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<SEC-DOCUMENT>0000950123-10-000636.txt : 20100106
<SEC-HEADER>0000950123-10-000636.hdr.sgml : 20100106
<ACCEPTANCE-DATETIME>20100106135839
ACCESSION NUMBER:		0000950123-10-000636
CONFORMED SUBMISSION TYPE:	N-CSR
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20091031
FILED AS OF DATE:		20100106
DATE AS OF CHANGE:		20100106
EFFECTIVENESS DATE:		20100106

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:		10510861

	BUSINESS ADDRESS:	
		STREET 1:		TWO AVENUE DE LAFAYETTE
		STREET 2:		PO BOX 5049 (02206-5049)
		CITY:			BOSTON
		STATE:			MA
		ZIP:			02111
		BUSINESS PHONE:		6176622789

	MAIL ADDRESS:	
		STREET 1:		TWO AVENUE DE LAFAYETTE
		STREET 2:		PO BOX 5049 (02206-5049)
		CITY:			BOSTON
		STATE:			MA
		ZIP:			02111
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-CSR
<SEQUENCE>1
<FILENAME>b78231a1nvcsr.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)

                      C/O STATE STREET BANK & TRUST COMPANY
                             2 AVENUE DE LAFAYETTE
                                  P.O. BOX 5049
                              BOSTON, MA 02206-5049
- --------------------------------------------------------------------------------
               (Address of principal executive offices)(Zip code)

                                                            Copy to:

            Elizabeth A. Watson                    Leonard B. Mackey, Jr., Esq.
                 Secretary                            Clifford Chance US LLP
           The China Fund, Inc.                        31 West 52nd Street
         4 Copley Place, 5th Floor                New York, New York 10019-6131
                 CPH-0326
             Boston, MA 02116

     (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, 2009

================================================================================

<PAGE>

ITEM 1.  REPORT TO STOCKHOLDERS.

<PAGE>

                              THE CHINA FUND, INC.

                                  ANNUAL REPORT

                                OCTOBER 31, 2009


                                         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 Manager's Statement                5
About the Portfolio Manager                   7
Schedule of Investments                       8
Financial Statements                         14
Notes to Financial Statements                19
Report of Independent Registered Public
  Accounting Firm                            31
Other Information                            32
Board Deliberations Regarding Approval
  of Investment Management Agreements        34
Dividends and Distributions;
  Dividend Reinvestment
  and Cash Purchase Plan                     38
Directors and Officers                       41
</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                              22,781,762
- --------------------------------------------------------------------------------------
        TOTAL NET ASSETS (10/31/09)                      US$620.5 MILLION
- --------------------------------------------------------------------------------------
   NET ASSET VALUE PER SHARE (10/31/09)                       $27.24
- --------------------------------------------------------------------------------------
     MARKET PRICE PER SHARE (10/31/09)                        $25.25
- --------------------------------------------------------------------------------------
</Table>




<Table>
<Caption>
- -----------------------------------------------------------------------------------------------
                                        TOTAL RETURN(1)
- -----------------------------------------------------------------------------------------------
       PERFORMANCE AS OF
           10/31/09:                    NET ASSET VALUE                   MARKET PRICE
- -----------------------------------------------------------------------------------------------
<S>                             <C>                              <C>
            1-Year                           71.10%                           73.37%
- -----------------------------------------------------------------------------------------------
       3-Year Cumulative                     79.61%                           71.96%
- -----------------------------------------------------------------------------------------------
       3-Year Annualized                     21.56%                           19.81%
- -----------------------------------------------------------------------------------------------
       5-Year Cumulative                    166.89%                          122.95%
- -----------------------------------------------------------------------------------------------
       5-Year Annualized                     21.69%                           17.39%
- -----------------------------------------------------------------------------------------------
      10-Year Cumulative                    496.38%                          608.54%
- -----------------------------------------------------------------------------------------------
      10-Year Annualized                     19.55%                           21.63%
- -----------------------------------------------------------------------------------------------
</Table>




<Table>
<Caption>
- -----------------------------------------------------------------------------------------------
                                        DIVIDEND HISTORY
- -----------------------------------------------------------------------------------------------
          RECORD DATE                       INCOME                        CAPITAL GAINS
- -----------------------------------------------------------------------------------------------
<S>                             <C>                              <C>
           12/24/08                         $0.4813                          $5.3361
- -----------------------------------------------------------------------------------------------
           12/21/07                         $0.2800                         $11.8400
- -----------------------------------------------------------------------------------------------
           12/21/06                         $0.2996                          $3.7121
- -----------------------------------------------------------------------------------------------
           12/21/05                         $0.2172                          $2.2947
- -----------------------------------------------------------------------------------------------
           12/22/04                         $0.1963                          $3.3738
- -----------------------------------------------------------------------------------------------
           12/31/03                         $0.0700                          $1.7100
- -----------------------------------------------------------------------------------------------
           12/26/02                         $0.0640                          $0.1504
- -----------------------------------------------------------------------------------------------
           12/31/01                         $0.1321                               --
- -----------------------------------------------------------------------------------------------
           12/31/00                              --                               --
- -----------------------------------------------------------------------------------------------
           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 or
market price, as the case may be, during each period and assumes that dividends
and capital gains distributions, if any, were reinvested in accordance with the
dividend reinvestment plan. The net asset value per share percentages are not an
indication of the performance of a shareholder's investment in the Fund, which
is based on market price. Total investment returns do not reflect the deduction
of taxes that a stockholder would pay on Fund distributions or the sale of Fund
shares. Total investment returns are historical and do no guarantee future
results.


                                        1

<PAGE>

THE CHINA FUND, INC.
ASSET ALLOCATION AS OF OCTOBER 31, 2009 (UNAUDITED)

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


<Table>
<Caption>
- -------------------------------------------------------------------------------
                    TEN LARGEST LISTED EQUITY INVESTMENTS *
- -------------------------------------------------------------------------------
<S>  <C>                                                     <C>
 1.  Sinopharm Medicine Holding Co., Ltd.                           4.50%
- -------------------------------------------------------------------------------
 2.  Shandong Weigao Group Medical Polymer Co., Ltd.                4.44%
- -------------------------------------------------------------------------------
 3.  Wumart Stores, Inc.                                            4.11%
- -------------------------------------------------------------------------------
 4.  China Medical System Holdings, Ltd.                            3.66%
- -------------------------------------------------------------------------------
 5.  Far Eastern Department Stores, Ltd.                            3.22%
- -------------------------------------------------------------------------------
 6.  China Shineway Pharmaceutical Group, Ltd.                      2.55%
- -------------------------------------------------------------------------------
 7.  Ruentex Development Co., Ltd.                                  2.33%
- -------------------------------------------------------------------------------
 8.  Fushan International Energy Group, Ltd.                        2.01%
- -------------------------------------------------------------------------------
 9.  Ports Design, Ltd.                                             2.00%
- -------------------------------------------------------------------------------
10.  Hsu Fu Chi International, Ltd.                                 1.97%
- -------------------------------------------------------------------------------
</Table>




<Table>
<Caption>
- --------------------------------------------------------------------------------
                              DIRECT INVESTMENTS *
- --------------------------------------------------------------------------------
<S>   <C>                                                     <C>
  1.  Queenbury Investments, Ltd. (Huiyan)                           7.60%
- --------------------------------------------------------------------------------
  2.  Ugent Holdings, Ltd.                                           3.68%
- --------------------------------------------------------------------------------
  3.  HAND Enterprises Solutions, Ltd.                               1.32%
- --------------------------------------------------------------------------------
  4.  Qingdao Bright Moon Seaweed Group Co., Ltd.                    1.10%
- --------------------------------------------------------------------------------
  5.  Highlight Tech Corp.                                           0.73%
- --------------------------------------------------------------------------------
  6.  China Silicon Corp., Series A Preferred                        0.68%
- --------------------------------------------------------------------------------
  7.  China Silicon Corp. Common Stock                               0.16%
- --------------------------------------------------------------------------------
  8.  China Silicon Corp. Warrants                                   0.00%
- --------------------------------------------------------------------------------
  9.  teco Optronics Corp.                                           0.00%
- --------------------------------------------------------------------------------
</Table>


* Percentages based on net assets at October 31, 2009.


                                        2

<PAGE>

     INDUSTRY ALLOCATION (UNAUDITED)

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

                                   (Pie Chart)


<Table>
<S>                                                                  <C>
Consumer Discretionary.............................................   18.8%
Financials.........................................................    9.7%
Consumer Staples...................................................   16.3%
Industrials........................................................    9.1%
Health Care........................................................   21.5%
Information Technology.............................................    7.6%
Materials..........................................................    3.0%
Energy.............................................................    4.4%
Utilities..........................................................    1.8%
Telecommunications.................................................    1.3%
Others.............................................................    6.5%
Total Net Assets...................................................  100.0%
</Table>



Fund holdings are subject to change and percentages shown above are based on
total net assets as of October 31, 2009. A complete list of holdings as of
October 31, 2009 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 STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Dear Stockholders,

A year ago, I wrote to you in the context of a calamitous year for the world's
stockmarkets, and for China's in particular. Twelve months on, I am pleased to
report not only that Chinese markets have enjoyed a spectacular rally, but also
that your fund has continued to outperform.

Last year, your manager suggested that Chinese markets would be the 'best place
to hide' in 2009 and that China was likely to be the only major economy to see
robust growth this year. Happily, both predictions have proved
prescient -- although with a return of more than 71% for the year, the portfolio
has done more than simply 'hide' investors' capital. The fund's return for the
year is primarily the result of increases in unrealized appreciation on
investments in the portfolio at October 31, 2009. As a result, this year's
dividend distribution will consist only of net investment income and will not
include realized gains as in recent years.

Your fund's focus on resilient themes -- healthcare, strong domestic brands and
beneficiaries of the improving relationship between mainland China and
Taiwan -- has been the key to its outperformance this year. The massive stimulus
measures unveiled by the Chinese government towards the end of last year have
had direct benefits for many portfolio companies. Meanwhile, the fund's unlisted
holdings continued to develop satisfactorily.

With clear signs of improvement in the Chinese economy and your fund
appropriately positioned to prosper, I believe that we can look forward to 2010
with a considerable degree of confidence. I hope to report upon a further
successful year in twelve months' time.

Yours sincerely,

James Lightburn
Chairman


                                        4

<PAGE>

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

REVIEW OF LISTED AND DIRECT INVESTMENTS

REVIEW

Chinese markets rallied spectacularly over the twelve months to October 31,
2009. The MSCI Golden Dragon index rose by 67.3%. The fund did better still,
rising 73.37% at market value.

After the global shock caused by the collapse of Lehman Brothers in September
2008, the Chinese A-share market was the first of the world's markets to
recover; it began to rally powerfully in November. This was sparked by the most
significant development over the past twelve months: Beijing's announcement of a
$4-trillion stimulus plan. The package included state and private investments in
infrastructure (power grid, railways, airports), post-earthquake reconstruction
in Sichuan, public housing, healthcare and environmental protection. Successive
further stimulus measures followed, including state-driven bank lending that in
January alone equalled the total for the whole of 2008 and continued apace for
the first half of 2009.

Over the period, the effect of such massive doses of stimulus became clear: with
third-quarter GDP growth of 8.9%, the 'magic' figure of 8% for the whole of 2009
now looks a certainty. Domestic consumption has been robust, with measures such
as subsidies for the purchase of domestic appliances helping to keep retail
sales strong (and helping Taiwanese exports of electronic components at the same
time). In the last months of the period, property developers have returned to
land auctions and labour shortages have returned to Guangdong; such is the scale
of the infrastructure investment in the inland provinces that huge numbers of
migrant workers have been lured away from the coastal provinces. There were some
spectacular statistics (car sales in August were up 90% year on year!), although
growth still appears heavily dependent on the government's largesse. Recently,
however, we have seen encouraging signs of a pick-up in private investment (in
September, private investment grew faster than public for the first time in a
year).

Thanks to its head start, the A-share market led the Greater Chinese
stockmarkets over the year, returning more than 90% -- and this despite a 22%
sell-off in August, after the authorities expressed some disquiet at the pace of
loan growth in the first half of the year. At the very end of the period, 28
companies listed on the new Growth Enterprise Market (GEM or ChiNext); all of
these stocks more than doubled on their first day of trading.

Taiwan was the weakest market over the period as a whole, but has outperformed
the Hong Kong indices considerably over the last nine months. In what was
latterly a troubled period for the island, its market was able to shrug off the
damage wreaked by Typhoon Morakot and the tensions that arose from the Dalai
Lama's subsequent visit. The drivers here were the return of Taiwanese
expatriate capital, along with continued progress in relations with Beijing.
Indeed, the real benefits of improved cross-strait ties were plain to see in
Kaohsiung harbour's first-half throughput, which equalled the total for 2008.

The fund's outperformance came as most of its key themes worked well over the
year. Healthcare -- a major beneficiary of the stimulus measures and a sector
that is immune to the vicissitudes of the global economy -- was represented in
the strong performance of Shandong Weigao, China Medical Systems and China
Shineway Pharmaceutical. Our cornerstone investment in Sinopharm, China's
largest drug distributor, was also a notable success.


                                        5

<PAGE>

In Taiwan, our focus on domestic consumption was rewarded in the strong
performance of Far Eastern Department Store and Ruentex Development. Among the
exporters, WPG and China Metal benefited from strong demand from the mainland.
In the island's financial sector, Yuanta Financial and Chinatrust rose on the
prospective signing of a cross-strait memorandum of understanding for their
industry.

Elsewhere, there were signs of money looking for value in small-caps (our
Singapore-listed leasing company, Financial One, for example, was 'discovered').
We also benefited from not holding index heavyweights China Mobile and Taiwan
Semiconductor.

OUTLOOK

The fund is 93% invested with holdings in 61 companies. The unlisted portion of
the fund is 15%. The listed portion is 33% invested in Hong Kong-listed
companies, 20% in Taiwan, 10% in A-shares and the balance in other markets.
These last, often 'orphaned' stocks in terms of broker coverage, offer
particular value. Two such, China Medical Systems, a well-managed drug
distribution business listed on the UK's AIM market, and Financial One, a
leasing company listed in Singapore, have both decided to seek listings in Hong
Kong (to the benefit of their share prices).

After the strong rally, it would be no surprise for markets to take umbrage at
the gradual normalization of policy, but we are seeing the first encouraging
signs of increased private investment. Together with robust consumption, this
should help reduce the impact, even as the outlook for exports remains grim
(September's exports were down 'only' 15.2% year on year). Inflation will
shortly turn positive, but looks unlikely to run away, especially as this
development will trigger a resumption of the renminbi's appreciation.

Our visits to Hong Kong and Taiwan have revealed the likelihood of a
construction boom in 2010, as the belated execution of substantial stimulus
spending plans coincides with a recovery in private construction activity. In
Taiwan, there will be the additional stimulus of the signing of a free-trade
agreement with the mainland. We therefore expect to add a number of local
construction and building-material companies; any market correction is likely to
provide good opportunities to do so.


                                        6

<PAGE>

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

LISTED AND DIRECT INVESTMENT MANAGER
Mr. Chris Ruffle serves as the portfolio manager for the Fund's portfolio of
listed and direct 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.

Mr. Shifeng Ke serves as the portfolio manager for the Fund's portfolio of
listed and direct securities. Mr. Ke joined Martin Currie's Asia team in 1997
and, until 2002, co-managed the China Heartland Fund, which at that time was the
only offshore fund to access China's A-share market. In 2006, Martin Currie,
Chris Ruffle and Shifeng established MC China Limited: a joint venture dedicated
to running our range of specialist China strategies. He is co-manager of the
Fund, Martin Currie's A-share products, Martin Currie's China hedge fund and the
micro-cap China Development Capital Partnership. Shifeng practiced law before
moving to China's ministry of labour and social security in 1990, where he
worked to develop an investment policy for pension funds.


                                        7

<PAGE>

THE CHINA FUND, INC.
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2009
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------


<Table>
<Caption>
NAME OF ISSUER AND TITLE OF ISSUE                         SHARES            VALUE (NOTE A)
- ---------------------------------                         ------            --------------
<S>                                                     <C>          <C>    <C>
COMMON STOCK AND OTHER EQUITY INTERESTS
HONG KONG
  CONSUMER DISCRETIONARY -- (4.7%)
     FU JI Food & Catering Services*#V(1)(2)..........   5,462,000           $         --
     Intime Department Store Group Co., Ltd.#(1)......  12,568,629              8,886,950
     Ports Design, Ltd.(1)............................   4,549,500             12,415,332
     Shangri-La Asia, Ltd.(1).........................   3,061,555              5,933,299
     Yorkey Optical International Cayman, Ltd.#.......   7,758,926              1,741,948
                                                                             ------------
                                                                               28,977,529
                                                                             ------------

  CONSUMER STAPLES -- (1.9%)
     Chaoda Modern Agriculture (Holdings), Ltd.(1)....  15,327,357             11,984,618
                                                                             ------------
  ENERGY -- (2.0%)
     Fushan International Energy Group, Ltd. .........  16,044,000             12,462,163
                                                                             ------------
  HEALTH CARE -- (6.1%)
     China Pharmaceutical Group, Ltd. ................  12,918,000              7,333,854
     China Shineway Pharmaceutical Group, Ltd.#.......  11,184,000             15,844,691
     Golden Meditech Co., Ltd.*#(1)...................  35,040,000              6,374,814
     Natural Beauty Bio-Technology, Ltd.#.............  48,680,000              8,291,036
                                                                             ------------
                                                                               37,844,395
                                                                             ------------
  INDUSTRIALS -- (0.9%)
     TPV Technology, Ltd. ............................   8,854,000              5,803,467
                                                                             ------------
  UTILITIES -- (1.8%)
     Xinao Gas Holdings, Ltd. ........................   5,084,000             10,981,086
                                                                             ------------
       TOTAL HONG KONG -- (Cost $61,001,520)..........               17.4%    108,053,258
                                                                     ----    ------------

HONG KONG -- "H" SHARES
  CONSUMER STAPLES -- (4.1%)
     Wumart Stores, Inc.#.............................  14,888,000             25,472,066
                                                                             ------------
  HEALTH CARE -- (8.9%)
     Shandong Weigao Group Medical Polymer Co.,
       Ltd.#..........................................   7,808,000             27,553,795
     Sinopharm Medicine Holding Co., Ltd.*#(1)(2).....   7,786,000             27,918,189
                                                                             ------------
                                                                               55,471,984
                                                                             ------------
  INDUSTRIALS -- (0.1%)
     Anhui Expressway Co., Ltd. ......................   1,163,300                733,981
                                                                             ------------
  MATERIALS -- (1.2%)
     Zijin Mining Group Co., Ltd. ....................   7,214,000              7,139,303
                                                                             ------------

</Table>





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

                                        8

<PAGE>

THE CHINA FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2009
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<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)
  TELECOMMUNICATIONS -- (1.3%)
     ZTE Corp.(1).....................................   1,461,926           $  8,261,973
                                                                             ------------
          TOTAL HONG KONG -- "H" SHARES --
            (Cost $50,104,972)........................               15.6%     97,079,307
                                                                     ----    ------------
          TOTAL HONG KONG (INCLUDING "H" SHARES) --
            (Cost $111,106,492).......................               33.0%    205,132,565
                                                                     ----    ------------

SINGAPORE
  CONSUMER STAPLES -- (4.1%)
     China Fishery Group, Ltd.#.......................  13,255,000             11,562,761
     China Milk Products Group, Ltd.*.................   4,923,000              1,584,033
     Hsu Fu Chi International, Ltd.(1)................   9,484,000             12,206,357
                                                                             ------------
                                                                               25,353,151
                                                                             ------------
  FINANCIALS -- (0.8%)
     Financial One Corp.*.............................  12,030,000              4,946,016
                                                                             ------------
  INFORMATION TECHNOLOGY -- (0.4%)
     CDW Holding, Ltd.#+..............................  54,708,000              2,542,648
                                                                             ------------
          TOTAL SINGAPORE -- (Cost $24,396,496).......                5.3%     32,841,815
                                                                     ----    ------------

TAIWAN
  CONSUMER DISCRETIONARY -- (5.3%)
     FamilyMart Co., Ltd.#............................   4,501,652              7,751,207
     Far Eastern Department Stores, Ltd. .............  19,066,931             19,962,150
     Synnex Technology International Corp. ...........   2,809,240              5,407,202
                                                                             ------------
                                                                               33,120,559
                                                                             ------------
  CONSUMER STAPLES -- (2.9%)
     Lien Hwa Industrial Corp.#.......................  16,476,881              7,675,330
     Uni-President Enterprises Corp. .................   9,112,638             10,311,013
                                                                             ------------
                                                                               17,986,343
                                                                             ------------
  FINANCIALS -- (5.7%)
     Fubon Financial Holdings Co., Ltd.*..............   4,948,000              5,613,910
     KGI Securities Co., Ltd. ........................  16,984,780              7,990,257
     Ruentex Development Co., Ltd. ...................  12,694,000             14,460,926
     Yuanta Financial Holdings Co., Ltd. .............  10,520,593              7,116,596
                                                                             ------------
                                                                               35,181,689
                                                                             ------------

</Table>





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

                                        9

<PAGE>

THE CHINA FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2009
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<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)
  INFORMATION TECHNOLOGY -- (4.0%)
     HTC Corp. .......................................     891,900           $  9,049,811
     Taiwan Secom Co., Ltd.#..........................   4,738,000              7,298,644
     WPG Holdings Co., Ltd. ..........................   6,320,000              8,841,742
                                                                             ------------
                                                                               25,190,197
                                                                             ------------
  MATERIALS -- (1.8%)
     China Metal Products Co., Ltd. ..................   9,200,278             10,919,372
                                                                             ------------
          TOTAL TAIWAN -- (Cost $87,348,187)..........               19.7%    122,398,160
                                                                     ----    ------------

UNITED KINGDOM
  HEALTH CARE -- (3.7%)
     China Medical System Holdings, Ltd.#+............   3,623,188             22,694,682
                                                                             ------------
          TOTAL UNITED KINGDOM -- (Cost $9,940,990)...                3.7%     22,694,682
                                                                     ----    ------------

UNITED STATES
  CONSUMER DISCRETIONARY -- (1.2%)
     New Oriental Education & Technology Group,
       ADR*(1)........................................      73,400              5,126,256
     The9, Ltd., ADR(1)...............................     358,900              2,691,750
                                                                             ------------
                                                                                7,818,006
                                                                             ------------
  ENERGY -- (1.1%)
     Far East Energy Corp.*#+.........................  14,565,477              6,700,119
                                                                             ------------
  HEALTH CARE -- (2.8%)
     Mindray Medical International, Ltd., ADR(1)......     191,700              5,890,941
     WuXi PharmaTech Cayman, Inc., ADR*...............     883,490             11,335,177
                                                                             ------------
                                                                               17,226,118
                                                                             ------------
  INFORMATION TECHNOLOGY -- (1.0%)
     Sina Corp.*(1)...................................     162,700              6,083,353
                                                                             ------------
          TOTAL UNITED STATES -- (Cost $40,657,065)...                6.1%     37,827,596
                                                                     ----    ------------
          TOTAL COMMON STOCK AND OTHER EQUITY
            INTERESTS -- (Cost $273,449,230)..........               67.8%    420,894,818
                                                                     ----    ------------

EQUITY LINKED SECURITIES
  CONSUMER STAPLES -- (3.3%)
     Dalian Zhangzidao Fishery Group Co., Ltd. Access
       Product (expiration 01/17/12) 144A,*(3)........   1,260,565              4,962,844
</Table>





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

                                       10

<PAGE>

THE CHINA FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2009
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<Caption>
NAME OF ISSUER AND TITLE OF ISSUE                         SHARES             VALUE (NOTE A)
- ---------------------------------                         ------             --------------
<S>                                                    <C>           <C>     <C>
EQUITY LINKED SECURITIES (CONTINUED)
     Shenzhen Agricultural Products Co., Ltd. Access
       Product  (expiration 01/17/12) 144A,*(3)......    6,800,000            $ 10,686,778
     Wuliangye Yibin Co., Ltd. Access Product
       (expiration 01/20/10) 144A,(3)................    1,403,507               4,610,521
                                                                              ------------
                                                                                20,260,143
                                                                              ------------
  ENERGY -- (1.3%)
     China Yangtze Power Co., Ltd. Access Product
       (expiration 10/26/10) 144A,(4)................    4,169,077               7,980,935
                                                                              ------------
  FINANCIALS -- (3.2%)
     Citic Securities Co., Ltd. China (expiration
       09/23/13) 144A,*(4)...........................    2,260,600               8,949,690
     Shanghai Yuyuan Tourist Mart Co., Ltd.
       (expiration 03/26/14) 144A,(4)................    2,385,020               6,818,834
     Zhejiang Guyuelongshan Access Product
       (expiration 10/07/13) 144A,(4)................    3,658,900               4,453,383
                                                                              ------------
                                                                                20,221,907
                                                                              ------------
  INDUSTRIALS -- (2.6%)
     Daqin Railway Co., Ltd. Access Product
       (expiration 11/02/11) 144A,*(4)...............    3,807,000               5,436,579
     Shanghai International Airport Co., Ltd. Access
       Product (expiration 01/20/10) 144A,*(3).......    1,816,700               3,769,652
     Suning Appliance Co., Ltd. Access Product
       (expiration 01/20/10) 144A,(3)................    2,874,013               6,805,663
                                                                              ------------
                                                                                16,011,894
                                                                              ------------
          TOTAL EQUITY LINKED SECURITIES --
            (Cost $49,424,537).......................                 10.4%     64,474,879
                                                                     -----    ------------

DIRECT INVESTMENTS
  CONSUMER DISCRETIONARY -- (7.6%)
     Queenbury Investments, Ltd., (Huiyan) (acquired
       05/06/08)*#+(2)(5)............................          450              47,108,700
                                                                              ------------
  INDUSTRIALS -- (1.8%)
     Highlight Tech Corp., (acquired
       09/12/07)*#+(2)(5)(6).........................    2,525,170               4,499,999
     Qingdao Bright Moon Seaweed Group Co., Ltd.,
       (acquired 02/28/08)*#+(2)(5)(6)...............   31,827,172               6,842,842
                                                                              ------------
                                                                                11,342,841
                                                                              ------------
</Table>



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

                                       11

<PAGE>

THE CHINA FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2009
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<Caption>
NAME OF ISSUER AND TITLE OF ISSUE                         SHARES             VALUE (NOTE A)
- ---------------------------------                         ------             --------------
<S>                                                    <C>           <C>     <C>
DIRECT INVESTMENTS (CONTINUED)
  INFORMATION TECHNOLOGY -- (2.2%)
     China Silicon Corp. Common Stock, (acquired
       01/08-10/09)*#+(2)(5).........................    1,171,572            $    995,836
     China Silicon Corp. Warrants (expiration
       11/30/10), (acquired 11/30/07)*#+(2)(5).......      685,450                      --
     China Silicon Corp., Series A Preferred
       (acquired 11/30/07)#+(2)(5)...................       27,418               4,241,565
     HAND Enterprise Solutions, Ltd., (acquired
       02/01/07)*#+(2)(5)............................      500,000               8,200,000
     teco Optronics Corp., (acquired
       04/26/04)*#+(2)...............................    1,861,710                      --
                                                                              ------------
                                                                                13,437,401
                                                                              ------------

<Caption>
                                                           FACE
                                                          AMOUNT
                                                          ------
<S>                                                    <C>           <C>     <C>
  INDUSTRIALS -- (3.7%)
     Ugent Holdings, Ltd., 12.0% 06/04/12
       (acquired 04/06/09)*#+@(2)(5).................  177,000,000              22,837,973
                                                       -----------            ------------
          TOTAL DIRECT INVESTMENTS -- (Cost
            $84,235,752).............................                 15.3%     94,726,915
                                                                     -----    ------------

<Caption>
                                                          SHARES
                                                          ------
<S>                                                    <C>           <C>     <C>
COLLATERAL FOR SECURITIES ON LOAN -- (4.9%)
     State Street Navigator Prime Portfolio..........   30,294,046              30,294,046
                                                                              ------------
          TOTAL COLLATERAL FOR SECURITIES ON
            LOAN -- (Cost $30,294,046)...............                  4.9%     30,294,046
                                                                     -----    ------------

<Caption>
                                                        PRINCIPAL
                                                          AMOUNT
                                                        ---------
<S>                                                    <C>           <C>     <C>
SHORT TERM INVESTMENTS UNITED STATES
     Repurchase Agreement with State Street Bank and
       Trust, 0.15%, 10/30/09(7).....................   33,201,000              33,201,000
                                                                              ------------
          TOTAL UNITED STATES -- (Cost $33,201,000)..                  5.3%     33,201,000
                                                                     -----    ------------

TOTAL INVESTMENTS -- (Cost $470,604,565).............                103.7%    643,591,658
                                                                     -----    ------------
OTHER ASSETS AND LIABILITIES.........................                 (3.7)%   (23,124,663)
                                                                     -----    ------------

NET ASSETS...........................................                100.0%   $620,466,995
                                                                     =====    ============

</Table>





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

                                       12

<PAGE>

THE CHINA FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2009
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Notes to Schedule of Investments

 *  Denotes non-income producing security.

  #  Illiquid security.

 V  Security is in default.

  +  Affiliated issuer (see Note B).

@  The bond contains a feature or option to be converted into common stock.

(1) A portion or all of the security was held on loan. As of October 31, 2009,
    the market value of the securities loaned was $27,006,695.

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

(3) Equity linked securities issued by Citigroup Global Markets Holdings.

(4) Equity linked securities issued by Credit Lyonnais (CLSA).

(5) 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 valued in good faith by the Board of Directors at
    fair market value. The securities continue to be valued in good faith by
    Board of Directors at fair market value as of October 31, 2009.

(6) The Fund holds a put option which allows the Fund to sell the investment for
    a value at least equal to the purchase price under certain circumstances.

(7) Repurchase agreement, dated 10/30/09, due 11/02/09 with repurchase proceeds
    of $33,201,028 is collateralized by US Treasury Bill 0.15% due 04/15/10 with
    a market value of $33,866,277.

144A Securities restricted for resale to Qualified Institutional Buyers. At
October 31, 2009, these restricted securities amounted to $64,384,879, which
represented 10.38% of total net assets.

ADR American Depositary Receipt.

FORWARD FOREIGN CURRENCY CONTRACTS:

<Table>
<Caption>
                                                                                                      UNREALIZED
                                                                                                     APPRECIATION/
 CURRENCY     SETTLEMENT DATE         LOCAL AMOUNT          BASE AMOUNT           MARKET VALUE      (DEPRECIATION)
 --------     ---------------         ------------          -----------           ------------      --------------
<S>         <C>                   <C>                   <C>                   <C>                   <C>
CNY (Sell)       11/30/2009           122,079,803           $17,382,150           $17,874,710         $(492,560)
 CNY (Buy)       11/30/2009           122,079,803            17,540,201            17,874,710            334,509
TWD (Sell)       11/30/2009           572,709,241            17,382,150            17,661,902          (279,752)
 TWD (Buy)       11/30/2009           572,709,241            18,055,147            17,661,902          (393,245)
</Table>


CNY - Chinese Yen
TWD - Taiwan Dollar



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

                                       13

<PAGE>

THE CHINA FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2009
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<S>                                                                   <C>
ASSETS
  Investments in securities, at value (cost $364,583,323)
     (securities on loan $27,006,695) (Note A)......................  $516,927,294
  Investments in affiliated investments, at value (cost
     $106,021,242) (Notes A and F)..................................   126,664,364
                                                                      ------------
  Total Investments.................................................   643,591,658
  Cash..............................................................           174
  Foreign currency, at value (cost $8,711,874)......................     8,804,323
  Receivable for securities lending income..........................        19,302
  Dividends and interest receivable.................................       961,401
  Receivable for open forward currency contracts....................       334,509
  Prepaid expenses..................................................        48,126
                                                                      ------------
TOTAL ASSETS........................................................   653,759,493
                                                                      ------------

LIABILITIES
  Payable for investments purchased.................................       169,302
  Payable upon return of collateral for securities loaned...........    30,294,046
  Payable for open forward currency contracts.......................     1,165,557
  Investment management fee payable (Note B)........................       501,479
  Administration and custodian fees payable (Note B)................       111,450
  Directors fee payable (Note B)....................................        20,675
  Payable for taxes on dividends....................................        11,091
  Contingent liability (Note A).....................................       717,795
  Accrued expenses and other liabilities............................       301,103
                                                                      ------------
TOTAL LIABILITIES...................................................    33,292,498
                                                                      ------------
TOTAL NET ASSETS....................................................  $620,466,995
                                                                      ============

COMPOSITION OF NET ASSETS:
  Paid in capital (Note C)..........................................   454,105,882
  Undistributed net investment income...............................     5,981,080
  Accumulated net realized loss on investments and foreign currency
     transactions...................................................   (11,868,413)
  Net unrealized appreciation on investments and foreign currency
     translations...................................................   172,248,446
                                                                      ------------
TOTAL NET ASSETS....................................................  $620,466,995
                                                                      ============


NET ASSET VALUE PER SHARE
  ($620,466,995/22,781,762 shares of common stock outstanding)......        $27.24
                                                                            ======

</Table>





See notes to financial statements.

                                       14

<PAGE>

THE CHINA FUND, INC.
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 2009
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<S>                                                                   <C>
INVESTMENT INCOME:
  Dividend income -- (including dividends of $2,506,299 from non-
     controlled affiliates, net of tax withheld of $580,381) (Note
     F).............................................................  $  9,454,914
  Interest income (including interest of $1,404,687 from non-
     controlled affiliates, net of tax withheld of $79,875).........     3,049,380
  Securities lending income.........................................       354,863
                                                                      ------------
     TOTAL INVESTMENT INCOME........................................    12,859,157
                                                                      ------------

EXPENSES
  Investment Management fees (Note B)...............................     4,149,008
  Custodian fees (Note B)...........................................       695,480
  Administration fees (Note B)......................................       450,388
  Directors' fees and expenses (Note B).............................       353,716
  Stock dividend tax expense........................................       119,170
  Legal fees........................................................       186,334
  Printing and postage..............................................       118,122
  Shareholder service fees..........................................       173,081
  Insurance.........................................................        50,668
  Audit and tax service fees........................................       125,953
  Stock exchange listing fee........................................        38,240
  Transfer agent fees...............................................        40,579
  Chief Compliance Officer fee......................................        54,598
  Miscellaneous expenses............................................        98,542
                                                                      ------------
     TOTAL EXPENSES.................................................     6,653,879
                                                                      ------------

NET INVESTMENT INCOME...............................................     6,205,278
                                                                      ------------

REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS AND FOREIGN
  CURRENCY TRANSACTIONS
  Net realized loss on investments .................................   (10,127,219)
  Net realized gain on non-controlled affiliate transactions (Note
     F).............................................................       135,926
  Net realized loss on foreign currency transactions................      (221,898)
                                                                      ------------
                                                                       (10,213,191)
                                                                      ------------
  Net change in unrealized appreciation/(depreciation) on
     investments....................................................   262,646,585
  Net change in unrealized appreciation/(depreciation) on foreign
     currency transactions..........................................      (831,048)
                                                                      ------------
                                                                       261,815,537
                                                                      ------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY
  TRANSACTIONS......................................................   251,602,346
                                                                      ------------

NET INCREASE IN NET ASSETS FROM OPERATIONS..........................  $257,807,624
                                                                      ============

</Table>





See notes to financial statements.

                                       15

<PAGE>

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

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

<Table>
<Caption>
                                                            YEAR ENDED           YEAR ENDED
                                                         OCTOBER 31, 2009     OCTOBER 31, 2008
                                                         ----------------     ----------------
<S>                                                      <C>                  <C>
INCREASE IN NET ASSETS FROM OPERATIONS
  Net investment income................................    $   6,205,278        $   8,481,100
  Net realized gain/(loss) on investments and foreign
     currency transactions.............................      (10,213,191)          95,324,572
  Net change in unrealized appreciation/(depreciation)
     on investments and foreign currency transactions..      261,815,537         (538,291,891)
                                                           -------------        -------------
  Net increase/(decrease) in net assets from
     operations........................................      257,807,624         (434,486,219)
                                                           -------------        -------------

DISTRIBUTIONS TO SHAREHOLDERS FROM:
  Net investment income................................       (8,737,395)          (4,080,764)
  Capital gains........................................      (96,870,178)        (172,579,378)
                                                           -------------        -------------
  Total distributions to shareholders..................     (105,607,573)        (176,660,142)
                                                           -------------        -------------

CAPITAL SHARE TRANSACTIONS:
  Fund shares sold (Note C)............................               --                   --
  Reinvestment of distributions (4,628,021 and
     3,577,780 shares, respectively)...................       73,909,497          123,648,061
                                                           -------------        -------------
  Net increase in net assets from capital share
     transactions......................................       73,909,497          123,648,061
                                                           -------------        -------------
INCREASE (DECREASE) IN NET ASSETS......................      226,109,548         (487,498,300)

NET ASSETS:
  Beginning of year....................................      394,357,447          881,855,747
                                                           -------------        -------------
  End of year..........................................    $ 620,466,995        $ 394,357,447
                                                           =============        =============

Undistributed net investment income, end of year.......    $   5,981,080        $   8,736,686
                                                           =============        =============

</Table>





See notes to financial statements.

                                       16

<PAGE>

THE CHINA FUND, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED OCTOBER 31, 2009
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<Caption>
INCREASE (DECREASE) IN CASH -
- -----------------------------
<S>                                                                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net increase in net assets resulting from operations.............  $ 257,807,624
     Adjustments to reconcile net increase in net assets from
       operations to net cash provided from operating activities:
     Purchases of investment securities............................   (153,551,782)
     Proceeds from disposition of investment securities............    210,428,495
     Net purchases of short-term investments.......................    (33,201,000)
     Proceeds from foreign cash transactions.......................       (187,979)
     Collateral for securities loaned..............................     11,421,675
     Increase in dividends and interest receivable.................        (31,912)
     Decrease in receivable for securities lending income..........         86,007
     Increase in prepaid expenses..................................           (278)
     Decrease in payable for securities purchased..................       (109,411)
     Decrease upon return of collateral for securities loaned......    (11,421,675)
     Increase in accrued expenses and other liabilities............        141,533
     Net change in unrealized (appreciation)/depreciation on
       foreign currency contracts..................................        831,048
     Net change in unrealized (appreciation)/depreciation on
       investments.................................................   (262,646,585)
     Net realized gain from investments............................      9,991,293
                                                                     -------------
       Net cash provided by operating activities...................     29,557,053
                                                                     -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Cash distributions paid.......................................    (31,698,076)
                                                                     -------------
       Net cash used for financing activities......................    (31,698,076)
                                                                     -------------
NET DECREASE IN CASH...............................................     (2,141,023)
CASH AT BEGINNING OF PERIOD........................................     10,945,520
                                                                     -------------
CASH AT END OF PERIOD..............................................  $   8,804,497
                                                                     =============
Noncash financing activities not included herein consist of:
          Reinvestment of distributions............................  $  73,909,497
</Table>



See notes to financial statements.

                                       17

<PAGE>

THE CHINA FUND, INC.
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING FOR THE YEARS INDICATED
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<Table>
<Caption>
                                                          YEAR ENDED OCTOBER 31,
                                           ----------------------------------------------------
                                            2009(1)     2008      2007(2)     2006       2005
                                           --------   --------   --------   --------   --------
<S>                                        <C>        <C>        <C>        <C>        <C>
PER SHARE OPERATION PERFORMANCE*
Net asset value, beginning of year.......  $  21.72   $  60.50   $  31.40   $  23.25   $  26.27
                                           --------   --------   --------   --------   --------
Net investment income....................      0.29       0.49       0.28       0.30       0.21
Net realized and unrealized gain (loss)
  on investments and foreign currency
  transactions...........................     11.24     (25.66)     32.83      10.36       0.34
                                           --------   --------   --------   --------   --------
Total income (loss) from investment
  operations.............................     11.53     (25.17)     33.11      10.66       0.55
                                           --------   --------   --------   --------   --------
Less dividends and distributions:
  Dividend from net investment income....     (0.48)     (0.28)     (0.30)     (0.22)     (0.20)
  Distributions from net realized capital
     gains...............................     (5.34)    (11.84)     (3.71)     (2.29)     (3.37)
                                           --------   --------   --------   --------   --------
Total dividends and distributions........     (5.82)    (12.12)     (4.01)     (2.51)     (3.57)
                                           --------   --------   --------   --------   --------
Capital Share Transactions:
  (Dilution) to net asset value,
     resulting from issuance of shares in
     stock dividend......................     (0.19)     (1.49)      0.00       0.00       0.00
                                           ========   ========   ========   ========   ========
Net asset value, end of year.............  $  27.24   $  21.72   $  60.50   $  31.40   $  23.25
                                           ========   ========   ========   ========   ========
Per share market price, end of year......  $  25.25   $  19.87   $  51.67   $  30.40   $  24.55
                                           ========   ========   ========   ========   ========
TOTAL INVESTMENT RETURN (BASED ON MARKET
  PRICE).................................     73.37%    (48.06)%    90.97%     37.20%     (5.50)%
                                           ========   ========   ========   ========   ========
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year (000's)..........  $620,467   $394,357   $881,856   $455,206   $334,496
Ratio of net expenses to average net
  assets.................................      1.44%      1.20%      1.08%      1.26%      1.44%
Ratio of gross expenses to average net
  assets.................................      1.44%      1.23%      1.08%      1.26%      1.44%
Ratio of net expenses to average net
  assets, excluding stock dividend tax
  expense................................      1.42%      1.11%      1.04%      1.23%      1.38%
Ratio of net investment income to average
  net assets.............................      1.36%      1.28%      0.67%      1.09%      1.04%
Portfolio turnover rate..................        34%        49%        46%        50%        26%
</Table>


*  Per share amounts have been calculated using the average share method.

(1) The fund was audited by Ernst & Young LLP for the year ended October 31,
    2009. The previous periods were audited by another independent registered
    public accounting firm.

(2) The Fund's Direct Investment Advisor changed as of June 2007.



See notes to financial statements.

                                       18

<PAGE>

THE CHINA FUND, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2009
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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 "1940 Act"). 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, 2009 relate to the valuation of Direct Investments and to the contingent
liability resulting from the sale of Captive Finance in March 2007. A reserve of
10% of the net sale proceeds was established to cover any potential liabilities
from the representation and warranties provided by the Fund in the transaction.

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, from 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 not readily available are valued at fair value using
methods determined in good faith by or at the direction of the Board of
Directors considering relevant factors, data and information including, if
relevant, the market value of freely tradable securities of the same class in
the principal market on which such securities are normally traded. Direct
Investments not traded on an exchange are valued at fair value as determined by
or at the direction of the Board of Directors based on financial and other
information supplied by the Direct Investment Manager regarding each Direct
Investment. Forward currency contracts are valued at the current cost of
offsetting the contract.

Factors used in determining value may include, but are not limited to, the type
of the security, the size of the holding, the initial cost of the security, the
existence of any contractual restrictions on the security's disposition, the
price and extent of public trading in similar securities of the issuer or of
comparable companies, the availability of quotations from broker-dealers, the
availability of values from third parties other than the Investment Manager or
Direct Investment Manager, information obtained from the issuer, analysts,
and/or the appropriate stock exchange (if available), an analysis of the
company's financial statements, an evaluation of the forces that influence the
issuer and the market(s) in which the security is purchased and sold and with
respect to debt securities, the maturity, coupon, creditworthiness, currency
denomination, and the movement of the market in which they trade.

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

                                       19

<PAGE>

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


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.

SECURITIES LENDING:  The Fund may lend any of its securities held by State
Street Bank and Trust Company ("State Street") as custodian to certain qualified
brokers, except those securities which the Fund or the Investment Manager
specifically identifies as not being available. Effective March 26, 2009, the
Board approved the increase in the amount of securities that the Fund could lend
from 25% to 33 1/3% of the Fund's total assets. By lending its investment
securities, the Fund attempts to increase its net investment income through the
receipt of income in respect of securities on loan. Any gain or loss in the
market price of the securities loaned that might occur and any interest or
dividends declared during the term of the loan would accrue to the account of
the Fund. Risks of delay in recovery of the securities or even loss of rights in
the collateral may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the collateral decreases
below the value of the securities loaned. Upon entering into a securities
lending transaction, the Fund receives cash or other securities as collateral in
an amount equal to or exceeding 100% of the current market value of the loaned
securities with respect to securities of the U.S. government or its agencies,
102% of the current market value of the loaned securities with respect to U.S.
securities and 105% of the current market value of the loaned securities with
respect to foreign securities. Any cash received as collateral is generally
invested by State Street, acting in its capacity as securities lending agent
(the "Agent"), in the State Street Navigator Prime Portfolio. Prior to April 7,
2009, the Fund invested in Securities Lending Quality Trust. A portion of the
dividends received on the collateral is rebated to the borrower of the
securities and the remainder is split between the Agent and the Fund.

As of October 31, 2009, the Fund had loaned securities which were collateralized
by cash and short term investments. The value of the securities on loan and the
value of the related collateral were as follows:

<Table>
<Caption>
  VALUE OF     VALUE OF CASH       TOTAL
 SECURITIES      COLLATERAL      COLLATERAL
 ----------    -------------    -----------
<S>            <C>              <C>
$27,006,695     $30,294,046     $30,294,046
</Table>


FOREIGN CURRENCY TRANSLATIONS:  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 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. Net unrealized foreign
currency gains and losses arise from changes in the value of assets and
liabilities, other than investments in securities, as a result of changes in
exchange rates.

FORWARD FOREIGN CURRENCY CONTRACTS:  The Fund may seek to protect the value of
some portion or all of its portfolio holdings against currency risks by engaging
in hedging transactions including transactions in forward foreign

                                       20

<PAGE>

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


currency contracts. A forward currency contract is an agreement between two
parties to buy or sell currency at a set price on a future date. Upon entering
into these contracts, risks may arise from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of the foreign currency relative to the U.S. dollar. The
U.S. dollar value of forward currency contracts is determined using forward
exchange rates provided by quotation services. Daily fluctuations in the value
of such contracts are recorded as unrealized gain or loss. When the contract is
closed, the Fund records a realized gain or loss equal to the difference between
the value at the time it was opened and the value at the time it was closed.
Such gain or loss is disclosed in the realized and unrealized gain or loss on
foreign currency in the Fund's accompanying Statement of Operations.

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.

EQUITY LINKED SECURITIES:  The Fund may invest in equity-linked securities such
as linked participation notes, equity swaps and zero-strike options and
securities warrants. Equity-linked securities currently held by the Fund,
identified as "Access Products" in the Schedule of Investments are privately
issued securities whose investment results are designed to correspond generally
to the performance of a specified stock index or "basket" of stocks, or a single
stock. Access Products may be used by the Fund to gain exposure to countries
that place restrictions on investments by foreigners. To the extent that the
Fund invests in Access Products whose return corresponds to the performance of a
foreign securities index or one or more foreign stocks, investing in Access
Products will involve risks similar to the risks of investing in foreign
securities. In addition, the Fund bears the risk that the issuer of an Access
Product may default on its obligation under the terms of the arrangement with
the counterparty. Access Products are often used for many of the same purposes
as, and share many of the same risks with, derivative instruments. In addition,
Access Products may be considered illiquid.

At October 31, 2009, the Fund held equity-linked Access Product warrants through
Credit Lyonnais ("CLSA") and Citigroup Global Markets Holdings, the issuers.
Under the terms of the agreements, each warrant entitles the Fund to receive
from the issuers an amount in U.S. dollars linked to the performance of specific
equity shares.

DIRECT INVESTMENTS:  The Fund may invest up to 25% of the net proceeds from its
offerings of its outstanding common stock in direct investments. Direct
investments are generally restricted and do not have a readily available

                                       21

<PAGE>

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


resale market. The value of these securities at October 31, 2009 was $94,726,915
or 15.3% of the Fund's net asset value. The table below details the acquisition
date, cost, and value of the Fund's direct investments as determined by the
Board of Directors of the Fund. The Fund does not have the right to demand that
such securities be registered.

<Table>
<Caption>
SECURITY                                          ACQUISITION DATE       COST         VALUE
- --------                                          ----------------   -----------   -----------
<S>                                               <C>                <C>           <C>
China Silicon Corp., Series A Preferred*........      11/30/2007     $ 6,552,874   $ 4,241,565
China Silicon Corp. Common Stock................     01/08-10/09         961,241       995,836
HAND Enterprise Solutions, Ltd. ................      02/01/2007       3,164,274     8,200,000
Highlight Tech. Corp. ..........................      09/12/2007       4,519,421     4,499,999
Qingdao Bright Moon Seaweed Group Co., Ltd......      02/28/2008       7,116,942     6,842,842
Queenbury Investments, Ltd. (Huiyan)............      05/06/2008      38,515,190    47,108,700
teco Optronics Corp. ...........................      04/26/2004         567,320            --
Ugent Holdings, Ltd. ...........................      04/06/2009      22,838,490    22,837,973
                                                                     -----------   -----------
                                                                     $84,235,752   $94,726,915
                                                                     ===========   ===========

</Table>


* The purchase of China Silicon Corp., Series A Preferred resulted in the Fund
  receiving 685,450 shares of China Silicon Corp. common stock warrants. Each
  warrant entitles the Fund to purchase twenty five shares of common stock at an
  exercise price of USD$2.98 per share, subject to adjustment.

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. Since the Fund's inception, no
claims have been made under these indemnification obligations. The Fund is not
aware of any facts that would give rise to a claim against the Fund under these
arrangements.

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 contract transactions.


                                       22

<PAGE>

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

The Fund made distributions of $8,738,986 from Ordinary Income and $96,868,587
from Long-Term Capital Gains during the year ended October 31, 2009. For the
year ended October 31, 2008 the Fund made distributions of $45,470,844 from
Ordinary Income and $131,189,298 from Long-Term Capital Gains. As of October 31,
2009, the components of distributable earnings on a tax basis was $5,842,398 for
undistributed ordinary income. At that date, the Fund had $170,529,912 of net
unrealized appreciation on a tax basis. Income and capital gains distributions
are determined in accordance with U.S. income tax regulations, which may differ
from generally accepted accounting principles. As of October 31, 2009, the Fund
had a capital loss carryforward of $9,991,827, expiring in 2017.

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 -- ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Martin Currie Inc. is the investment manager for the Fund's listed assets (the
"Listed Assets"). 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. Martin Currie Inc. is also the investment manager for the Fund's direct
investments. Martin Currie Inc. receives a fee computed weekly and payable
monthly, at an annual rate of 2.00% of the average weekly value of the Fund's
assets 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. Effective January 1,
2009, 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 $35,000 and
$15,000 respectively, plus $3,000 for each Board of Directors' meeting or Audit
and Nominating Committee meeting attended, $2,000 for each telephonic meeting
attended and $2,000 for each Valuation Committee teleconference. 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.
Prior to January 1, 2009, the Fund paid the Chairman of the Board an annual fee
of $27,500, plus the Fund paid the Chairman of the Board and each of the
directors $1,000 for each Valuation Committee teleconference.

State Street provides, or arranges for the provision of certain administrative
services for the Fund, including preparing certain reports and other documents
required by federal and/or state laws and regulations. The Fund pays State
Street a fee at an annual rate of 0.13% of the Fund's average weekly net assets
up to $150 million, 0.11% of the next $150 million and 0.06% of the next $400
million and 0.05% of those in excess of $400 million subject to certain minimum
requirements for fund administration services. The Fund also pays State Street
$100,000 per year for certain legal administration services, including corporate
secretarial services and preparing regulatory filings.


                                       23

<PAGE>

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

The Fund has also contracted with State Street to provide custody and fund
accounting services to the Fund. For these services, the Fund pays State Street
asset-based fees that vary according to the number of positions and transactions
plus out-of-pocket expenses.

NOTE C -- 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, 2009, the Fund did not participate in
this program. At October 31, 2009, 100,000,000 shares of $.01 par value common
stock were authorized.

NOTE D -- INVESTMENT TRANSACTIONS
For the year ended October 31, 2009, the Fund's cost of purchases and proceeds
from sales of investment securities, other than short-term securities, were
$153,551,782 and $211,775,978, respectively. At October 31, 2009, the cost of
investments for federal income tax purposes was $472,481,151. Gross unrealized
appreciation of investments was $194,262,996, while gross unrealized
depreciation of investments was $23,152,489, resulting in net unrealized
appreciation of investments of $171,110,507.

NOTE E -- 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.


                                       24

<PAGE>

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

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

<Table>
<Caption>
                                                                                                             GAIN REALIZED
                              BALANCE OF     GROSS        GROSS     BALANCE OF                                 ON SALE OF
                             SHARES HELD   PURCHASES      SALES    SHARES HELD     VALUE      INCOME FROM     SHARES AS OF
                             OCTOBER 31,      AND          AND     OCTOBER 31,  OCTOBER 31,  NON-CONTROLLED   OCTOBER 31,
NAME OF ISSUER                   2008      ADDITIONS   REDUCTIONS      2009         2009       AFFILIATES         2009
- ---------------------------  -----------  -----------  ----------  -----------  -----------  --------------  -------------
<S>                          <C>          <C>          <C>         <C>          <C>          <C>             <C>
CDW Holding, Ltd. .........   60,000,000           --   5,292,000   54,708,000  $ 2,542,648    $  348,248       $135,926
China Medical System
  Holdings, Ltd. ..........    3,623,188           --          --    3,623,188   22,694,682       905,797             --
China Silicon Corp. Common
  Stock....................      183,396      988,176          --    1,171,572      995,836            --             --
China Silicon Corp., Series
  A Preferred+.............       27,418           --          --       27,418    4,241,565       524,759             --
China Silicon Corp.
  Warrants.................      685,450           --          --      685,450           --            --             --
Far East Energy Corp. .....   10,478,634    4,086,843          --   14,565,477    6,700,119            --             --
HAND Enterprise Solutions,
  Ltd. ....................      500,000           --          --      500,000    8,200,000            --             --
Highlight Tech. Corp. .....    3,366,893           --     841,723    2,525,170    4,499,999     1,016,469             --
Qingdao Bright Moon........   31,827,172           --          --   31,827,172    6,842,842       727,495             --
Queenbury Investments, Ltd.
  (Huiyan).................          450           --          --          450   47,108,700            --             --
Ugent Holdings, Ltd. ......           --  177,000,000          --  177,000,000   22,837,973            --             --
teco Optronics Corp........    1,861,710           --          --    1,861,710           --            --             --
Wuxi PAIHO**...............   11,734,701           --  11,734,701           --           --       388,218             --
</Table>


*     Affiliated issuers, as defined in the 1940 Act as amended, include issuers
      in which the Fund held 5% or more of the outstanding voting securities.
**    Securities are no longer considered affiliated as of October 31, 2009.
+     China Silicon Corp., Series A Preferred had a stock dividend paid in China
      Silicon Corp. Common Stock.

NOTE G -- NEW ACCOUNTING PRONOUNCEMENTS
Beginning with the 2009 annual financial statements, the Fund adopted the
authoritative guidance for uncertainty in income taxes, Income Taxes. This
guidance requires the Fund to recognize a tax benefit from an uncertain position
only if it is more likely than not that the position is sustainable, based
solely on its technical merits and consideration of the relevant taxing
authority's widely understood administrative practices and precedents. If this
threshold is met, the Fund should measure the tax benefit as the largest amount
of benefit that is greater than fifty percent likely of being realized upon
ultimate settlement. As of October 31, 2009, the Fund had no uncertain tax
positions that would require financial statement recognition or disclosure. The
Fund recognizes interest and penalties, if any, related to tax liabilities as
income tax expense in the Statement of Operations. The Fund's federal tax
returns filed for the fiscal years ended October 31, 2006, October 31, 2007 and
October 31, 2008 remain subject to examination by the Internal Revenue Service.

On October 31, 2009, the Fund adopted the FASB amendments to general standards,
Subsequent Events, on accounting for and disclosures of events that occur after
the balance sheet date but before the financial statements are issued or are
available to be issued. Management has evaluated events and has determined that
there are no material events that would require disclosure in the Fund's
financial statements through December 17, 2009, the date the financial
statements were issued.


                                       25

<PAGE>

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

NOTE H -- FAIR VALUE MEASUREMENT
Effective November 1, 2008, the Fund adopted Fair Value Measurements and
Disclosures. Accordingly, fair value is defined as the price that the Fund would
receive upon selling an investment in a timely transaction to an independent
buyer in the principal or most advantageous market of the investment. A three-
tier hierarchy is established to maximize the use of observable market data and
minimize the use of unobservable inputs and to establish classification of fair
value measurements for disclosure purposes. Inputs refer broadly to the
assumptions that market participants would use in pricing the asset or
liability, including assumptions about risk, for example, the risk inherent in a
particular valuation technique used to measure fair value including such a
pricing model and/or the risk inherent in the inputs to the valuation technique.
Inputs may be observable or unobservable. Observable inputs are inputs that
reflect the assumptions market participants would use in pricing the asset or
liability developed based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are inputs that reflect the reporting
entity's own assumptions about the assumptions market participants would use in
pricing the asset or liability developed based on the best information available
in the circumstances.

The three-tier hierarchy of inputs is summarized in the three broad Levels
listed below.

     -  Level 1 -- Inputs that reflect unadjusted quoted prices in active
        markets for identical assets or liabilities that the Fund has the
        ability to access at the measurement date;

     -  Level 2 -- Inputs other than quoted prices that are observable for the
        asset or liability either directly or indirectly, including inputs in
        markets that are not considered to be active;

     -  Level 3 -- Inputs that are unobservable.


                                       26

<PAGE>

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

The following is a summary of the inputs used as of October 31, 2009 in valuing
the Fund's investments carried at value:

ASSETS VALUATION INPUT

<Table>
<Caption>
DESCRIPTION                                   LEVEL 1       LEVEL 2        LEVEL 3         TOTAL
- -----------                                ------------   -----------   ------------   ------------
<S>                                        <C>            <C>           <C>            <C>
COMMON STOCK AND OTHER EQUITY INTERESTS
  Hong Kong
     Consumer Discretionary.............   $ 28,977,529   $        --   $         --   $ 28,977,529
     Consumer Staples...................     11,984,618            --             --     11,984,618
     Energy.............................     12,462,163            --             --     12,462,163
     Health Care........................     37,844,395            --             --     37,844,395
     Industrials........................      5,803,467            --             --      5,803,467
     Utilities..........................     10,981,086            --             --     10,981,086
                                           ------------   -----------   ------------   ------------
  Total Hong Kong.......................    108,053,258            --             --    108,053,258
                                           ------------   -----------   ------------   ------------
  Hong Kong -- "H" Shares
     Consumer Staples...................     25,472,066            --             --     25,472,066
     Health Care........................     27,553,795            --     27,918,189     55,471,984
     Industrials........................        733,981            --             --        733,981
     Materials..........................      7,139,303            --             --      7,139,303
     Telecommunications.................      8,261,973            --             --      8,261,973
                                           ------------   -----------   ------------   ------------
  Total Hong Kong -- "H" Shares.........     69,161,118            --     27,918,189     97,079,307
                                           ------------   -----------   ------------   ------------
  Singapore
     Consumer Staples...................     25,353,151            --             --     25,353,151
     Financials.........................      4,946,016            --             --      4,946,016
     Information Technology.............      2,542,648            --             --      2,542,648
                                           ------------   -----------   ------------   ------------
  Total Singapore.......................     32,841,815            --             --     32,841,815
                                           ------------   -----------   ------------   ------------
  Taiwan
     Consumer Discretionary.............     33,120,559            --             --     33,120,559
     Consumer Staples...................     17,986,343            --             --     17,986,343
     Financials.........................     35,181,689            --             --     35,181,689
     Information Technology.............     25,190,197            --             --     25,190,197
     Materials..........................     10,919,372            --             --     10,919,372
                                           ------------   -----------   ------------   ------------
  Total Taiwan..........................    122,398,160            --             --    122,398,160
                                           ------------   -----------   ------------   ------------
</Table>


                                       27

<PAGE>

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

<Table>
<Caption>
DESCRIPTION                                   LEVEL 1       LEVEL 2        LEVEL 3         TOTAL
- -----------                                ------------   -----------   ------------   ------------
<S>                                        <C>            <C>           <C>            <C>
  United Kingdom
     Health Care........................   $ 22,694,682   $        --   $         --   $ 22,694,682
                                           ------------   -----------   ------------   ------------
  Total United Kingdom..................     22,694,682            --             --     22,694,682
                                           ------------   -----------   ------------   ------------
  United States
     Consumer Discretionary.............      7,818,006            --             --      7,818,006
     Energy.............................      6,700,119            --             --      6,700,119
     Health Care........................     17,226,118            --             --     17,226,118
     Information Technology.............      6,083,353            --             --      6,083,353
                                           ------------   -----------   ------------   ------------
  Total United States...................     37,827,596            --             --     37,827,596
                                           ------------   -----------   ------------   ------------
TOTAL COMMON STOCK AND OTHER EQUITY
  INTERESTS.............................    392,976,629            --     27,918,189    420,894,818
                                           ------------   -----------   ------------   ------------
EQUITY LINKED SECURITIES
  Consumer Staples......................     20,260,143            --             --     20,260,143
  Energy................................      7,980,935            --             --      7,980,935
  Financials............................     20,221,907            --             --     20,221,907
  Industrials...........................     16,011,894            --             --     16,011,894
                                           ------------   -----------   ------------   ------------
TOTAL EQUITY LINKED SECURITIES..........     64,474,879            --             --     64,474,879
                                           ------------   -----------   ------------   ------------
DIRECT INVESTMENTS
  Consumer Discretionary................             --            --     47,108,700     47,108,700
  Industrials...........................             --            --     34,180,814     34,180,814
  Information Technology................             --            --     13,437,401     13,437,401
                                           ------------   -----------   ------------   ------------
TOTAL DIRECT INVESTMENTS................             --            --     94,726,915     94,726,915
                                           ------------   -----------   ------------   ------------
COLLATERAL FOR SECURITIES ON LOAN.......             --    30,294,046             --     30,294,046
SHORT TERM INVESTMENTS
  UNITED STATES.........................             --    33,201,000             --     33,201,000
                                           ------------   -----------   ------------   ------------
TOTAL INVESTMENTS.......................    457,451,508    63,495,046    122,645,104    643,591,658
                                           ------------   -----------   ------------   ------------
FORWARD FOREIGN CURRENCY CONTRACTS......             --       334,509             --        334,509
                                           ------------   -----------   ------------   ------------
Total...................................   $457,451,508   $63,829,555    122,645,104   $643,926,167
                                           ------------   -----------   ------------   ------------
LIABILITIES
FORWARD FOREIGN CURRENCY CONTRACTS......             --     1,165,557             --      1,165,557
                                           ------------   -----------   ------------   ------------

</Table>




                                       28

<PAGE>

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

The following is a reconciliation of the fair valuations using significant
unobservable inputs (Level 3) for the fund during the period ending October 31,
2009:

<Table>
<Caption>
                                                                                                                        CHANGE IN
                                                                                                                       UNREALIZED
                                                                                                                      APPRECIATION
                                                                                                                     (DEPRECIATION)
                                                                                              NET                         FROM
                                                                              CHANGE IN    TRANSFERS                   INVESTMENTS
                           BALANCE AS      NET        ACCRUED    REALIZED    UNREALIZED    IN AND/OR  BALANCE AS OF      HELD AT
INVESTMENTS IN             OF OCTOBER   PURCHASES    DISCOUNTS     GAIN     APPRECIATION     OUT TO    OCTOBER 31,     OCTOBER 31,
SECURITIES                  31, 2008     (SALES)    (PREMIUMS)    (LOSS)   (DEPRECIATION)   LEVEL 3        2009           2009
- --------------            -----------  -----------  ----------  ---------  --------------  ---------  -------------  --------------
<S>                       <C>          <C>          <C>         <C>        <C>             <C>        <C>            <C>
COMMON STOCK AND OTHER EQUITY INTERESTS
  Consumer
     Discretionary......  $ 4,484,385  $(2,620,877)     $--     $(700,113)   $(1,163,395)     $--      $         --    $        --
  Health Care...........           --   16,252,377       --            --     11,665,812       --        27,918,189     11,665,812
  Materials.............      155,259     (156,497)      --       (31,412)        32,650       --                --             --
                          -----------  -----------      ---     ---------    -----------      ---      ------------    -----------
                            4,639,644   13,475,003       --      (731,525)    10,535,067       --        27,918,189     11,665,812
                          -----------  -----------      ---     ---------    -----------      ---      ------------    -----------
DIRECT INVESTMENTS
  Consumer
     Discretionary......   38,459,700           --       --            --      8,649,000       --        47,108,700      8,649,000
  Industrials...........   16,675,038   17,587,609       --            --        (81,833)      --        34,180,814       (146,250)
  Information
     Technology.........   10,011,966      524,759       --            --      2,900,676       --        13,437,401      2,786,401
                          -----------  -----------      ---     ---------    -----------      ---      ------------    -----------
                           65,146,704   18,112,368       --            --     11,467,843       --        94,726,915     11,289,151
                          ===========  ===========      ===     =========    ===========      ===      ============    ===========
                          $69,786,348  $31,587,371      $--     $(731,525)   $22,002,910      $--      $122,645,104    $22,954,963
                          ===========  ===========      ===     =========    ===========      ===      ============    ===========

</Table>


NOTE I -- DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Effective January 1, 2009, the Fund adopted amendments to authoritative guidance
related to Derivatives and Hedging, which required enhanced disclosures
addressing: a) how and why an entity uses derivative instruments, b) how
derivative instruments and related hedged items are accounted for and c) how
derivative instruments and related hedged items affect an entity's financial
position, financial performance and cash flows. The adoption of the additional
disclosure requirements did not materially impact the Fund's financial
statements. The following table, grouped into

                                       29

<PAGE>

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

appropriate risk categories, discloses the amounts related to the Funds use of
derivative instruments and hedging activities at October 31, 2009:

<Table>
<Caption>
                                                                 FOREIGN
                                                                EXCHANGE
DERIVATIVES NOT ACCOUNTED FOR AS HEDGING INSTRUMENTS         CONTRACTS RISK      TOTAL
- ----------------------------------------------------         --------------   ----------
<S>                                                          <C>              <C>
ASSET DERIVATIVES(1)
Forward Contracts..........................................    $  334,509     $  334,509
LIABILITY DERIVATIVES(2)
Forward Contracts..........................................     1,165,557      1,165,557
</Table>


   (1) Statements of Assets and Liabilities location: Receivable for open
       forward currency contracts.

   (2) Statements of Assets and Liabilities location: Payable for open forward
       currency contracts.

Transactions in derivative instruments during the year ended October 31, 2009,
were as follows:

<Table>
<Caption>
                                                                  FOREIGN
                                                                 EXCHANGE
DERIVATIVES NOT ACCOUNTED FOR AS HEDGING INSTRUMENTS          CONTRACTS RISK     TOTAL
- ----------------------------------------------------          --------------   ---------
<S>                                                           <C>              <C>
REALIZED GAIN (LOSS)(1)
Forward Contracts...........................................     $(221,898)    $(221,898)
CHANGE IN APPRECIATION (DEPRECIATION)(2)....................
Forward Contracts...........................................      (831,048)     (831,048)
</Table>


   (1) Statements of Operations location: Net realized loss on foreign currency
       transactions.

   (2) Statements of Operations location: Net change in unrealized depreciation
       on foreign currency transactions.

All open derivative positions at year end are reflected on the Fund's Schedule
of Investments and the volume of these open positions relative to the net assets
of the Fund is generally representative of open positions throughout the Fund's
reporting period.


                                       30

<PAGE>

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 of The
China Fund, Inc. (the Fund), including the schedule of investments, as of
October 31, 2009, and the related statements of operations, changes in net
assets and cash flows 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 statement
of changes in net assets for the year ended October 31, 2008 and the financial
highlights for each of the four years in the period ended October 31, 2008 were
audited by another independent registered public accounting firm whose report,
dated December 29, 2008, expressed an unqualified opinion on the statement of
changes in net assets and the financial highlights.

We conducted our audit in accordance with the 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. We were
not engaged to perform an audit of the Fund'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 and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2009 by correspondence with the custodian and
brokers or by other appropriate auditing procedures where replies from brokers
were not received. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
China Fund Inc. at October 31, 2009, the results of its operations, the changes
in its net assets, cash flows and the financial highlights for the year ended
October 31, 2009, in conformity with U.S. generally accepted accounting
principles.

                                                           -s- Ernst & Young LLP

Boston, Massachusetts
December 17, 2009


                                       31

<PAGE>

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

TAX INFORMATION

CAPITAL GAINS DISTRIBUTIONS:  $96,868,587 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:  The Fund designates $757,817 as foreign taxes paid and
$9,643,137 as a foreign source income earned for regular Federal income tax
purposes.

QUALIFIED DIVIDEND INCOME:  For the fiscal year ended October 31, 2009, 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 the 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 need 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 adviser 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 regarding how the investment
adviser votes these proxies is now available by calling the same number and on
the Commission's website. The Fund has filed its report on Form N-PX covering
the Fund's proxy voting record for the 12 month period ending June 30, 2009.

QUARTERLY PORTFOLIO OF INVESTMENTS
A Portfolio of Investments will be filed as of the end of the first and third
quarter of each fiscal year on Form N-Q and will be available on the Securities
and Exchange Commission's website at http://www.sec.gov. Form N-Q has been filed
as of July 31, 2009 for the third quarter of this fiscal year and is available
on the Securities and


                                       32

<PAGE>

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

Exchange 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 quarterly Portfolio of
Investments will be made available with out 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 April 27, 2009, 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.


                                       33

<PAGE>

BOARD DELIBERATIONS REGARDING APPROVAL OF
INVESTMENT MANAGEMENT AGREEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

GENERAL BACKGROUND

Martin Currie Inc. ("Martin Currie") acts as the Fund's investment manager, with
exclusive investment discretion over the Fund's assets pursuant to two
investment management and advisory agreements with the Fund: a "Listed
Management Agreement" and a "Direct Management Agreement" (as defined below).
Martin Currie is a registered investment adviser under the U.S. Investment
Advisers Act of 1940, as amended (the "Advisers Act").

The Fund may invest up to 100% of the portion of the Fund's assets allocated for
investment in listed securities (the "Listed Investments") pursuant to the
Listed Management Agreement. The Fund pays Martin Currie a fee for its
investment management of the Fund's Listed Investments that is computed weekly
and payable monthly, at an annual rate of 0.70% of the Fund's average weekly net
assets consisting of Listed Investments up to US$315 million and 0.50% of the
Fund's average weekly net assets consisting of Listed Investments in excess of
US$315 million (the "Listed Investment Management Fee").

The Fund may invest up to 25% of the net proceeds of its offerings of its
outstanding common stock in direct equity investments (the "Direct Investments")
pursuant to the Direct Management Agreement. The Fund pays Martin Currie a fee
for its investment management of the Fund's Direct Investments that is computed
weekly and payable monthly at an annual rate of 2.00% of the Fund's average
weekly value of the Fund's assets consisting of Direct Investments (the "Direct
Investment Management Fee").

ANNUAL APPROVAL PROCESS

The Fund's Board of Directors (the "Board") is legally required to review and
re-approve the Listed Management Agreement and the Direct Management Agreement
(together, the "Advisory Agreements") 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 Martin Currie and reviews and evaluates
Martin Currie's professional experience, credentials and qualifications. This
information supplements the materials the Board received in preparation for the
Meeting described below.

In determining whether it was appropriate to approve the Advisory Agreements
during fiscal 2009, the Board requested from Martin Currie information that the
Board believed to be reasonably necessary to reach its conclusion. This
information together with the information provided to the Directors throughout
the course of the year formed the primary basis for the Directors'
determinations.

The Board met in executive session for the purpose of considering the approval
of the Advisory Agreements. During the executive session, the Directors reviewed
a memorandum which detailed the duties and responsibilities of the Directors
with respect to their consideration of the Advisory Agreements. The Directors
reviewed the contract renewal materials provided by Martin Currie, including,
but not limited to (1) an organizational overview of Martin Currie and
biographies of those personnel providing services to the Fund, (2) copies of the
Listed Management Agreement, as amended, and the Direct Management Agreement,
(3) a profitability analysis of Martin Currie, (4) financial statements

                                       34

<PAGE>

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


of Martin Currie, (5) Form ADV of Martin Currie, and (6) performance and fee
comparison data provided by Fundamental Data, an independent third party vendor
of such information.

The Board, consisting entirely of "independent directors" within the meaning of
the Investment Company Act of 1940, unanimously approved the Advisory Agreements
at an "in person" meeting held on June 11, 2009 (the "Meeting"). In evaluating
the Advisory Agreements, the Directors drew on materials provided to them by
Martin Currie. In deciding whether to renew the Advisory Agreements, the
Directors considered various factors, including (1) the nature, extent and
quality of the services provided by Martin Currie under the Advisory Agreements,
(2) the investment performance of the Fund's Listed Investments and Direct
Investments (together, the "Fund's 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 might be realized
if and as the Fund grows and whether the fee levels in the Advisory Agreements
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
Advisory Agreements Martin Currie is responsible for managing the Fund's
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 the Fund's 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 (i)
of companies for which the principal securities trading market is in China, (ii)
of companies for which the principal securities trading market is outside of
China, or constituting direct equity investments in companies organized outside
of China, that in both cases derive at least 50% of their revenues from goods or
services sold or produced or have at least 50% of their assets, in China or
(iii) constituting direct equity investments in companies organized in China.
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 Investments, and the
responsibilities of the investment and compliance personnel with respect to the
Fund. They also considered the resources, operational structures and practices
of Martin Currie in managing the Fund's portfolio, in monitoring and securing
the Fund's compliance with its investment objective 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, had been of high quality, and could be expected to
remain so.


                                       35

<PAGE>

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

2. Performance of the Fund's Investments

The Directors noted that, in view of the distinctive investment objective of the
Fund, the Fund's investment performance over the review period was above
average. 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 the Fund outperformed the MSCI Golden Dragon
Index for the one-, three-, five- and ten-year periods ending April 30, 2009 (at
both net asset value and market price). 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 above average.

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 general data on the
Fund's profitability to Martin Currie. 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 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. The Directors also discussed whether the
compensation of Martin Currie personnel was at an appropriate level to retain
and motivate employees.

In considering whether Martin Currie benefits in other ways from its
relationship with the Fund, the Directors noted that, other than the advisory
fees payable to Martin Currie under the Advisory Agreements, there is no other
investment advisory, brokerage, or other fee received or receivable by Martin
Currie or its affiliates 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 Listed Management Agreement Reflect
these Economies of Scale

On the basis of their discussions with Martin Currie's 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 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. The Board indicated that these economies of scale were
appropriately reflected in the breakpoint in the Fund's fee structure.


                                       36

<PAGE>

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

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., public
funds that invest primarily in China. The Directors found that, because of the
distinctive nature of the Fund, the universe of similar funds was limited; the
total number of comparable funds, which included the Fund, was nineteen. They
also noted that there are no other public funds with a dedicated direct
investment component that provide a fee comparison. It was noted that the
closest comparison would be private equity funds and those funds normally have a
base fee of 2% of assets and an incentive based fee based on gains realized on
portfolio investments, and thus, the Directors determined that the Direct
Investment Management Fee compares favorably with the fees of private equity
funds. It was also noted that, while the Direct Investment Management Fee is
higher than the fees paid by other public funds, the Listed Investment
Management Fee compared favorably with management fees of other similar public
funds and the effective combined fees under the Listed Management Agreement and
the Direct Management Agreement were lower than the fees for most other similar
public funds. The Directors noted that the Fund's total expense ratio was lower
than most of the comparable funds' total expense ratios. The Directors concluded
that the limited data available provided some indirect confirmation of the
reasonableness of Martin Currie's fees.

APPROVAL OF THE ADVISORY AGREEMENTS

The Directors approved the continuance of the Fund's Advisory Agreements with
Martin Currie 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 above
average, 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 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.


                                       37

<PAGE>

DIVIDENDS AND DISTRIBUTIONS;
SUMMARY OF 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 automatically be a participant (a "Participant") in the Plan
unless Computershare Trust Company, N.A., the Plan Agent, is otherwise
instructed by the shareholder in writing, to have all distributions, net of any
applicable U.S. withholding tax, paid in cash. 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 shareholder by Computershare Trust Company,
N.A., as paying agent. Shareholders who do not wish to have distributions
automatically reinvested should notify the Fund by contacting Computershare
Trust Company, N.A. c/o The China Fund, Inc. at P.O. Box 43078, Providence,
Rhode Island 02940-3078, by telephone at 1-800-426-5523 or via the Internet at
www.computershare.com/investor.

The Plan will operate whenever a dividend or distribution is declared payable
only in cash or in cash or shares of the Fund's common stock, but it will not
operate with respect to a dividend or distribution declared payable only in
shares of the Fund's common stock (including such a declaration that provides an
option to receive cash).

Computershare Trust Company, N.A ("Computershare" or the "Plan Agent") act as
Plan Agent. 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, non-
participants in the Plan will receive cash and participants in the Plan will
receive Common Stock. The shares of common stock issued by the Fund will be
valued at net asset value or, if the net asset value is less than 95% of the
market price on the valuation date, then shares will be valued at 95% of the
market price. If the net asset value per share of the common stock on the
valuation date exceeds the market price, participants will be issued shares at
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 the Fund should
declare a dividend or capital gains distribution payable only in cash, the Plan
Agent will, as purchasing agent for the participants, buy shares of common stock
in the open market, on the New York Stock Exchange or elsewhere, with the cash
in respect of such dividend or distribution, for the participants' accounts on,
or shortly after, the payment date.

Participants in the Plan have the option of making additional payments to the
Plan Agent annually, in any amount from $100 to $3,000 for investment in the
Fund's Common Stock. The Plan Agent 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 January 15 of each year
or the next trading day if January 15th is not a trading day. Participants may
make voluntary cash payments by sending a check (in U.S. dollars and drawn on a
U.S. Bank) made payable to "Computershare" along with a completed transaction
form which is attached to each statement a Participant receives. The Plan Agent
will not accept cash, traveler's checks, money orders or third party checks. Any
voluntary cash payments received more than thirty-five days prior to such date
will be returned by the Plan Agent, and interest will not be paid on any such
amounts. To avoid unnecessary cash accumulations, and also to allow ample time
for receipt and processing by the Plan Agent, participants should send in
voluntary cash payments to be received by the Plan Agent approximately two 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. In the event that a Participant's
check for a voluntary cash payment is returned unpaid for any reason, the Plan
Agent will consider the

                                       38

<PAGE>

DIVIDENDS AND DISTRIBUTIONS;
SUMMARY OF DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------


request for investment of such funds null and void, and shall immediately remove
from the Participant's account those shares, if any, purchased upon the prior
credit of such funds. The Plan Agent shall be entitled to sell shares to satisfy
any uncollected amount plus any applicable fees. If the net proceeds of the sale
of such shares are insufficient to satisfy the balance of such uncollected
amounts, the Plan Agent shall be entitled to sell such additional shares from
the Participant's account as may be necessary to satisfy the uncollected
balance.

The Plan Agent will confirm in writing, each trade for a Participant's account
and each share deposit or share transfer promptly after the account activity
occurs. The statement will show the number of shares held, the number of shares
for which dividends are being reinvested, any cash received for purchase of
shares, the price per share for any purchases or sales, and any applicable fees
for each transaction charged the Participant. In the event the only activity in
a Participant's account is the reinvestment of dividends, this activity will be
confirmed in a statement on at least a quarterly basis. If the Fund pays an
annual dividend and the only activity in a Participant's account for the
calendar year is the reinvestment of such dividend, the Participant will receive
an annual statement. These statements are a Participant's continuing record of
the cost basis of purchases and should be retained for income tax purposes.

The Plan Agent will hold shares of common stock acquired pursuant to the Plan in
non-certificated form in the name of the Participant for whom such shares are
being held and each Participant's proxy will include those shares of common
stock held pursuant to the Plan. The Plan Agent will forward to each Participant
any proxy solicitation material received by it. In the case of shareholders,
such as banks, brokers or nominees, which hold shares for others who are the
beneficial owners, the Plan Agent will administer the Plan on the basis of the
number of shares certified from time to time by the shareholder as representing
the total amount registered in the name of such Participants and held for the
account of beneficial owners who participate in the Plan. Upon a Participant's
Internet, telephone or written request, the Plan Agent will deliver to her or
him, without charge, a certificate or certificates representing all full shares
of common stock held by the Plan Agent pursuant to the Plan for the benefit of
such Participant.

Participants will not be charged a fee in connection with the reinvestment of
dividends or capital gains distributions. The Plan Agent's transaction fees for
the handling of the reinvestment of dividends and distributions will be paid by
the Fund. However, Participants will be charged a per share fee (currently
$0.05) incurred with respect to the Plan Agent's open market purchases in
connection with the reinvestment of dividends or capital gains distributions and
with purchases from voluntary cash payments made by the Participant. A $2.50
transaction fee and a per share fee of $0.15 will also be charged by the Plan
Agent upon any request for sale. Per share fees include any brokerage
commissions the Plan Agent is required to pay.

The automatic reinvestment of dividends and distributions will not relieve
participants of any income tax which may be payable on such dividends and
distributions. Participants will receive tax information annually for their
personal records and to help them prepare their federal income tax return. For
further information as to tax consequences of participation in the Plan,
Participants should consult with their own tax advisors.

These terms and conditions may be amended or supplemented by the Plan Agent or
the Fund at any time or times but, except when necessary or appropriate to
comply with applicable law or the rules or policies of the Securities and
Exchange Commission or any other regulatory authority, only by mailing to the
Shareholders appropriate written

                                       39

<PAGE>

DIVIDENDS AND DISTRIBUTIONS;
SUMMARY OF DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (CONTINUED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------


notice at least 30 days prior to the effective date thereof. The amendment or
supplement shall de deemed to be accepted by the Participants unless, prior to
the effective date thereof, the Plan Agent receives written notice of the
termination of a Participant's account under the Plan. Any such amendment may
include an appointment by the Plan Agent in its place and stead of a successor
Plan Agent under these terms and conditions, with full power and authority to
perform all or any of the acts to be performed by the Plan Agent under these
terms and conditions. Upon any such appointment of a successor Plan Agent for
the purposes of receiving dividends and distributions, the Fund will be
authorized to pay to such successor Plan Agent, for the Participants' accounts,
all dividends and distributions payable on the shares of common stock held in
the Participants' name or under the Plan for retention or application by such
successor Plan Agent as provided in these terms and conditions.

Requests for copies of the Plan, which sets forth all of the terms of the Plan,
and all correspondence concerning the Plan should be directed to Computershare
Trust Company, N.A., the Plan Agent for The China Fund, Inc., in writing at P.O.
Box 43078, Providence, Rhode Island, 02940-3078, by telephone at 1-800-426-5523
or via the Internet at www.computershare.com/investor.


                                       40

<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.

<Table>
<Caption>
                                                 PRINCIPAL           NUMBER OF
NAME (AGE) AND                                 OCCUPATION(S)       FUNDS IN THE
ADDRESS OF                      DIRECTOR       OR EMPLOYMENT        COMPLEX (1)    OTHER DIRECTORSHIPS/
DIRECTORS           POSITION(-    SINCE            DURING           OVERSEEN BY      TRUSTEESHIPS IN
OR NOMINEES FOR       S)HELD      (TERM          PAST FIVE         THE DIRECTOR       PUBLICLY HELD
DIRECTOR            WITH FUND     ENDS)            YEARS            OR NOMINEE          COMPANIES
- ---------------    -----------  --------  -----------------------  ------------  -----------------------
<S>                <C>          <C>       <C>                      <C>           <C>
James J.           Chairman of    1992    Attorney, Nomos (law           1       Fromageries Bel S.A.
  Lightburn        the           (2012)   firm) (2004-present);
  (66)...........  Board and              Attorney, member of
  13, Rue          Director               Hughes Hubbard & Reed
  Alphonse de                             (law firm)
  Neuville 75017
  Paris, France
                                          (1993-2004).
Michael F.         Director       1992    Chairman, Holland &            1       The Holland Balanced
  Holland (65)...                (2010)   Company L.L.C.                         Fund, Inc.; Reaves
  375 Park Avenue                         (investment adviser)                   Utility Income Fund;
  New York,                               (1995-present).                        The Taiwan Fund, Inc.;
  New York 10152                                                                 State Street Master
                                                                                 Funds and State Street
                                                                                 Institutional
                                                                                 Investment Trust
William C. Kirby   Director       2007    Director, John K.              1
  (59)...........                (2011)   Fairbank Center for
  Harvard                                 Chinese Studies,
  University                              Harvard University
  CGIS South                              (2006-present);
  Building                                Chairman, Harvard China
  1730 Cambridge                          Fund (2006-present);
  Street                                  Harvard University
  Cambridge, MA                           Distinguished Service
  02138                                   Professor
                                          (2006-present); Dean of
                                          the Faculty of Arts and
                                          Sciences Harvard
                                          University (2002-2006).
Joe O. Rogers      Director       1992    The Rogers Team LLC            1       The Taiwan Fund, Inc.
  (60)...........                (2010)   (real estate),                         (1986-present)
  2477 Foxwood                            organizing member (July
  Drive                                   2001-present); Manager,
  Chapel Hill, NC                         The J-Squared Team LLC
  27514                                   (real estate) (April
                                          2003-May 2004).
Nigel S. Tulloch   Director       1992    Director, The HSBC             1
  (63)...........                (2011)   China Fund Limited
  7 Circe Circle                          (1992-2005).
  Dalkeith
  WA6009
  Australia
</Table>



   (1) The term "Fund Complex" means two or more registered investment companies
       that share the same investment adviser or principal underwriter or hold
       themselves out to investors as related companies for the purposes of
       investment and investor services.


                                       41

<PAGE>

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

OFFICERS OF THE FUND

The following table provides information concerning each of the officers of the
Fund.

<Table>
<Caption>
                      POSITION(S)
NAME (AGE) AND            HELD       OFFICER    PRINCIPAL OCCUPATION(S) OR EMPLOYMENT
ADDRESS OF OFFICERS    WITH FUND      SINCE             DURING PAST FIVE YEARS
- -------------------   -----------   ---------   -------------------------------------
<S>                   <C>           <C>         <C>
Jamie Skinner (48)..  President     September   Director, Head of Client Services,
  Martin Currie                        2009     Martin Currie Investment Management
  Investment                                    Limited since October 2004.
  Management Saltire
  Court
  20 Castle Terrace
  Edinburgh EH1 2ES
  Scotland
  United Kingdom
Chris Ruffle (51)...  Vice           December   Director, MC China Limited (2006-
  Martin Currie       President        2008     present); Director, Heartland Capital
  Investment                                    Management Limited, (2006-present);
  Advisers Saltire                              Director, Martin Currie Investment
  Court                                         Management Limited (1995-2006).
  20 Castle Terrace
  Edinburgh, EH12ES
  Scotland
Shifeng Ke (44).....  Vice           December   Director, MC China Limited, (2006-
  Martin Currie       President        2008     present); Director, Heartland Capital
  Investment                                    Management Limited, (2006-present);
  Advisers Saltire                              Director, Martin Currie Investment
  Court                                         Management Limited (2004-2006).
  20 Castle Terrace
  Edinburgh, EH12ES
  Scotland
Paul F. Hahsey        Chief          October    Director, Foreside Compliance
  (37)..............  Compliance       2007     Services, LLC (2008-present);
  Foreside            Officer                   Compliance Manager, Foreside
  Compliance                                    Compliance Services, LLC (2005-2008);
  Services, LLC                                 Compliance Consultant, MetLife Group,
  Three Canal Plaza,                            Inc. (2001-2005).

  Suite 100,
  Portland, ME 04101
Laura F. Healy        Treasurer      December   Vice President, State Street Bank and
  (45)..............                   2008     Trust Company (July 2007-present);
  2 Avenue de                                   Senior Director, Investors Bank and
  Lafayette,                                    Trust Company (January 2002-July
  Boston, MA 02111                              2007).
Brian O'Sullivan      Assistant       March     Vice President, State Street Bank and
  (34)..............  Treasurer        2009     Trust Company (December 2006-
  801 Pennsylvania                              present);  Assistant Vice President,
  Ave                                           State Street Bank and Trust Company
  Kansas City, MO                               (March 2004-December 2006).
  64105
Elizabeth A. Watson   Secretary      December   Vice President and Managing Counsel,
  (55)..............                   2008     State Street Bank and Trust Company
  4 Copley Place,                               (August 2007-present); Vice President
  Boston, MA 02206                              and General Counsel (May 2004-July
                                                2007) and Chief Compliance Officer
                                                (July 2004-October 2006),
                                                Quantitative Investment Advisors,
                                                Inc.; Clerk (July 2004-July 2007),
                                                Chief Legal Officer (January 2007-
                                                July 2007), Chief Compliance Officer
                                                (July 2004-December 2005),
                                                Quantitative Group of Funds;
                                                President and General Counsel, U.S.
                                                Boston Capital Corporation (May 2004-
                                                July 2007); Principal, Watson &
                                                Associates (2002-2004).
Francine S. Hayes     Assistant        June     Vice President and Senior Counsel,
  (41)..............  Secretary        2005     State Street Bank and Trust Company
  4 Copley Place,                               (2004-present); Assistant Vice
  Boston, MA 02206                              President and Counsel, State Street
                                                Bank and Trust Company (2001-2004).
</Table>




                                       42

<PAGE>

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

UNITED STATES ADDRESS
The China Fund, Inc.
c/o State Street Bank and Trust Company
2 Avenue de Lafayette
P.O. Box 5049
Boston, MA 02206-5049
1-888-CHN-CALL (246-2255)

DIRECTORS AND OFFICERS
James J. Lightburn, Chairman of the Board and Director
Michael F. Holland, Director
William Kirby, Director
Joe O. Rogers, Director
Nigel S. Tulloch, Director
Jamie Skinner, President
Chris Ruffle, Vice President
Shifeng Ke, Vice President
Paul Hahesy, Chief Compliance Officer of the Fund
Laura Healy, Treasurer
Elizabeth A. Watson, Secretary
Brian O'Sullivan, Assistant Treasurer
Francine Hayes, Assistant Secretary

INVESTMENT MANAGER
Martin Currie Inc.

SHAREHOLDER SERVICING AGENT
The Altman Group

ADMINISTRATOR AND CUSTODIAN
State Street Bank and Trust Company

TRANSFER AGENT, DIVIDEND PAYING AGENT AND REGISTRAR
Computershare Trust Company, N.A.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young, 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.

(a)   Audit Fees

      For the fiscal year ended October 31, 2009, Ernst & Young LLP ("E&Y"), the
Fund's independent registered public accounting firm, billed the Fund aggregate
fees of US$85,000 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 year ended October 31, 2009, Deloitte & Touche LLP
("Deloitte"), the Fund's previous independent registered public accounting firm,
billed the Fund aggregate fees of US$35,700 for professional services rendered
for the review of financial statements included in the Fund's semi-annual report
to shareholders.

      For the fiscal year ended October 31, 2008, Deloitte, billed the Fund
aggregate fees of US$67,465 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, 2009, E&Y 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, 2009, 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, 2008, 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.
<PAGE>

(c)   Tax Fees

      For the fiscal year ended October 31, 2009, E&Y billed the Fund aggregate
fees of US$10,000 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, 2009, Deloitte billed the Fund
aggregate fees of US$0 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, 2008, Deloitte billed the Fund
aggregate fees of US$9,500  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 years ended October 31, 2009, E&Y did not bill the Fund for
other fees.

      For the fiscal years ended October 31, 2009 and October 31, 2008, Deloitte
did not bill the Fund for other fees.

(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 preapproval requirement with respect to the provision of non-auditing
services to the Fund by the Fund's independent accountants may be waived by the
Audit Committee under the circumstances described in the Securities Exchange Act
of 1934, as amended (the "1934 Act"). All of the audit and tax services
described above for which E&Y or Deloitte billed the Fund fees for the fiscal
years ended October 31, 2009 and October 31, 2008, respectively, were
pre-approved by the Audit Committee.

      For the fiscal years ended October 31, 2009 and October 31, 2008, the
Fund's Audit Committee did not waive the pre-approval requirement of any
non-audit services to be provided to the Fund by E&Y or Deloitte.

(f)   Not applicable.

(g)   Not applicable.

(h) The Fund's Audit Committee has determined that the provision of non-audit
services by E&Y (and, previously, by Deloitte) to State Street Bank and Trust
Company is compatible with maintaining E&Y's and 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 James J. Lightburn, Nigel Tulloch, Joe O. Rogers,
William Kirby 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 adviser, Martin Currie,
Inc.

<PAGE>

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

(a)(1) As of January 5, 2010, the portfolio managers of the registrant are as
follows:

CHRIS RUFFLE
PORTFOLIO MANAGER, CHINA AND TAIWAN
INVESTMENT EXPERIENCE: 22 YEARS

Mr. Ruffle joined Martin Currie Investment Management Ltd ("MCIM") in 1994 and
is currently a director. Fluent in Mandarin and Japanese, Chris has worked in
the Far East since 1983. He initially worked in Beijing, Shanghai and Australia
for Wogen Resources. He moved to Tokyo in 1987 to work as an analyst for Warburg
Securities, and established their Taiwan office in 1990. Chris joined Martin
Currie in 1994, moving to work in Taipei from 2000 and in Shanghai from 2002. In
2006, Chris, Ke Shifeng and Martin Currie established MC China Ltd - a joint
venture dedicated to running  Martin Currie's range of specialist China
strategies. With Shifeng, he co-manages Martin Currie's China small and mid cap
strategies.

KE SHIFENG
PORTFOLIO MANAGER, CHINA AND TAIWAN
INVESTMENT EXPERIENCE: 12 YEARS

Mr. Shifeng practiced law before moving to China's ministry of labor and social
security in 1990, where he worked to develop an investment policy for pension
funds. Mr. Shifeng joined Martin Currie's Asia team in 1997 and co-managed the
China Heartland Fund, which at that time was the only offshore fund to access
China's A-share market, until 2002. In 2006, Martin Currie, Chris Ruffle and Ke
Shifeng established MC China Ltd - a joint venture dedicated to running  Martin
Currie's range of specialist China strategies. He co-manages Martin Currie's
China small and mid cap strategies.

(a)(2)

CHRIS RUFFLE

As of October 31, 2009, Chris Ruffle managed 2 mutual funds with a total of
approximately US$590 million in assets; 6 pooled investment vehicles other than
mutual funds with a total of approximately US$1,152 million in assets; and 13
other accounts with a total of approximately US$1,937 million in assets.

Of these pooled investment vehicles, 4 vehicles with a total of approximately
US$342 million in assets, had performance based fees.

Of these other accounts, 4 accounts with a total of approximately US$524 million
in assets, had performance based fees.

KE SHIFENG

As of October 31, 2009, Ke Shifeng managed 2 mutual funds with a total of
approximately US$590 million in assets; 6 pooled investment vehicles other than
mutual funds with a total of approximately US$1,152 million in assets; and 13
other accounts with a total of approximately US$1,937 million in assets.

Of these pooled investment vehicles, 4 vehicles with a total of approximately
US$342 million in assets, had performance based fees.

Of these other accounts, 4 accounts with a total of approximately US$524 million
in assets, had performance based fees.

CONFLICTS OF INTEREST:

Messrs. Ruffle's and Shifeng's simultaneous management of the Fund and other
pooled investment vehicles and the other accounts noted above may present
actual or apparent conflicts of interest with respect to the allocation and
aggregation of securities orders

<PAGE>
 placed on behalf of the Fund and the other pooled investment vehicles and
accounts. The Investment Manager, however, believes that sufficient controls,
policies and systems are in place which address such conflicts.

The Investment Manager has adopted several policies that address potential
conflicts of interest, including best execution and trade allocation policies
that are designed to ensure (1) that portfolio management is seeking the best
price for portfolio securities under the circumstances, (2) fair and equitable
allocation of investment opportunities among accounts over time and (3)
compliance with applicable regulatory requirements. All accounts are to be
treated in a non-preferential manner, such that allocations are not based upon
account performance, fee structure or preference of the portfolio manager. In
addition, the Investment Manager has adopted a Code of Conduct that sets forth
policies regarding conflicts of interest.

COMPENSATION:

Messrs. Ruffle and Shifeng receive a fee based upon assets under management of
The China Fund as compensation for their management of The China Fund. In
addition to being portfolio managers of The China Fund, Messrs. Ruffle and
Shifeng serve in a similar capacity for other products advised by Martin Currie
(or an affiliate). For their service managing certain other products advised by
Martin Currie, Messrs. Ruffle and Shifeng receive a fee based upon assets under
management of that product and a fee based upon the absolute performance (i.e.
performance of the product overall and calculated without respect to a
benchmark) of that product.

OWNERSHIP OF SECURITIES: The following table sets forth, for each portfolio
manager, the aggregate dollar range of the registrant's equity securities
beneficially owned as of October 31, 2009.

<TABLE>
<CAPTION>
Portfolio Manager                   Dollar Range of Fund Shares Beneficially Owned
<S>                                 <C>
Chris Ruffle                        $500,001 - $1,000,000
Ke Shifeng                          $100,001 - $  500,000
</TABLE>

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).

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

(a)(3) Not applicable.

<PAGE>

(a)(4) Proxy voting policies and procedures of the Fund and its investment
       adviser 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/ Jamie Skinner
       -----------------------------------------
       Jamie Skinner
       President of The China Fund, Inc.

Date:  January 6, 2010

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/ Jamie Skinner
       -----------------------------------------
       Jamie Skinner
       President of The China Fund, Inc.

Date:  January 6, 2010

By:    /s/ Laura F. Healy
       -----------------------------------------
       Laura F. Healy
       Treasurer of The China Fund, Inc.

Date:  January 6, 2010
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>2
<FILENAME>b78231a1exv99wcert.txt
<DESCRIPTION>SECTION 302 CERTIFICATIONS
<TEXT>
<PAGE>
                                                                EXHIBIT 12(a)(2)

I, Jamie Skinner, 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(s) 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(s) 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.

Date: January 6, 2010

By:   /s/ Jamie Skinner
      --------------------------------------
      Jamie Skinner
      President (principal executive officer) of The China Fund, Inc.

<PAGE>

I, Laura F. Healy, Treasurer of The China Fund, Inc., certify that:

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

4.   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(s) 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(s) 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.

Date:  January 6, 2010

By:    /s/ Laura F. Healy
       ---------------------------------------
       Laura F. Healy
       Treasurer (principal financial officer) of The China Fund, Inc.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.906CERT
<SEQUENCE>3
<FILENAME>b78231a1exv99w906cert.txt
<DESCRIPTION>SECTION 906 CERTIFICATIONS
<TEXT>
<PAGE>
                                                                   EXHIBIT 12(b)

Jamie Skinner, Chief Executive Officer, and Laura F. Healy, 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/ Jamie Skinner
      -------------------------------
      Jamie Skinner
      Chief Executive Officer of The China Fund, Inc.

Date: January 6, 2010

By:   /s/ Laura F. Healy
      --------------------------------
      Laura F. Healy
      Chief Financial Officer of The China Fund, Inc.

Date: January 6, 2010
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CODE ETH
<SEQUENCE>4
<FILENAME>b78231a1exv99wcodeeth.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:

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

      -     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;

      -     compliance with applicable laws and governmental rules and
            regulations;

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

      -     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.

      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

                                       1
<PAGE>

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:

      -     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;

      -     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

      -     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:

      -     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;

      -     the receipt of any non-nominal gifts;

      -     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;

      -     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

      -     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

- -     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.

- -     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.

- -     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,

                                       2
<PAGE>

      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.

- -     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:

      -     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;

      -     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

      -     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:

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

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

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

      -     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.

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

      -     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.

                                       3
<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

                                       4
<PAGE>

                                    EXHIBIT A

Persons Covered by this Code of Ethics:

<TABLE>
<CAPTION>
                                   TITLE                                            NAME
- -----------------------------------------------------------------------------   --------------
<S>                                                                             <C>
President, Chief Executive Officer and Principal Executive Officer              Jamie Skinner
Treasurer, Chief Financial Officer and Principal Financial Officer              Laura F. Healy
</TABLE>


                                       5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.12(A)(4)
<SEQUENCE>5
<FILENAME>b78231a1exv99w12xayx4y.txt
<DESCRIPTION>PROXY VOTING POLICY AND PROCEDURES
<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. (the "Listed Investment Manager" and
the "Direct Investment Manager", and the "Investment Manager", 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
      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.

- ----------
(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.

                                       1
<PAGE>

      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

            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

- ----------
(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>

                               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 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.


                                       1
<PAGE>

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