Ep82 China’s Rise as a Global Clean Tech Powerhouse with Dr Christine Loh, HKUST

China has emerged as the global clean tech leader through a national mandate for ecological progress and massive investments in solar, wind, and battery technology. Policy expert Christine Loh joins the show to explore China's transition away from coal and Hong Kong’s ambitious push for carbon neutrality by 2050. Listeners will gain vital insights into the future of green finance, including sourcing "deep green" materials like green steel and using climate science for insurance risk assessment. This episode provides an essential guide to the technical innovations and building retrofitting projects currently transforming the climate business landscape in Asia.

ABOUT CHRISTINE: Professor Christine Loh, SBS, JP, OBE, Chevalier de l’Ordre National du Mérite, is Chief Development Strategist at the Hong Kong University of Science and Technology. She served as Under Secretary for the Environment in the HKSAR Government, Special Consultant on the mainland’s ecological civilisation policy, and was twice a Member of the Hong Kong Legislative Council. She founded and led the think tank Civic Exchange and has long been active in public policy, establishing multiple non‑profit organisations in environment, equal opportunity, arts, culture and human rights. She sits on the boards of New Forests and Towngas Smart Energy, was Asia Society’s Scholar in Residence (2023-2025), and serves on several advisory and steering bodies. A lawyer by training and former commodities trader, she has taught in the US and published widely. She holds honorary doctorates from the University of Hull and the University of Exeter.

HOST, PRODUCTION, ARTWORK: Joseph Jacobelli  |  MUSIC: Ep76 onward excerpts from Vivaldi’s La Follia, played by Luca Jacobelli.

Transcript

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 Ep82 China’s Rise as a Global Clean Tech Powerhouse with Dr Christine Loh, HKUST

[00:00:00] Christine Loh: So in fact, the China story to show the rest of the world, if you really wanted to clean up, right? Because if you really believe air quality is killing your people, we can now show the data that it does do that. Right. Well, then if you wanted to do something as a politician, well, there's a pathway. Spend money on those things. It works.

[00:00:19] Narrator: Welcome to Asia Climate Finance, your front row seat to the policies, investments, and actors shaping climate, business and finance across Asia-Pacific. Subscribe now so others find this essential guide to Asia's Climate Economy and note the disclaimers at the end. Now over to the host, analyst, investor, and author Joseph Jacobelli.

[00:00:42] Joseph Jacobelli: Good morning, good afternoon, and good evening, wherever you may be listening from. Welcome to Asia Climate Finance. It's been a little while, so let me start with a quick apology. I've been juggling the day job of managing money while also launching my second "Powering the Unstoppable Green Shift". That has taken more time than expected, so thank you for your patience. Today I'm in Hong Kong with someone who needs absolutely no introduction in this region, Dr Christine Loh. Christine is one of Asia's most respected voices on environmental policy. She's a professor at the Hong Kong University of Science and Technology, (HKUST), a former policymaker and a longtime thinker on how governments and markets can drive real climate progress.

She brings clarity, context, and a huge amount of lived experience to this conversation. We talk about China's rise as a clean tech powerhouse and how national mobilisation cleaned up Beijing's air. Christine explains how that effort evolved into a broader mandate for ecological progress. We look at the extraordinary growth of solar and wind, and we ask when renewables might finally overtake coal. We also turn to Hong Kong. We discuss the city's dependence on mainland energy; the scale of retrofitting needed across thousands of ageing buildings and what it will take to reach carbon neutrality by 2050.

Along the way, we touch on deep green construction materials, climate science in insurance, and a few other threads. It's a wide-ranging and very grounded discussion. As always, if you have comments or ideas, please send them to the email address at the top of the show notes. Now, let's join the conversation. Christine, thank you so much for joining me again on the Asia Climate Finance Podcast. It's really good to have you and this time we talk face to face in Hong Kong, so it's absolutely wonderful. Um, how are things with you?

[00:02:47] Christine Loh: I'm very well. Thank you. So nice to see you.

[00:02:49] Joseph Jacobelli: Thank you so much, Christine. So I wanted to have a discussion about what's been happening in Hong Kong and in China in terms of whether we're just talking about climate reporting, whether we're talking about sustainability, the policy side, etc., in terms of trends so that we can basically better understand the future of where we're going. I think one of the headlines is that now it's increasingly recognised that China is the clean tech leader globally. That's no longer disputed. And Hong Kong obviously can piggyback on that, being part of China. So could we first do almost like a State of the Union assessment of where we are at in Hong Kong and in China?

[00:03:35] Christine Loh: Yeah, I mean, I agree with you that finally I think the world recognised something is happening in China and clean tech, clean energy is very much a part of it. I mean, for myself, the first time I went to China was in the 1980s. And I remember very clearly what that was like at that time. There was no power, brownouts, or just not very reliable energy. Right. And then of course from the eighties to the nineties, it was China industrialising, building out its power system. And what it had, of course, was coal power. And it wasn't really until the late, mid, late 1990s that China recognised that, well, actually our environmental condition has deteriorated a lot. I mean, they recognised that this was coming up with pollution that was coming out of all their factories.

And I remember that very well because in Hong Kong by the mid-1990s, we were beginning to see serious air quality. So because of that period, people in Hong Kong recognised that this had something to do with the expansion of factories just across the border. So that moment kind of was one where people talked about it's time to clean up, but of course the transition to cleaning up actually took some time. And we also remember a number of dates that I think are critical as we think back to think forward for China. Um. Now, 2008 was the year of the Winter Olympics. Right? Right. And two or three years before then, when China was bidding for the Olympics, one of the important milestones is, well, you've got to have two months of clean air.

[00:05:21] Joseph Jacobelli: I remember.

[00:05:21] Christine Loh: Right. So that became the moment that a sort of indication, right. Can you do it or not? And actually if we now look back at emissions data history and so on, what you see is China thinking through how do I give two months of blue sky in 2008 in Beijing for the Olympics? And actually for those of us who were involved with Air Quality Science, which includes my colleagues at the Hong Kong University of Science and Technology, we actually spent time thinking about how to do that. We worked with the main team in mainland China on doing all kinds of tests and experiments and so on.

Just to cut this story short, but it's important because during that period it was such a big deal for China. There was no alternative to not having blue skies. And when they realised that you have to shut down a lot of things, and when you shut down factories from a wide radius, well actually you do get cleaner air, but during that period, they actually learned a lot because they measured everything. They tried everything. Fast forward. By the time we got to the following year, 2010, it was the Shanghai Expo. That too had to have relatively clean air, right? So what I'm saying is China had a number of major events that for the Chinese government were events that kicked them into action and what became national mobilisation. Right. To clean up.

[00:06:50] Joseph Jacobelli: Mm.

[00:06:51] Christine Loh: Okay. Then you kind of go forward to 2012. So in 2012, the Chinese Communist Party changed its constitution to adding in ecological progress. Right. That's the word that they use.

[00:07:08] Joseph Jacobelli: Right.

[00:07:09] Christine Loh: Again, you can see the pacing. Right. Of doing experiments to clean up for big events and then leading to actually the ruling party in China changing its constitution to make it a mandate that you have to make ecological progress. Then by 2018, five years later, China changed the national constitution to achieve something that the Chinese call ecological civilisation.

So this is now something philosophical. It's a guiding plan. So by then the key policymakers in China were quite clear. We are going to have to continue to grow, but growth has to be ecologically sound. This was a big moment. Right. Then by 2013 and 2014, China started all these various plans: battle against, fight against pollution. Including air quality. So, okay, 2013-14, that was about 10 years ago from today, right? So from the time of 2008 with the Beijing Olympics, with all the tests that had been done, then China was actually practising all kinds of things to make improvement.

Right. As well as to train many, many people from universities and governments to go and measure pollution, right? So the learning pace in China was mobilised on a massive scale. By the time 2018 came along, China was kind of much more ready than it was before. Then now we take it forward. It was quite clear again, the next range of the five-year plans and so on, was to say, we're going to grow and the growth has to come from sustainability. And then in more recent years, digitalisation, right? And that had to do with AI's development. Then clean energy became even more important. So that's why I think today you see the rollout of something that China has been trying to deal with. Because energy lies at the core. No energy, no growth.

Right. So you've got to clean up energy, but at the same time, China has been cleaning up its natural assets. So massive cleanup of rivers and ecology protection and so on. So right now we are seeing the results, the collective results, going back to pre-Olympic days, of all these years of mass mobilisation.

[00:09:41] Joseph Jacobelli: But apart from climate change related policy and ecological or environmental policies improving, at the same time we've seen the business side.

[00:09:52] Christine Loh: Yes.

[00:09:52] Joseph Jacobelli: Um, the wind farms, solar and all of the rest and even nuclear growing very, very quickly. Do you think that it was purely the economics that drove it? Or it was just a new opportunity given by government? Because I don't really remember the Chinese going out and saying, "Oh, we want our wind equipment manufacturers to be the number ones in the world," or whatever it is. I don't really remember them saying that, so.

[00:10:22] Christine Loh: Well, they kind of did, but maybe it was not so loud that people heard it. But actually, if you look back at the history and follow it, you do see it. Um, the year of, I think it was COP15 in Copenhagen, that was also the first year that senior leaders—it was Wen Jiabao who was then the Premier.

[00:10:45] Joseph Jacobelli: Right, right, right.

[00:10:46] Christine Loh: It was the first time someone of that kind of senior position went to these climate change international meetings. I think when they were there, because the record is there. It was also the year in Copenhagen where things were a bit of a mess. It was during the time of the Obama administration; President Obama from the US was there and kind of Copenhagen didn't quite make it. Right. It was supposed to take climate change policy to the next stage. So I think for the Chinese, they've said, "Okay, now we are on the big stage, but we don't quite know what we are doing." Um, so again, that touched the point of China thinking about economically, financially, I mean, how do we stick all of this together?

But I think because the Chinese leadership was quite clear about the science. They kept learning about the science. I know a very well-known professor at Tsinghua University who is in air quality science, and he is the one who has gone over the years to actually give classes to the Politburo members. I think one of the things about the Chinese leadership is many of them do come from a technical background.

[00:11:58] Joseph Jacobelli: Yes.

[00:11:59] Christine Loh: And so, looking at evidence, looking at numbers is not strange to them. Right? In fact, they demand it. "If I'm going to make policy, what is it that I really need to do? Can you measure something for me to know that if I spent this money, it's actually going to work?" So they work very closely with all their technical think tanks and the universities. I think in China it's perhaps one of the few places where the knowledge that comes from science is matched with the policy-making sitting together. Because, okay, how am I going to clean up air quality? Because it became a political problem. Right? The smog became a political problem.

And you might remember the other Premier before Wen Jiabao, Zhu Rongji, and Zhu Rongji was the one who said, "Well, I need to see the evidence." Right? So they have a practice of working together and then mobilising. Right. The other thing that the Chinese Communist Party is really excellent at is to mobilise resources.

[00:13:01] Joseph Jacobelli: Yes.

[00:13:01] Christine Loh: Because once they make a decision, it flows down from the national government to the provincial government to the city governments. Right? Everybody has to have targets. So when they said, "I'm going to fight air quality," it was really quite serious all over the country. So what do you do? Well, you have to replace your coal plants. You have to put in scrubbers. I mean, you have to do 1,001 things, and they allocated the money to do all of that throughout the country. So in fact, the China story to show the rest of the world: if you really wanted to clean up, right? Because if you really believe air quality is killing your people, we can now show the data that it does do that. Right. Well, then if you wanted to do something as a politician, well, there's a pathway. Spend money on those things. It works.

[00:13:48] Joseph Jacobelli: So it was really—don't want to put words in your mouth—but it was really the strength of the signal from the central government that also allowed, and which filtered down all the way to the county governments, which kind of drove private business because there's lots of private business involved in the manufacturing of clean energy equipment.

[00:14:10] Christine Loh: Yeah. Well, private businesses, many of them are state-owned enterprises. And they're complemented by the private sector.

[00:14:15] Joseph Jacobelli: Right.

[00:14:15] Christine Loh: Right. Now the state-owned enterprises are the ones that run the big energy sector.

[00:14:20] Joseph Jacobelli: Yeah. Of course. They have to follow...

[00:14:21] Christine Loh: So, let's say the coal power plants. Right. So once the central government accepts that we've got to clean them up, so. There were two things that they did. One is, okay, cleanup technology. Right. The second thing that they did was, okay, the cleanup technology must include actually going higher up in the technology. Therefore, today's cleanest coal plants, if you have to use coal, come from China. Because they also knew that if you're going to have to keep burning coal, you've got to have to be the cleanest. And at those days, right, we are going back 15-plus years.

[00:14:59] Joseph Jacobelli: Right. Right. Right.

[00:14:59] Christine Loh: They didn't have too many other alternatives. They also knew that by about the year 2000, they better start looking at renewables. And then if you track solar, the growth of solar from hardly anything to, every five years, right, you see what they have, the trajectory is just amazing. And what is that evidence of? That's the evidence of consistent policy from the government. It's also that you have to keep investing to make it happen. And you have to really kind of believe in this because we have seen other governments around the world where they make a policy, whatever it is—clean energy, medical investments and so on—but if you have a change of government and they step back, then you have a break.

So in China you actually have massive mobilisation of technology talent, right? Because the two go together in a way because you are funding it. Therefore, all the things is how you mobilise massively on a national scale, and this is what the Chinese are good at. It goes back to when we think about building the Grand Canal, building the Great Wall, what are the Chinese good at there?

[00:16:11] Joseph Jacobelli: Chinese at doing big things. Because they always had to. But [What's wrong at is?] also there are a lot of private companies, like not state-owned, that got into the clean energy game and including some energy efficiency companies and some others. So those were like almost motivated by the policy, the consistency of policies that the government had, and now we're seeing the—I mean, one of my favourite examples is, I don't remember the exact number, but I think it's something like this: 200 electric vehicle manufacturers in China.

[00:16:43] Christine Loh: Yes.

[00:16:44] Joseph Jacobelli: Which is probably 192 too many. But it so that kind of shows it's not regulated by government, because if government regulated, let's say, "Okay, we don't just need three or four big companies to be the champions to go out" or whatever. But the fact that you've got much more than 10 is you've got this competitive kind of side of things, which I think people—it's a model not everybody appreciates.

[00:17:08] Christine Loh: Yeah, no. It's actually a model that needs to be understood from perhaps how the Chinese have in practice. Right? That's how it is. So whenever they wanted to promote something, um, they kind of let everybody bloom, right? And they say, "If you do this, then there will be some favourable incentives, subsidies and so on."

[00:17:29] Joseph Jacobelli: Right.

[00:17:29] Christine Loh: So of course then people start growing. Right? Okay. Well, at some stage, and we have seen this over and over again, there are then too many of these companies. Mm. These companies are not all surviving. So some will just die. Right. And then the next stage is when the government intervenes and says, "It is time for you to aggregate," because there are so many of you. A lot of you have died because you didn't quite make your business model right. Didn't quite work for you. But now we have quite a number that have kind of survived. But to go into the next stage, maybe what you really need to do is to reduce the numbers.

And how do you reduce the numbers? The state kind of again has maybe some incentives, or actually they even say in this province, "There are too many of you, right? So we want to help you to actually aggregate yourself into maybe three companies instead of having 10 companies." Right? So there is this process going on. So eventually the ones that are stronger, they're proven to you in a way that they've survived, that you're now given a better future. So we see this way of operation again and again in China on different products.

[00:18:46] Joseph Jacobelli: So we talked about the kind of longer history, the shorter term history. What's the status now? What exactly is going on in terms of like policies and how those policies are being executed?

[00:18:57] Christine Loh: The next stage is a really interesting stage, but let's stick with energy for now. So we know the story because this is the bit that is widely reported outside China, and people are beginning to see, "Wow, from year to year you've now built so much renewable energy." So the renewable energy capacity we know is now more than coal. Right. So the next stage is, okay, what is the system integration that you need for more of that to be used?

Right? So, there is also now a very robust and very capable battery technology. So what I'm saying is there are all these [comply?] apart from the power generation, and the power equipment, the transmission lines and all of that. Because that's all there now. Then the batteries are now also there. They're all kind of growing at the same time. And these people are now able to also articulate a much fuller picture of how they can all dovetail together, which the government has bought into. I think private investors can also see this. So it's a very lively market for energy—new energy, clean energy, whatever you want to call it—in China.

And now you are having also foreign investment coming in and seeing that this is the future, being able to invest. So it's a very interesting time. What we are now going to watch for is when is it now in the future that all this suddenly comes together much better so that you can actually flip over and use more renewable energy—because the capacity is now there—than coal. That will be like the magic moment in China where suddenly everything starts to flip. Now the government tells you they want to achieve peak coal by 2030. Now we think if you get all this integration right, and this other stuff together, you should be able to get there. Or maybe even before.

[00:20:59] Joseph Jacobelli: Yeah.

[00:20:59] Christine Loh: Is that flipping, that moment?

[00:21:01] Joseph Jacobelli: Yeah. Yeah. I see, I see. Um, where does Hong Kong fit into all this?

[00:21:08] Christine Loh: Um, in Hong Kong, we are very fortunate because our energy—we have very highly reliable electricity, right? Yes, every everybody knows that. And I teach in my class about how lucky we are to live in Hong Kong, and I asked my students, I said, "What floor do you live?" And says, "I live on the 25th floor." And there was one year where last year actually a student put her hand up and said, "I live on the 71st floor." Right. This is an apartment building in Hong Kong. Right. And I said, "Well, you win, hands down." And then we talked about, well, actually, if the electricity in Hong Kong is not highly reliable, you're never going to be able to get home. Right?

So the whole development of the city. Very high density, high-rise buildings. We have this magic subway system, right, that runs very smoothly. Lots of rail lines being built and so on. This high energy reliability doesn't come about if we didn't have all the pieces in the right place. So a lot of that energy also is related to China. So, for example, if we were talking about gas or gas fields, where does it come from? It comes from a gas field in the South China Sea, or it's coming from a Chinese contract buying by pipeline from Turkmenistan. Right. No, but it goes through China and then comes down to Hong Kong.

And of course in Hong Kong itself, um, more than a quarter of our electricity comes from a nuclear plant across the border in China. So what I'm saying is our reliance on energy sources that actually come from mainland China is huge. Point number one. Number two is Hong Kong is now interested really because we have our own targets and so on. We need to clean up; we have to have carbon neutrality by 2050. That means we need new contracts with our electricity suppliers. Well, where are we going to get it from? Again, the China component, the clean energy from the Southern China grid, or building new plants not very far away becomes vital. So that really is our future. That's number one.

Number two, perhaps more importantly, is Hong Kong and our leaders can see so clearly now that the Chinese policy trajectory is clean energy, is sustainability, is technology and innovation. Um, so I think that actually gives us a picture of where we need to be ourselves.

[00:23:47] Joseph Jacobelli: Mm. So how's progress in Hong Kong in terms of like regulatory policies and, I mean, do you think that the government has put in place enough green lights to allow for these developments? I mean, apart from climate finance, because I know the Hong Kong government is big on promoting climate finance in all sorts of ways.

[00:24:07] Christine Loh: Yeah.

[00:24:08] Joseph Jacobelli: Um, but do you think that there's enough policies out there to drive change?

[00:24:13] Christine Loh: Well with energy, at least, we have existing contracts, right, with our two power companies. So on that basis, the next change where you can do something new and different comes in the next few years for negotiation, where the new contract will start after 2033. So the next five years is actually very important because we are going to have to go towards something, right? And the going towards something inevitably has to be linked to mainland China.

[00:24:41] Joseph Jacobelli: Mm.

[00:24:41] Christine Loh: So I hope in that space that we can be more ambitious and see clean energy, how are we going to price it? How are we going to tap it down? So there's a structural engineering side and there's a pricing side. And then we are beginning to see more companies in Hong Kong, both big and small, going into efficiency, the technology, the innovation side. I'd like to think that Hong Kong people are getting more interested in energy itself because in the current contract, many people have put solar panels on their roofs. Now, of course, it's still relatively small, right? Because our rooftops are small.

[00:25:22] Joseph Jacobelli: Right.

[00:25:23] Christine Loh: But it kind of gives a new sense to the use of energy, and maybe people will be more interested in the future in technology that we can use ourselves personally and in our homes that will save energy.

[00:25:37] Joseph Jacobelli: How far behind is Hong Kong from China on climate related?

[00:25:42] Christine Loh: It again, it depends on how you are looking at it. Because we have already phased down coal. So in a way, if China wanted to point to a city that is within greater China, they could point to Hong Kong, that we've stopped building coal plants back in the late 1990s. Um, I think when people say we want Hong Kong to do more, is that, well, since we did that already so long ago, can we do something that further goes out there? But there are some things that we can do right now. We can think about how to reprice the clean energy that we have.

Right? How do you want... do you want to sell that cleaner energy? So, for example, um, more than a quarter of our energy is actually nuclear. Do you want that to be worth more, so that they could go to perhaps industry and commerce? What I'm saying is you've got to think of not just the hardware of energy. This is a good time to actually think about saving energy, how to sell energy in a different way. Um, there's so many... I mean, the more the financial and the service side of energy, I think in Hong Kong, could be much better.

[00:26:56] Joseph Jacobelli: Energy as a service. In terms of corporations, so we know that in China, they're pretty tightly regulated, so they don't have a lot of choice. If they're told to do climate reporting, they'll just report, whether it's good quality or bad quality. That's a different discussion. What about in Hong Kong? How do you see the climate transition? Because one of the kind of criticisms that I heard—and this is not just Hong Kong, it applies everywhere to Europe, applies for the US—is there's a lot of quasi-greenwash in the sense that they say, "Okay, well yeah, we'll do it because we have to do it." But as far as they're concerned, it's just a tick-in-the-box exercise. So there isn't a real commitment to change.

And I think it was mentioned in that example that some entities like fund managers now will make an allowance for a dirty, quote-unquote, company as long as they've got a transition plan and they've got a... so they won't get a green tick, but they'll get a kind of yellow tick as in, not a red one. So how are we doing in Hong Kong? Because I know you're quite close to that space.

[00:28:10] Christine Loh: Yeah. I think we can point to quite a lot of the listed companies because they have to write reports, right? And I would say like everywhere in the world, there's a group of companies we call the front runners, right? The front runners, inevitably their management, the governance of the company requires them to kind of really do something. And it's interesting to look at these companies over the last 10 years. That's been really the history of doing more, right?

Um, how they've gone about it. I think today we've now entered the beginning of the next stage, which is: it's not enough to say you've got a target and a timeline, because nobody actually knows how you're going to get there. One hopes your senior management and your board actually knows how to get there. Now people are beginning to talk about: "How do I get there? What is it that I have to do?" There's actually a very good report out from one of our listed property companies, Hang Lung. They've just put out a document that I'm actually asking my students to read at university.

What it does is, they say, "We're a property company. We have a portfolio in Hong Kong, and we have a portfolio in mainland China." They have looked at what is it that they have to do to get to net zero by 2050. Now, in order to do that, they actually have to say if they actually list out what they call a light green transition or deep green transition. The deep green transition is the one that will allow them to build new buildings. So this is expansion through new buildings. And what they're saying is it means that actually they have to be able to buy green steel. They have to be able to buy and use green cement.

Now, only if they could do that—and they're not going to produce it, right, so they have to actually work with producers who can do that—they said if they can go deep green, then they have an opportunity to build new buildings. So expand their portfolio through new buildings. However, if that's not possible, then what do you do about other strategies? Is it to retrofit your old buildings, or maybe you have to do both, obviously, right? Because you need to be net zero. So very interesting. They talk about: "What is the technology you need to do? What is the trade-off you're prepared to do?" So I think that kind of thinking is what you really expect companies to do. And they've kind of laid it out there.

So I think once somebody is doing something like that, you can ask other companies how they are doing it. So the next stage of conversation, I think, will be more specific. And that's a good thing. And to be a front runner, right, it also means the company has to go and find producers of green steel and cement and actually show how you are actually going to do it. You don't sit back and wait, right? Because if you think your strategy to grow involves maybe building new buildings in another part of some market, then as a portfolio you've got to be able to source these deep green transitional materials. So, very interesting.

[00:31:20] Joseph Jacobelli: If you were to take your crystal ball, we know that China is going to continue to accelerate because especially—I mean, in Asia Climate Finance, we don't talk about politics because it's not my area of expertise—but given the, let's call it geopolitical earthquakes that we've had of recent, especially in the Middle East. So that energy security drive for China is going to be anything but stronger. Don't want to rely on imported oil, don't want to rely on imported gas. So we know that kind of pathway.

What about Hong Kong's pathway? Because it's been disappointing in the sense of for those of us who observed Hong Kong for a long time, that there's so much hope, so much potential. It's a wealthy jurisdiction, a very well-educated population, well-educated government, and we could just do so much more and perhaps contribute to China's transition, but we seem to be going about it quite slowly. So if you were just to guesstimate where we're going to be in 10, 20 years from now in Hong Kong, how do you see it?

[00:32:32] Christine Loh: I like to think that we can use our own problems, right? So one of the problems that we have is retrofitting buildings. We have a lot of buildings that are getting older and older. And to retrofit buildings, it's not just even about energy, but of course you're going to do energy, right? Energy, water efficiency. These are critical, but also the wellbeing. And as you have younger people who are more digitally interested, how can we wrap that really into an opportunity, right?

Now, however, to be able to do that, I think there are a lot of policies and thinking—our own thinking about this—that are disjointed and disconnected. We are going to need government to actually make a policy that says retrofitting buildings is a great opportunity for the future, right, for economic growth, wellbeing, and good health of the people and so on. Yeah. So you need to think through what is the public sector trigger that you're going to get that into place.

And in our last policy address, this is in October 2025, we had one sentence in the Chief Executive policy address that says they want to accelerate the market for existing building retrofit. Now, it's important to have it there because that kind of wakes up the administration, the policymakers. But now, okay, since government wants to do that, what is it that we now need to do both in the public and private sector to do that? So we know actually all the problems, the disjointed benefits, right? So somebody has to spend heavy Capex to do that, but who gets the benefit? Is it the owners? Is it the tenant? And who is it along the way that will get what kind of benefit?

Now, the finance sector tends to look at this as, well, if you can do something and it fits in with the way that I'm willing to lend or invest, then I'll do it. But no, I think that's the old way. We need to collectively see how to invest or how to put some public money and private money into retrofitting a lot—we're talking about thousands, right—of Hong Kong's buildings. Then I think people see, "Wow, this is actually an economic opportunity."

[00:34:40] Joseph Jacobelli: Mm.

[00:34:40] Christine Loh: So what is it that you need to do there? So Hong Kong, we're now entering that discussion, which I'm quite excited about. So, as I said, one is supply-side —where are we going to get the power. The other one is the demand side, which is this is what it is. And I think once we sort out some funding and what are the policy needs, this could be replicated in other markets.

[00:35:03] Joseph Jacobelli: Interesting, interesting. Um, going back to the kind of climate, if I can talk a little bit about the environment and climate reporting as well, do you feel that what the Hong Kong Stock Exchange did, maybe last year or the year before I forgot, is going to be extended to smaller enterprises as well? Um, and if so, then how are smaller enterprises going to cope given that they're small?

[00:35:29] Christine Loh: Yeah. Well, I think because they're not listed, the stock exchange cannot directly ask them to do something, so it's indirect. So it'll be through smaller companies doing business with listed companies, right? The listed companies are going to ask them for that data. So I think that's kind of the number one drive, to some extent that's happening.

The second thing is, I think this happens to any business, even bigger business—your earlier point about companies saying, "All this ESG stuff, is it really serious? Can I just tick the box? This is compliance, I'll just do it, but I don't know if this is really going to help me." I was asked this question by an executive group of students, and I thought about it and I said, "Well, actually let us discuss this in a different way. Right? Because do you believe in the digital world now? Because that's also about you managing your business, right, so that you can know where to invest or squeeze more benefit out of the money that you are spending, right?"

And everybody says, "Yes, we know that." And "Do you believe that in the future you yourself want to know a lot more about your business, never mind about whether it's about environment? About everything. Right?" And they said, "Yes." I said, "Well, if you believe in that, that means your ESG becomes much easier. You're just measuring that as well. Right." So, but right now you are focusing on looking at that and saying ESG is not so relevant to you. But at the same time, when you're looking at digital improvement, you are looking at collecting more data.

[00:37:05] Joseph Jacobelli: Yes.

[00:37:06] Christine Loh: Right. So then actually you are just using this—you are now only looking at it from compliance. But actually, if you're looking at it from your total business, does that make sense? And everybody said, "Yes, that makes sense." Interesting. Yeah. So if you're looking at things from a digital perspective, they're actually spending lots of money doing that. Right?

[00:37:29] Joseph Jacobelli: Right, right.

[00:37:29] Christine Loh: So I think we are just missing a little component here. And I do believe that over time when people become much more data-sensitive and younger people enter the business, they'll find it much easier to do that. Whether you are a little café or you are a big, listed company, um, it will change. The compliance is no longer seen as a hassle, but just as part of what I do—I have the data.

[00:37:58] Joseph Jacobelli: For the final kind of point, I want to talk a little bit about HKUST because I know you've got some initiatives and I think, again, from the concept of looking at this from a bottom-up—or if you want to call it grassroots—but it's more like a bottom-up approach. From an economics perspective, there's a few things that you're working on. So could you tell us a little bit about those?

[00:38:20] Christine Loh: Well, I'll tell you something that I'm doing personally, but also some of the things I get really excited about when I see my colleagues doing it. And we are trying to see how to do it together. So I just throw out a couple of them. This whole thing about these existing buildings, right? Every time I look outside the window in Hong Kong, I see tens of thousands of buildings that need retrofitting.

[00:38:39] Joseph Jacobelli: Right. Yes.

[00:38:40] Christine Loh: So I've been working on this for a long time. I think now we've got government interest and so how can we stick it together better? So this is what I'm spending time doing. The other thing that has become very sexy in Hong Kong is something called nature-based solutions. So people are saying, "Oh, can you really do nature? And how do we price nature? How do we measure whether some tree is growing or to what extent is it absorbing carbon?"

So I see a lot of interest in understanding how nature performs and how to use that to help government policy because a lot of the nature conservation is about public land. Right. It's government, the coastline or the forest and whatnot. And then there is development land, right? So government land they want to be sold, or it's private land, but to get development right you have to follow guidelines from the government and so on. So, Hong Kong—something that we, I think, want to clap that. I think very recently, government is now providing a set of new guidelines on nature-based solutions for development, for infrastructure.

[00:39:55] Joseph Jacobelli: Mm.

[00:39:55] Christine Loh: So that's a great start. Yes. Because that triggers a whole new way of thinking. So Hong Kong, I think, is justifiably proud of that. We are now again hosting diverse disciplines to work together to articulate how we can get private funding, private investments into nature conservation. What is it that we need? The third example I want to give is these are all my very techy colleagues at HKUST: so we're looking at, okay, let's say we have all the technology—drones and robots and sensors, everything that you can use today—we can do a digital twin of a nature park in Hong Kong.

Now, once you can do that, you can actually manage it better because you are doing it real time, right? So this is something of great interest to actually a lot of people: to ecologists, to government that has to manage these nature parks, to providing also ecologists with "how are those trees growing?" So we are now—but as I said, there's a number of different techie disciplines from my colleagues in different departments that want to build something like that. So that's just one example. So I'm very excited by all this kind of stuff.

[00:41:09] Joseph Jacobelli: There was one project you were doing a couple of years back, which was completed, called the carbon counter for some small-medium enterprises.

[00:41:19] Christine Loh: Oh yes, yes. Well, that is out there. And actually, my colleagues have improved or expanded that to one of the Southeast ASEAN countries—we're being asked if we can do that. So the problem is getting people to use it.

[00:41:34] Joseph Jacobelli: Right, right. Communication part.

[00:41:36] Christine Loh: Yeah. So the technical side for us is not the challenge. It's really because we're a university, right? I mean, we have no capacity to go and get people to use this kind of stuff. So the thing really is: who is going to help with the popularisation of something like that?

[00:41:56] Joseph Jacobelli: Right? Well, it's all a process of education. What do you do? Do you use Instagram or do you use YouTube? I mean, which way are you going to go?

[00:42:15] Christine Loh: Well, we're trying to say to government, since they have supported us in doing this, that maybe they can take it to the next step.

[00:42:23] Joseph Jacobelli: I remember that. Um, you also had mentioned the private sector participation in cooperating with HKUST in some of the projects?

[00:42:34] Christine Loh: Yes.

[00:42:35] Joseph Jacobelli: Could you tell us a little bit more about that?

[00:42:37] Christine Loh: Well, one of the very exciting ones is to use science—to use climate science. And we are now working very closely with the insurance sector to look at risk, how we predict extreme climate looking at claims data that we are given on a confidential basis by the insurance sector, and what we can come up with that will help the insurance sector to predict and to assess risk and creating new products in insurance. So we are very excited about that, that we should have some new information coming out later this year in 2026.

[00:43:18] Joseph Jacobelli: Okay, great. Well, listen, Christine, I really appreciate your time today. It's been a really comprehensive conversation about China, about Hong Kong. Always enjoy it and hopefully we can do that sometime again soon.

[00:43:31] Christine Loh: Thank you. Thank you so much. So nice to see you.

[00:43:34] Joseph Jacobelli: Thanks.

[00:43:34] Narrator: Please note that the Asia Climate Finance Podcast is provided for educational purposes only and does not constitute investment advice. Any information discussed should not be relied upon for making investment decisions. Listeners should always seek advice from a suitably qualified and authorised investment professional. The views and opinions expressed by guests are their own and do not necessarily reflect the views of their current or former employers or of the podcast host or producers.