Editor's note: Monday marked a milestone for the internationalization of China's A shares as FTSE Russell, a leading global multi-asset index, data and analytics provider, completed the second step of its first-phase inclusion plan, and their inclusion in the S&P Dow Jones Indices took effect. 21st Century Business Herald comments:

This symbolizes another key stage in opening up China's capital market following the previous quota cancellation for Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors. It will greatly improve the convenience for foreign investors to participate in the domestic capital market.

China's securities market is the second largest in the world in terms of size. With A shares also included in the MSCI indexes that means the three major indexes all have assets of China's securities market, which means that the internationalization of A shares has achieved its task of being recognized by the international market.

Another indicator of the opening up of China's financial market is the ever-increasing use of the renminbi for international payments. The share of international payments in the Chinese currency reached 2.22 percent in August, the highest since January 2016. The RMB exchange rate has changed a lot since July, but the level of the RMB's internationalization has been greatly improved, which to some extent is a direct result of the increasing internationalization of China's A shares.

It has become an extensive consensus that the internationalization of the financial market can effectively promote the development of China's financial sector, especially its securities market.

The internationalization of the financial market can be viewed in at least two dimensions. First, it is related to the capital account. Money can be easily accessed. Second, it depends on the internationalization of market regulation and international competitiveness. The financial market is not a vegetable market. Financial products are not cabbages, but a high-end product. Being high-end means there are high requirements for market regulation and professional services. This is not only reflected in the complexity of procedures, but also in the variety of products.

Unrestricted cross-border capital flows are harmful to the regulation of financial markets and their stability. Therefore, for the internationalization of financial markets, the liberalization of capital accounts should proceed cautiously, but market regulation and the opening up of financial services should be more daring.

As far as the current A-share market is concerned, being included in the three major index systems means that it is more international in terms of governance objectives, which means that supervision and services are more open.

Only by enhancing the capability of the A-share market to counter capital fluctuations will enable it to truly attract the entry of long-term capital. Therefore, the securities market as the focus of the internationalization of the entire financial market must be targeted in order to truly realize the internationalization of the market and the internationalization of finance.