Tougher regulatory environment would aid A-share market

Some of the mainland's big-cap stocks have been included in a benchmark index of US index provider MSCI, which is widely expected to give a big boost to the wobbling domestic A-share market.

Indeed, the inclusion of 222 A-share companies in the MSCI's Emerging Markets Index and All Country World Index, beginning in June 2018, could potentially bring in more than $400 billion of funds from institutional investors over the next decade.

However, whether a stock market can fare well does not rely only on capital inflows; more fundamentally, it hinges on a healthy, transparent, and law-based regulatory system.