Over 500 global firms attended the 2023 China International Fair for Trade in Services (CIFTIS) in Beijing, the largest of its kind in the world, presenting their latest products and solutions in developing green trade.

The entrance to the 2023 China International Fair for Trade in Services in Beijing, Sept. 2, 2023. [Photo by Cui Can/China.org.cn]

In the wake of global climate change, the call for carbon neutrality has never been louder. As countries around the world strive to reduce their carbon footprints, the focus has shifted toward the development of green trade, particularly in the services sector. 

According to data from the United Nations Conference on Trade and Development (UNCTAD) and the Organization for Economic Cooperation and Development (OECD), global exports of green service trade increased from $2.2 trillion in 2010 to $3.8 trillion in 2018. This represents an average annual growth rate of 6.9%, which is 1.43% higher than that of the overall service trade during the same period. Furthermore, the share of green service trade exports in total service trade exports increased from 55.6% to 61.9%, indicating significant potential within the sector.

Green development in trade services means adopting cutting-edge technologies and eco-friendly models to achieve sustainable development, especially regarding environmental services, green financial services and technological innovation services.

China has been at the forefront of green service trade development in recent years, implementing a range of policies aimed at promoting green development, including tax incentives for sustainable businesses and eco-industrial parks. Additionally, China's Belt and Road Initiative (BRI) has included green development as one of its key pillars, providing opportunities for multinationals to participate in large-scale sustainable projects across Asia.

These initiatives have created a favorable environment for multinational companies to double down on their efforts to pursue green development of trade in services in China.

At CIFTIS this year, HSBC showcased products and solutions related to green financial services, such as sustainability-linked loans.

Wang Yunfeng, president and chief executive officer of HSBC's China operations, explained that sustainability-linked loans adjust interest rates based on the borrower's performance on certain environmental, social and governance criteria.

"It is becoming more popular as a way for companies to demonstrate their commitment to sustainability and access lower-cost financing," Wang said, adding that HSBC will continue to provide financial solutions to assist Chinese companies in improving their sustainability performance and aligning their business strategies with the U.N.'s sustainable development goals.

Wu Lianfeng, vice president and chief analyst of International Data Corporation (IDC China), said, "Digital technology plays an instrumental role in driving green sustainable development." In recent years, global market research firm IDC has utilized big data, artificial intelligence (AI) and other digital technologies to support the green transformation of Chinese manufacturing companies.

Wu also expressed optimism about the potential of AI technology in achieving carbon reduction goals. From 2021 to 2060, AI-driven carbon neutrality aims for a total reduction of over 35 billion metric tons. He predicted that the contribution of AI-powered carbon reduction will increase annually, reaching at least 70% by 2060.

Environmental services stand as a cornerstone of green development in service trade. Veolia, a French environmental solutions provider, is keen on expanding its investment in China's carbon and pollution reduction initiatives, capitalizing on the country's drive for carbon neutrality.

"Green development is a critical focus for international cooperation. It has played a very important role in China-France and China-Europe relations," said Huang Xiaojun, senior vice president and managing director of Veolia China.

In 2022, Veolia's low-carbon solutions in energy, circular economy and green fuels helped China lower its carbon dioxide emissions by 680,000 metric tons.

Zhou Xuejun, chief commercial officer and head of Asia region at Louis Dreyfus Company (LDC), stressed the role of sustainable agriculture in ensuring global food security. In recent years, LDC, a French merchant and processor of agricultural goods, has increasingly centered its investments around China's green initiatives.

Earlier this year, LDC inked a deal with an oil processing plant in Dongguan, Guangdong province, pledging to source 100% of its electricity from renewables, with the aim of cutting the plant's annual greenhouse gas emissions by over 20%. In 2021, the company also helped set up a demonstration zone for black soil protection in Yanbian prefecture, Jilin province, offering training to local farmers on enhancing soil health and biodiversity.

"China remains an attractive market for LDC. We are seeking opportunities to broaden our footprint here, to better meet China's growing demand for high-quality food and feed products," Zhou said.

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