MNI POLICY: PBOC Vows Bigger Policy Support for Green Finance

The People's Bank of China will encourage more investors to help the country speed up the transition to a low-carbon economy by improving standard and extending policy support, senior officials and advisors of the central bank said Thursday in the Green Finance Reform and Innovation Forum in Huzhou, Zhejiang Province.

The PBOC will continue to offer more measures to facilitate investment in green finance products and include climate change risks in policy framework and macro prudential management, said PBOC Deputy Governor Liu Guiping. The central bank will also encourage lenders to help large energy companies reduce fossil fuel dependency, Liu said.

China needs to accelerate low-carbon production and consumption to meet President Xi Jinping's stated objective of peaking carbon emission by 2030 and achieving carbon neutrality by 2060, Liu said.

As of September, China had provided in total CNY11.55 trillion green loans, the most in the world, while the green bonds totaled CNY1.2 trillion as of the end of June, the second globally, said Liu. The bad loan rate of green loans is below the average NPL of commercial bank, and so far no green bonds have defaulted, he said.

The PBOC will facilitate global institutions investing in China's green finance market given the cooperation momentum from the successful signing of RCEP (Regional Comprehensive Economic Partnership), Liu said.

President Xi's carbon neutrality goal entails trillion-yuan demand for investment in China, with about CNY7 trillion in renewable energy, zero-carbon technology, etc., said Ma Jun, chairman of China Green Finance Committee.

Currency regulators and sovereign funds could increase the ESG (environmental, social, governance) investing, while local governments can also be permitted to back more green projects, said Ma.