China's first green bond launch a 'success' on London Stock Exchange

China successully launched its first-ever green sovereign bond on the London Stock Exchange, raising $826 million and highlighting the country's ambitions to bolster its environmental credentials to investors.

Green bonds are intended to finance investments needed to tackle or adapt to climate change and to boost sustainable economic development. It seems investors are banking on China's energy policies with officials saying demand was seven times higher than supply. 

Investors get a guaranteed return in the form of interest with experts saying the bonds could offer security, as global markets try to make sense of the tariffs that U.S. president Donald Trump has unleashed this week.

Liao Min, China's Vice Minister of Finance in London for the launch, told CGTN Europe: "This is a green development. So that means the international investors have a huge confidence about the sustainable development of China, both in the green development and also, digital transformation in China in the future."

China plans to use the money for projects that produce clean energy and curb pollution. With the country being the world's biggest producer of green technology, it makes sense to invest in that space.

The London Stock Exchange described the event as a "milestone" that marked a "significant step" and demonstrated China's "commitment to support green and sustainable development."

China aims to diversify the global green bonds market, encouraging more domestic issuers to participate, and attracting further investment in the green financial markets.

The bonds could also offer some stability for markets on edge after Trump's raft of tariffs.

Bryan Pascoe of the International Capital Market Association told CGTN Europe: "We need signals that the financial markets are functioning well and we also need signals and clear signs that sustainable finance continues to be well supported by the international financial community."

Reciprical tariffs

As the global markets continue to shake amid the uncertainty, China will be hoping this bond will send a message that the future of investment is green. 

On Friday, China announced a slew of countermeasures against tariffs imposed by Trump, including additional tariffs of 34 percent on all U.S. goods and curbs on export of some rare earths.

Trump on Wednesday announced that China would be hit with a 34 percent tariff, on top of the 20 percent he imposed earlier this year, bringing the total new levies to 54 percent.

Zheng Zeguang, Chinese ambassador to the UK, said his country was firmly against the so-called "reciprocal tariffs”.

He stressed that under the pretext of "reciprocity", the U.S. imposed high tariffs on certain countries and regions, using tariffs as a "weapon" and that it "severely undermines the multilateral trading system and causes great harm to the interests of all parties."

The international community should "work more closely to reject the U.S.' unilateral, protectionist and trade bullying practises and keep the global trading system stable," added Zheng Zeguang.