Pakistan’s Finance Minister, Muhammad Aurangzeb, has announced plans to issue Panda bonds within this calendar year, aiming to leverage China’s capital market to strengthen the nation’s economy.
Panda bonds are yuan-denominated securities issued by foreign entities within China’s financial markets. By introducing these bonds, Pakistan seeks to diversify its funding sources, reduce dependence on Western financial markets, and attract investment from Chinese institutions, thereby bolstering foreign exchange reserves.
Speaking at the Boao Forum for Asia Annual Conference 2025 in China, Aurangzeb emphasized the significance of tapping into the world’s second-largest capital market. He highlighted that, while Pakistan has previously issued bonds in US dollars and euros, this will be the country’s inaugural venture into the Chinese capital market.
In January Aurangzeb indicated that the government aims to raise approximately $200 million from Chinese investors through the issuance of these bonds. This initiative follows recent upgrades in Pakistan’s sovereign rating by major credit agencies, reflecting improved macroeconomic indicators after overcoming a prolonged economic crisis that had brought the country to the brink of sovereign debt default.
