Green Banking in China: Emerging Trends

This briefing by the Climate Policy Initiative examines the development of green banking in China, highlighting the role of the 'Big Four' state-owned banks and the Industrial and Commercial Bank of China (ICBC). It analyzes the growth of green credit portfolios, the effectiveness of top-down policy incentives from the People's Bank of China (PBoC), and the financial performance of green loans compared to traditional loans. The document also identifies systemic barriers to scaling green finance, including insufficient risk modeling and the perceived trade-off between green investment and short-term profitability.

• Green loans in China have demonstrated lower risk than conventional loans, with a non-performing loan (NPL) ratio of 0.42% at the end of 2018, compared to an overall credit NPL ratio of 1.83%.
• The total balance of green loans grew as a share of the overall credit balance from 8.8% in 2013 to 10.4% by the end of 2019, totaling over RMB 10.6 trillion (USD 1.5 trillion). In 2019, clean transport and clean energy accounted for 45% and 24% of green finance, respectively.
• China's four largest state-owned commercial banks (the 'Big Four') hold combined total assets of RMB 103.6 trillion (USD 14.8 trillion) and were the top four global financiers of coal, contributing USD 106 billion to coal mining and coal power between 2016 and 2019.
• The Industrial and Commercial Bank of China (ICBC) had a green loan portfolio estimated at USD 199 billion in 2019, representing 8% of its total portfolio and 13% of China's total green credit balance. ICBC reported emissions reductions of nearly 90 million tons of CO2 as of 2018.
• Several barriers hinder the expansion of green banking in China, including a lack of environmental stress testing and responsibility mechanisms for environmental liabilities, weak direct financial incentives, regulatory pressure to deleverage, and a perception that green projects offer lower short-term profits than traditional sectors.

APA

Climate Policy Initiative (2020). Green Banking in China: Emerging Trends. https://www.climatepolicyinitiative.org/publication/green-banking-in-china-emerging-trends/

Chicago

Climate Policy Initiative. Green Banking in China: Emerging Trends. 2020. https://www.climatepolicyinitiative.org/publication/green-banking-in-china-emerging-trends/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Green Banking in China: Emerging Trends |date=18 August 2020 |url=https://www.climatepolicyinitiative.org/publication/green-banking-in-china-emerging-trends/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2020green, author = {{Climate Policy Initiative}}, title = {{Green Banking in China: Emerging Trends}}, institution = {Climate Policy Initiative}, year = {2020}, month = aug, url = {https://www.climatepolicyinitiative.org/publication/green-banking-in-china-emerging-trends/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }