Green finance: what can other countries learn from China? - with Calvin Quek

Jul 25, 2025

In this engaging discussion, Calvin Quek, Executive Director at the Nature Finance Program, dives into the intricacies of green finance in China. He defines its role in aligning investments with sustainability and details China's impressive issuance of green bonds. The conversation also covers the transparency issues surrounding these bonds and the debates over taxonomies, including clean coal. Calvin highlights how green finance supports China’s energy transition while revealing the concerns about state support overshadowing smaller projects.

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INSIGHT

What Green Finance Actually Means

Green finance aligns financial incentives with environmental goals using tools like green bonds, taxonomies, and disclosure rules.
It tries to nudge capital toward low-carbon projects via incentives and disincentives embedded in policy and markets.

INSIGHT

China Is Big On Green Bonds

Green bonds earmark proceeds for environmental projects and are mostly issued by banks in China.
China leads globally by issuance volume, but green instruments remain a small share of total bonds and loans.

INSIGHT

Where Green Money Actually Goes Is Unclear

Transparency is limited: proceeds from many green bonds and loans lack clear public tracking.
Flexible earmarking and refinancing rules mean funds labelled green may not finance new green activity.

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Green finance has been a hot topic for several years, and in some respects China is an overall leader in green finance -- at least in terms of the overall volume of green bonds and green loans. More green finance products are coming out at a steady stream. So what does all this mean for China's energy transition? Has it really helped, and is it contributing to greening China's investments abroad?

In today's podcast, we talk to longtime Beijing Energy Network green finance guru Calvin Quek about these and other questions. Calvin is the Executive Director, Nature Finance, Oxford Sustainable Finance Group, and he is also Director at Transition Asia. Previously he was Senior Environmental Specialist at the Asian Infrastructure Investment Bank (AIIB) in Beijing.

We specifically discuss a column Calvin authored together with Mathias Larsen, Research Associate at Brown University's Watson Institute for International and Public Affairs and Non-resident Fellow at the Green Finance and Development Center at Fudan University.

The column, 'What other countries can learn from how China financed a green transformation,' was published in Environmental Finance and can be found here: https://www.environmental-finance.com/content/analysis/what-other-countries-can-learn-from-how-china-financed-a-green-transformation.html.

Here's a look at the discussion:

2:00 What is green finance? What does it mean, in terms of incentives and disincentives for investment decisions or corporate decisions?

4:07 What are green bonds and how do green bonds in China differ?

5:27 What is the evidence about where funds from green bonds and loans go in China? (Short answer: we have limited data, and there is some evidence that funds don't necessarily go to green activities.)

6:45 What is a taxonomy?

9:20 Are green taxonomies or green finance instruments still going towards 'clean coal' or fossil fuels, and is that still a live part of the debate in China? (Short answer: yes.)

9:45 Did green finance play any role in China becoming the leader in clean energy technology? If so, how big? (Short answer: yes, but only a small role.)

12:30 Additionality: In general, financing costs for favored sectors and for SOE-built infrastructure is already benefitting from incredibly low costs of capital. So in that context, is green finance providing any additional incentive – at least in China?

15:00 If most green finance goes to SOE projects that might have happened anyway, does it help some marginal green projects around the edges, or does the huge state sector actually crowd out green finance for marginal projects and innovative new tech?

16:45 For green hydrogen or other technologies that are not close to economic viability on their own, green finance is not going to make the difference?

18:00 Role of green finance in China's overseas investments.

23:00 If green energy is more distributed, does that work against China's green finance model, based on large loans for big projects? Or can small be beautiful?