Focus of green finance in China shifts to high-quality development
Peng Wensheng, Chief Economist, CICC
In a new phase of the green transition, China is refining its focus on green finance, moving from quantity to quality. The recent issuance of the “Guidelines to Further Strengthen Financial Support for Green and Low-Carbon Development” by seven authorities, including the People’s Bank of China on April 10, clarify the direction of this evolving mission. The guidelines articulate several key points:
Firstly, they outline mid to long-term goals for green finance, providing market participants with a framework to develop stable expectations and comprehensive action plans.
Secondly, there is an emphasis on implementing an environmental disclosure framework across various financial institutions, underscoring the pivotal role of carbon accounting in enhancing green finance standards.
Thirdly, a dual strategy is proposed, focusing on transitioning high-carbon capacity while simultaneously nurturing green capacity. This entails supporting the greening and decarbonization of high-emission industries and projects, along with expediting the establishment of standard systems for transition finance.
Additionally, the guidelines advocate for research into financial products linked to carbon credits, aiming to broaden the involvement of financial institutions in carbon market transactions gradually.
Lastly, they underscore the importance of international cooperation.This involves aligning Chinese standards with global norms to facilitate the international flow of domestic green capital and attract international investment into China’s green and low-carbon assets.
