China is considering rules to standardize when and how State pension funds can be invested in the country's stock and bond markets, State media reported yesterday, opening the door for the markets to receive a major infusion of new assets.

The Ministry of Human Resources and Social Security is researching the possible establishment of unified rules governing the management of pension funds, most of which are from local governments, the official China Securities Journal reported ministry spokesman Yin Cheng as saying.

The new rules could pave the way for funds to entrust a portion of their assets to outside managers with the aim of generating higher returns.

Recently, China's National Social Security Fund received approval to manage a 100 billion yuan ($15.86 billion) chunk of the Guangdong provincial pension fund.

Many industry insiders expect that money will eventually be farmed in tranches to asset managers at Chinese fund houses and brokerages, mostly for investment in the domestic bond market.

Commenting on that plan, Yin said that Guangdong was qualified to make such investments because its fund was running a relatively large surplus.