China's issuance of its first Renminbi-denominated green sovereign bonds on the London Stock Exchange on Wednesday represents a strategic leap in global sustainable finance and currency internationalization, said a Chinese economist.
According to the Ministry of Finance, it successfully completed the bookbuilding and issuance of six billion yuan (around 825.52 million U.S. dollars) in green sovereign bonds in London on behalf of the central government.
This bond issuance delivers on commitments made during January's China-UK Economic and Financial Dialogue in Beijing.
To support this initiative, the ministry released a framework for sovereign green bonds in February, paving the foundation for the country to issue offshore sovereign green bonds and global capital to invest in its green development.
"The issuance is open to international investors, providing them with clear and standardized investment guidelines. It shows China's open attitude. This is about setting international standards. By issuing a bond that it needs, China is actively engaging in setting an international standard," said Zou Jingxian, an associate professor of the National Academy of Development and Strategy under Renmin University of China.
The move also comes as global demand for green sovereign bonds continues to grow, with such instruments typically enjoying strong investor appetite and favorable interest rates.
"The green transformation is critical for China's economy and also meets the public growing demand for a better quality of life. The funds raised through these bonds will be allocated to specific areas like green innovation, renewable energy. Second, it can boost international confidence in China's economy. We know that confidence is important for one economy. By issuing green sovereign bonds, China can attract more international capital," said Zou.
China issues first RMB green bonds in London, advancing global sustainable finance: expert
