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<SEC-DOCUMENT>0000950135-06-000080.txt : 20060109
<SEC-HEADER>0000950135-06-000080.hdr.sgml : 20060109
<ACCEPTANCE-DATETIME>20060109160821
ACCESSION NUMBER:		0000950135-06-000080
CONFORMED SUBMISSION TYPE:	N-CSR
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20060105
FILED AS OF DATE:		20060109
DATE AS OF CHANGE:		20060109
EFFECTIVENESS DATE:		20060109

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHINA FUND INC
		CENTRAL INDEX KEY:			0000845379
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		N-CSR
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-05749
		FILM NUMBER:		06519359

	BUSINESS ADDRESS:	
		STREET 1:		225 FRANKLIN ST
		CITY:			BOSTON
		STATE:			MA
		ZIP:			02110
		BUSINESS PHONE:		6176622965

	MAIL ADDRESS:	
		STREET 1:		225 FRANKLIN ST
		CITY:			BOSTON
		STATE:			MA
		ZIP:			02110
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-CSR
<SEQUENCE>1
<FILENAME>b57924cfnvcsr.txt
<DESCRIPTION>THE CHINA FUND, INC.
<TEXT>
<PAGE>



                                  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: 811-05749
                    -----------------------------------------

                              THE CHINA FUND, INC.
 ------------------------------------------------------------------------------
               (Exact name of registrant as specified in charter)

                               225 FRANKLIN STREET
                                BOSTON, MA 02110
 ------------------------------------------------------------------------------
               (Address of principal executive offices)(Zip code)

                                                            Copy to:

           Mary Moran Zeven                         Leonard B. Mackey, Jr., Esq.
               Secretary                               Clifford Chance US LLP
         The China Fund, Inc.                           31 West 52nd Street
          225 Franklin Street                      New York, New York 10019-6131
           Boston, MA 02110

(Name and Address of Agent for Service)


Registrant's telephone number, including area code:  (888) 246-2255

Date of fiscal year end:  October 31

Date of reporting period:  October 31, 2005


<PAGE>

ITEM 1.  REPORT TO STOCKHOLDERS.









<PAGE>

                              THE CHINA FUND, INC.

                                 ANNUAL REPORT

                                OCTOBER 31, 2005

                                              THE CHINA FUND, INC.
                                              TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                     PAGE
                                                                                                     ----
                                                                   <S>                               <C>
                                                                   Key Highlights                      1
                                                                   Asset Allocation                    2
                                                                   Industry Allocation                 3
                                                                   Chairman's Statement                4
                                                                   Investment Managers' Statements     5
                                                                   About the Portfolio Managers        9
                                                                   Schedule of Investments            10
                                                                   Financial Statements               16
                                                                   Notes to Financial Statements      20
                                                                   Report of Independent Registered
                                                                     Public Accounting Firm           25
                                                                   Other Information                  26
                                                                   Dividends and Distributions;
                                                                     Dividend Reinvestment
                                                                     and Cash Purchase Plan           35
</Table>
<PAGE>

THE CHINA FUND, INC.
KEY HIGHLIGHTS (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<Caption>
- --------------------------------------------------------------------------------------
                                      FUND DATA
- --------------------------------------------------------------------------------------
<S>                                         <C>
            NYSE STOCK SYMBOL                                  CHN
- --------------------------------------------------------------------------------------
               LISTING DATE                               JULY 10, 1992
- --------------------------------------------------------------------------------------
            SHARES OUTSTANDING                              14,388,287
- --------------------------------------------------------------------------------------
       TOTAL NET ASSETS (10/31/05)                       US$333.5 MILLION
- --------------------------------------------------------------------------------------
   NET ASSET VALUE PER SHARE (10/31/05)                       $23.25
- --------------------------------------------------------------------------------------
    MARKET PRICE PER SHARE (10/31/05)                         $24.55
- --------------------------------------------------------------------------------------
</Table>

<Table>
<Caption>
- --------------------------------------------------------------------------------------------------------------
                                                 TOTAL RETURN
- --------------------------------------------------------------------------------------------------------------
  PERFORMANCE AS OF
      10/31/05:                    NET ASSET VALUE(1)                            MARKET PRICE(2)
- --------------------------------------------------------------------------------------------------------------
<S>                    <C>                                          <C>
      12 Months                          (.70)%                                      (5.50)%
- --------------------------------------------------------------------------------------------------------------
  3-Year Cumulative                      85.63%                                      131.92%
- --------------------------------------------------------------------------------------------------------------
  3-Year Annualized                      22.90%                                       32.37%
- --------------------------------------------------------------------------------------------------------------
  5-Year Cumulative                     126.21%                                      230.50%
- --------------------------------------------------------------------------------------------------------------
  5-Year Annualized                      17.73%                                       27.01%
- --------------------------------------------------------------------------------------------------------------
 10-Year Cumulative                     134.85%                                      171.62%
- --------------------------------------------------------------------------------------------------------------
 10-Year Annualized                       8.91%                                       10.51%
- --------------------------------------------------------------------------------------------------------------
</Table>

<Table>
<Caption>
- --------------------------------------------------------------------------------------------------------------
                                               DIVIDEND HISTORY
- --------------------------------------------------------------------------------------------------------------
     RECORD DATE                         INCOME                                   CAPITAL GAINS
- --------------------------------------------------------------------------------------------------------------
<S>                    <C>                                          <C>
      12/22/04                          $ 0.1963                                     $3.3738
- --------------------------------------------------------------------------------------------------------------
      12/31/03                          $ 0.0700                                     $1.7100
- --------------------------------------------------------------------------------------------------------------
      12/26/02                          $0.06397                                     $0.1504
- --------------------------------------------------------------------------------------------------------------
      12/31/01                          $ 0.1321                                          --
- --------------------------------------------------------------------------------------------------------------
      12/31/99                          $ 0.1110                                          --
- --------------------------------------------------------------------------------------------------------------
      12/31/98                          $ 0.0780                                          --
- --------------------------------------------------------------------------------------------------------------
      12/31/97                                --                                     $0.5003
- --------------------------------------------------------------------------------------------------------------
      12/31/96                          $ 0.0834                                          --
- --------------------------------------------------------------------------------------------------------------
      12/29/95                          $ 0.0910                                          --
- --------------------------------------------------------------------------------------------------------------
      12/30/94                          $ 0.0093                                     $0.6006
- --------------------------------------------------------------------------------------------------------------
      12/31/93                          $ 0.0853                                     $0.8250
- --------------------------------------------------------------------------------------------------------------
      12/31/92                          $ 0.0434                                     $0.0116
- --------------------------------------------------------------------------------------------------------------
</Table>

(1) Total investment returns reflect changes in net asset value per share during
each period and assume that dividends and capital gains distributions, if any,
were reinvested in accordance with the dividend reinvestment plan. The net asset
value per share percentages is not an indication of the performance of a
shareholder's investment in the Fund, which is based on market price. Total
investment returns are historical and do not guarantee future results.

(2) Total investment returns are historical and do not guarantee future results.

                                        1
<PAGE>

THE CHINA FUND, INC.
ASSET ALLOCATION AS OF OCTOBER 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<Caption>
- ---------------------------------------------------------------------------------
                     TEN LARGEST LISTED EQUITY INVESTMENTS*
- ---------------------------------------------------------------------------------
<C>  <S>                                                <C>
 1.  Chaoda Modern Agriculture (Holdings) Ltd.                    3.85%
- ---------------------------------------------------------------------------------
 2.  China Netcom Group Corp. (Hong Kong) Ltd.                    3.04%
- ---------------------------------------------------------------------------------
 3.  China Life Insurance Co., Ltd.                               2.97%
- ---------------------------------------------------------------------------------
 4.  Cathay Financial Holding Co., Ltd.                           2.86%
- ---------------------------------------------------------------------------------
 5.  Xinao Gas Holdings, Ltd.                                     2.61%
- ---------------------------------------------------------------------------------
 6.  China Minsheng Co. Access Product                            2.50%
- ---------------------------------------------------------------------------------
 7.  Zijin Mining Group Co., Ltd.                                 2.34%
- ---------------------------------------------------------------------------------
 8.  Solomon Systech Ltd.                                         2.27%
- ---------------------------------------------------------------------------------
 9.  TPV Technology, Ltd.                                         2.27%
- ---------------------------------------------------------------------------------
10.  Anhui Expressway Co., Ltd.                                   2.11%
- ---------------------------------------------------------------------------------
</Table>

<Table>
<Caption>
- --------------------------------------------------------------------------------
                          LARGEST DIRECT INVESTMENTS*
- --------------------------------------------------------------------------------
<C>  <S>                                                  <C>
 1.  CDW Holding Ltd.                                             2.17%
- --------------------------------------------------------------------------------
 2.  Global e-Business Services (BVI) Ltd.                        0.92%
- --------------------------------------------------------------------------------
 3.  Captive Finance, Ltd.                                        0.91%
- --------------------------------------------------------------------------------
 4.  teco Optronics Corp.                                         0.04%
- --------------------------------------------------------------------------------
</Table>

* Percentages based on net assets at October 31, 2005.

                                        2
<PAGE>

    INDUSTRY ALLOCATION (UNAUDITED)
- --------------------------------------------------------------------------------
INDUSTRY ALLOCATION (AS A PERCENTAGE OF NET ASSETS)

                                  (PIE CHART)

<Table>
<S>                    <C>
Others                            13.6%
Information                       12.9%
  Technology
Financials                        12.5%
Industrials                       12.4%
Consumer                          12.3%
  Discretionary
Utilities                          8.2%
Materials                          6.6%
Energy                             6.4%
Consumer Staples                   6.1%
Health Care                        4.3%
Telecommunications                 4.7%
</Table>

Fund holdings are subject to change and percentages shown above are based on
total net assets as of October 31, 2005. A complete list of holdings as of
October 31, 2005 is contained in the Schedule of Investments included in this
report. The most current available data regarding portfolio holdings can be
found on our website, www.chinafundinc.com. You may also obtain holdings by
calling 1-800-246-2255.

                                        3
<PAGE>

THE CHINA FUND, INC.
CHAIRMAN'S STATEMENT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Dear Stockholders,

During the past year the Chinese economy continued to grow strongly, with
year-on-year Gross Domestic Product (GDP) growth exceeding 9%. But as the period
ended, there were some signs that this growth might be slowing slightly with
some weakness in the area of fixed asset investments. The prices of domestic
commodities such as steel and coal started to fall. In July, the renminbi was
re-pegged from the U.S. dollar to a basket of currencies, of undisclosed
composition, which resulted in slight currency appreciation. However, the trade
surplus with the U.S. continued to grow. And, given the mid-term Congressional
elections in the United States next year, and growth in protectionist sentiment,
we expect further upward pressure on the renminbi. Consumer inflation in China
has fallen to low levels, although this may pick up slightly in 2006 as the
government allows the adjustment of gasoline, electricity and water prices.
However, as the currency seems likely to firm, there is little immediate threat
of higher interest rates.

But this strong economic growth was not reflected in China's stock markets. A
small number of large cap stocks, notably oils and telecoms, constituted most of
what index gains there were. The entrepreneurial companies in which the Fund
invests, many of them manufacturers, found their margins coming under pressure
from rising costs. High levels of equity supply -- capped by the raising of US
$9 billion for the listing of China Construction Bank -- was another burden on
the market. Taiwan's market, to which the Fund had a large exposure, was held
back by the political stalemate between a Democratic Progressive Party (DDP)
president and Kuomintang (KMT) legislature. The domestic A-share market hit an
eight-year low in the middle of the year, but we were heartened by the radical
reform of the market undertaken by the Chinese authorities: in August the Fund
completed a rights issue in excess of US$110 million in order to make a
substantial asset allocation to the A-share market, which was previously closed
to foreign investors. With building Renminbi liquidity, good progress in the
reform of non-tradable shares and the increasing opening of the market to
foreign investors, we hope that this pioneering move will show positive results
in 2006.

A major obstacle to private equity deal activity in China was removed following
the issuance of Circular 75 by the State Administration of Foreign Exchange
(SAFE). This Circular removes the regulatory uncertainty created by two earlier
circulars. It marks a significant step towards a more transparent structure in
the area of overseas investments by People's Republic of China (PRC) residents.
Asian Direct Capital Management, the Fund's direct investment manager, expects a
pickup in deal activity in the wake of the new SAFE circular.

We thank you for your continuing support. If you have any questions, comments or
would like additional information on the Fund's holdings, we invite you to visit
the Fund's website at www.chinafundinc.com or call (toll free) 1-888-CHN-CALL
(246-2255).

Sincerely,

/s/ Alan Tremain

Alan Tremain
Chairman of the Board

                                        4
<PAGE>

THE CHINA FUND, INC.
INVESTMENT MANAGERS' STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

REVIEW OF LISTED INVESTMENTS
We continued to invest in what we consider the best Chinese companies wherever
they are listed. Our market coverage now includes: Hong Kong, Taipei, Singapore,
the A-share and B-share markets in Shanghai and Shenzhen, and ADRs traded on the
Nasdaq. In general, the key elements of the Fund's investment style remained:

     - An active, consistent and disciplined approach;

     - Bottom-up stock selection, recognizing the inefficiencies of the Chinese
       market;

     - A focus on growth; and

     - A strategic bias to entrepreneurial companies.

When researching companies we continued to look for:

     - Credible managements, owning equity in the company;

     - High growth with sustainable margins; and

     - Balance sheets that are unhampered by high accounts receivables and
       intra-group transactions.

Therefore, over the past year we have been focusing on privately-owned,
entrepreneurial companies that are set to benefit from China's economic growth,
developing infrastructure, rising demand for consumer products and the
progressive liberalisation of markets. We remain convinced that, by emphasising
these types of companies, the Fund will outperform over the longer term.

Despite good business fundamentals and low valuations, the share prices of these
companies have remained relatively becalmed. In part, the Fund's performance
relative to the MSCI Golden Dragon index was held back by the Fund's exposure to
the renminbi denominated A-share market, where the Fund began to invest from
April. Over the 12 months to October 31 2005, the MSCI Golden Dragon index rose
by 11.2% while the net asset value of the listed portfolio fell by 1.0%.
Although the A-share market has certainly been weak, a liquidity-driven rally
looks possible given the build-up in domestic liquidity and good progress in
resolving the non-tradable share problem.

We retained our reservations about investing in poorly-managed state-owned
enterprises and took the view that the major oil companies in China are
state-owned and therefore liable to act in national, rather than in
shareholders', interests. As such, a second negative factor for performance in
relative terms was the strong performance from the state-owned oil companies and
telecoms stocks, such as PETROCHINA, CNOOC and CHINA MOBILE. But we are
confident that our approach will prove to be the right one over the longer term.

In the six months that have passed since our interim report, we have remained
interested in consumer stocks. Some examples of recent additions include
BIO-TREAT, which makes systems for the treatment of waste water (a huge problem
in China) and the depressed SHANGHAI SEMICONDUCTOR, on signs of an upturn in the
semiconductor

                                        5
<PAGE>

THE CHINA FUND, INC.
INVESTMENT MANAGERS' STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

REVIEW OF LISTED INVESTMENTS (CONTINUED)

cycle. Purchases in June included Radiant, the backlight module maker, which we
expect to benefit from the growth in Liquid Crystal Displays (LCD) TV demand.
Worried about the effect of the rising oil price on fuel costs, we took profits
on EVA AIRWAYS. We took losses on the telecom equipment maker UTSTARCOM; debate
on the restructuring of the Chinese telecom industry has caused confused
operators to delay capital spending and postponed the issuance of 3G licences.
We sold positions in WEICHAI POWER, on signs of a slow down in heavy truck
demand, and GUANGSHEN RAILWAY, where funding from an A-share issue has been
delayed indefinitely.

We are positive about the A-share market, which is the midst of radical reform;
220 companies, representing 30% of free market capitalization, have already
announced non-tradable share reform plans, clearing a long-term overhang.

                                        6
<PAGE>

THE CHINA FUND, INC.
INVESTMENT MANAGERS' STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

REVIEW OF DIRECT INVESTMENTS
China has continued to register strong economic growth. GDP increased by 9.4% in
the nine months ended September 2005. Retail sales increased by 12.1% in the
same period.

We expect to increase the pace of direct investments following the issuance of
Circular 75 by SAFE. The new rules set forth in the Circular clarify how Chinese
residents can set up offshore vehicles to raise funds from foreign private
equity investors.

As of October 31, 2005 the Fund's Direct Investment portfolio comprised the
following investments:

CAPTIVE FINANCE LIMITED ("CAPTIVE")
Captive is engaged in providing operating and financial leases for technology
products (PCs, servers, telecom equipment etc.). It has operations in Greater
China, Singapore, Malaysia and Europe. Apart from seeking leasing opportunities
within each of its national markets, there is active cross-selling of services
between the Asian and European operations.

CDW HOLDING LIMITED ("CDW")
CDW manufactures a range of component parts for mobile telephones, office
equipment and household appliances. Its fastest growing business is the assembly
of backlight unit components for the mobile phone industry. For more than a
decade, CDW has been supplying parts and accessories for office and consumer
equipment to major Japanese manufacturers. CDW continues to expand its
production capacity to cope with increasing demand.

CDW was listed on the Singapore Stock Exchange on January 26, 2005 and during
the six month period ended October 31, 2005, CDW had paid a total dividend of
US$0.61mn (2004 final and 2005 interim) to the Fund. For the nine months ended
2005, the company's revenue was US$75.3mn with a net profit after tax of
US$7.6mn. Compared with same period last year, revenue increased by 3.9% while
net profits dropped by 32.1%.

TECO OPTRONICS CORP. ("TECO")
teco designs and manufactures organic light emitting diodes (OLED) displays. It
has a technology licensing agreement with Kodak. OLED is a new flat screen
display technology that is competing with liquid crystal displays (LCDs). teco
is a subsidiary of the TECO Group, a large Taiwanese business group.

teco has seen difficult trading conditions. Adoption of organic light emitting
diodes (OLED) is slower than forecast and the industry is still unable to bring
down costs sufficiently to compete with LCD display. teco is considering a
number of restructuring options.

On July 8, 2005, the Fund's Board, in accordance with the Fund's valuation
procedures, reduced teco's carrying value to US$150,000 from a cost of about
US$590,000.

                                        7
<PAGE>

THE CHINA FUND, INC.
INVESTMENT MANAGERS' STATEMENTS (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

REVIEW OF DIRECT INVESTMENTS (CONTINUED)

GLOBAL E-BUSINESS SERVICES (BVI) LTD. ("GO")
GO engages in operating e-commerce and e-government platforms and related
business opportunities. In March 2003, GO was awarded one of the two available
licenses in Hong Kong to provide and operate the front-end Government Electronic
Trading Services and related electronic processing services for the trading
community. GO is a subsidiary of Computer And Technologies Holdings Limited, a
listed company in Hong Kong.

                                        8
<PAGE>

THE CHINA FUND, INC.
ABOUT THE PORTFOLIO MANAGERS (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

LISTED INVESTMENT MANAGER
Mr. Chris Ruffle serves as the portfolio manager for the Fund's portfolio of
listed securities. Mr. Ruffle joined Martin Currie in 1994. He is a Chinese and
Taiwanese equity specialist with over 15 years investment experience in Asia.
Fluent in Mandarin and Japanese, Mr. Ruffle has worked in the Far East since
1983. He worked originally in Beijing and Shanghai and then in Australia for a
metal trading company. He then moved to Warburg Securities in 1987 as an analyst
in Tokyo, before establishing Warburg's office in Taiwan. Mr. Ruffle also
manages The Martin Currie China Hedge Fund and the China "A" Share Fund.

DIRECT INVESTMENT MANAGER
Mr. Koh Kuek Chiang is the Executive Director of Asian Direct Capital Management
("ADCM") and is the portfolio manager of the Fund's portfolio of direct
securities. Mr. Koh joined ADCM in 1998. Mr. Koh has over ten years of private
equity investment experience in the United States, Europe and Asia working for
the Government of Singapore Investment Corporation, Union Bank of Switzerland
and private interests. His investment experience covers a wide range of
industries, including telecommunications equipment, biotechnology, media,
financial services and basic materials. Mr. Koh graduated with an engineering
degree from the University of Western Australia and has a post-graduate Diploma
in Business Administration from the National University of Singapore. He is a
Chartered Financial Analyst and is fluent in English and Mandarin.

                                        9
<PAGE>

THE CHINA FUND, INC.
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<Caption>
NAME OF ISSUER AND TITLE OF ISSUE                               SHARES             VALUE (NOTE A)
- ---------------------------------                               ------             --------------
<S>                                                           <C>          <C>     <C>
COMMON STOCK AND OTHER EQUITY INTERESTS
CHINA -- SHENZHEN "B" SHARES
  INDUSTRIALS -- (0.9%)
     China International Marine Containers (Group) Co.,
       Ltd. ................................................   3,425,890            $  2,850,416
                                                                                    ------------
          TOTAL CHINA -- SHENZHEN "B" SHARES -- (Cost
            $1,215,941)                                                      0.9%      2,850,416
                                                                                    ------------
HONG KONG
  CONSUMER DISCRETIONARY -- (4.6%)
     Fu JI Food & Catering Services.........................   2,844,000               3,228,400
     Nanjing Dahe Outdoor Media Co., Ltd.+..................  37,500,000               1,064,214
     Ports Design Ltd. .....................................   4,721,500               4,415,634
     Shangri-La Asia Ltd. ..................................   3,100,000               4,338,768
     TCL Multimedia Technology Holdings Ltd. ...............  15,988,000               2,412,987
                                                                                    ------------
                                                                                      15,460,003
                                                                                    ------------
  CONSUMER STAPLES -- (6.1%)
     Chaoda Modern Agriculture (Holdings) Ltd. .............  34,089,900              12,862,537
     Li Ning Co. Ltd. ......................................  11,400,000               6,874,822
     Sino Golf Holdings, Ltd. ..............................   6,837,000                 590,902
                                                                                    ------------
                                                                                      20,328,261
                                                                                    ------------
  ENERGY -- (0.9%)
     China Power International Development Ltd. ............   4,907,000               1,645,752
     China Rare Earth Holdings, Ltd. .......................  15,254,000               1,219,974
                                                                                    ------------
                                                                                       2,865,726
                                                                                    ------------
  FINANCIAL -- (3.0%)
     China Life Insurance Co., Ltd.*........................  13,497,000               9,924,009
                                                                                    ------------
  HEALTHCARE -- (4.3%)
     China Shineway Pharmaceutical Group Ltd. ..............   7,615,000               3,192,481
     Global Bio-chem Technology Group Co. Ltd. .............   9,518,000               3,775,425
     Golden Meditech Co., Ltd. .............................  27,900,000               4,894,611
     Natural Beauty Bio-Technology, Ltd. ...................  32,780,000               2,431,374
                                                                                    ------------
                                                                                      14,293,891
                                                                                    ------------
  INDUSTRIALS -- (3.9%)
     Beiren Printing Machinery Holdings Ltd.+...............   7,000,000               1,155,801
     China Fire Safety Enterprise Group Holdings Ltd. ......  50,380,000               4,484,172
     TPV Technology, Ltd. ..................................   9,968,000               7,586,388
                                                                                    ------------
                                                                                      13,226,361
                                                                                    ------------
</Table>

See notes to financial statements and notes to schedule of investments.

                                        10
<PAGE>
THE CHINA FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<Caption>
NAME OF ISSUER AND TITLE OF ISSUE                               SHARES             VALUE (NOTE A)
- ---------------------------------                               ------             --------------
<S>                                                           <C>          <C>     <C>
COMMON STOCK AND OTHER EQUITY INTERESTS (CONTINUED)
HONG KONG (CONTINUED)
  INFORMATION TECHNOLOGY -- (3.2%)
     Arcontech Corp.(2)*....................................  18,386,000            $    237,171
     Digital China Holdings Ltd. ...........................  10,692,000               2,792,923
     Solomon Systech Ltd. ..................................  20,698,000               7,609,363
                                                                                    ------------
                                                                                      10,639,457
                                                                                    ------------
  MATERIALS -- (4.7%)
     Asia Aluminum Holdings Ltd. ...........................  23,250,000               1,889,464
     Asia Zirconium Ltd. ...................................  13,196,000               1,191,558
     Fountain Set (Holdings) Ltd. ..........................   6,714,000               2,598,230
     Ocean Grand Chemicals Holdings Ltd. ...................  17,379,000               2,174,561
     Zijin Mining Group Co., Ltd. ..........................  24,800,000               7,837,775
                                                                                    ------------
                                                                                      15,691,588
                                                                                    ------------
  TELECOMMUNICATIONS -- (4.1%)
     China Netcom Group Corp. (Hong Kong) Ltd. .............   6,435,500              10,169,355
     Comba Telecom Systems Holdings Ltd. ...................  16,118,000               3,638,516
                                                                                    ------------
                                                                                      13,807,871
                                                                                    ------------
  UTILITIES -- (2.6%)
     Xinao Gas Holdings Ltd. ...............................  11,560,000               8,723,459
                                                                                    ------------
  INDEX FUND -- (0.9%)
     Ishare Asia Trust*.....................................     580,000               3,030,108
                                                                                    ------------
          TOTAL HONG KONG -- (Cost $104,457,957)                            38.3%    127,990,734
                                                                                    ------------
HONG KONG -- "H" SHARES
  CONSUMER DISCRETIONARY -- (0.3%)
     Lianhua Supermarket Holdings Ltd. .....................     828,000                 897,191
                                                                                    ------------
  ENERGY -- (2.5%)
     China Oilfield Services Ltd. ..........................   9,546,000               3,509,468
     China Shenhua Energy Co. Ltd.*.........................   4,536,500               4,974,104
                                                                                    ------------
                                                                                       8,483,572
                                                                                    ------------
  INDUSTRIALS -- (2.7%)
     BYD Co., Ltd. .........................................   3,225,000               4,555,320
     Sinotrans Ltd. ........................................  12,835,000               4,470,279
                                                                                    ------------
                                                                                       9,025,599
                                                                                    ------------
</Table>

See notes to financial statements and notes to schedule of investments.

                                        11
<PAGE>
THE CHINA FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<Caption>
NAME OF ISSUER AND TITLE OF ISSUE                               SHARES             VALUE (NOTE A)
- ---------------------------------                               ------             --------------
<S>                                                           <C>          <C>     <C>
COMMON STOCK AND OTHER EQUITY INTERESTS (CONTINUED)
HONG KONG -- "H" SHARES (CONTINUED)
  UTILITIES -- (4.1%)
     Anhui Expressway Co., Ltd. ............................  13,938,000            $  7,056,919
     Shenzhen Expressway Co., Ltd. .........................  21,494,000               6,792,949
                                                                                    ------------
                                                                                      13,849,868
                                                                                    ------------
          TOTAL HONG KONG -- "H" SHARES -- (Cost
            $26,307,905)                                                     9.6%     32,256,230
                                                                                    ------------
          TOTAL HONG KONG (INCLUDING "H" SHARES) -- (Cost
            $130,765,862)                                                   47.9%    160,246,964
                                                                                    ------------
SINGAPORE
  UTILITIES -- (1.4%)
     Bio-Treat Technology Ltd. .............................   9,799,000               4,796,491
                                                                                    ------------
          TOTAL SINGAPORE -- (Cost $4,045,565)                               1.4%      4,796,491
                                                                                    ------------
TAIWAN
  CONSUMER DISCRETIONARY -- (4.7%)
     Merry Electronics Co., Ltd. ...........................   3,012,016               6,643,196
     Synnex Technologies International Corp. ...............   5,682,164               6,875,873
     Taiwan FamilyMart Co., Ltd. ...........................   1,645,592               2,354,244
                                                                                    ------------
                                                                                      15,873,313
                                                                                    ------------
  FINANCIALS -- (5.2%)
     Cathay Financial Holding Co., Ltd. ....................   5,438,000               9,562,672
     Fubon Financial Holdings Co., Ltd. ....................   7,180,952               6,206,805
     SinoPac Financial Holdings Co. Ltd. ...................   3,996,000               1,572,127
                                                                                    ------------
                                                                                      17,341,604
                                                                                    ------------
  INDUSTRIALS -- (0.9%)
     Cheng Shin Rubber Industry Co., Ltd. ..................   4,129,481               2,978,509
                                                                                    ------------
  INFORMATION TECHNOLOGY -- (6.6%)
     Advanced Semiconductor Engineering Inc. ...............   8,046,000               4,904,123
     Data Systems Consulting Co., Ltd. .....................   4,362,043               3,328,266
     Taiwan Green Point Enterprises Co., Ltd. ..............   1,286,777               2,795,882
     Tripod Technology Corp. ...............................   3,334,095               6,916,323
     Wintek Corp. ..........................................   2,908,209               3,995,900
                                                                                    ------------
                                                                                      21,940,494
                                                                                    ------------
</Table>

See notes to financial statements and notes to schedule of investments.

                                        12
<PAGE>
THE CHINA FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<Caption>
NAME OF ISSUER AND TITLE OF ISSUE                               SHARES             VALUE (NOTE A)
- ---------------------------------                               ------             --------------
<S>                                                           <C>          <C>     <C>
COMMON STOCK AND OTHER EQUITY INTERESTS (CONTINUED)
TAIWAN (CONTINUED)
  MATERIALS -- (0.9%)
     Yieh United Steel Corp. ...............................   9,483,000            $  2,967,721
                                                                                    ------------
          TOTAL TAIWAN -- (Cost $47,798,121)                                18.3%     61,101,641
                                                                                    ------------
UNITED STATES -- "N" SHARES
  CONSUMER DISCRETIONARY -- (1.1%)
     Chindex International Inc.*............................      69,987                 257,552
     The9 Ltd. ADR*.........................................     184,861               3,482,781
                                                                                    ------------
                                                                                       3,740,333
                                                                                    ------------
  TELECOMMUNICATIONS -- (0.6%)
     China Techfaith Wireless Communication Technology Ltd.
       ADR*.................................................     197,700               1,935,483
                                                                                    ------------
          TOTAL UNITED STATES -- "N" SHARES -- (Cost $8,079,263)             1.7%      5,675,816
                                                                                    ------------
          TOTAL COMMON STOCK AND OTHER EQUITY
            INTERESTS -- (Cost $191,904,752)                                70.2%    234,671,328
                                                                                    ------------
</Table>

See notes to financial statements and notes to schedule of investments.

                                        13
<PAGE>
THE CHINA FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<Caption>
NAME OF ISSUER AND TITLE OF ISSUE                               SHARES             VALUE (NOTE A)
- ---------------------------------                               ------             --------------
<S>                                                           <C>          <C>     <C>
WARRANTS
  CONSUMER DISCRETIONARY -- (1.5%)
     Kweichow Moutai Co. Ltd. Access Product (expiration
       10/26/10) 144A, (2)(4)...............................     547,906            $  3,213,445
     Youngor Group Co. Ltd. Access Product (expiration
       10/26/10) 144A, (2)(4)...............................   4,423,873               1,800,516
                                                                                    ------------
                                                                                       5,013,961
                                                                                    ------------
  ENERGY -- (2.9%)
     China Petroleum Access Product (expiration 01/20/10)
       144A, (2)(3).........................................   5,539,000               2,686,415
     China Yangtze Power Co. Ltd. Access Product
       (expiration 10/26/10) 144A, (2)(4)...................   3,699,980               3,313,332
     Shenergy Co. Ltd. Access Product 144A, (2)(3)..........   5,950,000               3,896,640
                                                                                    ------------
                                                                                       9,896,387
                                                                                    ------------
  FINANCIAL -- (4.5%)
     China Merchants Bank Co. Ltd. Access Product
       (expiration 10/26/10) 144A, (2)(4)...................   4,199,962               3,262,530
     China Minsheng Banking Corp. Ltd. Access Product
       (expiration 01/17/06)(2)(3)..........................  18,401,722               8,354,382
     Shanghai Zhenhua Port Machinery Co. Ltd. Access Product
       (expiration 10/26/10) 144A, (2)(4)...................   3,102,911               3,358,281
                                                                                    ------------
                                                                                      14,975,193
                                                                                    ------------
  INDUSTRIALS -- (3.0%)
     Shanghai International Airport Co. Ltd. Access Product
       (expiration 10/26/10) 144A, (2)(4)...................   1,799,974               3,306,192
     Shanghai Port Container Co. Ltd. Access Product
       (expiration 10/26/10) 144A, (2)(4)...................   2,434,945               3,376,295
     Xinjiang Tebian Electric Apparatus Stock Co. Ltd.
       Access Product (expiration 10/26/10) 144A, (2)(4)....   3,577,791               3,319,117
                                                                                    ------------
                                                                                      10,001,604
                                                                                    ------------
  MATERIALS -- (1.0%)
     Qinghai Salt Lake Potash Co. Ltd. Access Product
       (expiration 10/26/10) 144A, (2)(4)...................   2,396,122               3,325,338
                                                                                    ------------
          TOTAL WARRANTS -- (Cost $42,990,388)                              12.9%     43,212,483
                                                                                    ------------
</Table>

See notes to financial statements and notes to schedule of investments.

                                        14
<PAGE>
THE CHINA FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<Caption>
NAME OF ISSUER AND TITLE OF ISSUE                               SHARES             VALUE (NOTE A)
- ---------------------------------                               ------             --------------
<S>                                                           <C>          <C>     <C>
DIRECT INVESTMENTS
  FINANCIAL -- (0.9%)
     Captive Finance, Ltd., (acquired 5/24/02)(1)(2)*+......   2,000,000            $  3,045,000
                                                                                    ------------
  INFORMATION TECHNOLOGY -- (3.1%)
     CDW Holding Ltd., (acquired 1/26/05)(5)+...............  30,000,000               3,803,630
     CDW Holding Ltd., (acquired 1/26/05)(2)(5)(6)+.........  30,000,000               3,441,379
     Global e-Business Services (BVI) Ltd., (acquired
       6/18/04)(1)*.........................................      40,000               3,052,738
     teco Optronics Corp., (acquired 4/26/04)(1)(2)*........   1,861,710                 150,000
                                                                                    ------------
                                                                                      10,447,747
                                                                                    ------------
          TOTAL DIRECT INVESTMENTS -- (Cost $8,411,189)                      4.0%     13,492,747
                                                                                    ------------
TOTAL INVESTMENTS -- (Cost $243,306,329) (Note E)                           87.1%    291,376,558
                                                                                    ------------
OTHER ASSETS AND LIABILITIES                                                12.9%     43,119,016
                                                                                    ------------
NET ASSETS                                                                 100.0%   $334,495,574
                                                                           =====    ============
</Table>

Notes to Schedule of Investments

  * Denotes non-income producing security.

(1) Direct investments are generally restricted as to resale and do not have a
    readily available resale market. On the date of acquisition of each direct
    investment, there were no market quotations on similar securities, and such
    investments were therefore initially valued at acquisition cost. These
    direct investments are valued at fair value as determined by the Board of
    Directors as discussed in Notes A and B to the Financial Statements.

(2) Security valued at fair value using methods as determined by or at the
    direction of the Board of Directors.

(3) Warrants issued by Citigroup Global Markets Holdings.

(4) Warrants issued by Credit Lyonnais (CLSA).

(5) This investment is directly listed on the Singapore Stock Exchange, however
    is still managed by ADCM.

(6) Restricted security; not readily marketable; security is valued at fair
    value as determined in good faith by, or under the direction of the Board of
    Directors.

  + Affiliated issuer (see Note G).

See notes to financial statements and notes to schedule of investments.

                                        15
<PAGE>

THE CHINA FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<S>                                                           <C>
ASSETS:
  Investments in listed investments, at value (cost
     $230,544,908) (Note A).................................  $275,663,796
  Investments in direct investments, at value (cost
     $3,602,160) (Notes A and B)............................     3,202,738
  Investments in affiliated investments, at value (cost
     $9,159,261) (Notes A, B and G).........................    12,510,024
  Cash......................................................    62,649,307
  Foreign currency, at value (cost $10,082,794).............    10,094,824
  Receivable for investments sold...........................     5,941,381
  Receivable for fund shares sold...........................           632
  Dividends receivable......................................       114,142
                                                              ------------
TOTAL ASSETS................................................  $370,176,844
                                                              ------------
LIABILITIES:
  Payable for investments purchased.........................    35,285,645
  Investment management fee payable (Note C)................       198,343
  Administration, custodian and transfer agent fees
     payable................................................        92,811
  Directors fee payable.....................................        45,317
  Accrued expenses and other liabilities....................        59,154
                                                              ------------
TOTAL LIABILITIES...........................................    35,681,270
                                                              ------------
TOTAL NET ASSETS............................................  $334,495,574
                                                              ============
COMPOSITION OF NET ASSETS:
  Paid in capital (Note D)..................................  $251,448,636
  Undistributed net investment income.......................     3,069,063
  Accumulated net realized gain on investments and foreign
     currency transactions..................................    31,894,038
  Net unrealized appreciation on investments and foreign
     currency transactions..................................    48,083,837
                                                              ------------
TOTAL NET ASSETS............................................  $334,495,574
                                                              ============
NET ASSET VALUE PER SHARE:
  ($334,495,574/14,388,287 shares of common stock
     outstanding)...........................................        $23.25
                                                              ============
</Table>

See notes to financial statements.
                                        16
<PAGE>

THE CHINA FUND, INC.
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<S>                                                           <C>
INVESTMENT INCOME:
  Dividend income -- listed investments (including dividends
     of $719,624 from non-controlled affiliates, net of tax
     withheld of $445,278)..................................  $  7,027,085
  Interest income -- listed investments.....................         7,709
                                                              ------------
     TOTAL INVESTMENT INCOME................................     7,034,794
                                                              ------------
EXPENSES:
  Investment management fees (Note C).......................     2,212,905
  Custodian fees............................................       561,909
  Administration fees.......................................       368,344
  Directors' fees and expenses (Note C).....................       291,327
  Stock dividend tax expense................................       167,721
  Legal fees................................................       166,841
  Printing and postage......................................        90,022
  Shareholder service fees..................................        63,469
  Insurance.................................................        57,978
  Audit and tax service fees................................        57,431
  Stock exchange listing fee................................        23,590
  Transfer agent fees.......................................        22,696
  Miscellaneous expenses....................................         5,452
                                                              ------------
     TOTAL EXPENSES.........................................     4,089,685
                                                              ------------
NET INVESTMENT INCOME.......................................     2,945,109
                                                              ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
  AND FOREIGN CURRENCY:
  Net realized gain on listed investment transactions.......    31,894,268
  Net realized gain on foreign currency transactions........       124,147
                                                              ------------
                                                                32,018,415
                                                              ------------
  Net change in unrealized appreciation on listed
     investments and foreign currency transactions..........   (42,405,111)
  Net change in unrealized appreciation on direct
     investments............................................     1,087,398
                                                              ------------
                                                               (41,317,713)
                                                              ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
  FOREIGN CURRENCY TRANSACTIONS.............................    (9,299,298)
                                                              ------------
NET DECREASE IN NET ASSETS FROM OPERATIONS..................  $ (6,354,189)
                                                              ============
</Table>

See notes to financial statements.
                                        17
<PAGE>

THE CHINA FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<Caption>
                                                                 YEAR ENDED          YEAR ENDED
                                                              OCTOBER 31, 2005    OCTOBER 31, 2004
                                                              ----------------    ----------------
<S>                                                           <C>                 <C>
INCREASE IN NET ASSETS FROM OPERATIONS
  Net investment income.....................................    $  2,945,109        $  2,087,971
  Net realized gain on investments and foreign currency
     transactions...........................................      32,018,415          34,053,318
  Net increase (decrease) in unrealized appreciation on
     investments and foreign currency translation...........     (41,317,713)        (24,935,481)
                                                                ------------        ------------
  Net increase (decrease) in net assets from operations.....      (6,354,189)         11,205,808
                                                                ------------        ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
  Net investment income.....................................      (1,979,079)           (705,122)
  Capital gains.............................................     (34,014,358)        (17,225,127)
                                                                ------------        ------------
  Total dividends and distributions to shareholders.........     (35,993,437)        (17,930,249)
                                                                ------------        ------------
CAPITAL SHARE TRANSACTIONS:
  Fund shares sold (Note D).................................     110,307,729                  --
  Reinvestment of dividends and distributions (56,374 and
     8,740 shares, respectively)............................       1,649,496             332,196
                                                                ------------        ------------
  Net increase in net assets from capital share
     transactions...........................................     111,957,225             332,196
                                                                ------------        ------------
NET INCREASE (DECREASE) IN NET ASSETS.......................      69,609,599          (6,392,245)
NET ASSETS:
  Beginning of year.........................................     264,885,975         271,278,220
                                                                ------------        ------------
  End of year...............................................    $334,495,574        $264,885,975
                                                                ============        ============

Undistributed net investment income, end of year............    $  3,069,063        $  1,978,886
                                                                ============        ============
</Table>

See notes to financial statements.
                                        18
<PAGE>

THE CHINA FUND, INC.
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING FOR THE PERIOD(S)
INDICATED
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<Caption>
                                                                 YEAR ENDED OCTOBER 31,
                                                  ----------------------------------------------------
                                                    2005       2004       2003       2002       2001
                                                  --------   --------   --------   --------   --------
<S>                                               <C>        <C>        <C>        <C>        <C>
PER SHARE OPERATION PERFORMANCE
Net asset value, beginning of year..............  $  26.27   $  26.93   $  14.92   $  13.19   $  12.37
                                                  --------   --------   --------   --------   --------
Net investment income...........................      0.21       0.21       0.06       0.11       0.14
Net realized and unrealized gain on investments
  and foreign currency transactions.............      0.34       0.91      12.16       1.75       0.68
                                                  --------   --------   --------   --------   --------
Total income from investment operations.........      0.55       1.12      12.22       1.86       0.82
                                                  --------   --------   --------   --------   --------
Less dividends and distributions:
  Dividend from net investment income...........     (0.20)     (0.07)     (0.06)     (0.13)      0.00
  Distributions from net realized capital
    gains.......................................     (3.37)     (1.71)     (0.15)      0.00       0.00
                                                  --------   --------   --------   --------   --------
Total dividends and distributions...............     (3.57)     (1.78)     (0.21)     (0.13)      0.00
                                                  --------   --------   --------   --------   --------
Net asset value, end of year....................  $  23.25   $  26.27   $  26.93   $  14.92   $  13.19
                                                  ========   ========   ========   ========   ========
Per share market price, end of year.............  $  24.55   $  29.15   $  34.74   $  12.61   $  10.74
                                                  ========   ========   ========   ========   ========
TOTAL INVESTMENT RETURN (BASED ON MARKET
  PRICE)........................................     (5.50)%   (12.16)%   179.41%     18.63%     20.13%
                                                  ========   ========   ========   ========   ========
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year (000's).................  $334,496   $264,886   $271,278   $150,319   $132,912
Ratio of expenses to average net assets.........      1.44%      1.41%      1.76%      1.97%      2.39%
Ratio of expenses to average net assets,
  excluding stock dividend tax expense..........      1.38%      1.34%      1.68%      1.85%      2.31%
Ratio of net investment income to average net
  assets........................................      1.04%      0.78%      0.32%      0.72%      1.09%
Portfolio turnover rate.........................        26%        40%        55%        68%       115%
</Table>

See notes to financial statements.
                                        19
<PAGE>

THE CHINA FUND, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The China Fund, Inc. (the "Fund") was incorporated under the laws of the State
of Maryland on April 28, 1992, and is a non-diversified, closed-end management
investment company registered under the Investment Company Act of 1940, as
amended. The Fund's investment objective is long-term capital appreciation
through investments in the equity securities of companies engaged in a
substantial amount of business in the People's Republic of China. The following
is a summary of significant accounting policies followed by the Fund in the
preparation of its financial statements.

USE OF ESTIMATES:  The preparation of financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
income and expenses for the period. Actual results could differ from these
estimates. The significant estimates made as of, and for the year ended, October
31, 2005 relate to the valuation of the Fund's Direct Investments, as further
discussed below and in Note B.

SECURITY VALUATION:  Portfolio securities listed on recognized United States or
foreign securities exchanges are valued at the last quoted sales price in the
principal market where they are traded. Listed securities with no such sales
price and unlisted securities are valued at the mean between the current bid and
asked prices, if any, of two brokers. Short-term investments having maturities
of sixty days or less are valued at amortized cost (original purchase cost as
adjusted for amortization of premium or accretion of discount) which when
combined with accrued interest approximates market value. Securities for which
market quotations are readily available are valued at current market value.
Securities for which market quotations are not readily available are valued in
good faith at fair value using methods determined by the Board of Directors.
Direct Investments not traded on an exchange are valued at fair value as
determined by the Board of Directors based on advice from Direct Investment
Manager. The Direct Investment's original cost is considered to be fair value
unless the Board of Directors, based on such advice, concludes there has been a
material change of a long-term nature and sufficient reliable information is
available to revalue these investments.

REPURCHASE AGREEMENTS:  In connection with transactions in repurchase
agreements, it is the Fund's policy that its custodian take possession of the
underlying collateral securities, the fair value of which exceeds the principal
amount of the repurchase transaction, including accrued interest, at all times.
If the seller defaults, and the fair value of the collateral declines,
realization of the collateral by the Fund may be delayed or limited.

FOREIGN CURRENCY TRANSLATION:  The records of the Fund are maintained in U.S.
dollars. Foreign currencies, investments and other assets and liabilities are
translated into U.S. dollars at the current exchange rates. Purchases and sales
of investment securities and income and expenses are translated on the
respective dates of such transactions. Net realized gains and losses on foreign
currency transactions represent net gains and losses from the disposition of
foreign currencies, currency gains and losses realized between the trade dates
and settlement dates of security transactions, and the difference between the
amount of net investment income accrued and the U.S. dollar amount actually
received. The effects of changes in foreign currency exchange rates

                                        20
<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

on investments in securities are not segregated in the Statement of Operations
from the effects of changes in market prices of those securities, but are
included in realized and unrealized gain or loss on investments.

OPTION CONTRACTS:  The Fund may purchase and write (sell) call options and put
options provided the transactions are for hedging purposes and the initial
margin and premiums do not exceed 5% of total assets. Option contracts are
valued daily and unrealized gains or losses are recorded based upon the last
sales price on the principal exchange on which the options are traded. The Fund
will realize a gain or loss upon the expiration or closing of the option
contract. When an option is exercised, the proceeds on sales of the underlying
security for a written call option, the purchase cost of the security for a
written put option, or the cost of the security for a purchased put or call
option is adjusted by the amount of premium received or paid.

The risk in writing a call option is that the Fund gives up the opportunity for
profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Fund may incur a loss if
the market price of the security decreases and the option is exercised. The risk
in buying an option is that the Fund pays a premium whether or not the option is
exercised. Risks may also arise from an illiquid secondary market or from the
inability of counter parties to meet the terms of the contract.

INDEMNIFICATION OBLIGATIONS:  Under the Fund's organizational documents, its
Officers and Directors are indemnified against certain liabilities arising out
of the performance of their duties to the Fund. In addition, in the normal
course of business the Fund enters into contracts that provide general
indemnifications to other parties. The Fund's maximum exposure under these
arrangements is unknown as this would involve future claims that may be made
against the Fund that have not yet occurred.

SECURITY TRANSACTIONS AND INVESTMENT INCOME:  Security transactions are recorded
as of the trade date. Realized gains and losses from securities sold are
recorded on the identified cost basis. Dividend income is recorded on the
ex-dividend date, or, in the case of dividend income on foreign securities, on
the ex-dividend date or when the Fund becomes aware of its declaration. Interest
income is recorded on the accrual basis. All premiums and discounts are
amortized/accreted for both financial reporting and federal income tax purposes.

Dividend and interest income generated in Taiwan is subject to a 20% withholding
tax. Stock dividends received (except those which have resulted from
Capitalization of capital surplus) are taxable at 20% of the par value of the
stock dividends received. The Fund records the taxes paid on stock dividends as
an operating expense.

DIVIDENDS AND DISTRIBUTIONS:  The Fund intends to distribute to its
shareholders, at least annually, substantially all of its net investment income
and any net realized capital gains. Income and capital gains distributions are
determined in accordance with U.S. income tax regulations, which may differ from
generally accepted accounting principles. These differences are primarily due to
differing book and tax treatments for foreign currency transactions.

The Fund made distributions of $3,061,875 from Ordinary Income and $32,931,562
from Long-Term Capital Gains during the year ended October 31, 2005. For the
year ended October 31, 2004, the Fund made distributions of $11,181,223 from
Ordinary Income and $6,749,026 from Long-Term Capital Gains. As of

                                        21
<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

October 31, 2005, the components of distributable earnings on a tax basis were
$3,069,063 for undistributed ordinary income, $33,017,519 for undistributed
long-term capital gains. At that date, the Fund had $46,960,357 of net
unrealized appreciation. There were no significant differences between the book
basis and tax basis of components of net assets other than differences in the
net unrealized appreciation (depreciation) in value of investments attributable
to the tax deferral of losses on wash sales.

FEDERAL INCOME TAXES:  The Fund has qualified and intends to qualify in the
future as a regulated investment company by complying with the provisions of
Subchapter M of the Internal Revenue Code available to certain investment
companies, including making distributions of taxable income and capital gains
sufficient to relieve it from all, or substantially all, federal income and
excise taxes.

NOTE B -- VALUATION OF DIRECT INVESTMENTS
At October 31, 2005, Direct Investments amounting to $6,247,738 (1.87% of net
assets) have been valued at fair value as determined by the Board of Directors
in the absence of readily ascertainable market values. The procedures applied by
the Board of Directors in arriving at its estimate of value of securities
without readily available market values comply with the Fund's policies for
valuing Direct Investments at original cost unless the Board of Directors, based
on advice from the Direct Investment Manager, concludes that there has been a
material change of a long-term nature and sufficient reliable information is
available to revalue these investments. Determination of fair values involves
subjective judgment and, because of the inherent uncertainty of valuation, the
Board of Directors' estimated values may differ significantly from the values
that would have been used had a ready market for the securities existed, and the
differences could be material.

NOTE C -- ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Martin Currie Inc. is the investment manager for the Fund's listed assets (the
"Listed Assets"). On August 3, 2005, the Fund completed a rights offering which
permitted the Fund's stockholders to purchase one new share for each three
shares of the Fund held. Prior to completion of the rights offering, Martin
Currie Inc. received a fee, computed weekly and payable monthly, at the
following annual rates: 0.70% of the first US$400 million of the Fund's average
weekly net assets invested in Listed Assets; and 0.50% of the Fund's average
weekly net assets invested in Listed Assets in excess of US$400 million.
Effective as of the completion of the rights offering, Martin Currie Inc.
receives a fee, computed weekly and payable monthly, at the following annual
rates: 0.70% of the first US$315 million of the Fund's average weekly net assets
invested in Listed Assets; and 0.50% of the Fund's average weekly net assets
invested in Listed Assets in excess of US$315 million.

Asian Direct Capital Management ("ADCM") is the investment manager for the
Fund's assets allocated to Direct Investments. ADCM receives a fee, computed
weekly and payable monthly at an annual rate equal to the greater of $300,000 or
2.2% of the average weekly value of the net assets of the Fund invested in
Direct Investments.

No director, officer or employee of the Investment Manager or Direct Investment
Manager or any affiliates of those entities will receive any compensation from
the Fund for serving as an officer or director of the Fund.

                                        22
<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Effective October 1, 2005, the Fund pays the Chairman of the Board and each of
the directors (who is not a director, officer or employee of the Investment
Manager or Direct Investment Manager or any affiliate thereof) an annual fee of
$27,500 and $12,000, respectively, plus $2,000 for each Board of Directors'
meeting or Audit Committee meeting attended. In addition, the Fund will
reimburse each of the directors for travel and out-of-pocket expenses incurred
in connection with attending Board of Directors' meetings.

NOTE D -- CAPITAL STOCK
The Board of Directors of the Fund has approved a share repurchase plan. Under
the program, the Fund will repurchase shares at management's discretion at times
when it considers the repurchase to be consistent with the objectives of the
program. For the year ended October 31, 2005, the Fund did not participate in
this program.

On August 3, 2005, the Fund completed a rights offering, permitting stockholders
to purchase one new share for each three shares of the Fund held, for a total of
4 million shares of its common stock. Proceeds to the Fund, before expenses of
$1,339,770, amounted to $111,647,500. At October 31, 2005, 100,000,000 shares of
$.01 par value common stock were authorized.

NOTE E -- INVESTMENT TRANSACTIONS
For the year ended October 31, 2005, the Fund's cost of purchases and proceeds
from sales of investment securities, other than short-term securities, were
$67,608,894 and $166,389,632, respectively. At October 31, 2005, the cost of
investments for federal income tax purposes was $244,429,809. Gross unrealized
appreciation of investments was $67,670,065, while gross unrealized depreciation
of investments was $20,723,316, resulting in net unrealized appreciation of
investments of $46,946,749.

NOTE F -- INVESTMENTS IN CHINA
The Fund's investments in China companies involve certain risks not typically
associated with investments in securities of U.S. companies or the U.S.
Government, including risks relating to (1) social, economic and political
uncertainty; (2) price volatility, lesser liquidity and smaller market
capitalization of securities markets in which securities of China companies
trade; (3) currency exchange fluctuations, currency blockage and higher rates of
inflation; (4) controls on foreign investment and limitations on repatriation of
invested capital and on the Fund's ability to exchange local currencies for U.S.
dollars; (5) governmental involvement in and control over the economy; (6) risk
of nationalization or expropriation of assets; (7) the nature of the smaller,
less seasoned and newly organized China companies, particularly in China; and
(8) the absence of uniform accounting, auditing and financial reporting
standards, practices and disclosure requirements and less government supervision
and regulation.

                                        23
<PAGE>

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NOTE G -- INVESTMENTS IN NON-CONTROLLED AFFILIATES*:

<Table>
<Caption>
                                                                                                  DIVIDENDS
                                                                                                 INCLUDED IN
                                                                                                  DIVIDEND
                         BALANCE OF                                  BALANCE OF                    INCOME-
                         SHARES HELD       GROSS       GROSS SALES   SHARES HELD      VALUE         NON-
                         OCTOBER 31,     PURCHASES         AND       OCTOBER 31,   OCTOBER 31,   CONTROLLED
NAME OF ISSUER              2004       AND ADDITIONS   REDUCTIONS       2005          2005       AFFILIATES
- --------------           -----------   -------------   -----------   -----------   -----------   -----------
<S>                      <C>           <C>             <C>           <C>           <C>           <C>
Captive Finance,
  Ltd. ................   2,000,000             --             --     2,000,000    $ 3,045,000    $     --
CDW Holdings Ltd. .....                 80,000,000     20,000,000    60,000,000      7,245,009     615,489
Beiren Printing
  Machinery Holdings
  Ltd. ................   7,000,000                            --     7,000,000      1,155,801      67,661
Nanjing Dahe Outdoor
  Media Co., Ltd. .....  37,500,000                            --    37,500,000      1,064,214      36,474
                                                                                   -----------    --------
                                                                                   $12,510,024    $719,624
                                                                                   ===========    ========
</Table>

* Affiliated issuers, as defined in the 1940 Act, include issuers in which the
  Fund held 5% or more of the outstanding securities.

NOTE H -- RESTRICTED SECURITIES:
Certain investments of the Fund are restricted as to resale and are valued at
fair value as determined in good faith by, or under the direction of, the Board
of Directors under procedures established by the Board of Directors. The table
below shows the number of shares held, the acquisition dates, aggregate costs,
fair values as of October 31, 2005, the value per share of such securities, the
percentage of net assets which the securities represent. The Fund does not have
the right to demand that such securities be registered.

<Table>
<Caption>
                                                                                                          PERCENTAGE
                                           NUMBER OF    ACQUISITION                           VALUE PER     OF NET
      SECURITY           SECURITY TYPE       SHARES        DATE         COST     FAIR VALUE     SHARE       ASSETS
- ---------------------  -----------------   ----------   -----------   --------   ----------   ---------   ----------
<S>                    <C>                 <C>          <C>           <C>        <C>          <C>         <C>
CDW Holdings Ltd.      Direct Investment   30,000,000   1/26/2005     $882,014   $3,441,379     $0.11       1.03%
</Table>

                                        24
<PAGE>

THE CHINA FUND, INC.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF THE CHINA FUND, INC.:

We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of The China Fund, Inc. (the"Fund") as of October
31, 2005, and the related statement of operations, the statement of changes in
net assets and the financial highlights for the year then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit. The financial statements
of the Fund for the year ended October 31, 2004 were audited by other auditors
whose report, dated December 10, 2004, expressed an unqualified opinion on those
statements.

We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of it's
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of October 31, 2005, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. We believe that our audit provides a reasonable basis for
our opinion.

In our opinion, the financial statements and financial highlights present
fairly, in all material respects, the financial position of the Fund as of
October 31, 2005, the results of its operations, the changes in its net assets
and the financial highlights for the year then ended in conformity with
accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP
Boston, Massachusetts
December 27, 2005

                                        25
<PAGE>

THE CHINA FUND, INC.
OTHER INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

TAX INFORMATION

     CAPITAL GAINS DISTRIBUTIONS:  $32,931,562 of distributions during the
fiscal year ended October 31, 2005 has been designated as capital gains
dividends for the purpose of the dividends paid deduction, of which 100%
represents 15% rate gains.

     FOREIGN TAXES CREDIT:  With respect to distributions for the fiscal year
ended October 31, 2005, the Fund designates $612,999 as foreign taxes paid and
$7,472,363 as foreign source income earned for regular Federal income tax
purposes.

     QUALIFIED DIVIDEND INCOME:  For the fiscal year ended October 31, 2005, the
Fund will designate up to the maximum amount allowable pursuant to the Internal
Revenue Code, as qualified dividend income eligible for reduced tax rates. These
lower rates range from 5% to 15% depending on an individual's tax bracket.
Complete information will be reported in conjunction with Form 1099-DIV.

PRIVACY POLICY

                                 PRIVACY NOTICE

The China Fund, Inc. collects nonpublic personal information about its
shareholders from the following sources:

     [ ]  Information it receives from shareholders on applications or other
          forms; and

     [ ]  Information about shareholder transactions with the Fund.

THE FUND'S POLICY IS TO NOT DISCLOSE NONPUBLIC PERSONAL INFORMATION ABOUT ITS
SHAREHOLDERS TO NONAFFILIATED THIRD PARTIES (other than disclosures permitted by
law).

The Fund restricts access to nonpublic personal information about its
shareholders to those agents of the Fund who needs to know that information to
provide products or services to shareholders. The Fund maintains physical,
electronic and procedural safeguards that comply with federal standards to guard
its shareholders' nonpublic personal information.

PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that are used by the Fund's
investment advisers to vote proxies relating to the Fund's portfolio securities
is available (1) without charge, upon request, by calling 1-888-CHN-CALL
(246-2255); and (2) as an exhibit to the Fund's annual report on Form N-CSR
which is available on the website of the Securities and Exchange Commission (the
"Commission") at http://www.sec.gov. Information

                                        26
<PAGE>

THE CHINA FUND, INC.
OTHER INFORMATION (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

regarding how the investment advisers voted these proxies during the most recent
12-month period ended June 30th is available by calling the same number and on
the Commission's website.

QUARTERLY PORTFOLIO OF INVESTMENTS
The Fund files with the Commission its complete schedule of portfolio holdings
on Form N-Q for the first and third quarters of each fiscal year. The Fund's
Form N-Qs are available on the Commission's website at http://www.sec.gov.
Additionally, the Portfolio of Investments may be reviewed and copied at the
Commission's Public Reference Room in Washington, DC. Information on the
operation of the Public Reference Room may be obtained by calling
1-800-SEC-0330. The most recent Form N-Q is available without charge, upon
request, by calling 1-888-246-2255.

CERTIFICATIONS
The Fund's chief executive officer has certified to the New York Stock Exchange
that, as of October 31, 2005, he was not aware of any violation by the Fund of
applicable New York Stock Exchange corporate governance listing standards. The
Fund also has included the certifications of the Fund's chief executive officer
and chief financial officer required by Section 302 and Section 906 of the
Sarbanes-Oxley Act of 2002 in the Fund's Form N-CSR filed with the Securities
and Exchange Commission, for the period of this report.

                                        27
<PAGE>

BOARD DELIBERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

GENERAL BACKGROUND
Martin Currie Inc. ("Martin Currie") acts as the Fund's investment manager, with
exclusive investment discretion over the Fund's assets, other than those
invested in direct investments (the "Listed Assets"), pursuant to a Management
Agreement with the Fund. In August 2005, the Fund successfully completed a
rights offering which increased the Fund's assets by over US$110 million. Prior
to the rights offering, the Fund paid Martin Currie a fee for its investment
management services, computed weekly and payable monthly, at an annual rate of
0.70% of the Fund's average weekly net assets consisting of Listed Assets up to
US$400 million and 0.50% of the Fund's average weekly net assets consisting of
Listed Assets in excess of US$400 million. Pursuant to an amendment to the
Management Agreement ("Amendment No. 1 to the Management Agreement"), subsequent
to completion of the rights offering, Martin Currie has reduced the levels of
the Fund's assets consisting of Listed Assets at which the 0.50% of the Fund's
weekly net assets rate applies from $400 million to $315 million. Martin Currie
is a registered investment adviser under the U.S. Investment Advisers Act of
1940, as amended (the "Advisers Act").

Asian Direct Capital Management ("ADCM") acts as investment manager to the Fund
with exclusive investment discretion over the portion of the Fund's assets that
is invested in direct investments pursuant to the terms of a Direct Investment
Management Agreement between the Fund and ADCM (the "Direct Management
Agreement"). The Fund may invest up to 25% of the net proceeds of its offerings
of its outstanding common stock in direct equity investments. For its direct
investment management services, ADCM receives from the Fund a fee, payable
monthly, at an annual rate of the greater of US$300,000 or 2.2% of the average
weekly assets of the Fund allocated to direct investments. ADCM is a registered
investment adviser under the Advisers Act. ADCM is a wholly owned, indirect
subsidiary of State Street Global Advisors ("SSgA"), the investment management
division of State Street Corporation. State Street Bank and Trust Company
("State Street"), an affiliate of State Street Corporation, serves as
administrator and custodian for the Fund.

The Fund's Board of Directors (the "Board") is legally required to review and
re-approve the Management Agreement and the Direct Management Agreement once a
year. Throughout the year, the Board considers a wide variety of materials and
information about the Fund, including, for example, the Fund's investment
performance, adherence to stated investment objectives and strategies, assets
under management, expenses, regulatory compliance and management. The Board
periodically meets with senior management and portfolio managers of both Martin
Currie and ADCM and reviews and evaluates their professional experience,
credentials and qualifications. This information supplements the materials the
Board received in preparation for the Meeting described below.

APPROVAL PROCESS
The Board, consisting entirely of "independent directors" within the meaning of
the Investment Company Act of 1940, unanimously approved the Management
Agreement, Amendment No. 1 to the Management Agreement, and the Direct
Management Agreement at an "in person" meeting held on June 9, 2005 (the
"Meeting"). In determining whether it was appropriate to approve each of the
Management Agreement, Amendment No. 1 to

                                        28
<PAGE>

BOARD DELIBERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
(CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

the Management Agreement and the Direct Management Agreement, the Board
requested information, provided by Martin Currie and ADCM, that it believed to
be reasonably necessary to reach its conclusion. At the Meeting, the Board
discussed issues pertaining to the proposed approval of the Management
Agreement, Amendment No. 1 to the Management Agreement, and the Direct
Management Agreement with representatives from Martin Currie and ADCM and with
legal counsel. This information together with the information provided to the
Directors throughout the course of year formed the primary basis for the
Directors' determinations.

Prior to the Meeting, the Board met in an executive session for the purpose of
considering the approval of the Management Agreement, Amendment No. 1 to the
Management Agreement, and Direct Management Agreement. During that executive
session, the Directors reviewed a memorandum which detailed the duties and
responsibilities of the Directors with respect to their consideration of the
Management Agreement and Direct Management Agreement. The Directors reviewed the
contract renewal materials provided by Martin Currie and ADCM, including, but
not limited to (1) an organizational overview of each of Martin Currie and ADCM
and biographies of those personnel providing services to the Fund, (2) a copy of
each of the Management Agreement, Amendment No. 1 to the Management Agreement,
and the Direct Management Agreement, (3) a profitability analysis of each of
Martin Currie and ADCM, (4) financial statements of each of Martin Currie and
ADCM, including, with respect to ADCM, a letter of continuing financial support
from SSgA, (5) Form ADV of each of Martin Currie and ADCM, and (6) performance
and fee comparison data provided by Fundamental Data, a third party vendor of
such information.

MANAGEMENT AGREEMENT
In evaluating the Management Agreement and Amendment to the Management
Agreement, the Directors drew on materials provided to them by Martin Currie. In
deciding whether to renew the Management Agreement and approve Amendment No. 1
to the Management Agreement, the Directors considered various factors, including
(1) the nature, extent and quality of the services provided by Martin Currie
under the Management Agreement, (2) the investment performance of the Fund's
listed investments, (3) the costs to Martin Currie of its services and the
profits realized by Martin Currie, from its relationship with the Fund, and (4)
the extent to which economies of scale would be realized if and as the Fund
grows and whether the fee levels in the Management Agreement reflect these
economies of scale.

1. Nature, Extent and Quality of the Services provided by Martin Currie

In considering the nature, extent and quality of the services provided by Martin
Currie, the Directors relied on their prior experience as Directors of the Fund
as well as on the materials provided at the Meeting. They noted that under the
Management Agreement Martin Currie is responsible for managing the Fund's listed
investments in accordance with the Fund's investment objective and policies,
applicable legal and regulatory requirements, and the instructions of the
Directors, for providing necessary and appropriate reports and information to
the Directors, for maintaining all necessary books and records pertaining to the
Fund's transactions in listed

                                        29
<PAGE>

BOARD DELIBERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
(CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

investments, and for furnishing the Fund with the assistance, cooperation, and
information necessary for the Fund to meet various legal requirements regarding
registration and reporting. They noted the distinctive nature of the Fund as
investing primarily in equity securities of China companies. They also noted the
experience and expertise of Martin Currie as appropriate as an adviser to the
Fund.

The Directors reviewed the background and experience of Martin Currie's senior
management, including those individuals responsible for the investment and
compliance operations with respect to the Fund's listed investments, and the
responsibilities of the latter with respect to the Fund. They also considered
the resources, operational structures and practices of Martin Currie in managing
the Fund's listed portfolio, in monitoring and securing the Fund's compliance
with its investment objectives and policies and with applicable laws and
regulations, and in seeking best execution of portfolio transactions. Drawing
upon the materials provided and their general knowledge of the business of
Martin Currie, the Directors took into account the fact that Martin Currie's
experience, resources and strength in these areas are deep, extensive and of
high quality. On the basis of this review, the Directors determined that the
nature and extent of the services provided by Martin Currie to the Fund were
appropriate, and could be expected to remain so.

2. Investment Performance of the Fund's Listed Investments

The Directors noted that, in view of the distinctive investment objective of the
Fund, the investment performance of the Fund's listed investments was
satisfactory. Of importance to the Directors was the extent to which the Fund
achieved its objective. Drawing upon information provided at the Meeting and
upon reports provided to the Directors by Martin Currie throughout the preceding
year, the Directors determined that, while the Fund's listed investments had
underperformed the MSCI Golden Dragon Index during recent periods, the listed
investments had outperformed the Index for the three-year period ended April 30,
2005. The Directors discussed with the representatives of Martin Currie present
at the Meeting the reasons for the recent underperformance. They further
concluded, on the basis of the limited universe of comparable funds, that the
expense ratio of the Fund was as low as, or lower than, those of the Fund's
direct competitors. Accordingly, the Directors concluded that the performance of
the Fund was satisfactory.

3. The Costs to Martin Currie of its Services and the Profits realized by Martin
   Currie from its Relationship with the Fund

The Directors considered the profitability of the advisory arrangement with the
Fund to Martin Currie. The Directors had been provided with data on the Fund's
profitability to Martin Currie for the Fund. They first discussed with
representatives of Martin Currie the methodologies used in computing the costs
that formed the bases of the profitability calculations. Concluding that these
methodologies were reasonable, they turned to the data provided. After extensive
discussion and analysis they concluded that, to the extent that Martin Currie's
relationship with the Fund had been profitable, the profitability was in no case
such as to render the advisory fee excessive.

                                        30
<PAGE>

BOARD DELIBERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
(CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

In considering whether Martin Currie benefits in other ways from its
relationship with the Fund, the Directors noted that other than the advisory
fee, there is no other investment advisory and brokerage fee received or
receivable by Martin Currie from the Fund. The Directors concluded that, to the
extent that Martin Currie derives other benefits from its relationship with the
Fund, those benefits are not so significant as to render the adviser's fees
excessive.

4. The Extent to which Economies of Scale would be Realized if and as the Fund
   Grows and whether the Fee Levels in the Management Agreement Reflect these
   Economies of Scale

On the basis of their discussions with management and their analysis of
information provided at the Meeting, the Directors determined that the nature of
the Fund and its operations is such that Martin Currie was likely to realize
economies of scale in the management of the Fund as it grows in size. It was
noted in the Board's discussion with representatives of Martin Curie that Martin
Currie's assets under management from its China business had increased
substantially from US$200 million in March 2002 to US$1.2 billion currently and
as such Martin Currie had realized economies of scale from managing more China
portfolios for more clients. It was noted that these economies of scale were
shared with the Fund because they had enabled Martin Currie to develop
centralized dealing facilities that pool transactions across all of its clients.
However, Martin Currie had noted in its materials provided to the Board that
these economies of scale were not infinite and that managing too much money may
impair performance. Therefore, in August 2004, Martin Currie closed its Greater
China product to new segregated institutional business to protect the interests
of its existing clients so that the Fund would also benefit from Martin Currie's
not seeking to further grow its number of China clients. The Directors also
noted that the Management Agreement currently contemplates sharing economies of
scale by providing for a lower fee rate at higher asset levels and that Martin
Currie had agreed (in Amendment No. 1 to the Management Agreement) to lower the
asset level at which the lower fee rate took affect if the Fund's rights
offering was successful.

In order to better evaluate the Fund's advisory fee, the Directors had requested
comparative information with respect to fees paid by similar funds  -- i.e.,
funds that invest in China. The Directors found that, because of the distinctive
nature of the Fund, the universe of similar funds was limited. Moreover, the
Fund's aggregate advisory fees were lower than several of its competitors'. The
Directors noted that the Fund's total expense ratio was lower than most of the
comparable funds' total expense ratio. The Directors concluded that the limited
data available provided some indirect confirmation of the reasonableness of
Martin Currie's fee.

APPROVAL OF MANAGEMENT AGREEMENT
The Directors approved the continuance of the Fund's Management Agreement after
weighing the foregoing factors. They reasoned that, considered in themselves,
the nature and extent of the services provided by Martin Currie were
appropriate, that the performance of the Fund had been satisfactory, and that
Martin Currie could be expected to provide services of high quality. As to
Martin Currie's fees for the Fund, the Directors determined

                                        31
<PAGE>

BOARD DELIBERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
(CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

that the fees, considered in relation to the services provided, were fair and
reasonable, that the Fund's relationship with Martin Currie was not so
profitable as to render the fees excessive, that any additional benefits to
Martin Currie were not of a magnitude materially to affect the Directors'
deliberations, and that the fees adequately reflected shared economies of scale
with the Fund.

With respect to Amendment No. 1 to the Management Agreement, the Directors
determined that the proposed advisory fee was fair and reasonable based on the
information provided. It was noted that Amendment No. 1 would lower the level of
the Fund's listed assets at which a lower fee rate would apply and was
contingent upon the successful completion of the Fund's rights offering. Such
revised advisory fee would be 0.70% of the first $315,000,000 of the Fund's
average weekly net assets consisting of Listed Assets and 0.50% of the Fund's
average weekly net assets consisting of Listed Assets in excess of $315,000,000.
The details of such rights offering had been discussed earlier in the Meeting.

DIRECT MANAGEMENT AGREEMENT
In deciding whether to renew the Direct Management Agreement, the Directors
considered various factors, including (1) the nature, extent and quality of the
services provided by ADCM under the Direct Management Agreement, (2) the
investment performance of the Fund's direct investments, (3) the costs to ADCM
of its services and the profits realized by ADCM, from its relationship with the
Fund, and (4) the extent to which economies of scale would be realized if and as
the Fund grows and whether the fee levels in the Direct Management Agreement
reflect these economies of scale.

1. Nature, Extent and Quality of the Services provided by ADCM

In considering the nature, extent and quality of the services provided by ADCM,
the Directors relied on their prior direct experience as Directors of the Fund
as well as on the materials provided at the Meeting. They noted that under the
Direct Management Agreement, ADCM is responsible for managing the direct
investments of the Fund in accordance with the Fund's investment objective and
policies, applicable legal and regulatory requirements, and the instructions of
the Directors, for providing necessary and appropriate reports and information
to the Directors, for maintaining all necessary books and records pertaining to
the Fund's direct investments, and for furnishing the Fund with the assistance,
cooperation, and information necessary for the Fund to meet various legal
requirements regarding registration and reporting. They noted the distinctive
nature of the Fund as investing primarily in equity securities of China
companies. They also noted the experience and expertise of ADCM in making direct
investments as appropriate as an adviser to such Fund.

The Directors reviewed the background and experience of ADCM's senior
management, including those individuals responsible for the investment and
compliance operations relating to the direct investments of the Fund, and the
responsibilities of the latter with respect to the Fund. They also considered
the resources, operational structures and practices of ADCM in managing the
Fund's direct investments, in monitoring and securing the Fund's compliance with
its investment objective and policies with respect to the Fund's direct

                                        32
<PAGE>

BOARD DELIBERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
(CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

investments and with applicable laws and regulations. The Directors also
considered information about ADCM's overall investment management business,
noting that ADCM manages funds in South Korea and Thailand that invest in the
Asia Pacific region. In addition, ADCM, as a subsidiary of SSgA, has access to
the international business network of State Street Corporation for investment
opportunities. Drawing upon the materials provided and their general knowledge
of the business of ADCM, the Directors took into account the fact that ADCM's
experience, resources and strength in these areas are of high quality. On the
basis of this review, the Directors determined that the nature and extent of the
services provided by ADCM to the Fund were appropriate and could be expected to
remain so.

2. Investment Performance of the Fund

The Directors noted that, in view of the distinctive investment objective of the
Fund, the investment performance of the Fund's direct investment portfolio was
satisfactory. Of importance to the Directors was the extent to which the Fund
achieved its objective. Drawing upon information provided at the Meeting and
upon reports provided to the Directors by ADCM throughout the preceding year,
they determined that the Fund's direct investment portfolio had outperformed the
MSCI Golden Dragon Index for the year-to-date, one- and three-years periods
ending April 30, 2005. They further concluded, on the basis of the limited
universe of comparable funds, that the expense ratio of the Fund was as low as,
or lower than, those of their direct competitors. Accordingly, they concluded
that the performance of the Fund's direct investment portfolio was satisfactory.

3. The Costs to ADCM of its Services and the Profits realized by ADCM from its
   Relationship with the Fund

The Directors considered the profitability of the advisory arrangement with the
Fund to ADCM and of the Fund's relationship with ADCM's affiliate, State Street,
in its role as administrator and custodian for the Fund. The Directors had been
provided with data on the Fund's profitability to ADCM for the Fund's last two
fiscal years, as well as data on the Fund's profitability to State Street for
the last five years. They first discussed with representatives of ADCM and State
Street the methodologies used in computing the costs that formed the bases of
the profitability calculations. Concluding that these methodologies were
reasonable, they turned to the data provided. After discussion and analysis they
concluded that, to the extent that ADCM's and State Street's relationships with
the Fund had been profitable to either or both of those entities, the
profitability was in no case such as to render the advisory fee excessive. The
Directors also noted SSgA's continuing support of ADCM as a subsidiary.

In considering whether ADCM or its affiliates benefit in other ways from their
relationship with the Fund, the Directors noted that other than the advisory
fee, there is no other investment advisory and brokerage fee received or
receivable by ADCM or its affiliates; however, an affiliate of ADCM serves as
the Fund's administrator and custodian. The Directors noted that the fees
reserved by the affiliate for administration and custodial services were
reasonable in relation to the services provided. The Directors concluded that,
to the extent that ADCM or

                                        33
<PAGE>

BOARD DELIBERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
(CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

its affiliates derive other benefits from their relationship with the Fund,
those benefits are not so significant as to render the adviser's fees excessive.

4. The Extent to which Economies of Scale would be Realized if and as the Fund
   Grows and whether the Fee Levels in the Direct Management Agreement Reflect
   these Economies of Scale

On the basis of their discussions with management and their analysis of
information provided at the Meeting, the Directors determined that the nature of
the Fund and its operations is such that ADCM would not at this time realize
economies of scale in the management of the Fund. It was noted that the
Directors had discussed the closure of the ADCM Pan Asia Investment Fund
("AAIF") with ADCM and that a first closing of this fund was anticipated in
December 2005 and a final closing by June 2006. The Directors noted that ADCM
expected that its assets under management would increase substantially and this
may lead to the generation of some economies of scale, only if AAIF and the Fund
have a number of similar investments. Further, these economies of scale would be
greater than if there was no overlap between the funds.

The Directors noted that there were no comparable funds investing in direct
investments for purposes of comparing the fees paid by the Fund to ADCM to the
fees paid by other funds. The Directors noted, however, that advisers to private
funds that principally make direct investments (typically referred to as
"private equity funds") typically pay their advisers an asset-based fee of 1% to
2% of the fund's assets plus a performance fee of 15% to 25% of the private
fund's gains on its investments. Since the Fund is not permitted under the
Investment Company Act of 1940 to pay a similar performance fee, the Directors
concluded that the fee paid to ADCM of the greater of $300,000 and 2.2% of the
Fund's daily net assets invested in direct investments was a reasonable fee to
obtain the services of a direct investment manager such as ADCM. The Directors
also noted that, notwithstanding this relatively high fee rate paid to ADCM, the
Fund's overall advisory fees, combining the fees paid to ADCM with those paid to
Martin Currie, were nevertheless lower than the fees paid by comparable funds,
investing solely in listed investments and that the Fund's total expense ratio
was lower than most of the comparable fund's total expense ratios.

APPROVAL OF DIRECT MANAGEMENT AGREEMENT
The Directors approved the continuance of the Fund's Direct Management Agreement
after weighing the foregoing factors. They reasoned that, considered in
themselves, the nature and extent of the services provided by ADCM were
appropriate, that the performance of the Fund had been satisfactory, and that
ADCM could be expected to provide services of high quality. As to ADCM's fees
for the Fund, the Directors determined that the fees, considered in relation to
the services provided, were fair and reasonable, that the Fund's relationship
with ADCM and State Street was not so profitable as to render the fees
excessive, that any additional benefits to ADCM and/or State Street were not of
a magnitude materially to affect the Directors' deliberations.

                                        34
<PAGE>

DIVIDENDS AND DISTRIBUTIONS;
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

The Fund will distribute to shareholders, at least annually, substantially all
of its net investment income from dividends and interest earnings and expects to
distribute any net realized capital gains annually. Pursuant to the Dividend
Reinvestment and Cash Purchase Plan (the "Plan"), adopted by the Fund, each
shareholder will be deemed to have elected, unless Equiserve Trust Company,
N.A., the Plan Administrator, is otherwise instructed by the stockholder in
writing, to have all distributions automatically reinvested by the Plan
Administrator in Fund shares pursuant to the Plan. Shareholders who do not
participate in the Plan will receive all distributions in cash paid by check in
U.S. dollars mailed directly to the stockholder by Equiserve Trust Company,
N.A., as paying agent. Shareholders who do not wish to have distributions
automatically reinvested should notify the Fund by contacting EquiServe c/o The
China Fund, Inc. at P.O. Box 43010, Providence, Rhode Island 02940-3011. Phone:
1-800-426-5523.

Equiserve Trust Company, N.A. ("EquiServe") or the ("Plan Administrator"), a
federally chartered trust institution, acts as Plan Administrator. EquiServe,
Inc. an affiliate of EquiServe and a transfer agent registered with the
Securities and Exchange Commission, acts as Service Agent for EquiServe. If the
Directors of the Fund declare an income dividend or a capital gains distribution
payable either in the Fund's Common Stock or in cash, as shareholders may have
elected, non-participants in the Plan will receive cash and participants in the
Plan will receive Common Stock, to be issued by the Fund. If the market price
per share on the valuation date equals or exceeds net asset value per share on
that date, the Fund will issue new shares to participants at net asset value or,
if the net asset value is less than 95% of the market price on the valuation
date, then at 95% of the market price. The valuation date will be the dividend
or distribution payment date or, if that date is not a trading day on the
exchange on which the Fund's shares are then listed, the next preceding trading
day. If net asset value exceeds the market price of Fund shares at such time,
participants in the Plan will be deemed to have elected to receive shares of
stock from the Fund, valued at market price on the valuation date. If the Fund
should declare a dividend or capital gains distribution payable only in cash,
the Plan Administrator will, as administrator for the participants, buy Fund
shares in the open market, on the New York Stock Exchange or elsewhere, with the
cash in respect of such dividend or distribution, for the participant's account
on, or shortly after, the payment date.

Participants in the Plan have the option of making additional payments to the
Plan Administrator, annually, in any amount from $100 to $3,000 for investment
in the Fund's Common Stock. The Plan Administrator will use all funds received
from participants (as well as any dividends and capital gains distributions
received in cash) to purchase Fund shares in the open market on or about January
15 of each year. Any voluntary cash payments received more than thirty days
prior to such date will be returned by the Plan Administrator, and interest will
not be paid on any uninvested cash payments. To avoid unnecessary cash
accumulations, and also to allow ample time for receipt and processing by the
Plan Administrator, it is suggested that participants send in voluntary cash
payments to be received by the Plan Administrator approximately ten days before
January 15. A participant may withdraw a voluntary cash payment by written
notice, if the notice is received by the Plan Agent not less than 48 hours
before such payment is to be invested.

The Plan Administrator maintains all stockholder accounts in the Plan and
furnishes written confirmations of all transactions in the account, including
information needed by shareholders for personal and tax records. Shares in

                                        35
<PAGE>
DIVIDENDS AND DISTRIBUTIONS;
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

the account of each Plan participant will be held by the Plan Administrator in
non-certificated form in the name of the participant, and each stockholder's
proxy will include those shares purchased pursuant to the Plan.

In the case of shareholders, such as banks, brokers or nominees, which hold
shares for others who are the beneficial owners, the Plan Administrator will
administer the Plan on the basis of the number of shares certified from time to
time by the stockholder as representing the total amount registered in the
stockholder's name and held for the account of beneficial owners who are
participating in the Plan.

There is no charge to participants for reinvesting dividends or capital gains
distributions. The Plan Administrator's fees for the handling of the
reinvestment of dividends and distributions will be paid by the Fund. However,
each participant's account will be charged a pro rata share of brokerage
commissions incurred with respect to the Plan Administrator's open market
purchases in connection with the reinvestment of dividends or capital gains
distributions. A participant will also pay brokerage commissions incurred in
purchases from voluntary cash payments made by the participant. Brokerage
charges for purchasing small amounts of stock for individual accounts through
the Plan are expected to be less than the usual brokerage charges for such
transactions, because the Plan Administrator will be purchasing stock for all
participants in blocks and prorating the lower commission thus attainable.

The automatic reinvestment of dividends and distributions will not relieve
participants of any income tax which may be payable on such dividends and
distributions.

Experience under the Plan may indicate that changes are desirable. Accordingly,
the Fund reserves the right to amend or terminate the Plan as applied to any
voluntary cash payment made and any dividend or distribution paid subsequent to
notice of the change sent to all shareholders at least 90 days before the record
date for such dividend or distribution. The Plan also may be amended or
terminated by the Plan Administrator by at least 90 days' written notice to all
shareholders. All correspondence concerning the Plan should be directed to
EquiServe c/o The China Fund, Inc. at P.O. Box 43011, Providence, Rhode Island
02940-3011. Phone: 1-800-426-5523.

                                        36
<PAGE>

DIRECTORS AND OFFICERS (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

The following table provides information concerning each of the Directors of the
Fund. The Board of Directors is comprised of Directors who are not interested
persons of the Fund, as that term is defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended. The Directors are divided into three
classes, designated as Class I, Class II and Class III. The Directors in each
such class are elected for a term of three years to succeed the Directors whose
term of office expires. Each Director shall hold office until the expiration of
his term and until his successor shall have been elected and qualified. The Fund
Complex consists of one series.

<Table>
<Caption>
                                                            PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME (AGE) AND                   PRESENT OFFICE                 DURING PAST FIVE YEARS AND                DIRECTOR
ADDRESS OF DIRECTOR               WITH THE FUND          DIRECTORSHIPS IN PUBLICLY HELD COMPANIES          SINCE
- -------------------              ---------------  ------------------------------------------------------  --------
<S>                              <C>              <C>                                                     <C>
Alan Tremain (69)..............  Chairman of the  Chairman of the Board of the Fund; Chairman, Hotels of    1992
  58 Avenue de la Reale          Board and        Distinction Ventures, Inc. (1989-2005); Chairman,
  Port la Galere                 Director         Hotels of Distinction (International), Inc.
  Theoule-sur-Mer                                 (1974-2005).
  06590 France

Michael F. Holland (61)........  Director         Chairman, Holland & Company L.L.C. (1995-present);        1992
  375 Park Avenue                                 Director, The Holland Balanced Fund, Inc. and Reaves
  New York, New York 10152                        Utility Income Fund; Trustee, State Street Master
                                                  Funds and State Street Institutional Investment Trust.

James J. Lightburn (62)........  Director         Attorney, Nomos, (2004-present); Attorney, member of      1992
  13, Rue Alphonse de Neuville                    Hughes Hubbard & Reed (1993-present).
  75017 Paris, France

Joe O. Rogers (56).............  Director         The Rogers Team LLC, organizing member (July 2001-        1992
  2477 Foxwood Drive                              present); Manager, The J-Squared Team LLC (April 2003-
  Chapel Hill, NC 27514                           May 2004); Executive Vice President, Business
                                                  Development, PlanetPortal.com, Inc. (Sept. 1999-May
                                                  2001); Director, The Taiwan Fund, Inc. (1986-present).

Nigel S. Tulloch (59)..........  Director         Chief Executive, HSBC Asset Management Bahamas Limited    1992
  7, Circe Circle                                 (1986-1992); Director, The HSBC China Fund Limited.
  Dalkeith
  WA6009
  Australia

Gary L. French (54)............  President        Senior Vice President, State Street Bank and Trust
  225 Franklin Street                             Company (2002-present); Managing Director, Deutsche
  Boston, MA 02110                                Asset Management, Inc. and Zurich Scudder Investments
                                                  (acquired by Deutsche Bank in 2002) (2001-2002);
                                                  President, UAM Fund Services, Inc. (1995-2001).

William C. Cox (39)*...........  Treasurer        Vice President, State Street Bank and Trust Company.
  225 Franklin Street
  Boston, MA 02110

Mary Moran Zeven (44)..........  Secretary        Senior Vice President and Senior Counsel, State Street
  225 Franklin Street                             Bank and Trust Company.
  Boston, MA 02110
</Table>

* Ann M. Carpenter resigned as the Fund's Treasurer effective April 29, 2005,
  and William C. Cox was elected by the Fund's Board of Directors as the new
  Treasurer of the Fund on June 9, 2005.

                                        37
<PAGE>

                 (This page has been left blank intentionally.)
<PAGE>

                 (This page has been left blank intentionally.)
<PAGE>

                 (This page has been left blank intentionally.)
<PAGE>

THE CHINA FUND, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

UNITED STATES ADDRESS
The China Fund, Inc.
225 Franklin Street
Boston, MA 02110
1-888-CHN-CALL (246-2255)

DIRECTORS AND OFFICERS
Alan Tremain, O.B.E., Director and Chairman of the Board
Gary L. French, President
Michael F. Holland, Director
James J. Lightburn, Director
Joe O. Rogers, Director
Nigel S. Tulloch, Director
William C. Cox, Treasurer
Mary Moran Zeven, Secretary

LISTED INVESTMENT MANAGER
Martin Currie Inc.

DIRECT INVESTMENT MANAGER
Asian Direct Capital Management

SHAREHOLDER SERVICING AGENT
The Altman Group

ADMINISTRATOR AND CUSTODIAN
State Street Bank and Trust Company

TRANSFER AGENT, DIVIDEND PAYING AGENT AND REGISTRAR
Equiserve Trust Company, N.A. in care of Computershare Investor Services

INDEPENDENT AUDITORS
Deloitte & Touche LLP

LEGAL COUNSEL
Clifford Chance US LLP
<PAGE>


ITEM 2.  CODE OF ETHICS.

(a)      The China Fund, Inc. (the "Fund") has adopted a Code of Ethics that
         applies to the Fund's principal executive officer and principal
         financial officer.

(c)      There have been no amendments to the Fund's Code of Ethics during the
         reporting period for this Form N-CSR.

(d)      There have been no waivers granted by the Fund to individuals covered
         by the Fund's Code of Ethics during the reporting period for this Form
         N-CSR.

(f)      A copy of the Fund's Code of Ethics is attached as exhibit 12(a)(1) to
         this Form N-CSR.

ITEM 3.  AUDIT COMMITTEE FINANCIAL EXPERT.

(a)      (1)      The Board of Directors of the Fund has determined that the
                  Fund has one member serving on the Fund's Audit Committee that
                  possesses the attributes identified in Instruction 2(b) of
                  Item 3 to Form N-CSR to qualify as "audit committee financial
                  expert."

         (2)      The name of the audit committee financial expert is Michael F.
                  Holland. Mr. Holland has been deemed to be "independent" as
                  that term is defined in Item 3(a)(2) of Form N-CSR.

ITEM 4.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The Fund changed independent registered public accounting firms for the fiscal
year ended October 31, 2005.

(a)      Audit Fees

         For the fiscal year ended October 31, 2005, Deloitte & Touche LLP
("Deloitte"), the Fund's independent registered public accounting firm, billed
the Fund aggregate fees of US$48,500 for professional services rendered for the
audit of the Fund's annual financial statements and review of financial
statements included in the Fund's annual report to shareholders.

         For the fiscal years ended October 31, 2004, KPMG LLP ("KPMG"), the
Fund's previous independent public accounting firm, billed the Fund aggregate
fees of US$48,500 for professional services rendered for the audit of the Fund's
annual financial statements and review of financial statements included in the
Fund's annual report to shareholders.

(b)      Audit-Related Fees

         For the fiscal year ended October 31, 2005, Deloitte did not bill the
Fund any fees for assurances and related services that are reasonably related to
the performance of the audit or review of the Fund's financial statements and
are not reported under the section Audit Fees above.

         For the fiscal year ended October 31, 2004, KPMG did not bill the Fund
any fees for assurances and related services that are reasonably related to the
performance of the audit or review of the Fund's financial statements and are
not reported under the section Audit Fees above.

<PAGE>

(c)      Tax Fees

         For the fiscal year ended October 31, 2005, Deloitte billed the Fund
aggregate fees of US$8,500 for professional services rendered for tax
compliance, tax advice, and tax planning. The nature of the services comprising
the Tax Fees was the review of the Fund's income tax returns and tax
distribution requirements.

         For the fiscal year ended October 31, 2004, KPMG billed the Fund
aggregate fees of US$8,500 for professional services rendered for tax
compliance, tax advice, and tax planning. The nature of the services comprising
the Tax Fees was the review of the Fund's income tax returns and tax
distribution requirements.

(d)      All Other Fees

         For the fiscal year ended October 31, 2005, Deloitte billed the Fund
US$13,500 for the provision of security counts.

         For the fiscal year ended October 31, 2004, KPMG did not bill the Fund
any fees for products and services other than those disclosed above.

(e)      The Fund's Audit Committee Charter requires that the Audit Committee
pre-approve all audit and non-audit services to be provided to the Fund by the
Fund's independent registered public accounting firm; provided, however, that
the pre-approval requirement with respect to non-auditing services to the Fund
may be waived consistent with the exceptions provided for in the Securities
Exchange Act of 1934, as amended (the "1934 Act"). All of the audit and tax
services described above for which Deloitte or KPMG billed the Fund fees for the
fiscal years ended October 31, 2005 and October 31, 2004, respectively, were
pre-approved by the Audit Committee.

         For the fiscal years ended October 31, 2005 and October 31, 2004, the
Fund's Audit Committee did not waive the pre-approval requirement of any
non-audit services to be provided to the Fund by Deloitte or KPMG.

(f)      Not applicable.

(g)     For the fiscal year ended October 31, 2005, Deloitte did not bill the
Fund any non-audit fees. During the same period, the aggregate non-audit fees
billed by Deloitte for services rendered to State Street Bank and Trust Company,
an affiliate of the Fund's direct investment manager, Asian Direct Capital
Management, was approximately US$700,000. The non-audit services provided to
State Street Bank and Trust Company were not related directly to the operations
and financial reporting of the Fund. During this period, Deloitte did not
provide any services to Martin Currie Inc.

         For the fiscal year ended October 31, 2004, KPMG did not bill the Fund
any non-audit fees. During the same period, the aggregate non-audit fees billed
by KPMG for services rendered to State Street Bank and Trust Company, an
affiliate of the Fund's direct investment manager, Asian Direct Capital
Management, was approximately US$14 million. The non-audit services provided to
State Street Bank and Trust Company were not ongoing services and were not
related directly to the operations and financial reporting of the Fund. During
this period, KPMG did not provide any services to Martin Currie Inc.
<PAGE>


(h)      The Fund's Audit Committee has determined that the provision of non-
audit services by Deloitte to State Street Bank and Trust Company is compatible
with maintaining Deloitte's independence.

ITEM 5.  AUDIT COMMITTEE OF LISTED REGISTRANTS.

(a)      The Fund has a separately-designated audit committee established in
accordance with Section 3(a)(58)(A) of the Exchange Act. The members of the
Fund's audit committee are Alan Tremain, James J. Lightburn, Nigel Tulloch, Joe
O. Rogers and Michael F. Holland.

ITEM 6.  SCHEDULE OF INVESTMENTS.

Schedule of Investments is included as part of Item 1.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
INVESTMENT COMPANIES.

Attached to this Form N-CSR as exhibit 12(a)(4) are copies of the proxy voting
policies and procedures of the Fund and its investment advisers, Asian Direct
Capital Management and Martin Currie, Inc.

ITEM 8.  PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

Required disclosure beginning with fiscal year ending after 12/31/05.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

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 during the period
covered by this Form N-CSR filing.

ITEM 11.  CONTROLS AND PROCEDURES.

(a)      The registrant's principal executive and principal financial officers
         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 (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of
         a date within 90 days of the filing date of this Form N-CSR based on
         their evaluation of these controls and procedures required by Rule
         30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b)
         or 15d-15(b) under the 1934 Act (17 CFR 240.13a-15(b) or
         240.15d-15(b)).

(b)      There were no changes in the registrant's internal control over
         financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17
         CFR 270.30a-3(d))) that occurred during the registrant's second fiscal
         quarter that has materially affected, or is reasonably likely to
         materially affect, the registrant's internal control over financial
         reporting.

ITEM 12.  EXHIBITS.

(a)(1)   Code of Ethics is attached hereto in response to Item 2(f).


<PAGE>


(a)(2)   The certifications required by Rule 30a-2 of the 1940 Act are attached
         hereto.

(a)(3)   Not applicable.

(a)(4)   Proxy voting policies and procedures of the Fund and its investment
         advisers are attached hereto in response to Item 7.

(b)      The certifications required by Rule 30a-2(b) of the 1940 Act and
         Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
<PAGE>


                                   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.

THE CHINA FUND, INC.

By:      /s/Gary L. French
         ---------------------
         Gary L. French
         President of The China Fund, Inc.

Date:    January 9, 2006

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/Gary L. French
         ---------------------
         Gary L. French
         President of The China Fund, Inc.

Date:    January 9, 2006

By:      /s/William C. Cox
         ---------------------
         William C. Cox
         Treasurer of The China Fund, Inc.

Date:    January 9, 2006



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CODEETH
<SEQUENCE>2
<FILENAME>b57924cfexv99wcodeeth.txt
<DESCRIPTION>CODE OF ETHICS
<TEXT>
<PAGE>
                                                                EXHIBIT 12(a)(1)

                              THE CHINA FUND, INC.

                   CODE OF CONDUCT FOR PRINCIPAL EXECUTIVE AND
                            SENIOR FINANCIAL OFFICERS

I.       COVERED OFFICERS/PURPOSE OF THE CODE

         This Code of Conduct (the "Code") shall apply to the China Fund, Inc.'s
(the "Fund") Principal Executive Officer, Principal Financial Officer,
Controller, Principal Accounting Officer and persons performing similar
functions (the "Covered Officers," each of whom is named in Exhibit A attached
hereto) for the purpose of promoting:

         o        honest and ethical conduct, including the ethical handling of
                  actual or apparent conflicts of interest between personal and
                  professional relationships;

         o        full, fair, accurate, timely and understandable disclosure in
                  reports and documents that the Fund files with, or submits to,
                  the Securities and Exchange Commission ("SEC") and in other
                  public communications made by the Fund;

         o        compliance with applicable laws and governmental rules and
                  regulations;

         o        the prompt internal reporting of violations of the Code to an
                  appropriate person or persons identified in the Code; and

         o        accountability for adherence to the Code.

Each Covered Officer should adhere to a high standard of business ethics and
should be sensitive to situations that may give rise to actual as well as
apparent conflicts of interest.

II.      COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS
         OF INTEREST

         OVERVIEW. A "conflict of interest" occurs when a Covered Officer's
private interest interferes with the interests of, or his service to, the Fund.
For example, a conflict of interest would arise if a Covered Officer, or a
member of his family, receives improper personal benefits as a result of his
position with the Fund. Covered Officers must avoid conduct that conflicts, or
appears to conflict, with their duties to the Fund. All Covered Officers should
conduct themselves such that a reasonable observer would have no grounds for
belief that a conflict of interest exists. Covered Officers are not permitted to
self-deal or otherwise to use their positions with the Fund to further their own
or any other related person's business opportunities.

        This Code does not, and is not intended to, repeat or replace the
programs and procedures or codes of ethics of the Fund's investment adviser or
distributor.

                                       1
<PAGE>



         Although typically not presenting an opportunity for improper personal
benefit, conflicts may arise from, or as a result of, the contractual
relationship between the Fund and its service providers, including investment
adviser or administrator, of which the Covered Officers may be officers or
employees. As a result, this Code recognizes that the Covered Officers will, in
the normal course of their duties (whether formally for the Fund, the investment
adviser or administrator, or other service providers), be involved in
establishing policies and implementing decisions that will have different
effects on the service providers and the Fund. The participation of the Covered
Officers in such activities is inherent in the contractual relationship between
the Fund and its service providers and is consistent with the performance by the
Covered Officers of their duties as officers of the Fund. Thus, if performed in
conformity with the provisions of the Investment Company Act of 1940, as amended
("Investment Company Act") and the Investment Advisers Act of 1940, as amended
("Investment Advisers Act"), such activities will be deemed to have been handled
ethically. In addition, it is recognized by the Fund's Board of Directors (the
"Board") that the Covered Officers may also be officers or employees of one or
more other investment companies covered by other codes.

         The following list provides examples of conflicts of interest under the
Code, but Covered Officers should keep in mind that these examples are not
exhaustive. The overarching principle is that the personal interest of a Covered
Officer should not be placed improperly before the interest of the Fund.

                               *      *      *     *

Each Covered Officer must not:

         o        use his personal influence or personal relationship improperly
                  to influence investment decisions or financial reporting by
                  the Fund whereby the Covered Officer would benefit personally
                  to the detriment of the Fund;

         o        cause the Fund to take action, or fail to take action, for the
                  individual personal benefit of the Covered Officer rather than
                  the benefit of the Fund; or

         o        retaliate against any other Covered Officer or any employee of
                  the Fund or its affiliated persons for reports of potential
                  violations by the Fund of applicable rules and regulations
                  that are made in good faith.

                  Each Covered Officer must discuss certain material conflict of
                  interest situations with the Fund's Audit Committee. Examples
                  of such situations include:

         o        service as a Director, general partner, or officer of any
                  unaffiliated business organization. This rule does not apply
                  to charitable, civic, religious, public, political, or social
                  organizations, the activities of which do not conflict with
                  the interests of the Fund;

         o        the receipt of any non-nominal gifts;

                                       2

<PAGE>


         o        the receipt of any entertainment from any company with which
                  the Fund has current or prospective business dealings unless
                  such entertainment is business-related, reasonable in cost,
                  appropriate as to time and place, and not so frequent as raise
                  any question of impropriety;

         o        any ownership interest in, or any consulting or employment
                  relationship with, any of the Fund's service providers, other
                  than its investment adviser, administrator, transfer agent,
                  custodian or any affiliated person thereof; and

         o        a direct or indirect financial interest in commissions,
                  transaction charges or spreads paid by the Fund for effecting
                  portfolio transactions or for selling or redeeming shares
                  other than an interest arising from the Covered Officer's
                  employment, such as compensation or equity ownership.

III.     DISCLOSURE AND COMPLIANCE

o        Each Covered Officer will monitor the compliance of the Fund and the
         Fund's service providers with federal or state statutes, regulations or
         administrative procedures that affect the operation of the Fund.

o        Each Covered Officer should not knowingly misrepresent, or cause others
         to misrepresent, facts about the Fund to others, whether within or
         outside the Fund, including to the Fund's Board, Fund's Audit Committee
         and the Fund's independent auditors, and to governmental regulators and
         self-regulators and self-regulatory organizations.

o        Each Covered Officer should, to the extent appropriate within his or
         her area of responsibility, consult with other officers and employees
         of the Fund and its service providers with the goal of promoting full,
         fair, accurate, timely and understandable disclosure in the reports and
         documents the Fund files with, or submits to, the SEC and in other
         public communications made by the Fund.

o        It is the responsibility of each covered officer to promote and
         encourage professional integrity in all aspects of the Fund's
         operations.

IV.      REPORTING AND ACCOUNTABILITY

         Each Covered Officer must:

         o        upon adoption of this Code (or thereafter as applicable, upon
                  becoming a Covered Officer), sign and return a report in the
                  form of Exhibit B to the Fund's compliance officer affirming
                  that he or she has received, read, and understands the Code;

         o        annually sign and return a report in the form of Exhibit C to
                  the Fund's compliance officer as an affirmation that he or she
                  has complied with the requirements of the Code; and

                                       3
<PAGE>


         o        notify the Fund's Audit Committee promptly if he or she knows
                  of any violation of this Code. Failure to do so is itself a
                  violation of this Code.

         The Fund's Audit Committee is responsible for applying this Code to
specific situations in which questions are presented under it and has the
authority to interpret this Code in any particular situation including any
approvals or waivers sought by the Covered Persons.

         The Audit Committee will follow these procedures in investigating and
enforcing this Code:

         o        The Audit Committee will take all appropriate actions to
                  investigate any potential violations reported to the
                  Committee.

         o        If, after such investigation, the Audit Committee believes
                  that no violation has occurred, the Audit Committee is not
                  required to take any further action.

         o        Any matter that the Audit Committee believes is a violation of
                  this Code will be reported to the full Board.

         o        If the Board concurs that a violation has occurred, it will
                  notify the appropriate personnel of the applicable service
                  provider and may dismiss the Covered Officer as an officer of
                  the Fund.

         o        The Audit Committee will be responsible for granting waivers
                  of provisions of this Code, as appropriate.

         o        Any changes to or waivers of this Code will, to the extent
                  required, be disclosed as provided by SEC rules.

V.       OTHER POLICIES AND PROCEDURES

         This Code shall be the sole code of ethics adopted by the Fund for
purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and
forms applicable to registered investment companies thereunder. Insofar as other
policies or procedures of the Fund, the Fund's investment adviser, principal
underwriter, or other service providers govern or purport to govern the behavior
or activities of the Covered Officers who are subject to this Code, they are
superseded by this Code to the extent that they overlap or conflict with the
provisions of this Code. The Fund's, investment adviser's and principal
underwriter's codes of ethics under Rule 17j-1 under the Investment Company Act
and the investment adviser's more detailed policies and procedures are separate
requirements applying to the Covered Officers and others, and are not part of
this Code.

                                       4
<PAGE>



VI.      AMENDMENTS

         Any amendments to this Code, other than amendments to Exhibit A, must
be approved or ratified by a majority vote of the Board, including a majority of
Independent Directors.

VII.     CONFIDENTIALITY

         All reports and records prepared or maintained pursuant to this Code
will be considered confidential and shall be maintained and protected
accordingly. Except as otherwise required by law or this Code, such matters
shall not be disclosed to anyone other than the Fund's Board or Audit Committee.

VIII.    INTERNAL USE

         The Code is intended solely for the internal use by the Fund and does
not constitute an admission, by or on behalf of Fund, as to any fact,
circumstance, or legal conclusion.



Approved on: September 12, 2003


                                       5
<PAGE>


                                    EXHIBIT A

Persons Covered by this Code of Ethics:


<TABLE>
<CAPTION>
                                        TITLE                                                 NAME

- ----------------------------------------------------------------------------------- ---------------------
<S>                                                                                 <C>
          President, Chief Executive Officer and Principal Executive Officer             Gary L. French

- ----------------------------------------------------------------------------------- ---------------------
          Treasurer, Chief Financial Officer and Principal Financial Officer             William C. Cox

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


                                       6
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>3
<FILENAME>b57924cfexv99wcert.txt
<DESCRIPTION>CERTIFICATIONS OF CEO AND CFO
<TEXT>
<PAGE>
                                                                EXHIBIT 12(a)(2)

I, Gary L. French, President of The China Fund, Inc., certify that:

1.       I have reviewed this report on Form N-CSR of The China Fund, Inc.;

2.       Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations, changes in net
         assets, and cash flows (if the financial statements are required to
         include a statement of cash flows) of the registrant as of, and for,
         the periods presented in this report;

4.       The registrant's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Rule 30a-3(c) under the Investment Company Act of 1940) and
         internal controls over financial reporting (as defined in Rule 30a-3(d)
         under the Investment Company Act of 1940) for the registrant and have:

         (a)      Designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

         (b)      Designed such internal control over financial reporting, or
                  caused such internal control over financial reporting to be
                  designed under our supervision, to provide reasonable
                  assurance regarding the reliability of financial reporting and
                  the preparation of financial statements for external purposes
                  in accordance with generally accepted accounting principles;

         (c)      Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of a date within 90 days prior to the
                  filing date of this report based on such evaluation; and

         (d)      Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the second fiscal quarter of the period covered by this report
                  that has materially affected, or is reasonably likely to
                  materially affect, the registrant's internal control over
                  financial reporting; and

5.       The registrant's other certifying officer and I have disclosed to the
         registrant's auditors and the audit committee of the registrant's board
         of directors (or persons performing the equivalent functions):

         (a)      All significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize, and report
                  financial information; and

<PAGE>



         (b)      Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.

Date:    January 9, 2006

By:      /s/Gary L. French
         -------------------
         President (principal executive officer) of The China Fund, Inc.
<PAGE>

I, William C. Cox, Treasurer of The China Fund, Inc., certify that:

1.       I have reviewed this report on Form N-CSR of The China Fund, Inc.;

2.       Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations, changes in net
         assets, and cash flows (if the financial statements are required to
         include a statement of cash flows) of the registrant as of, and for,
         the periods presented in this report;

4.       The registrant's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Rule 30a-3(c) under the Investment Company Act of 1940) and
         internal control over financial reporting(as defined in Rule 30a-3(d)
         under the Investment Company Act of 1940) for the registrant and have:

         (a)      Designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

         (b)      Designed such internal control over financial reporting, or
                  caused such internal control over financial reporting to be
                  designed under our supervision, to provide reasonable
                  assurance regarding the reliability of financial reporting and
                  the preparation of financial statements for external purposes
                  in accordance with generally accepted accounting principles;

         (c)      Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of a date within 90 days prior to the
                  filing date of this report based on such evaluation; and

         (d)      Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the second fiscal quarter of the period covered by this report
                  that has materially affected, or is reasonably likely to
                  materially affect, the registrant's internal control over
                  financial reporting; and

5.       The registrant's other certifying officer and I have disclosed to the
         registrant's auditors and the audit committee of the registrant's board
         of directors (or persons performing the equivalent functions):

         (a)      All significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize, and report
                  financial information; and

         (b)      Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.
<PAGE>




Date:    January 9, 2006

By:      /s/William C. Cox
         -------------------
         William C. Cox
         Treasurer (principal financial officer) of The China Fund, Inc.
















</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(12)(A)(4)
<SEQUENCE>4
<FILENAME>b57924cfexv99wx12yxayx4y.txt
<DESCRIPTION>PROXY VOTING RESULTS
<TEXT>
<PAGE>
                                                                EXHIBIT 12(a)(4)

                              THE CHINA FUND, INC.
                       PROXY VOTING POLICY AND PROCEDURES

The Board of Directors of The China Fund, Inc. (the "Fund") hereby adopts the
following policy and procedures with respect to voting proxies relating to Fund
securities managed by Martin Currie Inc. and Asian Direct Capital Management
(the "Listed Investment Manager" and the "Direct Investment Manager",
respectively and the "Investment Managers", collectively).

I.       POLICY

It is the policy of the Board of Directors of the Fund (the "Board") to delegate
the responsibility for voting proxies relating to securities held by the Fund to
the Investment Managers as a part of the Managers' general management of the
Fund's assets, subject to the Board's continuing oversight. The Board of
Directors of the Fund hereby delegates such responsibility to the Investment
Managers, and directs each Investment Manager to vote proxies relating to Fund
portfolio securities managed by the Investment Manager consistent with the
duties and procedures set forth below. The Investment Managers may retain one or
more vendors to review, monitor and recommend how to vote proxies in a manner
consistent with the duties and procedures set forth below, to ensure such
proxies are voted on a timely basis and to provide reporting and/or record
retention services in connection with proxy voting for the Fund.

II.      FIDUCIARY DUTY

The right to vote a proxy with respect to securities held by the Fund is an
asset of the Fund. Each Investment Manager, to which authority to vote on behalf
of the Fund is delegated, acts as a fiduciary of the Fund and must vote proxies
in a manner consistent with the best interest of the Fund and its shareholders.
In discharging this fiduciary duty, each Investment Manager must maintain and
adhere to its policies and procedures for addressing conflicts of interest and
must vote in a manner substantially consistent with its policies, procedures and
guidelines, as presented to the Board.

III.     PROCEDURES

The following are the procedures adopted by the Board for the administration of
this policy:

         A.       Review of Investment Managers' Proxy Voting Procedures. The
         Investment Managers shall present to the Board their policies,
         procedures and other guidelines for voting proxies at least annually,
         and must notify the Board promptly of material changes to any of these
         documents, including changes to policies addressing conflicts of
         interest.

         B.       Voting Record Reporting.  Each Investment  Manager shall
         provide the voting record information necessary for the completion and
         filing of Form-NPX to the Fund at least annually. Such voting record
         information shall be in a form acceptable to the Fund and shall be
         provided at such time(s) as are required for the timely filing of
         Form-NPX and at such additional time(s) as the Fund and the Investment
         Manager may agree from


                                       1

<PAGE>



         time to time. With respect to those proxies that an Investment Manager
         has identified as involving a conflict of interest(1), the Investment
         Manager shall submit a separate report indicating the nature of the
         conflict of interest and how that conflict was resolved with respect to
         the voting of the proxy.

         C.       Record  Retention. The each Investment Manager shall
         maintain such records with respect to the voting of proxies as may be
         required by the Investment Advisers Act of 1940 and the rules
         promulgated thereunder or by the Investment Company Act of 1940 and the
         rules promulgated thereunder.

         D.       Conflicts of Interest. Any actual or potential conflicts of
         interest between or an Investment Manager and the Fund's shareholders
         arising from the proxy voting process will be addressed by the relevant
         Investment Manager and the Investment Manager's application of its
         proxy voting procedures pursuant to the delegation of proxy voting
         responsibilities to the Investment Manager. In the event that the
         Investment Manager notifies the officer(s) of the Fund that a conflict
         of interest cannot be resolved under the Investment Manager's Proxy
         Voting Procedures, such officer(s) are responsible for notifying the
         Chairman of the Board of the Fund of the irreconcilable conflict of
         interest and assisting the Chairman with any actions he determines are
         necessary.

IV.      REVOCATION

The delegation by the Board of the authority to vote proxies relating to
securities of the Fund is entirely voluntary and may be revoked by the Board, in
whole or in part, at any time.

V.       ANNUAL FILING

The Fund shall file an annual report of each proxy voted with respect to
securities of the Fund during the twelve-month period ended June 30 on Form N-PX
not later than August 31 of each year.(2)

VI.      DISCLOSURES


         A.       The Fund shall include in its annual report filed on
                  Form N-CSR:

                  1.       a  description  of this policy and of the  policies
                  and procedures used by the Fund and the Investment Managers to
                  determine how to vote proxies relating to portfolio securities
                  or copies of such policies and procedures; and

- ---------------
(1) As it is used in this document, the term "conflict of interest" refers to a
situation in which the Investment Managers or affiliated persons of the
Investment Managers have a financial interest in a matter presented by a proxy
other than the obligation they incur as Investment Managers to the Fund which
could potentially compromise the Investment Managers' independence of judgment
and action with respect to the voting of the proxy.

(2) The Fund must file its first report on Form N-PX not later than August 31,
2004, for the twelve-month period beginning July 1, 2003, and ending June 30,
2004.

                                       2

<PAGE>



                  2.       a statement disclosing that a description of the
                  policies and procedures used by or on behalf of the Fund to
                  determine how to vote proxies relating to securities of the
                  Fund is available without charge, upon request, by calling the
                  Fund's toll-free telephone number; through a specified
                  Internet address, if applicable; and on the SEC's website; and

                  3.       a statement disclosing that information regarding how
                  the Fund voted proxies relating to Fund securities during the
                  most recent 12-month period ended June 30 is available without
                  charge, upon request, by calling the Fund's toll-free
                  telephone number; or through a specified Internet address; or
                  both; and on the SEC's website.

VII.     REVIEW OF POLICY

The Board shall review from time to time this policy to determine its
sufficiency and shall make and approve any changes that it deems necessary from
time to time.



Adopted:  September 12, 2003


                                       3


<PAGE>



PROXY VOTING POLICY
   ASIAN DIRECT CAPITAL MANAGEMENT

INTRODUCTION

Asian Direct Capital Management ("ADCM") seeks to vote proxies in the best
interests of its clients. In the ordinary course, this entails voting proxies in
a way which ADCM believes will maximize the monetary value of each portfolio's
holdings. ADCM takes the view that this will benefit our direct clients (e.g.
investment funds) and, indirectly, the ultimate owners and beneficiaries of
those clients (e.g. fund shareholders).

Oversight of the proxy voting process is the responsibility of the ADCM
Investment Committee. ADCM's Compliance Officer is responsible for implementing
processes and procedures to ensure the objectives of this policy are properly
carried out. In addition to voting proxies, ADCM:


         1)       describes its proxy voting procedures to its clients in
                  Part II of its Form ADV;

         2)       provides the client with this written proxy policy, upon
                  request;

         3)       discloses to its clients how they may obtain information on
                  how ADCM voted the client's proxies;

         4)       matches proxies received with holdings as of record date;

         5)       reconciles holdings as of record date and rectifies any
                  discrepancies;

         6)       generally applies its proxy voting policy consistently and
                  keeps records of votes for each client;

         7)       documents the reason(s) for voting for all non-routine items;
                  and

         8)       keeps records of such proxy voting available for inspection by
                  the client or governmental agencies.


PROCESS

All proxies received on behalf of ADCM clients are voted according to our
guidelines listed below, as long as there are no special circumstances relating
to that company or proxy request.

However, from time to time, proxy votes will be solicited which (i) involve
special circumstances and require additional research and discussion or (ii) are
not directly addressed by our policies. These proxies are identified through a
number of methods, including but not limited to concerns of clients, review by
internal proxy specialists, and questions from consultants.

In instances of special circumstances or issues not directly addressed by our
policies, the Investment Team is consulted for a determination of the proxy
vote. The first determination is whether there is a material conflict of
interest between the interests of our client and those of ADCM. If the
Investment Team determines that there is a material conflict, the process
detailed below under "Potential Conflicts" is followed. If there is no material
conflict, we examine each of the issuer's proposals in detail in seeking to
determine what vote would be in the best interests of our clients. At this
point, the Investment Committee makes a voting decision based on maximizing the
monetary value of each portfolios' holdings. However, the Investment Committee
may determine that a proxy involves the consideration of particularly
significant issues and may seek additional guidance from ADCM's Compliance
Officer, and SSgA Compliance personnel.

ADCM also endeavors to show sensitivity to local market practices when voting
proxies of non-U.S. issuers.


                                       1

<PAGE>



VOTING

For most issues and in most circumstances, we abide by the following general
guidelines. However, as discussed above, in certain circumstances, we may
determine that it would be in the best interests of our clients to deviate from
these guidelines.

Management Proposals

I.       ADCM votes in support of  management on the following  ballot  items,
which are fairly common  management sponsored initiatives.

         o        Elections of directors who do not appear to have been remiss
                  in the performance of their oversight responsibilities

         o        Approval of auditors

         o        Directors' and auditors' compensation

         o        Directors' liability and indemnification

         o        Discharge of board members and auditors

         o        Financial statements and allocation of income

         o        Dividend payouts that are greater than or equal to country and
                  industry standards

         o        Authorization of share repurchase programs

         o        General updating of or corrective amendments to charter

         o        Change in Corporation Name

         o        Elimination of cumulative voting

II.      ADCM votes in support of management on the following items, which have
potentially substantial financial or best-interest impact:

         o        Capitalization changes which eliminate other classes of stock
                  and voting rights

         o        Changes in capitalization authorization for stock splits,
                  stock dividends, and other specified needs which are no more
                  than 50% of the existing authorization for U.S. companies and
                  no more than 100% of existing authorization for non-U.S.
                  companies

         o        Elimination of pre-emptive rights for share issuance of less
                  than a given percentage (country specific - ranging from 5% to
                  20%) of the outstanding shares

         o        Elimination of "poison pill" rights

         o        Stock purchase plans with an exercise price of not less that
                  85% of fair market value

         o        Stock option plans which are incentive based and not excessive

         o        Other stock-based plans which are appropriately structured



                                       2

<PAGE>



         o        Reductions in super-majority vote requirements

         o        Adoption of anti-"greenmail" provisions

III.     ADCM votes against management on the following items, which have
potentially substantial financial or best interest impact:

         o        Capitalization changes that add "blank check" classes of stock
                  or classes that dilute the voting interests of existing
                  shareholders

         o        Changes in capitalization authorization where management does
                  not offer an appropriate rationale or which are contrary to
                  the best interest of existing shareholders

         o        Anti-takeover and related provisions that serve to prevent the
                  majority of shareholders from exercising their rights or
                  effectively deter appropriate tender offers and other offers

         o        Amendments to bylaws which would require super-majority
                  shareholder votes to pass or repeal certain provisions

         o        Elimination of Shareholders' Right to Call Special Meetings

         o        Establishment of classified boards of directors

         o        Reincorporation in a state which has more stringent
                  anti-takeover and related provisions

         o        Shareholder rights plans that allow the board of directors to
                  block appropriate offers to shareholders or which trigger
                  provisions preventing legitimate offers from proceeding

         o        Excessive compensation

         o        Change-in-control provisions in non-salary compensation plans,
                  employment contracts, and severance agreements which benefit
                  management and would be costly to shareholders if triggered

         o        Adjournment of Meeting to Solicit Additional Votes

         o        "Other business as properly comes before the meeting"
                  proposals which extend "blank check" powers to those acting as
                  proxy

         o        Proposals requesting re-election of insiders or affiliated
                  directors who serve on audit, compensation, and nominating
                  committees.

IV.      ADCM evaluates Mergers and Acquisitions on a case-by-case basis.
Consistent with our proxy policy, we support management in seeking to achieve
their objectives for shareholders. However, in all cases, ADCM uses its
discretion in order to maximize shareholder value. ADCM, generally votes, as
follows:

         o        Against offers with potentially damaging consequences for
                  minority shareholders because of illiquid stock, especially in
                  some non-US markets

         o        For offers that concur with index calculators treatment and
                  our ability to meet our clients return objectives for passive
                  funds

         o        Against offers when there are prospects for an enhanced bid or
                  other bidders

                                       3

<PAGE>
         o        For proposals to restructure or liquidate closed end
                  investment funds in which the secondary market price is
                  substantially lower than the net asset value

SHAREHOLDER PROPOSALS

Traditionally, shareholder proposals have been used to encourage management and
other shareholders to address socio-political issues. ADCM believes that it is
inappropriate to use client assets to attempt to affect such issues. Thus, we
examine shareholder proposals primarily to determine their economic impact on
shareholders.

I.       ADCM  votes  in  support  of  shareholders  on  the  following  ballot
items, which are fairly common shareholder-sponsored initiatives:

         o        Requirements that auditors attend the annual meeting of
                  shareholders

         o        Establishment of an annual election of the board of directors

         o        Mandates requiring a majority of independent directors on the
                  Board of Directors and the audit, nominating, and compensation
                  committees

         o        Mandates that amendments to bylaws or charters have
                  shareholder approval

         o        Mandates that shareholder-rights plans be put to a vote or
                  repealed

         o        Establishment of confidential voting

         o        Expansions to reporting of financial or compensation-related
                  information, within reason

         o        Repeals of various anti-takeover related provisions

         o        Reduction or elimination of super-majority vote requirements

         o        Repeals or prohibitions of "greenmail" provisions

         o        "Opting-out" of business combination provisions

         o        Proposals requiring the disclosure of executive retirement
                  benefits if the issuer does not have an independent
                  compensation committee

II.      In light of recent events surrounding corporate auditors and taking
into account corporate governance provisions released by the SEC, NYSE, and
NASDAQ, ADCM votes in support of shareholders on the following ballot items,
which are fairly common shareholder-sponsored initiatives:

         o        Disclosure of Auditor and Consulting relationships when the
                  same or related entities are conducting both activities

         o        Establishment of selection committee responsible for the final
                  approval of significant management consultant contract awards
                  where existing firms are already acting in an auditing
                  function

         o        Mandates that Audit, Compensation and Nominating Committee
                  members should all be independent directors

         o        Mandates giving the Audit Committee the sole responsibility
                  for the selection and dismissal of the auditing firm and any
                  subsequent result of audits are reported to the audit
                  committee

                                       4

<PAGE>


III.    ADCM votes against shareholders on the following initiatives, which are
fairly common shareholder-sponsored initiatives:

         o        Limits to tenure of directors

         o        Requirements that candidates for directorships own large
                  amounts of stock before being eligible to be elected

         o        Restoration of cumulative voting in the election of directors

         o        Requirements that the company provide costly, duplicative, or
                  redundant reports; or reports of a non-business nature

         o        Restrictions related to social, political, or special interest
                  issues which affect the ability of the company to do business
                  or be competitive and which have significant financial or
                  best-interest impact

         o        Proposals which require inappropriate endorsements or
                  corporate actions

         o        Requiring the company to expense stock options unless already
                  mandated by FASB (or similar body) under regulations that
                  supply a common valuation model.

         o        Proposal asking companies to adopt full tenure holding periods
                  for their executives.

         o        Proposals requiring the disclosure of executive retirement
                  benefits if the issuer has an independent compensation
                  committee

SHAREHOLDER ACTIVISM

We at ADCM agree entirely with the United States Department of Labor's position
that "where proxy voting decisions may have an effect on the economic value of
the plan's underlying investment, plan fiduciaries should make proxy voting
decisions with a view to enhancing the value of the shares of stock" (IB 94-2).
Our proxy voting policy and procedures are designed to ensure that our clients
receive the best possible returns on their investments.

POTENTIAL CONFLICTS

As discussed above under Process, from time to time, the Investment Committee
will review a proxy which presents a potential material conflict. For example,
ADCM or its affiliates may provide services to a company whose management is
soliciting proxies, or to another entity which is a proponent of a particular
proxy proposal. Another example could arise when ADCM has business or other
relationships with participants involved in proxy contests, such as a candidate
for a corporate directorship.

As a fiduciary to its clients, ADCM takes these potential conflicts very
seriously. While ADCM's only goal in addressing any such potential conflict is
to ensure that proxy votes are cast in the clients' best interests and are not
affected by ADCM's potential conflict, there are a number of courses ADCM may
take. The final decision as to which course to follow shall be made by the
Investment Committee.

When the matter falls clearly within one of the proposals enumerated above,
casting a vote which simply follows ADCM's pre-determined policy would eliminate
ADCM's discretion on the particular issue and hence avoid the conflict.

In other cases, where the matter presents a potential material conflict and is
not clearly within one of the enumerated proposals, or is of such a nature that
ADCM believes more active involvement is necessary, the Investment Committee
will follow one of two courses of action. First, ADCM may employ the services


                                       5

<PAGE>


of a third party, wholly independent of ADCM, its affiliates and those parties
involved in the proxy issue, to determine the appropriate vote.

Second, in certain situations the Investment Committee may determine that the
employment of a third party is unfeasible, impractical or unnecessary. In such
situations, the Investment Committee shall make a decision as to the voting of
the proxy. The basis for the voting decision, including the basis for the
determination that the decision is in the best interests of ADCM's clients,
shall be formalized in writing as a part of the minutes to the ADCM Investment
Committee. As stated above, which action is appropriate in any given scenario
would be the decision of the Investment Committee in carrying out its duty to
ensure that the proxies are voted in the clients', and not ADCM's, best
interests.

RECORDKEEPING

In accordance with applicable law, ADCM shall retain the following documents for
not less than five years from the end of the year in which the proxies were
voted, the first two years in ADCM's office:

         1)       ADCM's Proxy Voting Policy and any additional procedures
                  created pursuant to such Policy;

         2)       a copy of each proxy statement ADCM receives regarding
                  securities held by its clients (note: this requirement may be
                  satisfied by a third party who has agreed in writing to do so
                  or by obtaining a copy of the proxy statement from the EDGAR
                  database);

         3)       a record of each vote cast by ADCM (note: this requirement may
                  be satisfied by a third party who has agreed in writing to do
                  so);

         4)       a copy of any document created by ADCM that was material in
                  making its voting decision or that memorializes the basis for
                  such decision; and

         5)       a copy of each written request from a client, and response to
                  the client, for information on how ADCM voted the client's
                  proxies.


DISCLOSURE OF CLIENT VOTING INFORMATION

Any client who wishes to receive information on how its proxies were voted
should contact ADCM's Compliance Officer.


                                       6

<PAGE>





                               MARTIN CURRIE, INC.
                      STATEMENT OF POLICIES AND PROCEDURES
                                  PROXY VOTING

Martin Currie, Inc. ("Martin Currie") has adopted a Statement of Policies and
Procedures for Voting Proxies (the "Policies and Procedures") designed to ensure
that it votes proxies in the best interests of its Clients in accordance with
its fiduciary duties, Rule 206(4)-6 under the Investment Advisers Act of 1940
and other applicable law. The Policies and Procedures do not apply to any Client
who has retained authority and discretion to vote its own proxies or delegated
such authority and discretion to a third party.

PROXY VOTING POLICIES
Martin Currie recognizes the importance of good corporate governance in ensuring
that management and boards of directors fulfil their obligations to
shareholders. As part of its investment process, it takes into account the
attitudes of management and boards of directors on corporate governance issues
when deciding whether to invest in a company. As set out in the Policies and
Procedures, it is Martin Currie's general policy to support management of the
companies in which it invests and it will generally cast votes in accordance
with management's proposals. However, it reserves the right to depart from this
policy in order to avoid voting decisions that it believes may be contrary to
its Clients' best interests.

The Policies and Procedures also contain proxy voting policies relating to
specific issues, such as: the election of directors; the appointment of
auditors; changes to a company's charter, articles of incorporation or bylaws;
corporate restructurings, mergers and acquisitions; transparency and
accountability in corporate governance; proposals regarding social, political
and environmental issues; and executive compensation. Martin Currie applies
these proxy-voting policies flexibly and reserves the right to vote contrary to
the policies when it believes they may be contrary to its Clients' best
interests.

Martin Currie is a global investment manager, and it invests significantly in
emerging markets. It should be noted that protection for shareholders may vary
significantly from jurisdiction to jurisdiction, and in some cases may be
substantially less than in the U.S. or developed countries.

PROXY VOTING PROCEDURES
Martin Currie's Market Data Team is responsible for the coordination of proxy
voting and liaises with Product Managers and/or the Proxy Voting Committee. The
Product Managers are responsible for evaluating proxies and determining voting
decisions in accordance with the general principles of the Policies and
Procedures.

The Proxy Voting Committee, which comprises senior investment personnel and
representatives of the Legal & Compliance Department, regularly reviews the
proxy policies and considers specific proxy voting matters in certain
situations.

CONFLICTS OF INTEREST
Martin Currie recognizes that there is a potential conflict of interest when it
votes a proxy solicited by an issuer with whom it has a material business or
personal relationship that may

                                       1

<PAGE>



affect how it votes on the issuer's proxy. Martin Currie believes that oversight
by the Committee ensures that proxies are voted with only its Clients' best
interests in mind. In order to avoid any perceived conflict of interests,
procedures have been established for use when proxy votes are issued by existing
Clients or where Martin Currie holds a significant voting percentage of the
company.

PROXIES OF CERTAIN NON-U.S. ISSUERS
Proxy voting in certain countries requires "share blocking." That is,
shareholders wishing to vote their proxies must deposit their shares shortly
before the date of the meeting (usually one week) with a designated depositary.
During this blocking period, shares that will be voted at the meeting cannot be
sold until the meeting has taken place and the shares are returned to the
Clients' custodian banks. Martin Currie may determine that the value of
exercising the vote does not outweigh the detriment of not being able to
transact in the shares during this period. In such cases, Martin Currie may
abstain from voting the affected shares.

AVAILABILITY OF POLICIES AND PROCEDURES AND PROXY VOTING RECORD
Clients may obtain a copy of the Policies and Procedures and information on how
Martin Currie voted with respect to their proxies by contacting the Client
Services Team at Martin Currie, Inc., Saltire Court, 20 Castle Terrace,
Edinburgh, Scotland, EH1 2ES, tel. 011-44-131-229-5252, fax 011-44-131-222-2527
or email Clientservices@martincurrie.com.


                                       2













</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.906CERT
<SEQUENCE>5
<FILENAME>b57924cfexv99w906cert.txt
<DESCRIPTION>CERTIFICATIONS PURSUANT TO SECTION 906
<TEXT>
<PAGE>
                                                                   EXHIBIT 12(b)

Gary L. French, Chief Executive Officer, and William C. Cox, Chief Financial
Officer of The China Fund, Inc. (the "Fund"), each certify that:

1.       This Form N-CSR filing for the Fund (the "Report") fully complies with
         the requirements of Section 13(a) or 15(d) of the Securities Exchange
         Act of 1934; and

2.       The information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operations of
         the Fund.


By:      /s/Gary L. French
         -------------------
         Gary L. French
         Chief Executive Officer of The China Fund, Inc.

Date:    January 9, 2006


By:      /s/William C. Cox
         -------------------
         William C. Cox
         Chief Financial Officer of the The China Fund, Inc.

Date:    January 9, 2006




</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
