Sustainable Financing in China Virtual Series - Episode 2
June 29, 2022
The Chinese government has pledged to achieve carbon neutrality by 2060, which will likely drive further growth for Chinese green bonds. International investors have increased their holdings of Chinese fixed-income securities by about 30% last year, reaching approximately CNY 3.9 trillion (USD 0.61 trillion), as of September 2021.
China's green bonds to boost global sustainable development
- China’s ESG market has grown from being just about green bonds to seeing carbon-neutrality bonds, sustainability-linked bonds and even green ABS. What is likely to be the next stage in the evolution of China’s ESG bond market?
- Who will be the next wave of issuers?
- Supporting policies for green bonds have been launched across China, including substantial incentives such as discounted interest rates, guarantees and subsidies for green bonds. Is there more to come?
- Is the taxonomy of green bonds harmonized enough to avoid “greenwashing”?
- China has made great efforts in the past year to unify its disparate domestic green bond standards and further align them with international standards. Is the work over? What more needs to be done to bring global standards to the domestic debt market?
- Are there green bond opportunities for the development of infrastructure projects, such as in the Greater Bay Area and along the Belt and Road Initiative?
- Regulators like NAFMII are taking big steps to grow their ESG market, by encouraging foreign issuers like SSAs to sell social or sustainability Panda bonds. What impact is this likely to have on the ESG Panda market? What other regulations can be implemented to boost ESG issuance onshore?