China’s 10-year government bond yield remained stable at around 1.78%, hovering near a six-week low, and signaling cautious market optimism. Investors are anticipating a modest improvement in the near-term growth outlook, even as geopolitical risks persist. The economy is forecast to expand by 4.8% year-on-year in Q1 2026, up slightly from 4.5% in the previous quarter, which had marked the slowest growth rate since the post-pandemic reopening in 2022. This gradual uptick allows policymakers more leeway to assess external risks—such as the ongoing conflict in the Middle East—before deciding on any adjustments to monetary or fiscal support.
At the same time, China’s Ministry of Finance is set to issue CNY 15.5 billion in government bonds in Hong Kong on April 22, the largest single tranche of Dim Sum bonds since October 2023. The issuance aligns with broader efforts to expand the offshore yuan bond market and enhance liquidity in offshore markets, in line with signals previously given by officials from the People’s Bank of China.
