Xiongan to be pilot project of China-UK Green Finance Center

By Christopher Georgiou
0 Comment(s)Print E-mail China.org.cn, March 27, 2018
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The Lord Mayor of the City of London Alderman Charles Bowman visited Beijing to co-chair the launch ceremony of the London branch of the China-U.K. Green Finance Center with Dr. Ma Jun, director of the Green Finance Committee of the China Society for Finance and Banking, on Mar. 26.

The Lord Mayor of the City of London Alderman Charles Bowman speaks at the launch ceremony of the U.K.-China Green Finance Center in Beijing on March 26. [Photo by Christopher Georgiou / China.org.cn]

With key sectors in the U.K., including the financial services of the City of London, seeking to gain opportunities and provide expert services in the development of the Belt and Road Initiative, the launching of a Green Finance Center is the latest addition in cooperation.

The fruition of the center stems from the U.K.-China Green Finance Taskforce, which was jointly established by the Green Finance Initiative (GFI) of the City of London and the Green Finance Committee (GFC) of the China Society for Finance and Banking to coordinate inputs and responses from a diverse network of public and private sector actors — culminating in an inaugural report published in Beijing on Sept. 4, 2017.

The taskforce was delegated by the China-U.K. Economic and Financial Dialogue (EFD) with promoting a cross-border flow of solutions for developing and scaling up green finance in China, the U.K. and globally.

To support this enhanced cooperation with more resources, the City of London is now launching the China-U.K. Green Finance Research Center, and will invite key participants from the taskforce to sit on the center's board.  

"President Xi has made clear that the Belt and Road must be green," Lord Mayor Bowman announced at the signing ceremony, adding, "We will soon be convening an international investor group to support sustainable projects and focusing on how private capital can most efficiently be brought into projects that involve public capital."

"It is time to take it to the next stage of cooperation. The taskforce needs a permanent home to take forward its projects, so I am delighted to announce this evening that we are creating exactly this—and opening a U.K.-China center for green finance in London to create green finance products to support smart city development,c Bowman said.

Bowman also announced, "We have decided the perfect pilot project for the center will be Xiongan New Area."

According to Dr. Ma Jun, director of the GFC, the project will build on the Memorandum of Understanding between the Canary Wharf Group in London and the Xiongan New Area. With the entire city of Xiongan being newly constructed, he said, it will require a great deal of green finance and will serve as a role model for other cities in China, as well as for the Belt and Road Initiative, as a high-tech smart city.

The center itself will focus on research, seminars, and providing investor education and capacity building. Acting as a fulcrum of collaboration between the U.K. and China, its aim is to support the ongoing work of the taskforce, serve as a home for inbound delegations from China, and function as a knowledge network for international capital markets and practitioners.

Ma explained the importance of green finance, saying "The Belt and Road region has at least 65 countries and the per capita income level is around half of China's. Twenty years from now – according to some experts – their income level may reach China's income level today. Because their population is three times as large as China, without a new growth model, the carbon emissions of the Belt and Road region could be three times that of China."

Ma also called for the need to securitize China's green assets to make them available for U.K. investors, as currently green loans (8 trillion yuan outstanding in China) are much higher than green bonds (500 billion yuan outstanding in China). "We need to get the message across that green assets yield better, to counter the misconception that green assets are not profitable," he said.

The December 2017 EFD asked the U.K.-China Green Finance Taskforce to take forward specific work in a number of key areas: developing voluntary principles for greening the Belt and Road, organizing Chinese and U.K. financial institutions to launch a pilot program on environmental information disclosure consistent with recommendations from the Task Force on Climate-related Financial Disclosures (TCFD), promoting securitization of green assets, and conducting research on the relationship between performance on Environmental, Social and Governance (ESG) criteria and costs of capital.

Bowman concluded with a cricketing analogy regarding progress, saying, "We need to get runs on the board before the EFD in November this year."

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