term. One thing is clear: It may be extremely difficult for China to sink back into a Communist centralist state. The capitalist, entrepreneurial cat has been let out of the bag and it will probably be impossible to get it back in. Despite the astounding growth of recent years, I believe that China has only begun to scratch the surface of its economic potential. I can well remember my early years in the Far East, when China was cut off from the rest of the world, keeping itself on the sidelines while Japan, Hong Kong, Singapore, Taiwan, Korea and the other Pacific Rim economies were starting their rapid economic ascents. When Mao died in 1976, it still had virtually no contact with the international business community. Even after Deng began his market- oriented reforms in 1978, it took several years for the world to notice an across-the-board impact. But once Beijing began to unleash, rather than suppress, the legendary natural entrepreneurship of its people, Gross National Product (GNP) growth skyrocketed and began to average two-digit numbers, the highest of all major countries in the world. Imagine a situation where people talk about the economy "slowing down" when it is growing by 10.5% a year! That's actually the case in China so far this year, where current growth has dipped a bit from 12.8% in 1992, 13.4% in 1993 and 11.8% in 1994 -- figures which were probably so high as to be unsustainable in the first place. Deng's policies have made China the developing world's single largest recipient of direct foreign investment, with a total of $90 billion attracted over the last decade. Although the country was doing well in this regard prior to 1992, these invest- 2 [MAP OF CHINA APPEARS HERE] ments rose appreciably that year, as the economic fallout from the 1989 Tienanmen Square massacres finally subsided and Deng gave his blessing to Chinese business. Direct foreign investment in China -- and by that I mean utilized, not just pledged -- rose from $4.4 billion to $11.2 billion between 1991 and 1992, then to $25.8 billion in 1993. 1994's figure was an astounding $28.8 billion, which means China received about half of the total volume of fixed investment that all private investors put into factories, machinery, and other industrial needs in all the emerging markets of the world. Add to this the approximately $2.5 billion in equity that Chinese companies raised internationally from private portfolio investors through placement of shares on the B (Shanghai and Shenzhen), H (Hong Kong) and N (New York) exchanges, and China's overall 1994 foreign investment total reaches $31.3 billion. That's larger than the entire GDPs of some developing nations. Although some of that external capital (we don't know exactly how much) was actually domestic Chinese money being recycled through Hong Kong for tax reasons, these are impressive numbers by any standard. And they may be just the tip of the iceberg, considering China's market of 1.2 billion people, natural resource base, strong educational 3 traditions, rising consumer culture, rapidly growing technological sophistication, natural links with the influential Chinese community in the rest of Asia, and the unleashing of a liberal, entrepreneurial wave after so many years of economic oppression and central planning. Despite the exciting economic environment of the first half of the 1990s, China still has not made many of the fundamental reforms that other emerging markets have adopted. That's why, given the uncertainty of what form of political leadership will follow Deng, and what its economic policies will be, the coming months are so important. What are the big differences between China and other emerging markets? For one thing, the central bank has no autonomy. It is firmly under the aegis of the ruling State Council, and thus does not have the independence it needs to set a non-political monetary policy. Like almost everything else of importance in the Chinese economy, commercial banking remains in state hands and thus in a state of extreme inefficiency with loans seemingly made on the basis of political rather than commercial considerations. The People's Construction Bank of China, the Agricultural Bank of China, the Bank of China, and the Industrial and Commercial Bank of China, four specialized governmental lenders, dominate the national financial system and are often subject to political considerations. In many other developing countries, privately owned banks are among the key blue chips listed on the local exchanges and appear in our portfolios, but this is not yet possible in China. Although Beijing took some initial steps last year towards making the big banks operate on a more commercial basis, it will probably take several years before the impact of these reforms is felt. In the meantime, we have to invest in China without the benefit of a fully convertible currency, 4 something that so many other emerging markets in Asia, Latin America and elsewhere have wisely adopted in recent years. A broader and more aggressive privatization program is another important ingredient I find missing in China. Although the role of the local, private sector has risen considerably in recent years, the big, state-owned enterprises still account for 70% of all fixed-capital investment in China and employ nearly half of the industrial labor force. Vice-Premier Zhu Rongji, the top reformer in the government, has said that 40% of the enterprises lost money last year, which means the big banks that lend them money must be feeling the impact. If this is the case, I wouldn't be surprised if the Chinese learn something from the recent experience of Russia, where we saw such a serious problem when people finally take note of the uncollectible debts that these big behemoths owe each other. At this time, government entities or former government entities are practically the only listed Chinese equities foreigners can buy. Although many of these companies have first-class products and impressive management, experience in other parts of the world has shown us that privatization is inevitable. It's difficult, however, to imagine how complex a task this would be in the world's most populous country. Government enterprises play an important social welfare role in China, giving large numbers of employees housing, health care and steady jobs even when this may not be economically viable. Reforming these enterprises would involve increased urban unemployment. For now, the government seems willing to accept high inflation as the cost of not incurring the political consequences of such action. But time may be running out. Acceptance into the new World Trade Organization (WTO) would also tend to be a big plus for China's reformers and companies since it would lower trade 5 barriers for both imports and exports and apply new pressure for competitiveness. When China was allowed to join the World Bank and the International Monetary Fund (IMF) in 1980, those multilateral institutions gained a vital tool for influencing the reform process. The WTO could play a similar role in the late 1990s and beyond -- especially now that the U.S. appears to be willing to relax its long-standing objections on this issue so long as China keeps improving its record on the vital issue of intellectual property rights protection. These are just some of the crucial decision areas facing China at a time of impending leadership change. If its new leaders keep up or accelerate the momentum already established, China's economic picture could improve substantially. Although no one can know for sure of what will happen, we are excited about investment opportunities there, and will continue to apply our disciplined, value-oriented selection process in whatever new environment emerges in our efforts to seek the best possible results for our shareholders. Sincerely, /s/ J. Mark Mobius J. Mark Mobius, Ph.D. President Templeton China World Fund, Inc. 6 Templeton China World Fund, Inc. Investment Portfolio, May 31, 1995 (unaudited) - --------------------------------------------------------------------------------
INDUSTRY ISSUE COUNTRY SHARES VALUE - ------------------------------------------------------------------------------------------------- COMMON STOCKS 83.8% - ------------------------------------------------------------------------------------------------- Appliances & Household Durables: 2.5% Semi-Tech (Global) Co., Ltd. H.K. 2,024,993 $ 3,246,146 Shanghai Narcissus Electric Appliances Co. Ltd., B Chn. 1,070,000 278,200 Shanghai Vacuum Electron Devices Co. Ltd., B Chn. 8,875,586 1,810,619 Shenzhen Huafa Electronics Co. Ltd., B Chn. 1,728,000 329,502 Shenzhen Konka Electronic Group Co. Ltd., B Chn. 651,000 319,807 ------------ 5,984,274 - ------------------------------------------------------------------------------------------------- Automobiles: 3.1% Jardine International Motor Holdings Ltd. H.K. 3,704,000 3,782,865 President Enterprises Corp. Twn. 2,017,200 3,580,735 ------------ 7,363,600 - ------------------------------------------------------------------------------------------------- Banking: 7.8% HSBC Holdings PLC H.K. 1,341,767 17,744,792 JCG Holdings Ltd. H.K. 1,194,000 872,119 ------------ 18,616,911 - ------------------------------------------------------------------------------------------------- Broadcasting & Publishing: 0.1% Leefung-Asco Printers Holdings Ltd. H.K. 1,071,000 171,686 - ------------------------------------------------------------------------------------------------- Chemicals: 3.2% Shanghai Chlor-Alkali Chemical Co. Ltd., B Chn. 8,151,000 1,891,031 Shanghai Pechemical Co. Ltd., H Chn. 7,500,000 2,496,671 Shenzhen Petrochemical (Group) Shareholding Co. Ltd., B Chn. 4,240,600 1,233,482 Zhuhai Sez Lizhu Pharmaceutical, B Chn. 4,309,600 2,061,396 ------------ 7,682,580 - ------------------------------------------------------------------------------------------------- Construction & Housing: 3.1% CTCI Corp. Twn. 600 1,232 Hopewell Holdings Ltd. H.K. 2,947,000 2,495,424 K-Wah International Holdings Ltd. H.K. 14,459,789 2,299,270 Shanghai Yaohua Pilkington Glass, B Chn. 2,670,000 2,616,600 Wai Kee Holdings Ltd. H.K. 386,000 68,364 ------------ 7,480,890 - ------------------------------------------------------------------------------------------------- Electrical & Electronics: 1.5% China Treasure Telecomunications Holdings Ltd. H.K. 2,000,000 104,715 Gold Peak Industries (Holdings) Ltd. H.K. 1,812,000 773,028 Great Wall Electronic International Ltd. H.K. 12,668,000 949,858 Tsann Kuen (China) Enterprise Co. Ltd., B Chn. 5,834,000 1,715,815 ------------ 3,543,416
7 Templeton China World Fund, Inc. Investment Portfolio, May 31, 1995 (unaudited) (cont.) - --------------------------------------------------------------------------------
INDUSTRY ISSUE COUNTRY SHARES VALUE - -------------------------------------------------------------------------------------------- COMMON STOCKS (CONT.) - -------------------------------------------------------------------------------------------- Electronic Components & Instruments: 0.2% S. Megga International Holdings Ltd. H.K. 8,508,000 $ 483,953 - -------------------------------------------------------------------------------------------- Financial Services: 1.7% Min Xin Holdings H.K. 1,000,000 243,042 Peregrine Investments Holdings Ltd. H.K. 1,581,000 2,002,999 Sun Hung Kai & Co. Ltd. H.K. 4,318,000 1,786,304 ------------ 4,032,345 - -------------------------------------------------------------------------------------------- Food & Household Products: 3.7% C.P. Pokphand Co. Ltd. H.K. 10,234,000 3,638,320 Dairy Farm International Holdings Ltd. H.K. 4,193,425 4,151,491 Fairway Holdings Ltd. H.K. 4,530,000 445,076 Hualing Holdings Ltd. H.K. 1,053,500 157,985 Vitasoy International Holdings Ltd. H.K. 1,400,000 552,015 ------------ 8,944,887 - -------------------------------------------------------------------------------------------- Health & Personal Care: 0.1% China Pharmaceutical Enterprise & Investment Corp. H.K. 1,000,000 107,300 - -------------------------------------------------------------------------------------------- Industrial Components: 0.8% Shanghai Rubber Belt Co. Ltd., B Chn. 4,170,270 483,751 Shanghai Tyre & Rubber Co. Ltd., B Chn. 4,611,100 1,383,330 ------------ 1,867,081 - -------------------------------------------------------------------------------------------- Leisure & Tourism: 0.2% Shanghai Jin Jiang Tower Co. Ltd., B Chn. 1,322,952 447,158 - -------------------------------------------------------------------------------------------- Machinery & Engineering: 2.1% China Textile Machinery Co. Ltd., B Chn. 13,200,200 1,755,627 Guangzhou Shipyard International Co. Ltd., H Chn. 1,204,000 517,536 Shanghai Erfangji Textile Machinery Co. Ltd., B Chn. 7,434,100 1,263,797 Shanghai Industrial Sewing Machine Corp. Chn. 2,155,100 443,951 Shanghai Refrigerator Compressor Company., B Chn. 432,900 151,515 Shanghai Steel Tube Co. Ltd., B Chn. 5,263,500 894,795 ------------ 5,027,221 - -------------------------------------------------------------------------------------------- Merchandising: 2.8% Dickson Concepts (International) Ltd. H.K. 2,689,000 1,520,869 Fortei Holdings Ltd. H.K. 9,582,000 569,819 Joyce Boutique Holdings Ltd. H.K. 2,896,000 651,434 Le Saunda Holdings Ltd. H.K. 1,776,000 123,982 Li & Fung Ltd. H.K. 1,826,000 1,439,970
8 Templeton China World Fund, Inc. Investment Portfolio, May 31, 1995 (unaudited) (cont.) - --------------------------------------------------------------------------------
INDUSTRY ISSUE COUNTRY SHARES VALUE - ------------------------------------------------------------------------------- COMMON STOCKS (CONT.) - ------------------------------------------------------------------------------- Merchandising (cont.) Linkful International Holdings Ltd. H.K. 1,700,000 $ 112,084 Wo Kee Hong (Holdings) Ltd. H.K. 6,826,000 1,553,108 Yaohan Hongkong Corp. Ltd. H.K. 6,888,000 676,752 ------------ 6,648,018 - ------------------------------------------------------------------------------- Multi-Industry: 15.5% CNT Group Ltd. H.K. 16,342,000 919,004 Cheung Kong Holdings Ltd. H.K. 3,468,000 17,081,535 China Southern Glass Co. Ltd., B Chn. 480,800 294,001 Jardine Matheson Holdings Ltd. H.K. 661,803 5,195,154 Jardine Strategic Holdings Ltd. H.K. 1,503,000 5,260,500 Jardine Strategic Holdings Ltd., wts. H.K. 167,000 84,335 Lai Sun Garment International Ltd. H.K. 1,907,000 2,046,217 Shenzhen Gintian Industrial Co. Ltd., B Chn. 1,852,067 634,491 Shenzhen Tellus Machinery & Electronics Co. Ltd., B Chn. 2,455,200 599,890 Stelux International Holdings Ltd. H.K. 8,475,084 2,328,229 Swire Pacific Ltd., B H.K. 465,000 565,072 Wheelock & Co. Ltd. H.K. 1,220,000 2,160,744 ------------ 37,169,172 - ------------------------------------------------------------------------------- Real Estate: 25.3% China Overseas Land & Investment Ltd. H.K. 6,048,000 1,172,805 Hang Lung Development Co. Ltd. H.K. 8,729,000 14,105,787 Hang Lung Development Co. Ltd., wts. H.K. 872,900 138,801 Lai Sun Development Co. Ltd. H.K. 21,838,000 2,653,772 New World Development Co. Ltd. H.K. 5,509,414 17,165,059 Prince Housing Development Corp. Twn. 1,986,000 1,622,904 Shanghai Jinqiao Export Processing Zone Development, B Chn. 4,421,560 2,299,211 Shanghai Lujiaxui Finance & Trade Zone Development Co., B Chn. 894,000 645,468 Shanghai Outer Gaoqiao Free Trade Zone Develop. Co., B Chn. 616,000 294,448 Shenzhen Properties & Resources Development (Group) Ltd., B Chn. 4,366,000 1,411,064 Shenzhen Vanke Co. Ltd., B Chn. 1,935,675 675,646 Sun Hung Kai Properties Ltd. H.K. 2,395,100 17,339,418 Tian An China Investments Co. Ltd. H.K. 6,869,750 1,083,487 Tian An China Investments Co. Ltd., wts. H.K. 82,350 106 ------------ 60,607,976 - ------------------------------------------------------------------------------- Recreation, Other Consumer Goods: 3.9% China First Pencil Co. Ltd., B Chn. 10,261,440 2,544,837 Fu Hui Jewellery Co. (HK) Ltd. H.K. 5,382,000 271,351
9 Templeton China World Fund, Inc. Investment Portfolio, May 31, 1995 (unaudited) (cont.) - --------------------------------------------------------------------------------
INDUSTRY ISSUE COUNTRY SHARES VALUE - ------------------------------------------------------------------------------- COMMON STOCKS (CONT.) - ------------------------------------------------------------------------------- Recreation, Other Consumer Goods (cont.) Shanghai Forever Bicycle Co. Ltd., B Chn. 5,726,000 $ 841,722 Shanghai Phoenix Bicycle Co. Ltd., B Chn. 2,411,000 556,941 Shanghai Wingsung Stationery Co. Ltd., B Chn. 3,835,400 820,776 Shenzhen China Bicycles Co. (Holdings) Ltd., B Chn. 5,827,000 1,468,935 Yue Yuen Industrial (Holdings) Ltd. H.K. 12,346,000 2,936,750 ------------ 9,441,312 - ------------------------------------------------------------------------------- Telecommunications: 0.1% Shanghai Posts & Telecommunications Equipment Co., B Chn. 50,000 29,500 - ------------------------------------------------------------------------------- Textiles & Apparel: 2.4% Goldlion Holdings Ltd. H.K. 9,210,000 2,827,783 Laws International Holdings Ltd. H.K. 3,332,000 577,208 Shanghai Lian Hua Fibre Corp., B Chn. 4,166,300 1,333,216 Top Form International Ltd. H.K. 1,252,000 103,587 Tungtex Holdings Co. Ltd. H.K. 964,000 168,242 Victor Onward Textile Industrial Co. Ltd., B Chn. 3,253,800 681,442 ------------ 5,691,478 - ------------------------------------------------------------------------------- Transportation: 1.8% Chiwan Wharf Holdings Ltd., B Chn. 1,470,000 703,140 Cross Harbour Tunnel Co. Ltd. H.K. 973,000 1,911,962 IMC Holdings Ltd. H.K. 2,435,000 1,747,088 ------------ 4,362,190 - ------------------------------------------------------------------------------- Utilities Electrical & Gas: 1.6% Hongkong Electric Holdings Ltd. H.K. 642,000 2,282,394 Shandong Huaneng Power Chn. 132,000 973,500 Wing Shan International Ltd. H.K. 4,474,000 584,171 ------------ 3,840,065 - ------------------------------------------------------------------------------- Wholesale & International Trade: 0.3% East Asiatic Co. (Hong Kong) Ltd. H.K. 6,170,000 829,548 - ------------------------------------------------------------------------------- TOTAL COMMON STOCKS: ($250,343,771) 200,372,561 - -------------------------------------------------------------------------------
10 Templeton China World Fund, Inc. Investment Portfolio, May 31, 1995 (unaudited) (cont.) - --------------------------------------------------------------------------------
PRINCIPAL INDUSTRY ISSUE COUNTRY AMOUNT* VALUE - --------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 10.2% (cost $24,438,927) - --------------------------------------------------------------------------- U.S. Treasury Bills, 5.46% to 5.65% with maturities to 7/27/95 U.S. 24,522,000 $ 24,438,909 - --------------------------------------------------------------------------- TOTAL INVESTMENTS: 94.0% (cost $274,782,698) 224,811,470 OTHER ASSETS, LESS LIABILITIES: 6.0% 14,239,529 ------------ TOTAL NET ASSETS: 100.0% $239,050,999 ============
* CURRENCY OF COUNTRIES INDICATED. 11 Templeton China World Fund, Inc. Financial Highlights, May 31, 1995 (unaudited) - --------------------------------------------------------------------------------
NET ASSET VALUE TOTAL NET ASSETS PER SHARE ----------------------- ---------------- Net Asset Value: Beginning of period, March 1, 1995 $229,892,127 $11.28 Net investment income $2,911,471 $0.14 Net gain from security and foreign currency transactions 6,247,401 0.31 ---------- ------- Net decrease in net asset value 9,158,872 0.45 ------------ -------- End of period, May 31, 1995 $239,050,999 $11.73 ============ ========
- --- This report is sent to the shareholders of Templeton China World Fund, Inc. for their information. It is not a prospectus, circular or representation in- tended for use in the purchase or sale of shares of the Fund or of any securi- ties mentioned in the report. 12 Templeton China World Fund, Inc. - -------------------------------------------------------------------------------- TRANSFER AGENT Chemical Mellon Shareholder Services Securities Transfer Services 450 West 33rd Street New York, NY 10001 800-526-0801 SHAREHOLDER INFORMATION Weekly comparative net asset value and market price information about Templeton China World Fund, Inc., shares is published each Monday in The Wall Street Journal, weekly in Barron's and each Saturday in The New York Times and other newspapers in a table called "Publicly Traded Funds". The Fund's New York Stock Exchange trading symbol is TCH. For current information about the net asset value, call 1-800-292-9293. If any shareholder is not receiving copies of the Reports to Shareholders be- cause shares are registered in a broker's name or in a custodian's name, he or she can write and request that his or her name be added to the Fund's mailing list, by writing Templeton China World Fund, Inc., 700 Central Avenue, St. Pe- tersburg, FL 33701. 13 Notes ----- Notes ----- - -------------------------- TEMPLETON CHINA WORLD FUND, INC. 700 Central Avenue St. Petersburg, Florida 33701-3628 Investors should be aware that the value of investments made for the Fund may go up as well as down and that the Investment Manager may make errors in selecting securities for the Fund's portfolio. Like any investment in securities, the Fund's portfolio will be subject to the risk of loss from market, currency, economic, political, and other factors. The Fund and Fund investors are not protected from such losses by the Investment Manager. Therefore, investors who cannot accept the risk of such losses should not invest in shares of the Fund. To ensure the highest quality of service, telephone calls to or from our service de- partments may be moni- tored, recorded, and accessed. These calls can be determined by the presence of a regu- lar beeping tone. - -------------------------- [LOGO OF RECYCLED PAPER APPEARS HERE] TEMPLETON CHINA WORLD FUND, INC. Third Quarter Report May 31, 1995 [LOGO OF FRANKLIN TEMPLETON APPEARS HERE] TLTCH Q95 5/95 -----END PRIVACY-ENHANCED MESSAGE-----