The Shanghai Composite, which tracks yuan-denominated A shares and foreign-currency B shares, rose 8.45, or 0.5 percent, to 1,740.90 at the end of the trading day. It was the index's highest close since July 11.

The Shenzhen Composite Index, which tracks the smaller of the two Chinese markets, added 1.63, or 0.4 percent, to 433.02.

Statements from a government official that China may allow the nation's 230 billion yuan (HK$225 billion) social pension to invest overseas limited gains. Sinopec Shanghai, a unit of China Petroleum & Chemical Corp - also known as Sinopec - climbed 0.22 yuan, or 3.8 percent, to 6.07.

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Chinese refiners benefit from falling oil prices because the prices at which they can sell to customers are capped. China Southern, China's largest airline, added 0.05 yuan, or 1.9 percent, to 2.76.

Meanwhile, the State Council, the government's Cabinet, is working on a plan to give the pension special approval to buy bonds and invest in money markets abroad, said Xiang Huaicheng, head of the government agency that manages the fund. The move may divert funds out of domestic stocks.

Inner Mongolia Yili Industrial Group, China's largest maker of dairy products, added 0.99 yuan, or 4.9 percent, to 21.26. Jiangxi Copper, China's biggest producer of the metal, fell 0.08 yuan, or 0.8 percent, to 10.16. Copper supply exceeded demand by 65,000 tonnes in January through July as demand fell in China, the World Bureau of Metal Statistics said. Global consumption climbed 2.8 percent to 9.98 million tonnes,while Chinese consumption fell 7.8 percent.

Tsingtao Brewery jumped 1.13 yuan, or by the 10 percent daily limit, to 12.44 in its first day of trading since a suspension on August 29. The advance was the biggest since May 29.

The company's controlling shareholder is offering 1.79 bonus shares and 2.4 yuan in cash for every 10 shares held by minority investors, up from an offer of 1.5 shares earlier this month. The shares are meant to compensate investors for making the brewer's state- owned stocks tradable.

China started a program in May last year to convert more than US$300 billion (HK$2.33 trillion) of nontradable shares in listed companies into common stock that can be traded on the stock exchange.

BLOOMBERG