R O C TAIWAN FUND, PRE 14A, 1996-03-28

R O C TAIWAN FUND
PRE 14A, 1996-03-28

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12

THE R.O.C. TAIWAN FUND
.................................................................
(Name of Registrant as Specified In Its Charter)

.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction
applies:

.................................................................

2) Aggregate number of securities to which transaction
applies:

.................................................................

3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it was
determined):

.................................................................

4) Proposed maximum aggregate value of transaction:

.................................................................

5) Total fee paid:

.................................................................

[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.

1) Amount Previously Paid:

.................................................................

2) Form, Schedule or Registration Statement No.:

.................................................................

3) Filing Party:

.................................................................

4) Date Filed:

.................................................................

[Logo]
- --------------------------------------------------------------------------------
THE R.O.C. TAIWAN FUND April , 1996
c/o Dewe Rogerson, 850 Third Avenue, 20th Floor, New York, New York 10022,
Telephone: 1-800-343-9567

Dear Shareholders:

You are cordially invited to attend the Annual Meeting of Shareholders (the
'Meeting') of The R.O.C. Taiwan Fund (the 'Trust'), which will be held at the
offices of Paul, Weiss, Rifkind, Wharton & Garrison, 24th Floor, 1285 Avenue of
the Americas, New York, New York on Friday, May 31, 1996 at 9:30 a.m., New York
City time. A formal notice and a Proxy Statement regarding the Meeting, a proxy
card for your vote at the Meeting and a postage prepaid envelope in which to
return your proxy are enclosed.

At the Meeting, shareholders will:

(i) Elect two trustees, each to serve for a term expiring on the date of
the 1999 Annual Meeting of Shareholders or the special meeting in lieu
thereof;

(ii) Consider and take action on a proposal to ratify the selection of
KPMG Peat Marwick by the Board of Trustees of the Trust as
independent public accountants of the Trust for its fiscal year
ending December 31, 1996; and

(iii) Consider and take action on a proposal to amend the Trust's existing
contract with International Investment Trust Company Limited (the
'Adviser') and Central Trust of China (the 'Custodian') in order to
reduce, in the manner described in the accompanying Proxy Statement,
the fees payable by the Trust thereunder to the Adviser and the
Custodian.

The Board of Trustees of the Trust recommends that you vote for the
nominees for trustee named in the accompanying Proxy Statement and in favor of
proposals (ii) and (iii).

Whether or not you plan to attend the Meeting in person, it is important
that your shares be represented and voted. After reading the enclosed notice and
Proxy Statement, please complete, date, sign and return the enclosed proxy card
at your earliest convenience. Your return of the proxy card will not prevent you
from voting in person at the Meeting should you later decide to do so.

If you are a beneficial owner holding shares through a broker-dealer,
please note that, under the rules of the New York Stock Exchange, broker-dealers
may not vote your shares on the proposal described in paragraph (iii) above
without your instructions. In addition, if you are a beneficial owner holding
shares through a bank or trust company nominee, you may find that such nominee
will not vote your shares in respect of some or all of the matters to be
considered at the Meeting without your

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instructions. Accordingly, the Board of Trustees of the Trust urges all
beneficial owners of shares who are not also record owners of such shares to
contact the institutions through which their shares are held and give
appropriate instructions, if necessary, to vote their shares. The Trust will
also be pleased to cooperate with any appropriate arrangement pursuant to which
beneficial owners desiring to attend the Meeting may be identified as such and
admitted to the Meeting as shareholders.

Time will be provided during the Meeting for discussion, and shareholders
present will hear a report on the Trust and have an opportunity to ask questions
about matters of interest to them.

Respectfully,

THEODORE S.S. CHENG DANIEL K. L. CHIANG
Theodore S.S. Cheng Daniel K. L. Chiang
Chairman President and Chief Executive Officer
</TABLE>

IMPORTANT MATTERS WILL BE CONSIDERED AT THE MEETING, AND YOUR VOTE MAY BE
NECESSARY TO INSURE THE PRESENCE OF THE MAJORITY QUORUM THAT IS REQUIRED BY LAW
IN ORDER TO APPROVE NEW INVESTMENT ADVISORY CONTRACTS. ACCORDINGLY, ALL
SHAREHOLDERS, REGARDLESS OF THE SIZE OF THEIR HOLDINGS, ARE URGED TO SIGN AND
MAIL THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, OR TO GIVE APPROPRIATE
INSTRUCTIONS TO PERSONS HOLDING SHARES OF RECORD ON THEIR BEHALF, PROMPTLY.

<PAGE>
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THE R.O.C. TAIWAN FUND
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 31, 1996

To the Shareholders of
The R.O.C. Taiwan Fund:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
'Meeting') of The R.O.C. Taiwan Fund (the 'Trust') will be held at the offices
of Paul, Weiss, Rifkind, Wharton & Garrison, 24th Floor, 1285 Avenue of the
Americas, New York, New York on Friday, May 31, 1996 at 9:30 a.m., New York City
time, for the following purposes:

1. To elect two trustees, each to serve for a term expiring on the date of
the 1999 Annual Meeting of Shareholders or the special meeting in lieu
thereof.

2. To consider and take action upon a proposal to ratify the selection of
KPMG Peat Marwick by the Board of Trustees of the Trust as independent
public accountants of the Trust for its fiscal year ending December 31,
1996.

3. To consider and take action on a proposal to amend the Trust's existing
contract with International Investment Trust Company Limited (the
'Adviser') and Central Trust of China (the 'Custodian') in order to
reduce, in the manner described in the accompanying Proxy Statement, the
fees payable by the Trust thereunder to the Adviser and the Custodian.

4. To transact such other business as may properly come before the Meeting
or any adjournment thereof.

The Board of Trustees of the Trust has fixed the close of business on
Friday, March 29, 1996 as the record date for the determination of shareholders
entitled to notice of and to vote at the Meeting and at any adjournment thereof.
Shareholders are entitled to one vote for each share of beneficial interest of
the Trust held of record on the record date with respect to each matter to be
voted upon at the Meeting.

You are cordially invited to attend the Meeting. All shareholders are
requested to complete, date and sign the enclosed proxy card and return it
promptly in the envelope provided for that purpose, which does not require any
postage if mailed in the United States. If you are able to attend the Meeting,
you may, if you wish, revoke the proxy and vote personally on all matters
brought before the Meeting. The enclosed proxy is being solicited by the Board
of Trustees of the Trust.

BY ORDER OF THE BOARD OF TRUSTEES
, Secretary
April , 1996

<PAGE>
<PAGE>
THE R.O.C. TAIWAN FUND
PROXY STATEMENT
INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees (the 'Board of Trustees' or the 'Board') of The
R.O.C. Taiwan Fund (the 'Trust') for use at the Annual Meeting (the 'Meeting')
of holders (the 'Shareholders') of shares of beneficial interest of the Trust
(the 'Shares') to be held at the offices of Paul, Weiss, Rifkind, Wharton &
Garrison, 24th Floor, 1285 Avenue of the Americas, New York, New York on Friday,
May 31, 1996 at 9:30 a.m., New York City time, and at any adjournment thereof.

This Proxy Statement and the accompanying proxy are first being mailed to
Shareholders on or about April , 1996. Any Shareholder giving a proxy has the
power to revoke it by mail (addressed to Marc E. Perlmutter, Assistant Secretary
of the Trust, at the Trust's address at c/o Dewe Rogerson, 850 Third Avenue,
20th Floor, New York, New York 10022) or in person at the Meeting, by executing
a superseding proxy or by submitting a notice of revocation to the Trust. All
properly executed proxies received by mail on or before the close of business on
May 30, 1996 or delivered personally at the Meeting will be voted as specified
in such proxies or, if no specification is made, for the nominees for election
named, and for proposals II and III described, in this Proxy Statement.

The Board of Trustees has fixed the close of business on Friday, March 29,
1996 as the record date for the determination of Shareholders entitled to notice
of and to vote at the Meeting and at any adjournment thereof. Shareholders of
record will be entitled to one vote for each Share. No Shares have cumulative
voting rights for the election of trustees. One third of the Trust's outstanding
Shares, present in person or represented by proxy at the Meeting, will
constitute a quorum for the transaction of business at the Meeting except with
respect to proposal III below, with respect to which a majority of the
outstanding Shares, present in person or represented by proxy, must be present
for a quorum. The affirmative vote of a plurality of the Shares present or
represented by proxy and voting on the matter in question at the Meeting will be
required at the Meeting to elect the nominees for election as trustees and for
the ratification of KPMG Peat Marwick as independent public accountants of the
Trust. Proposal III below must be approved by the vote of a 'majority' of the
Trust's outstanding voting securities (a 'Majority Shareholder Vote'), which, as
defined in the Investment Company Act of 1940 (the 'Investment Company Act')
consists of the lesser of (i) a vote of more than 50% of an investment company's
outstanding voting securities (in the Trust's case, more than 50% of the Shares)
or (ii) a vote of 67% of the voting securities present if more than 50% of the
outstanding voting securities are deemed to be present at the Meeting in person
or by proxy.

Abstentions and 'non-votes' will be counted as present for all purposes in
determining the existence of a quorum. (A 'non-vote' occurs when a nominee
(typically, a broker-dealer) holding shares for a beneficial owner attends a
meeting with respect to such shares (in person or by proxy) but does not vote on
one or more proposals because the nominee does not have discretionary voting
power with respect thereto and has not received instructions from the beneficial
owner.) Abstentions and 'non-votes' will not have the effect of votes in
opposition to the election of a trustee or 'no' votes on the proposed
ratification of the selection of the independent public accountants of the
Trust.

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However, because proposal III must be approved by a Majority Shareholder Vote,
abstentions and 'non-votes' will have the effect of a vote in opposition to the
adoption of such proposal. As of the record date, the Trust had outstanding
33,815,376 Shares.

International Investment Trust Company Limited, the investment adviser and
manager of the Trust (the 'Adviser'), knows of no business other than that
mentioned in proposals I, II and III below that will be presented for
consideration at the Meeting. If any other matter is properly presented, the
persons named in the enclosed proxy will vote in accordance with their
discretion.

To the knowledge of the Adviser, no person owned beneficially more than 5%
of the outstanding Shares at March 22, 1996.

S.G. Warburg & Co. Inc., 277 Park Avenue, New York, New York 10172, was the
principal underwriter for a placement of Shares by the Trust pursuant to a
public offering that was completed on November 10, 1995. The address of Dewe
Rogerson Inc., which provides certain administrative services for the Trust, is
850 Third Avenue, 20th Floor, New York, New York 10022.

I. ELECTION OF TRUSTEES

The trustees of the Trust are divided into three classes, each having a
term of three years; the term of one class expires each year. The persons named
in the accompanying proxy will, in the absence of contrary instructions, vote
all proxies FOR the election of the two nominees listed below as trustees of the
Trust, each to serve for a term expiring on the date of the 1999 Annual Meeting
of Shareholders or the special meeting in lieu thereof. If any such nominee
should become unable to serve (an event not now anticipated), the proxies will
be voted for such person, if any, as is designated by the Board of Trustees to
replace such nominee.

INFORMATION CONCERNING NOMINEES

The following table sets forth certain information concerning each of the
nominees for election as a trustee of the Trust. Messrs. Chiang and Kathe are
currently trustees of the Trust.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Principal Occupation and Business Experience
(including all Directorships) during the
Past Five Years and Other
Name and Address of Position with the Trust and Positions with Affiliated Persons of the Trust
Nominee (Age) Term of Office as Trustee
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
* Daniel K.L. Chiang (40) (i) Trustee since April 1994 and until the Director of the Adviser since February 1996,
17th Floor 1996 Annual Meeting of Shareholders or the Executive Vice President of the Adviser
167 Fu Hsing North Road special meeting in lieu thereof; and (ii) since 1993 and Vice President of the Adviser
Taipei, Taiwan, R.O.C. President and Chief Executive Officer 1987-93; Manager, Continental Illinois
of the Trust since April 1994 National Bank, Taipei, Taiwan, 1984-87

Raymund A. Kathe (73) Trustee since 1989 and until the 1996 Annual Retired since May 1995; International
1121 Crandon Blvd. Meeting of Shareholders or the special Adviser to the Chairman of the Bank of
Key Biscayne, FL 33149 meeting in lieu thereof Hawaii, Honolulu, Hawaii, 1985-95; Senior
U.S.A. Vice President and Senior Corporate Officer,
Asia-Pacific, Citicorp/Citibank, N.A.,
1979-84
</TABLE>

* Nominee considered by the Trust's counsel to be an 'interested person' (as
defined in the Investment Company Act) of the Trust. Mr. Chiang is deemed to
be an interested person because of his affiliation with the Adviser.

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Mr. Chiang, who is a citizen and resident of the Republic of China (the
'R.O.C.'), is neither a citizen nor a resident of the United States. There can
be no assurance that Mr. Chiang will have any assets in the United States that
could be attached in connection with any action, suit or proceeding to enforce
the provisions of U.S. securities laws. The Trust has been advised by its R.O.C.
counsel that an R.O.C. court will enforce liabilities predicated solely upon
U.S. securities laws if (i) the court properly obtained jurisdiction, (ii) there
was proper service of process, (iii) the judgment does not contravene public
order or good morals and (iv) the judgments of R.O.C. courts are reciprocally
recognized by U.S. courts.

INFORMATION CONCERNING OTHER TRUSTEES

The names and addresses of the trustees of the Trust (other than the
trustees who are also nominees referred to above) are set forth below, together
with their positions, principal occupations and business experience during the
past five years.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Principal Occupation and Business Experience
(including all Directorships) during the
Past Five Years and Other
Name and Address of Position with the Trust and Positions with Affiliated Persons of the Trust
Trustee (Age) Term of Office as Trustee
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
* Theodore S.S. Cheng (i) Trustee since 1989 and until the 1998 President, The International Commercial Bank
(65) Annual Meeting of Shareholders or the special of China ('ICBC'), Taipei, Taiwan, since
5/F, ICBC Building meeting in lieu thereof; and (ii) Chairman of 1987; Consultant to the Adviser, 1993;
100 Chilin Road the Trust since 1989 Chairman and Director of the Adviser,
Taipei, Taiwan, R.O.C. 1987-1993; Director, Grand Cathay Securities
Corp., since 1988; General Manager, ICBC,
Tokyo, Japan, 1985-87; Senior Vice President
and General Manager, ICBC, Tokyo, Japan,
1977-85

Pedro-Pablo Kuczynski Trustee since 1989 and until the 1997 Annual President and Chief Executive Officer, Latin
(57) Meeting of Shareholders or the special America Enterprise Fund, since June 1995;
Grand Bay Plaza meeting in lieu thereof President and Chief Executive Officer,
2665 S. Bayshore Drive Westfield Capital Ltd., since 1992;
Suite 1101 Chairman, First Boston International, and
Coconut Grove, Florida Managing Director, The First Boston
33133 Corporation, 1982-92; Director of the
U.S.A. Adviser, 1989-1990; Minister of Energy and
Mines, Government of Peru, 1980-82;
President and Chief Executive Officer, Halco
Inc. (mining company), 1977-80

Li-Yin Kung (83) Trustee since 1989 and until the 1997 Annual Director, China Trust Bank of New York,
19 Capi Lane Meeting of Shareholders or the special since 1989; Director, The Chinese-American
Port Washington, NY meeting in lieu thereof Bank, since 1980
11050
U.S.A.
</TABLE>

* Trustee considered by the Trust's counsel to be an 'interested person' (as
defined in the Investment Company Act) of the Trust. Mr. Cheng is deemed to
be an interested person because of his affiliation with ICBC, a shareholder
of the Adviser.
(table continued on next page)

<PAGE>
<PAGE>
(table continued from previous page)

David N. Laux (68) Trustee since 1992 and until the 1998 Annual President, USA-ROC Economic Council, since
1726 M Street, NW Meeting of Shareholders or the special 1990; Chairman and Managing Director,
Suite 601 meeting in lieu thereof American Institute in Taiwan, 1987-90;
Washington, D.C. 20006 Director of Asian Affairs, National Security
U.S.A. Council, the White House, 1982-86; Director
of The Laux Company, 1977-1994; Director of
BPI Packaging Technology, Inc., 1993-1995

Alfred F. Miossi (74) Trustee since 1992 and until the 1998 Annual Retired since 1987; Executive Vice
2511 Kenilworth Avenue Meeting of Shareholders or the special President, Continental Illinois National
Wilmette, Illinois meeting in lieu thereof Bank & Trust Company of Chicago
60091 ('Continental'), 1971-87; Head of
U.S.A. International Financial Services at
Continental, 1985-87; Director of
International Affairs at Continental,
1980-85

* Gregory Kuo-Hua Wang Trustee since 1989 and until the 1997 Annual President, United World Chinese Commercial
(63) Meeting of Shareholders or the special Bank ('UWCCB'), Taipei, Taiwan, since 1989;
65 Kuanchien Road meeting in lieu thereof Executive Vice President, UWCCB, Taipei,
Taipei, Taiwan, R.O.C. Taiwan, 1978-89; Director of the Adviser,
1983- 89; Vice Chairman, Grand Pacific
Petroleum Corporation; Managing Director,
Bankers Institute of the R.O.C.; Managing
Director, National Credit Card Center of the
R.O.C.; Chief Supervisor, Taipei Foreign
Exchange Market Development Foundation;
Director, Bankers Association of the
Republic of China; Director, Grand Cathay
Securities Corp.; Director, Wyse Technology
Inc.; Director, Channel Overseas
Corporation; Director, Channel International
Corporation; Director, Chinese National
Association of Industry and Commerce;
Director, HanTech Venture Capital
Corporation; Director, Taiwan Real-Estate
Management Company
</TABLE>

* Trustee considered by the Trust's counsel to be an 'interested person' (as
defined in the Investment Company Act) of the Trust. Mr. Wang is deemed to be
an interested person because of his affiliation with UWCCB, a shareholder of
the Adviser.

None of the trustees of the Trust beneficially owned any Shares at March 1,
1996.

The Board of Trustees has an Executive Committee, which, subject to certain
restrictions, may exercise all powers and authority of the Board between
meetings of the Board. The current members of the Executive Committee are
Messrs. Theodore S.S. Cheng, Daniel K.L. Chiang, Pedro-Pablo Kuczynski and
Gregory Kuo-Hua Wang. The Executive Committee did not meet during the fiscal
year ended December 31, 1995.

The Board of Trustees has an Audit Committee, the current members of which
are Messrs. Raymund A. Kathe, Li-Yin Kung, David N. Laux and Alfred F. Miossi.
The responsibilities of the Audit Committee include, among other things,
participation in the selection of the independent public accountants of the
Trust, review of financial statements of the Trust prior to their submission to
the trustees and of other accounting matters of the Trust, monitoring the
relationship of the Trust with the Adviser and review of the administration of
the Adviser's and the Trust's respective Codes of

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Ethics and the Adviser's Policy and Procedures to Prevent Insider Trading. The
Audit Committee held two meetings during the year ended December 31, 1995. At
those meetings the Audit Committee, among other things, (i) reviewed the audited
financial statements of the Trust for its 1994 fiscal year, (ii) approved the
selection of KPMG Peat Marwick as the Trust's independent public accountants for
its 1995 fiscal year and (iii) reviewed the investment management arrangements
between the Trust and the Adviser, including the management fee payable by the
Trust to the Adviser, and engaged in discussions with the Adviser in connection
with the proposal to reduce the fees paid by the Trust to the Adviser in the
manner described under proposal III below.

The Board of Trustees held four meetings during the fiscal year ended
December 31, 1995. Mr. Gregory Kuo-Hua Wang attended fewer than 75% of the total
number of Board meetings.

The Board of Trustees has a Nominating Committee, the current members of
which are Messrs. David N. Laux, Alfred F. Miossi and Gregory Kuo-Hua Wang. The
Nominating Committee exercises such responsibilities as may be charged to it by
the Board of Trustees from time to time. The Nominating Committee did not meet
during the fiscal year ended December 31, 1995.

OFFICERS OF THE TRUST

The following is a list of the officers of the Trust. Each of the Chairman,
the President, the Treasurer [and the Secretary] will hold office until his
successor is duly elected and qualified, and all other officers hold office at
the discretion of the trustees.

Theodore S.S. Cheng: For information concerning Mr. Cheng, see 'Information
Concerning Other Trustees' above.

Daniel K.L. Chiang: For information concerning Mr. Chiang, see 'Information
Concerning Nominees' above.

Marc E. Perlmutter (Age 43): Assistant Vice President and Assistant
Secretary of the Trust since February 1996. Mr. Perlmutter has been a partner in
the law firm of Paul, Weiss, Rifkind, Wharton & Garrison, U.S. legal counsel to
the Trust, since prior to 1991.

Edwin C. Laurenson (Age 47): Assistant Vice President and Assistant
Secretary of the Trust since February 1996. Mr. Laurenson has been a principal
attorney employed by the law firm of Paul, Weiss, Rifkind, Wharton & Garrison,
U.S. legal counsel to the Trust, since prior to 1991.

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TRUSTEE AND OFFICER COMPENSATION

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Total Compensation in 1995
from the Trust
Name of Trustee Paid to Trustees(1)(2)
- -------------------------------------------------------------------------------
<S> <C>
Theodore S.S. Cheng(3) --
Daniel K.L. Chiang(3) --
Raymund A. Kathe $13,000
Pedro-Pablo Kuczynski $ 9,750
Li-Yin Kung $21,000
David N. Laux $18,000
Alfred F. Miossi $16,000
Gregory Kuo-Hua Wang(3) --
</TABLE>

(1) The trustees of the Trust do not receive any pension or retirement benefits
from the Trust or the Adviser.
(2) Each trustee of the Trust who is not affiliated with the Adviser currently
receives fees, paid by the Trust, of $750 for each Board of Trustees meeting
or committee meeting attended and an annual trustee's fee of $7,500. Amounts
shown include reimbursement by the Trust of travel expenses incurred by the
spouses of trustees in connection with travel to and from meetings of the
Board of Trustees and the Audit Committee. The Adviser, which supervises the
Trust's investments and pays the compensation and certain expenses of the
personnel and other interested persons of the Adviser who serve as trustees
and/or officers of the Trust, receives an investment advisory fee.
(3) The trustees of the Trust who are officers of the Adviser, or who are
otherwise deemed to be interested persons (as defined in the Investment
Company Act) of the Adviser, receive no remuneration from the Trust.

II. RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS

At a meeting held on February 9, 1996, the Board of Trustees, including a
majority of the trustees who were not 'interested persons' of the Trust as
defined in the Investment Company Act, selected, by vote cast in person, KPMG
Peat Marwick to act as independent public accountants of the Trust for the
fiscal year ending December 31, 1996. The Trust knows of no direct or material
indirect financial interest of such firm in the Trust. One or more
representatives of KPMG Peat Marwick are expected to be present at the Meeting
and will have an opportunity to make a statement if they so wish. Such
representatives are expected to be available to respond to appropriate questions
from Shareholders.

KPMG Peat Marwick audited the financial statements for the year ended
December 31, 1995 included in the Trust's annual report to Shareholders and, in
connection with its audit services, also reviewed certain of the Trust's filings
with the United States Securities and Exchange Commission.

The selection of KPMG Peat Marwick by the Board of Trustees as independent
public accountants of the Trust is subject to ratification by the Shareholders
at the Meeting. The persons named in the accompanying proxy will, in the absence
of contrary instructions, vote all proxies FOR the ratification of the selection
of KPMG Peat Marwick as independent public accountants of the Trust for the
fiscal year ending December 31, 1996.

THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THE SELECTION OF KPMG PEAT MARWICK AS THE TRUST'S INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31, 1996.

<PAGE>
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III. APPROVAL OF REDUCTION OF ADVISORY FEE

PROPOSED FEE REDUCTION

The Adviser, a registered investment adviser in the United States pursuant
to the Investment Advisers Act of 1940, acts as the Trust's investment adviser
and manager for the Trust's assets held in the R.O.C. pursuant to an Amended and
Restated Investment Contract (the 'R.O.C. Investment Contract') dated July 11,
1993 among the Trust, the Adviser and Central Trust of China, as custodian (the
'Custodian'). All compensation paid to the Adviser by the Trust for the
Adviser's service as the Trust's investment adviser and manager for all of the
Trust's assets (including those held in the United States) is paid under the
terms of the R.O.C. Investment Contract.

For its services to the Trust rendered pursuant to the R.O.C. Investment
Contract, the Adviser and the Custodian receive fees in New Taiwan Dollars (NT$)
at a rate (the 'Current Fee Schedule') dependent on the net asset value ('NAV')
of the assets of the Trust held in the R.O.C. The Adviser receives fees of (a)
1.45% of such NAV of such Trust assets up to NT$7 billion (approximately US$257
million)1, (b) 1.30% of such NAV with respect to such Trust assets in excess of
NT$7 billion up to NT$10 billion (approximately US$367 million), (c) 1.15% of
such NAV with respect to such Trust assets in excess of NT$10 billion up to
NT$13 billion (approximately US$477 million) and (d) 1.00% of such NAV with
respect to such Trust assets in excess of NT$13 billion. The fee, which is paid
monthly in arrears, accrues daily and is calculated on each business day on
which the Taiwan Stock Exchange (the 'TSE') is open for business. The Adviser is
paid by the Trust directly from assets held pursuant to the R.O.C. Investment
Contract. In addition, pursuant to the Current Fee Schedule the Trust pays the
Custodian a fee in NT$ at the rate of (a) 0.19% of such NAV with respect to such
Trust assets up to NT$7 billion, (b) 0.17% of such NAV with respect to such
Trust assets in excess of NT$7 billion up to NT$10 billion, (c) 0.15% of such
NAV with respect to such Trust assets in excess of NT$10 billion up to NT$13
billion and (d) 0.13% of such NAV with respect to such Trust assets in excess of
NT$13 billion.

Following discussions between the trustees of the Trust who are not
'interested persons' (as defined in the Investment Company Act) of any party to
the R.O.C. Investment Contract (the 'Independent Trustees') and the other
trustees (including Mr. Chiang, who also serves as a Director and Executive Vice
President of the Adviser), the Board of Trustees, including all of the
Independent Trustees, unanimously resolved at its meeting on February 9, 1996 to
approve the following fee schedule (the 'Revised Fee Schedule'), which would
reduce the per annum rate of the fee paid by the Trust to the Adviser to (a)
1.40% of the NAV of the Trust's assets held in the R.O.C. up to NT$6 billion
(approximately US$220 million), (b) 1.20% of such NAV with respect to such Trust
assets in excess of NT$6 billion up to NT$9 billion (approximately US$330
million), (c) 1.00% of such NAV with respect to such Trust assets in excess of
NT$9 billion up to NT$12 billion (approximately US$440 million) and (d) 0.80% of
such NAV with respect to such Trust assets in excess of NT$12 billion. In
addition, the fees paid by the Trust to the Custodian would be reduced to (a)
0.16% of such NAV with respect to such Trust assets up to NT$6 billion, (b)
0.14% of such NAV with respect to such Trust assets in excess of NT$6 billion up
to NT$9 billion, (c) 0.12% of such NAV with respect to such Trust assets in
excess of NT$9 billion up to NT$12 billion and (d) 0.10% of such NAV with
respect to such Trust assets in excess of NT$12 billion.

- ------------
1The U.S. Dollar figures in parentheses are based on an exchange rate of
US$1.00=NT$27.27, which was the certified noon buying rate in New York for
cable transfers, as made available by the Federal Reserve, on March 21, 1996.

<PAGE>
<PAGE>
No other material changes are proposed to the R.O.C. Investment Contract,
and no change of any kind is proposed in the contract, described further below,
pursuant to which the Adviser manages (without additional compensation) the
Trust's assets held in the United States (the 'U.S. Investment Contract').

The following tables set forth the Current and Revised Fee Schedules for
the Adviser and corresponding information for the Custodian.

CURRENT FEE SCHEDULE

<TABLE>
<CAPTION>
AMOUNT UNDER
MANAGEMENT (1000 NT$) ADVISORY FEE % CUSTODIAN FEE %
- ------------------------------------- -------------- ---------------

<S> <C> <C>
Up to 7,000,000...................... 1.45% 0.19%
7,000,000 to 10,000,000.............. 1.30% 0.17%
10,000,000 to 13,000,000............. 1.15% 0.15%
13,000,000 and above................. 1.00% 0.13%
</TABLE>

REVISED FEE SCHEDULE

<TABLE>
<CAPTION>
AMOUNT UNDER
MANAGEMENT (1000 NT$) ADVISORY FEE % CUSTODIAN FEE %
- ------------------------------------- -------------- ---------------

<S> <C> <C>
Up to 6,000,000...................... 1.40% 0.16%
6,000,000 to 9,000,000............... 1.20% 0.14%
9,000,000 to 12,000,000.............. 1.00% 0.12%
12,000,000 and above................. 0.80% 0.10%
</TABLE>

The aggregate amount of the Adviser's fee in the 1995 Fiscal Year was
NT$113,304,741 (US$4,154,922). Had the Revised Fee Schedule been in effect
throughout 1995, the Adviser would have received NT$106,978,150 (US$3,922,924),
a reduction of NT$6,326,591 (US$231,998), or 5.58%.

The aggregate amount of the Custodian's fee in the 1995 Fiscal Year was
NT$14,843,527 (US$544,317). Had the proposed revised Custodian's fee been in
effect throughout 1995, the Custodian would have received NT$12,280,784
(US$450,340), a reduction of NT$2,562,743 (US$93,977), or 17.27%.

<PAGE>
<PAGE>
The following table compares the Trust's operating expenses for the 1995
Fiscal Year as a percentage of average net assets under both the Current Fee
Schedule and the Revised Fee Schedule.

COMPARATIVE EXPENSE TABLE
TRUST OPERATING EXPENSES FOR THE 1995 FISCAL YEAR
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
CURRENT FEE SCHEDULE REVISED FEE SCHEDULE
-------------------- --------------------

<S> <C> <C>
Advisory Fee.............. 1.42% 1.29%
Custodian Fee............. 0.19% 0.15%
Other Expenses............ 0.37% 0.37%
Total Trust Operating
Expenses................ 1.98% 1.81%
</TABLE>

The Investment Company Act requires that investment advisory contracts
between an investment company and an investment adviser be in writing, that such
contracts specify, among other things, the compensation payable to the adviser
pursuant thereto and that such contracts be approved by a Majority Shareholder
Vote of the investment company.

In considering whether to seek a revision of the advisory fee schedule, the
Board of Trustees reviewed information provided by the Adviser and also obtained
additional information from other sources. The information reviewed by the Board
of Trustees concerned, among other things, (i) the fees paid by the Trust for
investment advisory and administrative services and the Trust's expense ratio,
each compared to those of other single-country investment companies as well as
other closed-end investment companies whose stock is publicly traded in the
United States, (ii) the nature of the Trust's investments and (iii) data
provided by the Adviser with respect to the profitability of the Adviser's
management of the Trust after giving effect to all direct and allocated expenses
associated with the investment advisory and administrative services performed by
the Adviser on behalf of the Trust.

The Board of Trustees had also been provided previously with a memorandum
prepared by counsel to the Trust describing the trustees' legal duties in
connection with their consideration of the continuation or modification of the
R.O.C. Investment Contract. In addition, the Independent Trustees who serve on
the Trust's Audit Committee met privately to discuss what they believed would be
an appropriate level or levels of the advisory fee to be paid by the Trust to
the Adviser, and the Independent Trustees discussed such issues with the other
trustees, including Mr. Chiang, and representatives of IIT. Among the matters
considered by the Board of Trustees were (i) the nature, quality and extent of
the advisory, administrative, compliance and shareholder services provided by
the Adviser to the Trust and the Shareholders, (ii) the amount paid under the
Current Fee Schedule relative to other advisors' fees for comparable services
and the Trust's expense ratio in relationship to industry norms, (iii) the
feasibility of obtaining similar services from another investment manager
qualified to provide such services in the R.O.C., (iv) the extent to which,
relative to industry practice, the Adviser had passed on any economies of scale
to the Trust and the Shareholders in the administration of the Trust, (v) the
responsibility and liability assumed by the Adviser in managing the funds
entrusted to it and (vi) the income received by the Adviser after deducting the
cost of services provided to the Trust.

<PAGE>
<PAGE>
The Shareholders' approval of the Revised Fee Schedule would, for technical
purposes of the Investment Company Act, entail their approval of a new
investment advisory contract; and following such Shareholder approval and
approval by the R.O.C. SEC, the R.O.C. Investment Contract, revised to include
the Revised Fee Schedule, would remain in effect for an initial period of two
years from the date of its execution by the Trust (which, due to the anticipated
procedures for obtaining R.O.C. SEC approval, would likely precede the
submission of the R.O.C. Investment Contract, so revised, to the R.O.C. SEC for
its approval). Thereafter, the R.O.C. Investment Contract would continue in
effect from year to year if its continuance is specifically approved at least
annually by (i) a vote of a majority of the Independent Trustees, cast in person
at a meeting called for the purpose of voting on such approval, and (ii) either
a vote of a majority of the Board of Trustees as a whole or a Majority
Shareholder Vote.

If the Shareholders fail to approve the Revised Fee Schedule or if any
other condition to the implementation of the Revised Fee Schedule is not
satisfied in a timely manner (as a result, for instance, of a need to adjourn
the Meeting in order to obtain the requisite Shareholder vote), the Board of
Trustees, acting with the concurrence of a majority of the Independent Trustees,
would have the power to approve the continuation of the R.O.C. Investment
Contract (which would continue in effect only until June 21, 1996 without such
action by the Board) in its current form and would anticipate approving such a
continuation pending a determination of how to respond to such a failure by the
Shareholders to approve, or any failure to satisfy any other condition to the
implementation of, the Revised Fee Schedule.

Further information concerning the background of the R.O.C. Investment
Contract and the Trust's investment advisory and administrative arrangements,
including a description of certain other circumstances in which the R.O.C.
Investment Contract could terminate or be terminated, is set forth under 'The
Nature of the Trust's Management Arrangements' below.

Approval of the proposed amendment to the R.O.C. Investment Contract at the
Meeting will require a Majority Shareholder Vote. The persons named in the
accompanying proxy will, in the absence of contrary instructions, vote all
proxies FOR the approval of the proposed amendment to the R.O.C. Investment
Contract.

THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF
THE REVISED FEE SCHEDULE AND THE PROPOSED AMENDMENTS TO THE R.O.C. INVESTMENT
CONTRACT.

FURTHER INFORMATION CONCERNING THE ADVISER

The Adviser was incorporated on August 9, 1983 under the laws of the R.O.C.
as a securities investment trust enterprise with limited liability and with
authority to raise and manage investment trust funds. In its capacity as
investment adviser to the Trust, the Adviser is responsible for the continuing
administration of the assets of the Trust in accordance with the R.O.C.
Investment Contract and the U.S. Investment Contract, as well as in accordance
with applicable laws and regulations of the R.O.C. and the United States. Its
principal business address is 17th Floor, 167 Fu Hsing North Road, Taipei,
Taiwan, R.O.C.

<PAGE>
<PAGE>
The shareholders of the Adviser and their respective percentage
shareholdings as at March 13, 1996 are set out below:

<TABLE>
<CAPTION>
PERCENTAGE
SHAREHOLDERS SHAREHOLDING
- ------------ ------------
<S> <C>
R.O.C. SHAREHOLDERS
The International Commercial Bank of China ('ICBC').............. 13.4
Kingdom Pharmaceutical Co., Ltd. ................................ 11.0
Ming Tong Co., Ltd. ............................................. 9.3
The Farmers Bank of China........................................ 8.0
Central Trust of China........................................... 8.0
Bank of Taiwan................................................... 8.0
Maw Chong Investment Corporation Ltd............................. 7.0
Central Investment Holding Co., Ltd ('CIHC')..................... 6.4
United World Chinese Commercial Bank ('UWCCB')................... 4.9
UWCCB Cultural Benevolent Foundation............................. 3.1
Daniel M. Tsai................................................... 2.8
Yu Tai Industrial Corp. ......................................... 2.2
Chiloo Industries Inc. .......................................... 2.2
Central Insurance Co., Ltd. ..................................... 2.2
Tai Lung Corporation............................................. 2.1
Ming Yu Company Ltd. ............................................ 1.0

NON-R.O.C. SHAREHOLDERS
Lazard Brothers & Co., Limited................................... 4.2
United Merchant Bank Limited..................................... 4.2
-----
100.0
-----
-----
</TABLE>

From July 15, 1991 to April 20, 1995, CIHC, with 22.4% of the Adviser's
stock, was the largest shareholder of the Adviser. CIHC was established in July
1971 and is a general purpose investment company registered with the Ministry of
Economic Affairs of the R.O.C. CIHC is understood to be an investment vehicle
for, and has advised the Trust that it is approximately 100% (99.9984%) owned
by, the Kuomintang, the political party that has dominated the government of the
R.O.C. since many years before that government's removal to Taiwan from the
Chinese mainland in 1949. In April 1995 CIHC completed the sale of most of its
then shareholdings in the Adviser to Kingdom Pharmaceutical Co., Ltd., Yu Tai
Industrial Corp., Chiloo Industries Inc. and Central Insurance Co., Ltd
(collectively, the 'CIHC-Controlled Entities'). The Trust has been advised that
CIHC has a majority shareholding in each of the CIHC-Controlled Entities. The
Trust has also been advised that on March 13, 1996 Chiao Tung Bank, which had
owned 8.0% of the Adviser's stock, sold all of its shares of such stock to ICBC,
CIHC, Ming Tong Co., Ltd. and Daniel M. Tsai, all of whom were already
shareholders of the Adviser. CIHC and the CIHC-Controlled Entities currently
hold a total of 24.0% of the Adviser's stock. In addition, the Trust has been
advised that CIHC believes that, as the party controlling the largest block of
the Adviser's shares, CIHC has the power to exercise a controlling influence
over the management and policies of the Adviser. The address of the headquarters
of the Kuomintang, which, through its control of CIHC, in the Trust's view may
also be deemed to be the parent of the Adviser, is 11 Chungshan South Road,
Taipei, Taiwan, R.O.C.

<PAGE>
<PAGE>
In addition to the Adviser's largest direct shareholder, ICBC, four of the
other R.O.C. shareholders of the Adviser (The Farmers Bank of China, Central
Trust of China, Bank of Taiwan and UWCCB) are R.O.C. financial institutions. The
Farmers Bank of China, Central Trust of China and Bank of Taiwan are owned or
controlled by agencies or instrumentalities of the R.O.C. government. The UWCCB
Cultural Benevolent Foundation is a non-profit charitable foundation established
by UWCCB. The other R.O.C. Shareholders are general purpose investment companies
owned by prominent families in the R.O.C. or individual investors. R.O.C. law
currently requires that R.O.C. shareholders and other entities organized under
the laws of the R.O.C. maintain ownership of at least 51% of the stock of the
Adviser.

The Articles of Incorporation of the Adviser provide that the Adviser's
board of directors shall consist of 11 directors (of which ten are currently in
office). The current Chairman of the Adviser is Robert Chun Chien, who is also
an advisor to ICBC.

The day-to-day operations of the Adviser are managed by a president and
chief executive officer appointed by the board of directors of the Adviser. The
current President and Chief Executive Officer of the Adviser is Howard R.S. Ho.

The following table sets forth the names, principal positions and addresses
of the directors of the Adviser:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Name Position with Adviser Principal Occupation
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Ding-Yu Chang Director Senior Vice President, Bank of Taiwan
18 Alley 5, Lane 24,
Ting Chow Road, Sec. 3
Taipei, Taiwan
R.O.C.
Daniel K.L. Chiang Executive Vice President and Director Executive Vice President and Director
17th Floor of the Adviser; President, Chief
167 Fu Hsing North Road Executive Officer and Trustee of the
Taipei, Taiwan Trust
R.O.C.
Robert Chun Chien Chairman and Director Advisor, ICBC, and Chairman of the
6 Lane 111, Adviser
Hangchow South Road
Taipei, Taiwan
R.O.C.
Gow-Liang Chou Director Special Assistant to the Chairman, Maw
No. 3-4, Lane 161, Chong Investment Corporation Ltd.
Shin Sheng S. Road,
Sec. 2
Taipei, Taiwan
R.O.C.
Yin-Tarn Chou Director Vice President, Import and Export
49 Wu-Chang Street, Sec. 1 Department, Central Trust of China
Taipei, Taiwan
R.O.C.
Sy Pien Chow Director Advisor, UWCCB
4F-2, 447 Chung-Hua Road
Sec. 2
Taipei, Taiwan
R.O.C.
</TABLE>

(table continued on next page)

<PAGE>
<PAGE>
(table continued from previous page)

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Name Position with Adviser Principal Occupation
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Hiang-Meng Gn Director Executive Vice President, United
107 King's Road Merchant Bank Limited
Singapore 1026
Howard R.S. Ho President, Chief Executive Officer and Director President and Chief Executive Officer
17th Floor of the Adviser
167 Fu Hsing North Road
Taipei, Taiwan
R.O.C.
Yi-Tien Lin Director Senior Vice President, The Farmers Bank
No. 85, Sec. 2, of China
Nan-King E. Rd.
Taipei, Taiwan
R.O.C.
Arthur H.Y. Pang Director General Manager, Fubon Investment
8F, 10, Ming Chuon E. Rd., Services, Inc.
Sec. 3
Taipei, Taiwan
R.O.C.
</TABLE>

THE NATURE OF THE TRUST'S MANAGEMENT ARRANGEMENTS

The following is a summary description of certain provisions of the R.O.C.
Investment Contract and the U.S. Investment Contract. The described provisions
of the R.O.C. Investment Contract will also be included in the contract if it is
amended to incorporate the Revised Fee Schedule.

The R.O.C. Investment Contract establishes a contractual securities
investment trust fund arrangement through which, under current R.O.C.
regulations, the Trust is permitted to make portfolio investments in R.O.C.
securities. Under the R.O.C. Investment Contract the Adviser is required to
manage the investment of the assets held by the Custodian pursuant thereto in
the R.O.C. for the exclusive benefit of the Trust, including (i) making
investment decisions to the best of its ability; (ii) supervising the
acquisition and disposition of investments and selecting brokers or dealers to
carry out portfolio transactions, all in accordance with the Trust's investment
objective and policies and subject to the direction of the Board of Trustees;
(iii) calculating the NAV of the assets held pursuant to the R.O.C. Investment
Contract in NT Dollars; (iv) instructing the Custodian to maintain, exchange and
dispose of the Trust's investments as required; (v) maintaining appropriate
books and records; and (vi) performing its obligations so as to permit the Trust
to qualify as a regulated investment company under the U.S. Internal Revenue
Code of 1986, as amended.

The R.O.C. Investment Contract, which was last voted upon by Shareholders
in 1991 (when the previously applicable advisory fee of 1.5% of the Trust's
entire NAV was replaced by the Current Fee Schedule), became effective on July
15, 1991 and will remain in force until June 21, 1996 and thereafter from year
to year, subject to its continuance being approved at least annually by the vote
of a majority of the Independent Trustees, cast in person at a meeting called
for that purpose, and by either (a) the vote of a majority of the Board of
Trustees as a whole or (b) a Majority Shareholder Vote. The R.O.C. Investment
Contract was most recently reapproved by the trustees (including all of the
Independent Trustees) on May 31, 1995. The R.O.C. Investment Contract also
governs the relationship between the

<PAGE>
<PAGE>
Trust and the Custodian and was amended solely with respect to certain aspects
of such custodial relationship (including to reduce the fee payable by the Trust
for custodial services) on June 11, 1993.

The R.O.C. Investment Contract may be terminated by the Trust upon the vote
of a majority of the Trustees or by a Majority Shareholder Vote of the
Shareholders, without payment of any penalty, upon 60 days' written notice to
the Adviser and the Custodian, and will terminate automatically in the event of
its assignment (as defined in the Investment Company Act) by the Adviser or the
Custodian or a transfer or other disposition by the Trust (other than by
redemption) of units of beneficial interest in the assets held under the R.O.C.
Investment Contract. The R.O.C. Investment Contract will also terminate (i) if
required by the R.O.C. SEC, (ii) if in the opinion of the Adviser further
operation of the Trust in accordance with the R.O.C. Investment Contract is
illegal, impractical or inadvisable having regard solely to the interests of the
Trust, (iii) upon the resignation or removal of the Adviser or the Custodian
(the liquidation or bankruptcy or revocation of the R.O.C. license of the
Adviser or the Custodian being deemed to be a removal of the Adviser or the
Custodian, as the case may be), or if the R.O.C. SEC determines that the Adviser
or the Custodian is incapable of carrying out its functions properly and a
successor is not appointed within the subsequent three-month period, or (iv) if
the Trust is adjudicated a bankrupt.

The Adviser manages the assets of the Trust held in the United States
pursuant to the U.S. Investment Contract. Such assets may be held pending
remittance to the R.O.C. of the proceeds of any offering that may be made by the
Trust of its securities, or after any distribution to the Trust under the R.O.C.
Investment Contract, or to pay the Trust's expenses in the United States, or
otherwise as permitted under applicable R.O.C. laws and regulations. The amount
of such assets, however, has been, and is generally expected to continue to be,
small in relation to the total assets of the Trust. The Trust does not and will
not pay any additional compensation to the Adviser, and has not incurred and
will not incur any additional expenses, with respect to the services provided or
to be provided by the Adviser under the U.S. Investment Contract.

The U.S. Investment Contract, which became effective on July 15, 1991, will
be in force until July 15, 1996 and thereafter from year to year, subject to its
continuance being approved at least annually by the vote of a majority of the
Independent Trustees, cast in person at a meeting called for that purpose, and
by either (a) the vote of a majority of the Board of Trustees as a whole or (b)
a Majority Shareholder Vote.

The U.S. Investment Contract may be terminated by the Trust, without
payment of any penalty, upon 60 days' written notice to the Adviser, and will
terminate automatically in the event of its assignment (as defined in the
Investment Company Act). The U.S. Investment Contract will also terminate upon
the termination of the R.O.C. Investment Contract in accordance with the
provisions thereof.

FUND ADMINISTRATION AND EXPENSES

The Adviser bears all expenses associated with its investment management
activities under the R.O.C. Investment Contract and the U.S. Investment
Contract, as well as all salaries, fees and expenses of the Trust's officers and
trustees who are interested persons of the Adviser. Other than expenses borne by
the Adviser, the Trust bears all of its expenses, including: fees and expenses
of the Trust's trustees who are not interested persons of the Adviser; taxes and
governmental fees; brokerage commissions and other expenses incurred in
acquiring or disposing of portfolio securities; expenses of preparing stock
certificates and other expenses in connection with the issuance, offering,
distribution,

<PAGE>
<PAGE>
sale or underwriting of securities issued by the Trust; expenses of registering
and qualifying the Shares for sale with the U.S. Securities and Exchange
Commission (the 'U.S. SEC') and in various states and foreign jurisdictions;
auditing, accounting, insurance and legal costs; custodian, dividend disbursing
and transfer agent expenses; expenses of maintaining the listing of the Shares
on the New York Stock Exchange; and expenses of Shareholders' meetings and of
the preparation and distribution of reports to Shareholders.

PORTFOLIO TRANSACTIONS AND BROKERAGE

In portfolio transactions involving equity securities, the Adviser places
orders on behalf of the Trust directly with brokers, except that purchases of
shares in rights offerings are made directly from the issuers. In portfolio
transactions involving debt securities, the Adviser may place orders on behalf
of the Trust directly with brokers, bills finance companies (which are primarily
dealers in short-term securities and have other specified functions in the
R.O.C. financial markets under R.O.C. law) or other institutions or may make
purchases directly from issuers.

Since the inception of the Trust it has been the policy of the Adviser not
to conduct more than 10% of the Trust's total annual brokerage business with any
one broker and to limit outstanding unsettled transactions with any one broker
to less than 1% of the Trust's assets. Subject to the foregoing policy, the
factors considered by the Adviser in placing orders with brokers include
efficiency in completing securities transactions, financial condition, market
reputation and research and information gathering ability. The research and
market information that the Adviser has received or will receive from such
brokers may be useful to the Adviser in providing services to clients other than
the Trust; in addition, the research and market information that the Adviser has
received or will receive from brokers in connection with placing orders for
other clients of the Adviser may be useful to the Adviser in providing services
to the Trust. The Adviser makes its own assessment, however, concerning whether
to place any reliance upon such research and market information.

R.O.C. regulations require, with limited exceptions, that all transactions
in publicly traded stocks be effected through securities brokers qualified to
trade on the TSE. Of the Adviser's R.O.C. shareholders, all of the banks, as
well as Grand Cathay Securities Corp. (an integrated securities firm and an
affiliate of certain R.O.C. shareholders of the Adviser), offer securities
brokerage services. In addition, an affiliate of CIHC offers securities
brokerage services. The Adviser has apportioned, and intends to continue to
apportion, trading business to any securities broker, including shareholders of
the Adviser and certain affiliates of such shareholders.

Under the R.O.C. Investment Contract and R.O.C. law transactions for the
account of the Trust may be carried out through a 'connected person' of the
Adviser to such extent as the Adviser may think fit, provided that the cost
thereof to the Trust is not greater than it would have been had the transaction
been carried out through a broker that was not a 'connected person.' A
'connected person' is defined in the R.O.C. Investment Contract as a person that
owns more than 5%, or takes any significant, active role in the management, of
the Adviser and is separately defined in R.O.C. SEC regulations to include
directors and supervisors of the Adviser. Transactions with 'connected persons'
are, however, subject to certain limitations under the Investment Company Act
(particularly section 17(e) thereof) and guidelines adopted by the trustees.

'Affiliated persons' (as defined in the Investment Company Act) are subject
to the Investment Company Act regardless of whether or not they are 'connected
persons.' Brokerage commissions paid by the Trust to any affiliated person, or
any affiliated person of such a person, must conform to

<PAGE>
<PAGE>
section 17(e)(2)(A) of the Investment Company Act and rule 17e-1 thereunder,
which provide, among other things, that such brokerage commissions must be
reasonable and fair compared to the commissions received by other brokers in
connection with comparable transactions involving similar securities during a
comparable period of time.

Brokerage commission rates are approved by the R.O.C. SEC on the
recommendation of the TSE and are currently fixed at 0.1425% of the transaction
value for stocks and 0.1% for bonds for all brokerage houses. The aggregate
amounts of brokerage commissions paid by the Trust during 1995 were as follows:

<TABLE>
<CAPTION>
1995*
--------------

<S> <C> <C>
(A) Aggregate amount of brokerage commissions paid NT$18,549,822
(US$700,046)
(B) Aggregate amount of brokerage commissions paid to brokers an affiliated person of which is NT$3,082,988
an affiliated person (as defined in the Investment Company Act) of the Trust (US$116,348)
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

* The U.S. Dollar figures in the parentheses are based on an exchange rate of
US$1.00 = NT$26.498, which is the 1995 average of the certified noon buying
rates for NT$ in New York for cable transfers, as published in the Federal
Reserve Bulletin (published monthly by the Board of Governors of the Federal
Reserve System).

The brokers referred to in clause (B) above are the following:

<TABLE>
<CAPTION>
Percentage of aggregate brokerage
commissions paid to, and
percentage of transactions
effected through, such broker* by
Identity Relationship(s) the Trust during 1995
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Grand Cathay Securities Corp. Affiliate of CIHC, ICBC and UWCCB,
Shareholders of Adviser 4.02
Central Trust of China Custodian and Shareholder of Adviser 3.61
UWCCB Shareholder of Adviser 3.48
ICBC Shareholder of Adviser 2.29
Chiao Tung Bank Shareholder of Adviser 1.63
The Farmers Bank of China Shareholder of Adviser 1.60
- -------------------------------------------------------------------------------------------------------------
</TABLE>

* Because brokerage commission rates are fixed by the R.O.C. SEC, the
percentage of aggregate brokerage commissions paid to each broker and the
percentage of the aggregate dollar amount of transactions effected through
each broker are the same.

MISCELLANEOUS

Proxies will be solicited by mail and may be solicited in person or by
telephone or facsimile by officers or employees of the Adviser. The Trust has
also retained MacKenzie Partners to assist in the solicitation of proxies from
Shareholders at an anticipated cost of $8,500 plus reimbursement of out-
of-pocket expenses. The expenses connected with the solicitation of these
proxies and with any further proxies that may be solicited by such officers or
employees or by MacKenzie Partners in person, by telephone or by facsimile will
be borne by the Adviser or the Trust. The Trust will reimburse banks, brokers
and other persons holding Shares registered in their names or in the names of
their nominees for their expenses incurred in sending proxy material to and
obtaining proxies from the beneficial owners of such Shares.

<PAGE>
<PAGE>
THE TRUST'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1995, INCLUDING
FINANCIAL STATEMENTS, WAS MAILED ON OR ABOUT FEBRUARY 29, 1996 TO SHAREHOLDERS
OF RECORD ON FEBRUARY 29, 1996. HOWEVER, A COPY OF THAT REPORT WILL BE PROVIDED,
WITHOUT CHARGE, TO ANY SHAREHOLDER UPON REQUEST. PLEASE CALL 1-800-343-9567 OR
WRITE TO THE TRUST AT C/O DEWE ROGERSON, 850 THIRD AVENUE, 20TH FLOOR, NEW YORK,
NEW YORK 10022 TO REQUEST THE REPORT.

In the event that a quorum is not obtained for the transaction of business
at the Meeting by May 31, 1996 or sufficient votes are not received at the
Meeting to approve Proposal III, the persons named as attorneys in the enclosed
proxy may propose one or more adjournments of the Meeting to permit further
solicitation of proxies in order to obtain such a quorum or to solicit
additional votes. Any such adjournment would require the affirmative vote of the
holders of a majority of the Shares voting that are present in person or by
proxy at the session of the Meeting to be adjourned. The persons named as
attorneys in the enclosed proxy will vote in favor of such adjournment if it is
required. The costs of any such additional solicitation and of any adjourned
session will be borne by the Trust.

To the knowledge of the Trust, the following individuals or organizations
did not make timely filings, or failed to make filings, required during or with
respect to 1995 by rules of the United States Securities and Exchange Commission
pursuant to section 30(f) of the Investment Company Act, with respect to
holdings of, or transactions during 1995 or prior years in, Shares:

(1) Messrs. Hiang Meng Gn and Yi Tien Lin, who are directors of the
Adviser, did not make timely filings on Form 3 upon becoming directors.
Both such persons did, however, subsequently make filings on Form 3 and
have, to the knowledge of the Trust, complied with subsequent filing
requirements applicable to them under section 30(f).

(2) The Kuomintang has failed to make any filings of Forms 3, 4 or 5.
However, CIHC did make timely filings (or has provided statements in
lieu of required filings). In addition, if CIHC and the Kuomintang are
deemed to be controlling persons of the Adviser, then persons
controlled by CIHC or the Kuomintang would be required to file Forms 3,
4 and 5 with respect to ownership of, or transactions in, Shares,
regardless of whether such persons are otherwise directly affiliated
with the Adviser. Yu Tai Industrial Corporation, Chiloo Industries Inc.
and Central Insurance Co., Ltd., each of which the Trust understands to
be controlled by CIHC and each of which acquired 2.2% of the Adviser's
outstanding voting securities from CIHC in April 1995, made late
filings on Form 3 (disclosing no ownership of the Trust's shares) in
March 1996. No other such persons have made, or are expected to make,
any such filings.

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SHAREHOLDER PROPOSALS

Any proposal by a Shareholder intended to be presented at the 1997 Annual
Meeting of Shareholders must be received by the Trust at c/o Dewe Rogerson, 850
Third Avenue, 20th Floor, New York, New York 10022 not later than
.

BY ORDER OF THE BOARD OF TRUSTEES

Secretary
c/o Dewe Rogerson
850 Third Avenue
20th Floor
New York, New York 10022
April , 1996

18
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APPENDIX I:
FORM OF PROXY

1.) The election of Trustees to serve for a term expiring on the date of
the 1999 Annual Meeting of Shareholders or the special meeting in
lieu thereof:
With- For all
For hold Except
[ ] [ ] [ ]

DANIEL K.L. CHIANG
AND RAYMUND A. KATHE

IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR NOMINEE,
MARK THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE
NOMINEE'S NAME. YOUR SHARES WILL BE VOTED FOR THE REMAINING
NOMINEES.

2.) Ratification of the selection of KPMG Peat Marwick as independent
public accountants of the Trust for its fiscal year ending December
31, 1996.

For Against Abstain
[ ] [ ] [ ]

3.) Approval of a new investment advisory contract with the
International Investment Trust Company Limited (the "Adviser") and
Central Trust of China (the "Custodian") pursuant to which the fees
payable by the Trust thereunder to the Adviser and the Custodian
shall be reduced in the manner described in the accompanying Proxy
Statement.

For Against Abstain
[ ] [ ] [ ]

PROPERLY EXECUTED PROXIES WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED. IF NO SUCH DIRECTIONS ARE GIVEN, SUCH
PROXIES WILL BE VOTED FOR ALL NOMINEES REFERRED TO IN ITEM 1,
FOR THE PROPOSITION REFERRED TO IN ITEM 2 AND FOR THE PROPOSITION
REFERRED TO IN ITEM 3.

Please sign and return promptly in enclosed envelope. No postage
is required if mailed in the United States.

Mark box at right if comments or address change have been noted on
the reverse of this card.

RECORD DATE SHARES:

THE R.O.C. TAIWAN FUND
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
Annual Meeting of Shareholders
May 31, 1996

The undersigned hereby appoints Daniel K.L. Chiang and Marc E. Perlmutter,
or each or either of them, as Proxies of the undersigned, with full power of
substitution to each of them, to vote all shares of The R.O.C. Taiwan Fund (the
"Trust") which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of the Trust (the "Meeting") to be held at the offices of Paul,
Weiss, Rifkind, Wharton & Garrison, 24th Floor, 1285 Avenue of the Americas, New
York, New York on

Friday, May 31, 1996 at 9:30 a.m., New York City time, and at any adjournment
thereof, in the manner indicated below and, in their discretion, on any other
business that may properly come before the Meeting or any such adjournment.

PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.

Please sign this proxy exactly as your name appears on the books of the
Trust. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a corporation, this signature
should be that of an authorized officer who should state his or her title.

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

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