MNI BRIEF: PBOC to Boost Green Finance: Yi Gang

China's central bank will use targeted tools to boost green lending and debt issuance to help reduce carbon emissions, according to Yi Gang, governor of the People’s Bank of China (PBOC).

In a speech at Boao Forum for Asia on Wednesday, Yi called on the international community to unify standards for green finance to promote the products globally. The convergence of green finance products between China and the E.U. has reached about 80%, which provides standards for some institutions in China and some developing countries to issue green bonds and develop products, he added. China is mulling over green investment principles for the Belt and Road Initiative, Yi continued.

He said both "carrots and sticks” are needed to meet carbon targets and the PBOC can play a supportive role providing relending facilities with interest rates set as low as 1.75% to lenders that offer loans to projects targeting carbon emission reductions. The carbon emission reduction supportive facility targets clean energy, environmental protection, carbon reduction technology and clean use of coal. It offered over CNY300 billion of relending loans in 2022 which leveraged as much as CNY600 billion bank loans and helped reduce about 100 million tonne of carbon.