China’s 10-year government bond yield hovered around 1.74% on Tuesday, its lowest level in a week, as a mixed batch of economic indicators underscored ongoing headwinds for the world’s second-largest economy and drove investors toward the relative safety of government debt.
New home prices in 70 major cities fell for the 35th consecutive month, matching the steepest decline since May 2025, while fixed-asset investment weakened by more than markets had anticipated. Consumer activity also disappointed: retail sales unexpectedly contracted in May, registering their first year-on-year drop since December 2022.
In contrast, industrial production provided a brighter spot, expanding at a faster-than-expected pace in May and rebounding from April’s near three-year low. The labor market also showed tentative improvement, with the surveyed urban unemployment rate easing to its lowest level in five months.
