A less reluctant (green) Atlas? Explaining the People’s Bank of China’s distinctive environmental shift

Abstract

Why did the Chinese central bank embrace environmental policies earlier than Western central banks and with a consistent focus on a wider range of environmental issues and more ambitious promotional policies? Although the greening of central banks has attracted growing attention from scholars of political economy, this distinctive and pioneering role of the People’s Bank of China has received less attention than that of Western central banks. It can partly be explained by the Chinese central bank’s historically-rooted ‘developmental’ institutional features, namely its wider mandate, lack of political independence, and its more activist policy tools. But this institutionalist explanation also needs to be complemented by a more agency-centered one that examines the catalytic role of Chinese political authorities and financial technocrats, with their particular priorities and ideas. The analysis contributes to political economy literature on the emergence of green central banking by exploring the less-studied Chinese case and offering an analytical framework that encourages comparative study of this phenomenon beyond the Western context.