Singapore, Hong Kong banks to benefit most as Asia capital markets deepen in H2: Morgan Stanley

Chinese green-tech firms are looking to Hong Kong as a crucial hub for financing their expansion into emerging markets, according to senior banking executives. This shift is driven by geopolitical fragmentation and higher funding costs in the global energy transition. Hong Kong's robust sustainable finance market and ample offshore yuan liquidity position it well to serve as a bridge for Chinese green technology companies going global.

Executives from Bank of China (Hong Kong), DBS, HSBC, and Standard Chartered discussed this during a panel at a forum organized by the Hong Kong Green Finance Association and the Greater Bay Area Green Finance Alliance. Wang Huabin, deputy CEO of Bank of China (Hong Kong), highlighted Hong Kong's leadership in sustainable finance and its strategic position as a connector for Chinese green technology investments abroad.

HSBC's Natalie Blyth emphasized the dynamic nature of China's low-carbon technologies and the potential for significant climate change mitigation through their global deployment. HSBC recently launched a US$4 billion facility to support mainland companies expanding into overseas markets via Hong Kong. However, the primary challenge now lies not in capital availability but in finding projects that can generate returns at acceptable risk levels, especially in developing economies.

Kelvin Wong, DBS Bank's chief sustainability officer, noted that while capital is abundant, the bottleneck is the availability of viable projects. DBS is focusing on renewable energy, alternative fuels, and cross-border power infrastructure as key areas of investment. Standard Chartered's Marisa Drew pointed out that the current transition challenge has shifted from mobilizing capital to mobilizing investibility, with higher funding costs, currency risks, and other factors potentially making emerging market projects unbankable despite their viability elsewhere.

She stressed that targeted government support and financial innovation are essential to overcoming these barriers and unlocking more private capital for green projects.