Here’s your weekly update on green finance in China from the International Institute of Green Finance in Beijing with risks, reneging, another index, consumption up/down-grade, and snitches. 30th of August 2019. |
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一 ESG'ed, indexed, out there |
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Concrete information is scarce, but according to Xinhua, Hwabao Fund have launched an ESG vetted MSCI fund. The ESG part will align with the guidelines in the Green Investment Guidelines issued by the Asset Management Association of China, while stocks will be selected from the MSCI China index. "China is in a period of economic transformation. Environmental protection, green finance, promotion of social fairness and justice, and the strengthening of corporate governance are urgent needs for the whole of society, and the policy support in this area has continued to strengthen. We believe that ESG investment will become the next important investment opportunity for A-shares. For our asset management institutions, we need to actively embrace and seize such historical opportunities,” Huang Xiaoyu, General Manager at Hwabao Fund told Xinhua. Xinhua: 陆家嘴金融城推出国内首支基于MSCI ESG评级指数型基金 |
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二, perpetrators and protectors |
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The Ministry of Ecology and Environment has published aggregated data on environmental trespassers for the first six months of 2019. From January to June of 2019, a total of 63,744 cases were handled nationwide, with fines worth 4.633 billion RMB issued, at an average 72,700 RMB per fine. Top five violating provinces with regards to administrative penalty cases were: Hebei, Guangdong, Shandong, Jiangsu, and Henan; while the top five fine receiving provinces were: Guangdong, Jiangsu, Shandong, Hebei, and Zhejiang. The link goes to the MEE side where a table lists violations and what happened to the cases, alas, only macro data. There’s a geographical takeaway from the data. Many of the violations have to do with “classical” pollution such as that of waterways, soil and air. It’s the richer, more developed provinces that top the list of violators, but they might not be that much worse than the rest, it’s probably more a selection bias: There’s stricter enforcement in those provinces because the environment is a priority for the administration and the citizenry (or vice versa, depending on how you think the world runs). MEE: 生态环境部通报2019年1-6月环境行政处罚案件与《环境保护法》配套办法执行情况 |
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Speaking of violators, have you ever wondered what it takes to keep taps on all the environmental issues in China? Around 50.000 environmental reports by citizens are registered each month, according to Xinhua. In July of this year, 50.785 reports were registered at the 12369环保举报联网管理平台 office, down 37 percent year on year. The phone hotline 24,942 of the total, accounting for 49.1 percent, WeChat reports were 19,789, or 39 percent, while online submitted reports were 5,818, accounting for 11.5%. Air pollution was the top scorer in July, accounting for 50 percent of the total reported. Noise pollution, water pollution, solid waste pollution, ecological damage and radiation pollution made up 39.5 percent, 14.6 percent, 6.4 percent, and 1.9 percent, respectively. Geographically the reports overlap well with the story above. Xinhua: 生态环境部：7月共接到环保举报50785件 同比降低37.4% |
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This item is not explicitly green finance related, but among all the fanfare of green finance news and developments, fines and polluters, progress and expansion, that we feature in this newsletter, keeping an eye on the non-green part of the economy, i.e. the rest, is still relevant. With slowing growth, a trade war with the China’s biggest trading partners, the Hong Kong situation putting a ceiling on investments, it’s only natural that the central government is looking to stimulate, and they are at it: “China's State Council decided Wednesday to further ease market access by scrapping production permits for some industrial products. An additional 13 categories of industrial products including internal combustion engines and brake fluid will be exempted from applying for a permit for production, according to a statement released after a State Council executive meeting chaired by Premier Li Keqiang.” Less standards is not good for the environment, especially in the area of industrial production, but green finance is not guaranteed to take a hit, since the concept is still being promulgated from the highest peaks. Xinhua: China expands market access to industrial products GOV: 李克强主持召开国务院常务会议部署深化放管结合加强事中事后监管 促进公平竞争提升市场效率等 |
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五, cont'd: climate commitments; reneged |
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“China’s greenhouse gas emission targets are at risk as a result of the trade war with the United States, which has put Beijing’s coal-reliant economy under heavy pressure, a senior climate official said on Friday.” Reuters wrote today. The official is from the Ministry of Ecology and Environment and scapegoat is the global economy and the US led trade war. Li’s press conference occurred ahead of the UN climate summit in New York. “Don’t underestimate the determination and confidence of the Chinese government, but at the same time, don’t underestimate the difficulties China is facing,” he said, adding, “China will not be able to meet the goal many years ahead of schedule.”” And: “Li said the environment ministry would focus on climate financing in the future and work with the central bank and China’s top planning body to devise policies to support carbon reduction projects throughout the country, including renewables and electric vehicles.” Li also said China will be unable to do a full annual carbon inventory that should have been submitted to the United Nations, as the country lacked staff and resources. Chinese CO2 emissions is set to increase by 30 percent over the next decade. Reuters: China CO2 emission targets at risk from U.S. trade war: official |
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六, consumption greengrade |
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No matter where in the Chinese economy you’re positioned, you cannot have missed the idea of “consumption downgrade”. Basically, it’s the fear that people buy inferior and cheaper goods, instead of moving up the ladder of quality – literally and metaphorically it's the fear that Chinese economy ends up petrified as a middle income, never moving on to the lauded high income status. That shall not happen, if the State Council has its way. A new policy sets out to support the replacement of old and polluting goods with new and green ones. “[It aims to] to encourage qualified enterprises to recycle used electronic and electrical discarded products and replace them with greener, energy saving, and intelligent products.” The policy is aimed at more expensive household items such as television, refrigerators, washing machines, air conditions, etc. “Where conditions permit, certain support will be given to the promotion of related product promotion activities, construction of information platforms and recycling systems.” Sina: 国务院：支持绿色智能商品以旧换新 扩大消费 |
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There were two issuances in the labelled green bond market, while seven unlabelled bonds made it to market 盘点绿色债券8.12 - 8.18 |
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This is the twentysecond issue of our Green Finance in China newsletter. The idea is to bring the latest in news, research, and opinion related to green finance in China to anyone interested. Please send tips and criticisms our way. You can also have a look at greenfinanceinchina.com where we'll host earlier editions, blog posts, and more. If you've been signed up to our newsletter by mistake please unsubscribe at the bottom of the email. |
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