There are only hours left until MSCI is due to announce whether Shanghai and Shenzhen listed stocks or A-shares will be added to its Emerging Markets Index. Last year, the U.S. analytics firm said that further liberalization was needed before acceptance. So what progress has China made in the past year and what does it mean to the A share markets if its included in the index?

Expectation are high for China's A shares to finally gain access into one of the industry's respected equity indices this year. The inclusion could see billions in foreign inflows flow to the world's second largest equity market.

But the liquidity impact will be symbolic. Jeremy Stevens, China economist at Standard banks says the inclusion isn't likely to lead to a flood of investment to the A share market, due to high valuations, uncertainties in the renminbi, and fears about economic growth

But in the long run, it could pave the way for a greater inflow of funds into Chinese equities.

"The most direct benifit is to open a new channel to attract more foreign capital into the A share market in the future. We can see from history that when South Korea and Taiwan's markets joined the index, it had a good effect on their markets. Second of all, it is good for mid to long term regulatory improvements. Third of all, in terms of investment structure, more foreign capital inflow will diverse our investors' investment structure, improve their investment concept," Capital Securities' analyst Shao Shuai said.

Besides fresh capital inflows, the MSCI inclusion for China is also an important step in bolstering its status. Many believe its the next logical step after entering the IMF's SDR program last year and its just a matter of when it will happen.