China launched a private pension scheme in 36 cities on Friday as it grapples with a rapidly ageing population.

The move marked the official launch of the third pillar of China's pension system, with the first batch of cities including Beijing, Shanghai, Guangzhou and Chengdu, the Ministry of Human Resources and Social Security said in a statement.

The co-called third pillar will supplement the existing two pillars - public safety net, and corporate annuities.

China, which launched its first private pension scheme in April, earlier this month published rules, listed approved products and named companies that can participate in the scheme.

Domestic workers covered by China's basic pension insurance can participate in the scheme and contribute up to 12,000 yuan ($1,676) per year to their individual accounts and receive tax benefits.

They are able to open their personal pension fund accounts with 23 commercial banks, including the top six state banks and smaller peer Bank of Shanghai, the state-backed China Securities Journal reported separately.

Eligible investors can make voluntary deposits into the account and invest in qualified products, including banking wealth management products, deposits, insurance and public funds.

Domestic and international insurers and fund houses have been developing and promoting products, while Chinese banks are offering incentives to lure investors to open accounts as they seek to tap into a new market which some forecast will grow to $1.7 trillion by 2025. ($1 = 7.1585 Chinese yuan renminbi) (Reporting by Jason Xue and Brenda Goh; Editing by Muralikumar Anantharaman and Mike Harrison)