On April 25, Ambassador Zheng Zeguang attended City Week 2022 in London and delivered a keynote speech entitled China’s Efforts to Tackle Climate Change and China-UK Green Finance Cooperation.
Also speaking at the event were UK’s Economic Secretary John Glen, EBRD Governor Renaud-Basso, Lord Mayor Alderman Vincent Keaveny, Nikhil Rathi, Chief Executive of the UK's Financial Conduct Authority (FCA), Catherine McGuinness,Chair of the Policy & Resources Committee at the City of London Corporation, Timothy Adams, President and CEO of the Institute of International Finance(IIF) and other senior officials and financial leaders.
First held in 2010, City Week is an annual forum that brings together representatives of the governments, regulatory institutions and the financial community in discussions about the prospects and challenges of global financial service sector. City Week 2022 was co-hosted by the City of London, UKTI, TheCItyUK, UK Finance, City and Financial Global at the Guildhall.
The full text of Ambassador Zheng’s keynote speech is as follows:
China’s Efforts to Tackle Climate Change and
China-UK Green Finance Cooperation
Ladies and Gentlemen:
Good morning!
It is a real delight to join you at City Week 2022. I would like to thank the organizers for the kind invitation and friends from the business and financial sectors for your long-standing efforts in promoting China-UK cooperation.
As the theme of today’s Forum rightly points out, the financial services sector has a big role in helping achieve net zero and meet the climate change challenge.
In recent years, there has been much development in conservation-related financial services. Green finance has become an important area of international cooperation.
A lot has been said about the reality of climate change. The reality is dire. The challenges are real. Especially, the world is now faced with a series of problems: Covid-19, the sluggish economy, the Ukrainian crisis as well as the long-existing problem of inadequate financial and technological support for developing countries. Against this backdrop, all countries need to stay the course and make efforts for green and low-carbon development and continue the transition to new energy. And this would not be possible without the support of green finance.
In this connection, I would like to share with you some of my views.
First, China is firmly committed to promoting green and low-carbon development, and this has created ample opportunities for green finance.
Xi Jinping’s thought on ecological civilization has become China’s national consensus and has been put into real action.
When it comes to tackling climate change, it’s important to make pledges. But the key is to deliver. China has always delivered our pledges. In terms of reducing the intensity of carbon emissions, we had worked hard in the past 15 years and over-achieved the climate action target for 2020. To realize the goals of carbon peak before 2030 and carbon neutrality before 2060, China is now accelerating the establishment of the policy framework.
We have already unveiled the guideline and top-level design, and formulated carbon peak action plans for industries, transport and urban and rural development as well as scientific and technological support.
And these are now implemented at all levels. When the goals of carbon peak and neutrality come true, China will have realized the biggest reduction of carbon emissions intensity and the fastest leap from carbon peak to carbon neutrality in human history.
At the Central Economic Work Conference of China last December, it was emphasized once again that carbon peak and neutrality, as an integral requirement of China’s high-quality development, should be pursued persistently, and the “dual control” of energy consumption and intensity should be shifted to “dual control” of total carbon emissions and carbon intensity at an early date.
Second, green finance is growing rapidly in China and has displayed unique strengths.
China attaches great importance to the role of the financial sector in green and low-carbon development. It is one of the first countries that started to develop green finance.
We have continuously improved our policy framework for green finance. For example, China’s central bank, the People’s Bank of China, has revised the Green Bond Endorsed Projects Catalogue, improved the relevant standards, issued the Guidelines on Environmental Information Disclosure for Financial Institutions, and established mechanisms to encourage financial products innovation, improve bond issuance mechanisms, standardize trading process and improve trading transparency.
We have fostered a multi-layered products and market system that covers green loans, green bonds, green insurance, green funds, green trust and carbon finance products.
By the end of 2021, outstanding green loans in both RMB and foreign currencies stood at 15.9 trillion yuan, which represents an increase of 33% year-on-year and the largest stock scale in the world.
Last year alone, China issued over 600 billion yuan worth of green bonds, 180% more than the previous year. The outstanding amount reached 1.1 trillion yuan, which again was one of the largest in the world.
China’s green finance assets are good in quality, the maturity structure of green bonds is more reasonable, and their cost advantages are gradually emerging.
From 2018 to 2020, China’s insurance sector provided green insurance coverage of 45.03 trillion yuan. With a trading market launched, the development of the carbon finance market is well underway.
Third, there are broad prospects for China-UK cooperation on green development and green finance.
Clean energy and green finance have become important areas of China-UK cooperation.
The governments of our two countries have provided extensive support in terms of policies and market. During the ninth and tenth EFD (Economic and Financial Dialogue), the two sides reached many important agreements on promoting the development of clean energy, enhancing coordination on green standards, and deepening cooperation on green finance.
Through the China-UK Green Finance Taskforce, our two sides have carried out cooperation in areas of green Belt and Road, green capital market, green banking and supervision, ESG and sustainable investment, data disclosure and green technology and innovation. Such cooperation has yielded fruitful results.
The China-UK Green Finance Centre established by the City of London in 2019 has played an important and positive role in promoting China-UK cooperation on green finance.
Last November, the Bank of China listed six sustainable development bonds worth 2.2 billion US dollars at the London Stock Exchange. It was another outcome of the joint effort between the financial institutions of our two countries to promote sustainable development.
Ladies and gentlemen:
Amid the lingering pandemic, China has made coordinated efforts to control the pandemic and promote economic and social development. The results are self evident. In the past two years, we have not only maintained low infection and fatality rates, but also registered an average annual economic growth of 5.1%, taking the lead in the world. In 2021, China’s economic growth was 8.1% and consumer price only increased by 0.9%.
The “Two Sessions” held earlier in March this year set China’s targets for economic and social development in 2022, including about 5.5% GDP growth rate and over 11 million new urban jobs.
We will follow the general principle of “dynamic zero-Covid” and strive to curb the new round of Omicron infection as quickly as possible. We will seek economic progress while keeping performance stable, continue to regard better life for the people as the priority, work vigorously to create new jobs, open up the market at a higher level, and promote green and low-carbon development. President Xi Jinping has reaffirmed China’s determination to open up our market wider at the Boao Forum recently. The measures put in place will create more business opportunities for foreign companies.
The strong resilience, huge potential and the fundamentals that sustain long-term growth remain unchanged. We are confident that through hard work, we will hit this year’s development targets, help keep the global industrial and supply chains stable, and provide more positive energy in a turbulent world.
Ladies and gentlemen:
In their telephone conversation last month, President Xi Jinping and Prime Minister Boris Johnson reached important common understanding on enhancing China-UK relationship. Cooperation in green development, financial services and digital economy was highlighted.
We stand ready to work with the UK side, follow the direction given by the leaders of our two countries, and support more practical cooperation. There is broad space for China-UK cooperation on green development.
This year marks the 50th anniversary of the establishment of ambassadorial diplomatic relations between China and the UK. It is a new historical starting point for both the development of our respective countries and the bilateral relationship.
It is essential to follow the principles of free trade. We hope that Chinese companies in the UK can operate in a fair, just and non-discriminatory business environment.
Our two sides can seize the opportunities, leverage our respective strengths, and deepen bilateral cooperation in areas of green and low-carbon development, low-carbon technologies such as carbon capture and storage, civilian use of nuclear power, offshore wind power, energy storage, low-carbon hydrogen, new energy vehicles, the building of low-carbon cities, climate investment and green finance.
We can expand cooperation in Belt and Road partner countries. China attaches great importance to helping developing countries respond to climate change. In recent years, we have allocated 1.1 billion RMB yuan for South-South cooperation and donated energy conservation and new energy products and equipment to nearly 40 countries.
Our two sides have jointly initiated the Green Investment Principles for the Belt and Road, which received positive response from the international financial community. We should continue working to ensure the effective implementation of these principles.
As COP27 and the second phase of COP15 are coming up, both sides should step up policy coordination actively champion and promote international cooperation on green development and green finance, and work closely together to protect the planet we all call home.
There is a lot we can work together to create benefits for our two countries and the world. I hope the City of London will continue to play a central role as an international financial hub. We in China look forward to continuing the win-win cooperation with you.
And I wish the City Week 2022 a great success.
Thank you!
