Pakistan has reaffirmed its support for the proposed Shanghai Cooperation Organisation (SCO) Development Bank and outlined plans to issue additional Panda Bonds in China as part of its strategy to maintain access to international capital markets. The developments were discussed during a meeting between Federal Minister for Finance and Revenue Muhammad Aurangzeb and Chinese Finance Minister Lan Fo’an on the sidelines of the World Bank Group and International Monetary Fund Annual Meetings 2026 in Bangkok, Thailand. The talks covered regional financial cooperation, Pakistan’s borrowing plans in China’s domestic bond market, bilateral economic relations and ongoing collaboration in infrastructure and technology.
During discussions on the proposed SCO Development Bank, the Chinese side sought Pakistan’s active participation in consultations and support for building consensus among member countries on establishing the institution. Aurangzeb reaffirmed Pakistan’s commitment to advancing the initiative, which is intended to strengthen financial cooperation among SCO members. The proposed bank could provide a regional platform for supporting development priorities and improving coordination on financing needs among participating countries. However, the discussions described the institution as a proposal under consultation, and the meeting announcement did not indicate that its establishment had been formally completed or that operational arrangements had been finalised.
The two finance ministers also reviewed Pakistan’s plans to continue accessing China’s capital market through further Panda Bond issuances. Panda Bonds are debt securities issued by foreign entities in China’s domestic market and denominated in renminbi, China’s currency. Pakistan’s inaugural issuance received regulatory support and credit enhancement from the Asian Infrastructure Investment Bank (AIIB), secured a coupon rate of 2.5% and attracted strong investor demand, according to the meeting details. Aurangzeb said Pakistan intended to make additional issuances under its approved RMB 7.2 billion programme, with continued support from the AIIB. Further borrowing under the programme would allow Pakistan to maintain its presence in the Chinese market and diversify its sources of financing, although the timing, size and terms of future issuances were not specified.
The ministers also discussed Pakistan’s return to the international Eurobond market after a four-year absence. Access to both the Chinese bond market and international debt investors forms part of Pakistan’s broader effort to widen its financing options. Aurangzeb highlighted progress towards macroeconomic stability and acknowledged China’s financial assistance during periods of economic pressure. Chinese Finance Minister Lan Fo’an welcomed Pakistan’s improving economic position and its renewed access to international capital markets. The exchange reflected the importance both countries attach to financial cooperation as Pakistan seeks to manage its financing requirements and strengthen investor confidence. The meeting did not announce a new Eurobond transaction or disclose its potential size, currency or issuance date.
Regional cooperation was another key area of discussion, with the ministers reviewing Pakistan’s chairmanship of the SCO and preparations for the organisation’s forthcoming summit. The meeting also covered arrangements for the SCO Finance Ministers’ Meeting scheduled to take place in Islamabad. Lan Fo’an expressed his intention to attend the ministerial meeting, signalling continued engagement between the two countries through the organisation’s financial cooperation framework. The proposed development bank and the upcoming ministerial discussions are part of wider efforts to strengthen economic links among SCO members, although progress on regional initiatives will depend on consultations and agreement among participating governments.
Infrastructure development and technology cooperation also featured in the talks. Lan Fo’an referred to progress towards an agreement on proposed route changes to a China-Pakistan highway project, highlighting continued engagement on transport connectivity. Aurangzeb also briefed his Chinese counterpart on Pakistan’s engagement with Alibaba to promote digital transformation and the development of artificial intelligence skills. He reiterated the government’s commitment to implementing the cooperation framework and expanding collaboration in these areas. These discussions indicate that Pakistan-China economic engagement extends beyond financing to include infrastructure, digital capabilities and workforce development.
The meeting brought together Pakistan’s priorities in regional financial cooperation, international borrowing and bilateral economic engagement. Pakistan’s support for the proposed SCO Development Bank reflects its interest in strengthening regional financing mechanisms, while plans for additional Panda Bonds could help broaden access to China’s domestic capital market. Continued cooperation with the AIIB, China and other international financial partners remains relevant as Pakistan seeks to diversify funding sources and sustain economic stability. The next steps will depend on progress in SCO consultations, the implementation of Pakistan’s Panda Bond programme and further decisions on infrastructure and technology cooperation.
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