China is committed to drive forward global efforts for green finance development through its G20 leadership whilst maintaining robust economic growth to support the world economy, said Liu Xiaoming, Chinese ambassador to the UK.

Liu was speaking in London on Tuesday at this year's City Week conference, attended by hundreds of financial industry practitioners. His speech came months before the G20 meeting in Hangzhou in September, where the G20 green finance working group is expected to announce significant milestones in this industry. The study group is co-chaired by the central banks of China and the UK.

Liu highlighted the Chinese government's significant emphasis on green finance in its 13th five year plan, and the creation of a green financial system in China consisting of green credits, green bonds and green finance guidelines. The 13th five year plan sets out China's strategic growth targets for 2016-20.

"Over the years china has made enormous efforts to advance green efforts and environmentally friendly practices. The (green finance) market came into operation and started to thrive," Liu said.

The proceeds from so-called Green bonds are used to fund environmentally friendly projects, and are seen as attractive investments for funds that have long term strategies.

Chinese institutions issued $7.9 billion of green bonds in the first quarter of of 2016, nearly half of the global total. Over the same period, global green bond issuance reached $16.9 billion, nearly three times the volume seen the same period last year.

The global green bond market started in 2008 with the first issuance by the World Bank, it has become increasingly important in recent years, especially given the big funding requirement for climate change mitigation targets promised under the Paris agreement framework in 2015.

"China's domestic need to tackle pollution has brought a change to its foreign policy position. Traditional finance can't meet this huge demand, so we need the green bond market to develop", said Stewart James, managing director and deputy head of group government affairs for Asia and Pacific and Americas at HSBC.

James said the increase of transparency in companies' use of green bond funds in projects is a key factor to grow the market further globally. "This will allow investors to make their own judgments on the risks associated with their investment," he said.

The future potential for green bonds is enormous, as China is estimated to require 2.9 trillion yuan of investment annually in the next five years to support its green energy ambitions. Of these, potentially 300 billion a year could be funded by green bonds, according to the China's Financial Research Institute at the State Council's Research Center.

International investors are already eyeing keenly on China's green bond market's investment opportunities, especially as the Chinese government relaxed rules for international investors to participate in China's interbank bond markets earlier this year, where about 90 percent of Chinese bonds are traded.

Michael Wilkins, managing director for infrastructure finance ratings at Standard and Poor's, said he sees significant potential for China's green bonds market to grow, given the $7 trillion yuan size of its bond market, which is the third largest in the world following the US and Japan.

"We're seeing an evolution of (green bonds being used for funding the development of) electric power vehicles, energy storage and efforts to de-carbonize the economy, so we will need huge amounts of issuance if we go down that path," Wilkins said.

Ambassador Liu also emphasized China's positive economic outlook supported by its first quarter GDP figure of 6.7 percent. "The majority of people around the world are confident that the Chinese economy has hit its bottom and stabilized."

"Chinese economy undergoing crucial transition, the aim is to replace old economic drier with new ones, but the Chinese economy remains resilient and has much potential left untapped. China's structural advancement continues to be the biggest contributor to global growth. China will continue to power up world economy," Liu said.

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