Yuan Rises as Global Climate-Finance Leader, Outpacing Dollar and Euro

The yuan is gaining momentum as a global currency for climate finance, rivaling traditional markets like the US dollar and euro. China's GSS+ bond market has reached a cumulative issuance of 4.6 trillion yuan (HK$5.37 trillion) by 2025, making it the third-largest globally.

The growth can be attributed to regulatory reforms in China and Hong Kong, which have made cross-border yuan financing more practical. This is evident in the increased use of the yuan in trade and settlement, aligning financing with real economic cash flows.

GSS+ bonds are yuan-denominated sustainable finance tools that help issuers raise capital while meeting climate, social, and sustainability goals. According to a report by the Climate Bonds Initiative, overseas issuers like Panda, Dim Sum, and Free Trade Zone (FTZ) bonds are going mainstream due to lower yuan yields since 2023.

The first half of 2026 saw record sales for onshore Panda bonds and offshore Dim Sum bonds, reaching around 160 billion yuan and 350 billion yuan, respectively. This represents a significant increase of over 60 percent year-on-year.