* Up to 30 pct can go into shares, stock funds
* Vice minister: Move is not to rescue market
* Professional firms to decide timing of investments (Adds details, quotes)
BEIJING, Aug 28 (Reuters) - China’s local pension funds will start investing 2 trillion yuan ($313.05 billion) as soon as possible in stocks and other assets, senior government officials said on Friday, in a bid to boost the investment returns of such funds.
China said last weekend that it would let pension funds under local government units to invest in the stock market for the first time, a move that might channel hundreds of billions of yuan into the country’s struggling equity market.
Up to 30 percent can be invested in stocks, equity funds and balanced funds. The rest can be invested in convertible bonds, money-market instruments, asset-backed securities, index futures and bond futures in China, as well as major infrastructure projects.
“We will actively make early preparations... we will formally start investment operations as soon as possible,” Vice Finance Minister Yu Weiping told a briefing.
But the timing of investment will depend on preparations as the National Social Security Fund (NSSF), the manager of local pension funds, will entrust professional investment firms to make actual investments, Yu told reporters after the briefing.
“When they (investment firms) will enter the market, the government will not intervene,” Yu said.
You Jun, vice minister of human resources and social security, told the same news conference that pension investment will benefit the economy and the country’s capital market, but he downplayed any attempt to support the ailing stock market.
“Supporting the stock market or rescuing the stock market is not the function and responsibility of our funds,” You said.
The government will protect the safety of such pension funds by making diversified investments, he added.
The central government would give preferential tax treatment for local pension investment, officials said.
Chinese shares plunged recently despite a series of official measures aimed at supporting the market after an early summer crash.
The Shanghai stock index, which has rebounded since Thursday, is down about 11 percent this week. ($1 = 6.3888 Chinese yuan) (Reporting by Kevin Yao and Xiaoyi Shao; Editing by Kim Coghill and Richard Borsuk)