Taiwan Greater China Fund Monthly Update.

Market Environment -- January 2007

NEW YORK -- The Taiwan Greater China Fund's net asset value (NAV) declined in January but outperformed its primary benchmark, the Taiwan China Strategy Index (TCS Index) as computed by MSCI, as well as the Taiwan Stock Exchange Index (TAIEX). The Fund's share price beat the TAIEX in US$ terms but lagged the TCS Index. The Fund's NAV decreased 2.0% while its share price declined 2.6%, compared to a 2.4% decline of the TCS Index and a 2.7% decrease in US$ terms of the TAIEX. The Fund's discount to net asset value averaged 5.8% during January as opposed to 7.0% in December, with a low of 4.0%, a high of 7.5%, and a closing value of 7.1%. During the month, the Taiwan dollar depreciated 1.1% against the U.S. dollar.

After closing at a six year high at the end of December, the TAIEX consolidated during January. Electronics stocks within the index declined 2%, while financials stocks were significant underperformers during the month, declining 3.2% in US$ terms. Taiwan's exports, however, showed unexpected strength in January, increasing 17.9% over January 2006. In December 2006, YOY export growth was 9.1% and the median forecast of 15 economists for January 2007 was 10.2%. The export surge was due primarily to heavy demand from China ahead of Chinese New Year, as well as global demand for computers and other IT products. Quanta, a major producer of notebook computers said its January shipments were 52% higher than a year earlier. January figures, though, do include some additional working days due to the timing of the Chinese New Year holiday. Overall, the Taiwan government forecasts 2007 exports to grow at only 6.1% compared to a 12.9% growth during 2006, in anticipation of a slowing US economy.

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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 January 31, 2007:
NAV                    NYSE
-----                  -----
$6.93                  $6.44

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.