China has made significant strides in opening up its capital markets to foreign investors, but several key challenges need to be addressed before the mainland equity market can feature in broader equity benchmark indices.

Mainland-listed equities traded in the renminbi, also known as A shares, are currently excluded from global indices as they are not freely accessible by the global investing public. The existing China representation within those indices is largely via H shares, which are Chinese securities listed in Hong Kong.

With a sizeable market capitalisation of just under $4tn, the China A shares market could substantially alter the global investing landscape if it were to be incorporated into various broader indices, industry participants say.