Chinese capital markets offer a growing channel for international climate finance

New Climate Bonds report finds Panda and Dim Sum bond markets are expanding as conduits for cross-border sustainable finance

Highlights:  

• As of end-2025, GSS+ bonds account for 6% of total Panda bond issuance, reaching CNY64.2bn (USD9.4bn), of which 84% is aligned with Climate Bonds methodology.
• The GSS+ Dim Sum market is considerably larger, with cumulative issuance of CNY328.0bn (USD48.2bn), of which CNY253.3bn (USD37.2bn), or 77%, is aligned with Climate Bonds methodology.
• Green bonds dominate both markets, accounting for 60–64% of total GSS+ volume, followed by sustainability bonds at approximately 30%.

Beijing/London, 4 Aug 2026 – China's bond market has undergone significant opening over the past decade, with mechanisms such as Bond Connect and expanded Panda bond issuance rules broadening access for foreign issuers and investors. A new report from the Climate Bonds Initiative finds Chinese capital markets are emerging as a growing, if still nascent, channel for international climate finance through the Panda and Dim Sum bond markets. While GSS+ bonds still represent a relatively small share of total issuance in both markets, the volumes are growing.

Since the first green Panda bond in 2016 and the first green Dim Sum bond in 2019, both markets have expanded steadily. Panda bonds connect foreign issuers to China's onshore investor base; Dim Sum bonds offer offshore RMB access through Hong Kong SAR and a more international investor mix; and the new Free Trade Zone (FTZ) bonds are positioned as a hybrid channel that could bridge onshore policy priorities with offshore-style structuring. 

Despite this growth, cross-border RMB-denominated bonds remain challenged by a narrow issuer base, short tenors relative to infrastructure financing needs, and complications in cross-border execution, including disclosure requirements, regulatory interpretation, and taxonomy alignment. The report recommends clearer guidance on taxonomies and sector-specific criteria, alongside stronger credit enhancement mechanisms, to help build issuer capacity, reduce execution risk, and unlock a deeper, more diversified, and more scalable RMB GSS+ bond market.

Sean Kidney, Co-founder and CEO, Climate Bonds Initiative:

“Panda and Dim Sum bonds are becoming an important bridge between China’s capital markets and global sustainable finance. Their growth reflects not only rising issuance, but also the deeper integration of sustainability into cross-border RMB financing. By expanding access to RMB capital for emerging economies, they can strengthen China’s role in financing the global green transition. Clearer taxonomy guidance, sector criteria and greater regulatory predictability will be critical to scaling the market.”

Dr. Ma Jun, President of the Institute of Finance and Sustainability (IFS), Chairman of the Capacity-building Alliance of Sustainable Investment (CASI):

“Achieving global net-zero goals requires mobilizing sustainable capital across borders at an unprecedented scale, yet many transition economies continue to face high borrowing costs and acute financing constraints. RMB-denominated GSS+ instruments are maturing into vital cross-border corridors that bridge this gap. By lowering capital friction and optimizing financial structures, these flexible funding channels help convert latent green demand into bankable, real-economy projects globally while offering direct access to onshore liquidity. As international sustainability frameworks converge, signified by efforts such as the Multi-Jurisdiction Common Ground Taxonomy (MCGT), mastering these multi-directional financing formats will be essential for institutions seeking to drive high-impact sustainable growth.”

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For more information, please contact: 

Xiaoyan Shen 

Senior Communications and Marketing Specialist, Climate Bonds Initiative

Xiaoyan.shen@climatebonds.net