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The test of urbanization

By Xia Jiechang | China Daily | Updated: 2013-08-10 09:27

 Green finance requires financial departments to consider the potential environmental impact of their decisions to issue loans to businesses and entrepreneurs. China's financial institutions and regulating departments have a lot to do to guide economic resources toward green usage. They can start by establishing an eco-friendly legal system, following green evaluation methods to issue loans and setting up special agencies for green ratings.

Green logistics, too, could be part of the reform. Green logistics means maximum use, including recycling, of resources and reduction of pollution. The regulating department will have to set up special standards for logistics enterprises, and offer allowances and permits to enable green logistics companies to succeed in the market.

The test of urbanization

An energy-saving service industry, which provides eco-friendly technologies, services and products, and compels enterprises to follow green production and distribution methods has huge potential. But it will need more State support and regulation to enter the market.

Of course, while supporting these key industries, the State should also adopt related macro measures. Government agencies have to devise a long-term plan with environmental targets to facilitate the establishment of a green service sector. Detailed sub-plans are also needed for special industries like logistics and tourism.

The government as the regulator also needs to introduce more environmental protection authentication systems, like ISO14000 environmental management. It could offer more green-related services to enterprises, like promoting international exchange, making more systemic arrangements and championing green consumption. These measures will help more enterprises to establish green norms.

Moreover, the government should become green itself by initiating eco-friendly government purchases to support the country's fragile but growing green service sector. Only with State help, enterprises' participation and people's involvement can the green service sector become a reality.

The author is a researcher at the National Academy of Economic Strategy, Chinese Academy of Social Science. The Chinese version of this article was first published in China Development Observation magazine.

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