Market News International:

Shanghai will launch a national center for carbon trading. How will you explore new carbon financing, especially derivatives? What kind of financial risks do you think the traditional energy sector will suffer when you push for carbon neutrality? Will the government of Shanghai take measures to deal with these possible risks? How will you balance green development and economic growth? Thank you.

Chen Yin:

Thank you for the question. General Secretary Xi Jinping always stresses that lucid waters and lush mountains are invaluable assets. We should focus on the new development stage, implement the new development philosophy and establish the new development paradigm, and this requires us to insist on green development. Shanghai has been actively making adjustments, quickly advancing transformations and vigorously promoting development. Since the 1990s, Shanghai has started its urban industrial restructuring. Over the past two decades, the city has transformed from a traditional industrial city into a city with its service sector taking up more than 70% of the whole industrial structure. The city has also been upgrading its industrial structure, by proactively building strategic emerging industries. It has also quickly advanced the shift towards low-carbon energies, enabling a lower-carbon and more environmental-friendly energy consumption structure. The city has also been vigorously promoting the construction of a green, low-carbon system of technological innovation, thus to propel original technologies to upgrade and to realize high-quality development through green development. 

Shanghai has attached great importance to the development of green financing and has made many efforts to explore the carbon financing sector. We carried out many innovations and achieved some important results. We also successfully launched a group of never-seen-before products, including the first green, exchangeable corporate bond, the first green four-certificate special bond, and the first carbon-neutral, green bond. A group of important organizations are located in Shanghai as well, including a national carbon emission trading center and the National Green Development Fund. 

Next, we will make carbon financing an important part of our efforts to build Shanghai into an international financial center, and rely on the national carbon trading center to create an international carbon financing center. Under the guidance of relevant departments of the central government, we will make efforts in three aspects. First, we will make efforts in carbon financing business innovation, explore both spot and forward products in carbon financing, and offer support for financial innovation in terms of carbon funds, carbon bonds, carbon insurance, and carbon trusts. Second, we will make efforts to design investment and financing mechanisms for peak carbon emissions and carbon neutrality, and steer financial resources towards green development. Third, we will make efforts to better prevent financial risks, closely follow new developments and new problems emerged on the way to realizing carbon neutrality, and try to establish a financial risk management mechanism that can work well with the efforts for reaching carbon neutrality, so as to better serve enterprises' transition to green development. 

In short, Shanghai has been leading the country in terms of peak carbon emissions and carbon neutrality. General Secretary Xi Jinping has announced that China will reach peak carbon emissions by 2030, and strive to realize carbon neutrality by 2060. Shanghai's 2035 plan, which has been approved by the central government, clearly states that the city will try to peak its carbon emissions by 2025. We are currently writing an action plan for realizing this goal, and it will be published within the year. We will organically link the improvement of ecological environment and the construction of the international financial center together. Thank you.

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