The Diaoyutai State Guesthouse is a high security green oasis in the West of Beijing, where foreign leaders are housed when visiting China. Over the past three days the Chinese State Council (Cabinet Office) Development Research Centre have been holding its annual China Development Forum there. An amazing gaggle of multinational CEOs, Chinese Government leaders and luminaries like Henry Kissinger, Jeffrey Sachs and Joseph Stiglitz have been presenting their views on issues and prospects for China and the world.
The bulk of the agenda was around a slightly odd theme of the "New Normal" - which seems to be a reference to the Government's announced new 7% GDP growth rate target. But perched delicately in the middle of the weekend agenda was a session on "Greening China's Financial System". This was the launch of the "Synthesis Report" of the brick-like "Greening China’s Financial System" tome to be published in late April 2015 by the Financial Research Institute of the Development Research Center (DRC) and the International Institute for Sustainable Development (IISD). Lead authors of this synthesis are Zhang Chenghui, Simon Zadek, Chen Ning and Mark Halle.
Speakers at the launch were:
- Hou Yunchun, former Vice-President of the DRC.
- President and CEO of Mizuho Financial Group, Yasuhiro Sato (and Vice Chairman of the Japanese Bankers Association).
- Ye Yenfei, Deputy Director-General of the China Banking Regulatory Commission.
- Zhang Chenghui and Simon Zadek
Readers of this blog may remember that we've been involved expert in this project for nearly 18 months - as you would expect there's a big chunk in there about developing green bonds in China.
(On Tuesday evening we'll be launching our companion paper on "Growing a green bonds market in China - Key recommendations for policymakers in the context of China’s changing financial landscape". If you're in Beijing and can join us, there's space still available!)
The environmental damage resulting from China’s rapid development the past 30 years is increasingly recognized by high-level policymakers. But despite policies to curb the development of highly polluting and energy-intensive industries, the scale of these industries and practices continues to grow.
"Transforming from a resource- and pollution-intensive economy to a green economy is now a strategic priority for China," said Zhang Chenghui, director general of the DRC’s Financial Research Institute and co-author of the Synthesis Report. "Success depends on the development of green industries and the transformation and reduced importance of many traditional industries."
"China has made a forceful commitment to achieving a greener economy," said Mark Halle, IISD’s director of strategy and another co-author. "In terms of innovative policies, China is often ahead of the pack."
Green bonds are only part of the puzzle. Green finance in China is manifested in forms such as green credit, green securities and green insurance. For example, China's banking regulator has put in place Green Credit Guidelines that require banks to use environmental assessments in their lending processes, among other things.
This synthesis report has a focus on practical, actionable solutions for China’s policy makers: "The challenges are significant, but they are surmountable", says Simon Zadek, Co-Director of the United Nations Environment (UNEP) Inquiry into the Design of a Sustainable Financial System and report co-author. “This report points to practical solutions that can be implemented quickly.”
Download the Synthesis Report at: http://www.iisd.org/publications/greening-chinas-financial-system
