B20: Green, infrastructure, banking all key

Independent Business leaders and economists from the G20 economies met on Sunday in Washington to address concerns of the private sector over the international economic outlook.

"We need to work with the private sector and we need to leverage the capital market to address global challenges and to bring the world to the next high level," said Zhu Min, deputy managing director of IMF, to people attending B20, a forum through which the private sector produces policy recommendations for the annual meeting of G20 leaders.

Key among the issues discussed was the need for environmentally friendly development patterns and their steep costs.

"Most estimates are saying trillions of US dollars will be needed for investment in green areas such as environmental protection, energy saving, clean energy, clean transportation and clean buildings," said Ma Jun, chief economist at the People's Bank of China.

These investments will be forced to rely heavily on funding from areas outside of the government. "In China, we estimate that 85 percent of the green investment in China needs to be covered by private funding and only 15 percent can be covered by fiscal resources," said Ma.

Much of the green investment within China and other regions will consist of infrastructure projects, which, according to Ren Hongbin, chairman of China National Machinery Industry Corporation, is a welcome prospect.

"Reform in infrastructure could be key to mitigating the global economy's challenges," said Ren, chair of the Infrastructure Taskforce, one of the four taskforces set up by this year's B20, to be held in September in Hangzhou, East China's Zhejiang province during the G20 Summit.

"Infrastructure is one of the few areas identified by IMF reports as having potential to deliver strong productive gains across all kinds of countries - least developed, emerging, and developed," he said.

China is well-poised to take on future infrastructure projects with the establishment of the Asian Infrastructure Investment Bank (AIIB), as well as the Belt and Road Initiative. The initiative hopes to develop infrastructure between China's Central Asian and East European neighbors and beyond.

Another theme at discussion was the notion of financial inclusion, what Ma Jun defined as, "the provision of basic financial services such as account openings, payments, and lending to low-income populations and populations in remote and rural areas".

For many years, he said, these services were considered too costly by the banking system. But in the past few years, the development of digital financial services has enabled such services to be provided at much lower costs and with much higher efficiency.

About 400 million people are now users of mobile banking, Ma said. Digital banking has become more accessible with he invention of online platforms such as WeChat's banking services and Alipay, China's most popular online payment platform.

Allan Fong in Washington contributed to this story.

(China Daily USA 04/18/2016 page2)