Form N-CSR
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
N-CSR
CERTIFIED
SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT
INVESTMENT COMPANIES
Investment
Company Act file number: 811-05617
Taiwan
Greater China Fund
(Exact
name of registrant as specified in charter)
Bank
Tower, Room 1001
205
Dun
Hua North Road
Taipei
105, Taiwan
Republic
of China
(Address
of principal executive offices)
(Zip
code)
Brown
Brothers Harriman
40
Water
Street, P. O. 962047,
Boston,
MA 02196-2047
(Name
and
address of agent for service)
Registrant’s
telephone number, including area code: 1-617-742-1818
Date
of
fiscal year end: December
31
Date
of
reporting period: June
30, 2005
TAIWAN
GREATER CHINA FUND
www.taiwangreaterchinafund.com
Taiwan
Office:
Room
1001, 205 DunHua North Road
Taipei,
Taiwan, Republic of China
Tel:
886-2-2715-2988
Fax:
886-2-2715-3166
Officers
and Trustees:
David
N.
Laux, Chairman and Trustee
Steven
R.
Champion, President and Chief Executive
Officer
Edward
B.
Collins, Trustee and Audit Committee
Member
Frederick
C. Copeland, Jr., Trustee and Audit Committee
Member
Robert
P.
Parker, Trustee and Audit Committee
Member
Cheryl
Chang, Chief Financial Officer,
Treasurer
and Secretary
Administrator
& Custodian:
Brown
Brothers Harriman & Co.
40
Water
Street
Boston,
MA 02109
U.S.A.
Tel:
(617) 742-1818
Transfer
Agent,
Paying
and Plan Agent:
Computershare
Shareholder Services, Inc.
P.O.
Box
43010
Providence,
RI 02940-3010
U.S.A.
Telephone:
1-800-426-5523
Investor
Relations & Communications:
The
Altman Group
60
East
42nd Street, Suite 405
New
York,
NY 10165
U.S.A.
Telephone:
(212) 681-9600
U.S.
Legal Counsel:
Bingham
McCutchen LLP
150
Federal Street
Boston,
MA 02110-1726
U.S.A.
Tel:
(617) 951-8000
For
information on the Fund, including the NAV,
please
call toll free 1-800-343-9567.
DEAR
STOCKHOLDERS
Taiwan
Greater China Fund (Ticker: TFC) continued to follow a disciplined and sharply
focused investment strategy in the second quarter of 2005. The Fund also
continued to make progress in its efforts to reduce expenses and to achieve
a
lower discount to net asset value (NAV).
TFC’s
share price achieved total returns of 4.3% during the second quarter of 2005
and
20.2% for the 12 months ending June 30, 2005. The Fund’s NAV yielded total
returns of 4.4% and 16.2% for the quarter and for the 12 months, respectively,
after expenses. The corresponding NAV total returns before unaudited investment
expenses were 4.8% and 19.1% for the same periods.
These
results compare to US$ denominated returns for the Taiwan China Strategy
Index1
of 5.2%
and 17.0% for the quarter and the previous 12 months, respectively. The Taiwan
Stock Exchange Index (“TAIEX”) provided US$ total returns of 3.8% and 16.7% for
the same periods. The MSCI Taiwan Index returned 5.7% and 14.6% for the quarter
and the 12 months ending June 30.
The
Fund’s discount to NAV averaged 8.2% during the first half of 2005 compared with
10.5% for the corresponding period in 2004. The first half’s average discount to
NAV is the lowest average recorded for the Fund during the first six months
of
any year since 1996. The smallest closing discount during the first half of
2005
of 4.3% was recorded on March 30, and the largest closing discount was 12.1%
on
April 14. On an intraday basis, the lowest discount during the first half of
2005 was 2.7% on March 24 and the highest discount was 12.9% on April 26.
Average
and median trading volumes of the Fund’s shares on the New York Stock Exchange
during the first half of 2005 were 37,100 shares and 18,600 shares,
respectively. This compares to an average of 72,100 shares and a median of
19,900 shares during the same period in 2004.
Unaudited
total expenses for the first half of 2005 were approximately $1,100,000 compared
to $1,750,421 for the same period in 2004, a reduction of approximately 40%.
Unaudited legal fees were reduced approximately 77% from the first six months
of
2004 to approximately $99,000 for the first half of this year. For the first
six
months of 2005, the unaudited ratio of expenses to average net assets was 0.97%.
TFC’s
returns are highly correlated to the returns of the TAIEX with an R2
of 0.92
since the inception in early 2004 of the Fund’s new investment strategy to June
30, 2005. For the same period, the Fund’s beta is 1.04 relative to the TAIEX,
and its weekly alpha is 0.14%.
The
Fund’s portfolio of quality companies had attractive valuations at June 30, with
a price earnings ratio of 14.5, a price book ratio of 2.2and dividend yield
of
4.4%. In addition to these valuations, the portfolio’s return on equity was
15.8%. All of these calculations are based on weighted average statistics from
MSCI or, in the case of the average weighted dividend yield, Bloomberg.
Taiwan
made two changes in its financial system in the second quarter of 2005 that
could have far-reaching consequences. In a stride forward in promoting closer
economic relations with China, Taiwan’s top financial regulator announced that
Chinese banks could open representative offices on the island. China, starting
in 2002, has granted Taiwan banks entry into the mainland and in November 2003
said that several Chinese banks could set up Taiwan offices. Some foreign
analysts saw the Taiwan action as important progress toward allowing more
Chinese companies to do business in Taiwan. The Taiwan Stock Exchange also
announced relaxation of certain restrictions on short-selling of securities.
This step is part of Taiwan’s efforts to align its practices with those on major
international exchanges and to gain developed-market status in the FTSE Group’s
global stock indexes. Funds estimated at $2.5 trillion use the indexes as
benchmarks, and the FTSE Group has included Taiwan on a list for possible
upgrade in September.
The
Fund
continues to repurchase shares pursuant to the share repurchase program begun
in
November 2004. As of June 30, 2005, 1,794,000 shares have been repurchased
at an
average discount to net asset value of 7.1%.
The
Fund’s shareholders approved a fundamental policy to adopt an interval fund
structure at their June 21 annual shareholder meeting. Accordingly, the Fund
will begin conducting semi-annual repurchase offers for at least 5% of total
shares outstanding.
We
believe that the Fund offers investors a logical and effective way to
participate in China’s economic growth through Taiwan-listed companies.
Management remains focused on providing shareholder value through strong
investment performance, expense control, and attention to the Fund’s discount to
net asset value.
Respectfully
submitted,
Steven
R.
Champion
President
and
Chief
Executive Officer
July
25,
2005
p.s.
We
are enclosing with this report a letter concerning your ability to participate
in the Fund’s Dividend Reinvestment Plan.
1
Source:
MSCI. This information is for internal use only and may not be redistributed
or
used in connection with creating or offering any securities, financial products
or indices. Neither MSCI nor any other third party involved in or related to
compiling, computing or creating the MSCI data (the “MSCI Parties”) makes any
express or implied warranties or representations with respect to such data
(or
the results to be obtained by the use thereof), and the MSCI Parties hereby
expressly disclaim all warranties of originality, accuracy, completeness,
merchantability or fitness for a particular purpose with respect to such data.
Without limiting any of the foregoing, in no event shall any of the MSCI Parties
have any liability for any direct, indirect, special, punitive, consequential
or
any other damages (including lost profits) even if notified of the possibility
of such damages.
The
Taiwan China Strategy Index is a custom index calculated by MSCI for, and as
requested by, Taiwan Greater China Fund. To calculate this Index MSCI starts
with the MSCI Taiwan Index and then excludes those securities selected by Taiwan
Greater China Fund on a quarterly basis based on Taiwan Greater China Fund’s
screening criteria. MSCI has no role in developing, reviewing or approving
Taiwan Greater China Fund’s investing criteria or the list of companies excluded
from the MSCI Taiwan Index by Taiwan Greater China Fund to create the Taiwan
China Strategy Index.
*
* * * *
* *
Past
performance is no guarantee of future results. The returns reflected in this
report assume the reinvestment of dividends and capital gains.
Portfolio
Highlights
|
SCHEDULE
OF INVESTMENTS BY INDUSTRY AS OF JUNE 30, 2005
(Unaudited)
|
|
Industry
Diversification
|
|
|
|
Percent
of
|
Industry
|
U.S.
$ Value
|
Net
Assets
|
Computer
Systems & Hardware
|
21,285,035
|
19.47%
|
Semiconductors
|
16,168,525
|
14.79
|
Plastics
|
12,055,503
|
11.03
|
Flat-Panel
Displays
|
9,935,911
|
9.09
|
Computer
Peripherals/ODM
|
9,759,655
|
8.93
|
Steel
& Other Metals
|
9,439,536
|
8.64
|
Electronics
Components
|
6,134,520
|
5.61
|
Other
- Non-Technology
|
4,559,486
|
4.17
|
Transportation
|
3,645,883
|
3.34
|
Automobile
|
2,895,053
|
2.65
|
Electrical
& Machinery
|
2,452,146
|
2.24
|
Cement
|
2,345,438
|
2.15
|
Communications
Equipment
|
2,221,927
|
2.03
|
Food
|
1,804,590
|
1.65
|
Rubber
|
1,474,355
|
1.35
|
Textiles
|
579,777
|
0.53
|
Glass,
Paper & Pulp
|
574,012
|
0.53
|
Chemicals
|
517,254
|
0.47
|
Electronics
- General
|
475,363
|
0.43
|
Retailing
|
449,051
|
0.41
|
Short
Term Investments
|
209,726
|
0.19
|
Other
Assets in Excess of Liabilities
|
326,378
|
0.30
|
Net
Assets
|
$
109,309,124
|
100.00
|
TAIWAN
GREATER CHINA FUND
|
Schedule
of Investments (Unaudited) / June 30, 2005
|
|
|
COMMON
STOCKS —
99.51%
|
%
of
|
U.S.
Dollar
|
Automobile
— 2.65%
|
Net
Assets
|
Value
|
1,003,000
|
shs.
|
China
Motor Corp.
|
0.95
|
$
1,037,422
|
169,528
|
|
Tong
Yang Industry Co., Ltd.
|
0.22
|
240,766
|
283,000
|
|
TYC
Brother Industrial Co., Ltd.
|
0.20
|
221,996
|
1,204,885
|
|
Yulon
Motor Co., Ltd.
|
1.28
|
1,394,869
|
|
2,895,053
|
Cement
— 2.15%
|
1,790,090
|
|
Asia
Cement Corporation
|
1.08
|
1,174,897
|
1,883,290
|
|
Taiwan
Cement Corp.
|
1.07
|
1,170,541
|
|
|
|
|
2,345,438
|
Chemicals
— 0.47%
|
790,000
|
|
Eternal
Chemical Co., Ltd.
|
0.47%
|
517,254
|
|
|
|
|
|
Communications
Equipment — 2.03%
|
887,748
|
|
D-Link
Corp.
|
0.96%
|
1,047,383
|
494,450
|
|
Zyxel
Communicationns Corp.
|
1.07%
|
1,174,544
|
|
|
|
|
2,221,927
|
Computer
Systems & Hardware —
19.47%
|
731,286
|
|
Acer
Inc.
|
1.32
|
1,445,686
|
109,166
|
|
Advantech
Co., Ltd.
|
0.24
|
258,974
|
1,976,000
|
|
Asustek
Computer Inc.
|
5.11
|
5,587,677
|
1,008,285
|
|
Compal
Electronics Inc.
|
0.92
|
1,003,023
|
702,600
|
|
Elitegroup
Computer Systems Co., Ltd.
|
0.42
|
462,251
|
188,950
|
|
Giga-Byte
Technology Co., Ltd.
|
0.20
|
222,329
|
2,035,417
|
|
Hon
Hai Precision Industry Co., Ltd.
|
9.69
|
10,590,735
|
748,550
|
|
Inventec
Corp.
|
0.32
|
350,420
|
712,743
|
|
Quanta
Computer Inc.
|
1.25
|
1,363,940
|
|
|
|
|
|
21,285,035
|
Electrical
& Machinery — 2.24%
|
806,000
|
|
Teco
Electric & Machinery Co., Ltd.
|
0.22
|
239,391
|
4,875,000
|
*
|
Walsin
Lihwa Corp.
|
2.02
|
2,212,755
|
|
2,452,146
|
Electronic
Components — 5.61%
|
187,000
|
|
Career
Technology (MFG.) Co., Ltd.
|
0.26
|
286,282
|
83,800
|
|
Catcher
Technology Co., Ltd.
|
0.44
|
485,067
|
439,368
|
|
Delta
Electronics Inc.
|
|
0.62
|
683,060
|
466,000
|
*
|
Foxconn
Technology Co., Ltd.
|
1.61
|
1,761,411
|
101,400
|
|
Largan
Precision Co., Ltd.
|
0.61
|
667,126
|
101,909
|
|
Merry
Electronics Co., Ltd.
|
0.25
|
272,381
|
216,347
|
|
Tripod
Technology Corp.
|
0.43
|
465,336
|
706,996
|
|
Wus
Printed Circuit Co., Ltd.
|
0.27
|
291,833
|
3,141,000
|
*
|
Yageo
Corp.
|
|
1.12
|
1,222,024
|
|
6,134,520
|
Electronics
— 0.43%
|
326,000
|
|
Synnex
Technology International Corp.
|
0.43
|
475,363
|
See
accompanying notes to financial statements and accountants’ review
report.
|
TAIWAN
GREATER CHINA FUND
|
Schedule
of Investments (Unaudited) / June 30, 2005
|
|
|
Flat-Panel
Displays — 9.09%
|
3,514,000
|
shs.
*
|
AU
Optronics Corp.
|
5.38
|
$
5,879,823
|
1,287,913
|
|
Chi
Mei Optoelectronics Corp.
|
1.84
|
2,008,354
|
3,649,000
|
*
|
Chunghwa
Picture Tubes, Ltd.
|
1.47
|
1,604,337
|
860,000
|
*
|
Quanta
Display Inc.
|
0.40
|
443,397
|
|
9,935,911
|
Food
— 1.65%
|
3,829,000
|
|
Uni-President
Enterprise Corp.
|
1.65
|
1,804,590
|
|
Glass,
Paper & Pulp — 0.53%
|
421,476
|
|
Taiwan
Glass Ind. Corporation
|
0.35
|
375,949
|
495,000
|
*
|
Yuen
Foong Yu Paper Manufacturing Co., Ltd.
|
0.18
|
198,063
|
|
574,012
|
Computer
Peripherals/ODM — 8.93%
|
3,393,285
|
|
BenQ
Corp.
|
3.02
|
3,295,077
|
999,000
|
|
CMC
Magnetics Corp.
|
0.42
|
461,344
|
62,000
|
|
High
Tech Computer Corp.
|
0.48
|
525,573
|
3,135,300
|
|
Lite-on
Technology Corp.
|
3.30
|
3,609,835
|
559,200
|
|
Premier
Image Technology Corp.
|
0.58
|
634,992
|
3,248,009
|
|
Ritek
Inc.
|
1.13
|
1,232,834
|
|
9,759,655
|
Plastics
— 11.03%
|
2,729,320
|
|
Formosa
Chemicals & Fiber Corp.
|
4.86
|
5,309,289
|
1,916,198
|
|
Formosa
Plastics Corp.
|
2.87
|
3,139,619
|
2,175,920
|
*
|
Nan
Ya Plastics Corp.
|
2.94
|
3,210,712
|
657,000
|
|
Taiwan
Styrene Monomer Corp.
|
0.36
|
395,883
|
|
|
|
|
|
|
|
|
12,055,503
|
Retailing
— 0.41%
|
227,512
|
|
President
Chain Store Corp.
|
0.41
|
449,051
|
|
Rubber
— 1.35%
|
1,311,160
|
|
Cheng
Shin Rubber Ind. Co., Ltd.
|
1.35
|
1,474,355
|
|
Semiconductors
—
14.79%
|
1,312,314
|
*
|
Advanced
Semiconductor Engineering, Inc.
|
0.90
|
983,769
|
80,000
|
|
MediaTek
Inc.
|
|
0.63
|
694,607
|
93,400
|
|
Novatek
Microelectronics Corp.
|
0.37
|
400,307
|
662,100
|
|
Siliconware
Precision Industries Co., Ltd.
|
0.60
|
653,409
|
170,600
|
|
Sunplus
Technology Co., Ltd.
|
0.22
|
240,669
|
4,645,832
|
|
Taiwan
Semiconductor Manufacturing Co., Ltd.
|
7.41
|
8,096,959
|
7,008,640
|
*
|
United
Microelectronics Corp.
|
4.66
|
5,098,805
|
|
16,168,525
|
Steel
& Other Metals — 8.64%
|
8,241,260
|
|
China
Steel Corp.
|
7.63
|
8,341,620
|
2,091,000
|
|
Yieh
Phui Enterprise Co., Ltd.
|
1.01
|
1,097,916
|
|
9,439,536
|
Textiles
— 0.53%
|
809,256
|
|
Far
Eastern Textile Ltd.
|
0.53
|
579,777
|
|
|
|
See
accompanying notes to financial statements and accountants’ review
report
|
TAIWAN
GREATER CHINA FUND
|
Schedule
of Investments (Unaudited) / June 30, 2005
|
|
|
Transportation
— 3.34%
|
739,600
|
shs.
|
China
Airlines Ltd.
|
0.38
|
$
409,394
|
681,602
|
*
|
Eva
Airways Corp.
|
0.30
|
330,938
|
1,167,619
|
|
Evergreen
Marine Corp. (Taiwan) Ltd.
|
0.95
|
1,041,495
|
432,150
|
|
Wan
Hai Lines Ltd.
|
0.40
|
430,578
|
1,604,227
|
|
Yang
Ming Marine Transport Corp.
|
1.31
|
1,433,478
|
|
3,645,883
|
Other
— 4.17%
|
963,000
|
|
Giant
Manufacturing Co., Ltd.
|
1.42
|
1,556,517
|
602,000
|
|
Great
China Metal Industry Co., Ltd.
|
0.28
|
300,857
|
156,480
|
*
|
Nien
Made Enterprise Co., Ltd.
|
0.22
|
246,240
|
2,339,326
|
|
Pou
Chen Corp.
|
1.75
|
1,916,449
|
280,000
|
|
Taiwan
Fu Hsing Industrial Co., Ltd.
|
0.29
|
315,293
|
254,887
|
|
Taiwan
Hon Chuan Enterprise Co., Ltd.
|
0.21
|
224,130
|
|
4,559,486
|
|
TOTAL
COMMON STOCK (COST $113,092,998)
|
108,773,020
|
|
SHORT-TERM
SECURITIES —
0.19%
|
Time
Deposit —
0.19%
|
HSBC
Bank USA (Grand Cayman), 2.700%, Due 7/2/05
|
0.19
|
|
209,726
|
|
TOTAL
INVESTMENTS IN SECURITIES AT MARKET VALUE
|
99.70
|
|
108,982,746
|
(COST
$113,302,724)
|
|
|
OTHER
ASSETS (LESS LIABILITIES)
|
|
0.30
|
|
326,378
|
|
NET
ASSETS
|
100.00
|
|
$109,309,124
|
|
|
*
Non-income producing: these stocks did not pay a cash dividend during
the
year.
|
|
|
|
|
|
|
|
See
accompanying notes to financial statements and accountants' review
report.
|
|
TAIWAN
GREATER CHINA FUND
|
Statement
of Assets and Liabilities
|
June
30, 2005 (Unaudited)(Expressed in U.S. Dollars)
|
|
|
Assets
|
Investments
in securities at fair value (Notes 2B, 2C, 3 and 6):
|
Common
Stock (cost —
$113,092,998)
|
$
108,773,020
|
Short-term
securities (cost —
$209,726)
|
209,726
|
Total
investment in securities at fair value (cost —
$113,302,724)
|
108,982,746
|
|
|
Cash
|
138,011
|
Foreign
cash
|
52,468
|
Receivable
for dividend
|
506,724
|
Office
equipment (Note 2D)
|
27,719
|
Prepaid
expenses and other assets
|
72,796
|
|
Total
assets
|
109,780,464
|
|
|
Liabilities
|
|
Accrued
employee salaries and bonus
|
124,164
|
Professional
fees payable
|
119,866
|
Custodian
fee payable (Note 5)
|
28,791
|
Administration
fee payable (Note 4)
|
27,642
|
Payable
for fund shares repurchased
|
27,410
|
Accrued
taxes in the Republic of China (Note 2H)
|
25,222
|
Other
accrued expenses
|
118,245
|
|
Total
liabilities
|
471,340
|
|
|
Net
assets
|
$
109,309,124
|
|
|
Components
of net assets
|
Par
value of shares of beneficial interest (Note 7)
|
200,053
|
Additional
paid-in capital (Note 7)
|
220,518,687
|
Accumulated
net investment income
|
35,652,136
|
Accumulated
realized loss on investments
|
(109,251,260)
|
Unrealized
depreciation on investments (Note 6)
|
(4,319,978)
|
Cumulative
translation adjustment (Note 2F)
|
(33,490,514)
|
|
Net
assets
|
$
109,309,124
|
|
|
|
Net
asset value per share (20,005,318 shares issued and outstanding,
par value
$0.01)
|
$5.46
|
|
|
TAIWAN
GREATER CHINA FUND
|
Statement
of Operations
|
For
the Six Months Ended June 30, 2005 (Unaudited)(Expressed in U.S.
Dollars)
|
|
|
Investment
income (Note 2C)
|
|
|
Dividends
|
$
658,653
|
|
Interest
|
6,928
|
|
665,581
|
|
Republic
of China taxes (Note 2H)
|
(155,858)
|
|
|
|
509,723
|
|
|
Expenses
|
Portfolio
management expenses:
|
|
|
Personnel
expenses
|
284,875
|
|
|
Research
expenses
|
50,675
|
|
|
Rental
expenses
|
30,288
|
|
|
Travel
expenses
|
24,390
|
|
|
Other
expenses
|
9,566
|
|
|
|
|
Shareholder
communication expenses
|
138,731
|
Legal
fees and expenses
|
98,953
|
Custodian
fee (Note 5)
|
83,622
|
Administrative
fee (Note 4)
|
80,024
|
Trustee
fees and expenses
|
79,369
|
Audit
fee
|
70,461
|
Insurance
expenses
|
41,268
|
Other
expenses
|
60,264
|
|
|
1,052,486
|
|
Net
investment loss
|
(542,763)
|
|
Net
realized and unrealized gain/(loss) on investments and foreign currencies
(Notes 2E and 6)
|
|
Net
realized gain on:
|
|
|
investments
(excluding short-term investments)
|
1,193,445
|
|
|
foreign
currency transactions
|
37,919
|
|
|
net
realized gain on investments and foreign currency
transactions
|
1,231,364
|
|
|
Net
changes in unrealized appreciation / depreciation on:
|
|
|
|
investments
|
|
1,074,176
|
|
|
translation
of assets and liabilities in foreign currencies
|
(449,829)
|
|
|
|
|
Net
realized and unrealized gain from investments and foreign
currencies
|
1,855,711
|
|
|
Net
increase in net assets resulting from operations
|
$
1,312,948
|
|
|
|
See
accompanying notes to financial statements and accountant's review
report.
|
TAIWAN
GREATER CHINA FUND
|
Statement
of Changes in Net Assets
|
For
the Six Months Ended June 30, 2005, and the Year ended December 31,
2004
(Expressed in U.S. Dollars)
|
|
Six
Months
|
|
|
|
Ended
June 30,
|
|
Year
Ended
|
|
2005
|
|
December
31,
|
|
(Unaudited)
|
|
2004
|
Net
increase/decrease in net assets resulting from
operations
|
|
|
|
|
Net
investment loss
|
$
(542,763)
|
|
$
(388,769)
|
|
Net
realized gain / loss on investments and foreign currency
|
|
|
|
|
|
transactions
|
1,231,364
|
|
13,897,385
|
|
Unrealized
appreciation / depreciation on investments (including
|
|
|
|
|
the
effect of a change in accounting principle) (Note 2J)
|
1,074,176
|
|
(20,774,304)
|
|
Unrealized
appreciation / depreciation on translation of
|
|
|
|
|
|
assets
and liabilities in foreign currencies
|
(449,829)
|
|
7,678,828
|
|
|
|
Net
increase in net assets resulting from operations
|
1,312,948
|
|
413,140
|
|
|
Distribution
to shareholders (Note 2G)
|
-
|
|
(326,989)
|
|
|
Capital
share transactions:
|
|
|
Cost
of tender offer (Note 7B)
|
-
|
|
(50,901,403)
|
|
|
Cost
of shares repurchased (Note 7A)
|
(8,470,461)
|
|
(518,737)
|
|
|
|
|
Net
assets, beginning of period
|
116,466,637
|
|
167,800,626
|
|
|
|
|
Net
assets, end of period
|
$
109,309,124
|
|
$
116,466,637
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to financial statements and accountant's review
report.
|
|
TAIWAN
GREATER CHINA FUND
|
Financial
Highlights
|
(Expressed
in U.S. Dollars)
|
|
|
Six
Months
|
|
Ended
|
|
June
30, 2005
|
Years
Ended December 31,
|
|
(Unaudited)
|
2004
|
|
2003
|
|
2002
|
|
2001
|
|
2000
|
|
|
Per
share operating performance:
|
|
|
Net
asset value, beginning of year
|
5.37
|
|
5.13
|
|
4.37
|
|
5.40
|
|
5.78
|
|
10.23
|
|
Net
investment loss
|
(0.03)
|
|
(0.01)
|
|
(0.02)
|
|
(0.06)
|
|
(0.05)
|
|
(0.11)
|
|
Net
realized and unrealized gain / loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
on
investments (a)
|
0.11
|
|
(0.24)
|
|
0.73
|
|
(1.02)
|
|
0.06
|
|
(3.56)
|
|
Net
realized and unrealized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
appreciation
/ depreciation on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
translation
of foreign currencies (a)
|
(0.02)
|
|
0.26
|
|
0.11
|
|
0.05
|
|
(0.39)
|
|
(0.41)
|
|
|
|
Total
from investment operations
|
0.06
|
|
0.01
|
|
0.82
|
|
(1.03)
|
|
(0.38)
|
|
(4.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions
to Shareholders from:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
—
|
|
(0.01)
|
|
(0.06)
|
|
—
|
|
—
|
|
—
|
|
Net
realized gain on investments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(0.37)
|
|
|
|
Total
distributions*
|
—
|
|
(0.01)
|
|
(0.06)
|
|
—
|
|
—
|
|
(0.37)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Stock Transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Tender Offer/Repurchase
|
0.03
|
|
0.24
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
asset value, end of period
|
5.46
|
|
5.37
|
|
5.13
|
|
4.37
|
|
5.40
|
|
5.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per
share market price, end of period
|
5.11
|
|
4.90
|
|
4.75
|
|
4.05
|
|
4.75
|
|
4.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
investment return (%):
|
|
|
|
|
|
|
|
|
|
|
|
|
Based
on Trust's market price
|
4.29
|
|
3.42
|
|
18.79
|
|
(14.74)
|
|
4.17
|
|
(41.71)
|
|
Based
on Trust's net asset value
|
1.68
|
|
4.94
|
|
18.75
|
|
(19.07)
|
|
(6.57)
|
|
(39.94)
|
|
U.S.
$ return of Taiwan Stock Exchange
Index
|
1.96
|
|
11.69
|
|
35.32
|
|
(19.03)
|
|
10.16
|
|
(46.62)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios
and supplemental data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets, end of period (in thousands)
|
109,309
|
|
116,467
|
|
167,801
|
|
142,936
|
|
176,526
|
|
188,939
|
|
Ratio
of expenses to average net assets
(%)
|
0.97
+
|
|
2.79
|
|
2.57
|
|
2.19
|
|
2.01
|
|
1.67
|
|
Ratio
of net investment loss to average
net
assets (%)
|
(0.50)
+
|
|
(0.27)
|
|
(0.44)
|
|
(1.23)
|
|
(1.01)
|
|
(1.09)
|
|
Portfolio
turnover ratio (%)
|
3
|
|
137
|
|
78
|
|
107
|
|
173
|
|
165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
See
Note 2G for information concerning the Trust's distribution
policy.
|
|
|
|
|
|
|
(a)
Cumulative effect of change in accounting principle resulted in a
$0.06
reduction in realized
|
|
|
|
gain/losses
on investments and foreign currency transactions and a $0.06 increase
in
unrealized
|
|
|
appreciation
/ depreciation on investments and foreign currency translation during
2004.
|
|
|
+
|
Not
Annualized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TAIWAN
GREATER CHINA FUND
Notes
to Financial Statements / June 30, 2005 (Expressed in U.S. Dollars) (Unaudited)
Note
1 — Organization and Acquisition of The Taiwan (R.O.C.) Fund
The
Taiwan Greater China Fund (the “Trust”, formerly known as The R.O.C. Taiwan
Fund) is a Massachusetts business trust formed in July 1988 and registered
with
the U.S. Securities and Exchange Commission as a diversified, closed end
management investment company under the Investment Company Act of 1940. The
Trust changed its name from The R.O.C. Taiwan Fund to the Taiwan Greater China
Fund on December 29, 2003. The change took effect on the New York Stock Exchange
on January 2, 2004.
The
Trust
was formed in connection with the reorganization (the “Reorganization”) of The
Taiwan (R.O.C.) Fund (the “Fund”). The Fund, which commenced operations in
October 1983, was established under the laws of the Republic of China as an
open-end contractual investment fund pursuant to an investment contract between
International Investment Trust Company Limited and the Central Trust of China,
as custodian. Pursuant to the Reorganization, which was completed in May 1989,
the Trust acquired the entire beneficial interest in the assets constituting
the
Fund. On February 23, 2004, the investment contract was terminated and
substantially all of the assets held in the Fund were transferred to the direct
account of the Trust. The Trust thereupon converted to internal management
and
now directly invests in Taiwan as a Foreign Institutional Investor (“FINI”). The
Fund was subsequently liquidated.
As
required by the Trust’s Declaration of Trust, if the Trust’s shares trade on the
market at an average discount to net asset value (“NAV”) of more than 10% in any
consecutive 12-week period after the most recent vote by the Trust’s
shareholders, the Trust must submit to the shareholders for a vote at its next
annual meeting a binding resolution that the Trust be converted from a
closed-end to an open-end investment company. The affirmative vote of a majority
of the Trust’s outstanding shares is required to approve such a conversion.
At
the
Annual Meeting of Shareholders held June 21, 2005, the shareholders approved
the
adoption by the Trust of an interval fund structure which allows for the Trust
to provide for the semi-annual repurchase of shares.
Note
2 — Summary of Significant Accounting Policies
A
—
Basis of
presentation — The accompanying financial statements of the Trust have been
prepared in accordance with U.S. generally accepted accounting principles.
B
—
Valuation of investments — Common stocks represent securities that are traded on
the Taiwan Stock Exchange or the Taiwan over-the-counter market. Securities
traded on a principal securities exchange are valued at the closing price on
such exchange. Short-term investments are valued at amortized cost, which
approximates fair value. Under this method, the difference between the cost
of
each security and its value at maturity is accrued into income on a
straight-line basis over the days to maturity. When price movements are
constrained by collars imposed by Republic of China regulations and when market
quotations are not otherwise readily available, securities are valued at fair
value as determined in good faith under the procedures established by and under
the supervision of the Trust’s Trustees.
C
—
Security
transactions and investment income —Security transactions are recorded on the
date the transactions are entered into (the trade date). Dividend income is
recorded on the ex-dividend date, and interest income is recorded on an accrual
basis as it is earned.
D
—
Office
equipment — Office equipment is stated at cost less accumulated depreciation.
Depreciation is applied from the month such assets were placed into service,
using the straight-line method over the respective useful lives of such assets.
TAIWAN
GREATER CHINA FUND
Notes
to Financial Statements / June 30, 2005 (Expressed in U.S. Dollars) (Unaudited)
E
—
Realized
gains and losses — For federal income tax purposes and financial reporting
purposes, realized gains and losses on securities transactions are determined
using the first-in, first-out method and the specific identification method,
respectively. For the fiscal year ended December 31, 2004, the Trust utilized
$7,902,568 of capital loss carryover with a total capital loss carryover of
$109,550,145 remaining. This capital loss carryover may be used to offset any
future capital gains generated by the Trust, and, if unused, $81,239,188 of
such
loss will expire on December 31, 2009, $16,589,494 of such loss will expire
on
December 31, 2010 and $11,721,463 of such loss will expire on December 31,
2011.
Post
October losses represent losses realized on investment transactions from
November 1, 2004 through December 31, 2004. In accordance with federal income
tax regulations, the Trust expects to elect to defer capital losses of $932,479
and currency losses of $635,744 and treat them as arising during the fiscal
year
ending December 31, 2005.
F
—
Foreign
currency translation — Substantially all of the Trust’s income is earned, and
its expenses are partially paid in New Taiwan Dollars (“NT$”). The cost and
market value of securities, currency holdings, and other assets and liabilities
that are denominated in NT$ are reported in the accompanying financial
statements after translation into United States Dollars based on the closing
market rate for United States Dollars in Taiwan at the end of the period. At
June 30, 2005, that rate was approximately NT$31.615 to $1.00. Investment income
and expenses are translated at the average exchange rate for the period.
Currency translation gains or losses are reported as a separate component of
changes in net assets resulting from operations.
The
Trust
does not separately record that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations
are
included with the net realized and unrealized gain or loss from investments.
G
—
Distributions to shareholders — It is the Trust’s policy to distribute all
ordinary income and net capital gains calculated in accordance with U.S. federal
income tax regulations. Such calculations may differ from those based on U.S.
generally accepted accounting principles. Permanent book to tax differences
primarily relate to the treatment of the Trust’s gains from the disposition of
passive foreign investment company shares as well as the nondeductibility of
net
operating losses for U.S. federal income tax purposes. Temporary book to tax
differences are primarily due to differing treatments for certain foreign
currency losses.
H
—
Taxes —
The Trust intends to continue to elect and to continue to qualify as a regulated
investment company under the Internal Revenue Code of 1986, as amended (the
“Code”). If the Trust complies with all of the applicable requirements of the
Code, it will not be subject to U.S. federal income and excise taxes provided
that it distributes all of its investment company taxable income and net capital
gains to its shareholders.
The
Republic of China (“R.O.C.”) levies a tax at the rate of 20% on cash dividends
and interest received by the Trust on investments in R.O.C. securities. In
addition, a 20% tax is levied based on par value of stock dividends (except
those which have resulted from capitalization of capital surplus) received
by
the Trust. For the six months ended June 30, 2005, total par value of stock
dividends received was $191,138.
Realized
gains on securities transactions are not subject to income tax in the R.O.C.;
instead, a securities transaction tax of 0.3% of the market value of stocks
sold
or transferred, is levied. Proceeds from sales of investments are net of
securities transaction tax of $45,741 paid for the six months ended June 30,
2005.
TAIWAN
GREATER CHINA FUND
Notes
to Financial Statements / June 30, 2005 (Expressed in U.S. Dollars) (Unaudited)
I
—
Use of
estimates — The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements,
financial highlights and accompanying notes. Actual results could differ from
those estimates.
J
—
Change
in accounting policy for measurement of the cost basis of investments— During
the fiscal year 2004 the Trust changed from use of the average-cost method
of
measuring the cost of investments for financial statement reporting to the
specific identification method which enables the Trust to more closely align
the
measure of cost used for both financial reporting and tax reporting. This change
has been evaluated by the Trust as a change in application of an accounting
principle which, pursuant to accounting requirements under U.S. generally
accepted accounting principles, should be applied retroactively to all financial
statement periods presented if the effect of change is deemed to be material
to
those financial statements. The effect of adopting this change was to reduce
reported realized gains for the year ended December 31, 2004 by $1,823,027
with
an offsetting increase in the net change in unrealized
appreciation/depreciation. The impact of adopting this change in application
of
accounting principle was not material to the reported cost of net investments
as
of December 31, 2003. This change has no impact on the Trust’s valuation of
investments described in Note 2(B).
Note
3 — Investment Considerations
Because
the Trust concentrates its investments in publicly traded equity and debt
securities issued by R.O.C. corporations, its portfolio involves considerations
not typically associated with investing in U.S. securities. In addition, the
Trust is more susceptible to factors adversely affecting the R.O.C. economy
than
a fund not concentrated in these issuers to the same extent. Since the Trust’s
investment securities are primarily denominated in New Taiwan Dollars, changes
in the relationship of the New Taiwan Dollar to the U.S. Dollar may also
significantly affect the value of the investments and the earnings of the Trust.
Note
4 — Administrative Management
A
—
Since
October 1, 2004, Brown Brothers Harriman & Co. (“BBH”) has provided
administrative and accounting services for the Trust, including maintaining
certain books and records of the Trust, and preparing certain reports and other
documents required by federal and/or state laws and regulations. The Trust
pays
BBH a monthly fee for these services at an annual rate of 0.06% of the NAV
of
the Trust’s assets up to $200 million, 0.05% of such NAV equal to or in excess
of $200 million up to $400 million and 0.04% of such NAV equal to or in excess
of $400 million.
Note
5 — Custodian
Since
October 1, 2004, BBH has served as custodian of the assets of the Trust. The
Trust pays BBH a monthly fee for securities in the Taiwan market at an annual
rate of 0.15% of the NAV of the Trust’s assets up to $200 million, 0.13% of such
NAV equal to or in excess of $200 million up to $400 million and 0.11% of such
NAV equal to or in excess of $400 million. The total payment to BBH for
administrative and custodial services is subject to a minimum annual fee of
$200,000.
Note
6 — Investments in Securities
Purchases
and proceeds from sales of securities, excluding short-term investments, for
the
six months ended June 30, 2005, included approximately $3,589,285 for stock
purchases and approximately $11,789,643 for stock sales, respectively.
At
June
30, 2005, the cost of investments, excluding short-term investments, for U.S.
federal income tax purposes was approximately equal to the cost of such
investments for financial reporting purposes. At June 30, 2005, the unrealized
depreciation of $4,319,978 for financial reporting purposes consisted of
$8,205,412 of gross unrealized appreciation and $12,525,390 of gross unrealized
depreciation.
TAIWAN
GREATER CHINA FUND
Notes
to Financial Statements / June 30, 2005 (Expressed in U.S. Dollars) (Unaudited)
Note
7 — Shares of Beneficial Interest
A
—
The
Trust’s Declaration of Trust permits the Trustees to issue an unlimited number
of shares of beneficial interest or additional classes of other securities.
The
shares have a par value of $0.01, and no other classes of securities are
outstanding at present. The Trust has a repurchase program which allows for
the
repurchase of up to 10% of the outstanding shares. The share repurchase program
commenced on November 1, 2004.
In
connection with the share repurchase program, the Board of Trustees authorized
management to repurchase Trust shares in one or more block transactions provided
that no block exceeds 500,000 shares on any day, no more than 1,000,000 shares
in total are repurchased in block transactions, and that such share repurchases
are made on the New York Stock Exchange and in compliance with the safe harbor
provided by Rule 10b-18 under the Securities Exchange Act of 1934. This does
not
increase the overall repurchase authorization and the Trust will continue to
make non-block share repurchases under its share repurchase program.
During
the six-month period ended June 30, 2005, the Trust repurchased 1,681,700
shares, including block transactions totaling 1,000,000 shares, at an average
price of $4.99. The weighted average discount per share between the repurchase
cost and the net asset value applicable to such shares at the date of repurchase
was 6.95%. At June 30, 2005, 20,005,318 shares were outstanding.
The
Trust
has adopted an interval fund structure pursuant to which it will make
semi-annual repurchase offers of its shares of beneficial interest. The
percentage of outstanding shares of beneficial interest that the Trust can
offer
to repurchase in each repurchase offer will be established by the Trust’s Board
of Trustees shortly before the commencement of each offer, and will be between
5% and 25% of the Trust’s outstanding shares of beneficial interest. If the
repurchase offer is oversubscribed, the Trust may, but is not required to,
repurchase up to an additional 2% of shares outstanding. The Board of Trustees
has determined that the repurchase pricing date for the first repurchase offer
will be December 30, 2005, with subsequent repurchase offers to be made
semi-annually thereafter.
B
—
In
September 2004, the Trust accepted 10,899,658 shares for payment at a price
of
$4.67 per share in accordance with its tender offer for up to that number.
Pursuant to the tender offer, the purchase price was equal to 99% of the Trust’s
net asset value per share determined as of the conclusion of the tender offer.
The purchased shares constituted approximately one-third of the Trust’s
previously outstanding shares.
TAIWAN
GREATER CHINA FUND
The
Trust has been certified as a distributing fund by the Board of Inland Revenue
of the United Kingdom for the period from its inception to December 31, 2004.
The Trust intends to apply for such status for succeeding accounting
periods.
Steven
R. Champion has been the President, Chief Executive Officer and portfolio
manager of the Trust since February 2004. He was Executive Vice President of
the
Bank of Hawaii from 2001-2003 and Chief Investment Officer of Aetna
International from 1997-2001. Mr. Champion also previously served as the
portfolio manager of The Taiwan (R.O.C) Fund, predecessor to the Trust, from
1987 to 1989, and President and portfolio manager of the Trust from 1989 to
1992. Other positions he has held include Vice Chairman of the Bank of San
Francisco, Chief International Investment Officer at the Bank of America, and
Vice President and Country Manager in Taiwan
for Continental Illinois National Bank.
Proxy
Voting Policy
The
Trust’s policy with regard to voting stocks held in its portfolio is to vote in
accordance with the recommendations of Institutional Shareholder Services,
Inc.
(“ISS”) unless the Trust’s portfolio manager recommends to the contrary, in
which event the decision as to how to vote will be made by the Executive
Committee of the Trust’s Board of Trustees. A summary of the voting policies
followed by ISS may be found on the Trust’s website, http://www.taiwangreaterchinafund.com,
and a
more detailed description of those policies is available on the website of
the
Securities and Exchange Commission (the “SEC”), http://www.sec.gov.
In
addition, information regarding how the Trust voted proxies relating to its
portfolio securities during the 12-month period ended June 30, 2005 will be
available on or through the Trust’s website and on the SEC’s website no later
than August 31, 2005.
Portfolio
Holdings
The
Trust
provides a complete list of its Portfolio Holdings in its report to shareholders
four times each year, at each quarter end. For the second and fourth quarters,
the list of portfolio holdings appears in the Trust’s semi-annual and annual
reports to shareholders. For the first and third quarters, the list of portfolio
holdings appears in its quarterly reports to shareholders. These reports are
available on the Trust’s website. The Trust also files the list for the first
and third quarters with the Securities and Exchange Commission on Form N-Q,
which can be looked up on the SEC’s website at www.sec.gov.
Form
N-Q may also be reviewed and copied at the SEC’s Public Reference Room in
Washington, DC. To find out more about this public service, call the SEC at
1-800-SEC-0330.
For
additional information regarding the Trust, including additional portfolio
manager commentary and portfolio holdings information as of the end of each
fiscal quarter please visit our website at http://www.taiwangreaterchinafund.com.
2005
ANNUAL MEETING OF SHAREHOLDERS
On
June
21, 2005, the Trust held an annual meeting to:
i)
|
Elect
two trustees, each to serve for a term expiring on the date of the
2008
Annual Meeting of Shareholders or the special meeting in lieu thereof;
|
(ii)
|
Consider
whether to approve the conversion of the Trust from a closed-end
investment company into an open-end investment company;
and
|
(iii)
|
Consider
whether to approve a fundamental policy whereby the Trust would adopt
an
interval fund structure with semi-annual
repurchases.
|
The
results of the shareholder votes are shown below. Proxies representing
16,682,136, or 82.39%, of the 20,246,218 eligible shares outstanding were voted
in respect of the election of trustees. Frederick C. Copeland, Jr. and Robert
P.
Parker were each elected for a term expiring in 2008. The Trustees of the Trust
recommended that shareholders vote against the
conversion proposal which would have required the affirmative vote of a majority
of outstanding shares to pass. Proxies representing approximately 21.65% were
voted for the conversion. As a result, the proposal to convert the Trust to
an
open-end investment company was not approved. The Trustees of the Trust
recommended that shareholders vote for the fundamental policy whereby the Trust
would adopt an interval fund structure with semi-annual repurchases. Proxies
representing approximately 57.52% were voted for the adoption of an interval
fund structure, and the proposal was therefore approved.
|
For
|
Withheld
|
|
Nominees
to the Board of Trustees
|
|
|
Frederick
C. Copeland, Jr
|
12,904,000
|
3,778,136
|
|
Robert
P. Parker
|
12,903,382
|
3,778,754
|
|
Edward
B. Collins and David N. Laux, whose terms did not expire in 2005,
remain
trustees.
|
|
|
|
|
|
For
|
Against
|
Abstain
|
Conversion
of the Trust from a closed-end to an open-end investment
company
|
4,383,397
|
8,105,185
|
13,107
|
Proxies
covering 4,180,447 shares, or 25.06% of the shares represented at
the
meeting, were not voted on this issue.
|
|
|
|
|
|
For
|
Against
|
Abstain
|
Adopt
interval fund structure
|
11,645,415
|
791,177
|
65,097
|
Proxies
covering 4,180,447 shares, or 25.06% of the shares represented at
the
meeting, were not voted on this
issue.
|
Review
Report of Independent Registered Public Accounting Firm
Trustees
and Shareholders of the
Taiwan
Greater China Fund
We
have
reviewed the accompanying statement of assets and liabilities of the Taiwan
Greater China Fund, a Massachusetts business trust (the “Trust”), including the
schedule of investments, as of June 30, 2005, and the related statements of
operations and of changes in net assets and the financial highlights for the
six-month period ended June 30, 2005. These financial statements and financial
highlights are the responsibility of the Trust’s management.
We
conducted our review in accordance with standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with the standards of the Public Company Accounting Oversight Board (United
States), the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such
an
opinion.
Based
on
our review, we are not aware of any material modifications that should be made
to the financial statements and financial highlights referred to above in order
for them to be in conformity with U.S. generally accepted accounting
principles.
We
have
previously audited, in accordance with standards of the Public Company
Accounting Oversight Board (United States), the consolidated statement of
changes in net assets for the year ended December 31, 2004, and the consolidated
financial highlights for each of the years in the five-year period ended
December 31, 2004, and in our report dated January 20, 2005, we expressed an
unqualified opinion on the consolidated statement of changes in net assets
and
financial highlights.
Taipei,
Taiwan
August
1,
2005
/s/
KPMG
Certified Public Accountants
ITEM
2.
CODE OF ETHICS.
Not
applicable. This item is only required in an annual report on this Form
N-CSR.
ITEM
3.
AUDIT COMMITTEE FINANCIAL EXPERT.
Not
applicable. This item is only required in an annual report on this Form
N-CSR.
ITEM
4.
PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not
applicable. This item is only required in an annual report on this Form
N-CSR.
ITEM
5.
AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not
applicable. This item is only required in an annual report on this Form
N-CSR.
ITEM
6. A
Schedule of Investments is included as part of the report to shareholders filed
under item 1.
ITEM
7.
DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT
INVESTMENT COMPANIES.
Not
applicable. This item is only required in an annual report on this Form
N-CSR.
ITEM
8.
Portfolio Managers of Closed-End Management Investment Companies.
8(a)(1)
Not applicable. This item is only required in an annual report on this Form
N-CSR.
8a(2)
Not
applicable. This item is only required in an annual report on this Form
N-CSR
8a(3)
Not
applicable. This item is only required in an annual report on this Form
N-CSR.
8(a)(4)
Not applicable. This item is only required in an annual report on this Form
N-CSR.
8(b)
There has been no change, as of the date of filing, in the Portfolio Manager
identified in response to paragraph (a)(1) of this Item in the registrant’s most
recent annual report on Form N-CSR.
ITEM
9.
PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANIES
AND
AFFILIATED PURCHASERS.
Period
|
(a)
Total
Number of Shares (or Units) Purchased
|
(b)
Average
Price Paid per Share (or Unit)
|
(c)
Total
Number of Shares (or Units) Purchased as Part of Publicly Announced
Plans
or Programs
|
(d)
Maximum
Number (or Approximate Dollar Value) of Shares (or Units) that May
Yet Be
Purchased Under the Plans or Programs
|
January
1
to
January
31
|
149,200
(a)
|
4.69
|
149,200
|
1,918,432(b)
|
February
1
to
February
28
|
1,109,600
(a)
|
5.06
|
1,109,600
|
808,832(b)
|
March
1
to
March
31
|
128,600
(a)
|
5.04
|
128,600
|
680,232(b)
|
April
1
to
April
30
|
100,000
(a)
|
4.71
|
100,000
|
580,232(b)
|
May
1
to
May
31
|
93,100
(a)
|
4.79
|
93,100
|
487,132(b)
|
June
1
to
June
30
|
101,200
(a)
|
5.06
|
101,200
|
385,932(b)
|
(a) |
Open
Market repurchase
|
(b) |
Fund
may repurchase up to 2,179,932 shares under its repurchase program
commenced November 1, 2004. The repurchase program does not have
an
expiration date.
|
ITEM
10.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There
have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant’s board of directors..
ITEM
11.
CONTROLS AND PROCEDURES.
(a)
The
registrant's principal executive officer and principal financial officer have
concluded that the registrant's disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (“1940
Act”)) are effective as of a date within 90 days of the filing date of this
report based on their evaluation of these controls and procedures of such
disclosure controls and procedures as required by Rule 30a-3(b) under the 1940
Act and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934,
as amended.
(b)
The
registrant’s principal executive officer and principal financial officer are
aware of no changes in the registrant's internal controls over financial
reporting (as defined in Rule 30a-3(d) under the 1940 Act,) that occurred during
the registrant's last fiscal half-year that have materially affected, or are
reasonably likely to materially affect, the registrant’s internal control over
financial reporting.
ITEM
12.
EXHIBITS.
(a)(1)
CODE OF ETHICS REQUIRED BY ITEM 2 OF FORM N-CSR:
Not
applicable.
(a)(2)
CERTIFICATIONS REQUIRED BY RULE 30A-2(A) UNDER THE INVESTMENT COMPANY ACT OF
1940:
See
Exhibit 99.77Q3Cert attached hereto.
(b)
CERTIFICATIONS REQUIRED BY RULE 30A-2(B) UNDER THE INVESTMENT COMPANY ACT OF
1940 AND RULE 13A-14(B) UNDER THE SECURITIES EXCHANGE ACT OF 1934:
See
Exhibit 99.906Cert attached hereto.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934
and
the
Investment Company Act of 1940, the registrant has duly caused this report
to be
signed on its behalf by the undersigned, thereunto duly authorized.
Taiwan
Greater China Fund
By:
/s/
Steven R. Champion
----------------------------------
Name:
Steven R. Champion
Title:
President and Chief Executive Officer
Date:
August 24, 2005
Pursuant
to the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates
indicated.
By:
/s/
Steven R. Champion
----------------------------------
Name:
Steven R. Champion
Title:
President and Chief Executive Officer
By:
/s/
Cheryl Chang
----------------------------------
Name:
Cheryl Chang
Title:
Chief Financial Officer
Date:
August 24, 2005