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JARDINE FLEMING
CHINA REGION FUND, INC.
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SEMI-ANNUAL REPORT
JUNE 30, 2002
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JARDINE FLEMING
CHINA REGION FUND, INC.
CONTENTS
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PAGE
Objectives 1
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Management 1
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Market Information 1
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Highlights 2
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Chairman's Statement 3
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Investment Review 4
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Major Holdings 8
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Investment Portfolio 10
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Statement of Assets and Liabilities 15
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Statement of Operations 16
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Statements of Changes in Net Assets 17
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Financial Highlights 18
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Notes to Financial Statements 19
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Results of the Annual Shareholders Meeting 23
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Other Information 23
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Dividend Reinvestment and Cash Purchase Plan 24
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Directors and Administration 25
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JARDINE FLEMING
CHINA REGION FUND, INC.
OBJECTIVES
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Jardine Fleming China Region Fund, Inc. (the "Fund") seeks to achieve
long-term capital appreciation through investments primarily in equity
securities of companies with substantial assets in, or revenues derived from,
the People's Republic of China (PRC or China), Hong Kong, Taiwan, and
Macau--collectively, the China Region.
The Fund provides investors with an opportunity to participate in the
growing economies of the China Region, especially that of the PRC, although
investments are expected to be predominantly in securities listed on the Stock
Exchange of Hong Kong. Hong Kong enterprises have made substantial investments
in the PRC, in Guangdong Province in particular, where abundant cheap labor and
land are available. Hong Kong is also the largest trading partner of the PRC.
The economies of the PRC, Hong Kong, Taiwan, and Macau have become
increasingly linked over the past 10 years and are expected to become further
integrated now that Hong Kong and Macau have reverted to Chinese sovereignty.
Investments made by the Fund will seek to take advantage of opportunities
resulting from this linkage among the China Region markets.
MANAGEMENT
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JF International Management Inc. ("JFIM") (formerly Jardine Fleming
International Management Inc.) is the investment management company appointed to
advise and manage the Fund's portfolio. With the completion of the merger
between Robert Fleming Holdings Ltd. and The Chase Manhattan Corporation
("Chase") in October 2000, and the subsequent merger between Chase and J.P.
Morgan & Co. Incorporated in January 2001, JFIM became part of J.P. Morgan Chase
& Co. ("JPMC"), one of the world's premier financial services institutions. In
asset management, JPMC will operate globally under the name of JPMorgan Fleming
Asset Management ("JPMFAM"), although in Asia it will use the sub-brand JF Asset
Management. Funds under management for the global asset management business of
JPMFAM were US $541 billion as of June 30, 2002.
Chung Man Wing is the portfolio manager of the Fund. Mr. Chung joined JFIM
in late 2000 as head of the Greater China team. Previously, he was chief
investment officer at HSBC Asset Management (Asia).
MARKET INFORMATION
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THE FUND IS LISTED ON THE NEW YORK STOCK EXCHANGE (SYMBOL JFC). THE SHARE PRICE
IS PUBLISHED IN
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[] The Wall Street Journal (daily)
[] The Asian Wall Street Journal (daily)
[] Reuters (page JFC)
THE NET ASSET VALUE IS PUBLISHED IN
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[] The Wall Street Journal under "Closed-End Funds" (every Monday)
[] The Asian Wall Street Journal under "Closed-End Funds" (every Monday)
[] South China Morning Post in Hong Kong (first Thursday of every month)
[] Reuters (page JFC)
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JARDINE FLEMING
CHINA REGION FUND, INC.
HIGHLIGHTS
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JUNE 30, 2002 December 31, 2001
US$ US$
--------------------------------------------------------------------------------
Net Assets $37.9 MILLION $38.2 million
Net Asset Value Per Share $8.20 $8.14
MARKET DATA
Share Price on the
New York Stock Exchange $6.90 $6.57
Discount to Net Asset Value -15.9% -19.3%
TOTAL RETURN FOR THE PERIOD ENDED JUNE 30, 2002
--------------------------------------------------------------------------------
Net Asset Value 0.7%
Share Price 5.0%
JFC Benchmark Index* -4.8%
MSCI Hong Kong Index (Total) -4.7%
BNP Prime Peregrine China Index 1.9%
Taiwan Weighted Index -2.8%
NET ASSET VALUE AND SHARE PRICE VS. TARGET INDEX
JULY 16, 1992 = 100
[GRAPHICS OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
JF CHINA JFC
NET ASSET VALUE SHARE PRICE BENCHMARK INDEX*
7/16/92** 100 100 100
7/27/92 99.78 98.33 89.81
8/28/92 100.43 94.2 91.11
9/30/92 100.94 80 79.15
10/30/92 108.6 92.53 90.31
11/30/92 111.05 96.67 91.95
12/31/92 109.29 93.02 90.21
1/29/93 110.16 96.37 87.65
2/26/93 117.49 98.85 97.55
3/31/93 120.54 108.9 94.28
4/30/93 125.48 118.95 97.84
5/28/93 129.84 122.3 92.05
6/30/93 122.35 120.09 83.13
7/30/93 120.67 116.73 77.96
8/27/93 124.75 129.29 82.27
9/30/93 128.39 126.81 84.74
10/29/93 147.17 150.32 102.63
11/26/93 156.34 166.71 113.9
12/31/93 188.96 187.39 128.98
1/28/94 175.52 183.65 111.34
2/25/94 158.91 148.41 103.16
3/31/94 136.56 136.08 91.08
4/29/94 132.14 134.18 87.3
5/27/94 136.06 148.41 90.89
6/30/94 123.99 123.29 82.84
7/29/94 130.78 126.47 87.48
8/26/94 130.78 135.83 92.18
9/30/94 132.98 129.56 94.14
10/28/94 132.34 126.47 89.14
11/23/94 124.35 110.76 80.63
12/30/94 115.72 94.29 72.23
1/27/95 101.37 90.1 62.02
2/24/95 108.27 98.48 66.92
3/31/95 109.37 94.29 67.13
4/30/95 105.33 90.1 63.43
5/26/95 113.68 107.01 70.35
6/30/95 111.93 92.33 69.32
7/28/95 116.08 95.51 73.64
8/31/95 108.89 88.13 69.66
9/30/95 112.85 94.42 68.82
10/31/95 110.46 89.22 67.02
11/30/95 104.65 85.02 64.06
12/29/95 103.54 84.52 63.34
1/31/96 112.35 107.76 72.64
2/29/96 113.37 95.08 73.99
3/31/96 110.12 95.08 70.65
4/30/96 111.7 96.18 68.52
5/31/96 112.25 94.07 71.64
6/30/96 111.98 87.73 71.47
7/31/96 110.21 81.39 71.69
8/30/96 110.68 84.52 73.69
9/30/96 112.16 85.62 74.73
10/31/96 113.18 83.51 77.45
11/29/96 125.79 90.86 89.15
12/31/96 132.84 95.25 97.43
1/31/97 135.63 99.49 99.27
2/28/97 138.13 99.49 100.73
3/27/97 133.96 99.49 99.65
4/30/97 148.44 106.94 106.53
5/31/97 159.48 115.41 111.06
6/30/97 170.35 124.89 114.45
7/31/97 178.89 130.22 117.43
8/31/97 187.33 126.5 121.24
9/30/97 167.65 124.38 116.19
10/31/97 124.12 87.29 88.5
11/28/97 107.96 84.67 82.92
12/31/97 110 82.89 83.73
1/30/98 85.88 79.75 70.48
2/28/98 114.29 88.25 86.61
3/31/98 107.58 80.77 83.66
4/30/98 98.27 74.9 76.62
5/29/98 83.74 60.57 69.04
6/30/98 72.75 54.24 63.53
7/31/98 57.28 44.1 56.17
8/31/98 51.32 29.76 50.16
9/30/98 60.82 40.91 56.88
10/30/98 70.51 50.48 65.12
11/30/98 72.47 53.14 64.68
12/31/98 69.86 46.76 61.44
1/29/99 63.27 45.7 55.92
2/26/99 63.43 44.63 56.22
3/31/99 69.67 47.82 62.49
4/30/99 82.25 62.17 74.33
5/31/99 76.94 57.39 69.97
6/30/99 90.35 74.39 80.74
7/30/99 84.95 60.57 75.8
8/31/99 88.77 61.11 78.44
9/30/99 84.11 56.86 73.92
10/29/99 87.65 59.51 75.69
11/30/99 99.29 68.01 82.85
12/31/99 110.11 72.07 90.38
1/31/00 108.99 69.94 90.33
2/29/00 113.38 73.68 91.87
3/31/00 118.43 75.28 96.89
4/28/00 100.86 64.07 87.24
5/31/00 94.69 62.46 82.27
6/30/00 98.52 66.73 85.48
7/31/00 102.07 69.94 89.73
8/31/00 103.94 71.54 88.73
9/29/00 95.34 66.73 79.73
10/31/00 87.4 64.07 72.78
11/30/00 83 61.93 68.48
12/29/00 87.3 60.33 71.12
1/31/01 95.81 71.33 78.24
2/28/01 91.42 67.57 76.15
3/30/01 84.59 60.73 69.8
4/30/01 86.09 63.89 69.03
5/31/01 87.12 66.46 67.29
6/29/01 84.69 66.2 65.3
7/31/01 78.98 60.22 61.21
8/31/01 73.1 54.24 57.47
9/28/01 66.37 50.83 48.34
10/31/01 71.51 51.34 51.1
11/30/01 76.18 55.95 57.64
12/31/01 76.09 56.12 63.41
1/31/02 75.34 55.52 63.09
2/28/02 75.53 57.92 60.84
3/28/02 81.23 63.64 65.43
4/30/02 80.95 64.92 66.68
5/31/02 81.88 65.18 64.55
6/28/02 76.65 58.94 60.36
* JFC Benchmark: MSCI Golden Dragon Index (Total)
Prior to March 2001: 25% Taiwan Weighted Index, 20% BNP Prime Peregrine China
Index, 50% MSCI Hong Kong Index, 5% HSBC
Prior to March 1999: 60% Hong Kong All Ordinaries Index, 30% Credit Lyonnais
Securities Asia All China B Index, 10% Taiwan Weighted
Index
Prior to January 1997: Peregrine Greater China Index
** Commencement of operations
Source: Jardine Fleming
-- 2 --
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JARDINE FLEMING
CHINA REGION FUND, INC.
CHAIRMAN'S STATEMENT
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Dear Shareholders,
The first half of 2002 has been a roller coaster ride for the world's equity
markets. Investor confidence was rattled as further revelations of US corporate
malpractice and accounting malfeasance surfaced. Added to this in June major
markets have experienced significant declines from which neither Taiwan nor Hong
Kong was immune. China was an exception given its low correlation with the
developed markets and strong macro momentum.
Despite these difficult market conditions, the Fund managed to achieve a
positive return with the net asset value up 0.7% and share price up 5% over the
6-month period under review, compared to the benchmark return of -4.8% over the
same period in USD terms. The main contribution to the Fund's outperformance has
been through superior stock selection in both Hong Kong and China-related
companies, although this was somewhat offset by overweight positions in
Taiwanese technology and financials. Asset allocation was also positive due to
an overweight position in China and an underweight in Taiwan.
During the 6-month period, the Fund repurchased a total of 67,855 shares in
the open market at a per-share weighted average discount to NAV of 13.87%. The
Board noted that the discount of the Fund has improved to a level as low as
11.4% and prevailed at a level below 20% throughout the period. The Board has
and will continue to actively manage the discount to net asset value at which
the Fund's shares trade in the market.
We expect to see continued market volatility in the second half of the year,
whilst the direction of the Greater China markets will be largely contingent
upon the direction of the US recovery. While we do not expect an immediate
significant market upturn, we are finding a greater number of interesting
investment opportunities for which the Fund is well positioned to capture the
net beneficiaries in the current environment.
Respectfully submitted,
/s/ THE RT. HON. THE EARL OF CROMER
The Rt. Hon. The Earl of Cromer
Chairman
August 8, 2002
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JARDINE FLEMING
CHINA REGION FUND, INC.
INVESTMENT REVIEW
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Dear Shareholders:
The Greater China markets have shown divergent performance in the first half
of 2002. Taiwan had a good first quarter on the back of global recovery, but
this technology-heavy market suffered in the second quarter alongside global
technology stocks. In Hong Kong, the market trended downward amidst continued
weakness in the domestic economy and lackluster earnings. On the other hand,
domestic China shares outperformed as Beijing's cancellation of the plan to
dispose of state-owned shares to the public was perceived by local investors as
a response by the Chinese Government to support falling domestic stock markets.
The Fund's benchmark, the MSCI Golden Dragon Index, fell 4.8% over the
6-month period calculated in US dollars. Thanks to good stock selection, the
Fund managed to achieve a positive return both in terms of net asset value (up
0.7%) and share price (up 5%) over this period, thereby substantially
outperforming the benchmark. The most positive impact from stock selection was
derived in Hong Kong, where the Fund's overweight position in quality mid-cap
stocks, such as Fountain Set, Techtronic and Hung Hing Printing, boosted
performance. The overweightings in large-cap Chinese oil stocks, such as CNOOC,
also helped performance. However, stock selection in Taiwan somewhat detracted
value, as the concentrated overweight positions in technology stocks and
underweight in financials adversely affected performance. On the other hand,
asset allocation provided a positive contribution as did the small overweight in
China and underweight in Taiwan.
In Hong Kong, the Hang Seng Index fell 7.0% over this 6-month period.
Property counters significantly underperformed amid continued deflation despite
the bottoming of the interest rate cycle. Blue chip stocks in general and
large-cap telecom-related counters in particular underperformed, as they
suffered from structural difficulties, lack of a new earnings driver and gloomy
growth prospects, exacerbated by corporate problems in the US. Banks and
utilities outperformed given their defensive characteristics, despite their
muted earnings outlook. In addition, selected quality mid-cap stocks continued
to outperform the broad market given their strong earnings growth potential and
reasonable valuations.
On the macro front, the Hong Kong economy continued to be sluggish. Amid a
deflationary environment, asset prices continued to fall, private consumption
remained weak while unemployment worsened. On a slightly positive note, the
recent USD weakness, if sustained, should help alleviate the deflationary
pressure and regain some of the lost competitiveness.
The large Chinese telecommunication stocks were under pressure as results
failed to excite and as policy uncertainty persisted. On the other hand, low
PER, cyclical H-shares outperformed as China was regarded as a "safe haven"
against the external volatility and as investors took their cue from the
resilience of the China A-share markets, which were supported by the Chinese
government's decision to suspend the sale of state-owned enterprise shares. The
China oil and petrochemical counters Petrochina and Sinopec were sought after
for their dividend yields as well as the positive impact of a higher oil price.
In Mainland China, the decline of the USD and the outperformance of China's
exports enabled Chinese stocks to stay resilient amid volatility in global
markets. The ongoing technology crash encouraged investors to switch into safer
areas, to the benefit of the China stock markets. The BNP Prime Peregrine China
Index was up 1.9% over the first half of 2002 in USD terms.
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JARDINE FLEMING
CHINA REGION FUND, INC.
INVESTMENT REVIEW (CONTINUED)
--------------------------------------------------------------------------------
China macro data points to export recovery and acceleration in growth. Fixed
asset investment rose by 25% in the first five months of 2002 while retail sales
rose 8.5%. Deflation eased somewhat to -1.1% in May from -1.3%. We expect
consumption spending to remain strong in the second half of the year. As China's
political succession accelerates, politically motivated announcements relating
to the financial sector have been appearing with rising frequency. While these
announcements have limited substance, they do impact the market in the short
term. The cancellation of the planned sell-down of state-held A-shares does not
change the poor fundamentals and high valuations, but does remove the liquidity
overhang.
The Taiwan Weighted Index rose 11.1% in the 1st quarter, but the gain was
completely wiped out by the 16.4% plunge in the 2nd quarter alongside NASDAQ,
which slumped to its lowest close in five years, resulting in a net loss of 7.2%
for the 6-month period under review. The 6-month decline narrowed to 2.8% in USD
terms, due to the appreciation of the TWD against the USD. The focus of investor
attention shifted away from electronic counters to non-tech companies like
petrochemical, steel and other commodity-related counters due to uncertainty
over the recovery of the US economy, the lack of visibility in the demand of
leading IT companies, as well as investors concerns about the possible negative
impact of employee stock options on technology shares valuations.
Broad weakness displayed in the personal computer field forced both AMD and
Apple Computer to lower their second quarter 2002 sales projections. Taiwan PC
makers prognosticate further profit erosion as their clients pressure them to
lower prices. Additionally, the poor performance of NASDAQ continued to dampen
the confidence of local retail investors. Investors sought refuge in traditional
stocks; in the chemical, textile, food, transport, bicycle, and banking sectors,
resulting in strong relative outperformance in these sectors.
OUTLOOK AND STRATEGY
The accounting issues of US companies as well as the lack of confidence in
the market will continue to weigh on the Asian markets. However, we are seeing
good value emerging amongst the Greater China stock universe after the recent
corrections. Although the broad markets may still be clouded in the near term,
we still see opportunities in selected counters.
Given the external uncertainty, the severe deflationary pressure and the
lack of earnings momentum in Hong Kong, blue chip stocks will stay range bound
and the Hang Seng Index is likely to remain in the doldrums during the summer
months. From a fund flow and asset allocation perspective, Hong Kong still does
not stand out within the region as it lacks a catalyst while market valuation is
only fair. Given the uncertainty about the US economic recovery and new issue
supply from the likes of Bank of China and China Telecom, Hong Kong market
upside may remain capped, while volatility will stay high. When a clearer
picture emerges out of the US, the other North Asian markets are likely to
benefit more given their industrial structure and better corporate prospects.
Under these circumstances, our strategy for Hong Kong will be to concentrate on
stock selection, where we remain focused on those well-managed mid-cap companies
that have visibly strong earnings growth prospect and cheap valuations.
Improvements in Hong Kong's external trade and in the economic outlook generally
may become more obvious in the second half of the year. We expect domestic
consumption in Hong Kong and China will be the main investment stories later
this year.
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JARDINE FLEMING
CHINA REGION FUND, INC.
INVESTMENT REVIEW (CONTINUED)
--------------------------------------------------------------------------------
The US market is pricing in the possibility of slower recovery. If so,
China's exports should slow in the coming months. However, gains in market share
are playing an increasingly important role in China's export strength. Our focus
will continue to be on the domestic consumer plays in China, particularly those
that have a good franchise and are well positioned to tap the fast growing
consumer market in the Mainland, including selected quality "H" shares and
"private chips". These stocks should benefit from an increase in funds flow
because they are perceived by investors to be safer places given China's bullish
macro outlook and their relatively defensive characteristics. We also think that
the petrochemical stocks are due for a rally on the recovery in end-product
prices.
The Beidaihe summit at the end of July should finalize most of the political
succession issues, although the outcome of those discussions has not been
announced. The biggest uncertainty is on the role of Jiang Zeming in the next
government. The consensus is that he will retain the chairmanship of the Party's
central military commission, allowing him to retain influence over strategic
decisions, but hand over the running of the Party to Hu Jintao. If Jiang decides
to retain control of the Party also, it would raise the risk on China. To
encourage a favorable environment for the political transition in September, the
government may make more announcements favorable to the market in the third
quarter, while any negative surprises on price deregulation are likely to be
postponed until the fourth quarter.
In Taiwan, the Central Bank has cut the discount rate again by 25 basis
points to a record low of 1.875%. With monetary policy expected to remain loose
and external demand improving, the stock market remains liquidity-driven with
good fundamental support. As the banks have started cleaning up their
non-performing loans more aggressively, while the sector has underperformed the
market year-to-date, we have been gradually increasing our exposure to the
financials, together with selected China concept manufacturing stocks. We
continue to favor heavily blue chips with a high dividend yield. We also like
local plays and small-cap stocks with high growth potential.
After the recent sell down, value appears to be emerging among selected
quality technology companies in Taiwan. Although the uncertainty on order books
may last for another quarter, long-term prospects for this sector remain intact.
Within IT, we believe that the leading or first-tier companies will deliver the
better results as recovery in global technology takes hold. However, we
anticipate consolidation amongst IT stocks in the near term as the seasonally
weak second quarter continues to dampen market sentiment. Thereafter, we expect
demand for motherboards and notebooks to increase after Intel aggressively cuts
P4 CPU prices. For the PC segment, orders remain solid in the second quarter,
despite anticipated seasonal weakness.
We have transferred exposure from high valuation stocks to low valuation
stocks and high return-to-equity stocks in Taiwan, and will continue to monitor
closely the valuation and growth outlook of companies, regardless of whether
they are technology or traditional stocks.
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[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
INVESTMENT REVIEW (CONTINUED)
--------------------------------------------------------------------------------
In terms of asset allocation of the Fund, we remain underweight in Taiwan,
and overweight China and China-related counters.
Respectfully submitted,
/s/ A. DOUGLAS EU
A. Douglas Eu
President
August 8, 2002
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JARDINE FLEMING
CHINA REGION FUND, INC.
MAJOR HOLDINGS
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AT JUNE 30, 2002
------------------------------------------------------------------------------------------------------
% of Net
Assets
-------------------------------------------------------------------------------------------------------
FOUNTAIN SET HOLDINGS 5.9
Fountain Set (Holdings) Limited, through its subsidiaries, manufactures and
sells knitted fabrics, sewing threads, dyed yarns, and garments. The company
also provides knitting, dyeing, printing and fabric finishing services and
trades raw yarns.
CHAODA MODERN AGRICULTURE HOLDINGS 4.4
Chaoda Modern Agriculture (Holdings) Limited, through its subsidiaries,
grows and sells crops, breeds and sells livestocks and sells ancillary food
products.
CHINA INSURANCE INTERNATIONAL HOLDINGS 3.8
China Insurance International Holdings, through its subsidiaries,
underwrites treaty and facultative reinsurance of all classes of general
business, including non-marine and marine, and certain classes of long-term
business. The company also carries on reinsurance broking and, to support its
reinsurance activities, invests in securities, money market and properties.
TAIWAN SEMICONDUCTOR MANUFACTURING 3.3
Taiwan Semiconductor Manufacturing is the world's first and largest
dedicated integrated circuit foundry. The company currently operates two
6-inch-wafer fabs and three 8-inch-wafer fabs and owns two-thirds of WaferTech,
an 8-inch-wafer fab in Washington State. TSM benefits from the increase in
outsourcing by major IC companies around the world.
GLOBAL BIO-CHEM TECHNOLOGY GROUP 3.1
Global Bio-chem Technology Group Company Limited manufactures corn-refined
and corn-based biochemical products in China. The company also researches and
develops corn-based biochemical products. The products mainly comprise corn
starch, corn gluten, corn oil, feed, modified starch, corn sweeteners, and amino
acids.
SAMSUNG ELECTRONICS 3.1
Samsung Electronics Company Limited manufactures a wide range of consumer
and industrial electronic equipment and products such as semiconductors,
personal computers, peripherals, monitors, televisions, and home appliances
including air conditioners and microwave ovens. The company also produces
Internet access network systems and telecommunications equipment including
mobile phones.
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JARDINE FLEMING
CHINA REGION FUND, INC.
MAJOR HOLDINGS (CONTINUED)
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AT JUNE 30, 2002
-------------------------------------------------------------------------------------------------------
% of Net
Assets
-------------------------------------------------------------------------------------------------------
TECHTRONIC INDUSTRIES 3.0
Techtronic Industries Company Limited, through its subsidiaries,
manufactures and trades electrical, electronic, and professional industrial
products.
HOPEWELL HOLDINGS 3.0
Hopwell Holdings Limited, through its subsidiaries, develops and invests in
properties. The company also operates hotels, provides agency, construction, and
project management services as well as invests in treasuries and infrastructure
projects.
TCL INTERNATIONAL HOLDINGS 2.8
TCL International Holdings Limited, through its subsidiaries, manufactures
television sets and trades related components, manufactures audio visual
products, and manufactures and trades home electrical appliances. The company
manufactures personal computers and peripheral products and operates information
technology and other business.
COSCO PACIFIC 2.6
Cosco Pacific Limited, through its subsidiaries, provides shipping container
leasing services worldwide. The company also operates container terminals and
provides container handling, storage, transportation and management services, as
well as depot handling and stevedoring services.
-------------------------------------------------------------------------------------------------------
TOTAL MAJOR HOLDINGS 35.0
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[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
INVESTMENT PORTFOLIO
-------------------------------------------------------------------------------------------------------
AT JUNE 30, 2002 (UNAUDITED)
-------------------------------------------------------------------------------------------------------
Holdings Market
(in shares Value
Description or par) (in US$)
-------------------------------------------------------------------------------------------------------
COMMON STOCKS (UNLESS OTHERWISE NOTED)
-------------------------------------------------------------------------------------------------------
CHINA (22.2%)
-------------------------------------------------------------------------------------------------------
AIRLINES (3.5%)
China Eastern Airlines 'H' 4,900,000 822,970
China National Aviation 2,100,000 503,474
-------------------------------------------------------------------------------------------------------
1,326,444
-------------------------------------------------------------------------------------------------------
BIOTECHNOLOGY (2.2%)
Tong Ren Tang Technologies 'H' 790,000 820,406
-------------------------------------------------------------------------------------------------------
CHEMICALS (3.0%)
* Sinopec Beijing Yanhua Petrochemical 'H' 3,200,000 471,807
* Sinopec Shanghai Petrochemical 'H' 4,500,000 669,248
-------------------------------------------------------------------------------------------------------
1,141,055
-------------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES (2.8%)
TCL International Holdings 3,750,000 1,057,719
-------------------------------------------------------------------------------------------------------
MACHINERY (1.3%)
China International Marine Containers 'B' 105,000 123,984
Shanghai Zhenhua Port Machinery 'B' 370,000 368,150
-------------------------------------------------------------------------------------------------------
492,134
-------------------------------------------------------------------------------------------------------
OIL & GAS (3.8%)
* China Petroleum and Chemical 'H' 3,200,000 570,271
CNOOC 650,000 870,856
-------------------------------------------------------------------------------------------------------
1,441,127
-------------------------------------------------------------------------------------------------------
REAL ESTATE (1.0%)
China Vanke 'B' 360,000 392,318
-------------------------------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE (2.6%)
Cosco Pacific 1,250,000 993,615
-------------------------------------------------------------------------------------------------------
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[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
INVESTMENT PORTFOLIO (CONTINUED)
-------------------------------------------------------------------------------------------------------
AT JUNE 30, 2002 (UNAUDITED)
-------------------------------------------------------------------------------------------------------
Holdings Market
(in shares Value
Description or par) (in US$)
-------------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (2.0%)
* China Mobile (Hong Kong) 250,000 740,404
-------------------------------------------------------------------------------------------------------
TOTAL CHINA (COST $8,283,499) 8,405,222
-------------------------------------------------------------------------------------------------------
HONG KONG (40.5%)
-------------------------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (1.6%)
TPV Technology 1,700,000 615,721
-------------------------------------------------------------------------------------------------------
CONTAINERS & PACKAGING (3.7%)
Hung Hing Printing Group 1,150,000 759,314
Singamas Container Holdings 3,124,000 652,853
-------------------------------------------------------------------------------------------------------
1,412,167
-------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (3.0%)
Techtronic Industries 1,350,000 1,150,991
-------------------------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.6%)
Kingboard Chemical Holdings 266,000 235,314
-------------------------------------------------------------------------------------------------------
FOOD PRODUCTS (7.6%)
Chaoda Modern Agriculture Holdings 4,650,000 1,684,178
Global Bio-chem Technology Group 3,150,000 1,181,280
-------------------------------------------------------------------------------------------------------
2,865,458
-------------------------------------------------------------------------------------------------------
HEALTHCARE EQUIPMENT & SUPPLIES (1.9%)
Hengan International Group 1,900,000 718,608
-------------------------------------------------------------------------------------------------------
HEALTHCARE PROVIDERS & SERVICES (1.0%)
* Extrawell Pharmaceutical Holdings 8,200,000 388,984
-------------------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (2.6%)
Hutchison Whampoa 130,000 970,858
-------------------------------------------------------------------------------------------------------
INSURANCE (3.8%)
China Insurance International Holdings 3,000,000 1,442,345
-------------------------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (1.0%)
Kin Yat Holdings 1,500,000 375,010
-------------------------------------------------------------------------------------------------------
-- 11 --
[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
INVESTMENT PORTFOLIO (CONTINUED)
-------------------------------------------------------------------------------------------------------
AT JUNE 30, 2002 (UNAUDITED)
-------------------------------------------------------------------------------------------------------
Holdings Market
(in shares Value
Description or par) (in US$)
-------------------------------------------------------------------------------------------------------
MISCELLANEOUS (0.0%)
* Health Asia MediCentres Beijing++ 1,000,000 0
-------------------------------------------------------------------------------------------------------
MULTILINE RETAIL (1.7%)
* Convenience Retail Asia 1,650,000 613,477
Jusco Stores (Hong Kong) 86,000 45,482
-------------------------------------------------------------------------------------------------------
658,959
-------------------------------------------------------------------------------------------------------
REAL ESTATE (4.9%)
Cheung Kong Holdings 86,000 716,685
* Cheung Kong Life Sciences International Holdings Preference Offer
(expiration date 07/09/2002)++ 3,440 0
Hopewell Holdings 1,650,000 1,121,183
-------------------------------------------------------------------------------------------------------
1,837,868
-------------------------------------------------------------------------------------------------------
SOFTWARE (1.2%)
Hutchinson Harbour Ring 4,500,000 450,012
-------------------------------------------------------------------------------------------------------
TEXTILES & APPAREL (5.9%)
Fountain Set Holdings 5,800,000 2,230,826
-------------------------------------------------------------------------------------------------------
TOTAL HONG KONG (COST $13,801,181) 15,353,121
-------------------------------------------------------------------------------------------------------
SOUTH KOREA (3.1%)
-------------------------------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS (3.1%)
Samsung Electronics 4,300 1,175,977
-------------------------------------------------------------------------------------------------------
TOTAL SOUTH KOREA (COST $1,212,078) 1,175,977
-------------------------------------------------------------------------------------------------------
TAIWAN (28.9%)
-------------------------------------------------------------------------------------------------------
BANKS (4.5%)
Chinatrust Financial Holding 760,000 670,254
First Commercial Bank 650,000 454,709
Taipei Bank 725,000 578,700
-------------------------------------------------------------------------------------------------------
1,703,663
-------------------------------------------------------------------------------------------------------
-- 12 --
[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
INVESTMENT PORTFOLIO (CONTINUED)
-------------------------------------------------------------------------------------------------------
AT JUNE 30, 2002 (UNAUDITED)
-------------------------------------------------------------------------------------------------------
Holdings Market
(in shares Value
Description or par) (in US$)
-------------------------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (4.2%)
* Asustek Computer 125,213 376,200
High Tech Computer 68,400 235,157
Quanta Computer 200,000 562,033
* Zyxel Communications 245,000 410,164
-------------------------------------------------------------------------------------------------------
1,583,554
-------------------------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (2.0%)
Topco Scientific 120,650 375,115
Unimicron Technology 400,000 374,290
-------------------------------------------------------------------------------------------------------
749,405
-------------------------------------------------------------------------------------------------------
FOOD PRODUCTS (1.5%)
Uni - President Enterprises 1,600,000 585,949
-------------------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES (1.8%)
Far Eastern Textile 1,550,013 683,489
-------------------------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (1.5%)
Giant Manufacturing 560,000 584,275
-------------------------------------------------------------------------------------------------------
MACHINERY (1.0%)
Basso Industry 250,000 362,481
-------------------------------------------------------------------------------------------------------
METALS & MINING (1.8%)
China Steel 1,300,000 668,460
-------------------------------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS (7.8%)
* Elite Semiconductor Memory Technology 55,000 291,031
Realtek Semiconductor 95,000 339,387
Sunplus Technology 135,000 347,085
* Taiwan Semiconductor Manufacturing 605,000 1,229,895
* United Microelectronics 640,000 767,235
-------------------------------------------------------------------------------------------------------
2,974,633
-------------------------------------------------------------------------------------------------------
-- 13 --
[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
INVESTMENT PORTFOLIO (CONTINUED)
-------------------------------------------------------------------------------------------------------
AT JUNE 30, 2002 (UNAUDITED)
-------------------------------------------------------------------------------------------------------
Holdings Market
(in shares Value
Description or par) (in US$)
-------------------------------------------------------------------------------------------------------
SOFTWARE (1.6%)
Soft-World International 140,000 615,247
-------------------------------------------------------------------------------------------------------
TEXTILES & APPAREL (1.2%)
* Pou Chen 570,000 446,457
-------------------------------------------------------------------------------------------------------
TOTAL TAIWAN (COST $12,596,145) 10,957,613
-------------------------------------------------------------------------------------------------------
UNITED STATES (4.3%)
-------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT (4.3%)
Citibank Time Deposit, 1.70%, 07/02/02 1,650,000 1,650,000
-------------------------------------------------------------------------------------------------------
TOTAL UNITED STATES (COST $1,650,000) 1,650,000
-------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(99.0% of Net Assets) (Cost $37,542,903) 37,541,933
=======================================================================================================
Other assets less liabilities (1.0% of Net Assets) 362,359
=======================================================================================================
NET ASSETS (100.0%) 37,904,292
=======================================================================================================
Aggregate cost for Federal income tax purposes is $38,284,989.
The aggregate unrealized loss for all securities is as follows:
Excess of market value over cost 3,143,094
Excess of cost over market value (3,886,150)
-------------------------------------------------------------------------------------------------------
Net unrealized loss (743,056)
=======================================================================================================
* Non-income producing security.
++ At fair value as determined under the supervision of the Board of Directors.
See accompanying notes to financial statements.
-- 14 --
[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------------------------------
AT JUNE 30, 2002 (UNAUDITED)
--------------------------------------------------------------------------------------------------------
(in US$)
--------------------------------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------------------------------
Investments at value (Note 2) (cost $37,542,903) 37,541,933
Cash (including foreign currencies with a cost of $1,160,204 and value of $1,176,901) 1,285,250
Receivable for securities sold 185,126
Dividends receivable 87,258
Prepaid insurance premiums 3,063
Interest receivable 234
--------------------------------------------------------------------------------------------------------
TOTAL ASSETS 39,102,864
--------------------------------------------------------------------------------------------------------
LIABILITIES
--------------------------------------------------------------------------------------------------------
Payable for securities purchased 863,144
Payable for Fund shares redeemed 22,003
Accrued expenses payable 240,388
Due to Investment Advisor (Note 4) 67,295
Deferred foreign withholding taxes payable 5,742
--------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,198,572
--------------------------------------------------------------------------------------------------------
NET ASSETS 37,904,292
========================================================================================================
NET ASSETS CONSIST OF:
Common stock, $0.01 par value
(100,000,000 shares authorized;
4,620,969 shares issued and outstanding) 46,210
Paid-in capital 96,680,612
Accumulated net investment loss (150,125)
Accumulated realized loss on investments
and foreign currency transactions (58,688,156)
Net unrealized appreciation on investments, and
foreign currency holdings, and other assets
and liabilities denominated in foreign currencies 15,751
--------------------------------------------------------------------------------------------------------
NET ASSETS 37,904,292
========================================================================================================
NET ASSET VALUE PER SHARE ($37,904,292 / 4,620,969) 8.20
========================================================================================================
See accompanying notes to financial statements.
-- 15 --
[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 2002 (UNAUDITED)
--------------------------------------------------------------------------------------------------------
(in US$)
--------------------------------------------------------------------------------------------------------
INVESTMENT INCOME (LOSS) (Note 2)
--------------------------------------------------------------------------------------------------------
Dividend (net of foreign withholding tax of $11,164) 357,183
Interest (net of foreign withholding tax of $537) 4,157
--------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 361,340
--------------------------------------------------------------------------------------------------------
EXPENSES
--------------------------------------------------------------------------------------------------------
Investment advisory fees (Note 4) 195,627
Legal fees 78,337
Administration and accounting fees (Note 4) 68,433
Custodian fees 58,074
Directors' fees and expenses 51,585
Shareholder service fees 31,141
Audit fees 14,448
Shareholder report and meeting expenses 8,744
Interest expense 150
--------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 506,539
--------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (145,199)
========================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY
HOLDINGS AND OTHER ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES
--------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) (NOTE 2)
Investments (141,552)
Foreign currency transactions 7,779
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) (NOTE 2)
Investments 493,753
Foreign currency holdings and other assets and liabilities
denominated in foreign currencies 24,924
--------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS,
FOREIGN CURRENCY HOLDINGS AND OTHER ASSETS
AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES 384,904
========================================================================================================
Net Increase in Net Assets Resulting From Operations 239,705
========================================================================================================
See accompanying notes to financial statements.
-- 16 --
[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
---------------------------------------------------------------------------------------------------------
Six Months Ended
June 30, 2002 Year Ended
(in US$) December 31, 2001
(unaudited) (in US$)
---------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment loss (145,199) (587,001)
Net realized loss on investments
transactions (141,552) (4,688,873)
Net realized gain (loss) on foreign
currency transactions 7,779 (196,275)
Net change in unrealized
appreciation (depreciation) on investments,
foreign currency holdings
and other assets and liabilities
denominated in foreign currencies 518,677 (1,647,317)
---------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations 239,705 (7,119,466)
---------------------------------------------------------------------------------------------------------
CAPITAL SHARES REPURCHASED (NOTE 5) (505,294) (10,860,972)
=========================================================================================================
TOTAL DECREASE IN NET ASSETS (265,589) (17,980,438)
Net Assets:
Beginning of period 38,169,881 56,150,319
---------------------------------------------------------------------------------------------------------
End of period 37,904,292 38,169,881
=========================================================================================================
See accompanying notes to financial statements.
-- 17 --
[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------------------------------------------------
For the
Six Months
Ended For the For the For the For the For the
June 30, Year Ended Year Ended Year Ended Year Ended Year Ended
2002 December 31, December 31, December 31, December 31, December 31,
(in US$) 2001 2000 1999 1998 1997
(unaudited) (in US$) (in US$) (in US$) (in US$) (in US$)
----------------------------------------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
----------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period 8.14 9.34 11.78 7.50 11.81 14.31
================================================================================================================
Net investment income
(loss) (0.03) (0.11) (0.06) 0.03 0.02 (0.01)
Net realized and
unrealized gain (loss)
on investment and
foreign currency-
related transactions 0.07 (1.31) (2.73) 4.29 (4.33) (2.45)
----------------------------------------------------------------------------------------------------------------
Total from investment
operations 0.04 (1.42) (2.79) 4.32 (4.31) (2.46)
================================================================================================================
Dividends from net
investment income - - - (0.04) - (0.04)
================================================================================================================
Capital shares repurchased
(Note 5) 0.02 0.22 0.35 - - -
================================================================================================================
NET ASSET VALUE, END OF
PERIOD 8.20 8.14 9.34 11.78 7.50 11.81
================================================================================================================
Market value, end of
period 6.90 6.57 7.06 8.44 5.50 9.75
================================================================================================================
TOTAL INVESTMENT RETURN
Per share market value 5.0% (6.9%) (16.3%) 54.2% (43.6%) (13.9%)
Per share net asset
value 0.7% (12.8%) (20.7%) 57.6% (36.5%) (17.2%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period 37,904,292 38,169,881 56,150,319 107,250,954 68,288,936 107,494,855
Ratios of total expenses
to average net assets 2.59%++ 3.51%+ 2.02% 2.28% 2.49% 1.68%
Ratios of net investment
income (loss) to
average net assets (0.74%)++ (1.25%) (0.36%) 0.37% 0.24% (0.05%)
Portfolio turnover rate 136.1% 212.1% 94.8% 90.8% 111.9% 102.6%
Number of shares
outstanding at end of
period (in thousands) 4,621 4,689 6,012 9,101 9,101 9,101
+ The ratio of total expenses to average net assets for the year ended December
31, 2001 is relatively higher than that of previous years as a result of the
expenses incurred in relation to a tender offer and share repurchases that
decreased the size of the Fund following similar actions in the previous
year.
++ Annualized.
See accompanying notes to financial statements.
-- 18 --
[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
JUNE 30, 2002
--------------------------------------------------------------------------------
1. ORGANIZATION AND CAPITAL
Jardine Fleming China Region Fund, Inc. (the "Fund") was incorporated in
the State of Maryland on May 22, 1992, and is registered as a
non-diversified, closed-end management investment company under the
Investment Company Act of 1940. The Fund commenced operations on July 16,
1992.
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are in conformity
with accounting principles generally accepted in the United States of
America for investment companies, are consistently followed by the Fund in
the preparation of its financial statements. The preparation of financial
statements in accordance with accounting principles generally accepted in
the United States of America requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from these estimates.
I) SECURITY VALUATION
All securities for which market quotations are readily available are
valued at the last sales price prior to the time of determination, or,
if no sales price is available at that time, at the mean between the
last current bid and asked prices. Securities that are traded
over-the-counter are valued, if bid and asked quotations are
available, at the mean between the current bid and asked prices.
Investments in short-term debt securities having a maturity of 60 days
or less are valued at amortized cost. All other securities and assets
are valued at fair value as determined in good faith by the Board of
Directors. In valuing the Fund's assets, quotations of foreign
securities in a foreign currency are translated to U.S. dollar
equivalents at the exchange rate in effect on the valuation date.
II) U.S. FEDERAL INCOME TAXES
No provision for federal income taxes is required since the Fund
intends to continue to qualify as a regulated investment company and
distribute all of its taxable income. As of December 31, 2001, the
Fund has capital loss carryforwards for federal income tax purposes of
$57,645,571, of which $42,188,946 expires in 2006 and $11,676,567
expires in 2007 and $3,780,058 expires in 2009. The Fund intends to
retain gains realized in future periods that may be offset by
available capital loss carryforward.
During the year ended December 31, 2001, the Fund reclassified
$263,754 from accumulated net realized loss on investments to
accumulated net investment loss as a result of permanent book and tax
differences relating primarily to realized foreign currency losses.
The Fund also reclassified $845,828 from accumulated net investment
loss to paid-in capital as a result of permanent tax differences
relating to the net operating loss for the year ended December 31,
2001. Net investment loss and net assets were not affected by the
reclassifications. The Fund's foreign exchange losses incurred after
October 31, 2001, but before December 31, 2001, are deemed to arise on
the first business day of the following year. The Fund incurred and
elected to defer such foreign exchanges losses of $4,926.
-- 19 --
[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
III) FOREIGN CURRENCY TRANSLATION
The books and records of the Fund are maintained in United States
dollars. Foreign currency amounts are translated into U.S. dollars at
the mid-market price of such currencies against U.S. dollars as
follows:
o investments, other assets, and liabilities at the prevailing rates
of exchange on the valuation date;
o investment transactions and investment income at the prevailing
rates of exchange on the dates of such transactions.
Although the net assets of the Fund are presented at the foreign
exchange rates and market values at the close of the period, the Fund
does not isolate that portion of the results of operations arising as
a result of changes in the foreign exchange rates from the
fluctuations arising from changes in the market prices of the
securities held at period-end. Similarly, the Fund does not isolate
the effect of changes in foreign exchange rates from the fluctuations
arising from changes in the market prices of securities sold during
the period. Accordingly, realized and unrealized foreign currency
gains (losses) are included in the reported net realized and
unrealized gains (losses) on investments.
Unrealized currency gains (losses) from valuing foreign currency
denominated assets and liabilities at period-end exchange rates are
reflected as a component of accumulated net unrealized gain (loss) on
investments, foreign currency holdings, and other assets and
liabilities denominated in foreign currencies.
IV) DISTRIBUTION OF INCOME AND GAINS
The Fund intends to distribute to shareholders, at least annually,
substantially all of its net investment income and expects to
distribute annually any net long-term capital gains in excess of net
short-term capital losses. An additional distribution may be made to
the extent necessary to avoid the payment of a 4% federal excise tax.
Income and capital gain distributions are determined in accordance
with federal income tax regulations and may differ from those
determined in accordance with generally accepted accounting
principles.
V) OTHER
Security transactions are accounted for on the date the securities are
purchased or sold. Realized gains and losses on the sale of investment
securities are determined on the identified cost basis. Interest
income is recognized on the accrual basis. Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
Portfolio turnover rate is calculated by dividing the lesser of
purchases and sales of investment securities having maturities greater
than one year at the time of acquisition by the average monthly market
value of those investment securities.
-- 20 --
[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
Consistent with its investment objective, the Fund engages in the
following transactions practices. The investment objective, policies,
program, and risk factors of the Fund are described more fully in the
Fund's Prospectus.
I) FOREIGN TRANSACTIONS
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of U.S.
dollar denominated transactions as a result of, among other factors,
the level of governmental supervision and regulation of foreign
securities markets and the possibility of political or economic
instability.
II) OTHER
During the six months ended June 30, 2002, the Fund made purchases of
$51,929,942 and sales of $51,374,733 of investment securities other
than short-term investments. There were no purchases or sales of U.S.
government securities.
4. RELATED PARTY AND OTHER SERVICE PROVIDER TRANSACTIONS
I) JF International Management Inc. (formerly Jardine Fleming
International Management Inc.) (the "Adviser") an indirect
wholly-owned subsidiary of J.P. Morgan Chase & Co., provides
investment advisory services to the Fund under the terms of an
investment advisory agreement. Under the investment advisory agreement
effective November 1, 2001, the Advisor is paid a fee, computed weekly
and payable monthly, at the annual rate of 1.00% of the Fund's weekly
net assets. Prior to November 2001, the Adviser was paid a fee,
computed weekly and payable monthly, at the annual rate of 1.25% of
the first $75 million and 1.00% of the excess over $75 million of the
Fund's weekly net assets.
II) Effective June 1, 2001 PFPC Inc. (the "Administrator") provides
administrative and accounting services to the Fund under an
Administrative and Accounting Services Agreement. The Administrator
receives a fee, payable monthly, at an annual rate of 0.135% of the
first $100 million, 0.095% of the next $50 million, 0.08% of the next
$50 million and 0.065% of the excess over $200 million of the Fund's
average weekly net assets, subject to a minimum annual fee of
$138,000, plus reimbursement for certain out-of-pocket expenses.
III) Prior to June 1, 2001, T. Rowe Price Associates, Inc., the former
Administrator provided administrative services to the Fund under an
Administrative Services Agreement. The former Administrator received a
fee, payable monthly, at an annual rate of 0.10% of the first $250
million, 0.075% of the next $250 million and 0.05% of the excess over
$500 million of the Fund's average weekly net assets, subject to a
minimum annual fee of $200,000, plus reimbursement for certain
out-of-pocket expenses. The former Administrator also received an
annual fee of $85,000 for fund accounting services pursuant to an
Accounting Services Agreement.
IV) During the six months ended June 30, 2002, the Fund paid $49,721 in
brokerage commissions to J.P. Morgan Chase Group companies, affiliated
brokers/dealers.
-- 21 --
[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
5. CAPITAL SHARE TRANSACTIONS
During the year ended December 31, 2001, the Fund's Board of Directors
authorized the Fund to purchase shares of its common stock from Fund
shareholders, as described below. Any purchase of shares by the Fund has
the effect of increasing the net asset value per share of the Fund's
remaining shares outstanding. All shares purchased by the Fund are
thereafter considered authorized and unissued.
I) SHARE REPURCHASE PROGRAM
The Fund was authorized to repurchase up to 469,142 shares (10% of its
issued and outstanding shares) in the open market through July 22,
2002. Repurchases were made only when the Fund's shares were trading
at less than net asset value and at such times and amounts as were
believed to be in the best interest of the Fund's shareholders. On
July 23, 2002, the Fund's Board of Directors approved a new 10% share
repurchase program which authorized the Fund to repurchase up to
460,761 shares in the open market during 2002 and 2003.
During the six months ended June 30, 2002, the Fund paid $505,294 to
repurchase 67,855 shares, at a per-share weighted average discount to
net asset value of 13.87%. During the year ended December 31, 2001,
the Fund paid $1,161,805 to repurchase 150,600 shares, at a per-share
weighted average discount to net asset value of 20.03%.
Subsequent to June 30, 2002, the Fund paid $185,898 to repurchase
27,944 shares through August 12, 2002, at a per-share weighted average
discount to net asset value of 16.84%.
II) TENDER OFFER
Pursuant to a tender offer that closed on July 9, 2001, the Fund
purchased 20% of its outstanding common stock at a price equal to 95%
of the Fund's net asset value per share on the closing date. The Fund
acquired 1,172,856 shares for a total cost of $9,699,167 in cash.
-- 22 --
[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
RESULTS OF THE ANNUAL SHAREHOLDERS MEETING (UNAUDITED)
--------------------------------------------------------------------------------
The Fund held its annual shareholders meeting on May 9, 2002. At this meeting,
shareholders elected the following nominee proposed for election to the Fund's
Board of Directors. Shareholders also voted on a proposal to amend the Fund's
investment policies. The following tables provide information concerning the
matter voted on at the meeting:
I) ELECTION OF DIRECTORS
NOMINEE VOTES FOR VOTES ABSTAINED TOTAL VOTING SHARES
------------ --------- --------------- -------------------
Julian M.I. Reid 3,094,335 421,555 3,515,890
II) AMENDMENT OF FUND'S INVESTMENT POLICIES
VOTES FOR VOTES AGAINST VOTES ABSTAINED NON-VOTING SHARES TOTAL VOTING SHARES
--------- ------------- --------------- ----------------- -------------------
1,182,984 371,821 33,250 1,927,835 3,515,890
Proposal II did not pass.
OTHER INFORMATION
--------------------------------------------------------------------------------
On July 15, 2002, the Board of Directors amended the Fund's investment policy to
better reflect its historical investment approach by requiring that under normal
circumstances at least 80% of the Fund's net assets, plus the amount of any
borrowings for investment purposes, be invested in equity securities issued by
China Region companies or China Region associated companies (the policy
previously had a 65% requirement).
-- 23 --
[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
--------------------------------------------------------------------------------
THE FUND OPERATES AN OPTIONAL DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (THE
"PLAN") WHEREBY:
a) shareholders may elect to receive dividend and capital gain distributions
in the form of additional shares of the Fund (the Share Distribution Plan).
b) shareholders may make optional payments (any amount between $100 and
$3,000) which will be used to purchase additional shares in the open market
(the Share Purchase Plan).
FOR A COPY OF THE PLAN BROCHURE, AS WELL AS A DIVIDEND REINVESTMENT
AUTHORIZATION CARD, PLEASE CONTACT:
EquiServe Trust Company N.A.
(the Plan Agent):
P. O. Box 8200
Boston, Massachusetts 02266-8200
Telephone No: 800-426-5523 (toll-free)
The following should be noted with respect to the Plan:
If you participate in the Share Distribution Plan, whenever the Board of
Directors of the Fund declares an income dividend or net capital gain
distribution, you will automatically receive your distribution in newly issued
shares (cash will be paid in lieu of fractional shares) if the market price of
the shares on the date of the distribution is at or above the net asset value of
the shares. The number of shares to be issued to you by the Fund will be
determined by dividing the amount of the cash distribution to which you are
entitled (net of any applicable withholding taxes) by the greater of the net
asset value (NAV) per share on such date or 95% of the market price of a share
on such date. If the market price of the shares on such a distribution date is
below the NAV, the Plan Agent will, as agent for the participants, buy shares on
the open market, on the New York Stock Exchange or elsewhere, for the
participant's account on, or after, the payment date. There is no service charge
for purchases under this Plan.
For U.S. federal income tax purposes, shareholders receiving newly issued shares
pursuant to the Share Distribution Plan will be treated as receiving income or
capital gains in an amount equal to the fair market value (determined as of the
distribution date) of the shares received and will have a cost basis equal to
such fair market value. Shareholders receiving a distribution in the form of
shares purchased in the open market pursuant to the Plan will be treated as
receiving a distribution of the cash distribution that such shareholder would
have received had the shareholder not elected to have such distribution
reinvested and will have a cost basis in such shares equal to the amount of the
distribution.
There will be no brokerage charge to participants for shares issued directly by
the Fund under the Plan. Each participant will pay a pro rata share of brokerage
commissions incurred with respect to the Plan Agent's open market purchases of
shares in connection with the Plan. The Fund will pay the fees of the Plan Agent
for handling the Plan.
You may terminate your account under the Share Distribution Plan by notifying
the Plan Agent in writing. The Plan may be terminated by the Plan Agent or the
Fund with notice to you at least 30 days prior to any record date for the
payment of any distribution by the Fund. Upon any termination, the Plan Agent
will deliver a certificate or certificates for the full shares held for you
under the Plan and a cash adjustment for any fractional shares.
You also have the option of instructing the Plan Agent to make semiannual cash
purchases of shares in the open market. There is a service charge of $1.25 for
each purchase under this Share Purchase Plan.
-- 24 --
[GRAPHIC OMITTED]
JARDINE FLEMING
CHINA REGION FUND, INC.
DIRECTORS AND ADMINISTRATION
---------------------------------------------------------------------------------------------------------
OFFICERS AND DIRECTORS THE RT. HON. THE EARL OF CROMER - DIRECTOR AND
CHAIRMAN OF THE BOARD
A. Douglas Eu - Director, President, and Treasurer
Alexander R. Hamilton - Director
Julian M. I. Reid - Director
Lauren Pan - Secretary
John P. Falco - Assistant Secretary
INVESTMENT ADVISER JF INTERNATIONAL MANAGEMENT INC.
P.O. Box 3151
Road Town, Tortola
British Virgin Islands
ADMINISTRATOR PFPC INC.
400 Bellevue Parkway
Wilmington, Delaware
19809 U.S.A.
CUSTODIAN CITIBANK N.A.
NEW YORK:
111 Wall Street, 16th Floor
New York, New York 10005
U.S.A.
HONG KONG:
Citibank Tower
Citibank Plaza
3 Garden Road
Hong Kong
INDEPENDENT ACCOUNTANTS PRICEWATERHOUSECOOPERS LLP
250 West Pratt Street
Baltimore, Maryland 21201
U.S.A.
LEGAL COUNSEL CLEARY, GOTTLIEB, STEEN & HAMILTON
NEW YORK:
1 Liberty Plaza, 43rd Floor
New York, New York 10006
U.S.A.
HONG KONG:
Bank of China Tower
1 Garden Road
Hong Kong
REGISTRAR, TRANSFER AGENT, AND EQUISERVE TRUST COMPANY N.A.
DIVIDEND PAYING AGENT P. 0. Box 8200
Boston, Massachusetts
02266-8200 U.S.A.
NOTICE IS HEREBY GIVEN IN ACCORDANCE WITH SECTION 23(C) OF THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED, THAT FROM TIME TO TIME THE FUND MAY PURCHASE
SHARES OF ITS COMMON STOCK IN THE OPEN MARKET.
-- 25 --
THIS REPORT, INCLUDING THE FINANCIAL STATEMENTS HEREIN, IS SENT TO THE
SHAREHOLDERS OF THE FUND FOR THEIR INFORMATION. IT IS NOT A PROSPECTUS, CIRCULAR
OR REPRESENTATION INTENDED FOR USE IN THE PURCHASE OR SALE OF SHARES OF THE FUND
OR OF ANY SECURITIES MENTIONED IN THIS REPORT.
JFCRM-SR-01 F01-051 6/30/02