China’s Green Revolution — Can Fintech & Green Digital Finance Empower Sustainable Development in a Coal-Reliant Economy?

Lucía Morales and Bernadette Andreosso-O’Callaghan

Chapter 4 in Fintech and Green Investment:Transforming Challenges into Opportunities, 2024, pp 107-135 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Financial technologies and digital finance emerge as new elements to support countries in their quest for green transformation and sustainable economic models. The green revolution is a complex process supported by policies and reforms that achieve a well-grounded institutional, financial, and economic framework. This chapter focuses on analysing China’s green revolution and the importance of prioritising technologies within the financial ecosystem to achieve energy and environmental sustainability. In particular, the country’s financial system, the innovations associated with the fintech sector, green digital finance, and particularly Beijing’s financial incentives through its state-dominated banking sector are critical to driving China’s green revolution. However, the scale of the required operations, infrastructure, and innovations is enormous, and financial support to empower the green economy will be crucial. China’s five largest state-owned commercial banks are poised to take a decisive role in realising the country’s ambitious plan of becoming a more environmentally friendly economy. It is expected that green finance should promote high-quality economic development through its positive impact on the ecology, generating economic efficiencies and achieving solid economic structures. Nevertheless, Chinese authorities face a daunting task in moving away from a heavily coal-dependent energy model that has become a predicament as political leaders are confronted with the reality of managing the ongoing energy crisis. Policy-makers must balance the new economic realities and their existing energy and economic models to ensure an appropriate balance between sustainability and political and economic interests. In order to progress towards China’s 2060 “carbonneutral” agenda and to shift towards a high-quality growth vision, the Chinese authorities must engage in a cautious and slow approach to change and transform so as to avoid destabilising the country’s economy.

Keywords: Fintech; New Institutional Economics; Climate Change; Commons; Financialization; Distributed Ledger Technology; Neoliberalism; Trilemma; Securitisation; Blockchain; Sustainability; Innovation; Circular Economy; Implementation; Governance; Challenge; Security; Decentralization; Digital Currencies; Circular Economy; Environmental Accountancy; Food Loss; Food Security; Food Waste; Industrial Symbiosis; Material Flow Analysis; Waste Management; China; Green Growth; Digital Finance; Big Four; Coal; Sustainable Development; Bitcoin Mining; Proof-of-Work (PoW); Energy Consumption; Carbon; Footprint; Market Value; Investor Attention; Google Search Volume; Causality; Cardano Coin; Behavioural Finance; Green Cryptocurrencies; Proof-of-Stake (PoS); Energy Efficiency; Green Finance; DeFi; CeFi; Banking System; Financial System; Bank-based Systems; Market-based Systems; SMEs; Corporate Ownership; Cross-border Banking Flows; De Jure; De Facto Regulations; Green Banking; Environmental Risks; Green Finance Regulation; Green Finance Policies; Gender Equality; Financial Inclusion; Women; Climate Change; Environment; Inequality; Poverty; Central Bank Digital Currency (CBDC); Common Prosperity; Sustainable Democracy; Economic Inequality Elimination; COVID-19; Economic Perspectives; Interdisciplinary Study; Youth Banking; Unbanked; Underbanked; Neobank; Accessibility; Practicability; Financial Inclusion; Digital Technologies; Energy Sector; Financial Issues; Supply Chain Financing (search for similar items in EconPapers)
JEL-codes: G2 Q5 (search for similar items in EconPapers)
Date: 2024
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