Pakistan to raise $1 billion through Panda bonds in China by 2028

Pakistan is set to enter the Chinese debt market with a $1 billion Panda bond issuance, marking a significant development in economic ties between Islamabad and Beijing, sources from the Ministry of Finance told Nukta on Thursday.

According to officials, the Panda bonds—yuan-denominated debt issued by a non-Chinese entity in mainland China—will be launched in three phases between the current fiscal year and 2028. The first phase will see the issuance of bonds worth $250 million, while the remaining $750 million will be raised in the second and third phases.

The Ministry of Finance had initially considered issuing a single $250 million tranche, but later expanded the plan to a full $1 billion program, to diversify funding sources and tap into new investor bases.

The move comes as Pakistan seeks to ease pressure on its external financing needs and gradually reduce reliance on short-term instruments such as treasury bills. Officials have previously said the government plans to reduce the issuance of floating-rate and short-term T-bills as part of broader debt management reforms.

The Panda bond program is expected to gain momentum during Prime Minister Shehbaz Sharif’s upcoming visit to China next month. The finance minister is also scheduled to accompany the premier to finalize technical and regulatory arrangements with Chinese authorities.

Economists see the bond issuance as a signal of deepening financial cooperation with China amid tight global lending conditions and continued pressure from international credit rating agencies.

Credit ratings context

Pakistan has been under scrutiny from global credit rating agencies due to its mounting debt burden, external repayment obligations, and reliance on IMF support.

Against this backdrop, the Panda bond issuance offers an alternative financing route that could help stabilize Pakistan’s debt profile and demonstrate confidence to both domestic and foreign investors.

Finance Ministry projections also estimate strong macroeconomic growth over the next three years. According to official documents, Pakistan’s GDP is expected to increase by PKR 48 trillion by 2028—from PKR 114 trillion to PKR 163 trillion—reflecting hopes for a sustained economic recovery supported by structural reforms and foreign investment.