China Strategy – Foreign Capital Will Continue to Flow In


On March 1, 2019, MSCI announced the results of increasing the Inclusion Factors of China A-shares. MSCI decided to upgrade the Inclusion Factors of A shares in the MSCI Emerging Market Index in three steps and expanding the Inclusion Factor from 5% to 20%.


Research Summary:

  • The inclusion factor of A shares in the MSCI Emerging Markets Index will increase to 20% in three steps, which is expected to bring more than $50bn into the A shares market.
  • In 2019 multiple indexes will include China A-share and RMB bond into their flagship index. Foreign investment into A-shares and bond market will deepen. Stock connect will become the main investment channel.
  • Foreign capital currently prefers consumer sectors and the proportion of emerging industries is expected to increase in the future.


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