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Key Insights from the GSS+ Dim Sum, Panda, and FTZ Bond Market Workshop
Published: 15 Dec 2025
Photo from HKGFA
Read the Chinese version here.
On November 4, 2025, a landmark workshop was hosted in Hong Kong to explore the growth potential and challenges of the GSS+ bond market, specifically Dim Sum, Panda, and Free Trade Zone (FTZ) bonds. The event, co-hosted by CGS International Holdings Limited (CGS International), Hong Kong Green Finance Association (HKGFA), China International Capital Corporation (CICC), and Lianhe Green Development, and supported by Climate Bonds Initiative (CBI) and Green Development Institute (GDI), brought together policymakers, financial institutions, development banks, and rating agencies to discuss strategic approaches to boosting Hong Kong’s role as a global sustainable finance hub and improving cross-border financing for sustainable development projects, particularly for Global South countries.
The workshop’s primary goals were to address key market bottlenecks, explore ways to improve liquidity, and identify strategies to scale financing for issuers in emerging markets through innovative de-risking and guarantee mechanisms. Here’s a detailed summary of the key discussions, insights, and outcomes shared by the prominent speakers at the event.
Dr. Ma Jun opened the workshop by highlighting the urgent need for China to play a more prominent role in addressing the global climate finance gap, especially for developing countries. He pointed out that while OECD commitments to climate finance have fallen short, China has a unique opportunity to lead global efforts to finance climate action, particularly through RMB-denominated instruments such as Panda, Dim Sum, and FTZ bonds. These bonds offer cost advantage compared to USD-denominated bonds, even after considering hedging costs, under the current global interest environment. Leveraging these RMB instruments can help expanding financing channels for countries involved in the Belt and Road Initiative (BRI) and other developing nations, enabling them to access lower-cost capital, including funding for green and sustainable projects.
Dr. Ma also identified several challenges in promoting these RMB financing options: the awareness gap among Global South issuers regarding available RMB financing channels, liquidity constraints in Hong Kong’s offshore RMB market, and the lack of risk mitigation tools, such as credit guarantees. He proposed mobilizing onshore RMB liquidity to improve market conditions and recommended that multilateral development banks (MDBs) like AIIB, ADB, and the World Bank step in to offer partial guarantees to help reduce risks for emerging market issuers. Capacity building and joint marketing efforts were also highlighted as essential to raising awareness among issuers and increasing participation in the GSS+ bond market.
Liang Dongqing pointed to Hong Kong’s strong financial infrastructure and seamless integration with mainland China’s capital markets, which allow it to act as a key player in green bond issuance and sustainable finance across Asia and globally. Liang highlighted Hong Kong’s Sustainable Finance Taxonomy and ESG disclosure standards as important steps toward improving transparency and aligning with international green finance practices.
Liang noted that policy coordination between Hong Kong and mainland China is crucial to unlocking the full potential of the green bond market. She stressed the need for continuous market innovation and taxonomy alignment to drive broader market participation and ensure sustained growth in green finance initiatives.
Loran Chen presented the White Paper co-authored by CGS International, CICC, Lianhe Green, and supported by HKGFA, offering a comprehensive overview of Hong Kong’s GSS+ bond market. She noted that Hong Kong accounted for 45% of Asia’s green bond issuance in 2024, positioning it as a regional leader. However, despite this leadership, the market faces significant challenges such as fragmented green standards, limited liquidity, and higher bid-ask spreads than global markets.
To address these challenges, the white paper recommended several short-term, medium-term, and long-term strategies. In the short term, the paper advocated for product innovation based on standardised ESG scoring, the adoption of Common Ground Taxonomy (CGT), and policy incentives such as issuance fee subsidies. In the medium term, it emphasised the need to improve disclosure standards, enhance cross-border connectivity through Bond Connect, and create a GSS bond task force to engage potential issuers. Long-term goals included integrating fintech and carbon-linked pricing into green bond structures to further scale the market. The White Paper outlined actionable steps to make the GSS+ bond market more efficient and transparent, ensuring that Hong Kong maintains its leadership in sustainable finance.
Dafei Huang shared several real-world case studies that showcase the application of innovation in China’s green bond markets, demonstrating how these innovations can drive growth in both mainland China and Hong Kong. One example was the CGT-ESG Bond Portfolio, a US$4 million portfolio co-structured by CICC and CGS International, which applies CGT and ESG metrics to green U.S. dollar bonds issued in Hong Kong. Another example was the Sustainable Transition Bond Basket launched by CICC in China’s interbank market, with a basket size of ¥30 million, which focuses on carbon reduction and achieves approximately 18,000 tons of indirect CO₂ reduction annually.
Huang noted that carbon reduction-focused bond portfolios are helping increase the attractiveness and liquidity of green bonds, especially in China’s interbank market. The relatively lower bid-ask spreads in mainland China, compared to Hong Kong’s market, represent an opportunity for Hong Kong to learn from China’s market and enhance its own liquidity. Huang emphasised that such innovative finance products play a critical role in increasing market participation and driving long-term growth in the sustainable bond sector.
Mr. Xing Yong provided an update on the Shanghai Free Trade Zone (FTZ) bond market, which is undergoing significant expansion with the newly introduced policy framework for offshore RMB bond issuance. He emphasised that Shanghai’s FTZ is now more open and flexible, offering new opportunities for green bond issuers. The principle that “both issuers and investors should be mainly offshore”, including in Hong Kong and other Belt and Road countries, aims to tap into a larger pool of overseas investors. Xing also announced that FTZ bonds will be allowed to trade on offshore platforms like the HKEX, improving market liquidity and accessibility, embedding great potential for dual listings and co-marketing between Shanghai and Hong Kong to expand the FTZ bond market and boost market liquidity. Meanwhile, Shanghai is exploring policy incentives and subsidies for green FTZ bond issuance, which would further incentivise market participation. These developments position Shanghai FTZ as a growing player in the global sustainable bond market.
Wenhong Xie provided a comprehensive overview of the Dim Sum, Panda, and FTZ sustainable bond markets, focusing on their growth and potential for issuers in emerging economies. He highlighted that Dim Sum bonds are the largest and most active, with RMB 667 billion newly issued in 2025, while Panda bond issuance have reached RMB 119 billion. Among the GSS+ dim sum and panda bonds issued, around 70% of them were aligned with CBI’s methodology. Wenhong also noted that the FTZ bond market is still in its early stages but has received strong regulatory support.
He pointed out that RMB-denominated bonds offer a lower cost of capital compared to USD bonds, making them an attractive option for issuers in developing countries. However, low participation from the Global South remains a challenge, due to awareness gaps and technical capacity. Wenhong shared successful case studies such as Egypt’s Sustainable Panda bond and Suzano’s RMB issuance, both of which demonstrated the significant cost savings and financing advantages of RMB issuance. He emphasised that capacity building and the creation of de-risking mechanisms will be crucial to attract more issuers from developing countries into the market.
1. Structural Barriers
The GSS+ bond market, particularly Panda bonds, faces several structural challenges:
2. De-risking and Guarantee Mechanisms
One of the most discussed solutions to the challenges facing the GSS+ bond market is the availability and design of de-risking mechanisms:
3. Addressing the Need for Product Diversification
The market’s growth is further constrained by a need for diversified products that can cater to various financial needs and risk profiles. While many diversification opportunities exist, development incorporating the following elements was discussed:
4. Cross-Market Integration and Regulatory Harmonisation
A key topic of discussion at the workshop was cross-market integration, focusing on the relationship between the Shanghai FTZ offshore RMB bond market and Hong Kong’s offshore RMB (CNH) market. Both markets are essential components of China’s broader offshore RMB framework, which facilitates the relatively free circulation of funds between these two regions. This interconnectedness presents a significant opportunity to enhance market liquidity and broaden access for issuers and investors across jurisdictions.
To maximise the potential of these markets, regulatory alignment was proposed to avoid duplication in key areas such as accounting, disclosure, and GSS+ labelling. The FTZ framework is designed to allow issuers to follow a single set of standards, which would align with Hong Kong’s green standards while still meeting China’s domestic eligibility criteria for bonds. This regulatory streamlining would help reduce complexity, attract more issuers, and improve market efficiency, benefiting both local and international participants.
5. Guarantees, Ratings, and Issuer Incentives
The Panda bond market faces significant challenges not in terms of cost, but rather accessibility:
6. Liquidity Boosting Measures
Two complementary solutions were discussed to boost market liquidity:
7. Government Incentives and Policy Recommendations
Policy incentives are crucial for stimulating the growth of the Panda and GSS+ bond markets:
8. Enabling GSS+ Issuance and Taxonomy Alignment
The alignment of green taxonomies plays a critical role in enabling the growth of the green bond market:
In his closing remarks, Dr. Ma highlighted the need to raise awareness and expand guarantee facilities as low-cost, high-impact measures for advancing green finance. He advocated for leveraging private-sector actors—such as issuers, underwriters, investors, service providers, and second-party opinion firms—to promote relevant business opportunities to potential issuers in the Global South. Dr. Ma also emphasised the importance of diversifying guarantee facilities, encouraging greater participation from multiple MDBs and philanthropic organisations to provide full or partial guarantees that help reduce financing barriers for issuers in developing countries. Lastly, he underscored the significance of anchor investors and suggested promoting and drawing lessons from the successful international case studies (e.g., Egypt, Brazil, Hungary) to boost investor confidence and stimulate market growth in the GSS+ bond market.
The workshop highlighted the immense potential for growing the GSS+ Panda, Dim Sum, and FTZ bond markets, emphasising the need to overcome existing barriers through strategic policy coordination, product innovation, and enhanced guarantee mechanisms. By addressing these challenges, improving market liquidity, and expanding market education and awareness, the RMB-denominated green bond market can play a crucial role in driving sustainable development and green transition across the Global South.
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