CNR:
China has achieved positive results in building a green financial system since the 18th CPC National Congress, and is highly expected to fulfil the goal of peak carbon emissions and eventually achieve carbon neutrality. How will you help achieve that goal by better playing the role of green finance? Thank you.
Liu Guiping:
Thank you for your question. The PBC has always attached great importance to developing green finance and putting into action General Secretary Xi Jinping's thinking on promoting ecological progress and the concept of "lucid waters and lush mountains are invaluable assets." I mentioned some of our explorations in developing green finance when making the overall introduction, especially the pilot zones for green finance reform and innovation in nine localities of six provinces and autonomous regions. Since you asked about it, I would like to generally brief what we have done and what we will do.
Our work so far has mainly focused on the three major functions of finance in supporting green and low-carbon development: resource allocation, risk management, and market pricing. We have formed five pillars of green finance so far: a standard system of green finance, requirements for the supervision and information disclosure of financial institutions, a system of policy incentives and restraints, a system of green finance products and market, and international cooperation in green finance.
As the next step, in line with the peak carbon emissions and carbon neutrality targets set by General Secretary Xi Jinping during his participation in a relevant international event in September last year, we are taking the following measures.
First, we are putting in place the work to achieve peak carbon emissions and carbon neutrality, and carrying out carbon accounting step by step. One of the core, fundamental and difficult tasks is to explore the establishment of a national carbon accounting system. We have already started this work.
Second, we are strengthening the restraint mechanism based on information disclosure. We already issued a notice to the pilot zones for green finance reform and innovation, encouraging financial institutions to disclose environmental information. We also motivated listed companies, financial institutions, bond issuers, and key emission organizations to share environmental information with each other.
Third, we are playing the role of the market. A very important function of green finance out of the three as mentioned just now is price discovery. To realize this function, it is necessary to build a unified national carbon emission trading market. The market should embody more financial attributes, while finance supports and coordinates with the market.
Fourthly, with energy restructuring as the core, we will create carbon emission reduction policy support tools that directly reach the real economy. Our relevant departments and bureaus have already started to explore and study this area, and we will release relevant information to the public after yielding outcomes.
In addition, the PBC has launched a green financial performance evaluation of financial institutions in order to better promote the development of green finance. We are improving this evaluation system in the hope of establishing a better mechanism to promote financial institutions to support green and low-carbon development in an effective, strong and orderly manner, and to promote the achievement of peak carbon emissions and carbon neutrality.
Fifth, we will do a better job of risk prevention and control. We have decided to gradually incorporate climate change-related risks into the macro-prudential policy framework.
Sixth, we are further deepening international collaboration. China once again became the co-chair of the G20 Sustainable Finance Study Group this year. We will play this role and take the lead together with the U.S. Treasury Department to motivate the G20 to do more in sustainable finance. We will strive to work out a common green finance taxonomy together with the EU within the year. We will strictly control investment in new coal power projects overseas by further implementing the Belt and Road green investment principles. As you may have noted, China has the world's largest green loan balance and the world's second largest green bond market, and the quality is good, with not a single case of default so far.
Seventh, we are furthering pushing forward the construction of pilot zones for green finance reform and innovation. Besides those already constructed in nine localities of six provinces and autonomous regions, we will construct pilot zones in more localities to help realize the goal of peak carbon emissions and achieving carbon neutrality.
There are still many things that need to be done and many issues that need to be explored and studied in green finance. We will further strengthen international collaboration embodied with Chinese characteristics, and further put into action Xi Jinping's thinking on promoting ecological progress and fully implement the concept of "lucid waters and lush mountains are invaluable assets." Thank you.
Chen Wenjun:
Thanks to all our speakers and friends from the media. Today's press conference ends here.
Translated and edited by Xu Xiaoxuan, Zhou Jing, Yan Xiaoqing, Li Huiru, Liu Jianing, Fan Junmei, Wang Mengru, Liu Qiang, He Shan, Zhang Rui, Wang Qian, Zhang Jiaqi, Wang Wei, Wang Yiming, Yang Xi, Lin Liyao, David Ball, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.
