BUZZ-The MSCI China gets ready for a tech upgrade

** The rise of China's private sector, particularly that of its internet and e-commerce companies, could finally be better reflected in the main equity benchmark that offshore investors track

** As a result of a rule change announced by MSCI (NYSE: MSCI - news) in Jan, foreign-listed Chinese stocks are now eligible for inclusion into the MSCI China index

** Inclusion of all 17 U.S. listed Chinese stocks that are potentially eligible in the MSCI China would add $203bln to its market cap, $4bln in average daily turnover and reduce the weighting of SOEs to 59% from 74%, according to Goldman Sachs (NYSE: GS-PB - news)

** MSCI listed 17 stocks as possible candidates for addition including Alibaba , Baidu (Xetra: A0F5DE - news) , VIPshop and JD.com.

** This change would significantly reduce the influence of financials in favour of the tech sector that would see its weight double to 28% of the index, per Goldman

** From a trading point of view inclusion of these stocks would make China the region's (Asia-Pacific ex-Japan) most liquid index overtaking Australia. GS (KSE: 078935.KS - news) estimates $3.9 bln of daily turnover would be added to the index

** Perhaps more importantly, moving forward on this could result in a change in the perception that investing in a Chinese equity index is akin to buying a portfolio of low-growth SOE companies, Goldman says (RM (LSE: RM.L - news) : vikram.subhedar.thomsonreuters.com@reuters.net)