Pakistan is preparing to launch its first-ever Panda bond ahead of the 2026 Chinese New Year, marking a significant milestone in the country’s external financing strategy. The announcement was made by Federal Minister of Finance and Revenue, Senator Muhammad Aurangzeb, during an interview with China Global Television Network (CGTN).
The issuance of the Renminbi (RMB)-denominated bond will allow Pakistan to access China’s domestic capital market—the second-largest and second-deepest in the world—thereby diversifying funding sources and reducing reliance on the US dollar. The move complements Pakistan’s existing access to euro and Sukuk markets and signals a strategic effort to tap into a previously underutilised funding avenue.
A Panda bond is issued by a non-Chinese entity within mainland China, enabling access to local investors while supporting the internationalisation of the RMB. The Chinese New Year, also known as the Spring Festival, falls on 17 February 2026, which Pakistan aims to leverage for the bond’s launch.
Highlighting China’s critical role in Pakistan’s economic development, Aurangzeb noted that bilateral trade between the two countries reached nearly $17 billion in the first eight months of 2025. He emphasised that the partnership has consistently strengthened over decades, underpinned by China’s support at international fora and through major development projects, particularly the China-Pakistan Economic Corridor (CPEC).
CPEC Phase-I focused on developing critical infrastructure such as roads, ports, airports, and energy projects. Phase-II, officially launched following high-level meetings with President Xi Jinping and Premier Li Qiang earlier this year, centres on monetising existing infrastructure and emphasises private-sector-led, business-to-business cooperation. This shift reflects Pakistan’s strategic focus on sustainable economic growth and long-term investment.
Aurangzeb highlighted key sectors attracting Chinese investment in the new phase, including agriculture, minerals and mining, artificial intelligence, and the digital economy. Beyond capital flows, Phase-II is designed to promote knowledge transfer, technical support, and business collaboration between both countries.
Addressing the challenges of global uncertainty, rising protectionism, and geopolitical tensions, the finance minister reaffirmed that Pakistan’s economic strategy remains anchored in its longstanding partnership with China. He noted that China’s support has extended beyond trade and investment, assisting Pakistan during critical economic phases, including its IMF program and broader financing requirements.
Looking ahead, Pakistan and China have developed a clear strategic and economic roadmap through recent bilateral engagements, including meetings on the sidelines of the Shanghai Cooperation Organisation summit in Tianjin. Aurangzeb concluded that both countries are aligned not only on geopolitical priorities but also on a forward-looking economic agenda that will guide cooperation over the medium and long term.
The Panda bond issuance is expected to reinforce Pakistan’s external financing strategy, strengthen its bilateral partnership with China, and provide a critical boost to the country’s investment and infrastructure objectives.
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