(Yicai Global) Aug. 21 -- Demand for green investment in Xiongan New Area may be as high as about CNY1 trillion (USD150 billion) over the next five years, Ma Jun, chief economist of the research bureau of the People's Bank of China, and chair of the Green Finance Committee of the China Society for Finance, said at the second green finance forum held in Tianjin on Aug. 19.
Xiongan New Area may become the key to break the deadlock on the development of Beijing-Tianjin-Hebei region and reshape its regional economy. However, the green development of Xiongan New Area is facing severe challenges, including the weak economic foundation in the area, polluting industries-based industrial structure, huge financing gap, and low level of financial development, Ma warned.
For example, the investment for rehabilitating Baiyang lake, the largest lake in Hebei province alone, will need CNY100 billion. In addition, underground city pipeline corridor construction will require CNY140 billion investment, as well as CNY500 billion for green building construction over the next five years, and CNY10 billion for geothermal energy development, Ma said. Other investments like new energy also requires hundreds of billions of yuan. So altogether demand for green investment is likely to reach about CNY1 trillion.
"Green finance needs to achieve rapid and leap forward development to meet the huge green financing needs in the future. It is absolutely insufficient to rely only on local capabilities and resources and must be supported by external resources and policies," Ma stressed.
Data show that Xiongan New Area's gross national product (GDP) in 2016 was only CNY21.83 billion (USD3.25 million), accounting for 0.69 percent of that of Hebei province. However, the scale of development for the area is extensive. The starting area is about more than 100 square kilometers, which will reach 200 square kilometers in the mid-term, and the long-term planning projects 2,000 square kilometers, which is almost double the size of the Shenzhen Special Economic Zone, and 1.7 times bigger than Shanghai Pudong New Area.