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China's Green Bonds Account for Nearly 40% of the Global Market Share Reaching 5 Trillion in 2020

 

"Green" is now a relatively hot word, its development is relatively rapid in recent years. In the 2017 Beijing International Fair for Trade in Services, "Green Finance" caused great attention of relevant parties. Song Jinshan, executive general manager of BOC International(China) Limited, introduced in the China Green Path·Green Finance and Industry Cooperation Seminar 2017 that as a part of green industry chain, green bonds developed for a short time but at a high speed. Especially in China, the number of green bonds issued in 2016 reached 230 billion, accounting for nearly 40% of the global market share--China provided more support for the green industry than other countries in the world.

 

Green bonds,  is a tool for financing  or refinancing of  bonds of green projects explained in the simplest way, including energy conservation, environmental protection, ecology, climate, renewable energy, land use and development and other fields. Song Jinshan introduced that there are four standards for green project: the project has been assessed to support the green development; with standardized project evaluation and selection process; strict and transparent management of funds; to disclose the use of funds at least once a year.

 

The development of international green bond is short, but it developed very fast. The first green bond was launched by the World Bank and the European Investment Bank in 2007. The green debt reached 36.5 billion in 2014, 41.2 billion in 2015, 82.0 billion or so in 2016. China issued a notice to launch green bonds by the People's Bank of China (PBOC) in the end of 2015, the Bank of China and the Agricultural Bank of China issued the RMB and foreign currency denominated green bonds at London in October 2015. The green corporate bonds appeared in 2016, and the Shanghai Stock Exchange and Shenzhen Stock Exchange issued a formal announcement of launching green corporate bonds. In 2016, China issued 230 billion green bonds, accounting for nearly 40% of the global market share, according to the data; China provided more support for the green industry than other countries in the world.

 

Green bonds are divided into green financial bonds, green corporate bonds, green enterprise bonds. These three major categories are different in the regulatory agencies and audit institutions, corporate bonds are generally approved by the National Development and Reform Commission (NDRC), enterprise bonds are generally approved by the China Securities Regulatory Commission (CSRC), and financial bonds are approved and supervised by the People's Bank of China (PBOC).

 

Green corporate bonds have obvious financing advantages compared with others, which can be simply summarized as more, faster, better and more economical. "More"--the annual investment funds in this field will increase year by year and reach 5 trillion in 2020 according to the objectives of the 13th Five-Year Plan.

 

"Faster"--high efficiency of approval. Equipped with professional approval team for green bonds company, provide acceptance, pre-trial and green channel to improve the efficiency of the listing and transfer of companies.  The enterprise can choose the best time to issue the bonds at the release phase to increase the efficiency of the issuance, which can improve audit efficiency at the exchange level for green corporate bonds, they can also select release window flexibly to improve the speed.

 

"More Economical"--the core of the financing is the cost. The green labels were sought by the capital and the issue cost is lower than others for international issuance of green bonds, the government has more preferential policies such as tax cuts, discounts, regulatory concessions, which may be most concerned about and it is the "More Economical" for financiers.

 

"Better"--environment-friendly business image can be showed from inside to outside through the issuance of green corporate bonds, this image is indispensable, and it can increase the proportion of direct financing.