Pakistan plans to issue more Panda bonds in China as it seeks to become a regular sovereign borrower in the country’s domestic capital market, according to a government statement.
Finance Minister Muhammad Aurangzeb discussed the plans with Chinese Finance Minister Lan Fo’an on October 15 in Bangkok. The meeting took place on the sidelines of the World Bank Group-IMF Annual Meetings.
The two ministers reviewed Pakistan’s first Panda bond issuance and explored plans for further fundraising in China.
Pakistan Seeks Regular Access to China’s Bond Market
Aurangzeb highlighted progress towards macroeconomic stability, while Lan welcomed Pakistan’s renewed access to international capital markets.
Pakistan’s inaugural Panda bond carried a coupon rate of 2.5 per cent and received credit enhancement from the Asian Infrastructure Investment Bank (AIIB). The government said the offering attracted strong investor demand.
Aurangzeb said Pakistan wanted the first issuance to establish a foundation for regular bond sales. He also expressed interest in continued AIIB support for future offerings.
Panda bonds allow foreign governments and companies to raise funds in China’s domestic bond market, with proceeds generally denominated in Chinese yuan.
Further Pakistani issuances will depend on market conditions, borrowing costs and the country’s debt sustainability.
Ministers Discuss Eurobond Market Return
The meeting also covered Pakistan’s planned return to the Eurobond market after a four-year gap.
Access to both Chinese and international capital markets could broaden Pakistan’s financing options. However, the terms and timing of future borrowing will remain important for managing debt costs and financial risks.
SCO Finance Cooperation and Development Bank
The ministers discussed Pakistan’s chairmanship of the Shanghai Cooperation Organisation (SCO) and preparations for an upcoming summit in Islamabad.
They also reviewed plans for an SCO finance ministers’ meeting in the Pakistani capital. Lan said he intended to attend the meeting.
Both sides discussed a proposed SCO Development Bank. China encouraged Pakistan to participate in consultations and help build consensus on the initiative.
Aurangzeb reaffirmed Pakistan’s support for establishing the proposed institution.
China-Pakistan Connectivity and Digital Cooperation
Lan also referred to progress towards consensus on proposed route changes for a China-Pakistan highway project.
Aurangzeb briefed his Chinese counterpart on Pakistan’s engagement with Alibaba on digital transformation and artificial intelligence skills training. He reaffirmed Pakistan’s commitment to implementing the existing cooperation framework.
The discussions reflect the wider scope of Pakistan-China economic engagement, covering financial markets, regional cooperation, transport connectivity and digital skills development.
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