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The policy mix of green finance in China: an evolutionary and multilevel perspective

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  • Jian Shao
  • Ping Huang

Abstract

Against the background of climate change, green finance has received worldwide attention in recent years, as policymakers bring the ‘green’ idea into financial sectors and encourage investments in green projects. From an evolutionary and multilevel perspective, this study conducts a comprehensive review of the policy mix of green finance in China. Our analysis emphasizes the dimensions of time and scale of a policy mix that are important elements to understanding the evolution process. We identify a transition process in green finance policies in China with changes in both policy objectives and policy instruments. China has gradually shifted its policy focus from direct public intervention and investment to the construction of a green finance market. From the multilevel perspective, the dynamic vertical interactions between different levels of government have played an important role in this transition.Time and scale are important dimensions of a green finance policy mix, as policy strategies and instruments evolve over time; policies are also designed and implemented at different scales – with direction, learning and guidance from national to local (provincial) and eventually, with time, vice versa.China’s green finance policy mix is undergoing a transitional process, characterized by a shift from direct public intervention and investment to the construction of a green finance market. This involves placing greater emphasis on attracting private investment and financing, and moving away from top-down intervention towards a market-based, polycentric approach with greater engagement and interaction with the private sector.The dynamic vertical interactions between different levels of government have played an important role in the transition toward a more market-based approach. For instance, we find that local experimentation of green finance policies explores different development models for the local financial system against diverse local contexts, and these have, in turn, both influenced policy design of the central government and in some instances diffused to other jurisdictions.

Suggested Citation

  • Jian Shao & Ping Huang, 2023. "The policy mix of green finance in China: an evolutionary and multilevel perspective," Climate Policy, Taylor & Francis Journals, vol. 23(6), pages 689-703, July.
    • Handle: RePEc:taf:tcpoxx:v:23:y:2023:i:6:p:689-703
    DOI: 10.1080/14693062.2023.2202181
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    Cited by:

    1. Seyi Stephen & Clinton Aigbavboa, 2025. "Enhancing Academia–Industry Partnerships for Sustainable Building: A Change Framework for Research and Innovation Integration in Sub-Saharan Africa," Sustainability, MDPI, vol. 17(9), pages 1-33, April.
    2. Wu, Hanrui & Han, Zixin & Feng, Suling, 2025. "Green finance in action: How dual pilot policies reshape corporate environmental strategies," International Review of Financial Analysis, Elsevier, vol. 108(PB).
    3. Junying Chen & Yuxin Luo & Junzhi Fang, 2025. "Spatial-Temporal Evolution and Driving Factors of the Synergistic Development of Green Finance and Low-Carbon Innovation," Sustainability, MDPI, vol. 17(18), pages 1-32, September.
    4. Libin Feng & Zhengcheng Sun, 2023. "The Impact of Green Finance Pilot Policy on Carbon Intensity in Chinese Cities—Based on the Synthetic Control Method," Sustainability, MDPI, vol. 15(15), pages 1-21, July.
    5. H. M. N. K. Mudalige, 2023. "Emerging new themes in green finance: a systematic literature review," Future Business Journal, Springer, vol. 9(1), pages 1-20, December.
    6. Mohamed Ali Houfi & Chadlia Farhat, 2025. "Aligning financial development and banking sustainability for environmental sustainability: empirical insights from emerging economies," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(12), pages 29047-29073, December.
    7. Xu, Ting & Xuan, Siyuan & Xuan, Xiaoqin, 2025. "Green finance as a catalyst for energy transition: Green total factor productivity and digital economy," International Review of Financial Analysis, Elsevier, vol. 107(C).

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