span style="color:#000000;font-family:Times New Roman;font-size:8.4pt;"Under normal circumstances, the Matthews Japan Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in the common and preferred stocks of companies located in Japan./spanspan style="font-family:Times New Roman;font-size:8.4pt;"A company or other issuer is considered to be “located” in Japan, and a security or instrument is deemed to be a Japanese/spanspan style="font-family:Times New Roman;font-size:8.4pt;line-height:10.5pt;" /spanspan style="font-family:Times New Roman;font-size:8.4pt;"security or instrument, if it has substantial ties to Japan. Matthews currently makes that determination based primarily on one or more of the following criteria: (A) with respect to a company or issuer, whether (i) it is organized under the laws of Japan; (ii) it derives at least 50% of its revenues or profits from goods produced or sold, investments made, or services performed, or has at least 50% of its assets located, within Japan; (iii) it has the primary trading markets for its securities in Japan; (iv) it has its principal place of business in or is otherwise headquartered in Japan; or (v) it is a governmental entity or an agency, instrumentality or a political subdivision of Japan; and (B) with respect to an instrument or issue, whether(i) its issuer is headquartered or organized in Japan; (ii) it is issued to finance a project that has at least 50% of its /spanspan style="font-family:Times New Roman;font-size:8.4pt;"assets or operations in Japan; (iii) it is at least 50% secured or backed by assets located in Japan; (iv) it is a component of or its issuer is included in the MSCI Japan Index; or (v) it is denominated in the currency of Japan and addresses at least one of the other above criteria. The term “located” and the associated criteria listed above have been defined in such a way that Matthews has latitude in determining whether an issuer should be included within a region or country. The Fund may also invest in depositary receipts, including American, European and Global Depositary Receipts./spanspan style="color:#000000;font-family:Times New Roman;font-size:8.4pt;"The Fund seeks to invest in companies capable of sustainable growth based on the fundamental characteristics of those companies, including balance sheet information; number of employees; size and stability of cash flow; management’s depth, adaptability and integrity; product lines; marketing strategies; corporate governance; and financial health. The Fund may invest in companies of any market capitalization. Matthews measures a company’s size with respect to fundamental criteria such as, but not limited to, market capitalization, book value, revenues, profits, cash flow, dividends paid and number of employees. The implementation of the principal investment strategies of the Fund may result in a significant portion of the Fund’s assets being invested from time to time in one or more sectors, but the Fund may invest in companies in any sector./spanspan style="font-family:Times New Roman;font-size:8.4pt;"The Fund may invest in affiliated and unaffiliated ETFs, including the Matthews Japan Active ETF, a series of the Trust with a substantially similar investment strategy to the Fund, for cash equitization purposes, which allows the Fund to invest in a manner consistent with its investment strategy while managing daily cash flows, including purchases and redemptions by investors./span