The chair of one of China’s big state-owned banks has highlighted the need for a dramatic expansion in green finance over the next several decades in order to satisfy Beijing’s ambitious carbon mitigation targets.
In September 2020 President Xi Jinping announced the ambitious targets of achieving peak carbon before 2030, and carbon neutrality by 2060. The announcement has since been followed by a strong push for greater growth in China’s green financing sector from the central government.
Liu Liange (刘连舸), chairman of the Bank of China, writes in an article published by the People’s Daily that in order to achieve these goals China will need to invest as much as 100 trillion yuan (approx. USD$15.6 trillion) over the next 40 years.
Liu said that Chinese financial institutions will play an essential role during this process, and will need to provide both direct and indirect tools to provide support to low-carbon development.
“Financial institutions themselves are necessary components for China’s peak carbon and carbon neutrality targets,” wrote Liu. “Financial institutions are key drivers for the real economy to achieve peak carbon and carbon neutrality…finance is the lifeblood of the real economy.”
“Domestic financial institutions, and in particular large-scale institutions, must formulate plans as soon as possible, accelerate implementation, and strive to achieve their own peak carbon and carbon neutrality targets in advance.”