LONDON STOCK EXCHANGE PLC 
"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, told Reuters in an interview on 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 mainland stocks will be brought into the indexes, drawing an expected $10 billion from passive investors.
"$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.
Concerns are rising that China could slow or even roll back reform pledges because of the trade war. The American Chamber of Commerce of China said on Wednesday that nearly half its members were seeing non-tariff barrier retaliation.
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.
(Reporting by Samuel Shen and John Ruwitch; Editing by Simon Cameron-Moore)
