Pakistan’s first-ever Panda Bond issuance received an overwhelming response from investors and was oversubscribed, marking a major milestone in the country’s financial engagement with China and international capital markets, according to a Pakistan government press release issued on May 15.

Speaking at the inaugural Panda Bond Issuance Ceremony at the Embassy of Pakistan in Beijing, Muhammad Aurangzeb said the successful launch reflected growing investor confidence in Pakistan’s economic outlook, reform agenda and long-term cooperation with China.

Pakistan has established a CNY7.2bn ($1.06bn) Panda Bond programme after nearly two years of preparation and coordination with Chinese regulators, development partners and financial institutions. Under the programme, the country completed its debut issuance of CNY1.75bn, becoming the first South Asian nation to issue a Panda Bond in China’s onshore bond market.

Aurangzeb described the issuance as a symbol of trust, innovation and deepening bilateral financial cooperation as Pakistan and China mark 75 years of diplomatic relations. He said the transaction highlighted the confidence of Chinese institutions and investors in Pakistan’s economic direction.

The finance minister said the bond issuance was supported by China International Capital Corporation as lead underwriter, with Bank of China, Standard Chartered and Hongta Securities serving as joint lead underwriters. Habib Bank Limited acted as financial adviser.

He also acknowledged the role of the Asian Infrastructure Investment Bank and the Asian Development Bank for providing credit-enhancement guarantees that facilitated Pakistan’s entry into the Chinese debt market.

According to the finance minister, the issuance is Pakistan’s first sustainable Panda Bond, with proceeds earmarked for projects in the water, energy and health sectors, aligning with the government’s broader sustainable development agenda.

Aurangzeb said Pakistan’s economy was showing signs of renewed stability, citing improvements in GDP growth, lower inflation, stronger foreign exchange reserves and a more stable external account backed by exports and remittance inflows.

He added that the government was pursuing tax reforms through digitalisation and expansion of the tax base, while also implementing energy sector reforms aimed at reducing circular debt and improving efficiency. Reforms of state-owned enterprises, including restructuring and privatisation initiatives, were also progressing, alongside measures to simplify regulations and improve the investment climate.

The minister reiterated Pakistan’s commitment to the IMF programme, saying continued adherence to reforms had strengthened macroeconomic stability and enhanced market confidence.