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

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.