The Finance Minister also revealed plans for corporate stock listings in Hong Kong. He pointed to Service Long March, a Pakistani-Chinese joint venture producing tires for trucks and buses, as a candidate for an equity listing in Hong Kong.
Pakistan is taking significant steps to deepen its financial and economic engagement with China, aiming to tap into the world’s second-largest capital market and expand corporate opportunities in Hong Kong. Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, outlined the government’s strategy during an interview with Nikkei Asia on the sidelines of the Asian Financial Forum in Hong Kong.
Aurangzeb confirmed plans to issue an inaugural panda bond by the end of the year, with an estimated value between $200 million and $250 million. However, the minister emphasized that the initiative’s significance lies not in its size but in its potential to establish a foothold in the Chinese yuan bond market. “What is important is that we do go for an inaugural issue and then, once it’s successful, we can always keep it on tap,” he said.
The minister acknowledged that not utilizing China’s capital markets earlier was a missed opportunity. He expressed eagerness to correct this oversight in 2025, saying, “We are quite keen that during this calendar year, we do.”
Broadening Financial Horizons
Aurangzeb highlighted the importance of diversifying Pakistan’s funding sources and reducing reliance on traditional mechanisms, including International Monetary Fund (IMF) programs. To this end, he emphasized the value of reforms that could improve Pakistan’s credit rating and bolster investor confidence. “We are hopeful to reach the ‘B’ rating zone in due course by adhering to IMF’s terms,” he stated.
The Finance Minister also revealed plans for corporate stock listings in Hong Kong. He pointed to Service Long March, a Pakistani-Chinese joint venture producing tires for trucks and buses, as a candidate for an equity listing in Hong Kong. “These joint ventures want to do equity [fund] raising, and in international markets, Hong Kong is a very, very obvious choice,” he explained, hinting at future opportunities for Pakistani companies to pursue both primary and secondary listings in the financial hub.
Strengthening CPEC and Bilateral Ties
The China-Pakistan Economic Corridor (CPEC), a centerpiece of China’s Belt and Road Initiative, remains central to Pakistan’s economic agenda. Aurangzeb reaffirmed the government’s commitment to this flagship project, dismissing concerns that IMF conditions might hinder new tax incentives or economic zones tied to CPEC. “It’s not really as big a deal as it’s being made out to be,” he said, emphasizing the need to prioritize the implementation of existing projects.
The minister also addressed safety concerns for foreign nationals, particularly Chinese citizens working in Pakistan. He assured that the government is prioritizing security at the highest levels and highlighted that the situation on the ground is much better than portrayed in media outlets.
Economic Recovery; Challenges Ahead
Aurangzeb pointed to encouraging economic indicators, including a sharp decline in inflation from 38 per cent in May 2023 to 3 per cent in January 2025, a boost in foreign exchange reserves, and a record-breaking performance by the local stock market. “All of this has moved us in the right direction, including the biggest story for us, which is inflation,” he said.
Despite these gains, the minister acknowledged the need for structural reforms in taxation, the energy sector, state-owned enterprises, and public finance. Pakistan’s tax-to-GDP ratio, for instance, remains at 10.8 per cent, well below the target of 13.5 per cent. The government also plans to relaunch efforts to privatize the loss-making national carrier, Pakistan International Airlines (PIA), after a failed attempt last year.
Aurangzeb stressed the importance of building an export-led growth model and attracting more foreign direct investment. These steps, he said, are crucial to breaking the cycle of economic booms and busts. “It is critical that we stay away from boom and bust cycles,” he emphasized. “We are now in the 25th IMF program, and we want to ensure that this is the last program.”
The minister’s roadmap envisions Pakistan establishing a stronger presence in international capital markets while leveraging its strategic partnership with China. With the inaugural panda bond and Hong Kong equity listings on the horizon, Pakistan’s economic future may be set for a transformative phase. The success of these initiatives will likely hinge on the country’s ability to implement reforms and attract sustained foreign investment, paving the way for long-term stability and growth.
