The minister stated that Pakistan has followed Egypt’s example by issuing yuan bonds, bolstered by improved credit ratings from the Beijing-led Asian Infrastructure Investment Bank (AIIB).
Federal Minister for Finance and Revenue, Muhammad Aurangzeb, announced that Pakistan will issue Yuan-denominated Panda Bonds as early as June, aiming to further integrate its capital markets with China’s.
In an interview with the South China Morning Post (SCMP), the minister assured greater cooperation with Beijing on the next phase of the China–Pakistan Economic Corridor (CPEC), a key initiative aimed at boosting bilateral trade and investment.
He also urged increased participation from China’s private sector and export-oriented industries to help transform Pakistan’s debt-laden economy. Aurangzeb mentioned that Pakistan aims to raise between US$200 million and US$250 million from Chinese investors.
He said, Pakistan had endured years-long inflation and was pushed to the brink of default in 2023 as its economy withered amid political chaos and economic mismanagement. But the country’s economy rebounded last year as the inflation rate dropped from nearly 38 percent in May 2023 to 4.1 percent last month.
Amid what he called the “balance of payment problem”, Aurangzeb said that enhancing CPEC cooperation would be crucial, adding that the newest version of a flagship Belt and Road Initiative project would help the country digest its debt through an export-led model.
The second phase of the project, according to Pakistan, aims to set up special economic zones in partnership with China to reform the country’s agricultural and information technology sectors while attracting Chinese companies to relocate their low-end industries to the country.
Aurangzeb said Pakistan was in trouble because the economy had been “primarily import-led”, which caused the country to “run out of foreign currency and get into a balance of payment problem”.
“CPEC phase two is all about primarily business-to-business, especially the economic zones. We want to make it work for some companies from the mainland to come in and use it as a real export hub.” He also assured to step up security in his country to protect Chinese companies.
Meanwhile, the minister mentioned that Pakistan is exploring more joint ventures with Hong Kong and considering secondary listings for its firms in the city. This comes ahead of a meeting with Chief Executive John Lee Ka-chiu on Monday.
He said, he would express his interest to Lee about the possibility of having a Hong Kong delegation visit Pakistan to identify areas for closer collaboration.
“If there is an opportunity for companies out of Pakistan, as joint ventures with local companies, to come in and do primary and secondary listings in the Hong Kong stock exchange, for instance, I think it can be a real win-win, not only in terms of the investment that we expect back in Pakistan, but also outward investment,” he said.
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