China green finance status and trends 2025-2026

China’s green finance development in 2025 continued to make significant progress across several areas. This advancement contrasts with trends in many Western markets, which have slowed or, in the case of the United States, reversed progress on green and sustainable finance. China’s advancements in green finance appear to be driven by three factors: Policy trumps politics: unlike many Western countries, Chinese politics is less public, allowing policymakers to focus more on policy development. This enables the evaluation of environmental risks, such as climate change and biodiversity loss, based on scientific evidence rather than populism or current voter sentiment. As a result, policy recognises the need for green finance to address both short-term and long-term financial risks associated with climate change. This also reflects another feature of China’s system – long-term planning, in contrast to the shorter political election cycles in many Western countries. Green economy opportunities: China is increasingly capitalising on the economic opportunities presented by a green transition, supported by a growing green real economy (e.g., in renewable energy, electric vehicles, and green industrialisation). These opportunities manifest in green economy equipment (e.g., solar PV panels, wind turbines, batteries) as well as in the cost advantages of a green transition (e.g., lower energy prices) Green finance knowledge and capacity in key institutions: Key institutions, such as the People’s Bank of China (PBoC) (China’s central bank) and related government and non-government entities (both financial and non-financial), have developed strong expertise in green finance since the top-level establishment of China’s green financial system in 2015. Although significant gaps persist across the financial ecosystem, China’s green finance capacity is likely world-leading, enabling it to export its knowledge base (e.g., through the Green Investment Principles (GIP), the Global Green Finance Leadership Program (GFLP), and the Capacity Building Alliance of Sustainable Investment (CASI).