Case Study On China's Offshore Green Bonds

With the deepening of the concept of green development and the promotion of sustainable development strategies,the volume of green bond issuance has grown rapidly in the world.China has also issued a series of policies to support the issuance of green bonds.China's domestic and overseas green bond issuance volume has an explosive growth since 2016.However,the growth is mainly contributed by the issuance of domestic green bonds.In contrast,the offshore green bond market has grown slightly.Nevertheless,with the implementation of national strategies,the Belt and Road Initiative,for example,the role and importance of offshore green bonds have become increasingly prominent.Therefore,it is necessary to conduct a research on the development of China's offshore green bonds.This article researches on the offshore green bonds issued by Chinese entities.Firstly,it analyzes the development of China's green bond market in recent years,especially the development of offshore green bond markets.Then it selected three typical offshore green bonds issued by policy bank,commercial bank and enterprises respectively.The three typical bonds are Quasi-sovereign international green bonds issued by China Development Bank(CDB),the Belt and Road green bonds issued by Industrial and Commercial Bank of China(ICBC),and the green euro bonds issued by China Three Gorges Corporation(CTG).The article then analyzes the main factors of these three offshore bonds including the issuing bodes,listing places,pricing and subscription,investment project,certification and review,and summaries the characteristics,experience and deficiencies with regard to the above-mentioned factors of the three bonds.Finally,prospects of China's offshore green bond market are analyzed and corresponding suggestions are recommended.Through comparative analysis,this article finds that good financial conditions,credit ratings,and overseas business are the basis for the successful issuance of overseas green bonds.The deepening of green development concepts and the extensive domestic green bond practices all contribute to the successful issuance of overseas green bonds;The issuers of green bonds outside China are still large state-owned enterprises and financial institutions,lacking the participation of small and medium-sized enterprises;most offshore green bonds choose to be listed in Europe,where green bond development is more mature,and have certain pricing advantages;investors are diversified in types and in geographical distribution,offshore green bonds can achieve full or even oversubscription;investment projects follow the national strategy or help implement issuer's the national strategic layout;offshore green bonds issued by China met the international green bond certification standards and generally obtained third-party certification;the maturity of offshore bonds is distributed between 2 to 7 years,the scope of which is relatively narrow,and it cannot meet the requirements of green projects with longer periods;he difference in green bond standards at home and abroad are different to some degree,thus limits the development of overseas green bond markets to a certain extent.Through case analyses,this paper draws conclusions on the characteristics,experience,and deficiencies of China's overseas green bonds in terms of issuers,listing venues,issue pricing and maturity,investor subscriptions,investment projects,certification and review,etc.Based on these conclusions,several suggestions are made for the construction of China's offshore green bond market.The innovation of this article is that the research field is novel.Up till now,there is no case study for the development of China's offshore green bonds.The shortcoming of this article is that related information and materials for reference are not so much,therefore the analysis may be somewhat biased or inadequate;because the general characteristics are summarized through typical cases,the summarized contents in this article may not be applicable to other individual cases.