ISLAMABAD: Pakistan is seeking to establish a sustained presence in China’s domestic capital markets after successfully completing its inaugural Panda Bond issuance, Finance Minister Senator Muhammad Aurangzeb said Friday in Beijing.
Addressing the inaugural Panda Bond Issuance Ceremony at the Embassy of Pakistan in Beijing, Aurangzeb described the transaction as "far more than the completion of a financial transaction," saying it marked "the beginning of a new chapter in Pakistan’s economic and financial engagement with China in the context of international capital markets."
Pakistan raised 1.75 billion yuan ($250 million) through the three-year fixed-rate bond, its first sovereign yuan-denominated issuance in China’s onshore market, which officials said attracted subscriptions exceeding five times the amount offered.
"The debut issuance of CNY 1.75 billion experienced an overwhelmingly positive response, was over-subscribed by five times, and closed at a coupon rate of 2.5%," Aurangzeb said.
The finance minister said Pakistan had established a 7.2 billion yuan Panda Bond program following two years of engagement with Chinese regulators, financial institutions, development partners and market participants.
"Our goal was clear: to establish Pakistan’s long-term presence in the Chinese capital markets and to create a sustainable platform for future sovereign issues," Aurangzeb said.
The issuance marks Pakistan’s first entry into China’s domestic bond market and forms part of Islamabad’s broader strategy to diversify external financing sources beyond conventional dollar-denominated borrowing.
"We have previously accessed the Eurobond market, US markets, and Islamic Sukuk markets, but accessing the Chinese capital market, the second largest and second deepest capital market in the world, was long overdue," the minister said.
Aurangzeb said the transaction reflected growing confidence among Chinese institutions and investors in Pakistan’s economic reforms and macroeconomic trajectory.
"This achievement is far more than the completion of a financial transaction; it reflects trust, partnership, innovation, financial collaboration, and our shared commitment to sustainable development and regional connectivity," he said.
Pakistan became the first South Asian country to issue a Panda Bond, a milestone Aurangzeb linked to the growing maturity of economic cooperation between Islamabad and Beijing as the two countries mark 75 years of diplomatic relations.
The minister said proceeds from the issuance would support sustainable development initiatives, including projects in water, social infrastructure and education, describing the transaction as Pakistan’s first sustainable green Panda Bond.
Speaking on the economy, Aurangzeb said Pakistan was witnessing “renewed stability, disciplined reforms, and forward-looking transformation,” citing improvements in inflation, foreign exchange reserves, fiscal consolidation and external-sector stability.
He also reaffirmed Pakistan’s commitment to the International Monetary Fund reform programme, saying adherence to fiscal and structural reforms had strengthened market confidence and macroeconomic foundations.
Aurangzeb said the government intended to expand its engagement with Chinese capital markets following the strong response to the debut issuance.
"This achievement is only the beginning," he said. “We were always clear that we were not here for just one single trade."
"The overwhelming response, being five times oversubscribed, has guided us to issue the RFP for the next tranches right away," the minister added.
"We want to be regular issuers in the Chinese capital markets."
