South Korea’s National Pension Service, the world’s fourth-biggest pension fund, has won landmark approval to buy Chinese securities as part of its rapid international expansion.

The NPS said yesterday that it planned to begin direct Chinese investments this year, after it was granted permission to trade renminbi-denominated stocks and bonds on the mainland under China’s qualified foreign institutional investor programme. It said it was the first of the world’s big four pension funds to be awarded that right.

The fund could not specify how much it was intending to invest in China, saying it had to wait for China’s State Administration of Foreign Exchange (Safe) to set a ceiling. Safe keeps a tight grip on the amount that foreign institutions are permitted to invest in the country and has recently awarded quotas of only about $100m per institution.