Source: Global Times    Published: 2017-8-12

China`s green financial market has been growing rapidly in recent years, with the country becoming the largest green bond market in 2016.

There is a perception in the rest of world that China doesn’t take green issues seriously, and yet when you’re here on the ground, there is so much momentum in green issues and environmental solutions, Nick Pollard, managing director of the Asia Pacific region of CFA Institute told the Global Times on the sidelines of the 6th CFA China Investment Conference on Saturday in Beijing.

In the first seven months of this year, China issued a combined 49 green bonds and green asset-backed securities worth 90.8 billion yuan ($13.62 billion), accounting for 21.29 percent of global total, domestic news site ce.cn reported on Wednesday, citing a report from China Chengxin International Credit Rating Co. It said that the amount of green bonds and green asset-backed securities issued by China since 2016 represent 30.48 percent of global total.

However, there are still a number of challenges, Pollard said. “For example, the cost of cleaning up pollution far outstrips the government’s ability to direct resources to the area. How you can fund that? Typically, if you look at green products or innovation around the issues, they tend to be very expensive,” he said.

China needs to invest around 4 trillion yuan in the green industry annually, but the government can only provide 10 percent of the total, and thus the establishment of a green finance system to stimulate social funds into green industry is necessary, according to Ma Jun, chief economist of the People`s Bank of China (PBC), at the conference.

In fact, much work has been done to bolster the development of the green finance industry since the set up of Green Finance Commission in 2014. On June 14, the State Council, the cabinet, chose five provincial-level regions to implement green finance reform pilot programs, such as East China’s Zhejiang Province, South China’s Guangdong Province and Southwest China’s Guizhou Province, according to a report on gov.cn.

Pollard also said that China’s wealth management industry need to have adequate opportunities that really create value, given the rising tide of the middle class. With the proposal of the Belt and Road initiative, there are vast infrastructure investment opportunities outside China, but there is a lack of assets within China, he said, noting proper outlets for investments are necessary.