By Kate Li, Associate Director of Green Finance, Paulson Institute
The Paulson Institute’s Green Finance Center convened a webinar on March 9 with the Research Center for Green Finance Development of Tsinghua University to jointly release the Fintech Facilitates Green Finance Development in China: Cases and Outlook report. More than a dozen mainstream Chinese media outlets participated in the webinar to learn about the four featured cases that are using fintech for green finance including representatives from the People’s Daily, Xinhua News, China Daily, Caixin, China Business News and the Paper.
The event began with a brief introduction of the study’s purpose by project leaders Gracie Sun, Senior Advisor of the Paulson Institute and Managing Director of the Institute’s Green Finance Center and Liu Jialong, expert from Research Center for Green Finance Development (Tsinghua GFD) at Tsinghua University. They also highlighted the challenges of applying fintech to green finance and the policy recommendations from the report.
The report’s case studies were then presented by representatives of the Huzhou Branch of the People’s Bank of China, Huzhou municipal government, Huzhou Bank, and the People’s Insurance Company of China Property and Casualty (PICC P&C). The cases studies are comprised of fintech-enabled projects created by these entities—the Green Finance Information Management System, Green Finance One-Stop Service Platform, Green Credit Management System, and the Remote Damage Assessment and Claim Settlement System for Catastrophe Insurance respectively.
Then, there was the opportunity for interactive discussions between the media and the representatives from the Paulson Institute, Tsinghua GFD, Huzhou municipal financial office, Huzhou Bank, PICC P&C, and Beijing Uni Inclusive Technology—a technical support provider for the green finance systems.
As part of the discussion on China’s advantages of using fintech for green finance development, Sun said, “there are three advantages—technology, policy, and market. In terms of technology, China is playing a prominent role in the global fintech industry. There are three Chinese companies in the world’s top ten fintech companies. Ant Financial Services and JD Technology are first and third on the list. Regarding policy, China has embraced green finance as a cornerstone of national strategy and continued its efforts by involving both top-down guidance and bottom-up initiatives. And for the market, fintech can provide new approaches to address the challenges confronted to further improve China’s green finance development, and financial institutions are actively seizing this opportunity to invest green by using fintech solutions.”
Huzhou’s experience with applying fintech to green finance was also widely discussed at the event given the success stories from the region. Pan Chunhui, Deputy Head of Huzhou Municipal Financial Office spoke about using big data to set up the Huzhou Digital Brain platform for public data processing and sharing to overcome inter-agency communication barriers and about no longer requiring paper certificates for commercial loan applications. These are some additional examples to a few of the cases in the report of the innovation in Huzhou.
Lastly, there was also much dialogue around how green finance can support businesses, especially small and medium enterprises (SMEs) against the coronavirus outbreak. Liu highlighted, “It is more apparent that the financial system should pay more attention to environmental and climate risks. With fintech-based green finance tools like the Green Finance One-Stop Service Platform in Huzhou, SMEs can easily and effectively apply for green credit online.” And for PICC P&C, besides helping disaster-effected claimants, the company is making efforts to launch insurance products to provide medical insurance for the people who are impacted by the coronavirus.
Based on the innovation described in the report and at the event, it seems that there is significant momentum in seeking ways to use fintech to facilitate green finance development. And since China is one of the largest and fastest-growing green finance markets in the world, the increasing market demand for green finance will only provide more incentive to create cutting-edge technologies for green finance development and sustainability.