Chinese domestic green securities

Your access point to data and information on Chinese domestic green securities listed and traded on the Shanghai Stock Exchange (SSE) or traded on the Chinese Interbank Bond Market (CIBM).

Chinese domestic green bonds market

China boasts one of the world’s largest bond markets, valued at USD 11 tn, with green bonds issuances amounting to more than RMB 250 bn. However, the market may appear off-limits to the international investor community due to the difficulties of accessing the right level of information on the traded bonds. By displaying information about Chinese domestic green bonds traded either on Chinese exchanges or on the Chinese Interbank Bond Market (CIBM), LGX is bridging the information gap between Chinese issuers and international investors. Green bonds listed on the Shanghai Stock Exchange can be traded via existing channels. The cooperation with LuxSE focuses on providing exhaustive information in English to offshore investors. 

What is a Chinese domestic green bond?

Depending upon the nature of the Chinese domestic issuer, they are subject to different green bond guidelines which will define what constitutes eligible projects to be financed by a Chinese domestic green bond. The following guidelines exist:

  • ​Green bonds issued by financial entities are subject to the People’s Bank of China (PBOC) Green Bond Endorsed Project Catalogue
  • Green domestic corporate bonds, (and in general non-listed companies), are subject to the National Development and Reform Commission (NDRC) Green Bond Guidelines
  • Green bonds issued by listed companies and corporate asset-backed securities are subject to the China Securities Regulatory Commission (CSRC) Guidelines for Supporting Green Bond Development

Note that (as per CBI) the PBOC Green Bond Endorsed Project Catalogue accepts retrofits of fossil fuel power stations, clean coal and coal efficiency improvements, and rail lines that mainly transport fossil fuels, which are not accepted under the Climate Bonds Initiative’s eligibility taxonomy.
 
  • In December 2015, the PBOC published the Green Projects Catalogue for green financial bonds. The Catalogue, aimed at financial entities, defines eligible green projects and provides guidelines for project classification and eligibility criteria within the following six environmental sectors: 

    • Energy saving
    • Pollution prevention and control
    • Resource conservation and recycling
    • Clean transportation
    • Clean energy
    • Ecological protection and climate change adaption

  • In December 2015, the National Development and Reform Commission (NDRC), China’s national policy management agency, published its guidelines for green domestic corporate bonds. The Guidelines, aimed at non-listed companies, clarify what projects qualify as green. NDRC’s guidelines are limited to a list of eligible green projects that should be financed by green corporate bonds, and proposals for policy incentives for green bonds.

    The NDRC Guidance lays out some requirements for allocation of proceeds during the bond term. For example, issuers can use up to 50% of the bond proceeds to repay bank loans and invest in working capital. However, it does not establish rules for management of proceeds and reporting. NDRC’s guidelines also define a list of 12 project categories eligible for green bond issuance, which are largely in line with the PBOC Green Bond Endorsed Project Catalogue. The exception is with nuclear energy, which is included by NDRC but not endorsed by PBOC.

    Areas covered by the guidelines are:

    • Technology improvement for energy saving and emission reduction
    • Green urbanisation - energy saving
    • Energy saving and environmental protection industry
    • Pollution prevention and control
    • Circular economy
    • Water saving and unconventional water use
    • Green urbanisation - transport
    • Clean and efficient use of energy
    • New energy - hydropower, wind, nuclear, solar, bioenergy, geothermal, shallow geothermal energy, marine, and air energy
    • Ecological agriculture and forestry
    • Ecological civilisation demonstration projects
    • Low-carbon industry projects and demonstration projects

  • In March 2017, the China Securities Regulatory Commission (CSRC), the regulator overseeing the issuance of bonds from listed corporates and corporate asset-backed securities, released new guidelines for Chinese listed companies. The CSRC guidelines have adopted the green definitions used by PBOC, with a restrictive provision excluding high polluting and high-energy consumption companies that conflict with the national industrial planning policy. They also require the company to deliver a commitment letter to CSRC regarding the green characteristics of the issuance. The guidelines include a prohibition in principle on issuances of green bonds by non-green issuers.

Chinese domestic index series

In an effort to help bridge the gap between Europe and China, the world’s two largest green bond markets, the Luxembourg Stock Exchange with several Chinese partners decided to display Chinese domestic indices. The indexes’ visibility and accessibility allow international investors to monitor the performance of Chinese securities.


If you need more information

Contact us

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Carlo Oly

Head of Relationship Management

+352 47 79 36 227 col@bourse.lu
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Jackie Na Liu

Head of Asia Business Development

+352 47 79 36 418 jnl@bourse.lu