Pakistan will continue to \u201cdiversify its funding sources,\u201d 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.
\nAurangzeb spoke to Nikkei Asia on Monday on the sidelines of the annual meetings of the International Monetary Fund and World Bank, which kicked off in Bangkok on the same day.
\nIn 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\u2019s domestic bond market.
\nAurangzeb said the recent panda bond will not be a \u201cone-time issuance\u201d and that Pakistan intends to \u201ckeep going back and be a repeat issuer,\u201d given how China is the \u201csecond largest and deepest capital market in the world.\u201d
\nEmerging economies such as Pakistan and Indonesia have tapped the panda bond market in a bid to expand their investor base and diversify funding sources.
\nAccording 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.
\n\u201cWe do not want to increase the quantum of our external debt,\u201d said Aurangzeb, while expressing interest in ways to further diversify funding sources, including the issuance of yen-denominated samurai bonds.
\nSamurai bonds \u201cwould make sense,\u201d and are \u201csomething which we should think through,\u201d he said, adding: \u201cWe need to do more homework.\u201d
\nIn 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.
\n\u201cWe will not make any compromise on the national tariff policy,\u201d Aurangzeb said. \u201cIt\u2019s not only about the auto industry \u2014 it\u2019s about industries in general.\u201d
\nIn the past, the government has given protection without sunset clauses. \u201cThat has not worked for Pakistan,\u201d he said. \u201cWe want to make our industry competitive.\u201d He believes the NTP can help exports, \u201cespecially for raw materials and intermediate goods.\u201d
\nAurangzeb noted that ASEAN reduced tariffs in the late 1990s to generate various upsides. \u201cThis can very much be a Southeast Asia moment for Pakistan,\u201d he said.
\nPakistan is seeking cabinet approval for a revamped auto policy that will support the adoption of electric vehicles as part of the country\u2019s energy transition and climate change strategies. Islamabad wants 30% of new vehicles to be electric by 2030.
\nThe policy\u2019s strict export targets for automakers, however, have caused a stir, and some observers have said they favor Chinese new energy vehicle makers.
\nChinese EV players have already been attracted to Pakistan, including BYD, which has started assembling locally.
\nAurangzeb said Pakistan welcomes Chinese automakers \u2014 \u201call of them.\u201d
\nChina is Pakistan\u2019s largest bilateral lender. The two countries marked the 75th anniversary of diplomatic relations in May, underscoring a partnership that spans economic, defense and geopolitical cooperation.
\nSince becoming an IMF member in 1950, Pakistan has entered over two dozen IMF programs. Currently in its 25th arrangement, Pakistan is one of the most frequent users of IMF financial assistance.
\n\u201cWe are in good shape with respect to the program itself, which in turn helps us with our discussions with rating agencies and investors,\u201d Aurangzeb said. This program has a \u201cstructural reform agenda\u201d that will \u201clead to sustainability,\u201d he said.
\nPakistan will graduate from IMF assistance, he said, once the \u201crest of the world becomes convinced that we don\u2019t need the lender of last resort.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Pakistan will continue to \u201cdiversify its funding sources,\u201d 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 Monday on the sidelines of the annual meetings of the International Monetary Fund and World Bank, which […]<\/p>\n","protected":false},"author":2,"featured_media":537700,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-571945","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business"],"yoast_head":"\n