On May 7, 2025, Dr. Ma Jun participated in a dialogue organized by the European Union Chamber of Commerce in China, where he gave an in-depth presentation on the development of China’s green finance framework and discussed new avenues for EU-China collaboration in sustainable finance.
The session saw active participation from prominent members of the European Chamber, including Bruno Weill, Vice President and Chair of the Financial Services Working Group; Laura Liu, Vice Chair of the Banking and Securities Sub-working Group; Peter Ling-Vannerus, States' Representative of the European Chamber and Chief Representative of SEB Beijing; Frank Wu, Vice Chair of the Banking and Securities Sub-working Group; and Xiaobo Zhang, Vice Chair of the Environment Working Group.
From Green Finance to Transitional Finance
In his keynote speech, Dr. Ma Jun first gave an overview of the development of China’s green finance system over the past several years. Since 2016, China has established what is now the world’s largest green finance market, with outstanding green bonds totaling 4.16 trillion RMB and green loans reaching 30 trillion RMB. He emphasized that a green economy cannot function without capital and that the financial system has a central role in making the transition possible. Over time, China’s regulatory framework, market incentives, and classification systems have evolved to direct money into sustainable industries and infrastructure.
Dr. Ma then discussed the rise of transition finance in China, which targets high-emission sectors such as steel, cement, coal power, and shipping as they work toward decarbonization, unlike green finance, which supports only already-sustainable activities. According to Dr. Ma’s estimation, the market potential for transition finance could grow by as much as 100% per year, as more industries seek structured, financeable paths toward emissions reduction.
Dr. Ma encouraged European banks and institutions to pay attention to these developments, suggesting that similar approaches could be considered or adapted in the EU. As the need to finance emissions reductions across difficult sectors grows, structured tools and official taxonomies like those being piloted in China could offer useful reference points for developing parallel systems in other regions.
Potential for China–EU Cooperation
On the topic of China–EU cooperation, Dr. Ma highlighted the development of the Common Ground Taxonomy (CGT), a joint effort launched four years ago to align the green finance taxonomies of both regions, as a shining example of cooperation. The taxonomy is now being used or considered by several economies, including Hong Kong and Sri Lanka. Dr. Ma noted that the CGT has the potential to evolve into a widely accepted international baseline for green finance, providing clarity to issuers, investors, and regulators across markets. He encouraged EU institutions to continue supporting the development and refinement of the taxonomy and to explore how it might be used in conjunction with other global frameworks, such as the International Sustainability Standards Board (ISSB).
Q&A Session Highlights
Areas of China–EU Cooperation in Light of the U.S. Stepping Back
In response to a question about the U.S. reducing its formal climate funding, Dr. Ma noted that while the amount—around $10 billion—is relatively small compared to the roughly $3 trillion invested globally in green finance each year, the psychological impact is more significant. Such moves can lead to "green hushing," where companies become more reluctant to disclose or commit publicly to climate actions due to uncertainty or shifting political signals. He stressed that in this context, China and the EU have a responsibility to lead, not only by maintaining momentum but by shaping the global policy and investment environment.
Dr. Ma outlined three key areas for enhanced EU–China cooperation:
- Disclosure and Capacity Building: He supported the use of global frameworks like the ISSB (International Sustainability Standards Board) alongside taxonomies and emphasized the need to train companies before enforcing disclosure mandates. He pointed out that emerging tools—particularly AI—could reduce disclosure costs by up to 99%, making reporting feasible for smaller firms.
- Carbon Market Integration: Dr. Ma proposed further international alignment of carbon markets to improve transparency and confidence. He mentioned the London-based ISCBC as a potential platform for harmonizing standards and creating a baseline reference.
- Green Technology Access: With the EU, China, and the U.S. acting as the main technology innovators, he stressed that cooperation is necessary to ensure these tools are made accessible to developing countries, which are often users rather than producers.
Barriers EU Banks Face in Financing Green Projects in China
Responding to the question on how to address the systemic constraints and barriers EU banks face in financing Chinese green projects, where in some areas renewable energy is not readily available and local companies are prioritized when energy is allocated, Dr. Ma shared an example from Jiangsu province, where the government is piloting low-carbon industrial parks. Instead of each company negotiating green energy access on its own, the park negotiates with the government collectively, thus reducing transaction costs and improving access. He noted that this model has also been discussed in recent Two Sessions, where both the National Development and Reform Commission (NDRC) and the Ministry of Finance will provide financial support for local governments to develop more zero-carbon industrial parks.
Financing for Green Supply Chains
On the topic of green supply chain finance, a participant raised the concern that most current subsidies and financing structures benefit only project owners, leaving out suppliers who provide green technology and equipment. Dr. Ma agreed that this is a significant gap. Even though the PBOC now encourages green supply chain financing, implementation remains inconsistent, with many supplier applications still being rejected. He emphasized that the central bank is open to dialogue and welcomed further input from banks and businesses to refine these policies.
China’s Development of Blue Financing
In response to a question regarding China’s progress in blue financing, Dr. Ma outlined his team’s efforts in developing the nation’s first blue finance taxonomy. This framework seeks to establish clear criteria for financing marine-related projects, including initiatives such as offshore wind energy, sustainable fishing, ocean carbon credits, seaweed farming, and plastic recycling.
Dr. Ma identified a critical challenge in this domain: the majority of such projects are not commercially viable and continue to depend heavily on charitable funding. To address this constraint, he underscored the necessity of designing financially sustainable models by integrating revenue-generating components. For instance, he referenced a tree-planting project in Inner Mongolia that achieved financial viability through a multi-purpose approach, incorporating solar power generation, chicken farming, and the cultivation of Chinese medicinal herbs.
Dr. Ma emphasized that blue financing must adopt a similarly innovative strategy—linking ecological objectives with economically viable elements, such as eco-tourism or aquaculture—to effectively attract sustainable private investment.
