FX.co ★ China 10-Year Yield Falls Ahead of US-China Trade Talks

China's 10-year government bond yield dipped to approximately 1.72% on Monday, continuing its downward trend from the prior session amid increasing optimism about the US-China trade discussions. Scheduled for later today in Stockholm, the high-level meeting will include US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. Bessent expressed hope that the discussions might result in a prolonged truce, with the agenda anticipated to address broader issues beyond tariffs, including China's energy imports from Russia and Iran. Reports indicate that both parties are likely to extend the tariff truce by an additional three months, with a source indicating that no new tariffs are expected during this period. On the domestic front, China's fiscal revenue experienced a slight downturn in the first half of 2025, in spite of increased government expenditure. Additionally, industrial profits suffered further deterioration compared to the previous month, burdened by persistent deflationary pressures and ongoing US-China trade tensions.