MSCI has moved in mysterious ways, its wonders to perform… and again left Chinese stocks out of its global benchmark indices. At the same time, we learn that, after three years in index limbo, it will not add South Korea and Taiwan to the family of developed markets. These decisions have happened despite the fact that all three nations are among the world’s top 25 economies: China at number 2, Korea at 15 and Taiwan at 25.

As always, MSCI justified its decisions with reference to technical reasons relating to capital controls, market accessibility and tradability. Yet one cannot help but think that there are – deep down – other factors at work. Indeed, it is hard not to conclude that, like so many multilateral organisations that are located in and have grown out of the West, the likes of the MCSI are having difficulty coming to terms with admitting the leading lights of the emerging world – and especially China and east Asia – into their developed world clubs. Think of how distorted the IMF voting quotas remain: Belgium has 1.86 per cent (with a population of 11m and a GDP of $535bn) against South Korea with 1.37 per cent (50m and $1.27tn respectively), while the UK has a voting quota of 4.29 per cent (64m and $2.8tn respectively) versus China with 3.81 per cent (1.35bn and $9.2tn respectively.)

For us investors, determining just how to deal with these Asian “pretenders” to developed market status has highlighted an even deeper issue of classification that is increasingly dividing emerging markets: there is a growing recognition that there are effectively two sub-categories – call them clubs – within the EM asset class. In one club, there is China-centred east Asia: China, Korea, Taiwan and Asean; in the other club, there is everyone else in the emerging fraternity: Latin America, Africa, eastern Europe and the Indian sub-continent.