<PAGE>
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [_]
Check the appropriate box:
[_]Preliminary proxy statement [_]Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2))
[X]Definitive proxy statement
[_]Definitive additional materials
[_]Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
The China Fund, Inc.
-----------------------------------------------------
(Name of Registrant as Specified in Its Charter)
The China Fund, Inc.
-----------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
[X]No fee required.
[_]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 transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:/1/
(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:
- --------
/1/Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>
THE CHINA FUND, INC.
c/o HSBC Securities Inc.
140 Broadway, 5th Floor
New York, New York 10005
February 9, 2000
Dear Stockholders:
The Annual Meeting of Stockholders of The China Fund, Inc. (the "Fund") will
be held at 10:00 A.M. on Thursday, March 9, 2000, at the offices of Clifford
Chance Rogers & Wells LLP, Conference Room A, 50th Floor, 200 Park Avenue, New
York, New York, 10166. A Notice and Proxy Statement regarding the meeting,
proxy card for your vote at the meeting, and postage prepaid envelope in which
to return your proxy are enclosed.
At the Annual Meeting, the stockholders will (i) elect a class of the Fund's
directors and (ii) consider the ratification of the selection of KPMG LLP as
independent auditors. In addition, the stockholders present at the Annual
Meeting will hear a report on the Fund and will have an opportunity to discuss
matters of interest to them.
The Board has recommended that the stockholders vote in favor of each of the
foregoing matters.
Respectfully,
/s/ Thomas R. Callahan
Thomas R. Callahan
Secretary
STOCKHOLDERS ARE STRONGLY URGED TO SIGN AND MAIL THE ENCLOSED PROXY IN THE
ENCLOSED ENVELOPE TO INSURE A QUORUM AT THE MEETING.
<PAGE>
THE CHINA FUND, INC.
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
March 9, 2000
To the Stockholders of
The China Fund, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of The China
Fund, Inc. (the "Fund") will be held at the offices of Clifford Chance Rogers
& Wells LLP, Conference Room A, 50th Floor, 200 Park Avenue, New York, New
York, 10166, on Thursday, March 9, 2000, at 10:00 A.M., local time, for the
following purposes:
1. To elect three Class I directors to serve for a term expiring on the
date on which the annual meeting of stockholders is held in 2003.
2. To ratify or reject the selection of KPMG LLP as independent auditors of
the Fund for its fiscal year ending October 31, 2000.
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The Board of Directors has fixed the close of business on January 30, 2000
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting or any adjournments thereof.
You are cordially invited to attend the meeting. Stockholders who do not
expect to attend the meeting in person are requested to complete, date and
sign the enclosed form of proxy and return it promptly in the envelope
provided for that purpose. You may nevertheless vote in person at the meeting
if you choose to attend. The enclosed proxy is being solicited by the Board of
Directors of the Fund.
By order of the Board of Directors,
/s/ Thomas R. Callahan
Thomas R. Callahan
Secretary
February 9, 2000
<PAGE>
THE CHINA FUND, INC.
c/o HSBC Securities Inc.
140 Broadway, 5th Floor
New York, New York 10005
------------
PROXY STATEMENT
------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of THE CHINA FUND, INC. (the "Fund") for use
at the Annual Meeting of Stockholders, to be held at the offices of Clifford
Chance Rogers & Wells LLP, Conference Room A, 50th Floor, 200 Park Avenue, New
York, New York 10166, on Thursday, March 9, 2000, at 10:00 A.M., local time,
and at any adjournments thereof.
This Proxy Statement and the form of proxy are being mailed to stockholders
on or about February 9, 2000. Any stockholder giving a proxy has the power to
revoke it by mail (addressed to the Secretary, The China Fund, Inc., c/o HSBC
Securities Inc., 140 Broadway, 5th Floor, New York, New York 10005) or in
person at the meeting, by executing a superseding proxy or by submitting a
notice of revocation to the Fund. All properly executed proxies received in
time for the meeting will be voted as specified in the proxy or, if no
specification is made, for each proposal referred to in this Proxy Statement.
Abstentions and broker non-votes are each included in the determination of the
number of shares present and voting at the meeting.
The Board of Directors has fixed the close of business on January 30, 2000
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting and at any adjournments thereof. Stockholders on
the record date will be entitled to one vote for each share held, with no
shares having cumulative voting rights. As of the record date, the Fund had
outstanding 10,073,173.459 shares of common stock. To the knowledge of the
Fund's management, no person owned beneficially more than 5% of the Fund's
outstanding shares as of January 30, 2000.
Management of the Fund knows of no business other than that mentioned in
Items 1 and 2 of the Notice of Meeting which will be presented for
consideration at the meeting. If any other matter is properly presented, it is
the intention of the persons named in the enclosed proxy to vote in accordance
with their best judgment.
The Fund will furnish, without charge, a copy of its annual report for its
fiscal year ended October 31, 1999 to any stockholder requesting such report.
Requests for the annual report should be made by writing to The China Fund,
Inc., c/o Dewe Rogerson Inc., 850 Third Avenue, New York, New York 10022,
attention: Marissa L. Moretti, or by calling (888) CHN-CALL.
The Board recommends that the stockholders vote in favor of each of the
matters mentioned in Items 1 and 2 of the Notice of Meeting.
1
<PAGE>
(1) ELECTION OF DIRECTORS
Persons named in the accompanying form of proxy intend in the absence of
contrary instructions to vote all proxies for the election of Sir Alan Donald,
Mr. John W. English and Mr. Paul C. Guidone as Class I directors of the Fund,
to serve for a term expiring on the date on which the Annual Meeting of
Stockholders is held in 2003, or until their successors are elected and
qualified. 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 shall be
designated by the Board of Directors to replace any such nominee. The election
of each director will require the affirmative vote of a majority of the votes
cast at the meeting. For this purpose, abstentions and broker non-votes will
not be counted as votes cast at the meeting.
Information Concerning Class I Nominees and Members of the Board of Directors
The following table sets forth information concerning each of the nominees
as a Class I director of the Fund. Each of the nominees is currently a Class I
director of the Fund.
Nominees
<TABLE>
<CAPTION>
Principal Occupation or Shares
Employment During Past Beneficially
Five Years and Owned Percent
Name (Age) and Directorships in Director January of
Address of Director Publicly Held Companies Since 30, 2000(1) Class
----------------------- ------------------------ -------- ------------ ---------
<C> <S> <C> <C> <C>
Sir Alan Donald (68) British Ambassador to 1992 250 less than
Chiddingstone Causeway the People's Republic 1%
Nr. Tonbridge of China (1988-1991);
Kent, TN11 8JH Director, HSBC China
United Kingdom Fund Limited; Director,
Fleming Asia Investment
Trust; Adviser, Rolls
Royce plc.
John W. English (67) Vice President and Chief 1992 4,934 less than
50-H New England Avenue Investment Officer, The 1%
Summit, New Jersey Ford Foundation (1981-
07902-0640 1993); Director, The
Northern Trust
Institutional Funds;
Director, Washington
Mutual WM Funds;
Director, Select Sector
SPDR Trust; Director,
A.L.T. Films.
*Paul C. Guidone (42) Group Chief Executive 1999 None --
Officer, HSBC Asset
Management Ltd. (1998-
present); Deputy
Chairman and Group
Chief Investment
Officer, HSBC Asset
Management Ltd. (1997-
1998); Group Chief
Executive and Group
Chief, HSBC Asset
Management (1996-1997);
Investment Officer,
HSBC Asset Management
Ltd. (1994-present);
Chief Executive
Officer, HSBC Asset
Management Americas
Inc. (1995-1997);
Managing Director and
Chief Investment
Officer, The Prudential
Insurance Company, PDI
Strategies (1990-1994).
</TABLE>
- --------
* Mr. Guidone is considered to be an "interested person" (as defined in the
Investment Company Act of 1940, as amended) because of his affiliation with
HSBC Asset Management (Hong Kong) Limited, the Fund's Investment Manager.
2
<PAGE>
Other Current Directors
<TABLE>
<CAPTION>
Principal Occupation or Shares
Employment During Past Beneficially
Five Years and Owned Percent
Name (Age) and Directorships in Director January of
Address of Director Publicly Held Companies Since 30, 2000(1) Class
------------------------- ------------------------ -------- ------------ ---------
<C> <S> <C> <C> <C>
Michael F. Holland (55) Chairman, Holland & 1992 2,057 less than
375 Park Avenue Company L.L.C. (1995- 1%
New York, New York 10152 present); General
Partner, The Blackstone
Group (1994-1995); Vice
Chairman, Oppenheimer &
Co. Inc. (1992-1994);
Chairman and Chief
Executive Officer,
Salomon Brothers Asset
Management, Inc. (1989-
1992); Managing
Director, Salomon
Brothers Inc. (1989-
1992); Director, The
Holland Balanced Fund,
Inc.
Burton Levin (69) Visiting Professor 1992 498 less than
18 Page Farm Road Carleton College (1995- 1%
Sherborn, MA 01770 present); Co-Chairman,
Hopkins-Nanjing Center
(1999-present);
Director, Noble Ltd.
(1997-present); U.S.
Ambassador to Burma
(1987-1990).
James J. Lightburn (56) Attorney, member of 1992 500 less than
47, Avenue Georges Mandel Hughes Hubbard & Reed 1%
Paris, France 75116 (1993-present); member
of Jones, Day, Reavis &
Pogue (1986-1993).
Joe O. Rogers (51) Vice President of 1992 2000 less than
2247 Foxwood Drive Business Development, 1%
Chapel Hill, NC 27514 PlanetPortal.com, Inc.
(Sept. 1999-present);
President, Rogers
International, Inc.
(1986-present); Vice
President of Business
Development, Thomson
Consulting (1998-May
1999); Partner, PHH
Fantus Consulting
(1993-1996); Director,
The Taiwan Fund, Inc.
Alan Tremain (64) Chairman of the Board of 1992 4,782 less than
380 South Country Road the Fund; Chairman, BFX 1%
Suite 200 Hospitality Group, Inc.
Palm Beach, Florida 33480 (1996-1998); Chairman,
Hotels of Distinction
Ventures, Inc. (1989-
present); Chairman,
Hotels of Distinction
(International), Inc.
(1974-present).
Nigel S. Tulloch (53) Chief Executive, HSBC 1992 2,000 less than
7, Circe Circle, Asset Management 1%
Dalkeith Bahamas Limited (1986-
WA6009, 1992); Director, The
Australia HSBC China Fund
Limited.
</TABLE>
- --------
(1) The information as to beneficial ownership is based on statements
furnished to the Fund by the nominees and other current directors.
3
<PAGE>
The Fund's Board of Directors has an Audit Committee which is responsible
for reviewing financial and accounting matters. The current members of the
Audit Committee are Messrs. Donald, English, Holland, Levin, Lightburn,
Rogers, Tremain and Tulloch. The Audit Committee met four times during the
fiscal year ended October 31, 1999. The Fund's Board has a Nominating
Committee, comprised of the current members of the Audit Committee, which is
responsible for nominating candidates to fill any vacancies on the Board. The
Nominating Committee does not consider nominees recommended by security
holders. The Nominating Committee did not meet during the fiscal year ended
October 31, 1999. The Fund's Board of Directors held four regular meetings and
three special meetings during the fiscal year ended October 31, 1999. Each
director attended at least seventy-five percent of the aggregate number of
meetings of the Board and any committee on which he served.
Section 16(a) of the Securities Exchange Act of 1934 requires the Fund's
officers and directors, and persons who own more than ten percent of a
registered class of the Fund's equity securities, to file reports of ownership
and changes in ownership with the Securities and Exchange Commission and the
New York Stock Exchange, Inc. The Fund believes that its officers and
directors have complied with all applicable filing requirements for the fiscal
year ended October 31, 1999. Section 30(f) of the Investment Company Act of
1940 extends the reporting requirements under Section 16(a) of the Securities
Exchange Act of 1934 to the investment advisers of the Fund and the officers
and directors of such investment advisers. The Fund believes that its
investment advisers and the officers and directors of such investment advisers
have complied with all applicable filing requirements for the fiscal year
ended October 31, 1999.
Officers of the Fund
Mr. Thomas R. Callahan (age 53) has been Secretary and Treasurer of the Fund
since July 1992 and Vice President of the Fund since June 1993. Since April
1991, he has been a Managing Director of HSBC Securities, Inc. (formerly James
Capel Incorporated) and previously was a Managing Director of Wardley
Incorporated.
Fund Management and Administration
HSBC Asset Management (Hong Kong) Limited acts as Investment Manager for the
portion of the Fund's assets allocated for investment in listed securities
pursuant to an Investment Advisory and Management Agreement between the
Investment Manager and the Fund. The principal business address of the
Investment Manager is 12F, Tower 1, HSBC Centre, 1 Sham Mong Road, Kowloon,
Hong Kong.
HSBC Private Equity Management (Hong Kong) Limited acts as Direct Investment
Manager for the portion of the Fund's assets allocated for investment in
direct investments pursuant to a Direct Investment Management Agreement among
the Direct Investment Manager, the Investment Manager and the Fund. The
principal business address of the Direct Investment Manager is Level 17, 1
Queen's Road Central, Hong Kong.
State Street Bank and Trust Company acts as Administrator to the Fund
pursuant to an Administration Agreement between the Administrator and the
Fund. The principal business address of the Administrator is P.O. Box 1713,
Boston, Massachusetts 02105.
Transactions with and Remuneration of Officers and Directors
The aggregate remuneration for directors not affiliated with the Investment
Manager or the Direct Investment Manager was US$294,256 during the year ended
October 31, 1999 and, for that period, the aggregate amount of expenses
reimbursed by the Fund for directors' attendance at directors' meetings,
including affiliated directors, was US$67,756. Each non-affiliated director
currently receives fees, paid by the Fund, of US$2,000 for each directors'
meeting and committee
4
<PAGE>
meeting attended and an annual fee of US$10,000. The Chairman of the Fund
receives an annual fee of US$12,500.
The Direct Investment Manager pays the compensation and certain expenses of
the personnel of the Direct Investment Manager who serve as directors and
officers of the Fund and receives from the Investment Manager a portion of the
investment advisory fee paid by the Fund to the Investment Manager.
The following table sets forth the aggregate compensation from the Fund paid
to each director during the fiscal year ended October 31, 1999. The Investment
Manager and its affiliates do not advise any other U.S. registered investment
companies of which any of the directors of the Fund are directors or trustees.
<TABLE>
<CAPTION>
Aggregate
Compensation
Name of Director From Fund(1)
---------------- ------------
<S> <C>
John W. English...................... $30,500
Sir Alan Donald...................... $28,000
Paul C. Guidone*..................... --
Michael F. Holland................... $28,000
Burton Levin......................... $26,000
James J. Lightburn................... $28,000
Joe O. Rogers........................ $28,000
Alan Tremain......................... $28,000
Nigel S. Tulloch..................... $28,000
</TABLE>
- --------
(1) Includes compensation paid to directors by the Fund. The Fund's directors
did not receive any pension or retirement benefits as compensation for
their service as directors of the Fund.
* Mr. Guidone who is an "interested person" of the Fund because of his
affiliation with HSBC Asset Management (Hong Kong) Limited, the Fund's
Investment Manager, did not receive any compensation from the Fund for his
services as director during the fiscal year ended October 31, 1999.
(2) RATIFICATION OR REJECTION OF SELECTION
OF INDEPENDENT AUDITORS
At a meeting held on December 9, 1999, the Board of Directors of the Fund,
including a majority of the directors who are not "interested persons" of the
Fund (as defined in the Investment Company Act of 1940, as amended), selected
KPMG LLP to act as independent auditors for the Fund for the fiscal year
ending October 31, 2000. The Fund knows of no direct financial or material
indirect financial interest of such firm in the Fund. One or more
representatives of KPMG LLP are expected to be present at the meeting and will
have an opportunity to make a statement if they so desire. Such
representatives are expected to be available to respond to appropriate
questions from stockholders.
The Fund's financial statements for the fiscal year ended October 31, 1999
were examined by KPMG LLP. In connection with its audit services, KPMG LLP
audited the financial statements included in the Fund's annual report for the
period ended October 31, 1999 and reviewed the Fund's filings with the
Securities and Exchange Commission.
The selection of independent auditors is subject to the ratification or
rejection of the stockholders of the Fund at the meeting. Ratification of the
selection of the independent auditors will require the affirmative vote of a
majority of the votes cast at the meeting. For this purpose, abstentions and
broker non-votes will not be counted as votes cast at the meeting.
5
<PAGE>
MISCELLANEOUS
Proxies will be solicited by mail and may be solicited in person or by
telephone or telegraph, by officers of the Fund or personnel of the
Administrator. The Fund has retained Corporate Investor Communications, Inc.
to assist in the proxy solicitation. The cost of their services is estimated
at US$4,500. The expenses connected with the solicitation of proxies including
proxies solicited by the Fund's officers or agents in person, by telephone or
by telegraph will be borne by the Fund. The Fund will reimburse banks,
brokers, and other persons holding the Fund's 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.
In the event that sufficient votes in favor of any proposal set forth in the
Notice of this meeting are not received by March 9, 2000, the persons named as
attorneys in the enclosed proxy may propose one or more adjournments of the
meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of the holders of a majority of the shares
present in person or by proxy at the session of the meeting to be adjourned.
The persons named as proxies in the enclosed proxy will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of the
proposal for which further solicitation of proxies is to be made. They will
vote against any such adjournment those proxies required to be voted against
such proposal. The costs of any such additional solicitation and of any
adjourned session will be borne by the Fund.
STOCKHOLDER PROPOSALS
Any proposal by a stockholder of the Fund intended to be presented at the
Annual Meeting of Stockholders of the Fund to be held in March 2001 must be
received by the Fund, c/o HSBC Securities Inc. 140 Broadway, 5th Floor, New
York, New York 10005, not later than October 11, 2000 in order to be included
in the Fund's proxy statement and proxy card related to that meeting and
presented at the meeting.
A stockholder who wishes to make a proposal at the March 2001 Annual Meeting
of Stockholders without including the proposal in the Fund's proxy statement
must notify the Fund, at the Fund's offices, of such proposal before January
10, 2001 and after December 11, 2000. If a stockholder fails to give notice by
this date, then the persons named as proxies in the proxies solicited by the
Board of Directors of the Fund for the March 2001 Annual Meeting of
Stockholders may exercise discretionary voting power with respect to any such
proposal.
By order of the Board of Directors,
Thomas R. Callahan
Secretary
140 Broadway
New York, New York
February 9, 2000
6
<PAGE>
CIHFM-PS-00
<PAGE>
THE CHINA FUND, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Stockholders - March 9, 2000
The undersigned stockholder of The China Fund, Inc. (the "Fund") hereby appoints
Thomas R. Callahan and Glenn Francis, or either of them, proxies of the
undersigned, with full power of substitution to vote and to act for and in the
name and stead of the undersigned at the Annual Meeting of Stockholders of the
Fund, to be held at the offices of Clifford Chance Rogers & Wells LLP,
Conference Room A, 50th Floor, 200 Park Avenue, New York, New York 10166 at
10:00 a.m., local time, and at any and all adjournments thereof, according to
the number of votes the undersigned would be entitled to cast if personally
present.
The shares represented by this proxy will be voted in accordance with
instructions given by the stockholders, but if no instructions are given, this
proxy will be voted in favor of proposals 1 and 2 set forth in this proxy. In
addition, this proxy will be voted, in the discretion of such proxies, upon such
other business as may properly come before the meeting or any adjournments
thereof. The undersigned hereby revokes any and all proxies with respect to such
shares heretofore given by the undersigned. The undersigned acknowledges receipt
of the Proxy Statement dated February 9, 2000.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE, AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
Please sign this proxy exactly as your name(s) appear(s) on the books of
the Fund. 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, the signature should
be that of an authorized officer who should state his or her title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
1
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
[X]
PLEASE MARK VOTES
AS IN THIS EXAMPLE
1. The election of Class I Directors
to serve a term expiring on the date
on which the annual meeting is held
in 2003.
For All With- For All
Nominees hold Except
THE CHINA FUND, INC. Sir Alan Donald [_] [_] [_]
Mr. John W. English
Mr. Paul C. Guidone
If you do not want your shares voted "For" a particular nominee, mark the
"For All Except" box and strike a line through that particular nominee's name.
Your shares will be voted for the remaining nominee(s).
RECORD DATE SHARES: For Against Abstain
3. The ratification of the selection of [_] [_] [_]
KPMG LLP as independent auditors of the
Fund for its fiscal year ending October 31,
2000.
--------------
Please be sure to sign and date this Date Proxy. Date
- -----------------------------------------------------------------------
- ---------- -------------------------------- ----------
Mark box at right if an address change or comment [_]
has been noted on the reverse side of this card.
</TABLE>
DETACH CARD DETACH CARD
THE CHINA FUND, INC.
Dear Stockholder,
Please take note of the important information enclosed with this proxy
card. There are a number of issues related to the management and operations of
your Fund that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your stock.
Please mark the boxes on this proxy card to indicate how your stock will be
voted. Then sign the card, detach it and return it in the enclosed postage paid
envelope.
Your vote must be received prior to the Annual Meeting of Stockholders,
which is scheduled to be held on March 9, 2000.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
The China Fund, Inc.
2
