China’s Green Finance Sets Global Example for APEC’s Sustainable Future

The 31st Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting is underway in Peru, focusing on “Sustainable growth for resilient development”. Amid global efforts to embrace sustainable finance, China emerges as a leading example, offering valuable lessons for other nations aiming to integrate environmental, social, and governance (ESG) considerations into their financial systems.

Sustainable finance involves making investment decisions that not only generate financial returns but also contribute positively to environmental protection, social equity, and strong corporate governance. As climate change and environmental degradation pose increasing challenges, countries worldwide are seeking effective solutions, and China’s rapid advancement in green finance stands out.

China’s Rapid Growth in Green Finance

According to data from the People’s Bank of China (PBOC), the Chinese mainland’s central bank, as of September 2024, the green finance loans and bond balance in China reached approximately 38 trillion yuan ($5.25 trillion). This includes around 36 trillion yuan ($4.98 trillion) in green loans, more than quadruple the amount in 2015, and about 2 trillion yuan ($280 billion) in green bonds, both ranking first globally.

The remarkable development of green finance in China is attributed to effective collaboration between the nation’s leadership, government departments, and financial and industrial enterprises. In September 2015, the Communist Party of China (CPC) Central Committee and the State Council introduced the Integrated Reform Plan for Promoting Ecological Progress, proposing the establishment of a green financial system for the first time and encouraging financial institutions to expand green lending.

Subsequently, in 2016, seven state departments, including the PBOC and the Ministry of Finance, jointly issued the Guidelines for Establishing the Green Financial System, promoting greater social capital investment in green industries.

China’s proactive policies and substantial investments have positioned it as a global leader in sustainable finance. Its experience provides a valuable case study for APEC members and other nations seeking to balance economic growth with environmental sustainability.