The Potential for Scaling Climate Finance in China

The report examines China's green finance landscape, identifying a significant gap between current investment levels and the estimated USD 1.4 trillion annual investment needed over the next decade to meet 2015 climate and environmental targets. While green credit and bonds saw success during the 13th Five-Year Plan, finance remains heavily dominated by the public sector, with at least 51% of total green finance coming from public sources, primarily Central State Owned Enterprises and state-owned banks. The document highlights barriers for private capital, such as high 'search costs' and limited access to financing channels, and notes that half of the USD 292 billion in energy-related investments to Belt and Road Initiative countries between 2013 and 2019 went to fossil fuels. It recommends increasing the ambition of green standards, improving project pipeline visibility for private actors, and introducing mandatory exclusion lists for high-emission sectors.

• China requires a substantial increase in annual green investment to meet its 2015 climate targets and environmental protection standards, with estimated needs reaching USD 1.4 trillion per year over the next decade. This represents at least a four-fold increase from the annual average of RMB 2.1 trillion (USD 320 billion) recorded during 2017/2018.
• Green finance in China is heavily reliant on the public sector, which accounts for at least 51% of total green finance. The vast majority of this public funding—nearly 95%—is attributed to policy banks, major state-owned banks, and Central State Owned Enterprises (CSOEs).
• Private sector participation in climate finance is limited and concentrated in the solar sector. Private actors face significant barriers to accessing green capital, including high 'search costs' and restricted access to investment pipelines and formal financing channels.
• Between 2013 and 2019, China's outbound investment totaled over USD 2 trillion, with USD 739 billion (37%) directed toward Belt and Road Initiative (BRI) partner countries. Of the USD 292 billion invested in energy-related projects within BRI countries, approximately 50% was allocated to fossil fuels.
• Green investment is geographically concentrated in the north and southeast, particularly in coastal provinces. Solar energy investments are dominant in the northeast (including Hebei, Shanxi, Shaanxi, and Inner Mongolia), while wind energy is prominent in the southeast (led by Henan, Guangdong, and Jiangsu).

APA

Climate Policy Initiative (2021). The Potential for Scaling Climate Finance in China. https://www.climatepolicyinitiative.org/publication/the-potential-for-scaling-climate-finance-in-china/

Chicago

Climate Policy Initiative. The Potential for Scaling Climate Finance in China. 2021. https://www.climatepolicyinitiative.org/publication/the-potential-for-scaling-climate-finance-in-china/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=The Potential for Scaling Climate Finance in China |date=4 February 2021 |url=https://www.climatepolicyinitiative.org/publication/the-potential-for-scaling-climate-finance-in-china/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2021potential, author = {{Climate Policy Initiative}}, title = {{The Potential for Scaling Climate Finance in China}}, institution = {Climate Policy Initiative}, year = {2021}, month = feb, url = {https://www.climatepolicyinitiative.org/publication/the-potential-for-scaling-climate-finance-in-china/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }