Accelerating the New Stage of Green Finance Development

Dong Ximiao

“Green Finance: Exploring New Market Boundaries” by Lei Yao; published by China Financial Publishing House

“China’s Economy Toward the 14th Five-Year Plan” by the Institute of Economics, Chinese Academy of Social Sciences; published by Chinese Social Sciences Press. This book focuses on strategic issues related to the overall development of the Party and the country’s affairs, conducting multi-perspective research from historical, comparative, macro, and micro viewpoints.

“Quantum Financial Technology” edited by Wu Yongfei, Liu Yong, Long Guilu, and Wang Yanbo; published by CITIC Publishing Group. This book systematically analyzes the theory, application, and future prospects of quantum financial technology, with solid theoretical foundations and cutting-edge practical explorations.

Dr. Lei Yao’s work was published on the 20th anniversary of the “Two Mountains” concept, timely and relevant. As the first country in the world to establish a relatively complete green financial policy system, China has formed a multi-layered, diversified green financial market system covering green loans, green bonds, green insurance, green funds, green leasing, and green trusts, injecting strong momentum into comprehensive green transformation and development. The green financial market size ranks among the top globally.

China’s green finance development has evolved from nothing to something, from small to large, from weak to strong, becoming one of the “five major articles” in finance. Lei Yao, who has long engaged in policy research, formulation, and implementation at the People’s Bank of China, has been a witness, participant, and experiencer of green finance development. His unique experience and insights give this book its distinctive value—combining deep theoretical understanding, practical depth, and forward-looking perspectives, beyond mere theoretical deduction and model building. The content integrates the author’s firsthand involvement in building China’s green financial system, field research, and practical experience, offering a comprehensive summary of China’s green finance development and forward-looking analysis of future market opportunities and challenges.

China has basically established a policy framework of “three major functions” and “five main pillars” for green finance development. The next step should mainly focus on leveraging the role of the “effective market,” especially guiding and motivating financial institutions to become practitioners and exemplars of green finance. Financial institutions should establish and improve resource allocation mechanisms, risk management, comprehensive service, and evaluation systems to enhance the effectiveness of financial services for green development and continuously expand the breadth and depth of green finance. Of course, the role of a proactive government remains indispensable, and future efforts should deepen in the following three areas:

1. From “standard unification” to “standard implementation” to solve policy coordination issues. The “Green Finance Support Project Directory (2025 Edition)” further standardizes products like green loans, green bonds, and green insurance, but standards are only valuable if used. Future efforts should detail quantifiable, auditable assessment, evaluation, and incentive mechanisms, especially clarifying differentiated assessment requirements for small and medium-sized financial institutions; accelerate breaking down information barriers among finance, industry, and environmental departments to enable effective data sharing and mutual recognition.

2. From “scale expansion” to “structural optimization” to address gaps in direct financing. China’s green loan balance has reached nearly 45 trillion yuan, ranking first globally, but equity financing remains relatively low. Future efforts should vigorously develop green equity funds and other equity-based tools, as well as green insurance, supporting government industrial funds, specialized private equity firms, and venture capital companies to participate in green investments. Building a multi-layered service system of “credit + bonds + equity + insurance” will better match the full lifecycle funding needs of green projects.

3. From “qualitative disclosure” to “quantitative verification” to strengthen the data foundation. Currently, corporate environmental information disclosure is mainly descriptive, with little coverage of negative indicators, leading to insufficient information validity. The scope of semi-mandatory and mandatory disclosures should be gradually expanded, with clear disclosure timelines and roadmaps. Technology should be empowered—using AI, big data, IoT, and other technologies—to accelerate the construction of national data platforms, enabling zero-cost, zero-intervention carbon emission accounting and dynamic monitoring, effectively curbing “greenwashing” and false green behaviors.

As expressed in the book, the true “new boundary” of green finance is not distant but lies in the vivid details of implementing systems and standards, in the efficient deployment of each transition loan, and in the precise measurement of each “carbon account.” During the 14th Five-Year Plan period, it is believed that through joint efforts, the enormous potential of green finance will be further unleashed, better serving the green transformation of the real economy.

(The author is Chief Economist at Zhaolian and Deputy Director of the Shanghai Financial and Development Laboratory)