Article: Green Finance Empowers New Productivity

General Secretary Xi Jinping proposed "new quality productivity" for the first time during his visit to Heilongjiang in September 2023, pointing out that it is necessary to "integrate scientific and technological innovation resources, lead the development of strategic emerging industries and future industries, and accelerate the formation of new quality productivity". In the context of the global challenges of climate change and sustainable development, green finance, as an emerging form of finance, aims to guide the development of the real economy in a green, low-carbon, circular and sustainable direction through the allocation of financial resources. With the acceleration of China's industrialization and urbanization, and the increasing concern for ecological security and environmental protection, green finance has become an important means to promote the formation and development of new quality productivity.

The Theoretical Logic of Empowerment

The new quality productivity refers to the new form of productivity produced with the progress of science and technology and social development, which not only includes the traditional material productivity, but also emphasizes the role of non-material elements such as knowledge, technology, information, and management in the productivity system, and embodies the new characteristics and development trends of the productive forces under the conditions of informatization, intelligence, networking, and sustainable development. The new quality productivity emphasizes green development as the core connotation and necessary condition for productivity improvement, and the form of productivity is no longer simply the pursuit of short-term economic benefit maximization, but stimulates endogenous growth potential, and strives to achieve sustainable development in the three dimensions of economy, society and environment.

The essence of finance lies in optimizing the allocation of resources. The "techno-economic" paradigm of technological revolution driving economic development requires the support of financial innovation. Green finance applies this principle to the field of ecological environmental protection and sustainable development, and through the construction of an efficient and well-structured financial market, innovative financial instruments and market mechanisms, social capital is led to the commanding heights of industrial development with ecological and environmental protection benefits and economic benefits, which has become the key to the success of technological innovation. Through risk assessment, pricing and management mechanisms, green finance helps investors identify and avoid environmental risks, creates value for the green industry, and encourages enterprises to assume social responsibility while pursuing economic benefits. In other words, the generation and development of new quality productivity requires more resources to be invested in green industries through financial leverage, promote technological innovation and industrial upgrading, and promote the realization of green, low-carbon and sustainable development of the economy and society, so as to achieve a fundamental leap in productivity in the harmonious coexistence of man and nature.

The path to empowerment

At present, China's economic and social development has entered a new stage, and in pursuit of higher quality, higher efficiency, fairer and more sustainable development, it is urgent to cultivate and develop new quality productive forces, that is, those based on scientific and technological progress and innovation-driven, with high-tech content, high-efficiency output, high-quality characteristics and green development-oriented productive forces, so as to adapt to the changes of the times and the requirements of social progress. The new quality productivity is not only an upgrade of the traditional form of productivity, but also an important support for the implementation of the new development concept and the construction of a new development pattern. Green finance empowers new quality productivity is a systematic project, and the realization path is mainly reflected in the following aspects:

Promote the establishment of new production relations. The new type of production relations that are compatible with the new quality of productive forces involves social and economic reform and innovation at multiple levels. As an important economic activity, finance has a significant role in shaping and influencing the relations of production, including the ownership relationship of the means of production, the distribution relationship and the mode of cooperation between producers. Among them, high-quality financial development is an important development direction that must be adhered to, and it is necessary to continuously improve the efficiency of resource allocation, innovation ability and service level to achieve more stable, inclusive and sustainable development goals. Financial capital affects the distribution of power and interests among producers to a certain extent, so we should actively promote the reform of financial market, optimize the financial structure, increase the proportion of direct financing, improve the quality and efficiency of financial services, promote the development of diversified forms of financial property rights such as equity crowdfunding and venture capital, and plan future industries in a forward-looking manner, so that more social capital can participate in the development of the new economy and new business forms.

Optimize the innovative allocation of elements. The scientific, reasonable, efficient and orderly integration and allocation of various factors of production such as labor, land, technology, and data can better promote the efficiency of each factor and stimulate the improvement of total factor productivity. Green finance contains huge innovation potential, which is not only reflected in the market size, product innovation and changes in the structure of participants, but also in the construction of financial infrastructure, the improvement of regulatory mechanisms, and the improvement of the ability to provide financial services to the real economy and support green development. It is necessary to actively promote new financial formats such as green finance and science and technology finance, improve market liquidity, broaden financing channels, and reduce financing costs. Through the creation of a green financial market, we will promote the maturity of market-oriented mechanisms such as carbon trading and emission rights trading, and create a favorable market environment for new quality productivity. The research and development of various green financial products is conducive to meeting the diversified capital needs of new quality productivity enterprises in technology research and development, project construction and operation, promoting the deep integration and efficient use of data and ecological elements in the process of building new quality productivity, and providing strong financial support and guarantee for the realization of sustainable economic and social development.

Enhance risk management and social responsibility. Risk management and social responsibility are important components in the construction of a modern economic system, and they are also the basis for the long-term success and wide recognition of innovative enterprises. To provide the necessary stability and lasting power for new quality productivity, it is necessary to reduce the risk of enterprise development caused by uncertainty and external shocks. Nurturing best-in-class investment banks and institutions will help enable financial institutions to identify, quantify and manage environmental risks, thereby improving the stability and resilience of the entire economic system. Formulate scientific and reasonable operating rules, implement strict credit constraints for high-polluting and high-energy-consuming industries, give preferential policies to green industries, and pay more attention to risk management when carrying out green investment and green financing, which is conducive to avoiding the generation of non-performing assets and systemic risks. Improve the risk identification, assessment, monitoring and management system that is compatible with the new quality productivity, effectively control various uncertain risks caused by environmental pollution, resource depletion and other problems, and ensure that financial resources flow to enterprises and projects that are in line with the concept of green development, so as to ensure the safe and steady promotion of scientific and technological innovation.

Strengthen international competitive advantage and influence. The development of new quality productivity needs to meet international high standards, expand the sources and allocation scope of various resources, optimize the allocation of capital, technology, talent and other factor resources on a global scale, promote the collection of high-end factors, build a global industrial chain and value chain, and enhance competitiveness in the global market; By actively participating in international cooperation on green finance, promoting the formulation of global green finance standards, and initiating or participating in major green finance projects, we can shape international rules and lead the global trend of sustainable finance development. Green finance promotes the green transformation of the economy and society, demonstrates its responsibility for global environmental issues, and is conducive to enhancing the country's image and soft power. Good social governance ability and sense of social responsibility will promote the improvement of international reputation and influence, and will also enhance China's soft power in the international science and technology field through technology export and intellectual property sharing.

System and policy construction

Green finance empowers new quality productivity is an inevitable trend of current social development, and the main challenges include: the market mechanism, regulatory system and trading platform have not yet been formed, the definition and standards have not yet been unified, and there is great subjectivity and uncertainty in the specific operation, and it is necessary to establish a more consistent definition and evaluation system of green finance. Therefore, it is necessary to actively promote the construction of institutions and policies under the opportunities of strategy, investment and innovation.

First of all, we will continue to improve the legal and regulatory system and incentive policies for green finance, clarify the definition, scope, objectives and principles of green finance, formulate more scientific and reasonable green finance standards and evaluation systems, optimize the rules and regulations of targeted green credit, green bonds, green insurance and other financial products, provide clearer guidance for investors, reduce the investment risk of green finance, and strengthen the supervision of green financial activities to ensure that financial resources are effectively invested in green industries.

Second, we should improve the mandatory disclosure system for environmental and social information, establish an evaluation system for green projects and enterprises, and certify and rate the objects of green financial support, so as to facilitate financial institutions and investors to make green investment decisions and improve the accuracy of green financial resource allocation. Actively participate in the formulation and implementation of global green finance standards, and promote the integration of domestic and foreign green finance standards.

Author's Affiliation: Far East Credit Rating Co., Ltd