China’s 10-year government bond yield fell to around 1.72% on Wednesday, its lowest level since August 2025, as ample market liquidity outweighed worries about an increasing supply of government debt. The People’s Bank of China has maintained loose monetary conditions to support the economy, with overnight borrowing rates hovering near their lowest levels since 2023. This comes even as Beijing prepares to launch a record 30-year bond offering on Friday under its ultra-long sovereign bond program.
Against a backdrop of global uncertainty, Chinese government bonds are increasingly viewed as a safe-haven asset, particularly amid energy-market volatility linked to the conflict in the Middle East. At the same time, Indonesia has agreed to allow China to issue sovereign bonds in its domestic market on a reciprocal basis, marking a step forward for regional financial integration. The arrangement stems from discussions between Purbaya and Chinese Finance Minister Lan Fo'an at the IMF–World Bank Spring Meetings, where cross-border bond issuance was a central theme.
