PAGE 1
000 B000000 08/31/99
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PAGE 2
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PAGE 3
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PAGE 4
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PAGE 5
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PAGE 6
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PAGE 7
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PAGE 8
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PAGE 9
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PAGE 10
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PAGE 11
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PAGE 12
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PAGE 13
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PAGE 14
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PAGE 15
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PAGE 16
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SIGNATURE /s/JAMES R. BAIO
James R. Baio
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
The schedule contains summary financial information extracted from the Templeton
China World Fund, Inc. August 31, 1999 annual report and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000909226
<NAME> TEMPLETON CHINA WORLD FUND, INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> AUG-31-1999
<INVESTMENTS-AT-COST> 164333716
<INVESTMENTS-AT-VALUE> 184891811
<RECEIVABLES> 2708618
<ASSETS-OTHER> 2979995
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 190580424
<PAYABLE-FOR-SECURITIES> 233606
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 353247
<TOTAL-LIABILITIES> 586853
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 277773396
<SHARES-COMMON-STOCK> 19319572
<SHARES-COMMON-PRIOR> 19319572
<ACCUMULATED-NII-CURRENT> 1225801
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (109564902)
<ACCUM-APPREC-OR-DEPREC> 20559276
<NET-ASSETS> 189993571
<DIVIDEND-INCOME> 3869690
<INTEREST-INCOME> 867947
<OTHER-INCOME> 0
<EXPENSES-NET> (2772887)
<NET-INVESTMENT-INCOME> 1964750
<REALIZED-GAINS-CURRENT> (57613989)
<APPREC-INCREASE-CURRENT> 128292243
<NET-CHANGE-FROM-OPS> 72643004
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (4057110)
<DISTRIBUTIONS-OF-GAINS> (289794)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 68296100
<ACCUMULATED-NII-PRIOR> 3776668
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (52119619)
<GROSS-ADVISORY-FEES> (2049999)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (2772887)
<AVERAGE-NET-ASSETS> 163999931
<PER-SHARE-NAV-BEGIN> 6.30
<PER-SHARE-NII> 0.10
<PER-SHARE-GAIN-APPREC> 3.65
<PER-SHARE-DIVIDEND> (0.21)
<PER-SHARE-DISTRIBUTIONS> (0.01)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.83
<EXPENSE-RATIO> 1.69
</TABLE>
To the Board of Directors of
Templeton China World Fund, Inc.
In planning and performing our audit of the financial statements and financial
highlights of Templeton China World Fund, Inc. for the year ended August 31,
1999, we considered its internal control, including control activities for
safeguarding securities, in order to determine our auditing procedures for the
purpose of expressing our opinion on the financial statements and financial
highlights and to comply with the requirements of Form N-SAR, not to provide
assurance on internal control.
The management of Templeton China World Fund, Inc. is responsible for
establishing and maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs of controls. Generally, controls that are
relevant to an audit pertain to the entity's objective of preparing financial
statements and financial highlights for external purposes that are fairly
presented in conformity with generally accepted accounting principles. Those
controls include the safeguarding of assets against unauthorized acquisition,
use or disposition.
Because of inherent limitations in internal control, errors or fraud may occur
and not be detected. Also, projection of any evaluation of internal control to
future periods is subject to the risk that it may become inadequate because of
changes in conditions or that the effectiveness of the design and operation may
deteriorate.
Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of one or more
of the internal control components does not reduce to a relatively low level the
risk that misstatements caused by error or fraud in amounts that would be
material in relation to the financial statements and financial highlights being
audited may occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions. However, we noted no
matters involving internal control and its operation, including controls for
safeguarding securities, that we consider to be material weaknesses as defined
above as of August 31, 1999.
This report is intended solely for the information and use of management, the
Board of Directors of Templeton China World Fund, Inc. and the Securities and
Exchange Commission.
/s/PricewaterhouseCoopers LLP
New York, New York
77 K - CHANGE IN INDEPENDENT ACCOUNTANTS
On August 13, 1999, McGladrey & Pullen, LLP (McGladrey) resigned as independent
auditors of the Fund pursuant to an agreement by PricewaterhouseCoopers LLP
(PwC) to acquire McGladrey's investment company practice. The McGladrey partners
and professionals serving the Fund at the time of the acquisition joined PwC.
The reports of McGladrey on the financial statements of the Fund during the past
two fiscal years contained no adverse opinion or disclaimer of opinion, and were
not qualified or modified as to uncertainty, audit scope or accounting
principles. In connection with its audits for the two most recent fiscal years
and through August 13, 1999, there were no disagreements with McGladrey on any
matter of accounting principle or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of McGladrey would have caused it to make reference to the subject
matter of disagreement in connection with its report. On August 31, 1999, the
Fund, with the approval of its Board of Directors and its Audit Committee,
engaged PwC as its independent auditors."
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street
Washington D.C. 20549
We were previously the independent accountants for Templeton China World Fund,
Inc. We have read their notification of change in independent accountants made
in Item 77K of Form N-SAR. We agree with the statements in the filing.
MCGLADREY & PULLEN, LLP
New York, New York
October 27, 1999
