FTSE Russell is forging ahead with plans to add Chinese A shares to its widely tracked global benchmarks next month, a senior executive said, as China’s resolve to open its capital markets appears unaffected by an ongoing trade war with the United States.

“There is no doubt some foreign investors feel uncertainty and volatility under this current political climate,” Jessie Pak, Asia managing director for the global index publisher, said Friday.

Trade tensions between the world’s top two economies has roiled Chinese stock markets and the yuan currency, sapping foreigners’ appetite for China assets in recent weeks.

But short-term volatility won’t affect FTSE Russell’s previously-announced China inclusion plan, a decision made in recognition of China’s “significant progress on market reforms in recent years,” she said.

Pak said her recent contacts with Chinese regulators showed “they remain committed to market opening.”

FTSE Russell, a unit of the London Stock Exchange Group, will begin incorporating Chinese stocks from June 24, and the additions will be made in three stages ending March next year.

In all, 1,090 Shenzhen and Shanghai-listed stocks will be brought into the indexes, drawing an expected US$10 billion from passive investors.

“US$10 billion is not a huge amount of money, but it’s a starting point for more long-term institutional investors to go into the China market,” Pak said.

Further inclusion would depend on China’s progress on reforms, and FTSE Russell would consult investors, and take appropriate steps if adverse policy moves affected markets.

FTSE Russell is also considering adding China’s onshore bonds into its global indexes, with a decision to be made in September, but many investors remain concerned over liquidity of the market, as well as the ability to use onshore yuan for funding and hedging.

“I think they are still quite divided at this moment,” Pak said. (SD-Agencies)