Financing the climate transition in China’s agri-food systems

This report examines the financing gap in China's agri-food system transition, noting that while the sector is a major global emitter, it receives minimal climate finance. It argues that current green and inclusive finance policies are insufficient and advocates for a 'transition finance' framework. Key recommendations include improving GHG disclosure, developing credible entity-level transition plans, and aligning agricultural subsidies with climate goals to ensure a just transition for smallholders.

• China is the world's largest food-related emitter, with agri-food system GHG emissions exceeding 1.9 Gt CO2e in 2019, accounting for one-tenth of global food emissions.
• A significant global financing gap exists for the agri-food sector; only 4.3% of global climate finance (approximately USD 28.5bn in 2020) is allocated to these systems, which is one-seventh of the estimated requirement.
• China's current green and inclusive finance policies are poorly aligned with agri-food transition needs: green finance focuses on 'pure green' activities, while inclusive finance lacks climate considerations.
• Transition finance is identified as a critical tool to bridge the funding gap by supporting entities that are not yet green but have credible transition plans. The People's Bank of China (PBoC) is currently developing national transition finance standards with agriculture as a key focus.
• Climate-related information disclosure among Chinese agri-food companies is inadequate, particularly for A-share listed firms, where only 41% produce ESG or social responsibility reports and only seven disclose GHG indicators.
• Most Chinese agri-food companies lack credible entity-level transition plans due to unclear profitable business models, lack of policy guidance, and insufficient knowledge of transition finance instruments.
• The report recommends that the Ministry of Agriculture and Rural Affairs (MARA) enhance GHG accounting standards and establish monitoring systems to align the sector with transition finance standards.
• To ensure a just transition, the report suggests integrating supply chain finance with transition finance, allowing large and medium-sized corporates to support smallholders and SMEs in reducing emissions.
• Agricultural subsidies in China need realignment; while direct subsidies have increased significantly, agroecological compensation subsidies grew by only 9.8% between 2004 and 2015.
• The report proposes that the government increase its role as an agri-food bond issuer by issuing transition sovereign or local government bonds to fund activities with high public value but low commercial viability.

APA

Shao, D., Zhang, J., He, X., Li, S., & Xie, W. (2024). Financing the climate transition in China’s agri-food systems. Climate Bonds Initiative. https://www.climatebonds.net/files/documents/publications/Financing-the-climate-transition-in-China%E2%80%99s-agri-food-systems_2025-02-17-162812_kphm.pdf

Chicago

Shao, Danqing, Jingyi Zhang, Xiaobei He, Shaoxin Li, and Wenhong Xie. Financing the climate transition in China’s agri-food systems. Climate Bonds Initiative, 2024. https://www.climatebonds.net/files/documents/publications/Financing-the-climate-transition-in-China%E2%80%99s-agri-food-systems_2025-02-17-162812_kphm.pdf.

Wikipedia

{{cite report |last1=Shao |first1=Danqing |last2=Zhang |first2=Jingyi |last3=He |first3=Xiaobei |last4=Li |first4=Shaoxin |last5=Xie |first5=Wenhong |title=Financing the climate transition in China’s agri-food systems |publisher=Climate Bonds Initiative |date=October 2024 |url=https://www.climatebonds.net/files/documents/publications/Financing-the-climate-transition-in-China%E2%80%99s-agri-food-systems_2025-02-17-162812_kphm.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{shao2024financing, author = {Shao, Danqing and Zhang, Jingyi and He, Xiaobei and Li, Shaoxin and Xie, Wenhong}, title = {{Financing the climate transition in China’s agri-food systems}}, institution = {Climate Bonds Initiative}, year = {2024}, month = oct, url = {https://www.climatebonds.net/files/documents/publications/Financing-the-climate-transition-in-China%E2%80%99s-agri-food-systems_2025-02-17-162812_kphm.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }