The product will have a 20-year maturity if it is approved by the China Securities Regulatory Commission.
Speaking to Reuters, chief executive of HSBC Jintrust Fund Management, said he expected to launch the product later this year.
HSBC Jintrust is planning to launch another fund next year which will aim to invest money in overseas financial markets under China's Qualified Domestic Investor scheme (QDII).
Following massive interest in the Chinese market in 2006 the A-share is not cheap, but according to Mr Lee it is not becoming too expensive.
HSBC has a 49 per cent ownership in HSBC Jintrust and now manages three funds with assets totalling $1.4 billion.
QDII funds are now increasingly popular, they aim to put growing pressure on the currency and offer different investments for domestic investors.