Sino File | MSCI inclusion points China’s stock market in right direction
The MSCI Emerging Markets Index has admitted China into its global-investment club, but its membership comes with many stipulations

The inclusion of domestically traded, yuan-denominated stocks, or the so-called A-shares listed on the Shanghai and Shenzhen stock exchanges, is another milestone towards China gaining full acceptance in the global economy.
It follows the International Monetary Fund’s decision last year to include the yuan in its basket of currencies that make up the Special Drawing Right, making the Chinese currency the fifth global reserve asset.
It is a welcome vote of confidence as China aims to make reforms that are amenable to international investors after three years of delays.

However, China’s 222 large-cap stocks that will be included in the MSCI Emerging Markets Index in May 2018 will account for only 0.73 per cent of the index. They will also be included in the MSCI All Country World Index (ACWI) with a 0.1 per cent weighting, and MSCI Asia ex-Japan Index with a 0.83 per cent weighting.