The Government Pension Fund Global, one of the two sovereign wealth funds owned by the government of Norway, is reportedly preparing to allocate more capital toward stock markets on the Chinese mainland.

In an article published earlier this week by Bloomberg, Yngve Slyngstad, chief executive officer of Norges Bank Investment Management (NBIM), the investment unit of Norway's central bank which manages the fund on behalf of the country's finance ministry, was cited as saying that he and his team are confident in China's long-term growth prospects despite worsening perceptions of the country's equity markets. Norway's sovereign wealth fund is currently the largest in the world, with $760 billion in assets under management.

Thomas Sevang, a spokesman for NBIM, said in an interview published Wednesday by the China Business News (CBN) that adjustments have been made to the fund's strategy to increase investment in emerging markets.

At the end of June, 2 percent of the fund's stock capital was allocated toward Chinese shares, up from 1.7 percent at the end of 2012, Bloomberg data show. In total, emerging market equities account for some 10 percent of the assets in the fund's equity portfolio. By comparison, shares trading in the US and the UK account for a combined 45 percent of the fund's stock capital.

Slyngstad went on to tell Bloomberg that the fund intends to allocate 20 percent of its capital toward emerging markets in the future, a trend which will consequently lead to an increase in its Chinese equity holdings.

Last year, China's State Administration of Foreign Exchange granted the Norwegian fund a $1 billion QFII quota, the largest amount ever issued to a foreign institutional investor.

Chia Song Hwee, head of the investment group at Temasek Holdings (Private) Limited, Singapore's sovereign wealth fund, said at a press conference in July that his fund is not worried about China's economic situation. Temasek is currently a major stakeholder in several of China's largest financial service firms, including Industrial and Commercial Bank of China, China Construction Bank and Ping An Insurance (Group) Company of China.

"Even at 7.5 percent, China's economic growth is still strong. Besides, the A-share market is undervalued, creating the potential for high returns," Lu Qianjin, an associate professor of finance at Fudan University, told the Global Times in an interview.

With many experts now saying that economic growth rates below 8 percent are set to become the new norm for China, several prominent investment groups have downgraded their outlooks for the country's equity market. According to Lu though, most of the more bearish predictions are overblown.

"Some issues may arise during the process of economic restructuring, but the fundamentals of the economy are still fine," Lu remarked.