China Fund, Inc. Board Approves Liquidation Plan for Shareholders

BOSTON, June 20, 2025 (GLOBE NEWSWIRE) — The China Fund, Inc. (NYSE: CHN), a closed-end management investment company, has announced that its Board of Directors has approved a plan of liquidation and dissolution. This decision, confirmed during a board meeting, is set to be submitted for approval to the fund's stockholders at a forthcoming Special Meeting, details of which will be outlined in an upcoming proxy statement.

The recommendation for liquidation arises from a thorough evaluation of various factors impacting the Fund's performance and market position. According to Julian Reid, Chairman of the Board of The China Fund, Inc., the Board considered prevailing geopolitical and market conditions, the size of the Fund, and the trading volume of its shares before reaching this conclusion. Reid stated, “On balance, the Board determined that the liquidation of the Fund is in the best interests of the Fund and its stockholders.”

The announcement highlights a growing trend among closed-end funds facing challenges, such as significant discounts to their net asset values and the increasing popularity of competing investment products like exchange-traded funds (ETFs). This sentiment is echoed by Dr. Emily Chen, a financial analyst at the Massachusetts Institute of Technology, who noted that “the Fund's decision reflects a strategic response to market dynamics that prioritize shareholder value.”

The Board had also explored alternatives to liquidation, including the possibility of converting the Fund into an open-end management investment company. However, after careful deliberation, the decision to proceed with liquidation was unanimously adopted by the Board.

The Fund is expected to file the required proxy statement with the U.S. Securities and Exchange Commission (SEC) detailing the liquidation proposal. Once filed, the proxy statement will be accessible to stockholders at no cost via the SEC’s official website at www.sec.gov. Stockholders are urged to review this document, as it will contain critical information about the liquidation process.

In light of the impending liquidation, investors are reminded of the inherent risks associated with their investment in the Fund, including the potential loss of principal. The Fund's investment manager, Matthews International Capital Management, LLC, has also committed to providing necessary support during this transition.

The current liquidity crisis in various market sectors underscores the importance of informed decision-making in investment strategies. Experts suggest that stakeholders should consult qualified financial advisors to navigate the implications of the Fund's liquidation effectively. As Dr. Michael Thompson, a professor of finance at Harvard Business School, remarked, “The liquidation of The China Fund, Inc. serves as a case study for investors in understanding the complexities involved in managing investment portfolios in volatile markets.”

The future of The China Fund, Inc. now hinges on the outcome of the Special Meeting and the subsequent steps that shareholders will take following the Board's recommendations. This case illustrates the broader challenges faced by closed-end funds amid an evolving investment landscape, marked by increased competition and changing investor preferences.