CHINA SUSTAINABLE DEBT STATE OF THE MARKET REPORT 2023

In 2023, China maintained its position as the world's largest green bond issuance market, despite a slight decline in total volume. The market is characterized by a strong preference for short-dated debt and a growing reliance on Second Party Opinions to enhance credibility. While green bonds are increasingly aligned with the 100% Use of Proceeds (UoP) rule, social and sustainability bonds face challenges with transparency and disclosure. Sustainability-linked bonds (SLBs) are prolific in number but rarely utilize greenhouse gas (GHG) reduction targets. Policy drivers include the China Green Bond Principles and the China-EU Common Ground Taxonomy, alongside emerging local transition finance guidelines for hard-to-abate sectors like steel and chemicals.

• China was the world's largest green bond issuance market for the second consecutive year in 2023, with aligned volumes of USD 83.5bn from onshore and offshore issuance.
• The quality of green bond issuance improved in 2023, with the inclusion rate in the Climate Bonds green bond database (GBDB) rising to 63.6% from 57.3% in 2022.
• Energy and transport projects dominated green bond use of proceeds (UoP), accounting for 84% of total onshore green UoP in 2023.
• Chinese green bond issuers show a strong preference for short-term debt, with 93.8% of aligned green debt having a maturity of five years or less.
• The use of Second Party Opinions (SPOs) reached a record high in 2023, with 66.4% of all Chinese green bonds disclosing an SPO.
• Social and sustainability (S&S) bond issuance rebounded in 2023 to USD 13.7bn, with affordable infrastructure representing the largest UoP category at 24% of total volumes.
• The S&S bond market suffers from low transparency; 68.9% of excluded deals in 2023 were rejected due to insufficient disclosure.
• China is the most prolific source of sustainability-linked bonds (SLBs) by deal count, with 53 deals in 2023, though only three issuers used GHG reduction targets.
• The alignment of Chinese green bonds with the 100% Use of Proceeds (UoP) rule improved to over 98% in 2023 following the 2022 China Green Bond Principles.
• The China-EU Common Ground Taxonomy (CGT) is seeing increased application, with 219 green bonds meeting CGT standards to date, including 59 deals priced in 2023.
• Local governments in Huzhou, Chongqing, Tianjin, Shanghai, and Hebei introduced transition finance policy guidelines in 2023 to support hard-to-abate industries.

APA

Zhan, G., Jian, J., Matthew, M., Wenhong, X., Xinru, X., Lihua, Q., Qi, F., & Zhengwei, L. (2024). CHINA SUSTAINABLE DEBT STATE OF THE MARKET REPORT 2023. Climate Bonds Initiative. https://www.climatebonds.net/files/documents/publications/china_sustainable_debt_state_of_the_market_report_2023.pdf

Chicago

Zhan, GAO, JIN Jian, MACGEOCH Matthew, XIE Wenhong, XU Xinru, QIAN Lihua, FANG Qi, and LU Zhengwei. CHINA SUSTAINABLE DEBT STATE OF THE MARKET REPORT 2023. Climate Bonds Initiative, 2024. https://www.climatebonds.net/files/documents/publications/china_sustainable_debt_state_of_the_market_report_2023.pdf.

Wikipedia

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BibTeX

@techreport{zhan2024china, author = {Zhan, GAO and Jian, JIN and Matthew, MACGEOCH and Wenhong, XIE and Xinru, XU and Lihua, QIAN and Qi, FANG and Zhengwei, LU}, title = {{CHINA SUSTAINABLE DEBT STATE OF THE MARKET REPORT 2023}}, institution = {Climate Bonds Initiative}, year = {2024}, month = may, url = {https://www.climatebonds.net/files/documents/publications/china_sustainable_debt_state_of_the_market_report_2023.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }