<PAGE>
THE GREATER CHINA FUND, INC.
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
March 17, 1999
To the Stockholders:
The Annual Meeting of Stockholders of The Greater China Fund, Inc. (the
"Fund") is to be held at 9:30 A.M. on April 28, 1999, at the offices of the
administrator, Mitchell Hutchins Asset Management Inc., 1285 Avenue of the
Americas, 14th Floor, New York, New York 10019. Stockholders who are unable
to attend this meeting are strongly encouraged to vote by proxy, which is
customary in corporate meetings of this kind. A Proxy Statement regarding the
meeting, a proxy card so your vote can be cast at the meeting and a postage
prepaid envelope in which to return your proxy card are enclosed.
At the Annual Meeting, stockholders will elect certain of the Fund's
Directors whose terms expire in 1999 and consider the ratification of the
selection of PricewaterhouseCoopers LLP as independent accountants. There
will also be an opportunity to discuss matters of interest to you as a
stockholder.
Your Fund's Directors recommend that stockholders vote in favor of each of
the foregoing matters.
Respectfully,
/s/ Ronald G.M. Watt /s/ Richard B. Bradley
RONALD G.M. WATT RICHARD B. BRADLEY
President Chairman of the Board
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STOCKHOLDERS ARE URGED TO SIGN THE PROXY CARD AND MAIL IT IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE SO AS TO ENSURE A QUORUM AT THE MEETING. THIS IS
IMPORTANT REGARDLESS OF HOW MANY SHARES YOU OWN.
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<PAGE>
THE GREATER CHINA FUND, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of
THE GREATER CHINA FUND, INC.:
Notice is hereby given that the Annual Meeting of the Stockholders of The
Greater China Fund, Inc. (the "Fund") will be held at the offices of Mitchell
Hutchins Asset Management Inc., 1285 Avenue of the Americas, 14th Floor, New
York, New York 10019 on April 28, 1999 at 9:30 A.M. for the following
purposes:
(1) To elect two Class II Directors to serve for a term expiring on the
date of the Annual Meeting of Stockholders in 2002 or until their respective
successors shall have been duly elected and qualified.
(2) To ratify the action taken by the Board of Directors in selecting
PricewaterhouseCoopers LLP as independent accountants for the fiscal year
ending December 31, 1999.
(3) To consider and act upon such other business as may properly come
before the Meeting or any adjournments thereof.
Holders of record of the shares of common stock of the Fund at the close
of business on March 10, 1999 are entitled to vote at the meeting or any
adjournments thereof.
By order of the Board of Directors,
/s/ Peter C. Cairns
PETER C. CAIRNS,
Secretary
March 17, 1999
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IMPORTANT -- WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN
IT IN THE ENCLOSED ADDRESSED ENVELOPE WHICH REQUIRES NO POSTAGE AND IS
INTENDED FOR YOUR CONVENIENCE. YOUR PROMPT RETURN OF THE ENCLOSED PROXY CARD
MAY SAVE THE FUND THE NECESSITY AND EXPENSE OF FURTHER SOLICITATIONS TO
ENSURE A QUORUM AT THE ANNUAL MEETING. IF YOU CAN ATTEND THE MEETING AND WISH
TO VOTE YOUR SHARES IN PERSON AT THAT TIME, YOU WILL BE ABLE TO DO SO.
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-----------------
PROXY STATEMENT
-----------------
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The Greater China Fund, Inc. (the
"Fund") for use at the Annual Meeting of Stockholders, to be held at the
offices of Mitchell Hutchins Asset Management Inc., 1285 Avenue of the
Americas, 14th Floor, New York, New York 10019 on April 28, 1999, at 9:30
A.M., and at any adjournments thereof.
This Proxy Statement, the Notice of Annual Meeting and the proxy card are
first being mailed to stockholders on or about March 15, 1999. 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 the Proxy Statement. Any stockholder giving a proxy has the power to
revoke it by mail (addressed to Paul H. Schubert, Assistant Secretary to the
Fund, c/o Mitchell Hutchins Asset Management Inc., 1285 Avenue of the
Americas, New York, New York 10019) or in person at the meeting, by executing
a superseding proxy or by submitting a notice of revocation to the Fund.
Holders of record of the common stock of the Fund at the close of business
on March 10, 1999, will be entitled to one vote per share on all business of
the meeting and any adjournments. There were 12,593,049 shares of common
stock outstanding on the record date. Abstentions and "broker non-votes" (as
defined below) are counted for purposes of determining whether a quorum is
present, but do not represent votes cast with respect to any proposal.
"Broker non-votes" are shares held by a broker or nominee for which an
executed proxy is received by the Fund, but are not voted as to one or more
proposals because instructions have not been received from the beneficial
owners or persons entitled to vote and the broker or nominee does not have
discretionary voting power.
(1) ELECTION OF DIRECTORS
The Fund's Board of Directors has been divided into three classes, the
term of one of which expires each year. The terms of Messrs. Richard B.
Bradley and Don G. Hoff, constituting Class II Directors, expire at the 1999
Annual Meeting of Stockholders.
Persons named in the accompanying form of proxy intend, in the absence of
contrary instructions, to vote all proxies in favor of the election of the
three nominees listed below as Directors of the Fund to serve as Class II
Directors of the Fund for a term expiring on the date of the 2002 Annual
Meeting of Stockholders, or until their successors are duly elected and
qualified. All nominees have consented to stand for election and to serve if
elected. 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. YOUR FUND'S
DIRECTORS RECOMMEND THAT STOCKHOLDERS VOTE IN FAVOR OF THE ELECTION OF THE
NOMINEES LISTED BELOW.
CLASS II
Richard B. Bradley
Don G. Hoff
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INFORMATION CONCERNING NOMINEES AND MEMBERS OF THE BOARD OF DIRECTORS
The following table sets forth certain information concerning each of the
Directors and nominees for Director of the Fund. Each of the nominees is
currently a Director of the Fund. Unless otherwise noted, each of the
nominees has engaged in the principal occupation listed in the following
table for more than five years, but not necessarily in the same capacity.
<TABLE>
<CAPTION>
SHARES
YEAR BENEFICIALLY
PRESENT OFFICE WITH THE FUND; FIRST OWNED ON PERCENT
PRINCIPAL OCCUPATION OR BECAME DECEMBER 31, OF
NAME (AGE) EMPLOYMENT AND DIRECTORSHIPS A DIRECTOR 1998(1) CLASS
- ----------------------- ---------------------------------------------- ------------ -------------- ---------
<S> <C> <C> <C> <C>
Edward Y. Baker (64) ... Director; Investment Advisor; Chairman and 1992 1,000 (2)
Director, Orion Energy Holdings Inc.;
Director, Canada Life of America Series Fund,
Inc.; Trustee, Rogers Sugar Income Fund;
Director, SkyDome Corporation; previously
President, Chief Executive Officer, HOOPP
Investment Management Limited, Chief
Investment Officer, Hospitals of Ontario
Pension Plan and Senior Vice-President,
Investments and Chief Investment Officer of
the Ontario Hospital Association.
Richard B. Bradley (61) Chairman and Director; Chairman of The Risk 1992 -- --
Advisory Group Limited; Director of The
Aberdeen New Dawn Investment Trust Limited;
Director of Photobition Group plc; previously
Group Managing Director of Asia Equity
Holdings.
John A. Bult (62)* .... Director; Chairman of PaineWebber 1992 5,307 (2)
International Inc.; Director of The Germany
Fund, Inc.; The New Germany Fund, Inc.; The
Central European Equity Fund, Inc.; The France
Growth Fund, Inc.
Richard Graham (40)* .. Director; Divisional Director; Product 1993 -- --
Specialist-European and Emerging Markets,
Baring Asset Management; previously head of
ING Barings Group in China and Chairman of the
British Chamber of Commerce in Shanghai.
(table continued on next page)
2
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SHARES
YEAR BENEFICIALLY
PRESENT OFFICE WITH THE FUND; FIRST OWNED ON PERCENT
PRINCIPAL OCCUPATION OR BECAME DECEMBER 31, OF
NAME (AGE) EMPLOYMENT AND DIRECTORSHIPS A DIRECTOR 1998(1) CLASS
- ----------------------- ---------------------------------------------- ------------ -------------- ---------
John A. Hawkins (56) ... Director; Senior Executive Vice President and 1992 -- --
Executive Committee Member of The Bank of
Bermuda Limited; Director of Bermuda Far East
Properties Limited; Bermuda Trust (Far East)
Limited; MIL (Far East) Limited; Bermuda Trust
(Cook Islands) Limited; Bermuda Trust
(International) Limited; Bermuda Trust (Hong
Kong) Limited; Casana Nominees Limited; Somers
Nominees (Far East) Limited; Universal
Corporate Services Limited; Bermuda Trust
(Mauritius) Limited; Bermuda Trust (Western
Samoa) Limited; MIL Properties (Cook Islands)
Limited; Bermuda Asia Pacific Holdings
Limited; Bermuda Trust (South Pacific)
Limited; Bermuda Trust (New Zealand) Limited;
Bermuda Trust Holdings (South Pacific)
Limited; Somers Services Limited; Somers
Nominees Limited; Somers Administration
Limited; Somers Secretarial Limited; Bermuda
Trust (Singapore) Limited; MIL Corporate
Services (Singapore) Ltd.; S.R. Investment(L)
Limited; SR Global Fund Inc.; Le Masurier,
James & Chinn Limited; SR Fund Marketing
Limited; The New China Hong Kong Roc Fund
Limited; Integral Bond Arbitrage Fund Limited;
Integral Select Funds Limited; Ermitage Selz
Fund Ltd.; Ermitage U.K. Value Fund Ltd.; E.T.
Investment Management Limited; LIM Global
Funds; Bermuda International Guernsey Limited;
Bank of Bermuda (Guernsey) Limited; Bermuda
Trust (Guernsey) Limited; Bermuda Trust
(Jersey) Limited; Bermuda International
(Dublin) Limited; Bermuda Trust (Dublin)
Limited; Bank of Bermuda (Luxembourg) SA;
Bermuda International Investment Management
Limited; Bermuda Trust Company Limited;
Bermuda Equity Funds Limited; Bermuda Money
Funds Limited; Global Manager Limited;
Management International (Bermuda) Limited;
Bermuda Investments
(Europe) Limited.
(table continued on next page)
3
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SHARES
YEAR BENEFICIALLY
PRESENT OFFICE WITH THE FUND; FIRST OWNED ON PERCENT
PRINCIPAL OCCUPATION OR BECAME DECEMBER 31, OF
NAME (AGE) EMPLOYMENT AND DIRECTORSHIPS A DIRECTOR 1998(1) CLASS
- ----------------------- ---------------------------------------------- ------------ -------------- ---------
Don G. Hoff (63)........ Director; Chairman and Chief Executive Officer 1992 419 (2)
of Intertec Inc. and The Lamaur Corporation;
Director and Chairman of The Asia Pacific
Fund; Director of Prudential's World Fund
International & Global Series, Tax-Free Money
Fund, Special Money Market Fund, Pacific
Growth Fund, Natural Resources Fund, Moneymart
Assets, Institutional Liquidity Portfolio and
Global Genesis Funds, Europe Growth Fund, Tax
Free Fund, Command Money Fund and Command
Government Fund.
Jonathan J.K. Taylor Director; Chairman and Managing Director of 1992 2,000 (2)
(55) ................... Dragon Partners Limited; Director of Onyx
Country Estates Limited; Onyx Town Estates
Limited; previously Director of Baring Asset
Management Limited and Baring Asset Management
(Holdings) Limited.
Tak Lung Tsim (52)...... Director; Principal, T.L. Tsim & Associates 1992 1,000 (2)
Ltd.; Member of Li Po Chun United World
College of Hong Kong; Director of Playmates
Toys Holdings Limited; Director of Prestige
Properties Holdings Limited; Director of
New-Alliance Asset Management (Asia) Ltd.;
All Directors and 9,726 (2)
Officers as a group ....
</TABLE>
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* Directors considered by the Fund and its counsel to be "interested
persons" (which as used in this proxy statement is as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")) of the
Fund or of the Fund's investment manager. Mr. Graham is deemed to be
an interested person due to his affiliation with the Fund's
investment manager, Baring International Investment (Far East)
Limited, 19/F Edinburgh Tower, 15 Queen's Road Central, Hong Kong, or
affiliates thereof. Mr. Bult is deemed to be an interested person
because of his affiliation with affiliates of PaineWebber
Incorporated, the lead manager of the underwriting syndicate in
connection with the initial public offering of the Fund's shares.
(1) The information as to beneficial ownership is based on statements
furnished to the Fund by the Directors. Unless otherwise noted,
beneficial ownership is based on sole voting and investment power.
(2) Represents less than 1% of the Fund's outstanding common stock.
--------------------
4
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STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
To the best of the Fund's knowledge, as of March 10, 1999, no person owned
beneficially more than 5% of the Fund's outstanding common stock:
COMMITTEES OF THE BOARD--BOARD MEETINGS
The Board of Directors of the Fund has an Executive Committee and an Audit
Committee. The Board does not have a Nominating Committee.
The Board of Directors of the Fund met three times during the fiscal
period ended December 31, 1998. During such period each Director attended at
least 75% of the meetings of the Board of Directors and the committees of the
Board on which they served.
EXECUTIVE COMMITTEE
The Board has an Executive Committee consisting of Messrs. Baker, Bradley
and Taylor. The Executive Committee did not meet during the fiscal period
ended December 31, 1998.
AUDIT COMMITTEE
The Board has an Audit Committee consisting of Messrs. Baker, Hawkins,
Hoff and Tsim, each of whom is not an interested person of the Fund or of
Baring International Investment (Far East) Limited (a "Noninterested
Director"). The Audit Committee met three times during the fiscal period
ended December 31, 1998. The Audit Committee reviews with management and the
independent accountants for the Fund, among other things, the scope of the
audit and the controls of the Fund and its agents, reviews and approves in
advance the type of services to be rendered by independent accountants,
recommends the selection of independent accountants for the Fund to the Board
and in general considers and reports to the Board on matters regarding the
Fund's accounting and bookkeeping practices.
5
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EXECUTIVE OFFICERS
The following people are executive officers of the Fund:
<TABLE>
<CAPTION>
PRESENT OFFICE WITH THE FUND;
IF ANY, PRINCIPAL OCCUPATION OR YEAR FIRST
EMPLOYMENT AND DIRECTORSHIPS BECAME
NAME (AGE) IN PUBLICLY HELD COMPANIES AN OFFICER(*)
- --------------------------- ----------------------------------------------- -------------
<S> <C> <C>
Ronald G.M. Watt (52) .... President; Director of Institutional and Mutual 1998
Fund Group of Baring Asset Management Limited:
Director of Baring International Investment
(Far East) Limited.
Henry Ho (42) ............ Vice President; Director of Institutional Group 1996
of Baring International Investment (Far East)
Limited; Director of Institutional Group of
Baring Asset Management (Asia) Limited.
Peter C. Cairns (37) ..... Secretary; Director of Baring Asset Management 1996
(Asia) Limited; Baring International Fund
Managers Limited; Baring International
Investment (Far East) Limited; Baring
(Guernsey) Limited.
Julian F. Sluyters (38) ... Vice President; Senior Vice President and Chief 1994
Administrative Officer of Mitchell Hutchins
Asset Management Inc.
Paul H. Schubert (36) .... Treasurer and Assistant Secretary; Senior Vice 1999
President and Director of the mutual fund
finance department of Mitchell Hutchins Asset
Management Inc.; Treasurer for other investment
companies for which Mitchell Hutchins serves as
investment adviser/ administrator.
</TABLE>
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(*) The President, Treasurer and Secretary each hold office until his or
her successor has been duly elected and qualified and all other
officers hold office at the discretion of the Directors.
6
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TRANSACTIONS WITH AND COMPENSATION OF DIRECTORS AND OFFICERS
The officers receive no compensation from the Fund. The Directors who are
"interested persons" of the Fund or of the Fund's investment manager, Baring
International Investment (Far East) Limited, receive no compensation from the
Fund. The following table provides information regarding the compensation
paid by the Fund for the fiscal year ended December 31, 1998 to the persons
who were Noninterested Directors during such period:
<TABLE>
<CAPTION>
PENSION OR RETIREMENT ESTIMATED TOTAL COMPENSATION
AGGREGATE BENEFITS ACCRUED ANNUAL BENEFITS FROM FUND AND
COMPENSATION AS PART OF UPON FUND COMPLEX PAID
NAME OF DIRECTOR FROM FUND FUND EXPENSES RETIREMENT TO DIRECTORS
- --------------------- -------------- --------------------- --------------- ------------------
<S> <C> <C> <C> <C>
Edward Y. Baker ...... $16,000 -- -- $16,000
Richard B. Bradley .. $16,000 -- -- $16,000
John A. Hawkins ...... $16,000 -- -- $16,000
Don G. Hoff .......... $16,000 -- -- $32,250
Jonathan J.K. Taylor $16,000 -- -- $16,000
Tak Lung Tsim ........ $16,000 -- -- $16,000
</TABLE>
The Directors of the Fund do not receive any pension or retirement
benefits from the Fund. Each Noninterested Director receives fees, paid by
the Fund, of up to $2,000 per Directors' meeting attended and an annual
Director's fee of $10,000.
The Fund's investment manager supervises the Fund's investments, pays the
compensation and certain expenses of its personnel who serve as Directors and
officers of the Fund, and receives a management fee for its services. Several
of the Fund's officers and Directors are also officers, directors, employees
or stockholders of the Fund's investment manager or its affiliates.
Section 16(a) of the Securities Exchange Act of 1934 as applied to the
Fund requires the Fund's officers and Directors, persons who beneficially own
more than ten percent of a registered class of the Fund's own equity
securities ("ten percent stockholders"), and certain other persons to file
reports of ownership of the Fund's securities and changes in such ownership
with the SEC and the New York Stock Exchange. Based solely upon its review of
the copies of such forms furnished to it, and written representations from
certain reporting persons that no Forms 5 were required for those persons,
all filings applicable to the Fund's officers, Directors and ten percent
stockholders were made.
REQUIRED VOTE
Election of each of the listed nominees for Director requires the
affirmative vote of a plurality of the votes cast at the meeting in person or
by proxy. YOUR FUND'S DIRECTORS RECOMMEND THAT STOCKHOLDERS VOTE IN FAVOR OF
THE TWO DIRECTOR NOMINEES.
(2) RATIFICATION OF THE SELECTION
OF INDEPENDENT ACCOUNTANTS
At a meeting held March 2, 1999, the Board of Directors of the Fund,
including a majority of the Noninterested Directors, selected
PricewaterhouseCoopers LLP to act as independent accountants for the Fund for
the fiscal year ending December 31, 1999. PricewaterhouseCoopers LLP has
advised the Fund that it has no direct or material indirect financial
interest in the Fund. One or more representatives of PricewaterhouseCoopers
LLP is expected to be present at the meeting and will have an opportunity
7
<PAGE>
to make a statement if they so desire. Such representatives are expected to
be available to respond to appropriate questions posed by stockholders or
management.
The Fund's financial statements for the fiscal year December 31, 1998 were
audited by PricewaterhouseCoopers LLP. In connection with its audit services,
PricewaterhouseCoopers LLP reviewed the financial statements included in the
Fund's annual report to stockholders and its filings with the SEC.
REQUIRED VOTE
This selection of independent accountants is subject to the ratification
or rejection by a majority of the Fund's outstanding voting securities. YOUR
FUND'S DIRECTORS RECOMMEND THAT STOCKHOLDERS RATIFY THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS.
(3) OTHER MATTERS
The Board of Directors is not aware of any other business to be brought
before the meeting other than as set forth above. If, however, any other
matters properly come before the meeting, it is the intention of the persons
named in the enclosed proxy form to vote such proxies on such matters in
accordance with their best judgment.
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 Mitchell
Hutchins Asset Management Inc., the Fund's Administrator, or PNC Bank,
National Association, the Fund's Transfer Agent. The expenses connected with
the solicitation of the proxies and with any further proxies which may be
solicited by the Fund's officers or personnel of the Administrator or the
Transfer Agent in person, by telephone or by telegraph will be borne by the
Fund. In addition, the Fund has retained Shareholder Communications
Corporation to aid in the solicitation of proxies, for whose services the
Fund will pay an estimated fee of $7,500, inclusive of reasonable
out-of-pocket expenses. 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.
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1998 TO ANY SHAREHOLDER UPON REQUEST. Requests
should be directed to the Fund's Transfer Agent, PNC Bank, National
Association, 400 Bellevue Parkway, Wilmington, Delaware 19809 or by telephone
to (800) 852-4750.
In the event that sufficient votes in favor of any proposal set forth in
the Notice of this meeting are not received by April 28, 1999, 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 attorneys 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.
8
<PAGE>
STOCKHOLDER PROPOSALS
Any proposal by a stockholder of the Fund intended to be presented at the
2000 Annual Meeting of Stockholders of the Fund must be received by Paul H.
Schubert, Assistant Secretary of the Fund, c/o Mitchell Hutchins Asset
Management Inc., 1285 Avenue of the Americas, New York, New York 10019, not
later than November 15, 1999.
By order of the Board of
Directors,
/s/ Peter C. Cairns
PETER C. CAIRNS
Secretary
1285 Avenue of the Americas
New York, New York 10019
March 17, 1999
9
