The government of Pakistan held a ceremony in Beijing on Friday to mark the introduction of Islamabad's first Panda Bonds onto China's onshore capital market.

Panda Bonds are renminbi-denominated debt instruments issued by foreign sovereigns or institutions in China's domestic capital market, allowing overseas borrowers to raise funds in yuan and diversify sources of financing.

Pakistan's Minister for Finance and Revenue Muhammad Aurangzeb said that becoming the first country in South Asia to issue Panda Bonds underscores the strength of the Pakistan-China bilateral relationship and the credibility of Pakistan's reform agenda.

According to Aurangzeb, the first tranche of Panda Bonds, worth 1.75 billion yuan ($2.50 billion), was oversubscribed more than fivefold, demonstrating the firm confidence among Chinese investors in Pakistan's economic reforms and development prospects, adding that Pakistan plans to pursue an overall Panda Bond issuance program of 7.2 billion yuan.

While noting the issuance was backed by the ?Asian Development Bank and the Asian Infrastructure Investment Bank, Aurangzeb said the funds raised will be allocated exclusively to projects in the water sector, social infrastructure and education. The initiative demonstrates Pakistan's commitment and dedication to inclusive and sustainable growth, he added.

Khalil Hashmi, Pakistan's ambassador to China, said Friday's move not only reflects the in-depth financial cooperation between the two nations, but also demonstrates a recognition from Chinese and global investors of Pakistan's economic development roadmap and long-term growth potential.

Aurangzeb said he expected a smooth rollout of subsequent bond issuances, adding that Pakistan remains optimistic about strong economic cooperation with China, closer financial connectivity and joint pursuit of sustainable growth.