China’s 10-year government bond yield edged back up toward 1.74% on Tuesday, rebounding from a two-week low as investors weighed stronger-than-expected trade data against mounting signs of slowing economic growth ahead of the release of Q2 GDP figures.
Exports jumped 27% year-on-year to a record USD 412.4 billion, while imports rose 36% to an all-time high of USD 286.8 billion, with both readings comfortably beating market expectations. This drove the trade surplus up to USD 125.6 billion.
Solid global demand for AI-related products and resilient semiconductor prices continued to underpin China’s export performance, helping to partially offset underlying weakness in the domestic economy.
Looking ahead, China’s economy is expected to expand 4.5% year-on-year in the second quarter, down from 5.0% in the first quarter and placing growth near the lower end of Beijing’s 2026 target range of 4.5%–5.0%. The slowdown is being driven by tepid consumer spending, a protracted property downturn, and muted private investment.
