LINE

Text:AAAPrint
Economy

Green finance pilot to be extended

1
2018-06-14 09:18:07China Daily Editor : Li Yan ECNS App Download

China is preparing a nationwide green finance development trial model and extending a one-year pilot program in five provinces, to encourage faster and cheaper loans for environment-friendly industries, according to a senior central bank official.

The People's Bank of China, the central bank, is drafting an assessment system to evaluate banking depository financial institutions' performance of issuing "green loans", and "the pilot plan will be released soon", Chen Yulu, PBOC vice-governor, said at a two-day meeting that ended on Wednesday in Huzhou, Zhejiang province.

The country launched a green finance reform and innovation pilot program in five provinces in June last year, including Zhejiang, Guangdong and Guizhou. "The pilot program has achieved successful results, and some of the mature experiences can be extended to the whole country," the vice-governor said.

The PBOC will further improve the green finance pilot program in the near future, including the launch of a green credit management system, to introduce unified green credit statistics standards, start mortgage and collateral financing of environmental equities and support the clean energy industry, said Chen.

Green finance is financing of investments that provide environmental benefits in the broader context of sustainable development, which seeks to improve the financial system's effectiveness in mobilizing capital toward a green and inclusive economy. It covers nearly all types of financing channels, including banking loans, bonds, stocks, insurance, private equity and venture capital.

Under the pilot program for investors, they can get faster and cheaper funds through financial institutions, if the projects can be identified as "green" according to certain assessment standards. As for financial institutions, they can get subsidies from local governments if they raise a certain amount of capital to support the qualified projects.

"Like the two sides of the coin, it is encouraging for financial institutions to provide green credit and services, but risk management is the core for the financial activities, which needs unified standards to select qualified investment targets and tight regulations for credit disbursal," said Li Xiaowen, an official from the policy research bureau of the China Banking and Insurance Regulatory Commission.

By the end of March, the five pilot zones' outstanding green credit reached 260 billion yuan ($40.6 billion), a growth of 13 percent from a year earlier. Among that, the nonperforming loans comprised 0.12 percent of the total, compared with 1.06 percent of the average NPL ratio in those regions, according to data from the central bank.

According to the PBOC vice-governor, the central bank will include green credit into the macro prudential assessment system, a framework to ensure financial stability and prevent systemic risks, to better regulate commercial banks' lending activities and funnel the fund injection into targeted areas.

Ma Jun, director of China Green Finance Committee, said that some key issues need to be solved on the next step to facilitate securitization of green finance by creating more products and services, while encouraging private equity and venture capital to join the funding scheme.

Green finance was included in the discussion topics of the Hangzhou G20 summit in 2016 and a Green Finance Study Group was established for the purpose. The concept of green finance has been widely accepted by the G20 members as an important method to achieve sustainable global growth, said Ma.

  

Related news

MorePhoto

Most popular in 24h

MoreTop news

MoreVideo

News
Politics
Business
Society
Culture
Military
Sci-tech
Entertainment
Sports
Odd
Features
Biz
Economy
Travel
Travel News
Travel Types
Events
Food
Hotel
Bar & Club
Architecture
Gallery
Photo
CNS Photo
Video
Video
Learning Chinese
Learn About China
Social Chinese
Business Chinese
Buzz Words
Bilingual
Resources
ECNS Wire
Special Coverage
Infographics
Voices
LINE
Back to top Links | About Us | Jobs | Contact Us | Privacy Policy
Copyright ©1999-2018 Chinanews.com. All rights reserved.
Reproduction in whole or in part without permission is prohibited.