The Board of directors of the China Heartland Fund have resolved to make an interim distribution of $20 million to shareholders of the fund.

The Bermuda Stock Exchange announced yesterday that following the announcement dated 6 August 2002 and in accordance with the Alternative Proposal as detailed in the Circular to shareholders dated 27 March 2002, the Board of Directors had resolved to make the interim distribution to shareholders of the Fund.

This represents a payment of approximately 55 percent of net assets attributable to shareholders. The board received a letter from the Fund's auditors stating that nothing has come to their attention to indicate that the Fund does not have sufficient funds to make this initial distribution.

The interim payment will be made on 30 August 2002. The Board of Directors intend to meet on September 5, to review the financial position of the Fund, and to progress further the distribution of liquid assets to shareholders.