The recent announcement that the China Securities Regulatory Commission is expanding quotas for foreign investment sends a clear message to international investors that the Chinese government is committed to opening up its capital markets further. The amount available for qualified foreign institutional investors, or QFII, was raised by $50bn, taking the total to $80bn, an unprecedented step for the Chinese authorities.

The QFII programme has been in existence since 2002 and is the only way for overseas investors to get access to China’s growing domestic A-shares market. Listed on two exchanges in Shanghai and Shenzhen, A-shares are denominated in renminbi and almost entirely owned by domestic investors. Far from a being a niche local market, the total A-shares market is the second largest in the world, with only the New York Stock Exchange surpassing it.

Of course this is not the only way of investing in Chinese equities: overseas investors are familiar with the H-shares and red chips traded on the Hong Kong market, which are freely accessible to international investors, but these are much smaller compared with A-shares, which make up over 75 per cent of Chinese market capitalisation.