Yuan Surges as Global Climate-Finance Rival

The Chinese yuan is gaining traction as a global currency for climate finance, rivalling the US dollar and euro. The yuan-denominated GSS+ bond market has reached 4.6 trillion yuan ($573 billion) in cumulative issuance by 2025, making it the third-largest globally. Experts say this growth is driven by lower yuan yields since 2023, offering issuers a cost advantage.

The Climate Bonds Initiative reported that overseas issuers are increasingly turning to Panda, Dim Sum, and Free Trade Zone bonds due to their affordability. Regulatory reforms in China and Hong Kong have made cross-border yuan financing more practical, allowing for increased use of the currency in trade and settlement. This reduces currency mismatch for projects relying on Chinese contractors or supply chains.

The onshore Panda bond and offshore Dim Sum bond achieved record sales of around 160 billion yuan ($20 billion) and 350 billion yuan ($44 billion), respectively, in the first half of 2026, up over 60% year-on-year. The Bank of Switzerland plans to issue panda bonds for the first time, raising up to 2 billion yuan.