Renminbi is closing climate gap

As the United States renounces its climate commitments, a chain reaction of wavering pledges and scaled-back investments by other donors and multilateral institutions has followed.

- MA JUN SEAN KIDNEY

This trend raises the stakes for everyone else, underscoring the urgency of closing the financing gap for climate adaptation and mitigation in the developing world.

Fortunately, China has increasingly been projecting itself as a source of alternative, low-cost funding for climate and sustainability projects across the Global South. Its outreach features a trifecta of interconnected, renminbi-denominated bond markets: the onshore panda bond market, the offshore dim sum bond market, and the free-trade-zone (FTZ) offshore bond market.

The recent growth of these markets has been nothing short of remarkable. In the first three quarters of 2025, offshore entities raised nearly CN¥120 billion (540.7 billion baht) in panda bonds and CN¥667 billion in dim sum bonds, according to Wind, a Chinese financial data provider. Meanwhile, the FTZ offshore bond market's cumulative issuance had reached US$18 billion (573.5 billion baht) by September 2025. Together, these figures indicate a significant surge in international capital mobilisation through renminbi-denominated channels.

Many countries are already using these markets to support their own sustainable development strategies. For example, in 2021 and 2022, Hungary issued a total of CN¥3 billion in green sovereign panda bonds to finance renewable energy and clean transportation projects in Central and Eastern Europe. And this year, OTP Bank became the first Hungarian private entity to issue an offshore renminbi-denominated bond, raising CN¥900 million through a green dim sum bond. Meanwhile, Egypt issued a CN¥3.5 billion sustainable panda bond in 2023 — the first of its kind in Africa — with backing from the African Development Bank and the Asian Infrastructure Investment Bank.