Financing the Dual Reality: State-Led Capital Allocation and Renewable Energy Infrastructure in China's Green Transition

This thesis examines the evolution, structural dynamics, and operational mechanics of China's green finance architecture through the theoretical framework of the "green investor state." While global sustainable finance frameworks originally developed within Western, market-oriented economies driven by decentralized private capital, China has selectively adapted these principles to fit its top-down, state-led institutional context. The analysis investigates how the Chinese state transcends traditional market-failure correction to actively construct green markets, insulate strategic infrastructure from volatility, and anchor financial allocation within macro-planning mechanisms like the Five-Year Plans, the Beautiful China Initiative, and the 2030/2060 Dual Carbon goals. Guided by three core research questions, the study maps out the three-channel financial transmission mechanism (policy bank lending, the Carbon Emission Reduction Facility (CERF), and state-owned enterprise (SOE) green bonds) driving capital allocation across the solar, wind, and hydroelectric sectors. This state-directed infrastructure financing is empirically evaluated through a case study of the China Three Gorges Corporation (CTG). Finally, the thesis outlines the "dual reality" of managing the brown economy's decline alongside green expansion, while noting institutional implementation gaps and emerging directions in transition finance.