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Balancing Both Worlds
Finance expert says new approach to sustainable future combining profits with social benefits is in line with China’s development vision
By Zhao Wei & Li Xiaoyang  ·  2019-04-14  ·   Source: Web Exclusive

 

Ma Weihua, former President of China Merchants Bank and Chairman of China Global Philanthropy Institute, speaks at the Harvard College China Forum 2019 in Boston, the U.S., on April 13 (COURTESY OF HARVARD COLLEGE CHINA FORUM)   

Impact investing, a form of socially responsible investment that seeks to benefit society or the environment while pursuing a financial return, is in line with China's new vision of innovative, coordinated, green and open development that is for everyone, Ma Weihua, former President of China Merchants Bank and Chairman of China Global Philanthropy Institute, said at the Harvard College China Forum 2019 in Boston, the U.S., on April 13.  

Impact investment also has a key role in shifting the focus of China’s economic growth from high speed to high quality, Ma added. 

According to him, technological revolution, financial innovation and the globalization of the capital market have promoted economic growth, with global wealth witnessing exponential growth in the past 20 years. "Still, poverty, hunger and problems in many other fields such as education and health continue to pose grave challenges," he said. 

Against this backdrop, the UN has adopted the 2030 Agenda for Sustainable Development that has set time-bound goals for meeting targets that range from ending extreme poverty to ensuring peaceful and inclusive societies. 

However, emerging markets face a financing gap of $3.9 trillion per year to meet the 17 goals set out in the agenda, Ma pointed out. Since the governmental inputs and funds raised by nongovernmental organizations are both inadequate to meet the financing needs, impact investing can play a complementary role, he said. 

The problems holding back progress in sustainable development will be resolved when economic activities are undertaken for both financial profits and positive social influences, he said, giving the example of CD Finance, a microfinance provider that has helped millions of Chinese farmers out of poverty. Its stakeholders include leading financial institutions such as Ant Financial and Sequoia Capital. 

The practice of incorporating public interest into business models is gaining traction, Ma said. According to him, impact investing has seen rapid development across the globe, soaring from only $10 billion in 2014 to over $500 billion this year. 

In line with China's development vision, impact investing can promote innovations in public welfare and finance and produce balanced results with both profit and social influence. It can also promote foreign investment, boost green finance and help disadvantaged groups share the fruits of development, he said. 

Ma also stressed that impact investing can play a key role in China's economic transformation. Since inadequate supply of public goods, especially in pension, education and medical care, remains a prominent social problem, traditional approaches can be combined with impact investing to create new solutions. 

(Reporting from Boston) 

Copyedited by Sudeshna Sarkar  

Comments to zhaowei@bjreview.com 

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