Zhou Chengjun, the central bank research bureau: Establishing a sustainable green bond ecosystem

In 2018, the annual meeting of the Central Clearing Company Overseas Investors was held in Shanghai yesterday. Zhou Chengjun, deputy director of the Research Bureau of the People's Bank of China, pointed out at the meeting that it would build a sustainable ecosystem around green bonds and benchmarking international, from distribution to infrastructure. Standards, incentives to investors, and openness to the outside world form a good ecology that encourages effectiveness. "At present, there are some phenomena in China that are essentially green bonds but have not been labeled. The main reason is that the standard of green bonds is not clear, but more importantly, the government's supervision of green bonds is not in place." Zhou Chengjun said. The central bank will build a sustainable ecosystem around green bonds, and even if the issuing party will have the convenience of issuing, investors will be motivated by investment. The convenience of distribution is reflected in such things as more cost-effective, easier procedures, and more significant social responsibilities. The central bank and regulatory authorities are considering issuing green bonds, providing better convenience to issuers from the aspects of access, process, and approval. At the same time, the cost of issuance is reduced, and the government subsidies are considered. At present, some local governments, especially the five green financial reform and innovation pilot zones, are considering subsidies for green bond issuance. Zhou Chengjun believes that investors in green bonds are mainly financial institutions. Since the third quarter, the People's Bank of China has conducted an MPA assessment of the green assets held by commercial banks. However, in the past, it only evaluated the green credit of commercial banks. At present, it is studying the plan and, through appropriate methods, the green assets of the financial institutions' assets. Environmental and social effects are accurately measured. At the same time, it is also considering that in some innovative experimental areas, the environmental and social effects generated by the financial institutions' green assets can be traded. On the one hand, commercial banks can achieve the assessment requirements by buying and selling green assets in the market, and on the other hand, let the green assets The environmental and social effects of a well-doing commercial bank or financial institution can be sold to generate revenue. Regarding tax incentives, we are currently considering giving financial institutions additional incentives for green assets investment in terms of income tax and value-added tax. At the same time, in terms of enriching the types of green bonds, it is considering allowing the governments of each pilot area to come up with better, cash-spent, completed green infrastructure projects and public facilities projects to securitize their cash flows. On the one hand, it will revitalize the cash flow and assets of this part of the green project. On the other hand, it will help local governments obtain additional funds and invest in more green projects. Even with the Ministry of Finance, in the special bonds issued by local governments, some green projects dedicated to supporting the localities were set aside.