Regional green finance development and local green innovation:Evidence from a quasi-natural experiment of green bond issuance in China

Based on provincial panel data in China from 2008 to 2019, this research takes the issuance of China's green bond as a quasi-natural experiment to explore whether China's regional green finance development promotes local green innovation by using the multi-period DID model. The results show that the regional green financial development can promote local green innovation, and the rapid growth of the green bond market driven by policy does improve environmental sound technology innovation. The promotion of regional green finance development to local green innovation is related to the funds allocation of green credit,but not to the issuance scale of green bonds, according to further analysis, because China's development pattern can lead to a lack of endogenous market power and low credit resource allocation efficiency. In addition, the issuance of green bonds can effectively promote the allocation of green credit funds, thus enhancing the local green innovation level, but it can't reduce local carbon emissions through promoting green innovation. Therefore, the government should strengthen the green finance implementation assessment mechanism, taking into account the heterogeneity of regions and enterprises, complete the green finance monitoring and disclosure system, and increase the rate of green technology conversion.

Counteraction to China?Impact of the U.S.International Development Finance Corporation on China’s Development Finance

The United States passed the Better Utilization of Investment Leading to Development(BUILD Act),as a counterweight to China’s overseas development activities.Under the Act,the US established a new federal agency,the U.S.International Development Finance Corporation(DFC),to enhance U.S.development financing capabilities.To better understand the impact of the DFC on China’s development finance,this article analyzes the DFC’s purpose,functions,structure,and funding.Then it focuses on the purpose of establishing the DFC,providing a preliminary analysis of the potential motivation for its establishment.It also compares the China Development Bank(CDB)and the DFC based on their focused sectors.Finally,through an in-depth analysis of financial frictions in China-U.S.relations,this article argues that the DFC competes with China’s overseas development financing activities in the context of broader strategic competition between China and the U.S.

The Determinants of Risk Exposure When Development Finance Institutions Consider Approval of Funding to Different Development Markets—Case Study Development Bank of Southern Africa

This paper evaluates the determinants of risk exposure when development finance institutions consider approval of funding to different development markets utilising multiple regression econometric models and the Development Bank of South Africa(DBSA)as a case study.The research presents the classical development finance institution(DFI)business model and market size estimation with the contemporary DFI risk classification and enterprise risk management framework.In addition to reviewing the profile of financial and non-financial products and services,the related project cycles and the DFI credit risk pricing and mitigation approaches for the different development markets.Our results suggest that there is a correlation between the funding of under-resourced municipalities by DBSA and its exposure to financial risk though the correlation is not overwhelmingly significant,but also evidence of a negative correlation between the funding of under-resourced municipalities and the minimization of the financial risk exposure of DBSA.Likewise,there is a negative correlation between funding to all three different sizes of a municipality and ability of the DFI to absorb future losses(non-performing loan coverage ratio).The negative correlation is highest for secondary cities followed by metros and least for under resourced municipalities.The research concludes with four major recommendations of what the role of the DFI should be in enhancing access of under-resourced municipalities to development funding.

Global Development Finance 2011 Released

Net capital flows to developing countries fell 20 percent in 2009 to $598 billion and were a little over half the 2007 peak of $1.11 trillion. This is according to a new comprehensive dataset

The Grey Correlation Analysis on the Relationship between the Rural Finance and the Rural Economical Growth in Sichuan Province

This paper analyzes the relationship between rural finance and the rural economy of Sichuan Province from 1999 to 2009 by using the sequential growth rate of the gross value of farming, forestry, animal husbandry and fishery and the sequential growth rate of the per capital total income of rural households as the indicators of rural economic development; and taking the volume of deposit, volume of credit, volume of agricultural credit and the credit volume of township enterprises as the indicators of rural financial development; as well as the method of grey correlation analysis. The results show that there is an obvious positive correlation between them, and the development of country finance has the closest connection with the sequential growth rate of farming, forestry, animal husbandry, sideline production and fishery. The loan scale of township enterprises has the biggest influence on the increase of the rural economy. The countermeasures are put forward, covering optimizing investment structure; supporting the development of township enterprises; encouraging loan; actively lightening the financial difficulties in the process of developing rural economy; innovating and exploring; and promoting the diversified development of rural finance.

Financing and the Role of Multilateral Development Banks are the Highlights

For me,the highlights of these recommendations are the financing and the role of Multilateral Development Banks.The recommendations I follow with most interest are the ones that protect and insure against political risk and regulatory risk.These

全球金融治理:赤字膨胀和必要改革

In recent years,due to the complex interplay of cyclical,structural,geopolitical,geoeconomic,and public health factors,the demand for global financial governance(GFG)has risen to new heights.The global foreign exchange market is undergoing disruptive adjustments;low-income countries are rapidly approaching a debt crisis;the gap in international development finance is widening;and the ongoing Ukraine crisis threatens to fragment and fracture the global economic and financial system.However,the current GFG system cannot address the above issues responsibly and effectively.This is largely because the system is a loose cooperation web based on soft laws instead of a closely integrated mechanism guided by hard rules.Reform on multiple fronts is required to improve the quality and relevance of GFG.This includes refocusing on key issues and ensuring that the system functions as a whole,prioritizing development,modernizing the international debt resolution framework,advancing the reform of international financial institutions,and thinking outside the box.Despite China’s late entry into the GFG system,it is an ardent advocator of international development cooperation,an active promoter of green finance,and a responsible participant in international efforts to address the debt crisis.With its Belt and Road Initiative,Global Security Initiative,Global Development Initiative,and unique path to modernization,China has offered the world an alternative development path while breathing new life into the old GFG system.

Does Foreign Direct Investment Provide Desirable Development Finance? The Case of China

Foreign direct investment （FDI） is ofen considered as a cost-effective and risk-reducing source for development finance. This paper, however, shows that FDI finance often entails underestimated risks and costs. FDI might react sensitively to business cycles and might not be as ＂permanent＂ as conventionally believed. FDI might also accelerate other forms of capital flow in times of financial difficulties and, hence, destabilize ftnancial order. In addition to the risks, compensations to FDI and the high import-dependency of FDI-related trade lead to a considerable drain on the balance of payments. Moreover, the reliance on foreign capital for development finance is equivalent to building a Ponzi financing scheme and, therefore, is unsustainable. Given the fact that FDI financing is risky and costly and China does not lack savings, it is suggested in the present paper that China ＇s efforts in attracting FDI should not aim at external capital provisioning.

AN ALTERNATIVE MODEL OF DEVELOPMENT FINANCE

In a written interview with Beijing Review reporter Yu Shujun,K.V.Kamath,President of the BRICS New Development Bank,discusses the bank’s uniqueness and purpose,its focus and methods,and the need for such multilateral development banks to innovate to meet investment needs.Beijing Review:The BRICS bank was officially named the New Development

Challenges and Countermeasures for the Sustainable Development of Local Finance under the Impact of COVID-19

In recent years,the risks and challenges at home and abroad have increased significantly,and the downward pressure on the economy has increased,especially the implementation of larger-scale tax and fee cuts under the proactive fiscal policy,while the rigidity of local fiscal expenditure has not been reduced,and the sustainable development of local finance is facing greater challenges.In particular,the COVID-19 pandemic has had a serious impact on the already stressed local finance,which has led to the intensifi ed contradiction between local fiscal revenue and expenditure.This paper analyzes the challenges to the sustainable development of local finance under the impact of COVID-19 from four angles:the greater economic downward pressure combined with larger-scale tax and fee cuts,the fiscal relationship between the central and local governments,land finance,and transfer payment,then puts forward the corresponding policy recommendations.

TRANSFORMATION OF FOOD SYSTEMS:HOW CAN IT BE FINANCED?

The paper provides a review of the work on financing the transformation of food systems done by the author and colleagues at IFPRI.The analysis discusses the objectives of that transformation(related to the Sustainable Development Goals and the Paris Agreement)and shows estimates of the costs involved.Then it presents an evaluation of the existing financial flows and their potential scaling up,using a broader view of six main flows involved:two that are internal to food systems(consumer expenditures on food and related items,which are the main source of revenue(as sales)for the variety of actors on the supply side of food systems);and four that are external(international development funds,public budgets,banking systems,and capital markets).The paper notes that although current funding does not reach the scale needed to finance the desired transformation of food systems,there are sufficient potential financial resources available in the aggregate to achieve such transformation.However,to mobilize the existing potential funds the paper discussed several things that need to be done,starting with an adequate macroeconomic and overall incentive framework to guide both the internal flows related to consumption and production decisions,as well as the four external ones.The paper also suggested other possible interventions to mobilize,reorient,and increase the financial flows to the desired objectives.It further noted that the costs and financing,which in the paper were discussed at the global level,must be estimated at the country level,as part of the design and implementation of adequate national plans for equitable,healthy and sustainable food systems.

How Does Digital Finance Promote Household Consumption:An Analysis Based on Micro Survey Data

The inexorable rise of digital finance has lead to huge changes in consumption patterns.Under this background,we match the index of Digital Financial Inclusion with data of the China Family Panel Studies(CFPS)to explore the relationship between digital finance and household consumption.Firstly,based on sub-sample empirical analysis,we find that digital finance has helped increase urban household consumption,especially the basic consumption related to life,in China.Secondly,we discuss the mechanism of digital finance to promote household consumption,concluding that the payment convenience of digital finance has accelerated household consumption decisions,thereby promoting consumption growth.Moreover,digital finance can also promote household consumption by reducing the uncertainty faced by family.

China’s role in scaling up energy storage investments

Accelerating the planning and development of a new power system that is more renewable energy-based is a strategic priority of achieving“dual carbon”goals(peaking carbon emissions before 2030 and becoming carbon neutral before 2060)in China.The large-scale development of energy storage technologies will address China’s flexibility challenge in the power grid,enabling the high penetration of renewable sources.This article intends to fill the existing research gap in energy storage technologies through the lens of policy and finance.Results indicate that policy uncertainties in renewable energy might undermine domestic investor confidence in energy storage technologies,while insufficient economic incentives may crowd out private sector participation.Drawing on international best practices,blended concessional finance,supported by development partners,can play a significant role in closing energy storage financing gaps in China and in countries of the Belt and Road Initiative(BRI).To deliver on China’s domestic and international climate commitments,this article makes three policy recommendations:(1)moving forward with a carbon pricing agenda that incentivizes energy storage investments in China;(2)tapping the potential of the domestic capital market to close financing gaps for novel energy storage technologies;(3)scaling up energy storage supply chains in BRI countries through multilateral cooperation.

Renewable Energy： The Trillion Dollar Opportunity for Chinese Overseas Investment

This paper compares the global flows of Chinese overseas investment in power plants with renewable energy investment potential embodied in ＂Nationally Determined Contributions.＂ With over US$1tn （671 GW） in Nationally Determined Contributions renewable energy investment potential in developing countries, we estimate the total level of power plant investments from China＇s policy banks and commercial entities since the early 2000s at US$216bn （158 GW）. Although past investment has mainly been directed at fossil fuels and hydroelectric power, we argue that China is uniquely poised to lead renewable energy global investments for three reasons： （i） China＇s solar and wind industries are globally competitive; （ii） Chinese policy banks can give domestic firms advantages in financing global expansion; and （iii） renewable energy investment opportunities still exist in developing countries with less sovereign risk than for traditional energy investments. The Chinese government should provide special incentives for the policy banks to capitalize on these investment opportunities by deploying Chinese solar and wind technologies to Belt and Road countries and beyond.