Panda bonds to be issued by June: FinMin

Aims to raise $200m to $250m, turn Pakistan into export hub with help of CPEC

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ISLAMABAD:

Pakistan plans to issue Yuan-denominated Panda Bonds by June 2025 to enhance its capital market integration with China, Federal Minister for Finance and Revenue Muhammad Aurangzeb said.

In an interview with the South China Morning Post (SCMP), Aurangzeb reaffirmed Pakistan's commitment to deeper cooperation with Beijing under the second phase of the China–Pakistan Economic Corridor (CPEC), emphasising its role in boosting trade and investment. He urged greater participation from China's private sector and export-led industries to help transform Pakistan's debt-laden economy. The minister revealed that Pakistan aims to raise $200 million to $250 million through the Panda Bonds.

Aurangzeb, attending the Asian Financial Forum in Hong Kong, said, "Since I took over [in March 2024], I've been very vocal about this—we want to go for Panda Bonds, an inaugural sovereign Panda Bond... I'm pushing everyone, including our own teams, to see if we can get this done before June."

He explained that Pakistan is following Egypt's lead in issuing Yuan bonds, backed by credit improvements from the Beijing-led Asian Infrastructure Investment Bank (AIIB).

The minister highlighted Pakistan's economic recovery after a turbulent period of political instability and mismanagement. Inflation dropped from 38% in May 2023 to 4.1% last month, and the country secured a $7 billion, 37-month bailout from the IMF in 2024, alongside a one-year debt rollover agreement with China.

Amid Pakistan's balance of payment issues, Aurangzeb said CPEC's second phase would focus on an export-led model, including establishing special economic zones in partnership with China. These zones aim to reform Pakistan's agricultural and IT sectors while encouraging Chinese companies to relocate low-end industries to Pakistan.

He stressed, "We have to fundamentally change the DNA of the economy towards export-led growth. CPEC phase two is primarily about business-to-business cooperation, especially the economic zones. We aim to turn Pakistan into a real export hub." Aurangzeb also assured enhanced security for Chinese companies operating in Pakistan.

Meanwhile, he announced plans to explore joint ventures with Hong Kong firms and secondary listings for Pakistani companies in Hong Kong. Aurangzeb said he would discuss collaboration opportunities with Hong Kong's Chief Executive John Lee Ka-chiu, including the possibility of a Hong Kong delegation visiting Pakistan.

"If Pakistani companies partner with local firms for primary and secondary listings on the Hong Kong Stock Exchange, it would be a win-win—bringing investment into Pakistan and fostering outward investment," he said.