Govt could issue more Chinese yuan-based bonds: Aurangzeb

ISLAMABAD  –  Pakistan will continue to “diversify its funding sources”, Finance Minis­ter Muhammad Aurangzeb said, hint­ing that his government could issue more Chinese yuan-based bonds and tap the Japanese market for samurai bond issuances. Aurangzeb spoke to Nikkei Asia on the sidelines of the an­nual meetings of the International Monetary Fund and World Bank, which kicked off in Bangkok. In mid-May, Pak­istan issued its first panda bond worth 1.75 billion yuan ($261 million) as part of a 7.2 billion yuan program, with the Asian Development Bank and the Asian Infrastructure Investment Bank providing partial guarantees. A panda bond is a yuan-denominated bond is­sued by a foreign entity to raise money in China’s domestic bond market.

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Aurangzeb said the recent panda bond will not be a “one-time issuance” and that Pakistan intends to “keep go­ing back and be a repeat issuer,” given how China is the “second largest and deepest capital market in the world.” Emerging economies such as Pakistan and Indonesia have tapped the panda bond market in a bid to expand their investor base and diversify funding sources. According to S&P Global, pan­da bond issuance reached roughly 160 billion yuan ($23.8 billion) in the first half of 2026, surging 68% year on year. Foreign issuers have increased, ac­counting for 50% of the pie compared to 39% last year. “We do not want to increase the quantum of our external debt,” said Aurangzeb, while express­ing interest in ways to further diversify funding sources, including the issuance of yen-denominated samurai bonds.

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Samurai bonds “would make sense,” and are “something which we should think through,” he said, adding: “We need to do more homework.” In addi­tion to diversifying external borrow­ing, Pakistan is accelerating efforts to attract foreign direct investment by increasing competitiveness in key industries, including the automobile sector. Last year, the country unveiled a five-year National Tariff Policy (NTP), which gradually reduces im­port tariffs in key sectors. “We will not make any compromise on the national tariff policy,” Aurangzeb said. “It’s not only about the auto industry — it’s about industries in general.”

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In the past, the government has giv­en protection without sunset clauses. “That has not worked for Pakistan,” he said. “We want to make our industry competitive.” He believes the NTP can help exports, “especially for raw mate­rials and intermediate goods.” Aurang­zeb noted that ASEAN reduced tariffs in the late 1990s to generate various up­sides. “This can very much be a South­east Asia moment for Pakistan,” he said. Aurangzeb said Pakistan welcomes Chi­nese automakers — “all of them.”

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Meanwhile, Aurangzeb has ex­pressed condolences over the loss of lives in recent incidents in Saudi Arabia and thanked the Kingdom for its long­standing support to Pakistan. The min­ister met with Sultan Abdulrahman Al-Marshad, Chief Executive Officer of the Saudi Fund for Development (SFD), on the sidelines of the World Bank Group–IMF Annual Meetings 2026 in Bangkok, Thailand, said a press release issued by the ministry of finance here Tuesday. He highlighted Pakistan’s improving macroeconomic position and renewed access to international capital markets. Discussions focused on expanding trade and investment, strengthening private-sector engagement, following up on the bilateral investment protec­tion agreement and exploring oppor­tunities for refinery upgrades. Both sides noted satisfactory progress on SFD-supported projects and empha­sized the importance of developing a fresh pipeline of projects. The SFD re­affirmed its continued support to Paki­stan within its mandate.

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Meanwhile, Aurangzeb also met with Imad Fakhoury, IFC Regional Vice President for the Middle East and Central Asia. Discussions focused on strengthening IFC support for private-sector-led growth and jobs and trans­lating macroeconomic stability into sustainable growth, a press release from the ministry of finance said on Tuesday. The meeting reviewed IFC’s expanding portfolio, small-business financing, entrepreneurship, capital markets, and green and digital bonds. The finance minister reaffirmed com­mitment to Reko Diq and appreciated IFC’s financing leadership.

Discussions also covered mining infrastructure and value addition, af­fordable housing and developer fi­nancing, and agricultural development through improved storage, cold chains and electronic warehouse receipt fi­nancing. Meanwhile, Aurangzeb has stressed the urgent need to address Pakistan’s rapid population growth and its implications for health, educa­tion and employment, calling for coor­dinated action to strengthen human capital and create jobs. He was speak­ing at the World Bank’s roundtable on “Transforming Demographic Transi­tion into Human Capital Gains and Job Creation”. Drawing on experiences from Indonesia, Bangladesh and Iran, Aurangzeb highlighted women’s edu­cation, workforce participation and engagement with religious leaders on birth spacing as key priorities.

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