Pakistan seeks cooperation from Chinese institutional investors for Panda bonds

Pakistan has sought cooperation from Chinese institutional investors in the capital market to launch Panda Bonds.

According to a press release issued by the Finance Ministry, Finance Minister Aurangzeb and Energy Minister Awais Leghari held meetings with People’s Bank of China (PBoC) Governor Pan Gongsheng, National Energy Administration (NEA) Deputy Administrator Ren Jingong and other senior financial officials and investors.

Highlighting Pakistan’s plan to launch Panda Bonds, the Finance Minister briefed the PBoC and other financial institutions on the steps taken so far and asked them to benefit from the business-friendly policies of the new government.

He also briefed the senior Chinese officials on the current government’s reform agenda and its engagement with the International Monetary Fund (IMF). Discussions focused on the significant progress made by Pakistan in improving its macroeconomic indicators with emphasis on reforms in the areas of taxation, energy and privatization of state-owned enterprises.

The reforms have already started to bear fruit, including reducing inflation from 38% to 13%, which is a substantial achievement for the economy, the finance minister said.

Furthermore, stabilizing the exchange rate and strengthening foreign exchange reserves were highlighted as key factors contributing to economic recovery. It was agreed that such reforms are essential to achieve long-term stability and foster sustainable economic growth.

The Governor of the People’s Bank of China acknowledged Pakistan’s policy measures as they reflect a broader international perspective on the importance of economic resilience and the positive impact of prudent fiscal management, the statement added.

Welcoming President Xi Jinping’s Belt and Road Initiative (BRI), the two ministers noted the achievements of the first phase of the China-Pakistan Economic Corridor (CPEC), a flagship project of the BRI, in strengthening infrastructure in the energy and transport sectors, among others.

It was stressed that in the next phase of CPEC, the focus will be on strengthening B2B cooperation with the private sector playing a central role in development and economic growth.

Meanwhile, in a meeting with the NEA Deputy Administrator, the Energy Minister expressed the government’s willingness to introduce energy reforms aimed at improving the efficiency of the energy sector by addressing systemic issues and reducing transmission losses. He thanked the NEA for signing the MoU on improving energy sector governance and expressed his determination to expedite the implementation of the agreement.

The ministers also met with the Executive Vice President of the China Development Bank (CDB), the President of the National Association of Financial Market Institutional Investors (NAFMII), the President of the Silk Road Fund (SRF) and the President of the China International Capital Corporation (CICC).

On the instructions of the Prime Minister, the two ministers paid an official visit to Beijing from July 24 to 26, 2024 as part of the government’s efforts to implement the consensus reached at the leadership level during the former’s recent visit to China.