05 Jul 3-on-3 with Wang Yao: Finance key in promoting sustainability in China
Prof. Wang Yao is the Deputy Secretary General of the China Green Finance Committee, China Finance Society. She tells us more about China’s financial sector is increasingly moving towards sustainability, in response to the high environmental cost imposed by the country’s rapid development. She was in Singapore for the 3rd Singapore Dialogue on Sustainable World Resources organised by the SIIA.
Q. What are some of the key reforms that Green Finance Committee hopes to achieve?
The Green Finance Committee submitted 14 suggestions to the People’s Government and the Vice Prime Minister. Most of these 14 suggestions were adopted and now included in China’s 13th five-year plan. Our five-year plan actually is China’s national strategy, the most important national strategy, I think, about setting up China’s Green Finance system – including 4 parts, one is Green Financial Institution system, the second is Green Products and Service system, and the third is Green Finance Policy system, the fourth is, we called it the Green Financial Infrastructure system, including a Green Credit and Green Index and so on. And the key reforms are first Green Banking, Green Bonds and Green Funds and of course international Green Finance Cooperation.
Q. What is the Committee’s source of inspiration?
You all know China has experience in rapid growth – but with high environmental cost, and Beijing’s air condition is a good example of that. And now our China’s government and also our people realise this problem. So this is the first background. The second background is that finance is actually the core for the economy transition, and to promote a more environmental-friendly economy, finance is the most important factor for that. And the third is that, I think, China’s financial regulators have a very strong effect on the financial institutions. And so, top-to-down green finance policy could work in China. So yes, this is the inspiration for setting up the Green Finance Committee.
Q. How could these reforms possibly affect other countries in the ASEAN region?
Based on China’s experience and also lessons, other countries could identify institutions and market barriers to promotion of green finance, and also develop options to find the way to enhance the ability of their financial system to mobilize private firms, private investors into green areas. And also you know now, under the G20 framework, the green finance is one of the five groups and the international cooperation is very important. So I think the ASEAN countries can also do this.