Follow the Money - Regulations for "Green" Capital Flow in China

Various government-led efforts in China suggest that green finance is gaining momentum in the nation, and is set to be one of the key measures to environmental protection and carbon emission reduction. Green credit regulation in China was an untapped field in legal research preceding this dissertation, yet it has the potential of evoking the power and influence of banking financial institutions to change corporate borrowers' behavior. Given the rising importance of green credit in China, there is a need to fill the existing gap in legal studies on the subject. By fine-combing the statutory texts and historical development of the black-letter law governing banking financial institutions' green credit lending practice, and clarifying the credit appraisal and risk analysis process required of them, this dissertation presents today's legal framework of green credit in China. The underlying legal and policy architecture for green credit in China is comprised of rules and standards surrounding risk management, environmental due diligence, post-lending onsite investigations, offsite control, contract management, industrial classification and differentiation, information disclosure and sharing, credit performance evaluations, liabilities, extraterritorial projects, financial innovations, and many other aspects of green credit finance. Both the legal framework and the banking financial institutions' practice of green credit have developed in China. However, problems still exist. This dissertation examines Chinese banking financial institutions' green credit financing practice and identifies issues with compliance, such as low credit risk related to environmental law violations, lack of resource and capability to effectively control risk, lack of timely updated environmental law compliance information, local protectionism, and so on. Green credit regulation is potentially an extensive topic. This study aims to open the door of legal studies on the subject, and serve as a starting point and useful reference for interested scholars to further explore the many academic possibilities deriving from it.