Greater Bay Area Research Project
China has announced its ratification of the Paris Agreement on climate change. Following the national roadmap for sustainable development, the “Framework Agreement on Deepening Guangdong-Hong Kong-Macao Cooperation in the Development of the Bay Area” has outlined the Greater Bay Area’s (GBA) development directions for prioritising ecology and pursuing green development. Through analysing the current sustainable financing landscape in the GBA, as well as new green and sustainable investment opportunities presented by the strategic industrial and economic development directions, this report aims to highlight the huge potential for sustainable financing in the area.
The green project types with the greatest potential can be identified by using the six categories defined in the People’s Bank of China “Green Bond Endorsed Project Catalogue” (中國人民銀行《綠色債券支持項目目錄》) and by considering the current industrial development in each GBA city. The findings suggest that Energy Saving, Resource Conservation and Recycling and Clean Transportation are the three key investment directions.
There appears to be a disproportion between the proceeds from green bond issuances in the GBA (which make up 5.6% of China’s total) and the GDP of the area (12% of China’s total). This disproportion reflects the potential growth opportunity in sustainable financing.
Hong Kong is an international financial centre with a large pool of professional service providers and international talent, as well as mature economic and judicial systems, so it is an ideal green financial hub for international investors and companies entering the GBA. The Hong Kong SAR Government has announced its support for the development of green financing such as Green Bond Grant Scheme. Green finance guidelines and standards will enhance the credibility and transparency of the market, and also strengthen investors' confidence in it.
In short, given the development direction of the GBA and the support of the central government, the outlook for achieving sustainable development in the GBA is promising. Interested investors and the industry should pay attention to ongoing developments in this dynamic economic region in order not to miss any investment or business opportunities.
To view the report of this research, please click here.
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