FTSE will launch two transitional emerging market indexes which include China A Shares, taking its first steps towards including the renminbi shares in global benchmarks.

A Shares will be given a 5% weighting in the FTSE emerging inclusion indexes initially, rising to 32% when China A Shares become fully available to international investors. 

When at target weight Chinese stocks, including B-Share, H-Share, P Chips and Red Chips, will make up 50% of FTSE emerging index.

"The inclusion of China A Shares is the most significant challenge today facing global benchmark providers," said Mark Makepeace, chief executive of FTSE Russell. 

"The China domestic market is opening up to international investors but it will take several years for all of these investors to gain access to China's capital markets."

FTSE expects institutional investors benchmarked to its global indexes to adopt the new FTSE Emerging Markets China A Inclusion Indexes as they receive or increase their RQFII allocations.

Makepeace explained that the indexes would allow customers better access to the Chinese market.

"The transition to include A Shares in global portfolios is now beginning and we will support this transition while ensuring that all users of our global benchmarks have sufficient time to manage the change."

The A Share weighting will increase as total RQFII allocations increase and the China A Shares inclusion indexes will merge with the standard FTSE emerging markets indexes when China A Shares fully meet its country classification criteria for emerging markets.

As part of its transition programme, FTSE is working with China Securities Regulatory Commission (CSRC) and State Administration of Foreign Exchange (SAFE) to ensure that the index provider's country classification criteria is included in China's capital markets development plan.

The firm will also consult widely with institutional investors prior to determining the timing of the inclusion of A Shares in its standard global indexes.