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BEIJING (MNI) - China is trying to attract foreign institutional investors
to raise money for green financing initiatives in yuan, which would boost both
its green finance market and its currency internationalisation drive, Ma Jun, a
member of the People's Bank of China's monetary policy committee, told MNI on
the sidelines of the Second Belt and Road Forum for International Cooperation.
"The Chinese government is encouraging foreign institutions to issue
RMB-denominated panda bonds here," said Ma, a leading promoter of China's green
finance initiative on the global stage, who spoke to MNI as China announced that
27 global financial institutions had signed up to a set of green investment
principles for Beijing's continent-crossing Belt and Road infrastructure drive.
Tapping investors for green financing can still be challenging, with only a
small fraction of more than $100 trillion of global assets under management
allocated to the category, Ma said.
One possibility might be to repackage banks' green loans into asset-back
securities, for sale to global institutional investors, Ma noted, adding that
this would require further opening up of China's capital account.
"We need to provide incentives for market forces and should not rely on
fiscal or government-backed funding," said Ma, who sees potential for the global
green finance market to grow into the tens of trillions of dollars.
A major source of demand for green finance will be the Belt and Road
project, which aims to link China to economies across Eurasia, as well as in the
Middle East and Africa. Utilising green financial instruments is one of the
project's seven green investment principles, along with others such as promoting
sustainability and disclosure of environmental information.
"The majority of global infrastructure investment in the coming decades
will be in the Belt and Road region and they will have a significant impact on
the implementation of the Paris Agreement and UN Sustainable Development Goals,"
Ma Jun said in a news release.
--MNI London Bureau; +44 203 865 3829; email: email@example.com