Pakistan is preparing to launch its first-ever Panda Bond by June 2025, with the goal of increasing its presence in China’s capital markets, according to Finance Minister Muhammad Aurangzeb. In an interview with Hong Kong’s TVB News Channel, he revealed that the country aims to raise approximately $200 million to $250 million from Chinese investors through the bond issuance.
While the financing goal is estimated at around $200 million, Aurangzeb emphasized that the key objective is not just the amount raised, but rather successfully executing the inaugural bond issue. “What matters is the first successful issue, and once we establish that, we can always keep it on tap,” he said.
Pakistan’s decision to tap into China’s bond market is seen as a missed opportunity, as it has not yet fully utilized the world’s second-largest capital market. The finance minister expressed a strong desire to make this move in the current calendar year.
Pakistan’s sovereign credit rating remains in the low “CCC” or “Caa” range, despite an upgrade following a $7 billion bailout from the International Monetary Fund (IMF). However, Aurangzeb is optimistic that with ongoing reforms aligned with IMF guidelines, Pakistan will gradually improve its rating and eventually reach the “B” zone. Diversifying funding sources, including potential listings in Hong Kong, is part of the government’s strategy to reduce reliance on conventional financing methods.
Aurangzeb also highlighted the potential for Pakistani companies to list in Hong Kong, particularly through joint ventures like Service Long March, a Pakistani-Chinese partnership that manufactures tires. He noted that the city presents an ideal platform for international equity fundraising, and Pakistani firms may explore primary and secondary listings in the region in the near future.
Pakistan’s longstanding partnership with China, exemplified by the China-Pakistan Economic Corridor (CPEC), remains a cornerstone of the country’s economic strategy. Aurangzeb reaffirmed the importance of CPEC as a flagship project under China’s Belt and Road Initiative, which continues to drive infrastructure development and economic cooperation between the two nations.
When asked about the security situation for Chinese nationals in Pakistan, following a series of attacks, the finance minister reassured that the government is prioritizing security. “The situation on the ground is much better than what’s portrayed in the media,” he stated, emphasizing that Pakistan’s government is fully committed to safeguarding all foreign nationals.
Regarding the IMF’s restrictions on offering new tax incentives and creating new economic zones, Aurangzeb downplayed the issue, stating that existing projects are the primary focus at this time, with no significant disruptions anticipated.
Through these initiatives, Pakistan aims to build a more diversified and stable economic foundation, improving both its financial position and its relationships with global and regional markets.
