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China’s role in global green-bond market grows bigger
China will play a paramount role in the global green-bond market as the country needs the financing channel to provide capital for environmental improvement projects, analysts said.
China has overtaken the United States as the world’s largest green-bond issuer. Last year, the country issued more than US$30 billion worth of green bonds, or roughly 33 per cent of the $92-billion total issuance value, accounting for 65 per cent of issuance-value growth year on year in 2016, according to a report by Bank of America Merrill Lynch released last month.
Green bonds are tools to finance environmental-protection projects, including in renewable energy, energy efficiency, water treatment, waste management and electric cars.
Green bonds are identical to conventional bonds in terms of credit, liquidity, currency and tenor, as well as price.
Commercial banks, clean-technology companies, carmakers and infrastructure companies are the major issuers in the Chinese green-bond market.
Although China was the top single issuer in 2016, the US remains the largest issuer to date, accounting for $34.3 billion of the outstanding market, versus $33.6 billion for China, according to BoA Merrill Lynch.
“China will push for the growth of the global green-bond market as population growth and urbanisation will create demand for environmental solutions,” BoA Merrill Lynch’s thematic investing strategist, Ma Beijia, said at a news conference recently.
People’s Bank of China chief economist Ma Jun said last month: “China needs at least 2 trillion yuan [Bt10 trillion] of green investment annually over the next five years to promote environmental protection and reduce pollution.” – China Daily
Fed signals it will start shrinking balance sheet
US Federal Reserve officials have signalled that they may shift away from a post-financial-crisis investment policy that built a US$4.5-trillion portfolio to help boost economic growth, minutes from their latest meeting showed on Wednesday.
At their March policy meeting, US central bankers also said they continued to see “considerable uncertainty” about the effects of possible fiscal stimulus from the administration of President Donald Trump.
The minutes recorded the views of US policymakers expressed at a March 14-15 meeting, when they voted to raise the target range for their benchmark interest rates to 0.75-1.00 per cent in order to head off mounting inflation.
With continued economic growth and gradual interest-rate increases, most meeting participants believed a shift in balance-sheet policy “would likely be appropriate later this year”, the minutes said. – AFP
