Forum on Development of Green Finance Reform and Innovation Pilot Zone Held in Huzhou, Zhejiang, In Search of Repeatable and Expandable Practices

  Release date: 10:34 06-15-2018

  Forum Scene

  Huadu News Today: The State Council decided at an executive meeting on June 14, 2017 to launch green finance reform and innovation pilot zones in Guangdong, Zhejiang, Jiangxi, Guizhou, and Xinjiang, each with its own distinct focus and characteristics, in search of repeatable and expandable new practices at institutional level. In order to take stock of the achievements made in developing green finance reform and innovation pilot zones in the past year, and to analyze the new situations and new tasks facing the pilot program, a forum on development of green finance reform and innovation pilot zone was held in Huzhou, Zhejiang from 12-13, June, at which Mr. Chen Yulu, deputy governor of the People’s Bank of China, was present and delivered an important speech. Mr. Xiao Xue, Secretary of the Leading Party Members Group, and Director of Guangdong Financial Affairs Office, Ms. Li Simin, Deputy Secretary of the Leading Party Members Group, and Vice President of People’s Bank of China Guangdong Branch, Mr. Qiu Yitong, Secretary of the Leading Party Members Group, and Chief of Guangzhou Bureaux of Financial Affairs, Mr. Huang Weilin, Secretary of the CPC Huadu District Committee, and Mr. Cai Jian, Standing Member of CPC Huadu District Committee and Deputy Secretary of the District Government’s Leading Party Members Group attended the forum and gave briefs on the development of Guangzhou Green Finance Reform and Innovation Pilot Zone for the past year. Bureau Chief Qiu Yitong signed as a representative of pilot zone local government the Initiative on Building Green Project Database for Green Finance Reform and Innovation Pilot Zones in Guangdong, Zhejiang, Jiangxi, Guizhou, and Xinjiang; and Bank of Guangzhou signed the Initiative on Pioneering Disclosure of Environmental Information by Banking Institutions in Green Finance Reform and Innovation Pilot Zones in Guangdong, Zhejiang, Jiangxi, Guizhou, and Xinjiang.

  PBC Deputy Governor Chen Yulu pointed out at the Forum that all pilot zones have made certain progress through their promotion of tasks in a creative manner that incorporates their own unique conditions with the overall plan approved by the State Council. Over 85% of the tasks listed in the overall plans have been activated and pushed forward. Preliminary statistics showed that as of March, green loan balance in the five pilot zones reached R

  MB 260 billion yuan, representing a 13% increase over the time of their approval, and a growth rate 2 percentage points higher than that of balance of other loans in the same period. Quality of green credit assets remains at high standard while the total quantity expands; as of March, green loans in the five pilot zones registered a non-performing loan ratio of 0.12%, which is 0.94% lower than the average NPL ratio in the pilot zones. The achievements are mainly fourfold: firstly, establishment of rules and regulations to improve systems and institutions needed to promote the pilot program of green finance reform and innovation; secondly, application of market forces to stimulate green finance innovations; thirdly, use of multiple methods to effectively push forward construction of infrastructure construction for green finance; and fourthly, control of risk to ensure surefooted development of reform and innovation of pilot zones.

  On June 12, during the section of the Forum in which work of green finance reform and innovation pilot zones were reported, Mr. Xiao Xue, Director of Guangdong Financial Affairs Office noted that since the approval of Guangzhou Green Finance Reform and Innovation Pilot Zone, Guangdong Province, taking it as a key area to fully implement the spirit of the Party's 19th National Congress, and the important instructions and comments of President Xi Jinping, has committed to the carrying out of the Overall Plan for Construction of Guangzhou Green Finance Reform and Innovation Pilot Zone in Guangdong, and that the Province, following the overall plan in which "Huadu will act as the core and connect nodes elsewhere to form a network that will cover the whole Guangzhou area, extend to the whole province, and serve the greater neighboring area" and bearing in mind the four major targets, that is, to become "a test field for green finance reform and innovation, a demonstration zone for coordinated development of green finance and green industries, a green platform for cooperation and development in the Guangdong-Hong Kong-Macau Greater Bay Area, and a booster for the Belt and Road Initiative", has blazed a new path that features dedicated efforts in creating favorable business environment, vigorous innovations in systems and institutions, and underpinning ecological civilization construction with the help of green finance.

  According to Mr. Xiao, the preliminary achievements made in the construction of Guangzhou Green Finance Reform and Innovation Pilot Zone are in four major areas: the first one is innovating systems and institutions with concrete results. Innovations are made to the accreditation and approval system for green enterprises and green projects, in which new measures and methods are introduced to determine whether an enterprise or a project is green. Innovations are also made to the system for alignment between green projects and finance, in which management rules are made for green enterprises and green projects pool, for alignment between green projects and finance, and for daily operation of green projects pool. The second is improving green finance organizing system with concrete results. A batch of specialized green finance agencies are attracted to the District. ICBC, Bank of China, and China Construction Bank have upgraded their sub-branches in Huadu to green branches; Bank of Guangzhou, Industrial Bank, and Pudong Development Bank among others have set up their green finance departments in the District, and China Construction Bank has establish in Huadu a green finance innovation center, which is the first of its kind in the country. The third is promoting green industry financing with fruitful results. The portion of green credits is on the rise; as of March 2018, the total green loan balance of banks in Guangzhou was RMB 259.6 billion yuan, which is 34.7% up from last June when the Pilot Zone was approved, and represents a growth rate 20 percentage points higher than all other loans. And the fourth is taking solid measures to promote green transition. A 3000 mu (ca.500 acres) green industry value innovation park, and a 10 km2 green industry park are planned and set up respectively to the south and west of Huadu Lake, which, with the support from green finance, will focus on the development of new-energy vehicle, intelligent equipment, robots, and other advanced manufacturing industries, and will be built with quickened pace into a highly efficient, energy conserving, eco-friendly demonstration zone for the development of green industry.

  On June 13, during the opinion exchange section of the Forum, Mr. Cai Jian, Standing Member of CPC Huadu District Committee and Deputy Secretary of the District Government’s Leading Party Members Group,highlighted the features of the development of the green finance reform and innovation pilot zone centering around Huadu, Guangzhou, as follows: firstly, innovating carbon finance. The Emission Exchange in Guangzhou has registered a carbon quota spot trading volume of over 70 million tons, with a total value surpassing 1.6 billion yuan, which secures it a leading place among the first 7 pilot exchanges. Continuous innovations of the Emission Exchange in financing business secured by mortgage or pledge of carbon emission rights have helped two companies obtain credit lines, totaling a combined amount of 2.6 million yuan. Meanwhile, an ecological forest covering an area of 30000 mu (ca.5000 acres) was selected for a pilot program of carbon sink trade, with a value of about 170,000 yuan. Secondly, building with joint forces green financial circle in the Guangdong-Hong Kong-Macao region. Financial institutions from Hong Kong and Macau are encouraged to set up branches or joint-venture securities, fund, and insurance companies in Huadu; great efforts are being made to promote Aluminum Corporation of China Limited, Tang Ping Kong Limited from Hong Kong, and other companies to set up joint-venture securities companies that focus on green securities business; and the projects are now waiting for approval. Cooperation with Hong Kong Quality Assurance Agency is in progress to explore the possibility of a Green Finance Development Index. Thirdly, actively building a system that can align finance with green enterprises and projects. Working on the foundation laid by Guangdong Credit Information and Financing Alignment Platform for Medium, Small, and Micro Businesses, an interface for green project sub-platform has been created to integrate information of all government agencies of the Huadu District. It is planned that a green finance credit information database will be created to store information of companies in relation to their administration for industry and commerce registration, taxes, environmental protection, energy consumption, and financial conditions, which will serve as a platform where banking institutions may inquire about government and credit information specific to a green project, display their financial products, and carry out on-line financing alignment. The system, coupled with meetings regularly convened for financing alignment between industry and financial sectors, will provide a seamless platform, both online and offline, for financing alignment between industry and financial sectors. And fourthly, creating a green finance comprehensive service center on the basis of the green finance street. The highlight is a sub-center of government services, where government agencies, including administration for industry and commerce, tax bureaus, human resources and social security bureau, and bureau of science, industry and information technology, will take their turns to be present on the site to provide one-stop service, resulting in great improvement of service quality and efficiency.

  The next step for Guangzhou to take is to earnestly act on Xi Jinping Thought on Socialist Economy with Chinese Characteristics for a New Era, and follow the requirements raised by Mr. Xi for Guangdong during the NPC and CPPCC Sessions this year that Guangdong should "quicken the pace in creating systems and institutions to promote green development, pursue green, low-carbon circular economy, and take green development to a higher level" when it continues to concentrate on supporting green industry development with green finance, to deliver a good performance in a variety of reforms and innovations, to achieve a new pattern of synergized development of green finance and green industries, to push forward experiments and applications of green finance, and to enhance regional and international exchanges, and eventually to provide a "Guangzhou Model-Huadu Experience" for the benefit of green finance reform and innovation in the country.