TEMPLETON CHINA WORLD FUND INC, DEF 14A, 1999-01-07

TEMPLETON CHINA WORLD FUND INC
DEF 14A, 1999-01-07

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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______________)

Filed by the Registrant /X/
Filed by a party other than the Registrant / /

Check the appropriate box:
/ / 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 Sec. 240.14a-11(c) or Sec. 240.14a-12

TEMPLETON CHINA WORLD FUND, INC.
------------------------------------------------
(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)(4) and 0-11.

(1) Title of each class of securities to which transactions 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 (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

[GRAPHIC OMITTED]

TEMPLETON CHINA WORLD FUND, INC.

IMPORTANT SHAREHOLDER INFORMATION

These materials are for the annual meeting of shareholders scheduled for
Tuesday, February 16, 1999 at 10:00 a.m. (EST). They discuss the proposals to be
voted on at the meeting, and contain your proxy statement and proxy card. A
proxy card is, in essence, a ballot. When you vote your proxy, it tells us how
you wish to vote on important issues relating to your fund. If you complete and
sign the proxy, we'll vote it exactly as you tell us. If you simply sign the
proxy, we'll vote it in accordance with the Directors' recommendations on page 1
of the proxy statement.

WE URGE YOU TO SPEND A FEW MINUTES REVIEWING THE PROPOSALS IN THE PROXY
STATEMENT. THEN, FILL OUT THE PROXY CARD AND RETURN IT TO US SO THAT WE KNOW HOW
YOU WOULD LIKE TO VOTE. WHEN SHAREHOLDERS RETURN THEIR PROXIES PROMPTLY, THE
FUND MAY BE ABLE TO SAVE MONEY BY NOT HAVING TO CONDUCT ADDITIONAL MAILINGS.

WE WELCOME YOUR COMMENTS. IF YOU HAVE ANY QUESTIONS, CALL FUND INFORMATION AT
1-800/DIAL BEN(R) (1-800/342-5236).

- --------------------------------------------------------------------------------
TELEPHONE AND INTERNET VOTING

FOR YOUR CONVENIENCE, YOU MAY BE ABLE TO VOTE BY TELEPHONE OR THROUGH THE
INTERNET, 24 HOURS A DAY. IF YOUR ACCOUNT IS ELIGIBLE, A CONTROL NUMBER AND
SEPARATE INSTRUCTIONS ARE ENCLOSED.
- --------------------------------------------------------------------------------

<PAGE>

[GRAPHIC OMITTED]

TEMPLETON CHINA WORLD FUND, INC.

NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS

The Annual Meeting ("Meeting") of shareholders of Templeton China World Fund,
Inc. (the "Fund") will be held at 500 East Broward Boulevard, 12th Floor, Ft.
Lauderdale, Florida 33394-3091 on Tuesday, February 16, 1999 at 10:00 a.m.
(EST).

During the Meeting, shareholders of the Fund will vote on three proposals:

1. The election of Directors of the Fund to hold office for the terms
specified;

2. The ratification or rejection of the selection of McGladrey & Pullen, LLP
as independent auditors of the Fund for the fiscal year ending August 31,
1999; and

3. The transaction of any other business that may properly come before the
Meeting.

By order of the Board of Directors,

Barbara J. Green,
SECRETARY

January 11, 1999

- --------------------------------------------------------------------------------
MANY SHAREHOLDERS HOLD SHARES IN MORE THAN ONE TEMPLETON FUND AND WILL RECEIVE
PROXY MATERIAL FOR EACH FUND OWNED. PLEASE SIGN AND PROMPTLY RETURN EACH PROXY
CARD IN THE SELF-ADDRESSED ENVELOPE REGARDLESS OF THE NUMBER OF SHARES YOU
OWN.
- --------------------------------------------------------------------------------

<PAGE>

TEMPLETON CHINA WORLD FUND, INC.

PROXY STATEMENT

/diamond/ INFORMATION ABOUT VOTING:

WHO IS ELIGIBLE TO VOTE?

Shareholders of record at the close of business on December 18, 1998
are entitled to be present and to vote at the Meeting or any adjourned
Meeting. Each share of record is entitled to one vote on each matter
presented at the Meeting. The Notice of Meeting, the proxy card, and
the proxy statement were mailed to shareholders of record on or about
January 11, 1999.

ON WHAT ISSUES AM I BEING ASKED TO VOTE?

You are being asked to vote on three proposals:

1. The election of six nominees to the position of Director;

2. The ratification or rejection of the selection of McGladrey &
Pullen, LLP as independent auditors of the Fund for the fiscal
year ending August 31, 1999; and

3. The transaction of any other business that may properly come
before the Meeting.

HOW DO THE FUND'S DIRECTORS RECOMMEND THAT I VOTE?

The Directors unanimously recommend that you vote:

1. FOR the election of nominees;

2. FOR the ratification of the selection of McGladrey & Pullen, LLP
as independent auditors of the Fund; and

3. FOR the proxyholders to vote, in their discretion, on any other
business that may properly come before the Meeting.

<PAGE>

HOW DO I ENSURE THAT MY VOTE IS ACCURATELY RECORDED?

You may attend the Meeting and vote in person or you may complete and
return the enclosed proxy card. If you are eligible to vote by
telephone or through the internet, a control number and separate
instructions are enclosed.

Proxy cards that are properly signed, dated and received at or prior
to the Meeting will be voted as specified. If you specify a vote for
any of the Proposals 1 through 3, your proxy will be voted as you
indicated. If you simply sign and date the proxy card, but don't
specify a vote for any of the Proposals 1 through 3, your shares will
be voted IN FAVOR of the nominees for Director (Proposal 1), IN FAVOR
of ratifying the selection of McGladrey & Pullen, LLP as independent
auditors (Proposal 2), and/or IN ACCORDANCE with the discretion of the
persons named in the proxy card as to any other matters that legally
may come before the Meeting (Proposal 3).

CAN I REVOKE MY PROXY?

You may revoke your proxy at any time before it is voted by (1)
delivering a written revocation to the Secretary of the Fund, (2)
forwarding to the Fund a later-dated proxy card that is received by
the Fund at or prior to the Meeting, or (3) attending the Meeting and
voting in person.

/diamond/ THE PROPOSALS:

PROPOSAL 1: ELECTION OF DIRECTORS

HOW ARE NOMINEES SELECTED?

The Board of Directors of the Fund (the "Board") has a Nominating and
Compensation Committee (the "Committee") consisting of Andrew H.
Hines, Jr., Edith E. Holiday and Gordon S. Macklin. The Committee is
responsible for the selection, nomination for appointment and election
of candidates to serve as Directors of the Fund. The Committee will
review shareholders' nominations to fill vacancies on the Board, if
these nominations are in writing and addressed to the Committee at the
Fund's offices. However, the Committee expects to be able to identify
from its own resources an ample number of qualified candidates.

<PAGE>

WHO ARE THE NOMINEES AND DIRECTORS?

The Board is divided into three classes, each class having a term of
three years. Each year the term of office of one class expires. This
year, the terms of four Directors are expiring. Harris J. Ashton,
Nicholas F. Brady, S. Joseph Fortunato and Edith E. Holiday have been
nominated for three-year terms, set to expire at the 2002 Annual
Meeting of Shareholders. In addition, Frank J. Crothers has been
nominated for a three-year term, set to expire at the 2002 Annual
Meeting of Shareholders and Constantine D. Tseretopoulos has been
nominated for a two-year term, set to expire at the 2001 Annual
Meeting of Shareholders. These terms continue, however, until
successors are duly elected and qualified. With the exception of
Messrs. Crothers and Tseretopoulos, all of the nominees are currently
members of the Board. In addition, all of the current nominees and
Directors are also directors or trustees of other investment companies
in the Franklin Group of Funds(R) and/or the Templeton Group of Funds
(collectively, the "Franklin Templeton Group of Funds").

Certain Directors of the Fund hold director and/or officer positions
with Franklin Resources, Inc. ("Resources") and its affiliates.
Resources is a publicly owned holding company, the principal
shareholders of which are Charles B. Johnson and Rupert H. Johnson,
Jr., who own approximately 19% and 15%, respectively, of its
outstanding shares. Resources is primarily engaged, through various
subsidiaries, in providing investment management, share distribution,
transfer agent and administrative services to a family of investment
companies. Resources is a New York Stock Exchange, Inc. ("NYSE")
listed holding company (NYSE: BEN). Charles E. Johnson, a director and
vice president of the Fund, is the son and nephew, respectively, of
brothers Charles B. Johnson, the chairman of the Board and a vice
president of the Fund, and Rupert H. Johnson, Jr., a vice president of
the Fund.

Each nominee is currently eligible and has consented to serve if
elected. If any of the nominees should become unavailable, the persons
named in the proxy card will vote in their discretion for another
person or other persons who may be nominated as Directors.

<PAGE>

Listed below, for each nominee and current Director, is a brief description
of recent professional experience.

HARRIS J. ASHTON Director, RBC Holdings, Inc. 100** 1,105,180
DIRECTOR SINCE 1993 (bank holding company) and Bar-S
Foods (meat packing company);
director or trustee, as the case may
be, of 49 of the investment
companies in the Franklin
Templeton Group of Funds; and
FORMERLY, President, Chief
Executive Officer and Chairman of
the Board, General Host
Corporation (nursery and craft
centers). Age 66.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
OWNED BENEFICIALLY GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING ON FUND) AS OF
WITH THE FUND YEARS AND AGE NOVEMBER 12, 1998 NOVEMBER 12, 1998
- ------------------------ ------------------------------------- -------------------- ------------------
<S> <C> <C> <C>
NICHOLAS F. BRADY* Chairman, Templeton Emerging 1,000** 45,169
DIRECTOR SINCE 1993 Markets Investment Trust PLC,
Templeton Latin America
Investment Trust PLC, Darby
Overseas Investments, Ltd. and
Darby Emerging Markets
Investments LDC (investment
firms) (1994-present); Director,
Templeton Global Strategy Funds,
Amerada Hess Corporation
(exploration and refining of
natural gas), Christiana
Companies, Inc. (operating and
investment companies), and H.J.
Heinz Company (processed foods
and allied products); director or
trustee, as the case may be, of 21
of the investment companies in the
Franklin Templeton Group of
Funds; and FORMERLY, Secretary of
the United States Department of
the Treasury (1988-1993) and
Chairman of the Board, Dillon,
Read & Co., Inc. (investment
banking) prior to 1988. Age 68.

FRANK J. CROTHERS Chairman, Atlantic Equipment & 0 118,461
Power Ltd.; Vice Chairman,
Caribbean Utilities Co., Ltd.;
President, Provo Power
Corporation; director of various
other business and non-profit
organizations; and director or
trustee, as the case may be, of 7 of
the investment companies in
the Franklin Templeton Group of
Funds. Age 54.

</TABLE>

5
<PAGE>

EDITH E. HOLIDAY Director, Amerada Hess 100** 4,978
DIRECTOR SINCE 1996 Corporation (exploration and
refining of natural gas) (1993-
present), Hercules Incorporated
(chemicals, fibers and resins)
(1993-present), Beverly
Enterprises, Inc. (health care)
(1995-present) and H.J. Heinz
Company (processed foods and
allied products) (1994-present);
director or trustee, as the case may
be, of 25 of the investment
companies in the Franklin
Templeton Group of Funds; and
FORMERLY, Chairman (1995-1997)
and Trustee (1993-1997), National
Child Research Center, Assistant
to the President of the United
States and Secretary of the
Cabinet (1990-1993), General
Counsel to the United States
Treasury Department (1989-1990),
and Counselor to the Secretary
and Assistant Secretary for Public
Affairs and Public Liaison-United
States Treasury Department
(1988-1989). Age 46.

</TABLE>

<PAGE>

CONSTANTINE D. Physician, Lyford Cay Hospital 0 81,989
TSERETOPOULOS (1987-present); director of various
nonprofit organizations; director or
trustee, as the case may be, of 7 of
the investment companies in the
Franklin Templeton Group of
Funds; and FORMERLY, Cardiology
Fellow; University of Maryland
(1985-1987) and Internal Medicine
Intern, Greater Baltimore Medical
Center (1982-1985). Age 44.

DIRECTORS SERVING UNTIL 2001 ANNUAL MEETING OF SHAREHOLDERS:

ANDREW H. HINES, JR. Consultant for the Triangle 1,294** 40,954
DIRECTOR SINCE 1993 Consulting Group; Executive-in-
Residence of Eckerd College
(1991-present); director or trustee,
as the case may be, of 22 of the
investment companies in the
Franklin Templeton Group of
Funds; and FORMERLY, Chairman
and Director, Precise Power
Corporation (1990-1997), Director,
Checkers Drive-In Restaurant, Inc.
(1994-1997), and Chairman of the
Board and Chief Executive
Officer, Florida Progress
Corporation (holding company in
the energy area) (1982-1990), and
director of various of its
subsidiaries. Age 75.
</TABLE>

<PAGE>

SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
OWNED BENEFICIALLY GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING ON FUND) AS OF
WITH THE FUND YEARS AND AGE NOVEMBER 12, 1998 NOVEMBER 12, 1998
- ------------------------ ------------------------------------- -------------------- ------------------
<S> <C> <C> <C>
CHARLES B. JOHNSON* President, Chief Executive Officer 1,000** 1,795,726
CHAIRMAN SINCE 1995 AND and Director, Franklin Resources,
VICE PRESIDENT SINCE 1993 Inc.; Chairman of the Board and
Director, Franklin Advisers, Inc.,
Franklin Advisory Services, Inc.,
Franklin Investment Advisory
Services, Inc. and Franklin
Templeton Distributors, Inc.;
Director, Franklin/Templeton
Investor Services, Inc. and
Franklin Templeton Services, Inc.;
officer and/or director or trustee,
as the case may be, of most of the
other subsidiaries of Franklin
Resources, Inc. and of 50 of the
investment companies in the
Franklin Templeton Group of
Funds. Age 65.

CHARLES E. JOHNSON* Senior Vice President and 0 1,987
DIRECTOR SINCE 1993 AND Director, Franklin Resources, Inc.;
VICE PRESIDENT SINCE 1996 Senior Vice President, Franklin
Templeton Distributors, Inc.;
President and Director, Templeton
Worldwide, Inc.; Chairman and
Director, Templeton Investment
Counsel, Inc.; Vice President,
Franklin Advisers, Inc.; officer
and/or director of some of the
other subsidiaries of Franklin
Resources, Inc.; and officer and/or
director or trustee, as the case may
be, of 34 of the investment
companies in the Franklin
Templeton Group of Funds.
Age 42.

</TABLE>

8
<PAGE>

JOHN Wm. GALBRAITH President, Galbraith Properties, 1,863** 1,838,341
DIRECTOR SINCE 1995 Inc. (personal investment
company); Director Emeritus, Gulf
West Banks, Inc. (bank holding
company) (1995-present); director
or trustee, as the case may be, of
20 of the investment companies in
the Franklin Templeton Group of
Funds; and FORMERLY, Director,
Mercantile Bank (1991-1995), Vice
Chairman, Templeton, Galbraith &
Hansberger Ltd. (1986-1992), and
Chairman, Templeton Funds
Management, Inc. (1974-1991).
Age 77.

BETTY P. KRAHMER Director or trustee of various civic 1,317** 136,268
DIRECTOR SINCE 1993 associations; director or trustee, as
the case may be, of 21 of the
investment companies in the
Franklin Templeton Group of
Funds; and FORMERLY, Economic
Analyst, U.S. government. Age 69.

</TABLE>

9
<PAGE>

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED IN THE
FRANKLIN
FUND SHARES TEMPLETON
OWNED BENEFICIALLY GROUP OF FUNDS
PRINCIPAL OCCUPATION AND % OF TOTAL (INCLUDING THE
NAME AND OFFICES DURING PAST FIVE OUTSTANDING ON FUND) AS OF
WITH THE FUND YEARS AND AGE NOVEMBER 12, 1998 NOVEMBER 12, 1998
- ------------------------ ------------------------------------- -------------------- ------------------
<S> <C> <C> <C>
GORDON S. MACKLIN Director, Fund American 2,000** 373,061
DIRECTOR SINCE 1993 Enterprises Holdings, Inc., Martek
Biosciences Corporation, MCI
WorldCom (information services),
MedImmune, Inc. (biotechnology),
Spacehab, Inc. (aerospace services)
and Real 3D (software); director
or trustee, as the case may be, of
49 of the investment companies in
the Franklin Templeton Group of
Funds; and FORMERLY, Chairman,
White River Corporation (financial
services) and Hambrecht and
Quist Group (investment banking),
and President, National
Association of Securities Dealers,
Inc. Age 70.

FRED R. MILLSAPS Manager of personal investments 10,000** 420,628
DIRECTOR SINCE 1993 (1978-present); director of various
business and nonprofit
organizations; director or trustee,
as the case may be, of 22 of the
investment companies in the
Franklin Templeton Group of
Funds; and FORMERLY, Chairman
and Chief Executive Officer,
Landmark Banking Corporation
(1969-1978), Financial Vice
President, Florida Power and Light
(1965-1969), and Vice President,
Federal Reserve Bank of Atlanta
(1958-1965). Age 69.

</TABLE>

------------------------

* Nicholas F. Brady, Charles B. Johnson and Charles E. Johnson are "interested
persons" as defined by the Investment Company Act of 1940, as amended (the
"1940 Act"). The 1940 Act limits the percentage of interested persons that
can comprise a fund's board of directors. Mr. Charles B. Johnson is an
interested person due to his ownership interest in Resources, and Mr. Charles
E. Johnson is an interested person due to his employment affiliation with
Resources. Mr. Brady's status as an interested person results from his
business affiliations with Resources and Templeton Global Advisors Limited.
Mr. Brady and Resources are both limited partners of Darby Overseas Partners,
L.P. ("Darby Overseas"). Mr. Brady is Chairman and shareholder of Darby
Emerging Markets Investments LDC, which is the corporate general partner of
Darby Overseas. In addition, Darby Overseas and Templeton Global Advisors
Limited are limited partners of Darby Emerging Markets Fund, L.P. The
remaining nominees and Directors of the Fund are not interested persons of
the Fund (the "Independent Directors").

** Less than 1% of the outstanding shares of the Fund.

10
<PAGE>

HOW OFTEN DO THE DIRECTORS MEET AND WHAT ARE THEY PAID?

The role of the Directors is to provide general oversight of the Fund's
business, and to ensure that the Fund is operated for the benefit of
shareholders. The Directors anticipate meeting at least five times during the
current fiscal year to review the operations of the Fund and the Fund's
investment performance. The Directors also oversee the services furnished to
the Fund by Templeton Asset Management Ltd.--Hong Kong Branch, the Fund's
investment manager (the "Investment Manager"), and various other service
providers. The Fund pays the Independent Directors and Mr. Brady an annual
retainer of $2,000 and a fee of $200 per Board meeting attended. Directors
serving on the Audit Committee of the Fund and other investment companies in
the Franklin Templeton Group of Funds receive a flat fee of $2,000 per Audit
Committee meeting attended, a portion of which is allocated to the Fund.
Members of a committee are not compensated for any committee meeting held on
the day of a Board meeting.

During the fiscal year ended August 31, 1998, there were five meetings of the
Board, one meeting of the Audit Committee, and two meetings of the Nominating
and Compensation Committee. Each of the Directors then in office attended at
least 75% of the total number of meetings of the Board and the total number
of meetings held by all committees of the Board on which the Director served.
There was 100% attendance at the meetings of the Audit Committee and the
Nominating and Compensation Committee.

Certain Directors and Officers of the Fund are shareholders of Resources and
may receive indirect remuneration due to their participation in management
fees and other fees received from the Franklin Templeton Group of Funds by
the Investment Manager and its affiliates. The Investment Manager or its
affiliates pay the salaries and expenses of the Officers. No pension or
retirement benefits are accrued as part of Fund expenses.

11
<PAGE>

The following table shows the compensation paid to Directors by the Fund and
by the Franklin Templeton Group of Funds:

AGGREGATE NUMBER OF BOARDS WITHIN THE TOTAL COMPENSATION FROM
COMPENSATION FRANKLIN TEMPLETON GROUP OF THE FRANKLIN TEMPLETON
NAME OF DIRECTOR FROM THE FUND* FUNDS ON WHICH DIRECTOR SERVES** GROUP OF FUNDS***
- ------------------------- ---------------- ---------------------------------- ------------------------
<S> <C> <C> <C>
Harris J. Ashton $3,675 49 $361,157
Nicholas F. Brady 3,675 21 140,975
S. Joseph Fortunato 3,675 51 367,835
John Wm. Galbraith 3,489 20 134,425
Andrew H. Hines, Jr. 3,689 22 208,075
Edith E. Holiday 3,675 25 211,400
Betty P. Krahmer 3,675 21 141,075
Gordon S. Macklin 3,675 49 361,157
Fred R. Millsaps 3,689 22 210,075
</TABLE>

- ------------------------

* Compensation received for the fiscal year ended August 31, 1998. During
the period from September 1, 1997 through February 27, 1998, an annual
retainer of $2,500 and fees at the rate of $200 per Board meeting
attended were in effect.
** We base the number of boards on the number of registered investment
companies in the Franklin Templeton Group of Funds. This number does not
include the total number of series or funds within each investment
company for which the Board members are responsible. The Franklin
Templeton Group of Funds currently includes 54 registered investment
companies, with approximately 168 U.S. based funds or series.
*** For the calendar year ended December 31, 1998.

The table above indicates the total fees paid to Directors by the Fund
individually and all of the funds in the Franklin Templeton Group of Funds.
These Directors also serve as directors or trustees of other investment
companies in the Franklin Templeton Group of Funds, many of which hold
meetings at different dates and times. The Directors and the Fund's
management believe that having the same individuals serving on the boards of
many of the funds in the Franklin Templeton Group of Funds enhances the
ability of each fund to obtain, at a relatively modest cost to each separate
fund, the services of high caliber, experienced and knowledgeable Independent
Directors who can more effectively oversee the management of the funds.

Board members historically have followed a policy of having substantial
investments in one or more of the funds in the Franklin Templeton Group of
Funds, as is consistent with their individual financial goals. In February
1998, this policy was formalized through adoption of a requirement that each
board member invest one-third of fees received for serving as a director or
trustee of a Templeton fund in shares of one or more Templeton funds and
one-third of fees received for serving as a director or trustee of a Franklin
fund in shares of one or more Franklin funds until the value of such
investments equals or exceeds five times the annual fees paid such board
member. Investments in the name of family members or entities controlled by a
board member constitute fund holdings of such board member for purposes of
this policy, and a three year phase-in period applies to such investment
requirements for newly elected board members. In implementing such policy, a
board member's fund holdings existing on February 27, 1998, are valued as of
such date with subsequent investments valued at cost.

12
<PAGE>

WHO ARE THE EXECUTIVE OFFICERS OF THE FUND?

Officers of the Fund are appointed by the Directors and serve at the pleasure
of the Board. Listed below, for each Executive Officer, is a brief
description of recent professional experience:

NAME AND OFFICES PRINCIPAL OCCUPATION
WITH THE FUND DURING PAST FIVE YEARS AND AGE
- ----------------------------- ------------------------------------------------------------------------
<S> <C>
CHARLES B. JOHNSON See Proposal 1, "Election of Directors."
CHAIRMAN SINCE 1995 AND
VICE PRESIDENT SINCE 1993

J. MARK MOBIUS Portfolio Manager of various Templeton advisory affiliates; Managing
PRESIDENT SINCE 1993 Director of Templeton Asset Management Ltd.; officer of 8 of the
investment companies in the Franklin Templeton Group of Funds;
and FORMERLY, President, International Investment Trust Company
Limited (investment manager of Taiwan R.O.C. Fund) (1986-1987)
and Director, Vickers da Costa, Hong Kong (1983-1986). Age 62.

RUPERT H. JOHNSON, JR. Executive Vice President and Director, Franklin Resources, Inc. and
VICE PRESIDENT SINCE 1996 Franklin Templeton Distributors, Inc.; President and Director,
Franklin Advisers, Inc.; Senior Vice President and Director, Franklin
Advisory Services, Inc. and Franklin Investment Advisory Services,
Inc.; Director, Franklin/Templeton Investor Services, Inc.; and officer
and/or director or trustee, as the case may be, of most of the other
subsidiaries of Franklin Resources, Inc. and of 53 of the investment
companies in the Franklin Templeton Group of Funds. Age 58.

HARMON E. BURNS Executive Vice President and Director, Franklin Resources, Inc.,
VICE PRESIDENT SINCE 1996 Franklin Templeton Distributors, Inc. and Franklin Templeton
Services, Inc.; Executive Vice President, Franklin Advisers, Inc.;
Director, Franklin/Templeton Investor Services, Inc.; and officer
and/or director or trustee, as the case may be, of most of the other
subsidiaries of Franklin Resources, Inc. and of 53 of the investment
companies in the Franklin Templeton Group of Funds. Age 53.

CHARLES E. JOHNSON See Proposal 1, "Election of Directors."
DIRECTOR SINCE 1993
AND VICE PRESIDENT
SINCE 1996
</TABLE>

13
<PAGE>

NAME AND OFFICES PRINCIPAL OCCUPATION
WITH THE FUND DURING PAST FIVE YEARS AND AGE
- ----------------------------- -------------------------------------------------------------------------
<S> <C>

DEBORAH R. GATZEK Senior Vice President and General Counsel, Franklin Resources, Inc.;
VICE PRESIDENT SINCE 1996 Senior Vice President, Franklin Templeton Services, Inc. and Franklin
Templeton Distributors, Inc.; Executive Vice President, Franklin
Advisers, Inc.; Vice President, Franklin Advisory Services, Inc.; Vice
President, Chief Legal Officer and Chief Operating Officer, Franklin
Investment Advisory Services, Inc.; and officer of 53 of the
investment companies in the Franklin Templeton Group of Funds.
Age 50.

MARK G. HOLOWESKO President, Templeton Global Advisors Limited; Chief Investment
VICE PRESIDENT SINCE 1993 Officer, Global Equity Group; Executive Vice President and Director,
Templeton Worldwide, Inc.; officer of 21 of the investment companies
in the Franklin Templeton Group of Funds; and formerly, Investment
Administrator, RoyWest Trust Corporation (Bahamas) Limited
(1984-1985). Age 38.

MARTIN L. FLANAGAN Senior Vice President and Chief Financial Officer, Franklin
VICE PRESIDENT SINCE 1993 Resources, Inc.; Executive Vice President and Director, Templeton
Worldwide, Inc.; Executive Vice President, Chief Operating Officer
and Director, Templeton Investment Counsel, Inc.; Executive Vice
President and Chief Financial Officer, Franklin Advisers, Inc.; Chief
Financial Officer, Franklin Advisory Services, Inc. and Franklin
Investment Advisory Services, Inc.; President and Director, Franklin
Templeton Services, Inc.; Senior Vice President and Chief Financial
Officer, Franklin/Templeton Investor Services, Inc.; officer and/or
director of some of the other subsidiaries of Franklin Resources, Inc.;
and officer and/or director or trustee, as the case may be, of 53 of the
investment companies in the Franklin Templeton Group of Funds.
Age 38.

JOHN R. KAY Vice President and Treasurer, Templeton Worldwide, Inc.; Assistant
VICE PRESIDENT SINCE 1994 Vice President, Franklin Templeton Distributors, Inc.; officer of 25 of
the investment companies in the Franklin Templeton Group of Funds;
and FORMERLY, Vice President and Controller, Keystone Group, Inc.
Age 58.

</TABLE>

14
<PAGE>

NAME AND OFFICES PRINCIPAL OCCUPATION
WITH THE FUND DURING PAST FIVE YEARS AND AGE
- ------------------------- ---------------------------------------------------------------------
<S> <C>

ELIZABETH M. General Counsel, Secretary and Senior Vice President, Templeton
KNOBLOCK Investment Counsel, Inc.; Senior Vice President, Templeton Global
VICE PRESIDENT - Investors, Inc.; officer of 21 of the investment companies in the
COMPLIANCE SINCE 1996 Franklin Templeton Group of Funds; and FORMERLY, Vice President
and Associate General Counsel, Kidder Peabody & Co. Inc. (1989-
1990), Assistant General Counsel, Gruntal & Co., Inc. (1988), Vice
President and Associate General Counsel, Shearson Lehman Hutton
Inc. (1988), Vice President and Assistant General Counsel, E.F.
Hutton & Co. Inc. (1986-1988), and Special Counsel of the Division
of Investment Management, U.S. Securities and Exchange
Commission (1984-1986). Age 43.

BARBARA J. GREEN Senior Vice President, Templeton Worldwide, Inc. and Templeton
SECRETARY SINCE 1996 Global Investors, Inc.; officer of 21 of the investment companies in
the Franklin Templeton Group of Funds; and FORMERLY, Deputy
Director of the Division of Investment Management, Executive
Assistant and Senior Advisor to the Chairman, Counselor to the
Chairman, Special Counsel and Attorney Fellow, U.S. Securities and
Exchange Commission (1986-1995), Attorney, Rogers & Wells, and
Judicial Clerk, U.S. District Court (District of Massachusetts).
Age 51.

JAMES R. BAIO Certified Public Accountant; Treasurer, Franklin Mutual Advisers,
TREASURER SINCE 1994 Inc.; Senior Vice President, Templeton Worldwide, Inc., Templeton
Global Investors, Inc. and Templeton Funds Trust Company; officer
of 22 of the investment companies in the Franklin Templeton Group
of Funds; and FORMERLY, Senior Tax Manager, Ernst & Young
(certified public accountants) (1977-1989). Age 44.

</TABLE>

PROPOSAL 2: RATIFICATION OR REJECTION OF INDEPENDENT AUDITORS

HOW ARE INDEPENDENT AUDITORS SELECTED?

The Board has a standing Audit Committee consisting of Messrs. Galbraith,
Hines and Millsaps, all of whom are Independent Directors. The Audit
Committee reviews the maintenance of the Fund's records and the safekeeping
arrangements of the Fund's custodian, reviews both the audit and non-audit
work of the Fund's independent auditors, and submits a recommendation to
the Board as to the selection of independent auditors.

WHICH INDEPENDENT AUDITORS DID THE BOARD SELECT?

For the current fiscal year, the Board selected as auditors the firm of
McGladrey & Pullen, LLP, 555 Fifth Avenue, New York, New York 10017.
McGladrey & Pullen, LLP has been

15
<PAGE>

the auditors of the Fund since its inception in 1993, and has examined
and reported on the fiscal year-end financial statements, dated August
31, 1998, and certain related U.S. Securities and Exchange Commission
filings. Neither the firm of McGladrey & Pullen, LLP nor any of its
members have any material direct or indirect financial interest in the
Fund.

Representatives of McGladrey & Pullen, LLP are not expected to be
present at the Meeting, but have been given the opportunity to make a
statement if they wish, and will be available should any matter arise
requiring their presence.

PROPOSAL 3: OTHER BUSINESS

The Directors know of no other business to be presented at the
Meeting. However, if any additional matters should be properly
presented, proxies will be voted or not voted as specified. Proxies
reflecting no specification will be voted in accordance with the
judgment of the persons named in the proxy.

/diamond/ INFORMATION ABOUT THE FUND

THE INVESTMENT MANAGER. The Investment Manager of the Fund is
Templeton Asset Management Ltd.--Hong Kong Branch, a Singapore company
with a branch office at Two Exchange Square, Hong Kong. Pursuant to an
investment management agreement, the Investment Manager manages the
investment and reinvestment of Fund assets. The Investment Manager is
an indirect, wholly-owned subsidiary of Resources.

THE FUND ADMINISTRATOR. The administrator of the Fund is Franklin
Templeton Services, Inc. ("FT Services") with offices at 777 Mariners
Island Blvd., San Mateo, California 94403-7777. FT Services is an
indirect, wholly-owned subsidiary of Resources. Pursuant to an
administration agreement, FT Services performs certain administrative
functions for the Fund. In addition, FT Services and the Fund have
entered into a sub-administration agreement with Princeton
Administrators, L.P. ("Princeton"), pursuant to which Princeton
performs, subject to FT Services' supervision, various administrative
functions for the Fund. Princeton is an affiliate of Merrill Lynch,
Pierce, Fenner & Smith Inc., an initial underwriter of the Fund's
shares, and its address is P.O. Box 9011, Princeton, New Jersey 08543.

THE TRANSFER AGENT. The transfer agent, registrar and dividend
disbursement agent for the Fund is ChaseMellon Shareholder Services,
L.L.C., 85 Challenger Road, Overpeck Centre, Ridgefield Park, New
Jersey 07660.

16
<PAGE>

THE CUSTODIAN. The custodian for the Fund is The Chase Manhattan Bank,
MetroTech Center, Brooklyn, New York 11245.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. U.S.
securities laws require that the Fund's Directors, Officers and
shareholders owning more than 10% of outstanding shares, as well as
affiliated persons of its Investment Manager, report their ownership
of the Fund's shares and any changes in that ownership. Specific due
dates for these reports have been established, and the Fund is
required to report in this proxy statement any failure to file by
these dates during the fiscal year ended August 31, 1998. To the best
of the Fund's knowledge, all of these filing requirements were met.

OTHER MATTERS. The Fund's last audited financial statements and annual
report, dated August 31, 1998, are available free of charge. To obtain
a copy, please call 1-800/DIAL BEN(R) or forward a written request to
Franklin/Templeton Investor Services, Inc., P.O. Box 33030, St.
Petersburg, Florida 33733-8030.

As of December 18, 1998, the Fund had 19,319,572 shares outstanding
and total net assets of $154,915,663. The Fund's shares are listed on
the NYSE (symbol: TCH). From time to time, the number of shares held
in "street name" accounts of various securities dealers for the
benefit of their clients may exceed 5% of the total shares
outstanding. To the knowledge of the Fund's management, as of November
12, 1998, there were no other entities holding beneficially or of
record more than 5% of the Fund's outstanding shares.

In addition, to the knowledge of the Fund's management, as of November
12, 1998, no nominee or Director of the Fund owned 1% or more of the
outstanding shares of the Fund, and the Officers and Directors of the
Fund owned, as a group, less than 1% of the outstanding shares of the
Fund.

/diamond/ FURTHER INFORMATION ABOUT VOTING AND THE MEETING

SOLICITATION OF PROXIES. The cost of soliciting proxies, including the
fees of a proxy soliciting agent, are borne by the Fund. The Fund
reimburses brokerage firms and others for their expenses in forwarding
proxy material to the beneficial owners and soliciting them to execute
proxies. In addition, the Fund may retain a professional proxy
solicitation firm to assist with any necessary solicitation of
proxies. The Fund expects that the solicitation would be primarily by
mail, but also may include telephone, telecopy or oral solicitations.
If the Fund does not receive your proxy by a certain time you may
receive a telephone call from Shareholder Communications Corporation
asking you to vote. If professional proxy

17
<PAGE>

solicitors are retained, it is expected that soliciting fees would be
approximately $3,500, plus expenses. The Fund does not reimburse
Directors and Officers of the Fund, or regular employees and agents of
the Investment Manager involved in the solicitation of proxies. The
Fund intends to pay all costs associated with the solicitation and the
Meeting.

VOTING BY BROKER-DEALERS. The Fund expects that, before the Meeting,
broker--dealer firms holding shares of the Fund in "street name" for
their customers will request voting instructions from their customers
and beneficial owners. If these instructions are not received by the
date specified in the broker-dealer firms' proxy solicitation
materials, the Fund understands that NYSE Rules permit the
broker-dealers to vote on the items to be considered at the Meeting on
behalf of their customers and beneficial owners. Certain
broker-dealers may exercise discretion over shares held in their name
for which no instructions are received by voting these shares in the
same proportion as they vote shares for which they received
instructions.

QUORUM. A majority of the shares entitled to vote--present in person
or represented by proxy--constitutes a quorum at the Meeting. The
shares over which broker-dealers have discretionary voting power, the
shares that represent "broker non-votes" (I.E., shares held by brokers
or nominees as to which (i) instructions have not been received from
the beneficial owners or persons entitled to vote and (ii) the broker
or nominee does not have discretionary voting power on a particular
matter), and the shares whose proxies reflect an abstention on any
item are all counted as shares present and entitled to vote for
purposes of determining whether the required quorum of shares exists.

METHODS OF TABULATION. Proposal 1, the election of Directors, requires
the affirmative vote of the holders of a plurality of the Fund's
shares present and voting on the Proposal at the Meeting. Proposal 2,
ratification of the selection of the independent auditors, requires
the affirmative vote of a majority of the Fund's shares present and
voting on the Proposal at the Meeting. Proposal 3, the transaction of
any other business, is expected to require the affirmative vote of a
majority of the Fund's shares present and voting on the Proposal at
the Meeting. Abstentions and broker non-votes will be treated as votes
not cast and, therefore, will not be counted for purposes of obtaining
approval of Proposals 1, 2, and 3.

SIMULTANEOUS MEETINGS. The Meeting is to be held at the same time as
the meetings of shareholders of Templeton Global Income Fund, Inc.,
Templeton Global Governments Income Trust, Templeton Emerging Markets
Fund, Inc., and Templeton Emerging Markets Income Fund, Inc. It is
anticipated that all meetings will be held simultaneously. If any

18
<PAGE>

shareholder at the Meeting objects to the holding of a simultaneous
meeting and moves for an adjournment of the Meeting to a time promptly
after the simultaneous meeting, the persons named as proxies will vote
in favor of such adjournment.

ADJOURNMENT. In the event that a quorum is not present at the Meeting,
the Meeting will be adjourned to permit further solicitation of
proxies. In the event that a quorum is present, but sufficient votes
have not been received to approve one or more of the proposals, the
persons named as proxies may propose one or more adjournments of the
Meeting to permit further solicitation of proxies with respect to
those proposals. The persons named as proxies will vote in their
discretion on questions of adjournment those shares for which proxies
have been received that grant discretionary authority to vote on
matters that may properly come before the Meeting.

SHAREHOLDER PROPOSALS. The Fund anticipates that its next annual
meeting will be held in February, 2000. Shareholder proposals to be
presented at the next annual meeting must be received at the Fund's
offices, 500 East Broward Boulevard, 12th Floor, Ft. Lauderdale,
Florida 33394-3091, no later than September 14, 1999 in order to be
included in the Fund's proxy statement and proxy card relating to that
meeting and presented at the meeting. Submission of a proposal by a
shareholder does not guarantee that the proposal will be included in
the proxy statement. A shareholder who wishes to make a proposal at
the 2000 annual meeting of shareholders without including the proposal
in the Fund's proxy statement must notify the Fund, at the Fund's
offices, of such proposal by November 28, 1999. If a shareholder fails
to give notice by this date, then the persons named as proxies in the
proxies solicited by the Board for the 2000 annual meeting of
shareholders may exercise discretionary voting power with respect to
any such proposal.

By order of the Board of Directors,

Barbara J. Green,
SECRETARY

January 11, 1999

PAGE

TEMPLETON CHINA WORLD FUND, INC.
ANNUAL MEETING OF SHAREHOLDERS, FEBRUARY 16, 1999

The undersigned hereby appoints BARBARA J. GREEN, JAMES R. BAIO and
BRUCE S. ROSENBERG, and each of them, proxies of the undersigned with full power
of substitution to vote all shares of Templeton China World Fund, Inc. (the
"Fund") that the undersigned is entitled to vote at the Fund's Annual Meeting to
be held at 500 East Broward Blvd., 12th Floor, Ft. Lauderdale, Florida at 10:00
a.m., EST, on the 16th day of February 1999, including any adjournment thereof,
upon matters set forth below and revokes all previous proxies for his shares.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IT WILL BE
VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY SHALL BE VOTED FOR
PROPOSALS 1 (INCLUDING ALL NOMINEES FOR DIRECTORS) AND 2, AND WITHIN THE
DISCRETION OF THE PROXYHOLDERS AS TO ANY OTHER MATTER PURSUANT TO PROPOSAL 3.

(CONTINUED, AND TO BE SIGNED ON THE OTHER SIDE)

FOLD AND DETACH HERE

<PAGE>

Please mark your ballot as
indicated in this example [ ]

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 THROUGH 3.

Proposal 1 - Election of Directors.

FOR all nominees WITHHOLD Nominees: Harris J. Ashton, Nicholas F. Brady, Frank J.
listed (except as AUTHORITY Crothers, S. Joseph Fortunato, Edith E. Holiday and
marked to the right) to vote for all Constantine D. Tseretopoulos.
nominees listed

[ ] [ ] To withhold authority to
vote for any individual
nominee, write that
nominee's name on the line
below.

------------------------------------------------------------
</TABLE>

Proposal 2 - Ratification of the selection of McGladrey & Pullen, LLP as
independent auditors for the Fund for the fiscal year ending August 31, 1999.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

Proposal 3 - In their discretion, the Proxyholders are authorized to vote upon
such other matters that may legally come before the Meeting or any adjournments
thereof.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

I PLAN TO ATTEND THE MEETING. YES NO
[ ] [ ]

SIGNATURE(S): DATED , 1999
--------------------------------------------- ---------
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY. IF SIGNING FOR ESTATES,
TRUSTS OR CORPORATIONS, TITLE OR CAPACITY SHOULD BE STATED. IF SHARES ARE HELD
JOINTLY, EACH HOLDER SHOULD SIGN.

FOLD AND DETACH HERE