The growing internationalization of Chinese equities and bonds means China is now 'too big to ignore,' according to FTSE Russell Managing Director of Global Markets Research, Philip Lawlor.
U.S. Senator Marco Rubio recently followed President Donald Trump's hardline trade war position on China, by writing to MSCI to request information on why it was increasing the weighting of Chinese company shares in its benchmarks.
Lawlor told CNBC that while FTSE Russell "might get a letter" from Rubio, the index provider "can look people in the eye and say this is not being driven by any external political pressure," on account of its "objective, very systematic and transparent" approach to assessing the quality of markets. FTSE Russell is also planning inclusions of Chinese bonds in its fixed income indices, which Lawlor said would be "very big events for global investors in terms of the sheer scale and exposure" the bonds would have, in combination with the A-share inclusion.
"China is going from being something people could be watching, but not feeling they have got to get involved, to a market you've got to get involved in because if you don't, it could be very costly," he added.index is up more than 20% for the year to date despite ongoing uncertainty over the trade war between China and the U.S.
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