Chinese state-owned bank the Industrial and Commercial Bank of China (ICBC) has become the first Chinese bank to help arrange an international dollar based sukuk. ICBC helped arrange Pakistan’s recent $1 billion 5 year Sukuk.
ICBC helped Pakistan achieve an orderbook of over $8 billion for its dual issuance of sukuk and a conventional Eurobond of $1.5 billion and likely attracted Chinese state coffers flush with US dollars holdings.
China is building stronger trade ties with Asian countries under its “One Belt, One Road” strategy to rebuild Silk Road trade links with Asia and Europe. As part of this strategy it is eager to build its Islamic financing capabilities both to tap and invest funds in infrastructure projects.
Additionally, the China–Pakistan Economic Corridor (CPEC) is a collection of infrastructure projects that are currently under construction throughout Pakistan. The value of CPEC projects is worth $62 billion and provides China with a vital route to the Arabian Sea for trade routes to the Middle East, Africa and Europe.