China will allow local governments to invest pension funds in the stock market for the first time.

According to rules released on Aug 23 by the State Council, pension funds will be able to invest up to 30 percent of their net assets in the country’s financial products, such as stocks, equity funds and balanced funds.

The pension funds can also be invested in convertible bonds, money-market instruments, asset-backed securities, index futures, bond futures as well as major national projects.

By the end of 2014, the net assets of pension funds in China were about 3.5 trillion yuan (about $548 billion).

Analysts say the new rules on pension funds will inject billions of yuan into the Chinese markets.

The Shanghai Composite Index is down more than 30 percent from mid-June.