Green shoots of new bond market in China

Innovative kind of financial instrument will benefit the country's environmental efforts

China has the potential to become the world's largest market for green bonds because of its government's commitment to tackle pollution by setting up a green financial system, experts say. The government's move to promote green bonds could set an example for other countries, they say, and produce the critical mass for the green-bond market to take off globally.

Green bonds are a new but rapidly growing asset class, of which about $40 billion worth have been issued globally, but in China it is estimated that at least 2 trillion yuan ($300 billion) is needed to achieve China's environmental targets under the 13th Five-Year Plan (2016-20).