The No.170 online seminar of the “Macro-Finance Salon”, also the 13th of the “Learning the Spirit of the Two Sessions – Finance Supports the Grand Start of the 14th Five-Year Plan” serial salon, jointly organized by the International Monetary Institute (IMI) and the Department of Money and Finance of School of Finance, Renmin University of China (RUC), was successfully held on the afternoon of December 11th, 2021. The theme of this salon was “How to Bring Green Bond Market into Play Under the Dual Carbon Target,” on which Dr. Tian Xinming, an external expert of IMI and Investment Manager of Ping An Fund Management Co., Ltd., made a keynote report. Lan Hong, Deputy Director of the Center for Eco-Finance Studies, RUC, and Professor of School of Environment & Natural Resources, RUC; Li Rong, Deputy Director of the Institute of Chinese Debt Research, RUC, and Associate Professor of School of Finance, RUC; Shi Yi, Deputy General Manager of Chinese Debt R&D Center, China Central Depository & Clearing Co., Ltd.; Wang Bin, Chief Macroeconomy Analyst of Department of Investment Banking, ICBC; Zhang Jingjing, Chief Macroeconomy Analyst of Western Securities; Fan Binbin, Manager of Investment Banking and Asset Management Department, Bank of China; and other experts participated in this seminar. The salon was moderated by Professor Tu Yonghong, IMI Deputy Director.

Dr. Tian Xinming gave a presentation entitled “How to Bring Green Bond Market into Play Under the Dual Carbon Target.” Starting from the perspective of industry, he pointed out that “dual carbon” is a long-term target to serve the environment and long-term human development, and also a historical opportunity for related industries to overtake. Firstly, he analyzed the basic situation of green bond market, remarking that in the current green bond market, the use of funds was concentrated in green services and energy conservation and environmental protection. According to him, the issuance venues were mainly domestic exchanges and the inter-bank market, the external examination of green certification tended to be strict, the issuance varieties were gradually balanced, the issuance interest rates did not enjoy obvious advantages, and the main issuers were local governments and state-owned enterprises in developed regions.

Dr. Tian then argued from the current problems of China’s green bond market, pointing out that there were differences in the existing rating standards, as the green bond regulatory mechanism had yet to be improved. The green bond issuance side also faced many challenges - small enterprises had obvious disadvantages in cost, and private enterprises issued fewer bonds and encountered many difficulties in issuing bonds. Meanwhile, the general credit environment was relatively poor, and the financing ability of private enterprises and urban construction & investment groups in weak regions tended to diminish. In the long run, it was more important to improve the credit environment so that the financing capacity of the bond market could be restored.

Dr. Tian concluded with some suggestions for future development of the green bond market. First, green bond standards should be improved, and domestic standards should be aligned with international standards. Second, the regulatory mechanism related to green bonds should be improved, taking the overall situation into consideration. Third, policy support for the issuance side should be optimized, and product optimization and innovation should be strengthened. Fourth, support for the investment side should be stepped up, and the investor structure and risk compensation mechanism should be refined. Finally, a disciplinary warning mechanism should be established for the credit bond market. For dishonest private enterprises, their use of funds shall be investigated for illegal and non-compliant acts, and the actual controllers of these enterprises shall to some certain extent bear joint and several liability.

After that, the attendees carried out extensive discussions on Dr. Tian’s report and related issues.