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China Report: Lessons from the Development of Green Finance in China

With the initial progress of China’s green finance market, some lessons are emerging that are useful both for the further development of the green finance system and for other emerging market countries embarking on green finance development.

  •  Strategic political commitment has been the key driver for China’s development of green finance, but translating this into effective implementation remains a challenge.
  • Reconciling diverse interests between central and local governments and between state and market players has been the critical challenge.
  • An initial, loosely defined approach to the scope of green finance has enabled experimentation; however, to scale-up the development further requires clear and comparable definitions.
  • Mechanisms for coordination and cooperation between departments are a critical success factor, but need continued strengthening.
  • Supporting policies are critical to translating high-level commitments into action, but are not yet fully in place.
  • China’s green finance system is at an early stage of innovation and development and is not yet balanced across different channels, investors and products.
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