Caixin
Oct 27, 2020 07:51 PM
FINANCE

China Sketches Out Rules for Green Finance

What’s new: China has released guidelines (link in Chinese) on investment and financing activities surrounding climate change, marking another step for the government in gearing up the country’s financial sector to embrace a green future.

The guidelines — jointly published by the Ministry of Ecology and Environment, the National Development and Reform Commission, the People’s Bank of China, the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission — specified how relevant entities should come up with policies and measures, and how domestic and overseas investment should be encouraged to enter the sector.

The guidelines dated Oct. 20 suggest that such investment and financing activities, intended to steer investment toward mitigating and adapting to climate change, are essential parts of green finance.

What’s the background: The latest guidelines are yet another joint issuance from ecological and financial regulators after they published guidelines on building a green finance framework in 2016.

In September, President Xi Jinping said at a United Nations event that China aims to go carbon neutral by 2060, about 10 years later than the European Union, which underwent industrialization earlier than many other parts of the world.

The guidelines also addressed regulatory policies to help various types of financial institutions develop climate-friendly green financial products and provide financial support for major climate projects.

Qualified climate-friendly businesses will be encouraged to seek financing or refinancing on the capital markets, and small businesses and the general public will be encouraged to participate in actions addressing climate change, according to the guidelines.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full Caixin article in Chinese, click here.

Contact reporter Timmy Shen (hongmingshen@caixin.com) and editor Heather Mowbray (heathermowbray@caixin.com)

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