In the report delivered at the 19th National Congress of the Communist Party of China in 2017, President XI Jinping emphasized that building an ecological civilization would be a “millennium project for the sustainable development of the entire nation,” and stressed the need to “construct a market-oriented system of innovation for green technology, develop green finance, as well as expand energy conservation and environmental protection industries, clean production industries, and clean energy industries.”
The Party Congress report signals that the Chinese government has elevated the development of green finance to the level of a national strategy, in an effort to provide real support to the country’s green sectors.
The rapid growth of China’s green bond market is a testament to both the strong policy support and the enormous potential of China’s green finance system. Although the green bond market was launched in China only in December 2015—when the People’s Bank of China first introduced green financial bonds in the country’s interbank bond market and the Green Finance Committee of the China Society for Finance and Banking published its Green Bond Endorsed Project Catalogue—it became the world’s largest within a single year, making up 40 percent of total green bond issuance in 2017. In recent years, innovative securitized products such as green covered bonds1 and green asset-backed securities are also beginning to emerge, thanks to improvements in the regulations and service of the green bond market, as well as increasing inter- national cooperation.
Read More: Chapter 7 China Green Bond Market.pdf