China’s green loans exceed $3.2 trillion

To reduce emissions, Beijing has lent 300b yuan via relending tool

BOAO:

China’s outstanding green loans currently exceed 22 trillion yuan ($3.2 trillion), accounting for about 10% of the country’s total loan balance, said Yi Gang, Governor of People’s Bank of China on Wednesday.

Separately, China’s green bonds have hit more than 2.5 trillion yuan, Yi said at the Boao Forum in southern China’s Hainan province.

“Achieving carbon neutrality requires ‘carrots and sticks’,” Yi said, adding that a central bank incentive mechanism, which provides commercial banks with loans with interest rates as low as 1.75%, could be equated to a “carrot”.

To support carbon emission reduction, the central bank has lent more than 300 billion yuan via a relending tool, which has helped banks to make 600 billion yuan in loans to green projects.

The central bank said in January it would keep the relending tool in place until the end of 2024.

Published in The Express Tribune, March 30^th, 2023.

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