The Climate Bonds Initiative and the China Central Depository & Clearing Co. Ltd (CCDC) just published their China Green Bond Market 2017 report, supported by HSBC. This is the second annual flagship publication reviewing China’s progress on green bond issuance, policy development and market growth.
The latest figures show total green bond issuance from China reached USD37.1bn (RMB248.6bn) in 2017, 4.5% up on the previous record-breaking year. Of this total, USD22.9bn (RMB 154.3bn) issuance is aligned with international definitions, accounting for 15% of global green bond issuance and making China the second largest green bond market in the world.
- 118: green bonds issued (113 onshore, 5 offshore)
- USD37.1bn (RMB248.6bn): total issuance
- USD22.9bn (RMB 154.3bn): issuance aligned with international definitions (62% of total)
- USD6.01bn (RMB40.2bn): Chinese Certified Climate Bonds - including the USD2.15bn green bond from ICBC, the worlds’ largest bank
- China Development Bank (CDC): Largest cumulative issuer in the year with USD4.6bn, including their offshore bond of USD1.67bn (RMB11.1bn) which was also Climate Bonds Certified.
Catalysts for scaling up China’s green bond market
To play their part in reaching the global USD1tn by 2020 milestone, the Chinese market needs to achieve a tenfold growth in green bond issuance in the next three years.
The report outlines five catalysts for growth, including:
- A greener ‘Belt and Road Initiative’
- Increasing green sovereign and sub-sovereign issuance
- Inter-country capital flows supporting green bond market growth
- A growing role for Hong Kong
- A ‘Green Bond Connect’ to help international investors invest in China’s domestic market
Regulatory developments, green finance developments and harmonisation
Policy support and momentum continued with several new developments in 2017, including:
- China Securities Regulatory Commission (CSRC) issued green bond guidelines for Chinese listed companies;
- Green Finance was included into the 2017 Government Work Report;
- The Fifth National Financial Work Conference encouraged development of green finance
- New guidelines for verifiers were released by PBoC and CSRC in December;
- The State Council set up pilot zones in Guangdong, Guizhou, Jiangxi, Zhejiang and Xinjiang to promote green finance;
- Four Ministries, jointly issued ‘Guidance on Promoting Green Belt and Road’, signalling a boost for green infrastructure.
China is also working to harmonize local green bond guidelines with those of international markets. A joint initiative between PBoC and the European Investment Bank produced a White Paper in November comparing green bond standards and working towards new frameworks for green finance.
Download the English version of the report here.
Download the Chinese version of the report 点击下载中文报告。点击下载中文报告.
Previous China publications:
China Green Bond Market 2016 is here.
China Mid-Year 2017 report is here.
Other China based reports are here.