CBRC pushes green fi­nance

China Daily (USA) - - BUSINESS - By JIANG XUEQING jiangx­ue­qing@chi­nadaily.com. cn

China’s bank­ing reg­u­la­tor has de­voted great ef­forts to build­ing a green credit pol­icy sys­tem, lead­ing bank­ing in­sti­tu­tions to sup­port the de­vel­op­ment of an econ­omy that is green, low car­bon, and cir­cu­lar — mean­ing that it is de­signed to re­store and re­gen­er­ate resources.

Ye Yanfei, se­nior in­spec­torate ad­viser of the pol­icy re­search bu­reau of the China Bank­ing Reg­u­la­tory Com­mis­sion, said on Fri­day: “The CBRC has launched a se­ries of guide­lines on green credit since 2007, es­tab­lish­ing a pol­icy frame­work that de­fines clearly the bound­aries of green credit poli­cies, management ap­proaches and per­for­mance eval­u­a­tion meth­ods.”

On Wed­nes­day, the CBRC, along with six other cen­tral gov­ern­ment au­thor­i­ties, jointly is­sued the guide­line on build­ing China’s green fi­nance sys­tem, putting for­ward a se­ries of mea­sures to en­cour­age in­vest­ment in and fi­nanc­ing of en­vi­ron­men­tal­lyfriendly in­dus­tries.

The CBRC also played a lead­ing role in build­ing an in­ter­na­tional com­mu­ni­ca­tion and co­op­er­a­tion sys­tem for green credit, Ye said.

Ini­ti­ated by the CBRC, the Sus­tain­able Bank­ing Net­work, a com­mu­nity of fi­nan­cial sec­tor reg­u­la­tory agen­cies and bank­ing as­so­ci­a­tions from emerg­ing mar­kets com­mit­ted to ad­vanc­ing sus­tain­able fi­nance in line with in­ter­na­tional good prac­tice, was for­mally launched in 2012. To date, 12 coun­tries have launched na­tional poli­cies, guide­lines, prin­ci­ples or roadmaps fo­cused on sus­tain­able bank­ing.

Sta­tis­tics from the CBRC show that, as of the end of June, the green credit bal­ance of 21 ma­jor Chi­nese banks amounted to 7.26 tril­lion yuan ($1.1 tril­lion), ac­count­ing for 9 per­cent of their to­tal loans. The loan bal­ance of strate­gic emerg­ing in­dus­tries, such as new en­ergy, was 1.69 tril­lion yuan, and the loan bal­ance of en­ergy sav­ing and en­vi­ron­men­tal pro­tec­tion projects and ser­vices reached 5.57 tril­lion yuan.

Com­pared with other loans, the as­set qual­ity of loans to en­ergy sav­ing and en­vi­ron­men­tal pro­tec­tion projects and ser­vices is rel­a­tively good. As of June 30, their non­per­form­ing loan ra­tio was 0.41 per­cent, or 1.35 per­cent­age points lower than that of the to­tal loan port­fo­lio of 21 ma­jor banks.

The bank­ing reg­u­la­tor said loans to en­ergy sav­ing and en­vi­ron­men­tal pro­tec­tion projects and ser­vices have achieved sig­nif­i­cant en­vi­ron­men­tal ben­e­fits. Ev­ery year, they are es­ti­mated to save 187 mil­lion met­ric tons of stan­dard coal and re­duce 435 mil­lion tons of car­bon diox­ide emis­sions, equiv­a­lent to the amount of car­bon diox­ide emis­sions that would be re­duced by stop­ping 70,000 Beijing taxis for 298 years.

Tang Weiqi, re­search fel­low at the re­search arm of In­dus­trial and Com­mer­cial Bank of China Co Ltd, said green bonds have been grow­ing rapidly in China dur­ing the last two years, with di­ver­si­fied mar­ket par­tic­i­pants, in­clud­ing com­mer­cial banks, se­cu­ri­ties deal­ers and en­ter­prises.

“In the first half of 2016, China is­sued about 58 bil­lion yuan of green bonds do­mes­ti­cally, ac­count­ing for 30 per­cent of the to­tal world­wide. Start­ing from the sec­ond half, the growth of the Chi­nese green bond mar­ket fur­ther ac­cel­er­ated. We es­ti­mate that the do­mes­tic green bond mar­ket will reach 300 bil­lion yuan by the end of this year, or half of the global mar­ket,” he said.

It’s a crit­i­cal mo­ment be­cause the Hang Seng In­dex shot up to new highs and has out­per­formed global mar­kets in Au­gust.”

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