BEIJING, June 20 (Xinhua) -- Having been delayed for three years, an inclusion of China's A-shares into the MSCI Emerging Markets Index will certainly be welcomed if it is greenlighted during an upcoming review due Tuesday.
But even if it is kept out of the international benchmark index again, it will not change the fact that a yes is somewhere down the road, sooner or later.
With the world's second largest stock market by capitalization and what it has achieved over the past years of reform, China has every reason to be incorporated into any global emerging markets stock index.
An inclusion into the MSCI index will be not just a milestone for China's capital market, a recognition of how much it has evolved, but also a significant boon for global investors.
A leading global equity index compiler, MSCI had over 1.5 trillion U.S. dollars in assets benchmarked to the MSCI Emerging Markets Index family by the end of 2016.
Despite being the world's second largest economy and among the fastest-growing ones, China only represents 28 percent of the MSCI Emerging Markets Index currently, with only Chinese stocks traded in Hong Kong or the United States included.
Without Chinese mainland-listed shares in their portfolios, international investors can not enjoy the benefits of a truly global asset allocation.
For them, an inclusion of the A-shares into the MSCI index means more opportunities to buy into China's growth story.
The momentum of China's economic growth remains stable, and the ongoing supply-side reform and deleveraging process are sowing the seeds for a brighter outlook.
The appeal of China's capital market is hard to ignore. Earlier this year, Bloomberg decided to incorporate China's bond market into two of its widely used Bloomberg Barclays fixed-income indices.
For the country's stock market, while it still has a long way to go before matching the developed markets, its value of investment is undeniable as it provides the opportunity of trading the shares of some of the world's fastest-growing and most promising companies.
Moreover, a string of reforms since 2016 have dispelled much of the concerns of international investors over the A-share market's accessibility.
Arbitrary trading suspensions were better regulated, restrictions on qualified foreign institutional investors were further relaxed, while the Shenzhen-Hong Kong stock connect scheme was launched to broaden channels of foreign investment in the A-share market.
With or without China's inclusion into the MSCI Emerging Markets Index, the path and pace of capital market reform and opening up is unlikely to alter. The assimilation of China into the global financial market is in the interests of both China and the rest of the world.
As a Chinese idiom says, "where water flows, a channel will form." The global capital market will become more inter-connected than ever, and with its size and growing appeal to overseas investors, the A-share market's inclusion into global benchmark indices is only a matter of time.
