Panda and Dim Sum bonds are becoming an important channel for cross-border sustainable finance. Panda bonds allow international organisations to raise renminbi funding in mainland China, while Dim Sum bonds are issued offshore, commonly through Hong Kong.

A new report values cumulative green, social, sustainability and sustainability-linked issuance across the two markets at CNY392.2 billion by the end of 2025. This figure represents the wider GSS+ market and is not entirely made up of green bonds. Green instruments accounted for approximately 60% to 64% of issuance, followed by sustainability bonds at around 30%.

The markets provide funding diversification and access to renminbi investors, but short maturities, concentrated participation, different taxonomies and currency-hedging costs continue to limit their scale.

Key Overview

• Panda and Dim Sum GSS+ bonds reached a combined CNY392.2 billion by the end of 2025.
• The total includes green, social, sustainability and sustainability-linked bonds.
• Panda GSS+ issuance reached CNY64.2 billion.
• Dim Sum GSS+ issuance was significantly larger at CNY328 billion.
• Green bonds represented approximately 60% to 64% of both markets.
• Around 84% of Panda GSS+ issuance aligned with Climate Bonds’ methodology.
• Approximately 77% of Dim Sum GSS+ issuance was considered aligned.
• Short maturities remain a challenge for long-term climate infrastructure.

Panda and Dim Sum Bonds Reach CNY392.2 Billion in GSS+

Renminbi-denominated bond markets are developing into a new channel through which international companies, governments and development banks can finance climate and sustainability projects.

The new Climate Bonds market report found that cumulative Panda and Dim Sum green, social, sustainability and sustainability-linked bonds reached CNY392.2 billion by the end of 2025.

However, the figure should not be described as CNY392.2 billion of green bonds.

It covers the broader GSS+ market, which includes:

• Green bonds;
• Social bonds;
• Sustainability bonds; and
• Sustainability-linked bonds.

Green instruments were the largest part of the market, representing approximately 60% to 64% of GSS+ issuance. Sustainability bonds contributed around 30%, while social and sustainability-linked securities accounted for smaller shares.

Panda and Dim Sum Bonds Explained

Panda bonds are renminbi-denominated securities issued by foreign organisations within mainland China.

They provide international issuers with access to China’s large domestic investor base, including banks, insurers and asset managers.

Dim Sum bonds are also denominated in renminbi but are issued outside mainland China, most commonly through Hong Kong. They are generally marketed to offshore and international investors.

The Climate Bonds’ full market analysis explains that Panda bonds operate through China’s onshore regulatory system, while Dim Sum bonds use the more internationally familiar offshore market.

This distinction affects documentation, regulatory approvals, investor access, currency treatment and the use of proceeds.

For international issuers, Panda bonds can provide deeper access to mainland Chinese liquidity. Dim Sum bonds may offer greater flexibility and a simpler route into offshore renminbi funding.

Dim Sum Market Is Significantly Larger

Cumulative Panda GSS+ issuance reached CNY64.2 billion, equivalent to approximately US$9.4 billion, by the end of 2025.

Of this amount, CNY54.1 billion—or approximately 84%—was considered aligned with Climate Bonds’ methodology.

Panda GSS+ bonds still represented only around 6% of total Panda issuance, showing that sustainable debt remains a relatively small part of the wider market.

Dim Sum GSS+ issuance was significantly larger at CNY328 billion, equivalent to approximately US$48.2 billion.

Around CNY253.3 billion, or 77%, was considered aligned with Climate Bonds’ methodology. GSS+ instruments represented approximately 7% of total Dim Sum issuance.

The offshore market has grown more quickly partly because international issuers are more familiar with Hong Kong’s documentation, intermediaries and investor base.

It also gives issuers greater flexibility when deploying proceeds across different countries.

Green Bonds Dominate Both Markets

Green instruments accounted for approximately 60% of Panda GSS+ issuance, followed by sustainability bonds at 31% and sustainability-linked bonds at around 8%.

In the Panda market, funds were mainly directed toward:

• Energy projects: 33%;
• Waste management: 20%;
• Low-carbon transport: 16%;
• Water projects: 11%;
• Buildings: 7%; and
• Land-use projects: 3%.

The Dim Sum market also remained strongly focused on climate-related activity.

Renewable energy represented approximately 22% of the identified use of proceeds, while low-carbon transport contributed 20%, buildings 19% and water projects 15%.

These sectors require substantial capital and can benefit from access to a larger and more diverse investor base.

However, investors still need to confirm whether individual securities follow credible environmental standards rather than relying only on the label attached to the bond.

Alignment Is Not the Same as Labelling

A bond can be marketed as green or sustainable without necessarily satisfying every independent climate methodology.

Climate Bonds distinguishes between bonds that are merely labelled and those screened against its own eligibility and climate-alignment criteria.

International investors may also assess securities against the ICMA Green Bond Principles guidance.

The principles encourage issuers to provide clear information on:

• How proceeds will be used;
• How projects are selected;
• How bond proceeds are managed; and
• How issuers will report allocations and environmental impact.

These disclosures help investors determine whether the funds are genuinely supporting environmental projects and reduce the risk of greenwashing. (ICMA)

Regulatory Rules Are Becoming Clearer

Foreign issuers entering the Panda market must follow mainland Chinese registration, disclosure and reporting requirements.

The official Panda Bond Manual guidance provides procedures for overseas issuers and includes provisions covering sustainable bond frameworks, proceeds management and post-issuance reporting.

China’s rules increasingly recognise both domestic green taxonomies and international frameworks. However, public bond documentation may still need to be submitted in Chinese, which can increase the cost and complexity of a first transaction.

Hong Kong has also developed incentives to support offshore green and sustainable finance.

The official Hong Kong grant-scheme information explains how eligible issuers can receive support for bond-issuance and external-review expenses.

The programme was extended to 2027 and expanded to include eligible transition-finance instruments, helping Hong Kong strengthen its role as an offshore sustainable-finance centre.

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Lower Coupons May Attract Issuers

Lower renminbi interest rates have made Panda and Dim Sum bonds more attractive to some international borrowers.

The weighted-average coupon for Panda bonds issued by China- and Hong Kong-associated organisations was approximately 2.92%. Supranational issuers recorded a weighted average of 2.44%, while non-China issuers averaged 3.44%.

Individual international borrowers have achieved attractive headline rates.

Brazilian pulp producer Suzano, for example, issued a three-year green Panda bond with a 2.80% coupon. The New Development Bank and Asian Infrastructure Investment Bank have also accessed relatively low renminbi coupons.

The Climate Bonds’ coupon comparison tables show that renminbi borrowing can compare favourably with dollar funding under the right conditions.

Low Coupons Do Not Tell the Whole Story

A lower renminbi coupon does not automatically mean the issuer has secured cheaper financing.

The full cost can include:

• Credit-guarantee expenses;
• Legal and documentation fees;
• External reviews;
• Regulatory and listing costs;
• Currency-conversion expenses; and
• Foreign-exchange hedging.

An issuer earning most of its revenue in dollars, euros or another currency may need to hedge its future renminbi repayments.

These hedging costs can offset part—or all—of the benefit created by lower renminbi interest rates.

The funding decision may still make sense where an issuer has renminbi-linked revenue, procurement or construction costs. In such cases, borrowing in renminbi can provide a natural hedge and reduce currency mismatches.

Panda and Dim Sum sustainable bonds reached a combined CNY392.2 billion by the end of 2025. Panda GSS+ issuance totalled CNY64.2 billion, with 84% aligned with Climate Bonds’ methodology, while Dim Sum GSS+ issuance reached CNY328 billion, with 77% considered aligned. Green bonds represented approximately 60% to 64% of issuance across both markets. Panda bonds are issued in mainland China and mainly target onshore investors, while Dim Sum bonds are issued offshore, commonly through Hong Kong, and provide access to a more international investor base. The infographic also highlights short maturities, taxonomy differences, currency-hedging costs and the need for stronger disclosure.

Short Maturities Create a Financing Gap

One of the largest challenges is the short maturity of many Panda and Dim Sum bonds.

Approximately 67% of Panda GSS+ issuance had maturities of five years or less.

In the Dim Sum market, the proportion was even higher at 76%.

Shorter bonds may appeal to investors who are still becoming familiar with international issuers and renminbi sustainable debt. They can also reduce the initial execution risk for first-time borrowers.

However, renewable-energy facilities, transport networks, water infrastructure and industrial-transition projects often require capital for much longer periods.

The Climate Bonds’ detailed market-barrier analysis warns that the mismatch can create refinancing risk and reduce the usefulness of these markets for long-life infrastructure.

Market Depth Remains Limited

Despite the growth in headline volumes, Panda and Dim Sum sustainable bonds remain a small part of their wider markets.

The issuer base is concentrated among development banks, supranational institutions, financial companies and a limited number of international corporations.

Secondary-market trading can also be limited because many sustainable-bond investors hold their securities until maturity.

This can reduce liquidity, make price discovery more difficult and limit the development of reliable benchmark curves.

First-time issuers may also face high rating expectations. Some emerging-market borrowers require partial guarantees or other credit enhancements before Chinese investors are willing or permitted to participate.

What Investors Should Monitor

Investors should examine each Panda or Dim Sum bond individually rather than assuming that every renminbi sustainable bond carries the same risks.

Important considerations include:

• The issuer’s credit quality;
• The specific use of proceeds;
• Alignment with recognised climate standards;
• Independent external reviews;
• Post-issuance allocation reporting;
• Currency exposure;
• Hedging arrangements;
• Guarantees and credit enhancement;
• Bond maturity; and
• Secondary-market liquidity.

They should also distinguish between use-of-proceeds bonds and sustainability-linked bonds.

Green and sustainability bonds generally direct funds toward identified projects. Sustainability-linked bonds may fund general corporate activities, with their financial terms linked to whether the issuer achieves agreed sustainability targets.

The credibility of those targets and the consequences of missing them are therefore important parts of the investment assessment.

Conclusion

Panda and Dim Sum bonds are creating a new cross-border channel for climate and sustainability finance.

Their combined GSS+ market reached CNY392.2 billion by the end of 2025, with the offshore Dim Sum market accounting for most of the issuance.

Green bonds remain the largest category, but the headline total also includes social, sustainability and sustainability-linked securities.

The markets give international issuers access to mainland and offshore renminbi investors while supporting funding diversification and the international use of China’s currency.

However, further growth will depend on clearer rules, stronger taxonomy alignment, improved reporting, wider issuer participation and longer maturities.

The Climate Bonds’ policy recommendations section argues that the priority is not simply increasing issuance volumes. These markets must also become easier to access, more repeatable and better suited to the long-term funding needs of climate infrastructure.

FAQs

1. What is the difference between Panda and Dim Sum bonds?

Panda bonds are renminbi-denominated bonds issued by overseas organisations inside mainland China. They provide access to China’s domestic investors but require compliance with onshore registration, documentation and disclosure rules. Dim Sum bonds are renminbi-denominated securities issued offshore, usually in Hong Kong. Their documentation and distribution structures are generally more familiar to international issuers and investors.

2. Is the CNY392.2 billion total entirely green bonds?

No. The CNY392.2 billion figure represents cumulative GSS+ Panda and Dim Sum bonds through the end of 2025. GSS+ includes green, social, sustainability and sustainability-linked bonds. Green bonds were the dominant category and represented approximately 60% to 64% of the two markets, but they did not account for the entire amount.

3. Why would an international issuer borrow in renminbi?

An issuer may use renminbi bonds to access Chinese investors, diversify its funding sources or take advantage of relatively low RMB interest rates. Renminbi borrowing can also provide a natural hedge where the issuer has revenue, equipment purchases or construction expenses linked to China. However, issuers without matching RMB cash flows must consider foreign-exchange risk and hedging costs.

4. What are the main risks for investors?

Investors face the issuer’s normal credit and interest-rate risks, together with currency, liquidity and regulatory considerations. They should examine whether the bond follows credible sustainable-finance standards, how proceeds will be used, whether external reviews are available and how the issuer will report environmental results. Short maturities may also create refinancing risks where the bonds support long-term infrastructure projects.

Sources: Climate Bonds Initiative market report, Climate Bonds Initiative press release, ICMA Green Bond Principles guidance, NAFMII Panda Bond Manual guidance and Hong Kong sustainable-finance incentives.

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