Inclusion is not a foregone conclusion. MSCI has passed on including mainland China in the last three years, even as its competitor, FTSE (owned by the London Stock Exchange), does include mainland China stocks.

Major issues included too many trading halts and concerns over quotas, specifically whether Chinese authorities would put limitations over how much could be invested or withdrawn.

But the arguments “for” inclusion are getting louder. The main argument is the sheer size of the mainland China market: north of $6 trillion in the combined Shenzhen and Shanghai indices. That’s about 10 percent of the market capitalization of the entire global equity market (the U.S. market cap is roughly $28 trillion). Excluding 10 percent of the global equity market does not make sense, the argument goes. Right now MSCI’s broadest index — the MSCI All-Country World Index — assigns China a roughly 3 percent weighting. But China’s actual total weighting is closer to 17 percent.

And Chinese authorities have addressed some concerns raised in prior years. For example, there are new rules that limits under what circumstances and for how long Chinese companies can halt trading, a major issue last year when hundreds simply suspended trading during a drop in the market early in 2016.

China has also instituted the Shanghai–Hong Kong Stock Connect and the Shenzhen–Hong Kong Stock Connect, which connects both mainland exchanges with the Hong Kong Stock Exchanges and which enables investors to trade shares listed on each other’s markets using local brokers and clearinghouses. The Connect has a daily quota (just over $2 billion a day can go in or out on each exchange).

These changes may be sufficient to get the deal through. BlackRock, the world’s biggest asset manager, has backed inclusion of domestic Chinese shares this year.

Part of this may be strategic. BlackRock’s rival, Vanguard, which uses an index provided by FTSE, an MSCI competitor, already includes A-shares. It’s taken some time, but the world is coming around to our point of view — that China ultimately will become an asset class by itself. Investors will need China.

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