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Bending of MSCI rules not a sign of China's progress

Maturity requires acceptance that falling prices aren't sign of abnormal trading

| China

On its fourth consideration, MSCI has decided to include Chinese domestic shares in its broadly followed global emerging market index, but no one in China or overseas should really be popping any champagne corks. The proposal passed only because MSCI has lowered its acceptance hurdles and is effectively just including a token sampling of Chinese A-shares.

The decision to include 222 large-cap A-share stocks will become effective in two phases in May and August 2018. Direct inflows stemming from the decision will amount to a few tens of billions of dollars. That pales compared to daily trading volumes of more than $50 billion a day in China or the hundreds of billions of dollars already put into the market by foreign investors.

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