20 January 2022Deutsche BankResearch Asia China Cross-Discipline China Market Perspectives Date China 2022 Outlook: Invest for a Greener FutureKey theme: Invest for a greener future: China has been shaping up its long-term green development strategy and has introduced a number of key policies and set specific timelines for implementation since September last year. We believe these actions set the stage for green/ESG investment and financing as the most important market theme in the coming decades. In 2022, we expect China will continue to refine the “1+N” policy framework. We expect fiscal stimulus spending to focus on green infrastructure investment in 2022, mostly in new infrastructure for clean energy/digitalization/data centre/5G etc. Green investment will accelerate in 2022 and with favorable policy and regulatory backing, we expect robust growth in regulation, structure and the breath of China's green finance market 2022. Specifically, China - EU Common Ground Taxonomy likely will be finalized and officially introduced later this year, becoming the first global common taxonomy for green finance. We think financial regulators may consider introducing new policy tools and favorable regulatory conditions to incentivize commercial banks to extend credits.Economic outlook: We think “beating upwind” also describesChina’s economy in 2022. China's previous growth model has reached its limits. The government's pursuit of high-quality growth has set the economy in a direction full of headwinds, slowing the economy in 2021. However, with the right policies, economic headwinds can also be turned into supporting forces. Stabilizing growth has now become a top priority. 2022 will be a test of how policymakers can i...
