Taiwan Greater China Fund August Monthly Update.

Market Environment - August 2007

NEW YORK -- The Taiwan Greater China Fund's net asset value (NAV) in August outperformed both its primary benchmark, the Taiwan China Strategy Index (TCS Index) as computed by MSCI, and the total return of Taiwan Stock Exchange Index (TAIEX). The Fund's share price during the month underperformed the TCS Index but outperformed the TAIEX in US$ terms. The Fund's NAV increased 0.1% while its share price decreased by 1.4%, compared to a 0.7% decline in the TCS Index and a 2.8% decline in US$ terms of the TAIEX. The Fund's discount to net asset value averaged 11.6% during August, with a low of 8.1%, a high of 14.7%, and a closing value of 12.2%. During the month, the Taiwan dollar depreciated 0.4% against the U.S. dollar.

The Taiwan Stock Exchange was not immune to the travails and volatility suffered by equity markets globally in the wake of the concerns about the US sub-prime mortgage market and subsequent fears of a potential credit crunch, The index closed July at 9,287 having already been buffeted for a few days by the beginning of the downturn. The worst of the storm was felt in the middle of month, when on August 17th, the index hit an intra-day low just below the 8,000 mark. Since then, the index climbed back over the next two weeks to close August at 8,982 albeit with continued volatility. As could be expected in an effort to marshal liquidity, foreign investors in the Taiwan markets net sold Taiwan shares, pulling a record US$6.9 billion out of the market in the four weeks prior to August 20th. However, during the last week of the month, foreign investors net bought US$600 million in securities, reversing the trend. For the year through the end of August, foreign investors have purchased a net US$2.5 billion in shares, bringing the total market capitalization of foreign ownership of the Taiwan Stock Exchange to US$215 billion or 33.1% of the total.

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(*) Past results are not necessarily indicative of future performance of the Fund. Rates of return and principal value will fluctuate and you may have a gain or a loss when you sell shares. Performance figures reflect reinvested dividends and capital gains. Dividends and capital gains reinvested are on a net basis, after the deduction of applicable taxes. The returns shown above for the TCS Index are also calculated on a net basis but the TAIEX is measured on a gross return basis, with the full reinvestment of all dividends received. February 27, 2004 is a significant date for measurement as it is when the Fund fully implemented its China-focused investment strategy. Returns for the Fund, TCS Index and TAIEX in US Dollars. Source: Bloomberg except MSCI for TCS Index. For more information and important disclosures on the TCS Index please see the Fund's website at http://www.taiwangreaterchinafund.com/. Returns, except 12-month period, are not annualized.

(**)Total returns reflect changes in NAV per share during each period and assume that dividends and capital gains distributions, if any, were reinvested. These percentages are not an indication of the performance of a shareholder's investment in the Fund based on market price

Portfolio Management

The Fund holds about 100% of its assets in equities. Such holdings are well diversified among top quality stocks, with investment decisions based on a fundamental approach to securities and economic analysis. Portfolio holdings and sector composition are subject to change.

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Per Share Standing at August 31, 2007:

NAV        NYSE
$8.26      $7.25

The opinions and forecasts expressed are those of the portfolio manager and may not actually come to pass. The information presented is subject to change at any time, based on market and other conditions and should not be construed as a recommendation of a particular security. Fund shares are not FDIC insured and are not deposits or other obligations of, or guaranteed by, any bank. Fund shares involve investment risk, including possible loss of principal.