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<PAGE> PAGE 2
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<PAGE> PAGE 3
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SIGNATURE ANN CASEY
TITLE ASSISTANT DIRECTOR
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 286506909
<INVESTMENTS-AT-VALUE> 251076313
<RECEIVABLES> 2091578
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 1372529
<TOTAL-ASSETS> 254540420
<PAYABLE-FOR-SECURITIES> 2511705
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 672571
<TOTAL-LIABILITIES> 3184276
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 273134732
<SHARES-COMMON-STOCK> 16365572
<SHARES-COMMON-PRIOR> 16365572
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 13626692
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (35405280)
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<DIVIDEND-INCOME> 1759988
<INTEREST-INCOME> 1040626
<OTHER-INCOME> 0
<EXPENSES-NET> 8211713
<NET-INVESTMENT-INCOME> (5411099)
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<PER-SHARE-NAV-BEGIN> 35.98
<PER-SHARE-NII> (0.33)
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</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO ACCOMPANY FORM N-SAR
To the Shareholders and Board of Directors of The Taiwan Fund, Inc.:
In planning and performing our audit of the financial statements
and financial highlights (hereafter referred to as "financial
statements") of The Taiwan Fund, Inc. for the year ended August 31,
1998 we considered the Funds' internal control, including control
activities for safeguarding securities, in order to determine our
auditing procedures for the purpose of expressing our opinion on the
financial statements and to comply with the requirements of Form N-SAR,
not to provide assurance on internal control.
The management of The Taiwan Fund, Inc. is responsible for
establishing and maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of controls. Generally,
controls that are relevant to an audit pertain to the entity's objective
of preparing financial statements for external purposes that are fairly
presented in conformity with generally accepted accounting principles.
Those controls include the safeguarding of assets against unauthorized
acquisition, use or disposition.
Because of inherent limitations in internal control, misstatements
due to errors or fraud may occur and not be detected. Also, projection
of any evaluation of internal control to future periods is subject to
the risk that it may become inadequate because of changes in conditions
or that the effectiveness of the design and operation may deteriorate.
Our consideration of internal control would not necessarily
disclose all matters in internal control that might be material
weaknesses under standards established by the American Institute of
Certified Public Accountants. A material weakness is a
condition in which the design or operation of any specific internal
control component does not reduce to a relatively low level the risk
that misstatements due to errors or fraud in amounts that would be
material in relation to the financial statements being audited may occur
and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no
matters involving internal control and its operation, including controls
over safeguarding securities, that we consider to be material weaknesses
as defined above as of August 31, 1998.
This report is intended solely for the information and use of
management of The Taiwan Fund, Inc.<:f><:f240,,> and the Securities and
Exchange Commission.
PricewaterhouseCoopers LLP
Boston, Massachusetts
