China supported the creation of a loss and damage fund at last year's COP27 climate summit, but so far has not confirmed it will pay into it. Talks have begun to write the rules for how these funds should be collected and disbursed – who to pay, who will benefit. The attention will be on China, which peculiarly still has 'developing country' status despite being an economic heavyweight, and how it reacts to pressure to contribute financially towards helping vulnerable countries recover from climate disasters.
It is sharing two seats on a global panel with five other Asia Pacific nations similarly classified as developing countries. Going on the charm offensive at these international platforms previously did help Beijing get off the hook without making too many commitments. Expectations for it to become more proactive on climate change, however, are rising.
The common notion that bigger boys should do more also seems to hold true among Chinese corporates. Fintech giant Ant Group is leading the pack in setting net-zero emissions targets across Scopes 1, 2 and 3 – something still quite rare for Chinese companies. It recently secured a US$6.5 billion sustainability-linked loan, which is Asia's largest, though concerns remain about a lack of transparency for the type of projects it backs with this huge loan.
This edition of the China newsletter also spotlights Hong Kong – read about how the city is trying to reduce reliance on the mainland for its edible greens by building up urban indoor farms, and a start-up's bid to clear marine debris from its harbour and river canals using advanced technology.
“Very strong views” meant the standoff was resolved less than two weeks before a global meeting to flesh out details for the climate fund. South Korea and Saudi Arabia are among wealthy nations sharing APAC's “developing country” seats.
Ant’s group VP and treasurer says the $6.5 billion deal allows the fintech company to raise capital at a cheaper cost to meet green goals. There are, however, concerns about the lack of transparency behind sustainability-linked structures.
The world’s top three credit rating agencies – S&P Global, Moody’s, and Fitch – still assign high investment-grade ratings to companies with weak ESG credit scores. This could expose investors to abrupt rating downgrades, a new study says.
Getting more clean cars on the road would also save tens of thousands of lives annually by reducing air pollution. Chinese transportation officials have no reason to hold back and should set more ambitious targets for electric vehicles.
A dangerous mix of airborne carbon dioxide and upstream chemicals can cause coastal seawater to acidify so much that microbes start emitting high levels of nitrous oxide, which warms the Earth quickly and stays in the air for a century.
Hong Kong had never experienced a food shortage before – until 2022. The city now imports 98 per cent of vegetables and produce from other countries. Do indoor farms have the potential to help it weather the next unexpected shortfall?
Recycling systems can't keep up with plastic pollution, and solutions are hard to scale. Enter Clearbot: Its trash-collecting boats are bringing about a sea change in clean-ups, and using AI-collated data to bring about policy change.
Population panic
China, the world's most populous country, just saw a pivotal demographic shift. Its population has declined for the first time in six decades, according to latest official statistics. The government said that 9.56 million people were born in the country last year, while 10.41 million people died – the first time deaths had outnumbered births since the Great Leap Forward, Mao Zedong's economic experiment that led to widespread famine and death in the 1960s. Observers say this might herald the end of an era of high growth for the economic powerhouse.
Green lending boost
A series of relending programmes launched by the People's Bank of China (PBOC) to encourage financial institutions in and outside of the country to lend to Chinese firms and help them cut carbon emissions seems to be working. China's freshly-reappointed central bank chief Yi Gang says the PBOC's funding for these low-interest loans, which has reached 300 billion yuan (US$43.6 billion), has incentivised banks to allocate more capital to the green sector. Singapore bank DBS was recently chosen to participate in PBOC's Carbon Emission Reduction Facility. It is the first Southeast Asian bank in the line-up.
Catching up with regional partner Asean
There has been a flurry of activity on both the diplomatic and economic fronts between China and Southeast Asian nations. Last week, Asean secretary-general Kao Kim Hourn met with Chinese state councillor and foreign minister Qin Gang on his visit to Beijing to discuss deepening ties between the two parties, as China fully reopens its borders. In Singapore, multiple forums involving Chinese investors and stakeholders were held, with some looking at opportunities in deal-making in decarbonisation and green finance. Agreements were inked at an investment forum, which involved the Tianjin Eco-city, Keppel Smart City and Singapore climate start-up Greenie Web, which is helping its Tianjin partners reduce the carbon footprint of their websites.
