ASSIGNMENT AND ASSUMPTION AGREEMENT


         THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment") is made
and entered into as of August 8, 2003 by and among TEMPLETON CHINA WORLD FUND,
INC., a Maryland corporation (the "Assignor"), TEMPLETON CHINA WORLD FUND, a
Delaware statutory trust (the "Assignee"), and JPMorgan Chase Bank (the "Bank"),
formerly The Chase Manhattan Bank, N.A.

                              W I T N E S S E T H:

         WHEREAS, pursuant to a certain Agreement and Plan of Reorganization
dated as of February 25, 2003 between Assignor and Assignee, Assignor has sold
and conveyed to Assignee certain assets of Assignor; and

         WHEREAS, in connection with such conveyance of assets, Assignor and
Assignee have agreed that Assignor shall transfer and assign to Assignee all
rights, title and interests of Assignor in and to certain contracts to which
Assignor is a party; and

         WHEREAS, Assignor and Assignee have further agreed that Assignee shall
expressly assume all of the obligations of Assignor arising under such contracts
from and after the date of this Assignment; and

         WHEREAS, the Assignor and the Bank are parties to a certain Custody
Agreement dated as of September 7, 1993, as amended by Amendment dated March 2,
1998, and as further amended by a certain Amendment No. 2 dated July 23, 1998
and a certain Amendment No. 3 dated as of May 1, 2001 (collectively, the
"Custody Agreement"); and

         WHEREAS, the parties hereto desire that the Custody Agreement be
transferred from Assignor to Assignee, as more specifically set forth below.

         NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each party hereto, the parties
hereto, intending to be legally bound, hereby agree as follows:

         1. Transfer and Assignment. Assignor hereby sells, transfers and
assigns to Assignee, its successors and assigns, all rights, title and interests
of Assignor in, to and under the Custody Agreement.

         2. Assumption of Obligations. Assignee hereby assumes and agrees to
observe and perform all of the obligations and duties of Assignor under the
Custody Agreement from and after the date of this Assignment.

         3. Consent to Assignment. Notwithstanding the provisions of Section 22
of the Custody Agreement, the Bank hereby acknowledges, consents and agrees to
the foregoing assignment and assumption of the Custody Agreement.

         4. Governing Law. This Assignment shall be governed by and construed in
accordance with the laws of the State of New York, without reference to the
conflicts of laws provisions thereof.

         5. Binding Effect. This Assignment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns.

         6. Counterparts. This Assignment may be executed in any number of
counterparts, each of which so executed shall be deemed an original, and all of
which, when taken together, shall constitute one and the same instrument.

         IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed as of the day and year first above written.


                           TEMPLETON CHINA WORLD FUND, INC.,
                           a Maryland corporation


                           By:    /s/ DAVID P. GOSS
                                  --------------------------------------------
                           Name:  David P. Goss
                           Title: Vice President and Assistant Secretary

                           TEMPLETON CHINA WORLD FUND,
                           a Delaware statutory trust


                           By:    /s/MURRAY L. SIMPSON
                                  --------------------------------------------
                           Name:  Murray L. Simpson
                           Title: Vice President and Assistant Secretary

                           JPMORGAN CHASE BANK


                           By:    /s/APRIL JOHNSTON
                                  --------------------------------------------
                           Name:  April Johnston
                           Title: Vice President