The People's Bank of China (PBOC) will continue working with relevant departments to improve the green finance system, fully harnessing its guiding role to support the green transformation of China's economy and society, it said on Friday.
The statement was made at a Green Finance Reform and Innovation Exchange Conference held last Friday in Huzhou City of east China's Zhejiang Province, which drew leaders from China's central bank PBOC, major financial institutions, and experts from related institutions.
The PBOC official introduced further plans to promote the development of green finance at the conference. The central bank will further connect green finance with transition finance, and is currently developing standards for transition finance in seven industries, including shipping and chemicals, to help financial institutions and businesses formulate and carry out transition plans. By the end of May, green finance pilot regions had issued a total of 55 billion yuan (about 7.7 billion U.S. dollars) in transition loans, with multiple financial institutions introducing transition loans, transition bonds, and other financial tools to support the green and low-carbon transition of high-carbon industries.
China places strong emphasis on the development of green finance. This year, the country released its first national standard for green finance. The PBOC has also led the revision of the Green Bond Endorsed Project Catalog, unifying the classification of domestic green financial products. Transition finance standards for the coal power, steel, building materials, and agriculture sectors have already been applied in more than 20 provinces and cities. In Shanghai, Guangdong, and Zhejiang, pilot programs for sustainability information disclosure among small and medium-sized enterprises have been rolled out, encouraging them to transition toward green and sustainable development through financial incentives. "We have built the world's largest green bond market. These financial tools have strongly supported the growth of our green industries, including the 'new trio,' namely, electric vehicles, lithium-ion batteries, and photovoltaic production, as well as wind energy and other sectors. Their competitiveness and scale are now top in the world," said Ma Jun, Chairman of the Green Finance Committee of the China Society for Finance and Banking.
By the end of the first quarter of this year, China's green loan balance had reached 40.6 trillion yuan, while the green bond balance stood at 2.13 trillion yuan, with cumulative issuance surpassing 4.33 trillion yuan. Given the huge market, the green and sustainable transition of traditional sectors will be a major driving force for China's green finance development, noted Ma.
"Transition finance will be the most crucial breakthrough in the future development of the green finance system. Why? Because its demand is enormous, possibly even exceeding that of purely-green finance. In the coming years, transition finance could see an annual growth rate of up to 100 percent," he said.
Central bank to continue improving green finance system
