R O C TAIWAN FUND
PRE 14A, 1998-03-26
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<PAGE>

<PAGE>
               Section 240.14a-101  Schedule 14A.
          Information required in proxy  statement.
                 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]  No fee required
[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
           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:

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



<PAGE>

<PAGE>
- --------------------------------------------------------------------------------
THE R.O.C. TAIWAN FUND                                          [        ], 1998
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 Thursday, June 4, 1998 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 four trustees, three to serve for a term expiring on the date of
          the 2001 Annual Meeting of Shareholders or the special meeting in lieu
          thereof, and one 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 upon a proposal to ratify the selection by
           the Board of Trustees of KPMG Peat Marwick as independent public
           accountants of the Trust for its fiscal year ending December 31,
           1998; and
 
     (iii) Consider whether to approve the conversion of the Trust from a
           closed-end investment company into an open-end investment company and
           certain related matters.
 
     The Board of Trustees recommends that you vote in favor of proposals (i)
and (ii) and against proposal (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 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.
 


<PAGE>

<PAGE>
     Time will be provided during the Meeting for discussion, and shareholders
present will have an opportunity to ask questions about matters of interest to
them.
 
                                 Respectfully,
 
<TABLE>
<S>                                                        <C>

                   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 A QUORUM AT THE MEETING. 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>

<PAGE>
                             THE R.O.C. TAIWAN FUND
                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                            TO BE HELD JUNE 4, 1998
 
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 Thursday, June 4, 1998 at 9:30 a.m., New York
City time, for the following purposes:
 
     1. To elect four trustees, three to serve for a term expiring on the date
        of the 2001 Annual Meeting of Shareholders or the special meeting in
        lieu thereof, and one 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 the ratification of the selection by the Board of Trustees
        of KPMG Peat Marwick as independent public accountants of the Trust for
        its fiscal year ending December 31, 1998.
 
     3. To consider whether to approve the conversion of the Trust from a
        closed-end investment company into an open-end investment company and
        certain related matters.
 
     4. To transact such other business as may properly come before the Meeting
        or any adjournment thereof.
 
     The Board of Trustees has fixed the close of business on [Friday, March 27,
1998] 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

                                         James M. Wang, Secretary
April [  ], 1998




<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
Thursday, June 4, 1998 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  [  ], 1998. 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 June 3, 1998 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, for proposal II and against proposal III described below in this
Proxy Statement.
 
     The  Board of Trustees has fixed the close of business on Friday, March 27,
1998 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. Abstentions and 'non-votes' will  be
counted  as  present 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.) 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;  therefore,  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. However, because proposal III below
would require  for  its adoption  the  affirmative vote  of  a majority  of  all
outstanding Shares, abstentions and 'non-votes' will have the effect of votes in
opposition to the adoption of proposal III. As of the record date, the Trust had
outstanding  32,698,976 Shares. One  third of such Shares,  present in person or
represented  by  proxy  at  the  Meeting,  will  constitute  a  quorum  for  the
transaction of business at the Meeting.
 
     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 31, 1998.
 
                                       1
 


<PAGE>

<PAGE>
     The  Adviser's  address is  17th Floor,  167 Fu  Hsing North  Road, Taipei,
Taiwan, Republic of  China. 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 four nominees  listed below as trustees of
the Trust. Each of Messrs. Cheng, Laux and Miossi currently is a trustee of  the
Trust  and, if reelected, will serve for a term expiring on the date of the 2001
Annual Meeting  of Shareholders  or the  special meeting  in lieu  thereof.  Mr.
Parker, who is not currently a trustee of the Trust, will, if elected, 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 be 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.
 
     The  Board of Trustees has  nominated Mr. Parker for  election to the Board
position vacated by Mr. Raymund A. Kathe, who retired from the Board of Trustees
in February 1998 after  having served as  a trustee since  the inception of  the
Trust  in 1989. Mr. Parker is a  former practicing attorney and currently is the
Chairman of  Allegro Capital,  Inc.,  a venture  capital  company based  in  San
Francisco.  He has  had extensive business  experience in the  Republic of China
(the 'R.O.C.') and is a member of the Executive Committee of the US-ROC (Taiwan)
Business Council. Mr.  Parker also  previously served as  President of  Taipei's
American  Chamber of Commerce and, for more  than ten years, as Vice Chairman of
the Taipei International Community Cultural Foundation.
 
INFORMATION CONCERNING NOMINEES
 
     The following table sets forth  certain information concerning each of  the
nominees  for election as a trustee of the Trust. Messrs. Cheng, Laux and Miossi
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
     Nominee (Age)                   Term of Office as Trustee                               Trust
 
<S>                        <C>                                            <C>
* Theodore S.S. Cheng      (i) Trustee since 1989 and until the 1998      Chairman, China United Trust & Investment
  (67)                     Annual Meeting of Shareholders or the special  Corporation and Taipei Financial Center
  136, Sung Kiang          meeting in lieu thereof; and (ii) Chairman of  Corp., Taipei, Taiwan, since 1997;
  Road                     the Trust since 1989                           President, The International Commercial Bank
  Taipei, Taiwan, R.O.C.                                                  of China ('ICBC'), Taipei, Taiwan,
                                                                          1987-1997; Consultant to the Adviser since
                                                                          1993; Chairman and Director of the Adviser,
                                                                          1987-1993; Director, Grand Cathay Securities
                                                                          Co., Ltd., since 1988; Executive Vice
                                                                          President and General Manager, ICBC, Tokyo,
                                                                          Japan, 1985-87; Senior Vice President and
                                                                          General Manager, ICBC, Tokyo, Japan, 1977-85
</TABLE>
 
* Trustee considered by the Trust's counsel to be an 'interested person' (as
  defined in the Investment Company Act of 1940 (the 'Investment Company Act'))
  of the Trust. Mr. Cheng  is deemed to be an  interested person because of his
  affiliation with the Adviser.


                                                  (table continued on next page)
 
                                       2
 


<PAGE>

<PAGE>

(table continued from previous page)

 
<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
     Nominee (Age)                   Term of Office as Trustee                               Trust
<S>                        <C>                                            <C>

 David N. Laux (70)        Trustee since 1992 and until the 1998 Annual   President, US-ROC (Taiwan) Business Council,
 1726 M Street, NW         Meeting of Shareholders or the special         since 1990; Director, BPI Packaging
 Suite 601                 meeting in lieu thereof                        Technology, Inc.; Chairman and Managing
 Washington, D.C. 20036                                                   Director, American Institute in Taiwan,
 U.S.A.                                                                   1986-90; Director of Asian Affairs, National
                                                                          Security Council, the White House, 1982-86;
                                                                          Director of The Laux Company, 1977-1994
 Alfred F. Miossi (75)     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
 Robert P. Parker (56)     None                                           Chairman, Allegro Capital, Inc., since 1997;
 2 Embarcadero Center,                                                    Partner, McCutchen, Doyle, Brown & Enersen,
 Suite 200                                                                1988-97
 San Francisco,
  California 94111
 U.S.A.
</TABLE>
 
     Mr. Cheng,  who is  a citizen  and resident  of the  R.O.C., is  neither  a
citizen  nor a resident of the United States. There can be no assurance that Mr.
Cheng 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.
 
                                       3
 


<PAGE>

<PAGE>


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
     Nominee (Age)                   Term of Office as Trustee                               Trust
 
<S>                        <C>                                            <C>
* Daniel K.L. Chiang       (i) Trustee since 1994 and until the 1999      President of the Adviser since January 1997;
  (42)                     Annual Meeting of Shareholders or the special  Director of the Adviser, 1996-97; Executive
  17th Floor               meeting in lieu thereof; and (ii) President    Vice President of the Adviser, 1993-96; Vice
  167 Fu Hsing North       and Chief Executive Officer of the Trust       President of the Adviser, 1987-93; Manager,
  Road                     since 1994                                     Continental Illinois National Bank, Taipei,
  Taipei, Taiwan, R.O.C.                                                  Taiwan, 1984-87
 Pedro-Pablo Kuczynski     Trustee since 1989 and until the 2000 Annual   President and Chief Executive Officer, Latin
 (59)                      Meeting of Shareholders or the special         America Enterprise Capital Corporation,
 Grand Bay Plaza           meeting in lieu thereof                        since June 1995; President and Chief
 2665 S. Bayshore Drive                                                   Executive Officer, Westfield Capital Ltd.,
 Suite 1101                                                               since 1992; Director, Siderurgica Argentina
 Coconut Grove, Florida                                                   S.A.; Director, BHP Tintaya; Member of the
 33133                                                                    International Advisory Board, Toyota Motor
 U.S.A.                                                                   Corporation; Director, Stein S.A.; Director,
                                                                          Cosapi, S.A.; Chairman of the Board and
                                                                          Director, Edelnor S.A.; Chairman, First
                                                                          Boston International, and Managing Director,
                                                                          The First Boston Corporation, 1982-92;
                                                                          Minister of Energy and Mines, Government of
                                                                          Peru, 1980-82; President and Chief Executive
                                                                          Officer, Halco Inc. (mining company),
                                                                          1977-80
 Li-Yin Kung (85)          Trustee since 1989 and until the 2000 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.
 
* Gregory Kuo-Hua Wang     Trustee since 1989 and until the 2000 Annual   President, United World Chinese Commercial
  (65)                     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, 1977-89; Director, UWCCB; Chairman,
                                                                          Seaward Leasing Ltd., Vice Chairman, Grand
                                                                          Pacific Petrochemical Corporation; Managing
                                                                          Director, Bankers Institute of the R.O.C.;
                                                                          Managing Director, Bankers Association of
                                                                          the R.O.C.; Managing Director, Chinese
                                                                          National Association of Industry & Commerce;
                                                                          Managing Director, National Credit Card
                                                                          Center of the R.O.C.; Director, UWCB Futures
                                                                          Corp.; Director, Grand Cathay Securities
                                                                          Corp.; Director, Wyse Technology Inc.;
                                                                          Director, Taiwan Real-Estate Management Co.;
                                                                          Chief Supervisor, Taipei Foreign Exchange
                                                                          Market Development Foundation; Supervisor,
                                                                          Taipei Forex Inc.; Governor, Taipei World
                                                                          Trade Center Club
</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
31, 1998.
 
     The Board of  Trustees of the  Trust held four  meetings during the  fiscal
year ended December 31, 1997.
 
                                       4
 


<PAGE>

<PAGE>
     The Trust's 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, 1997.
 
     The Board of Trustees has an Audit Committee, the current members of  which
are   Messrs.  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  Ethics and  the Adviser's
Policy and Procedures to Prevent Insider  Trading. The Audit Committee held  two
meetings  during the fiscal year ended December  31, 1997. At those meetings the
Audit  Committee,  among  other  things,  (i)  reviewed  the  audited  financial
statements of the Trust for its 1996 fiscal year, (ii) approved the selection of
KPMG  Peat Marwick  as the Trust's  independent public accountants  for its 1997
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.
 
     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  of the Trust from  time to time  and will consider, when
appropriate, recommendations submitted by Shareholders. The Nominating Committee
met once during the fiscal year ended December 31, 1997.
 
OFFICERS OF THE TRUST
 
     The following is a list of the officers of the Trust. The Chairman and  the
President  each holds office until his  successor is duly elected and qualified,
and all other officers hold office at the direction of the trustees.
 
     Theodore S.S. Cheng: For information concerning Mr. Cheng, see 'Information
Concerning Nominees' above.
 
     Daniel K.L. Chiang: For information concerning Mr. Chiang, see 'Information
Concerning Other Trustees' above.
 
     James M. Wang (Age 41): Secretary, Treasurer and Chief Financial Officer of
the Trust since May 1996 and from  1992 to February 1996. From February 1996  to
April  1996  Mr.  Wang  served  as Director  of  Finance  and  Administration of
International Paper Taiwan, Ltd.
 
     Dirk Bennett (Age 51): Assistant Vice President and Assistant Secretary  of
the Trust since 1996. Mr. Bennett has been Manager of the Research Department of
the  Adviser since 1992. From 1992 to 1994  Mr. Bennett served as Advisor of the
National Bureau of Standards, Ministry of Economic Affairs, R.O.C.
 
     Marc E.  Perlmutter  (Age  45):  Assistant  Vice  President  and  Assistant
Secretary  of the Trust since 1996. Mr. Perlmutter has been a partner of the law
firm of Paul,  Weiss, Rifkind,  Wharton & Garrison,  U.S. legal  counsel to  the
Trust, since prior to 1993.
 
                                       5
 


<PAGE>

<PAGE>
     Edwin  C.  Laurenson  (Age  49):  Assistant  Vice  President  and Assistant
Secretary of the Trust since 1996. Mr. Laurenson has been securities counsel  to
the  law firm of Paul, Weiss, Rifkind, Wharton & Garrison, U.S. legal counsel to
the Trust, since 1996. He  was a principal attorney  employed by such firm  from
prior to 1993 until 1996.
 
TRUSTEE AND OFFICER COMPENSATION
 
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
                                                                                            Total Compensation
                                                                                              from the Trust
Name of Person                                                                            Paid to Trustees(1)(2)
- ------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>
Theodore S.S. Cheng(3)                                                                                 --
Daniel K.L. Chiang(3)                                                                                  --
Pedro-Pablo Kuczynski                                                                              $9,750
Li-Yin Kung                                                                                       $14,327
David N. Laux                                                                                     $11,250
Alfred F. Miossi                                                                                  $14,476
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) During 1997  each trustee  of the  Trust  who was  not affiliated  with  the
    Adviser received 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.
    The   Adviser,  which  supervises  the  Trust's  investments  and  pays  the
    compensation and  certain  expenses  of  the  personnel  and  certain  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 13, 1998, the Board of Trustees of the Trust,
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, 1998. 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, 1997 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, 1998.
 
     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, 1998.
 
                                       6
 


<PAGE>

<PAGE>
       III. CONVERSION OF THE TRUST FROM A CLOSED-END INVESTMENT COMPANY
                       TO AN OPEN-END INVESTMENT COMPANY
 
BACKGROUND AND SUMMARY
 
     The Trust  is  registered as  a  closed-end investment  company  under  the
Investment  Company  Act  and  has  operated  as  a  closed-end  fund  since the
reorganization of  The Taiwan  (R.O.C.) Fund  (which was  an open-end  fund  not
registered  in the United  States) into the  Trust on May  19, 1989. The Trust's
Amended and  Restated Declaration  of  Trust (the  'Declaration of  Trust')  and
By-Laws  provide  that  the Board  of  Trustees  is required  to  submit  to the
Shareholders at their next  annual meeting a binding  resolution to convert  the
Trust  into an open-end investment  company if the Shares  trade on the New York
Stock Exchange (the 'NYSE')  at an average discount  from their net asset  value
('NAV')  of more than 10% during any twelve-week period beginning after the most
recent such vote. For these purposes the average variation of the trading  price
of  the Shares from their NAV is determined on the basis of such variances as of
the last trading day  in each week.  The affirmative vote of  a majority of  the
outstanding Shares is required for the adoption of such a resolution.
 
     By the terms of the Declaration of Trust, this requirement became effective
on June 1, 1992, and since then the Shareholders have voted on such a resolution
twice,  in  1995  and  1997.  In  both  instances  the  Board  recommended  that
Shareholders vote against the resolution to  convert the Trust into an  open-end
investment  company,  and both  times  such resolution  was  not adopted  by the
Shareholders. In the most recent vote, on June 3, 1997, 11.7% of the outstanding
Shares were voted in favor of the proposal, 19.4% were voted against, and  68.9%
were  either not  present at the  meeting or  were not voted  on that particular
matter.
 
     After last year's vote, the Shares, like those of most other country funds,
continued to trade at a discount.  During each of the twelve-week periods  ended
August  29, 1997  through [       [   ] 1998],  the Shares traded  at an average
discount of greater than 10%.  Such average discount ranged from  [  ]% for  the
week  ended [                ]  to 22.51% for the week ended September 12, 1997.
Thus, the  Board of  Trustees is  required  to submit  to the  Shareholders  the
proposal described herein.
 
     On  April [  ],  1998, the most recent trading  date before the printing of
this Proxy  Statement,  the  Shares' trading  price  on  the NYSE  closed  at  a
[premium/discount]  to NAV of [      ]%.  Conversion would eliminate the trading
market in the Shares and provide each Shareholder with a continuing  opportunity
to redeem his Shares at their NAV. However, for the reasons described below, the
Board of Trustees recommends that Shareholders vote against this proposal, which
will  be adopted, as provided  in the Declaration of  Trust, only if approved by
holders of a majority of the outstanding Shares.
 
     At a meeting  on February  13, 1998,  the Board  of Trustees  of the  Trust
reviewed,  as it has in the  past, information concerning the legal, operational
and practical differences between closed-end and open-end investment  companies,
the   Trust's  performance  to  date  as   a  closed-end  fund,  the  historical
relationship between  the market  price of  the  Shares and  their NAV  and  the
possible  effects  of  conversion  on  the Trust.  At  that  meeting  the Board,
including all of the trustees who are not interested persons (as defined in  the
Investment  Company Act) of the  Trust, unanimously concluded that  it is in the
best interests  of  the Trust  and  the Shareholders  that  the Trust  remain  a
closed-end investment company.
 
                                       7
 


<PAGE>

<PAGE>
     The  Board  of  Trustees and  the  Adviser  believe that  conversion  to an
open-end investment  company  could  adversely affect  the  functioning  of  the
Trust's investment operations and its investment performance, as described below
under  'Effect of  Conversion on the  Trust -- Portfolio  Management.' They also
believe that conversion  could expose  the Trust to  the risk  of a  substantial
reduction  in  its size  and  a corresponding  loss  of economies  of  scale and
increase in  its expenses  as a  percentage  of NAV,  as described  below  under
'Effect  of Conversion on the  Trust -- Potential Increase  in Expense Ratio and
Decrease in Size.'
 
     In deciding how to recommend that the Shareholders vote on this matter, the
Board of Trustees took note of the  fact that, since the inception of the  Trust
in  1989, the Shares frequently  have traded at a  premium above NAV. (See below
under 'Differences  Between  Open-end  and  Closed-end  Investment  Companies --
Fluctuation  of Capital;  Redeemability of  Shares; Elimination  of Discount and
Premium.') The Shares' average annual discount/premium (determined by  comparing
the Shares' NAV to their closing price on the NYSE on each  trading day) by year
is as follows:
 
<TABLE>
<CAPTION>
                                                                DISCOUNT( - )/
YEAR                                                               PREMIUM
- ------------------------------------------------------------   ----------------
<S>                                                            <C>
1989 (May 12 to December 31)................................        2.71%
1990........................................................       - 9.47%
1991........................................................       - 3.28%
1992........................................................        4.40%
1993........................................................        3.46%
1994........................................................        0.75%
1995........................................................        1.66%
1996........................................................        2.95%
1997........................................................       - 17.17%
1998 (January 1 to April [  ])..............................       [    ]%
</TABLE>
 
     The  Board  of  Trustees believes  that  eliminating the  possibility  of a
discount would not justify the fundamental changes that conversion would  entail
to the Trust's portfolio management and operations, the risk of reduced size and
the  potential adverse effect on the Trust's investment performance. In order to
reduce or eliminate the discount without impairing the Trust's closed-end format
and the  benefits it  derives  therefrom, the  Adviser  has sought  to  increase
awareness  about  the Trust  through Shareholder  and market  communications and
meetings with securities  analysts and  market professionals  in the  investment
community  specializing  in the  closed-end  funds sector.  While  the Adviser's
efforts in this  respect have not  eliminated the Shares'  tendency at times  to
trade  at a discount  to NAV, the  Board of Trustees  believes that such efforts
have been beneficial.
 
     In addition, in  1991 the  Board of  Trustees authorized  a periodic  share
repurchase  program under Rule 10b-18 under the Securities Exchange Act of 1934,
pursuant to which purchases of Shares may  be made by the Trust when the  Shares
trade  at a discount to their NAV. Purchases under that program were made during
the second half of 1991 and during May through July of 1997, and such  purchases
could  be  recommenced at  any time  after  appropriate notice  to Shareholders.
However, the Board of Trustees currently has no plan or intention of causing the
Trust to make further such purchases. Shareholders also have the opportunity  to
purchase additional Shares in the market at the discounted price when the Shares
trade  below their NAV. The Shares' NAV at  the end of each week is published in
compilations of such information for  all closed-end funds in publications  such
as The Wall Street
 
                                       8
 


<PAGE>

<PAGE>
Journal,  The New  York Times and  Barron's; the daily  NAV at the  close of the
preceding trading  day  in  Taiwan can  be  obtained  by calling  the  Trust  at
1-800-343-9567.
 
     If  this  proposal is  not  approved, the  Shares  continue to  trade  at a
discount and the average discount is again greater than 10% during a twelve-week
period beginning after the date  of the Meeting, the  Board of Trustees and  the
Shareholders  will have  an opportunity to  consider again  converting the Trust
into an open-end investment company. (The  Board of Trustees may also decide  at
any time to present to the Shareholders the question of whether the Trust should
be  converted to an open-end investment  company; however, under the Declaration
of Trust such a voluntary submission would require the approval of two-thirds of
the outstanding Shares for its adoption.)
 
     As described below under  'Measures to be Adopted  if the Trust Becomes  an
Open-end  Fund -- Redemption Fee,' if the Shareholders vote to convert the Trust
into an open-end fund, the Board of Trustees may cause the Trust to impose a fee
payable to the Trust on  all redemptions of up  to 0.50% of redemption  proceeds
for a period of up to nine months from conversion.
 
DIFFERENCES BETWEEN OPEN-END AND CLOSED-END INVESTMENT COMPANIES
 
     1. Fluctuation of Capital; Redeemability of Shares; Elimination of Discount
and  Premium.  Closed-end investment  companies  generally do  not  redeem their
outstanding shares or engage in the continuous sale of new securities, and  thus
operate  with  a  relatively  fixed  capitalization.  The  shares  of closed-end
investment companies are normally  bought and sold in  the securities market  at
prevailing  market prices, which  may be equal  to, less than  or more than NAV.
From May 12, 1989  to April [ ],  1998 the Shares traded  on the NYSE at  prices
ranging  from  31.55% below  NAV (on  April 27,  1990) to  35.36% above  NAV (on
December 31, 1993). The Shares most recently traded at a premium to their NAV on
[           ], 1998. On April [ ], 1998, the most recent trading date before the
printing of this Proxy Statement, the closing  price of a Share on the NYSE  was
[      ]% [above/below] its NAV. Although it is now possible, subject to certain
restrictions, for both  institutions and  individuals outside  Taiwan to  invest
directly  in R.O.C.  stocks, the  Board of  Trustees believes  that most foreign
investors continue to invest in the R.O.C. market through a managed intermediary
like  the  Trust.  These  developments  (particularly  the  ability  of  foreign
indiviuals  to invest  directly) have only  recently taken  effect, however, and
additional alternatives to the Trust can be expected to develop as vehicles  for
investment  in R.O.C.  securities by investors  outside the  R.O.C., which could
have the  effect of  reducing or  eliminating (or  changing to  a discount)  any
premium,  or increasing any discount,  at which the Shares  trade in relation to
their NAV.
 
     By contrast, open-end investment companies, commonly referred to as  mutual
funds,  issue redeemable securities  with respect to  which no secondary trading
market is permitted to develop. Except during periods when the NYSE is closed or
trading thereon is restricted, or when redemptions may otherwise be suspended in
an emergency as permitted  by the Investment Company  Act, the holders of  these
redeemable  securities have the right  to surrender them to  the mutual fund and
obtain in return their proportionate share of the mutual fund's NAV at the  time
of  the redemption (less  any redemption fee  charged by the  fund or contingent
deferred sales charge imposed by the fund's distributor). It should be noted  in
this  connection  that  R.O.C.  authorities  could  institute  foreign  exchange
controls, which  have  historically  been utilized  for  economic  or  political
reasons  to regulate the flow  of money into and out  of the country, that could
delay or restrict remittances to the Trust in the future. Such foreign  exchange
controls   have,  however,  been   relaxed  in  recent   years  and  have  never
 
                                       9
 


<PAGE>

<PAGE>
been used to prevent the  remittance of funds out  of the country in  connection
with the redemption of securities issued by R.O.C. open-end investment funds.
 
     Most  mutual funds  also continuously  issue new  shares to  investors at a
price based upon  their shares'  NAV at the  time of  issuance. Accordingly,  an
open-end  fund  experiences  continuing inflows  and  outflows of  cash  and may
experience net sales  or net redemptions  of its shares.  In that connection  it
should also be noted that R.O.C. exchange control regulations could restrict the
remittance  of funds into the  R.O.C. from time to  time (although they have not
been so used in recent years),  thus preventing the Trust from replenishing  its
assets.
 
     Upon   conversion  of  the  Trust  into  an  open-end  investment  company,
Shareholders who wished to realize the value of their Shares would be able to do
so by redeeming their shares at NAV (less the possible temporary redemption  fee
discussed  below under 'Measures to be Adopted  if the Trust becomes an Open-end
Fund -- Redemption Fee'). The trading market for the Shares would be eliminated,
and with it the discount from NAV  at which the Shares have periodically  tended
to  trade on the NYSE. Conversion would also eliminate, however, any possibility
that the Shares could trade at a premium over NAV.
 
     2. Cash Reserves; Raising Capital. Because closed-end investment  companies
are  not required to meet redemptions, their cash reserves can be substantial or
minimal,  depending  on  the  investment  manager's  investment  strategy.  Most
open-end   investment  companies   maintain  cash  reserves   adequate  to  meet
anticipated  redemptions   without  prematurely   liquidating  their   portfolio
securities.  The  maintenance  of  larger  cash  reserves  required  to  operate
prudently as an open-end investment company when net redemptions are anticipated
may reduce an open-end  investment company's ability  to achieve its  investment
objective by limiting its investment flexibility and the scope of its investment
opportunities.  In addition,  open-ended investment  companies are  subject to a
requirement that  no more  than  15% of  their net  assets  may be  invested  in
securities  that are  not readily marketable  or are otherwise  considered to be
illiquid. However,  the  Trust  currently  does  not  invest  in,  nor  does  it
anticipate investing in, illiquid securities to any material extent.
 
     Closed-end  investment companies may not issue  new shares at a price below
NAV  except  in  rights  offerings  to  existing  shareholders,  in  payment  of
distributions  and  in  certain other  limited  circumstances.  Accordingly, the
ability of closed-end funds to raise new capital is restricted, particularly  at
times when their shares are trading at a discount to NAV. The shares of open-end
investment  companies, on the other hand, are offered by such companies (in most
cases continuously) at NAV, or at NAV plus a sales charge, and the absence of  a
secondary trading market generally makes it impossible to acquire such shares in
any other way.
 
     3.  NYSE Delisting; State and Federal Fees on Sales of Shares. If the Trust
converted to an open-end fund, the Shares would immediately be delisted from the
NYSE. Some investment managers believe that the listing of an investment company
on a U.S. stock  exchange, particularly the NYSE,  represents a valuable  asset,
especially  in  terms of  attracting  non-U.S. investors.  In  addition, certain
investors, such as pension  funds, have internal restrictions  on the amount  of
their  portfolio that can be invested  in non-listed securities. Delisting would
save the Trust annual NYSE fees of  approximately $32,000; but the absence of  a
stock  exchange  listing,  combined  with  the need  to  issue  new  Shares when
investors wish to increase  their holdings, would have  the effect of  requiring
the Trust to pay federal and state fees on sales of Shares, except to the extent
that  the underwriter  of such  sales paid  some or  all of  such fees.  Any net
savings or increased cost to the  Trust because of the different expenses  would
not, however, be expected to materially affect the Trust's expense ratio.
 
                                       10
 


<PAGE>

<PAGE>
     4.  Underwriting; Brokerage Commissions  or Sales Charges  on Purchases and
Sales. Open-end investment  companies typically  seek to  sell new  shares on  a
continuous  basis in  order to offset  redemptions and avoid  shrinkage in size.
Shares of 'load'  open-end investment  companies are normally  offered and  sold
through  a principal underwriter, which deducts a sales charge from the purchase
price at the time  of purchase or  from the redemption proceeds  at the time  of
redemption, or receives a distribution fee from the fund, or both, to compensate
it  and securities dealers for sales and marketing services (see 'Measures to be
Adopted if the Trust Becomes an Open-end Fund -- Underwriting and  Distribution'
below).  Shares  of 'no-load'  open-end investment  companies  are sold  at NAV,
without a  sales charge,  with the  fund's investment  adviser or  an  affiliate
normally  bearing the cost of sales and marketing from its own resources. Shares
of closed-end investment companies,  on the other hand,  are bought and sold  in
secondary  market  transactions  at  prevailing  market  prices  subject  to the
brokerage  commissions  charged  by  the  broker-dealer  firms  executing   such
transactions.
 
     5.  Shareholder Services.  Open-end investment  companies typically provide
more services  to  shareholders  and incur  correspondingly  higher  shareholder
servicing  expenses. One service that is  generally offered by open-end funds is
enabling shareholders to transfer  their investment from  one fund into  another
fund that is part of the same 'family' of open-end funds at little or no cost to
the  shareholders. The Trust  has engaged in  no discussions with  any family of
funds to become a part  of such family, and there  can be no assurance that  the
Trust  would be able  to make such  an arrangement if  the Shareholders voted to
convert the  Trust  to  an open-end  fund.  If  the requisite  majority  of  the
Shareholders  approve this proposal, the Board  of Trustees would weigh the cost
of any particular service against the  anticipated benefit of such service.  The
Board  of Trustees has no current view as to which, if any, Shareholder services
it would seek to  make available to  Shareholders and implement  as part of  the
Trust's joining a family of funds or otherwise.
 
     6. Leverage. Open-end investment companies are prohibited by the Investment
Company  Act from  issuing 'senior securities'  representing indebtedness (i.e.,
bonds, debentures, notes and other similar securities), other than  indebtedness
to  banks with respect to which there is asset coverage of at least 300% for all
borrowings, and may not issue preferred stock. Closed-end investment  companies,
on  the  other  hand,  are permitted  to  issue  senior  securities representing
indebtedness when the 300% asset coverage test is met, may issue preferred stock
subject to various  limitations and are  not limited to  borrowings from  banks.
This  greater  ability to  issue senior  securities gives  closed-end investment
companies more flexibility in 'leveraging' their shareholders' investments  than
is  available to open-end investment companies. This difference is not likely to
be of  importance  with respect  to  the  Trust, however,  because  the  Trust's
fundamental  investment  policies (which  may be  changed only  with Shareholder
consent) forbid it to borrow more than  5% of its NAV. Although the  Declaration
of  Trust permits the Board of Trustees to create and issue preferred stock, the
trustees have no intention of doing so.
 
     7. Annual Shareholders Meetings. The Trust is organized as a  Massachusetts
business  trust under  the terms  of the Declaration  of Trust.  As a closed-end
investment company listed on the NYSE, the Trust is required by the rules of the
NYSE to hold annual meetings of  its Shareholders. This requirement would  cease
upon  a delisting of the Shares from the NYSE. A provision in the Declaration of
Trust provides  that, if  the Trust  were converted  to an  open-end  investment
company,  the Declaration of  Trust could be  amended to provide  that the Trust
would no longer be required to hold  annual meetings. However, no vote is  being
sought  on such a proposal at this time. If the Trust were no longer required to
hold annual  meetings  of  Shareholders,  it would  still  be  required  by  the
Investment Company Act to have periodic meetings to approve certain matters and,
under certain
 
                                       11
 


<PAGE>

<PAGE>
circumstances,  to elect trustees. (See the  discussion below under 'Measures to
be Adopted  if the  Trust Becomes  an Open-end  Fund --  Effect on  the  Trust's
Declaration  of Trust.') The Trust would save the cost of annual meetings, which
management estimates  to  be  approximately $30,000  per  year;  however,  these
savings would not be expected to materially affect the Trust's expense ratio.
 
     8.  Reinvestment of  Dividends and  Distributions. Like  the plans  of many
other closed-end  funds, the  Trust's Dividend  Reinvestment Plan  (the  'Plan')
permits Shareholders to elect to reinvest their dividends and distributions on a
different  basis than would  be the case  if the Trust  converted to an open-end
investment company. Currently,  if the  Shares are  trading at  a discount,  the
agent  for the Plan will attempt to buy as  many of the Shares as are needed for
this purpose on the NYSE or elsewhere. This permits a reinvesting Shareholder to
benefit by purchasing additional Shares at a discount, and this buying  activity
may tend to lessen any discount. If Shares are trading at a premium, reinvesting
Shareholders are issued Shares at the higher of NAV and 95% of the market price.
As  an open-end  investment company,  all dividends  and distributions  would be
reinvested at NAV.
 
     9. Capital Gains. The  treatment of capital gains  required under the  Code
can  be onerous to non-redeeming stockholders of an open-end fund. To raise cash
to satisfy  redeeming  stockholders, a  mutual  fund  may be  required  to  sell
portfolio  securities. If the  fund's basis in the  portfolio securities sold is
less than the sale price  obtained, net capital gain  may be realized. The  Code
imposes both an income tax and an excise tax on a regulated investment company's
net  capital gain unless the gain  is distributed to all stockholders, including
non-redeeming stockholders. Thus, unless adequate capital gain distributions are
made, non-redeeming stockholders may be  required to recognize a greater  amount
of  capital gain. Furthermore, in  order to make a  capital gain distribution, a
fund may need to sell additional portfolio securities, thereby reducing  further
its size and, possibly, creating additional capital gain.
 
EFFECT OF CONVERSION ON THE TRUST
 
     In   addition  to  the  inherent  characteristics  of  open-end  investment
companies described  above, the  Trust's conversion  to an  open-end  investment
company would potentially have the consequences described below.
 
     1.  Portfolio Management. As  noted above, a  closed-end investment company
operates with a relatively fixed  capitalization while the capitalization of  an
open-end investment company fluctuates depending upon whether it experiences net
sales  or net redemptions  of its shares.  Although the data  on the subject are
unclear, some observers  believe that  open-end funds  tend to  have larger  net
sales  near market  highs and  larger net redemptions  near market  lows. To the
extent that this is true, if the Trust were to convert to an open-end investment
company, the Adviser could  be required to invest  new monies near market  highs
and  to sell portfolio  securities in a  falling market when  it might otherwise
wish to invest.  Because the Trust  is a closed-end  fund, however, the  Adviser
currently  is not required to invest  new monies or liquidate portfolio holdings
at what may be inopportune  times, and can manage  the Trust's portfolio with  a
greater emphasis on long-term considerations.
 
     The  Board of Trustees  also believes that the  closed-end format is better
suited than the open-end format to the Trust's investment objective of achieving
long-term capital appreciation through  investment primarily in publicly  traded
equity  securities  of  R.O.C. issuers.  The  Board of  Trustees  believes that,
notwithstanding developments in Taiwan that have had the effect of  liberalizing
restrictions on investment by foreign investors in the Taiwan securities market,
investor psychology
 
                                       12
 


<PAGE>

<PAGE>
towards  Taiwan remains  susceptible of rapid  and extreme swings  that would be
likely to have a material and unpredictable impact on inflows and outflows  from
the  Trust if it were to become an open-end fund. The Board of Trustees believes
that the Adviser can  better pursue the  Trust's long-term investment  objective
without  short-term  pressures  to  invest  new  monies  or  liquidate portfolio
holdings at  times  when the  Adviser's  investment style  would  dictate  doing
otherwise. Furthermore, the Board of Trustees believes that a need for the Trust
to  maintain some level of cash reserves  to fund redemptions could restrict the
Trust's ability to remain fully  invested in equity securities in  circumstances
in which the Adviser otherwise thought it advantageous to be so invested.
 
     2.  Potential Increase in Expense Ratio and Decrease in Size. Conversion to
an open-end  investment  company  would  raise  the  possibility  of  the  Trust
suffering   substantial  redemptions  of  Shares,  particularly  in  the  period
immediately  following  the   conversion,  although   the  potential   temporary
redemption  fee of up to 0.50% described  below under 'Measures to be Adopted if
the Trust  Becomes  an  Open-end  Fund'  might  reduce  the  number  of  initial
redemptions   that  would   otherwise  occur.   Unless  the   Trust's  principal
underwriter, if any,  were able to  generate sales of  new Shares sufficient  to
offset  these redemptions, the  size of the  Trust would be  expected to shrink.
(See  'Measures   to   be   Adopted   if   the   Trust   Becomes   an   Open-end
Fund  --  Underwriting  and  Distribution.')  Because  certain  of  the  Trust's
operating expenses are fixed and others (including the fees paid by the Trust to
the Adviser) decline as a percentage of the Trust's NAV as the NAV increases,  a
decrease  in  the Trust's  asset size  would  likely increase  the ratio  of its
operating expenses to its income and net  assets and, as a result, decrease  the
Trust's  net income per  Share. Such a decrease  in size would  also result in a
reduction in the  amount of  fees paid  by the Trust  to the  Adviser and  could
result  in a decision  by the Board  of Trustees to  terminate and liquidate the
Trust (or by the Adviser not  to continue to act as  such) if the amount of  the
Trust's  assets were reduced such that  it was no longer considered economically
feasible for the Trust to continue to carry on business.
 
     3. Possible Sales of Portfolio Securities. If the Trust were to  experience
substantial  redemptions  of  Shares  following its  conversion  to  an open-end
investment company, it would probably not have sufficient cash reserves to  fund
such  redemptions and therefore  could be required  to sell portfolio securities
and incur  increased transaction  costs in  order  to raise  cash to  meet  such
redemptions. Any net gains resulting from sales of portfolio securities effected
to  fund  cash  redemption  obligations would  normally  be  distributed  to all
Shareholders, thereby  further reducing  the size  of the  Trust, and  would  be
taxable  to them.  See 'Differences  Between Open-end  and Closed-end Investment
Companies -- Capital Gains' above.
 
     4. Conversion Costs.  The process of  converting the Trust  to an  open-end
investment  company  would  involve  legal  and  other  expenses  to  the Trust,
including the preparation of a  registration statement under the Securities  Act
of  1933  (see  'Measures  to  be  Adopted  if  the  Trust  Becomes  an Open-end
Fund -- Timing' below) and  the payment of necessary  fees with respect to  such
registration  statement and the sale  of Shares in various  states. The Board of
Trustees has been advised that these conversion expenses, which would be paid by
the Trust and would result in a one-time increase in the Trust's current expense
ratio, could be expected to total at least $150,000. Because the Trust is unable
to determine  at this  time  the actual  costs that  would  be involved,  it  is
possible that the conversion expenses would be substantially higher.
 
                                       13
 


<PAGE>

<PAGE>
MEASURES TO BE ADOPTED IF THE TRUST BECOMES AN OPEN-END FUND
 
     If  the Shareholders voted  to convert the  Trust to an  open-end fund, the
Board of Trustees may take the following actions.
 
     1. Redemption Fee.  In order  to reduce the  number of  redemptions of  the
Shares  immediately following conversion (thereby reducing any disruption of the
Trust's normal  portfolio management),  and to  offset the  brokerage and  other
costs  of such  redemptions, for  a period  of up  to nine  months following the
Trust's conversion to  an open-end  investment company, the  Board reserves  the
right  to impose  a fee,  to be  retained by the  Trust, of  up to  0.50% of the
redemption proceeds payable by the Trust on all redemptions. Such a fee would be
similar to fees that have been proposed by other funds considering a  conversion
from closed-end to open-end status.
 
     2.  Underwriting and Distribution. If the Shareholders voted to convert the
Trust to an  open-end investment company,  the Board would  consider whether  to
select  a principal underwriter of  the Shares. The Shares  could be offered and
sold directly by  the Trust itself,  and by any  other broker-dealers who  enter
into selling agreements with the principal underwriter. The Trust has engaged in
no  discussions with  prospective principal  underwriters, and  there can  be no
assurance  regarding  whether   satisfactory  arrangements   with  a   principal
underwriter would be achieved. The Board of Trustees reserves the right to cause
the  Trust to enter into an  underwriting agreement with a principal underwriter
in such form  and subject  to such  conditions as  the Board  of Trustees  deems
desirable. If a principal underwriter were selected, there could be no assurance
that  any such broker-dealer firms would be able to generate sufficient sales of
Shares to  offset  redemptions, particularly  in  the initial  months  following
conversion.
 
     3.  Effect on  the Trust's Declaration  of Trust. The  Declaration of Trust
provides that, if the Shareholders voted to change the Trust's subclassification
under the Investment  Company Act  from a  closed-end investment  company to  an
open-end  investment company, provisions in the  Declaration of Trust (set forth
in Exhibit A to this Proxy Statement) would become effective that authorize  the
issuance of redeemable securities at NAV and provide that the outstanding Shares
will  be  redeemable  at  the  option  of  the  Shareholders.  In  addition, the
Declaration of Trust provides that if the Trust becomes an open-end fund and  is
no  longer required  by stock  exchange rules  to hold  annual meetings  for the
election of trustees, the Board of Trustees may submit a proposal, which may  be
adopted  by vote of a majority of the Trust's outstanding Shares, that the Trust
cease to hold  annual meetings  of its Shareholders  and that  it eliminate  its
staggered  Board  of  Trustees.  These actions  would  have  the  consequence of
requiring Shareholders' meetings to be held only when required by the Investment
Company Act, either for the election of trustees (if a majority of the  trustees
in  office were not elected by the  Shareholders) or to approve specific matters
in accordance with the Investment Company Act's requirements.
 
     4. Timing. If the  Shareholders voted to convert  the Trust to an  open-end
investment  company,  a number  of  steps would  be  required to  implement such
conversion,  including   the  preparation,   filing  and   effectiveness  of   a
registration statement under the Securities Act of 1933 covering the offering of
the  Shares and the negotiation and execution of a new or amended agreement with
the Trust's transfer agent. It is anticipated that such conversion would  become
effective  no later  than December 31,  1998 and  that the discount,  if any, at
which the Shares trade in relation to their NAV would be reduced in anticipation
of the ability to redeem  Shares at NAV upon  the completion of the  conversion.
The  provisions of the Declaration of Trust  set forth in Exhibit A would become
effective
 
                                       14
 


<PAGE>

<PAGE>
simultaneously with the effectiveness of the registration statement referred  to
above under the Securities Act of 1933.
 
     THE  BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST CONVERSION
OF THE TRUST FROM  A CLOSED-END INVESTMENT COMPANY  INTO AN OPEN-END  INVESTMENT
COMPANY.  The persons named  in the accompanying  proxy will, in  the absence of
contrary instructions, vote all proxies AGAINST this proposal.
 
                                 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, Inc. to assist in the solicitation of  proxies
from  Shareholders  at  an  anticipated cost  of  $8,000  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, Inc. in person, by telephone or by facsimile
will be borne by 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.
 
     THE  TRUST'S ANNUAL REPORT FOR THE  YEAR ENDED DECEMBER 31, 1997, INCLUDING
FINANCIAL STATEMENTS, WAS MAILED ON OR  ABOUT FEBRUARY 27, 1998 TO  SHAREHOLDERS
OF RECORD ON FEBRUARY 19, 1998. HOWEVER, A COPY OF THIS 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 June 4, 1998, 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. 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.
 
            SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
     To the knowledge of  the Trust, of persons  who were affiliated persons  of
the  Adviser (as defined  in the Investment  Company Act) during  1997, only the
Kuomintang (the ruling political party in the R.O.C., which the Trustees believe
may be deemed to  be a controlling  person of the Adviser)  did not make  timely
filings,  or failed to make filings, required  during or with respect to 1997 by
rules of the U.S. Securities and  Exchange Commission pursuant to section  30(h)
of  the Investment Company Act and Section  16(a) of the Securities Exchange Act
of 1934, with respect to holdings of, or transactions in, Shares during 1997  or
prior  years.  Certain holding  companies in  the R.O.C.  through which,  to the
knowledge of  the Trust,  the  Kuomintang owns  its  interests in  the  Adviser,
however,  did  make  timely filings  (or  have  provided statements  in  lieu of
required filings). In addition, if the Kuomintang is
 
                                       15
 


<PAGE>

<PAGE>
deemed to  be  a controlling  person  of the  Adviser,  then all  other  persons
controlled  by the Kuomintang would be required to file statements on Forms 3, 4
and 5 with respect to ownership of, or transactions in, Shares. No such  persons
have made any such filings.
 
                             SHAREHOLDER PROPOSALS
 
     Any  proposal by a Shareholder intended to  be presented at the 1999 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 [December  ,
1998]. The Board of Trustees will  consider whether any such proposal should  be
submitted to a Shareholder vote in light of applicable rules and interpretations
promulgated  by the U.S. Securities and Exchange Commission; but a Shareholder's
timely submission of a  proposal will not automatically  confer a right to  have
that proposal presented for a vote at the Trust's 1999 Annual Meeting.
 
                                               BY ORDER OF THE BOARD OF TRUSTEES
 
                                               James M. Wang
                                               Secretary
 
c/o Dewe Rogerson
850 Third Avenue
20th Floor
New York, New York 10022
April [  ], 1998
 
                                       16




<PAGE>

<PAGE>
                                                                       EXHIBIT A
 
                 ARTICLE X OF THE TRUST'S DECLARATION OF TRUST
 
                                  REDEMPTIONS
 
     In the event that the Shareholders of the Trust vote to convert the Trust
from a 'Closed-end company' to an 'Open-end company'. . . , the following
provisions shall, upon the effectiveness of such conversion, become effective:
 
          SECTION 10.1. REDEMPTIONS. All outstanding Shares may be redeemed at
     the option of the holders thereof, upon and subject to the terms and
     conditions provided in this Article X. The Trust shall, upon application of
     any Shareholder or pursuant to authorization from any Shareholder, redeem
     or repurchase from such Shareholder outstanding Shares for an amount per
     Share determined by the Trustees in accordance with any applicable laws and
     regulations; provided that (a) such amount per Share shall not exceed the
     cash equivalent of the proportionate interest of each Share in the assets
     of the Trust attributable thereto at the time of the redemption or
     repurchase and (b) if so authorized by the Trustees, the Trust may, at any
     time and from time to time, charge fees for effecting such redemption or
     repurchase, at such rates as the Trustees may establish, as and to the
     extent permitted under the 1940 Act, and may, at any time and from time to
     time, pursuant to the 1940 Act, suspend such right of redemption. The
     procedures for and fees, if any, chargeable in connection with the
     effecting and suspending redemption of Shares shall be as set forth in the
     prospectus filed as part of the Trust's effective Registration Statement
     with the Commission from time to time. Payment will be made in such manner
     as described in such prospectus.
 
          SECTION 10.2. REDEMPTIONS OF ACCOUNTS. The Trustees may redeem Shares
     of any Shareholder at a redemption price determined in accordance with
     Section 10.1 if, immediately following a redemption of Shares for any
     reason, the aggregate net asset value of the Shares in such Shareholder's
     account is less than an amount determined by the Trustees. If the Trustees
     redeem Shares pursuant to this Section 10.2, a Shareholder will be notified
     that the value of his account is less than such amount and be allowed sixty
     (60) days to make an additional investment before the redemption is
     processed.
 
                                      A-1







<PAGE>
 
<PAGE>

                                                       APPENDIX I: FORM OF PROXY

1.)  The election of three Trustees, Messrs. Cheng, Laux and Miossi, to serve
     for a term expiring on the date of the 2001 Annual Meeting of
     Shareholders or the special meeting in lieu thereof, and one Trustee,
     Robert P. Parker, 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
                                   [   ]            [   ]           [   ]

     THEODORE S.S. CHENG
     DAVID N. LAUX
     ALFRED F. MIOSSI
     ROBERT P. PARKER

     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, 1998.

                                    For          Against          Abstain
                                   [   ]          [   ]            [   ]

3.)  Conversion of the Trust from a closed-end investment company into an open-
     end investment company and certain related matters.
                                    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 AGAINST 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.


<PAGE>
 
<PAGE>


                                                                               2

     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
                                  June 4, 1998

         The undersigned hereby appoints Daniel K. L. Chiang and James M. Wang,
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 Thursday, June 4, 1998 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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