The Hand of the Market, the Way of Governance: Paradigm Innovation of Public Governance in China’s Green Futures Practice

This paper uses the innovative practice of China’s green futures market as a “small incision” to explore the “big issue” of financial markets as a tool for public governance from both theoretical and practical dimensions. Against the backdrop of the global sustainable development transformation, traditional “command-and-control” environmental regulations face efficiency bottlenecks and insufficient incentives. This paper argues that futures contracts are evolving from purely economic tools into “governance contracts” that carry public policy objectives. Through three core mechanisms—price discovery, risk management, and standard embedding—futures markets can internalize environmental externalities and provide dynamic, forward-looking incentive signals for sustainable development. The article provides an in-depth analysis of specific practices in areas such as new energy metals, green agricultural products, and the circular economy at futures exchanges in Guangzhou, Zhengzhou, and Shanghai, revealing their multi-dimensional governance value in serving the national “dual-carbon” goals, safeguarding industrial chain security, and promoting common prosperity. The study finds that this practice is a vivid embodiment of China’s theory of combining an “effective market” with a “proactive government,” forming a new paradigm of collaborative governance among top-level national design, market intermediary institutions, and micro-level market entities. Finally, the paper discusses the governance challenges this model faces, including data infrastructure, regulatory coordination, and participation equity, and proposes corresponding optimization pathways to provide theoretical references and policy insights for improving the sustainable financial governance system with Chinese characteristics and constructing an autonomous knowledge system of public administration.