China is strengthening its green transition by using financial instruments to promote sustainable development. Based on the guidelines issued by the Central Committee of the Chinese Communist Party and the State Council, the country is focusing on green finance and financial leasing to promote its economic transformation. A big part of this transition is the rise of green finance, with the People’s Bank of China predicting that green finance will reach $4.1 billion by the end of 2023, a 36.5 percent increase from last year. of the past. This represents the highest increase among all credit categories. Funding from these green funds will be focused on green projects in sectors such as energy, construction and mining, which are critical for China’s transition to a low-carbon environment. In addition, China’s green bond issuance will reach $498 billion by the end of 2023. This influx of capital supports the green transition in in various industries and strengthen the country’s ability to reduce carbon emissions and promote sustainable growth. The increase in green bond issuance is in line with China’s overall goal of expanding green finance to support projects that promote environmental sustainability. The country is also seeing an expansion of environmental, social and governance (ESG) investments. According to the China Asset Management Association, by the end of 2022 there will be 296 equity funds in China focusing on sustainability and ESG, with more than $55.5 billion in assets. E Fund Management Co., Ltd., the largest fund manager in China and one of the first signatories of the Principles for Responsible Investment (PRI) in China, is responsible for the development of ESG investment products. The company advances its ESG strategies by creating a new ESG rating framework designed for the A share market. This framework combines quantitative and qualitative assessments to assess companies based on their environmental impact. , management and capacity.
In addition, E Fund Management has introduced a weather risk management framework to monitor and manage weather-related risks in the investment fund. These projects are part of China’s broader strategy to direct capital to green and low-carbon industries, and signal the country’s commitment to sustainable economic growth. As China accelerates its green transition, financial institutions are playing an important role by increasing their efforts in sustainable investment and building advanced ESG frameworks to the unique characteristics of the Chinese market. This strategic push demonstrates the country’s ability to achieve a sustainable and environmentally responsible economic model, positioning itself as a global leader in green finance and sustainable development.