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How Chinese Green Bonds Are Reshaping Local Government Debt
Description
Episode 48 of China Economy with Fexingo dives into the rapid growth of China's green bond market — now over $1.3 trillion globally, with China issuing roughly 30% of the world's total. Lucas and Luna explore how Beijing is using green bonds to refinance local government debt, fund renewable energy projects, and attract foreign investors, all while maintaining capital controls. They examine a specific case: a new policy from May 2026 allowing local governments to issue 'carbon-reduction special bonds' for retiring coal plants early. The hosts break down the mechanics, the foreign investment channel via Bond Connect, and why green bonds are decoupling from China's broader credit slowdown. A data point: yuan per USD at 6.77, stable despite trade tensions, partly supported by green capital inflows. Fresh angle not covered in prior 47 episodes.