China’s offshore green bond market slumped 36% to record low in 2023 on rate hikes, lack of property issuers: Sustainable Fitch
- Offshore green bond issuances by Chinese firms sank 36 per cent last year to just over US$10 billion after declining 21 per cent in 2022, Sustainable Fitch report says
- Growth in Chinese onshore green bond issuance slowed to 10 per cent last year, compared with 65 per cent a year earlier
China’s offshore green bond market stumbled last year, hitting a record low amid rising US interest rates and an absence of Chinese property developers, according to a report from Sustainable Fitch.
But green bonds are becoming increasingly popular among mainland Chinese firms to meet rising demand for financing of transition projects.
Offshore green bond issuances in China fell 36 per cent last year to just over US$10 billion after declining 21 per cent in 2022, reaching half the level in 2021, according to the sustainable finance research unit of Fitch Solutions.
Chinese property developers missing from the bond market contributed to the decline in offshore green bond issuance, according to the report. The developers accounted for only 4 per cent of offshore green bonds in 2023, compared with a 40 per cent share of overall offshore issuance in 2021.
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“Banks, local government financing vehicles and energy corporates are now the dominant issuers that remain active in the offshore green bond market,” Jingwei Jia, associate director of Sustainable Fitch, said in the report.