Investing in clean air: China's expanding green bond leadership

Editor's note: Lu Jiajun is an assistant professor at Zhejiang University International Business School (ZIBS) and a researcher at the Academy of Financial Research at Zhejiang University and ZIBSciTechX. The article reflects the author's opinions and not necessarily the views of CGTN.

Green bonds at the center of China's clean-air progress

The Financial Times recently highlighted China's rise as the world's largest green bond market, underscoring green finance as a key driver of cleaner air. Over the past decade, national average PM2.5 levels have fallen by more than 50 percent, with Beijing and major cities in the Yangtze and Pearl River deltas seeing significant improvements. This progress reflects industrial upgrades, clean-energy deployment, stricter emissions standards, and, crucially, the predictable, long-term investments enabled by green finance, which are powering energy transition, industrial emission reductions, and electrified transport to sustain healthier, clearer cities.

Green finance powers clean-energy growth

China's green bond market has surged, raising over $70.3 billion in 2025 and accounting for roughly 17 percent of global issuance. Funds are channelled into renewable power, grid upgrades, electric vehicles, charging networks, green buildings, and low-emission industrial parks, turning environmental goals into investable projects. The impact is tangible: China installs more solar and wind energy annually than the rest of the world combined, produces over 60 percent of global EVs, while hundreds of cities have expanded electric bus fleets, cutting PM2.5 and nitrogen oxides. These investments not only improve air quality but also create new engines for economic growth.

A pathway for developing countries

China's growth in green finance carries global significance. Many developing economies face the same dilemma China once confronted: improving living standards while tackling severe air pollution. Most countries lack the financial resources to build renewable energy systems or electrify transport. China's large-scale, increasingly transparent green finance framework provides a replicable model. Growing international interest in RMB-denominated green bonds is expanding global liquidity for sustainable development. Chinese financial institutions are also supporting renewable energy and clean infrastructure projects across Asia, Africa and Latin America, helping partner coutries secure clean electricity, reduce local pollution and modernize industry. Unlike unilateral carbon border measures, China's approach emphasizes partnership, affordability and technology diffusion.

Green development for cleaner skies

China's clean-air progress is rooted in its long-term commitment to ecological civilization, where environmental protection is seen as a driver of high-quality development. Green finance, which is led by a rapidly expanding green bond market, is channelling capital into cleaner energy, industrial upgrades and low-emission transport. These investments are delivering visible reductions in PM2.5 and nitrogen oxides, improving public health and strengthening the foundations of a modern green economy.

Looking ahead: Finance for blue skies

As the world's largest issuer of green bonds, China is demonstrating how financial tools can accelerate air-quality improvement at scale. Its experience shows that economic growth and cleaner skies can advance together when investment flows align with environmental priorities. For many developing countries facing similar pollution challenges, China's evolving green finance model offers a practical pathway, turning capital into cleaner air and supporting a more sustainable future.