Filing Details

(a). This statement is being filed by City of London Investment Group PLC ("CLIG") and City of London Investment Management Company Limited ("CLIM," and together with CLIG, the "Reporting Persons").

(b). The business address and principal executive offices of CLIG are 77 Gracechurch Street, London, EC3V 0AS, England.  The directors and executive officers of CLIG, their business addresses and present principal occupation or employment are set forth on Annex A attached to this Schedule 13D.  The business address and principal executive offices of CLIM are 77 Gracechurch Street, London, EC3V 0AS, England.  The directors and executive officers of CLIM, their business addresses and present principal occupation or employment are set forth on Annex A attached.

(c).  CLIM is primarily an emerging markets fund manager, which specializes in investing in closed-end investment companies and is a registered investment adviser under Section 203 of the Investment Advisers Act of 1940.  CLIM is controlled by CLIG.  CLIM is principally engaged in the business of providing investment advisory services to various public and private investment funds, including The Emerging World Fund ("EWF"), a Dublin, Ireland-listed open-ended investment company, Emerging Markets Country Fund ("GBL"), a private investment fund organized as a Delaware business trust, Investable Emerging Markets Country Fund ("IEM"), a private investment fund organized as a Delaware business trust, Emerging Markets (BMI) Country Fund ("BMI"), a private investment fund organized as a Delaware business trust, Emerging (Free) Markets Country Fund ("FREE"), a private investment fund organized as a Delaware business trust, The EM Plus CEF Fund ("PLUS"), a private investment fund organized as a Delaware business trust, Emerging Markets Global Fund ("EMG"), a private investment fund organized as a Delaware business trust, Emerging Markets Investable Fund ("EMI"), a private investment fund organized as a Delaware business trust, Emerging Markets Free Fund ("EMF"), a private investment fund organized as a Delaware business trust, Global Emerging Markets Fund ("GEM"), a private investment fund organized as a Delaware business trust, and unaffiliated third-party segregated accounts over which CLIM exercises discretionary voting and investment authority (the "Segregated Accounts"). EWF, GBL, IEM, BMI, FREE, PLUS, EMG, EMI, EMF and GEM are collectively referred to herein as the "City of London Funds."

(d). None of the Reporting Persons has, during the last five years, been convicted in any criminal proceeding.

(e). None of the Reporting Persons has, during the last five years, been a party to any civil proceeding commenced before a judicial or administrative body of competent jurisdiction as a result of which it or he was or is now subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f). City of London Investment Group PLC, (CLIG) and City of London Investment Management Company Limited (CLIM) are companies incorporated under the laws of England and Wales.

December 15, 2016

Professor William C. Kirby, Chairman

The Taiwan Fund, Inc.

Morgan Hall 167

Harvard Business School

Boston, MA 02163

RE: The Taiwan Fund, Inc.

Dear Professor Kirby

City of London Investment Management Company Limited ("City of London"), on behalf of its clients, is a long-term investor in The Taiwan Fund, Inc. ("the Fund").  We are writing today to respond to your letter of November 14, 2016.

Last month, we expressed our growing concern over the Fund's wide discount levels.  We stated that, "When discounts are out beyond the 12-13% range, there comes a point at which the share price has lost connection with reality."  We went on to say that we saw no evidence of share repurchase activity since mid-2013 when the previous Discount Control Mechanism was discontinued.  Your response to our concerns about the Fund's wide discount was unsettling.

First, you indicated that the Share Repurchase Program Committee considered the Fund's discount level six times last year. The Fund trades daily, and thus Shareholders deserve a Board of Directors that is far more actively engaged in monitoring and managing the Fund's discount. Having said that, we would balk at the idea that the members of the Committee should each be paid ($2,500 per Director per meeting) to decide more frequently to do nothing.  That compensation structure does not seem to benefit Shareholders' interests.

Second, you replied that the Board of Directors receives regular updates from the Fund's investment manager.  The investment manager would reduce its own revenue stream by encouraging buy-back activity and therefore cannot be counted on to be objective on the matter. This conflict of interest is precisely why the Board of Directors needs to be independent of the investment manager and actively engaged in managing the discount level.  As noted above, despite wide discount levels, there has been no share buy-back activity since mid-2013.

Third, you compared the Fund's discount level to a peer group.  The Fund's discount is an absolute measure and it translates directly into dollars and cents. The difference between the closing share price on a given day and the net asset value (NAV) is not an abstract concept. Examining discount levels in the context of peer funds is therefore a dangerous game, since the Board of Directors is leaving the Fund exposed to activist shareholders if absolute levels are wide, even if the average of the peer group is also wide. We note that on page 19 of the Fund's most recent Annual Report, the threshold for open market purchases is 9%, which we would say is a reasonable metric.

As noted above, on behalf of our clients, City of London is a long-term investor in emerging markets closed-end funds. As such, we have a strong incentive to hope for a robust, vibrant CEF sector.  The Board of Directors must decide which tools should be employed to control the discount level and, as a major shareholder, we would hope to be in a position to support the Board of Directors in its efforts to take steps to ensure the long-term success of the Fund.

Sincerely,

Jeremy Bannister

Director, Corporate Governance