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Huadu offers 12m yuan to attract green companies
A pilot zone for green finance reform and innovation, the first in South China, will be established in Huadu district, Guangzhou, the State Council of China announced last month.


A pilot zone for green finance reform and innovation, the first in South China, will be established in Huadu district, Guangzhou, the State Council of China announced last month. 

The pilot zone represents an effort by Guangzhou and China to deepen supply-side reform and explore replicable ways to boost green finance and green industries.
According to the National Guidance on the Construction of a Green Finance System, green finance refers to the services provided by the financial sector to improve the environment, tackle climate change, efficiently utilize resources and promote the development of green industries. Being environmentally friendly is also important to achieving sustainable development for the financial industry itself.
An Overall Plan for the Pilot Zone for Green Finance Reform and Innovation was released, along with “1+4” policies Huadu district proposed to promote the effort. Green financial institutions and companies are going to be amply rewarded if they settle in the district. Financial institutions can expect a reward of up to 20 million yuan, while financial market trading platforms will be eligible for up to 5 million yuan. Such institutions might even be rewarded with the same amount of their economic contribution to the local economy in the first three years and 70 percent of that in the next two years. 

The district also offers rewards of up to 12 million yuan to lure green companies. A green development fund of no less than 10 billion yuan is being established to support the innovation, merger, acquisition, lending and public listing of green companies. Beginning this year, about 1 billion yuan will also be allocated annually for five consecutive years in support of green finance and green industries, Ye Zhiliang, head of Huadu district, announced on July 11.
Administrative approval will be streamlined to enable new companies to finish registration in one day. Policies are also put in place to encourage green companies to go public. Talented individuals of key green companies will be rewarded a maximum of 3 million yuan every year and a subsidy of up to 3 million yuan in purchasing their first houses in the pilot zone.

The district will also try to develop and test innovative financial products and services such as the trading of emission, water and energy rights.
Promoting and innovating green finance is important to motivating the financial sector and expanding green development. Some green energy and manufacturing projects are often denied the chance of getting investment from financial institutions because of their long investment periods, relatively low return and high risks.
“To support the green economy with green finance is not just about attracting investments and supporting green projects,” said Lin Jiangru, professor of economics at Sun Yat-sen University. “A green financial system must be established to specify the roles of all parties, including financial institutions, the local government and companies, and to lay out the principles of issuing green bonds. If necessary, a nationwide and even worldwide exploration is needed.”

(By Sophia Tang, Louis Berney)

Editor:Joanna You
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