The agency tasked with buying stocks to prop up the market is looking for another $322bn (£207bn) in funds, according to Bloomberg.
Local reports also said that close to 300 Chinese funds were waiting on the sidelines to enter the market.
The Shanghai Composite index closed up 2.3% at 3,744.20.
In Hong Kong, the Hang Seng index finished 0.7% higher at 24,552.47.
Shares in China Railway Signal & Communication Corp (CRSCC) rose 0.3% on its market debut. The company - which is the world's largest builder of rail traffic control systems - raised $1.4bn (£902m) through a flotation to help grow its business.
Trading in the rest of Asia was mixed, with investors remaining cautious ahead of key US jobs data due out later.
July's non-farm payrolls figure could give a strong pointer as to when the Federal Reserve will raise interest rates.
The central bank next meets in mid-September, and opinion is split as to whether the Fed will act in September or wait until December.
Japan's benchmark Nikkei 225 index closed up 0.3% at 20,724.56 after the Bank of Japan kept its stimulus programme unchanged, as widely expected.
In Australia, weaker commodity prices continued to weigh on shares, as oil prices fell on concerns of oversupply.
The S&P/ASX 200 index finished 2.4% down at 5,474.80.
Shares in ANZ bank fell more than 7% after the lender announced on Thursday that it was raising $2.2bn to meet tougher capital ratio rules. Its third quarter earnings figures also came in below expectations.
South Korea's Kospi closed down 0.2% at 2,010.23. The index lost 1% over the week, marking its third consecutive week of losses.
